Return to Transcripts main page
QUEST MEANS BUSINESS
Obama's Debt Ceiling Warning; US Stocks Little Changed; Apple Shares Fall; Small Gains for European Stocks; UPS-TNT Deal Collapses; Swatch to Buy Harry Winston; Harry Winston's Red Carpet History; Swatch and Harry Winston, Compare and Contrast; Reports of Dell Shares Halted; Dollar Holding Steady; UK, EU Relationship; Eurozone Manufacturing Down; Future of Europe
Aired January 14, 2013 - 14:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
RICHARD QUEST, HOST: President Obama raises the roof about the Republicans' refusal to raise the debt ceiling.
From plastic fantastic to a diamond deal. Swatch switches to luxury.
And Heathrow's busiest year on record. Its CEO tells me the airport's a microcosm for the global economy.
I'm Richard Quest, of course, the start of a new week, and I mean business.
Good evening. Barack Obama says America is not a deadbeat nation, and the president says that the country needs to pay the debts it has already racked up.
In the final news conference of his first term in office, Mr. Obama warned of downgrades, default, and global financial disaster. Three Ds if Congress does not raise the debt ceiling. And he said the failure to so do would put the US on the edge of recession.
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: It would be a self- inflicted wound on the economy. It would slow down our growth, might tip us into recession and, ironically, would probably increase our deficit.
So to even entertain the idea of this happening, of the United States of America not paying its bills, is irresponsible. It's absurd. As the speaker said two years ago, it would be -- and I'm quoting Speaker Boehner, now -- "a financial disaster not only for us, but for the worldwide economy."
(END VIDEO CLIP)
QUEST: A disaster, irresponsible, and calamitous for the worldwide economy. Maggie Lake is in New York this evening. Disaster and irresponsible. So, Maggie, why aren't they just raising the ceiling?
MAGGIE LAKE, CNN INTERNATIONAL CORRESPONDENT: Because, Richard, Republicans are trying to use this as leverage for their negotiating position with the president over the -- the effort to sort of tackle the budget. They're linking the two. The president taking great pains today to try to say you can't do that, that shouldn't be the case, that it's historically never been the case.
This is not new spending. This is spending you already voted on. Those two should not be linked. He said we're welcome to try to sit down, come to a bipartisan agreement on the budget, but we shouldn't be putting the credit rating of the US at risk.
And Richard, if he said that once, he said it about ten times, because there is some confusion among the American public because these two issues are tied together again, just like they were last year. A lot of people think when they hear "debt ceiling" --
LAKE: -- that this is about our spending and that we overspend. And of course, the two are separate. So the president really trying to drive that point home today, very tough language.
QUEST: And the analogy is often made that the debt ceiling is like having a limit on your credit card that -- to stop yourself from spending. I know our mutual colleague Ali Velshi would lose his hair if he had any at the mere question -- or analogy of that. But isn't as -- is it as false as it sounds?
LAKE: I do think it's false, because when you have a credit limit, you look at that in the future. This is already been spent, so if it's a credit limit, it's one that doesn't work very well. The analogy the president was trying to use instead --
QUEST: All right, but --
LAKE: -- this is like eating at a restaurant and running out before you pay your bill. That's the more appropriate one according to President Obama that we should be looking at, and I do think that it is a little bit of a mischaracterization.
QUEST: OK. So, how do we get out of this, or how does the US get out of it, and if the US doesn't get out of it, then the rest of us are all in it because, Maggie, time is short.
We've already got Tim Geithner at the moment literally almost doing a shell game moving the money around to see where the $200 billion is at any given moment. So, he can only do that until maybe the end of February, when they've got -- so what happens next?
LAKE: Yes, in between February 15th and March 1st, that's when they're going to run out of levers to pull to try to keep moving things around. So you're right, time is really of the essence.
And unfortunately, we have been here before. This is an exact repeat of what we went through, and remember how much of a fallout we saw in stocks. Big swings. We were down at the New York Stock Exchange every day reporting on it, so time is of the essence.
What needs to be done is that they have to get together and Congress just to raise it, separate it out from this other issue, which is the budget negotiation, and then get down to tacks on that, which needs to be done, as well, to try to -- to agree on some spending cuts, which is going to be hard work.
The president has said there's no negotiating on it. There is no Plan B. Republicans seem to be that there is going to be one, but so far, that's the decision of the White House --
QUEST: I --
LAKE: You raise it, it's not connected, end of story.
QUEST: Stay where you are Maggie. Stay where you are in -- at CNN New York. Alison Kosik's at the New York Stock Exchange. Alison, you've heard what Maggie was saying. So, is the market now getting angst and anxious about debt ceiling?
