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QUEST MEANS BUSINESS
Daring Diamond Heist; Theft and Recovery of Diamonds; Value of Diamonds; US Markets Hit Five-Year Highs; Crunch Time in US; Simpson-Bowles Debt Plan; Euro Up, Yen Down; Sterling Slide; Currency Skirmish; Novartis Scraps Golden Goodbye
Aired February 19, 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: It's the great Belgium diamond robbery. Thieves pull off a daring heist in the heart of Brussels.
No U-turn at Novartis. The chairman slips his golden handcuffs.
And pouncing on the pound. Speculators may have sterling in their sights.
I'm Richard Quest. We have an hour together, and I mean business.
Good evening. We begin tonight with a story that is scarcely believable. In an age of tight airport security, perhaps it should be confined to the work of fiction, but tonight, it's a stunning reality. It was an audacious heist. It was completed with near military precision. Robbers have stolen $50 million worth of diamonds.
It was at Brussels Airport late on Monday. There were eight masked and heavily-armed thieves who broke through security fences and drove across the airport. They ten took gems from the hold of a regular passenger plane waiting to depart shortly thereafter.
The whole heist took less than three minutes. Our correspondent tonight is Dan Ravers -- Dan Rivers in Brussels. I can barely say your name, Dan. The extraordinary -- when you hear this story, you wonder how it happened.
DAN RIVERS, CNN SENIOR INTERNATIONAL CORRESPONDENT: It is quite remarkable, Richard, that they managed to pull this off in what should be a highly-secure airport area without a single shot being fired and made off with $50 million worth of diamonds, all within 11 minutes from the time that they cut their way through that perimeter fence to the time they drove back through that hole.
And it seems like the authorities here in Belgium haven't really got a clue as to who has carried this out. We know, as you say, it was carried out with real military precision. There must have been a degree of inside knowledge here. They knew exactly where they were going, they turned up, they were there at the air -- at the side of the airplane --
RIVERS: -- for about three minutes with sub-machine guns, and back away before anyone knew what had happened.
QUEST: Now, the police -- and I also believe, obviously, didn't know what happened. The pilot and those near the plane -- the passengers weren't on, but the pilot and co, they did face down the barrel of a gun, I believe. So -- how -- what -- the sheer nature and audacity. They knew what they wanted, they knew where it was, and they were prepared to brandish their gun to the pilot.
RIVERS: They were. And the interesting thing is, Richard, this isn't the first time that this has happened at Brussels Airport. It's happened a number of times. There is an enormous amount of diamonds that come through this airport every day, about $200 million worth, if you can believe that, every day.
This has happened here several times. Back in 2000, there was a plane that was hit, $9 million worth was stolen from a plane bound for Frankfurt. 2001, they opened fire on a truck, they didn't get anything. In 2005, they stole an undisclosed number of diamonds from a FedEx office.
Clearly there are questions for the authorities here about whether security needs to be tightened, especially around that perimeter.
QUEST: We're going to be talking about this in a moment, about the diamond business. Antwerp is not that far, and it's believed that that's where the source -- either the -- of these diamonds, the Antwerp connection, for want of a better phrase.
RIVERS: Absolutely. These diamonds were on their way from Antwerp to Zurich. Antwerp is the world's hub for polished diamonds. It's where everyone goes to if you're a trader in the gem business. They were on their way from Antwerp, only 20 minutes down the road from here.
It's amazing how much diamond exports contribute to the GDP here. Something I looked at is about 5 percent of Belgium's GDP is -- or exports, rather -- are derived from the exports of diamonds. It is a massive worldwide industry that is focused here in Belgium and particularly in Antwerp.
Now, though, these guys could have got anywhere in Europe. With the open borders here, they could have driven to Italy or further into Eastern Europe without having to be checked at all at any one of the number of border crossings.
QUEST: Dan Rivers who is in Brussels at the airport for us tonight. Dan, we thank you. In just a moment, we're going to put this into context of the industry. In New York is Donald Palmieri, the chairman of a gemstone fingerprinting company. We'll be talking to him in just one or two seconds while -- after I've given you some background.
Join me at the -- never mind -- the super screen. A sizzling screen. The gems that we are talking about are a mixture of the polished diamonds and the rough diamonds. Essentially, diamonds look like dirty and glassy gravel, and the sparkling beauty you admire through the shop window really comes after they've been polished and cut.