ALISON KOSIK, CNN BUSINESS CORRESPONDENT: No. No, not just yet. Not just yet. I mean, look, it's a flat day, quiet day. What's really in focus is earnings. You look at the VIX, it's up a little bit, it's up one and a third percent. Not getting anxious yet.
But you know what? As time goes by, as we get closer to that new deadline, expect more volatility, because the market will continue to react to that, as we saw it happen at the end of last year, when the fiscal cliff concerns were coming into play.
And the interesting thing with the markets, Richard, is that the market could wind up pushing the hand of Congress if investors decide to start selling off big time, that could wind up pushing Congress's hand to do something faster, Richard.
QUEST: So, of all the ones -- of all the issues out there -- debt ceiling, sequestration, and continuing resolution -- is it the debt ceiling, from the market point of view, that's most worrying at the moment?
LAKE: It is the debt ceiling that is the bigger -- that is the bigger worry, even beyond the spending cuts. But Richard, it is -- spending cuts are a close second. They're almost neck-and-neck with the debt ceiling.
Because spending cuts -- I'll start with the second placeholder, spending cuts are a big deal to Wall Street because that has that sort of ripple effect to companies, that if companies don't know whee spending cuts are going to be made, in the big picture, how is that going to trickle down to companies. So, that's why Wall Street would be affected by the spending cuts.
Now, then, we talk about the debt ceiling. We saw what happened last summer with the debt ceiling, right? Got down to the wire. There was the S&P downgrade. There is the worry that if Congress continues with its shenanigans of dragging their feet on the debt ceiling that we could see a replay, and there could be yet another downgrade, Richard.
QUEST: Just remind us where the Dow stands tonight or what the market's doing at the moment.
KOSIK: The Dow is flat, up 18 points at 13,507. S&P is down only a mere 2 points, Richard.
QUEST: My -- your point is made. Alison's at the Exchange. Back to Maggie. Maggie, Dow's flat, markets are yawning, the president's berating, and you and I are none the wiser about where this goes.
LAKE: That's right. Listen, the market is like that because they think that despite all the noise that nobody is going to want to force a default, that would be disaster, or a downgrade or shutting down the government, which are the options.
So, despite that fact, they don't like it, with their backs up against the wall, the market's betting the Republicans cave and raise it. But there are -- there is a core contingent on the Republican side who think let's do it.
LAKE: Let's force this issue. If they feel like that is gaining traction and Boehner does not have control of those House Republicans, you will start to see more market fallout. And Allison is right. The markets will then drive what happens in Washington.
QUEST: Alison's at the Exchange, Maggie is at CNN New York, and we thank you both. Now, Apple shares -- well, Apple shares are currently trading at their lowest level in almost a year. That's after reports that demand for the iPhone 5 has slowed down.
According to the Nikkei News Service, Apple has cut back on some orders for components of its flagship phone, and that suggests Apple was expecting stronger demand. The shares are down more than 3 percent as competitors like Samsung are making ground on its dominance of the SmartPhone sector. Apple recently shot down rumors that it was developing a cheaper version of the iPhone.
Factor it into the markets and Europe had already closed by the time the president spoke and by the time we got the news from Apple or the speculation on Apple. Very modest gains for the major markets. The SMI moved to a fresh three year and a half high. SocGen and Agricole helped lift the CAC 40 into the black. Banks saw their outlooks upgraded by Credit Suisse.
QUEST: QUEST MEANS BUSINESS. After the break, diamonds by Swatch. The world's biggest watchmaker swoops on the jeweler to the stars.
QUEST: UPS, the parcel delivery service, has failed to deliver in its $7 billion quest to buy the rival TNT in Europe. It's after the European Commission said it would block the deal, which has been rumbling on for the best part of a year.
Jim Boulden is with us. Jim, extraordinary. This is going on for a long time, they've made many concessions, so why did the commission finally decide no.
JIM BOULDEN, CNN INTERNATIONAL CORRESPONDENT: It seems the commission never liked this deal, and I'll tell you why. A combined UPS-TNT would have controlled around 17 percent of Europe's express package market. That would've been before any sell-offs enforced by the European Commission.
But in this space, mergers are preferred, as it's expensive to grow overnight delivery and to build up hubs. UPS says it's extremely disappointed that the European Commission has told it that it will block this deal.
Now, this is what's happened to TNT shares. You see down 41 percent in Amsterdam's trading today. But TNT will get a breakup fee from UPS. It's interesting -- UPS will have to pay a $265 million feel once the deal is formally blocked.
You might have thought there wouldn't be a breakup fee because it's being blocked. However, TNT will get some money for that. However, that did not help the share price.
Let's look at this market. The big four of these companies control around 87 percent of the international express delivery market. If the merger had taken place, this would've been sold off. Interestingly, FedEx said no thank you.
There was lots of talk that FedEx would buy some of this in order to help the European Commission decide yes to have this deal go through. But it could also have helped some of the privatized postal services here in Europe get bigger, because few other companies would have been interested in the parts of TNT.
As, of course, this deal didn't happen, it leaves these big four as is and it leaves TNT suffering to try to find a new strategy, Richard.
QUEST: Right. Now, here's the point, here, Jim. Let me come over and join you -- in the library. Here's the point: does TNT need to do a deal to replace that which it's lost?
BOULDEN: I think it does because it -- like I said, it just takes forever to build up organically. They say they can do it organically, but then why would they do the deal to begin with? But you have only four of these, and then you have much smaller deals. So, maybe they can buy some of the privatized postal services in Europe and try to build up that way.
QUEST: And briefly, wider ramifications. It was a European and an American. So, is it likely to have wider ramifications? In other words, political fallout?
BOULDEN: No, no. We've seen this before. We saw them block GE- Honeywell, we saw them block the New York Stock Exchange with the Deutsche Bourse. Just another example of the European Commission saying no to a deal like this.
QUEST: Jim, thank you. All right. As we move on, staying in the world of acquisitions, mergers, and doing deals, square-shaped or pear- shaped, Swatch says diamonds are its new best friend. The world's biggest watchmaker has offered a billion dollars or so for Harry Winston, the jewelers immortalized in the song by Marilyn Monroe. The deal excludes the mining operations.
Swatch already owns Omega, allegedly, the watch of choice of James Bond. Harry Winston's acquisition will bring it into direct competition with the luxury market leader, Cartier.
Now, Harry Winston began the trend of lending actresses jewels for special events in 1943. Since then, the generations of leading ladies from Jennifer Lopez to Marilyn Monroe to Madonna have worn them on the red carpet. Join me over at the super screen and you'll see.
Jessica Alba wore a Winston diamond necklace. Rather splendid little beauty. It's worth 5.8 -- get in there and look at those jewels properly. Jessica Chastain was decked in $3 million worth of Harry Winston Jewels -- $3 million -- to collect her Best Actress award for her role in "Zero Dark Thirty." And -- that's the --
QUEST: You don't get many of those for the price of a cup of tea. The Best Actor winner, Hugh Jackman, wore Harry Winston cuff links. They gave him cuff links and you can't even see them, but they are in there somewhere. And so did the director Steven Spielberg.
What's the difference, then, between a Swatch and a Harry Winston? Not much, if you're strolling the hundred yards or so between the stores in London. Tens of millions if you go inside.
QUEST: These are the famous multicolored Swatch watches from the eponymous group, the Swatch group. They are the watches that gave the company its fame and flavor. But it's not all that Swatch is about. There's Tissot, Longines, and Omega at the higher end of the Swatch range.
And now, to add to these plastic and somewhat cheap $50 watches, throw in Harry Winston, half a mile away.
Talk to me, Harry Winston.
From the hustle and bustle of Oxford Street to the luxury and boutiques of New Bond Street.
Chopard, Bugari, Piaget -- it was to join this upper echelon of of jewelers that Swatch decided it needed an upper brand.
Feast your eyes on these beauties.
QUEST (voice-over): Beauty celebrated by none other than Marilyn Monroe, who called out for Harry Winston in "Gentlemen Prefer Blondes."
MARILYN MONROE AS LORELEI LEE, "GENTLEMEN PREFER BLONDES" (singing): Black Star, Frost, Gorhom, talk to me Harry Winston, tell me all about it!
QUEST (on camera): So, the Swatch will cost you $50, the Harry Winston will cost you $50,000. And that's before you've bought the bracelet. They both tell the right time.
QUEST: Harry Winston and Swatch coming together. Now, before we go any further, just to point out that there are reports that -- there are reports in the market that Dell computer shares have been halted by NASDAQ after price move circuit breakers were triggered.
We are efforting to confirm and to bring you the exact -- according -- the current price down -- or the current price movement of Dell shares was about -- was 17 percent. What -- and still counting. Whether that was higher or lower, we're still just looking on the screens to see the way in which --
But anyway, the shares have been halted by the NASDAQ after at least a 10 percent price move circuit breaker was triggered.
Now, when it comes to Dell computers, of course, a vast company. So for any form of -- movement of that magnitude, 15, 16, 17 percent, would be worth -- well, it's more than worth talking about. But we need to tell you we'll find out more details. We'll have Alison Kosik back with us to give us some more information in a moment or two.
Swatch and Harry Winston all about time, which it's time for today's Currency Conundrum. This is a 2004 commemorative coin of time, featuring the clock face on the reverse. Which eurozone hopeful issued this distinctive memento? Is it Latvia, Lithuania, or Luxembourg? The answer later in the program.