So, 88 million carats of diamond -- polished diamonds. If you take a look at these numbers: 7.4 million carats in 2012. Now, the thing about the polished diamond. The polished diamond can be cut and it can be certified and very much that is the way it is reviewed and looked at.
The rough diamond, which should be somewhere around there. It's so rough I can't -- it's not actually -- there you are. The rough diamond, 88 million carats in 2012. These, of course, are part of the Kimberley Process and these can be certified.
Let's talk more about this with our guest in New York. Sir, the diamonds that we're looking at and the diamonds that have been stolen on this occasion, firstly, are you surprised?
DONALD PALMIERI, CHAIRMAN, GEMPRINT: Well, we're only surprised that it took ten years before this happened again. But the great news is that no one was hurt.
QUEST: OK. So, no one was hurt, and that is a blessing, absolutely. That goes without saying. But the fact that this sort of attack could take place, and it's not been the first time that this has happened, did that surprise you?
PALMIERI: Well, I think that everyone is shocked at the precision with which this heist took place last night, and I can assure you that there will -- that every security system in place yesterday is being reviewed today and probably changed.
QUEST: Right. An inside job, or at least inside information?
PALMIERI: Well, somebody knew a lot, and this was carried out with military precision. And it is -- it's just absolutely amazing that they got away with this, or so far they got away with it.
But there's also another bright spot is that we have -- and I think you touched on it -- we have many ways of detecting --
PALMIERI: -- and of recovering diamonds.
QUEST: Let's talk about them, because I have here the unpolished and we have here the polished. Of the two diamonds there, which will be the easier to trace, or can both be relatively easily traced?
PALMIERI: It depends on when we actually find them, when we see them, and of course the details have not been released yet, which I'm a little bit surprised at because these types of materials tend to get fenced very quickly.
And so, what we want to prevent is the rough diamonds from getting cut and polished, because if that happens, then there will be no way to detect them from the original rough. Right now, we can assume that they've been photographed, they've been measured, they've been weighed, and they have been classified as to the quality of the rough diamond that it is.
In terms of -- go ahead.
QUEST: Well, yes, because this is the fascinating part, isn't it? What I'm trying to get and understand is, fundamentally, there are now however many diamonds, $50 million worth, we don't know actually how many physically number of diamonds there are.
There's all these diamonds out there. Somebody's going to try, to use your phrase, fence them, and ultimately somebody's got to try and buy and sell them.
PALMIERI: Right. What -- the message I can give those who are thinking about buying them is that they should understand that no matter what bargain price you may pay for them, if you're found with stolen diamonds, they're going to be taken from you by law enforcement and you're not going to be reimbursed.
So, you should be very, very careful. As a matter of fact, the best care is not to buy any diamonds that are suspect. For example, the rough diamonds will have a -- should have a Kimberly Process certificate.
PALMIERI: Which details at least the weight of the stones and basically you -- no one should buy a rough diamond without that.
QUEST: All right. Sir, we thank you for that for joining us, putting it in perspective. If you find some diamonds lying around, do let us know. And certainly if anybody offers you this lot, give me a call before you buy them.
The value of a diamond, be it polished or rough, is a fickle business. Diamond merchants often only source the most expensive diamonds if they have the guaranteed buyer. One of those merchants is Vashi Dominguez, the founder and chief executive of DiamondManufacturers.co.uk. He explained to me how it all works.
QUEST: There is a $20 bill. We know that has value, or does at the moment, because the Fed prints it and we all accept it.
VASHI DOMINGUEZ, FOUNDER AND CEO, DIAMONDMANUFACTURERS.CO.UK: Yes.
QUEST: You're telling me that that is worth 50,000 of these.
DOMINGUEZ: Absolutely, yes.
QUEST: I'm a complete and utter cynic. Over the years --
DOMINGUEZ: That's good.
QUEST: Over the years, I've heard too many people tell me that diamonds are an investment and they are not. Tell me why I'm wrong.
DOMINGUEZ: I think you're wrong because the diamond market outlook is looking very positive. Demand is becoming stronger every day, supplies are becoming shorter. If we take one to five-carat diamonds over the last five years, this produces an annual compound return of 11.6 percent.
QUEST: Let's be absolutely clear here. You are not talking about the diamond that is in somebody's -- most people's engagement or wedding ring.
DOMINGUEZ: It is those diamonds, but unfortunately, the diamonds that are in most people's engagement and wedding rings that have been purchased at the high premium price already, so although the value of those diamonds is increasing, those people are not going to be able to realize any return on their investment.