Now to the currency rates this evening. The US dollar is holding steady. It's gaining a third of one percent against sterling, down a fifth up against the yen. Those are the rates --
QUEST: -- this is the break.
QUEST: The British prime minister David Cameron has brought forward his long-awaited speech on the UK's position in the European Union. That speech, now, takes place in the Netherlands on Friday. The location that the British government says is entirely appropriate because it was a founding member of the EU.
The speech was previously expected on January the 22nd. It would have clashed, then, with the anniversary of -- the 50th anniversary of France and Germany's post-war reconciliation.
Factories in the eurozone turned out far fewer goods than expected towards the end of last year. Industrial production in the zone fell by three tenths of one percent in November from October. That's according to Eurostat.
And this is worrying because economists were expecting a rise. Year- on-year, down 3.7. The sharpest declines, in Slovenia, Spain, and Portugal. The output in Germany, France, and the Netherlands actually increased.
Ken Wattret is the chief eurozone economist for BNP Paribas. Despite this setback, he says the worst of Europe's troubles are already behind us.
KEN WATTRET, CHIEF EUROZONE ECONOMIST, BNP PARIBAS: The announcement by the ECB in the summer of last year that it would buy unlimited amounts of sovereign debt under certain conditions, that really took away the main tail risk event, I think, for the eurozone. So, in that context, I would say the worst is behind us.
But we have had periods before where the tensions in markets and the impact on the economy comes back very quickly, and we know there is some problems still with the level of debt, the level of budget deficits, political uncertainty, social unrest. So it would be unrealistic to think that all the problems have gone away.
But probably the most acute period of stress in markets and the risk of that spilling over, I would think, was behind us on the basis of what the ECB is now willing to do.
QUEST: Talk of Greece exit and the most extreme possibilities, which was where the speculation was rampant last year, to some extent, off the table?
WATTRET: Greece still faces major challenges economically and financially, but there has been a willingness in the core countries of the euro area, particularly Germany, to buy some time for Greece, and I think that change of political mood is equally important as what the central bank is willing to do.
QUEST: If the immediate, serious, disastrous, catastrophic, whatever adjective we want to use -- if that has gone away, we are left with a mind- numbingly grinding -- periphery trying to get things growing again, where unemployment across the zone is 11 percent plus. So, we're far from out of the woods.
WATTRET: I think that's a fair assessment. Normally the way an economy adjusts to one of these shocks is you have a major exchange rate adjustment, which generates improved competitiveness, and you export your way out of a crisis.
We know for the euro area countries, that option isn't available, so there is a more prolonged, gradual adjustment through an internal devaluation, as we would call it. Costs come down and competitiveness comes back, and slowly but surely, the economy gets on an even keel.
But the timetable for that in a monetary union is much longer than when you have sufficient exchange rate flexibility.
QUEST: The president's going to be talking about and has been talking about the debt ceiling. Do you -- from your vantage point, do you see the debt ceiling debate and debacle as being a serious worry that could send everything over the edge again?
WATTRET: Well, potentially it is, depending on how the politicians handle it. I think markets for the moment take a relatively constructive view, and the reason is, history tells us when push comes to shove, the politicians in the US make a decision to raise the debt ceiling if necessary to avoid the painful consequences on public spending, employment, and so on.
So, I think it's reasonable to assume that the same thing will happen, but there is a longer-term issue here. The US is still running a very large budget deficit and the public sector debt to GDP ratio is rising, and it's rising pretty rapidly. So, the medium-term problem of consolidating the public finances and the impact that has on the economy hasn't gone away at all.
QUEST: Ken Wattret at BNP Paribas. If you're flying through Heathrow soon, pay close attention to the places on the departure board. Your final destination may say an awful lot about the state of the economy. The boss of Heathrow --
QUEST: -- after the break.
QUEST: Hello, I'm Richard Quest. There's 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): French warplanes (inaudible) the Islamist militant targets in Mali for the fourth day. Meanwhile the rebels have mounted a counteroffensive into the government controlled south. France says rebels have captured the town of Diabaly north of the capital.
Thousands of protesters are descending on Pakistan's capital right now demanding that the government resign. They're following an outspoken cleric who says he wants a caretaker government to ensure this brings national elections are honest and fair. Security in Islamabad remains strict. Authorities have cordoned off the president's house and parliament with shipping containers.
This YouTube video purports to show the devastation in Damascus suburbs today moments after a Syrian government airstrike. A new report of a major refugee agency says entire neighborhoods in Syria are decimated. Health care is difficult to find and sexual assault is rife.
(Inaudible) outside the country the civil war has created a staggering refugee crisis.