QUEST: So, which diamonds do increase in value?
DOMINGUEZ: The same diamonds, but you have to be able to buy them at true wholesale prices.
QUEST: So, somebody offers you a cheap diamond --
QUEST: -- ring the bell. After the break, President Obama's dire warning go Congress, forced spending cuts look, and there's no agreement on the way forward. You and me, QUEST MEANS BUSINESS.
QUEST: US stocks are higher, with the Dow and the S&P at five-year records. For the Dow, just 1 percent high of an all-time record. That was in October 2007. And 3 percent below the S&P's record.
Now, Alison Kosik is at the New York Stock Exchange with the details. Alison, they're going to get there eventually, it's just a question of when.
ALISON KOSIK, CNN BUSINESS CORRESPONDENT: It is a question of when, but it is -- you know what it is? It's all these catalysts that helped the Dow get to that record level. Right now, obviously, at 14,036.
And some of what's pushing stocks higher today, some M&A activity, those reports of a possible merger between Office Depot and Office Max, those stocks surging right now, Office Depot up more than 13 percent, Office Max up 22 percent because Wall Street likes M&A activity, Richard. It means companies are confident enough to spend money and take risks.
Also pushing stocks higher, there's some optimism here on Wall Street that a deal can get done in Congress about those automatic spending cuts, that even if it's temporary, the deal is like a band-aid measure, it's still something that would put off a possible hit to US GDP. Richard?
QUEST: Alison's in New York and will continue to watch markets until we go through those levels, and it's really just a question of who or when. Alison, we thank you for that.
Barack Obama says forced spending cuts will destroy jobs, reduce emergency services, and keep you waiting longer at the airport. The president called on Congress to agree a temporary fix before the planned cuts, which are due to come in on March the 1st.
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: If they can't get such a budget agreement done by next Friday, the day these harmful cuts begin to take effect, then at minimum, Congress should pass a smaller package of spending cuts and tax reforms that would prevent these harmful cuts, not to kick the can down the road, but to give them time to work together on a plan that finishes the job of deficit reduction in a sensible way.
(END VIDEO CLIP)
QUEST: Too longtime deficit hawks think they have the definitive answer. They are Alan Simpson and Erskine Bowles, and they're proposing a compromise plan that would involve rewriting the tax code and implementing deep new spending cuts.
The pair who headed up, originally, the president's fiscal commission, say they can reduce America's debt by $2.4 trillion, and they plan to do it by firstly tax reform, eliminating and minimizing deductions, reducing Medicare and health costs to health care providers and, crucially, adopting a less-generous and some say more accurate inflation formula. They're proposing to use something known as the Chained CPI. So, that's the way they are looking at things.
Now, to a Currency Conundrum for you. Today's question: in 2001, Niue, a self-governed island in New Zealand, released a commemorative coin with which cartoon character printed on it? Was it A, Bart Simpson? B, Fred Flintstone? C, Pikachu? We'll tell you the answer later in the program.
The rates in the markets: the euro's higher against the dollar, the yen's losing ground, the pound's weak against the greenback. Those are the rates --
QUEST: -- this is the break.
QUEST: Sterling has struck a seven-month low against the dollar, and at the super screen we'll talk about the reasons and the influences that have moved the currency. This is the pound versus the dollar.
Incidentally, by the way, you'll be well aware that we call this rate cable. It's known as cable, the pound versus the dollar, sterling and dollar, because it was the first traded rate under -- that was done by cable under the trans-Atlantic.
Take a look at the currency and you'll see exactly -- it's a fascinating story, this, of what happened. Now remember, this is the pound versus the dollar. The pound is -- we've got the first thing. On the 26th of November, Governor Mark Carney announced as the new Bank of England governor, OK?
So, we've got a new governor, and the belief is that he is prepared to tolerate elevated levels of inflation, more so than the current governor, Sir Mervyn King. So, we have the rate of the pound sterling getting as high as $1.6270, roughly.
But then, the decline, the managed -- well, arguably, managed decline -- continues over this perspective all the way down to the 16th of February, where the Bank of England signals higher inflation tolerance.
This is the idea that the bank is prepared, either through nominal GDP or through higher QE or simply not to intervene to reverse this trend because a weaker pound is better for UK exports, and therefore a competitive devaluation. The Bank of England's minutes out tomorrow expected to give more indication on this.