In Italy, the exotic dancer at the center of a sex case involving the former prime minister Silver Berlusconi appeared in court on Monday. Karima El Mahroug was not called to testify. She's been nicknamed "Ruby the Heart-Stealer." Prosecutors say Berlusconi paid her for sex when she was 17, although both say they were never together.
Livestrong has confirmed to CNN that its founder, Lance Armstrong, has apologized for the charity's staff. It comes ahead of an interview with Oprah Winfrey today, where it is rumored that the disgraced cyclist may admit to doping.
QUEST: So earlier in the program I told you that Dell's share price had risen very sharply indeed, currently up just to nearly 10 percent, maybe 11 percent. It is bouncing around quite considerably. But look at how the day has done for Dell's price. And you could just look at that. That's very sharp.
Now for a mature stock, a major stock in the Nasdaq to have something like that going on tells you there's something going on.
Alison Kosik back with us from New York.
As always, Alison, I tell you, when there's something to report, we need you back. What is going on?
ALISON KOSIK, CNN BUSINESS CORRESPONDENT: So there are reports of a possible equity buyout which means Dell is considering going private. Dell has reportedly been in talks with two different firms. Keep in mind; this is reportedly in the very early stages. These firms would still need to shore up financing for the wheels to really get moving.
You know, Dell's had a rough ride of it lately. It struggled to hold onto its personal computer market share. More people have been shifting to tablets and smartphones. You know, I talked with one analyst who said, you know, Dell kind of lost its way.
It was really this sort of cost -- it lost its way from its core, meaning its laptop and its PCs and it went on to try to make printers, even TVs. It kind of lost its way. And we certainly saw that in its stock price of late. It's really just been down in the dumps compared to where it used to be. You know, this analyst, Richard, equated Dell as the Apple of the 1990s.
But he said this move, if true, could be a good move for Michael Dell. It could let him, of course, be more creative. He said, "This could be Michael Dell's born-again moment," Richard.
QUEST: Alison Kosik in New York, one that we will watch very closely in the days ahead as that comes.
And Alison is quite right, of course. There's never any guarantee that these deals happen.
Alison, thank you.
Dell Computers say they refuse to speculate on market rumors of this nature. But, clearly, a share price up 10 percent, 12 percent, 14 percent, 16 percent at the opening of a session, that tells us that something is going on.
From busy share prices to busy airports and 2012 was the busiest year in history for London's Heathrow Airport. Almost 70 million passengers flew in and out of the U.K.'s biggest hub. And their destinations tell us a lot about the state of the global economy.
Heathrow is particularly important because it is the world's busiest - - the world's busiest international airport. Some like Atlanta, Beijing, Chicago have more passengers overall. But if you're talking about cross- border traffic, then it is London Heathrow. And what it shows, not surprisingly, is, for example, the BRIC countries.
The planes are flying more and more to Russia, to India and to Brazil. And not surprisingly -- look at Brazil. Traffic up 21.6 percent. The best BRIC nation, and it is getting more flights left and right.
But back to Heathrow, those are the regions that are growing that we can see -- not surprising. Again, it's in Southeast Asia. It is in parts of the Gulf and the Middle East and even parts of North Africa. And way over in Asia, in Japan, where, of course, you'll see certain numbers, services up 6.2 percent in East Asia.
Now that is because traffic has stabilized as a result since the tsunami. The Middle East, of course, is because of the Arab Spring and again shows the picture that where there is the growth, the airlines are starting to fly. And of course, the reverse of that is the south of Europe, where of course, Greece still prices down, flights down 7.3 percent; Italy off 7 percent; Portugal and Spain fall, too.
Putting it all together, I was joined by the CEO of Heathrow, Colin Matthews, who says, "Look at the map and look at where the planes are flying," and you can study the numbers and see what's happening in the economy.
(BEGIN VIDEO CLIP)
COLIN MATTHEWS, CEO, HEATHROW: Well, I think Heathrow does give a good picture of global economic activity. If a market is growing strongly, then the traffic to and from that market grows strongly.
So in total, if you look at our numbers, they're up a little bit. Obviously our capacity is constrained. So even relatively small increases, like the ones we're announcing today, are good news. And as you say, you can see trends within global economic activity within the numbers.
But let me say, the thing I'm most pleased about for the year is that our passenger scores have gone up, in terms of the quality of the experience they have here at Heathrow, that's not just about a great Olympic period, but it's about improvements we've made through the year.
QUEST: If we look at the numbers, the BRICs are up; Germany was up; North America was up. Those are all parts of the world where economies are growing and yet obviously southern Europe, the periphery was down.
I'm surprised at the nimbleness of the aviation and tourism world to be able to shift capacity quite so succinctly.
MATTHEWS: Well, airplanes move very quickly from one market for another. They're free to do so. Airlines can reallocate different aircraft onto different routes, different sizes, to adjust, as you say, very quickly to changes in economic circumstances.
So if you look at some of the more troubled economies in Europe, they were down; but France and Germany up a little bit. So net in total for us, European traffic just a fraction up compared to equivalent period last year. But not as strongly as the North Atlantic was up and then other markets in East Asia, elsewhere in Asia and Brazil, for instance, which was strongly up.
QUEST: And if we look to this year, because obviously, your company forecasters, one runway is a runway's length, but it doesn't really matter, you know, you put one plane down it, where do you expect more growth? Where would you like to see more growth on those runways going to which parts of the world?
MATTHEWS: Well, of course, we'd like to see growth to markets which are growing into the future. So we'd love to see more connections to China, mainland Chinese cities, which are growing very fast and which are developing routes around the world.
We want the best of those routes to be here to London so the U.K. economy can flourish. Trade with the U.K. can flourish. That'll be good for the U.K. and, of course, good for our business. So we want to see those routes develop equally. We've always had strings from Heathrow to North Atlantic, of course. We want that to continue to be strong.
We'd love to have more capacity which would allow us to provide more links. As it is, we make absolutely the best we can with every square centimeter of capacity we've got.
(END VIDEO CLIP)
QUEST: Colin Matthews, the CEO of Heathrow Airport, talking to me earlier.
After the break, the booming business of corporate Cupid. QUEST MEANS BUSINESS in love.
(BEGIN VIDEO CLIP)
QUEST (voice-over): The answer to today's "Currency Conundrum," which country issued this commemorative coin of time? The answer: Latvia. Its distinctive inner circle is made from niobium, which was first recognized as an element by the Latvian scientist, Heinrich Rosen (ph).
The other side of the coin features a rose and an inscription in his honor.
(END VIDEO CLIP)
QUEST: Now if you met your match on match.com and caught someone's eye on Plenty of Fish or find love on eHarmony, you are not alone. January is the time when people turn to the Internet to find a partner.
Online dating has not only become this huge industry, it's also become largely socially acceptable, at least by perhaps the younger generation. Isa Soares met two people who've tried it.
(BEGIN VIDEO CLIP)
TONY CONAGHAN, ONLINE DATER: The story of our life so far, isn't it?
ISA SOARES, CNN CORRESPONDENT (voice-over): The album is a reminder of how they met.
CONAGHAN: That's where we had our first meal.
SOARES (voice-over): Photo after photo of memories that recount their first meeting all of three months ago.
CHARLOTTE HOGG, ONLINE DATER: (Inaudible)?
CONAGHAN: Yes, that's me first present, wasn't it? Vulgar.
SOARES (voice-over): Charlotte and Tony met via dating website Lovestruck. For Tony, going online gave him flexibility.
CONAGHAN: I was an aircraft engineer and I'm going to do shift work at an airport. It was very hard for me to get the weekends off. So you kind of like fit into my lifestyle because I could actually meet people when it suited me.
SOARES (voice-over): Online they had similar interest. In the real world, however, there was no connection.
HOGG: I thought Tony was short and had a rather large nose and was going a little bit bald. (Inaudible) go, no, I'm not interested. And I had to be fair. (Inaudible) pictures that (inaudible) very favorable light. And obviously he was (inaudible) since I'd posted the pictures, I'd probably eaten quite a few chocolate bars and aged a bit.
SOARES (voice-over): That's the reality of online dating. But more and more of us are logging on with some sites around the world reporting a 350 percent increase in signups in the past two months.
BRYN SNELSON, MARKETING DIRECTOR, EHARMONY U.K.: If you're thinking of looking on for a relationship online, now's a great time to be doing it. At eHarmony, we've seen a four times' increase in singles coming to our site looking for a relationship.
SOARES: Last year, nearly 30 percent of all relationships in the E.U. were formed online. The British held the fort with an annual turnover of $280 million. But online dating sites aren't the only ones (inaudible) at the simple click of a mouse. I may not be looking for love. But singles here in the U.K. contribute $5.5 billion to the economy.
SOARES (voice-over): With any luck, Charlotte and Tony may not need to browse online dating sites again. But with a dress and a wedding still to come --
HOGG: What do you think?
SOARES (voice-over): -- there's plenty of love for the economy to go around -- Isa Soares, CNN, London.
(END VIDEO CLIP)
QUEST: And I've been reading some of your views on Twitter about that.
We'll get maybe -- if we've turned tonight, some of your views about whether you -- @RichardQuest, is it now a generational thing, those of us over 40 and 50 are slightly more -- not embarrassed, but slightly more reserved about saying whether we would do online dating? Those at the 20s and 30s are -- have no problem with it all the time.