Now, hedging funds are looking for similarities with Japan. Japan's prime minister, of course, is denying much of this. But if you look at the way the dollar has risen and you imagine that as the opposite of the way the pound has fallen, you start to see the question about whether or not we are now moving into cases -- of currency wars.
It was an issue I discussed with Ian Bremmer, the president of the Eurasia Group, a global risk and research fund and consulting firm. He told me that even though it looks like there could be currency skirmishes, he's not buying it.
IAN BREMMER, PRESIDENT, EURASIA GROUP: In order to get a war, the big actors have be fighting, and they're not. The most important player out there that would need to engage would be China, and they're not focused on the Japanese yen and its rates or the euro, for that matter.
They're really focusing on the trade balance, and they're moving only very incrementally. Trade balance is moving in the right direction, the economy's increasing, they're trying to rebalance it. If anything, they're getting more worried about inflation, so they're not going to engage.
The Europeans are done. The -- we're not talking about the French, we're talking about the ECB, the European Central Bank. And so -- unless -- if they're not going to engage, then all of the countries out there -- they can talk all they want, but it takes two sides to have a fight. That -- we don't have that right now.
QUEST: Yes but -- well, you say you don't have it, but you do have vast easing and liquidity sloshing around, which in the fullness of time, when you've got the US Fed basically printing money at $85 billion a month on an unlimited basis for an indefinite period of time, eventually that is going to lead to the dollar's devaluation.
BREMMER: It may. It hasn't thus far. And one of the reasons it hasn't, of course, is because other currencies out there don't look more attractive. The US is growing in a way that other developed states are not. There are lots of reasons for that.
But the point is that you're looking at things at different periods of time. The Japanese devaluation is a different time than when the Europeans were engaged in creating all this liquidity. It was a different time than when the Americans originally were engaged in creating all this liquidity.
And a year ago, the Chinese would have been much more concerned. Now they're not.
BREMMER: A year ago, the Europeans might have responded in a tit-for- tat fashion. Today, the ECB is not responding in that manner --
QUEST: Well -- no, well -- hang on --
BREMMER: -- and so as a consequence --
QUEST: -- hang on, hang on, hang on. Not responding yet. But Mario Draghi at his press conference just last week, week before last, certainly made it clear that the euro exchange rate was on his radar. So what I suggest to you is that maybe the first, maybe not in a full-scale global currency war, but the skirmishes are well and truly underway.
BREMMER: I think you're going to see lots of skirmishes on the sidelines, but the major players will not be engaged in true, full-frontal battle on currency. They're -- everyone is looking out for themselves, but the interests are more aligned than non-aligned at this point.
QUEST: Ian Bremmer on the question of the competitive devaluation and whether sterling and the yen and whether actually we are now heading towards currency wars. It's a story we're going to follow very closely on QUEST MEANS BUSINESS.
QUEST: After the break, coming up, those golden handcuffs. The outgoing chairman of the Swiss drug maker Novartis turned down $78 million that was supposed to stop him working for rivals. There's anger in the Alps in a moment.
QUEST: 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.
The Tunisian prime minister Hamadi Jebali is resigning, he says because he's failed to form a new government. The country was plunged into political turmoil after the assassination of a prominent opposition leader. Tunisia was the birthplace of the Arab Spring.
Syrian activists say a Scud-type missile has destroyed an entire neighborhood on the eastern edge of Aleppo. Reports of the death toll range from at least 20 to as high as 90 people. Video posted online shows dozens of people scouring the rubble looking for survivors.
A bail hearing for the South African track star Oscar Pistorius will resume on Wednesday. Pistorius has been charged with premeditated murder after the shooting death of his girlfriend, Reeva Steenkamp. Pistorius says he loved his girlfriend deeply and never intended to kill her. He says he mistook her for a burglar.
A group of eight heavily-armed thieves has carried out the most daring of diamond heists at Brussels Airport. The robbers took advantage of a security breach and stole $50 million worth of polished and rough diamonds. The police say the theft took just a matter of moments to complete.
A new report from a US cyber security firm is painting an alarming picture of computer-hacking in China, where it says hackers are waging an extensive campaign of cyber espionage from a location near Shanghai, and that's being done with the support of the Chinese government.
The Swiss drug company Novartis has agreed to abandon a $78 million golden handcuff contract with the outgoing chairman Daniel Vasella. It was all part of a non-compete deal. The company had sparked widespread anger among shareholders.
Novartis had said they would pay him $13 million a year for six years to stop him working for rivals. Daniel Vasella said in a statement today - - there we go -- "I have understood that many people in Switzerland find the amount of compensation linked to a non-compete agreement unreasonably high." He goes onto say he'll now forgo payments linked to the contract.