All right. (Inaudible) hazardous air pollution is causing widespread disruption in China.
(BEGIN VIDEO CLIP)
QUEST (voice-over): Several flights to and from Beijing have been canceled and some of the city's factories and construction sites have agreed to either reduce work or stop entirely until the air clears.
Tom Sater's at the World Weather Center.
Why now, Tom? What's going on meteorologically?
TOM SATER, AMS METEOROLOGIST: Meteorologically --
QUEST: Yes, yes; you try spelling it.
SATER: It's actually a lot to do with the weather, Richard. You're absolutely right. But I've got good news. I think the pattern that has really been acting as a lid on a jar is going to break down. And we may actually see some stirring of the atmosphere, which could disperse this smog and this pollution.
Eastern, northeastern areas of China, you can see it here. We have a little storm system. It's weak in nature. It's not going to produce any rain or snowfall. I mean, it's pretty cold right now. But it is going to stir up the atmosphere. To give you an idea, weather is a big culprit with this. This is all smog you see here. The mountains, the topography really act like the lip of a jar.
And when you have high pressure and that air descends, it just traps everything. The winds are light; there's no stirring of the atmosphere. There's no blowing around of the pollutants. So that lid is tight. And as the days roll on and the longer high pressure hangs around, the pollutants build. And we've seen the worst of it, I think, over the weekend.
In fact, take a look at the numbers for you, again, anything above 500 they consider it beyond the levels, 500. On Saturday, we had levels near 900. The U.S. embassy on Sunday reported 720. At 3:00 am in the morning, Monday morning, it dropped down to 515 and I think it's getting better.
But the long- and short-term effects health wise, that's the big problem. Obviously, we've had disruption of travel and delays. Schools are closed as well.
But, Richard, you know, there's two CEOs that may be looking at global expansion, they're looking at Beijing, too, because if this problem continues, the long-term corrosion of those particles in the air can really do some damage to the infrastructure. But this is the latest 24-hour period. Typically at night, the winds are even lighter. I mean, they're not stirring up much during the day.
But we do have a filtered sunshine. And the number's at 515 (inaudible) 3:00 am, started to drop and look what happens here. We have now levels into the orange rate. It's still unhealthy for sensitive groups. But overall, it's improving and I think the reason for that really is going to have to do with this little frontal system.
Again, it's extremely dry front; it really doesn't matter. The weak winds will be replaced. And maybe we'll get improving numbers in the days ahead. Richard, I wouldn't -- I got to give you justice here and pay tribute to the little snowfall that dusted your fair city. There it is, a little bit of the white stuff. The radar showed it. It started out as some light snow, changed at times to a little mix.
We're still going to have some accumulation I think on the coast. But, again, it's not just in London. Paris, 0 degrees; snow is falling. I've got to show you this picture here, too. This is a live picture. Earthcam.com, if you look closely, you'll see a few dark specks kind of hit the screen here. Yes, it is snowing -- and there is it. It's snowing in London. (Inaudible) Paris right now.
You had a little bit of a break and it looks like there will be more. In fact, Paris, take a look at this. In the next, oh, 24-48 hours, maybe, 6.8 centimeters. Hope you enjoyed it today, Richard.
QUEST: Tom Sater with the -- well, we've got the snow; you've got the details about why. We thank you, Tom, for that.
When we come back after the break, we will put some more perspective on Dell Computers. The halt in trading that took place and the current state of Dell shares and what might be behind this (inaudible). In a moment, QUEST MEANS BUSINESS, good evening.
QUEST: Dell shares are soaring on the talk the computer firm's looking to go private. Maggie is in New York.
I was just saying to you, Maggie, in the break, this came out of -- it just shows you; you start your average Monday and the next thing you know, Dell shares are up 12 percent and trading's halted -- or was -- for five minutes.
MAGGIE LAKE, CNN CORRESPONDENT: That's right. It was briefly halted, Richard. And you're right. The Dell's specific news is a surprise. But I have to tell you, this is part of a trend that we talked about at the end of last year and that is the fact that PCs are in decline as more and more people move on to tablets and phones.
Last year was the first year that PCs declined for the year, purchases declined for the year in over a decade.
And Richard, before we get into it, I just want to tell you, I talked to Michael Dell just a couple of months ago when Microsoft launched Windows 8 and I asked him specifically about those who were saying that the PC's dead. Have a listen to what he said.
(BEGIN VIDEO CLIP)
MICHAEL DELL, CEO, DELL COMPUTERS: Now this year there will be about 400 million PCs sold. I remember hearing that when there were 100 million PCs sold a year. So they've been doing this for a while. So you know, that's been going -- there's been discussion of that for a long time. But there seem to be more and more PCs being sold.
There are about a billion and a half PCs in the world and so, you know, if you go out in the real world and look at how business is done, how people get, you know, productive work done, you see a lot of PCs. It's not to say there's not a role for smartphones and tablets. What really interesting is -- interesting, of course, about this announcement is now we have tablets that are also full PCs.
LAKE: Right. And this clearly is geared, this overhaul is geared to work across that, right/
Steve, I mean, what is your response to is the PC dead?
STEVE BALLMER, CEO, MICROSOFT: I'd say the PC's never been dead, it never will die. (Inaudible). It moves on. We started with desktops, for gosh sakes. And then, boom, PC gets reimagined in the big (inaudible). And then laptops and then light notebooks and then ultrabooks. And now we have PCs as tablets. And the number of form factors.
(END VIDEO CLIP)
QUEST: That was an announcement, of course, from earlier in the year, Maggie. And it's (inaudible) Ballmer when they announced the tablets. But, Maggie, fundamentally, why would -- why would Michael Dell, as owning 15 percent or so of the company, why would he want to take it private?
LAKE: Because he wants to redirect the company, despite those words. He understands the business is going someplace else. He has already been focusing more on services, on enterprise, kind of trying to redefine and in a similar way that IBM did. But maybe he wants to do it off the radar of Wall Street. Investors want quarter on quarter profits. Stocks -- Dell's stock lost a third of its value last year.
So it may be that he just wants more time to execute. He doesn't want to have to do it with the short-term pressures of being a public company. But we'll have to see. Again, this is not confirmed; it is just speculation at this point, Richard.
QUEST: Speculation and of course there's no guarantee it will happen. Maggie is in New York for us this evening.
While we're talking technology, whether it be Dell, Microsoft or Apple, Java has a bug and a patch isn't good enough. Well, when I heard about this -- you know me -- I almost -- I started to wonder what on Earth was happening. Anyway, join me in the superscreen, the nerve center.
Let's start with the basics. You all know, of course, many of you, that Java is the programming language. It's widely used. And it is used particularly because it is ambidextrous. It can be used -- it has a billion uses across multiple platforms, Windows, Mac and Linux, all can use it as well.
It's in everything from DVD players, mechanical -- medicinal machines, you name it, it's in all of them.
But the problem is -- the problem is that one doesn't want to work.
So the problem is that a flaw has been found. Users are advised -- have been advised to disable the software because apparently the flow in Java allows hackers into your computer and we all know what can happen after that.
Apparently this is in all versions according to the U.S. Department of Homeland Security and they say disable the Java. But Oracle has issued a patch and the patch can be found at Java.com. You can download it and it - - use it from the Oracle website.
Well, that should all be good enough and all nice, hunky-dory. Not so fast, young man, because Java says it will actually work, we don't -- well, rather, one expert says, "We don't dare to tell users that it's safe to enable Java again." So putting it simply, you have to decide whether to elect disable, take the risk or wait. "Profitable Moment" next.
QUEST: Tonight's "Profitable Romantic Moment": our report about online dating explains the revolution and shows just how it's taking place. Well, ask around your office. Anyone under 30, when it comes to online dating has either tried it, is going to try it or certainly knows someone who has tried it.
There's a new generation that's no longer embarrassed to be open about finding partners online. Maybe those of us over 50 are a little more reserved about going online. But remembering the newspaper back page ads that offered dating agencies, trying to match the unmatchable? Today it seems everyone is at it. And if the office gossip is anything to go by, they're having a good time, too.
And that's QUEST MEANS BUSINESS for tonight. I'm Richard Quest. Whatever you're up to in the hours ahead, I hope it's profitable.
(BEGIN VIDEO CLIP)
QUEST (voice-over): The news headlines at the top of the hour: French warplanes are pounding Islamist militant targets in Mali for the fourth straight day. The rebels have mounted a counteroffensive into the government controlled south. France says rebels have captured the town of Diabaly north of the capital.
This YouTube video purports to show the devastation in a Damascus suburb moments after a Syrian government airstrike. A new report from a major refugee agency says entire neighborhoods in Syria are decimated. Health care is difficult to find and sexual assault is rife.
This is outside the country; the civil war has created a staggering refugee crisis.
Shares in the Dell Computer Company are up nearly 12 percent on rumors the company is in talks to go private. The Nasdaq confirmed trading in the shares was halted for five minutes after they spiked more than 10 percent.
Livestrong has confirmed to CNN its founder, Lance Armstrong, has apologized to the charity's staff. It comes ahead of an interview with Oprah Winfrey, which it's rumored the disgraced cyclist may admit to doping.
(END VIDEO CLIP)
QUEST: Those are the stories. "AMANPOUR" is live from New York.