Novartis holds its AGM on Friday. The Swiss public will get a chance to speak on it, too.
Jim Boulden is here.
JIM BOULDEN, CNN CORRESPONDENT: That's right.
QUEST: I know you're going to go into this in detail. But just to be clear, they were going to pay him $13 million a year.
QUEST: Even though he must have earned millions -- well, (inaudible).
BOULDEN: Because he's retiring, but they didn't want him to go to GSK; they didn't want him to go to anybody else. So they said, we're going to pay you not to work. Ultimate retirement plan isn't it, really?
Well, remember, Daniel Vasella is the chairman until Friday's AGM. And his previous salaries have already caused problems for him, because many people say he made too much money. Last year, he earned $14.5 million as chairman and CEO.
However, he has been at this company for a very long time and is the man that we knew as the head of Novartis, putting this company together. And he has been compensated well for the years that he has been at Novartis.
Now this comes at exactly the same time that Switzerland gears up for a referendum on corporate pay. That'll take place on March 3rd. The Swiss will vote over whether to give shareholders a stronger say in executive compensation for companies based in Switzerland. Right now, it looks like it's possibly going to pass, but we'll find out on March 3rd.
Meanwhile, the European Union is talking with the European parliament about moves to cap bankers' bonuses. And the CBI here in the U.K. says, well, that move is worrying. Why? Well, they say, do you start with bankers' bonuses? It'll move into businesses. And Richard, they say, aren't bonuses around to reward people's behavior?
QUEST: The problem here, though, Jim, is that no matter the merit of a banker who's done -- who's done well and got a bonus, when you get the sort of Vasella case, you know, that becomes a lightning rod and a touchstone.
BOULDEN: It does in a place like Switzerland, where they talk about fairness when it comes to compensation, where they don't like to see people standing out too much. Everybody is supposed to be making money. Yes, Vasella made a lot of money.
But the thought that he would actually be paid not to work for competitor really pushed people over the edge on this one. And I think it's going to affect the referendum as well, because now people see --
BOULDEN: -- what could happen. This could actually change the outcome.
QUEST: Finally, Jim, what was he going to do with the money?
BOULDEN: He was going to give the majority of it to charity. And in fact, it isn't Vasella who's going to lose out on this money, frankly; it's going to be whatever charity he had decided to give it to. Now he won't have that money to give to that charity.
QUEST: Right. So how much would you want not to go to the compensation?
BOULDEN: They call it gardening leave here, don't they? You're not allowed to work for six months for a competitor for instance, but six years?
QUEST: Six years.
BOULDEN: That's --
QUEST: Jim, I --
BOULDEN: We'll never get that one, Richard.
QUEST: Nice to see you.
How much would you -- how much would you want not to go to the competitor in your business? @RichardQuest, $13 million not to go and work for the competition.
On a major trade delegation, the prime minister of the U.K., David Cameron, is drumming up business in New Delhi. In just a moment, one of India's top CEOs on why he thinks Cameron has picked the right place to do it.
(BEGIN VIDEO CLIP)
QUEST (voice-over): The answer to tonight's "Currency Conundrum," which of these cartoon characters did Niue, a self-governing island in New Zealand, print on a commemorative coin in 2001?
And the answer: it's C, Pikachu, a character from the popular children's serial program on and the coins are legal tender. You can spend them, even if it's just on an ice cream. But apparently they're worth a lot more now, since they are collector's items.
(END VIDEO CLIP)
QUEST: The British prime minister, David Cameron, has suffered an embarrassing public challenge by his Indian counterpart during a trade visit to the country.
The Indian prime minister, Manmohan Singh, urged Mr. Cameron to provide British help for a corruption investigation that involves a defense firm with major British interests. India suspended the contract to buy 12 helicopters after arrests at the Anglo-Italian company, AgustaWestland. David Cameron responded.
(BEGIN VIDEO CLIP)
DAVID CAMERON, PRIME MINISTER, GREAT BRITAIN: In terms of AgustaWestland, as the prime minister has said, we will respond to any requests for information. I'm glad that the Italian authorities are looking into this issue in detail as Finmeccanica is an Italian company, the parent company of AgustaWestland.
But let me make absolutely clear that in Britain, we had introduced anti-bribery legislation that is probably the strongest anywhere in the world. And we will root out any problems of bribery or corruption wherever they appear and whenever they appear.
(END VIDEO CLIP)
QUEST: The prime minister there, referring to the U.K. bribery act.
Sarojini Damodaran Shibulal is the chief executive of the Bangalore- based I.T. company, Infosys. It'll start trading on the New York Stock Exchange, NYSE Euronext, tomorrow. In an interesting development, he will ring the bell in Europe and London. And then he'll ring the closing bell in New York. He told me why he thinks India's such an attractive market for foreign investors.
(BEGIN VIDEO CLIP)
SAROJINI DAMODARAN SHIBULAL, CEO, INFOSYS: First of all, I see that a tremendous potential. There are many, many reasons for it. If you look at the last many years, you completely see that India is a modernizing economic power. When I was growing up, India had 13 million middle class. Today, that number is 300 million -- 300 million middle class people who are there as consumers.
So there's a huge market which is evolving. That's number one.
Number two, India produces a million engineers a year, English- speaking. That is the largest talent pool that you can get English- speaking talent pool. And let me give you one more point. It is also becoming the center of innovation. You look at --
SHIBULAL: -- $1 ECG machine which is being built, which will -- which will completely change the way things happen.
QUEST: With all those statistics, I only have one other statistic, or one other fact to give you.
Why is the expenditure and why is the investment in infrastructure so poor?
SHIBULAL: First of all, the large country. One can't --
QUEST: You can't have it both ways. You can't have a million engineers --
SHIBULAL: No, that's not true.
QUEST: -- and not spend --
SHIBULAL: Actually, that is a point that -- that is the point of emerging economies. These are economies of contradictions. India is a country of contradiction. On one side, you product a million engineers; on the other side, you have a million children who are not in school. You have health care interested urban India, 70 percent of it.
But 70 percent of the people are enrolled in it. That is where the potential is because in our countries of contradictions, they will coexist for a while. It will not be over tomorrow. You are going to have infrastructure issues. But you are going to have growth.
QUEST: Do you get the feeling that many Western countries develop -- other developed countries -- are just basically looking at India, and they believe that there is this gold rush?
SHIBULAL: What (inaudible) India needs is affordable, durable and leaner products. It is not about creating a bad quality product. It is about creating a product which is (inaudible) into the market.
QUEST: So what does India want from outside investment?
SHIBULAL: I think this is not some -- one side won or not won, because it's about actually creating progress on both sides. There is an opportunity for both sides, right, whether it is U.K. in India, U.S. in India, whichever it is, because India offers (inaudible) market. It (inaudible). It creates innovation.
On the other front, it gives an opportunity for other countries to sell their products and solutions as long as it is -- it is (inaudible) to the market.
QUEST: Tomorrow you are starting trading of your company on NYSE Euronext. And then in London you're -- so you're going to start the trading in Europe. And then you're going to hoof it on a plane and get to the other side of the Atlantic and close the trading in New York.
SHIBULAL: Yes, that's true. (Inaudible) in line with our global philosophy of building a global brand. Over the last many years, we have focused on building a global brand. So for example, we were the first Indian company to be listed on Nasdaq many years back, the first Indian company.
Now that gives enormous (ph) brand in the U.S. Now we are moved to NYSE and through NYSE, we are listing in London and in Paris tomorrow. Tomorrow morning, at 8 o'clock London time, it will start trading in Euronext.
(END VIDEO CLIP)
QUEST: Will he make it? Start in London at 8:00; he'll then catch the 10 or 11 o'clock to New York and be there in time for the closing bell. We'll let you know if he's on his way.
Europe's strongest economy is rebounding. Never mind India. Let's talk about Germany. German investor sentiment surged to levels not seen for almost three years. It's the ZEW February Survey. And, look, it's up 16.7, 48.2. The market's expecting Germany to continue to pick up this year. Wind the boxes (ph).
The OECD, Organization for Economic Cooperation and Development, the developed world grouping shows a 4th quarter contraction. Now this is hardly surprising, if you bear in mind OECD members include the E.U., which, of course, you'll remember, saw the appalling figures on Q4, and the U.S., which also was negative on an annualized basis.
Put it all together, not a surprise that GDP fell by 0.2 of a percentage point in the OECD countries. Wind the clock and you see all that didn't really take a toll on the markets. They are enjoying a resurgence, a bit of a bump possession. The CAC 40, the best of the session, 1.8 percent. (Inaudible) was up nearly 6 percent as it announced it was cutting 900 jobs in Europe.
Iberia, the Spanish airline, part of IAG, International Airline Group, has been forced to cancel flights for a second day as workers continue to strike. Cabin crew, ground staff, maintenance workers are protesting against the plans to lose nearly 4,000 jobs. IAG, which owns Iberia and British Airways announced the job cuts last week and says it's still open to talks with the unions.
So you don't need me to remind you about the awful state of employment in Spain, where unemployment is twice the E.U. average. Amongst the young, more than 55 percent, one in two are out of work. So not surprisingly, this week, we are focusing on the grassroots movement. It's called Los Indignados. It has no formal structure, no clear leaders and no official spokesperson.
The protesters say they are indignant at the way people are making sacrifices in the name of austerity. So today, the 19-year-old student, a musician; his name is Alex Alvarez Cachero.
(BEGIN VIDEO CLIP)
ALEX ALVAREZ CACHERO, MUSICIAN (from captions): What we look for here is to live with dignity and be in charge of our own lives, which is very important.
What I liked about this is that it is not a movement with leaders. This is an open assembly. Here you come, you speak, proposals are made. You debate with people and it helps you socialize.
UNIDENTIFIED MALE: There's an hour and 15 minutes left to organize a demonstration which, in addition, has been convened every day.
CACHERO: Looking at the problems and sharing solutions improves your own life and the lives of others.
UNIDENTIFIED MALE: It's just that the political parties aren't able to make decisions against their own interests.
UNIDENTIFIED MALE: But we are denouncing many other things. It would be good to organize a demonstration taking advantage of the momentum and make it bigger.
GROUP (from captions): They call it democracy, but it's not.
UNIDENTIFIED FEMALE (from captions): Illegal gathering? It's not. And I don't have the money to pay the fine.
CACHERO: It's a shame that in the city we live looking at each other's faces without getting to know each other. Because that, in the end, makes us very empty.
GROUP (from captions): Thieves! Thieves!
CACHERO (from captions): Patience is a virtue and if we don't know how to apply it to the people we are supposed to defend, we would not be worth of doing all this.
GROUP (from captions): Resign! Resign! Resign! Resign!
CACHERO (from captions): I don't know how far to go to get the government's attention in this country. We don't know what else we can do.
CACHERO (from captions): I'm unemployed and I have never applied for jobless benefits. I don't want to get paid by the government and I think I can earn my life with dignity and with my own work. So I do not apply for benefits. I won't do it. My youth is that I still believe things can change. My youth is that when I go out on the street, I see a world of opportunities and I can grab them.
That, is my youth.
(END VIDEO CLIP)
QUEST: We'll be focusing more on the hardship of Spain as the week moves forward.
Coming up next, it's an Oscar-nominated film shot partially on an iPhone. The app behind "Searching for Sugar Man," (inaudible).
QUEST: The Oscars, they are a-coming, and this is a case of from handset to Hollywood. The Oscar-nominated film, "Searching for Sugar Man" was partially shot on an iPhone and then edited using an app that cost the director $1. I jest not. Nischelle Turner reports from Hollywood.
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If ever there is an air of intrigue and mystery around a pop artist, it is around the artist known as Rodriguez.
NISCHELLE TURNER, CNN CORRESPONDENT (voice-over): "Searching for Sugar Man" is one of the hottest documentaries of the year, racking up awards worldwide. Now it's in the running for an Academy Award. Director Malik Bendjelloul admits --
MALIK BENDJELLOUL, DIRECTOR: I was being cool times. So far, so good.
TURNER (voice-over): The film tells the unusual story of Rodriguez, a singer from Detroit, who never gained fame in America but became somehow a legend in South Africa.
And I was like, wow, this is the best story I ever heard in my life.
TURNER (voice-over): And the story behind the movie? Pretty remarkable, too. It was shot partly on an iPhone. Bendjelloul told us that was a matter of necessity.
BENDJELLOUL: I started shooting this film with a Super 8 camera, like with film, which is pretty expensive stuff. And I completely ran out of money. I really just had very few stuff. It was just a very few shots left. But I needed those shots. And one day I realized that there was this $1 app. It was on my iPhone. And I tried it, and it looked basically the same as the real stuff.
So then the film was finished with a smartphone.
TURNER: The app Bendjelloul used is this one. It's called 8mm, created by the company Nexvio. What Instagram does for photos, this application essentially does for video, turns everything retro instantly. Check this out. So this is me being shot with normal video. And this is me being shot with the 8mm application.
TURNER (voice-over): The director showed us frame by frame where he used the app. One example, this aerial sequence.
BENDJELLOUL: This is actually with -- out of a flight window with this. It likes real film. It really does. You can't tell the difference.
TURNER (voice-over): Bendjelloul told us he also used the app to shoot video off a computer screen. His purpose was to get that '70s feel, the time when his subject, Rodriguez, was actively making music.
BENDJELLOUL: I filmed this with a normal camera. And this is Rodriguez's reflection on this wall in his house. And then I shot the -- actually, the computer, just like this, the computer screen like that. So I got the Super 8 feeling.
TURNER (voice-over): Tracking down the creator of the app proved a challenge worthy of a movie about tracking down a mystery musician. We eventually located Nexvio's president, Hongyu Chi, in northeastern China where he was visiting. By Skype, he shared his reaction to finding out his app was used in an Oscar-nominated film.
HONGYU CHI, APP DEVELOPER: It's crazy. We are pretty surreal (ph).
TURNER (voice-over): Hearing about his app's connection to the film inspired Hongyu to watch "Searching for Sugar Man."
TURNER: And what did you think?
HONGYU: It's quite a touching film, I think. I never thought that a documentary can be so touching.
TURNER (voice-over): Hongyu is a fan of the movie, but Bendjelloul is a fan of the app that helped put him in the thick of the Oscar race -- Nischelle Turner, CNN, Hollywood.
QUEST: Absolutely amazing story, all that for a $1 app.
You'll get just -- (inaudible) -- Jenny Harrison, I was going to say all that for a $1 app, but hopefully, you've got a little bit more; it's probably cost more than $1.
JENNY HARRISON, CNN METEOROLOGIST: What? Yes. You talking about the weather? Yes. Good value for money. Is that what you want? Yes.
QUEST: Excellent money (ph). But, listen, all I do know is that you've -- that, according to you, I'm going to need me thermals sooner rather than later.
HARRISON: Well, you know, I'm hoping you've not packed them away just yet, because --
HARRISON: -- it's not going to be, you know, bitterly, bitterly cold, but that cold air is back on its way. You've had a bit of a mild spell for the last few days across the northwest and the southwest of Europe. It's still going to stay pretty good across the southwest. Doesn't mean exactly fine and dry the last few hours. Quite a bit of cloud.
But you can feel that cloud spilling down from the north. It's not just cloud. Look at all that snow that's been streaming across Germany in the last few hours. And the system responsible is going to bring plenty of that and the cold air with it, so much so that, look at this, we could be seeing maybe 6 cm of snow in Munich.
Now just take a note of that, because that might mean Wednesday morning some very lengthy delays at the airport. And with all the snow coming down, it also means images like this will be wiped clean once again. The snow will come down and fill in those footprints.
This is the system, this area of low pressure. So it's spreading from the north, bringing the snow but at the same time, bringing that cold air. So it'll filter right the way across to the northwest, through much of France as well.
This is showing you the temperature trends over the next couple of days. So you'll notice all this blue and the purple sort of shading, showing you where the temperatures are going to be either back to average or probably a little bit below average. The snow generally across the central and eastern areas, there is rain out west, but it doesn't make a huge amount of headway.
And the snow, as I say, very widespread. No areas seeing really high amounts. But it's just covering a big area. Munich, as I say, in the morning, be prepared, maybe 90-minute delays at the airport there.
And you might see a few flurries in the overnight hours Wednesday into Thursday as far south as Milan. Temperatures, 4 Celsius in London, 5 in Paris, freezing in Berlin on Wednesday and that, of course, is where you will see more snow.
Now across in the U.S., the last few hours we have seen rain and snow working its way up the Eastern Sea Bird -- that's seaboard. Sea bird; the sea birds are there as well along the Eastern Seaboard. But this snow is in that colder air in the northeast. Now the delays have been sort of picking up apace across the U.S.
You can see that the ground stop right now in Philadelphia. But this system is actually going to clear pretty well. It's this one; this is the one we're really following over the next few days, very heavy snow, strong winds and at the same time rain in the south. So the warnings are already posted. Look at this, huge area here under a winter storm watch.
And the temperatures, well, they are very low at the moment, -19 Celsius. That is how it feels in Chicago, that cold air in the wake of that system. But all of this coming in from the south and the west, heavy snow, blizzard conditions. And then eventually we could well see thunderstorms across the south, flooding rains. But Wednesday, a mild day in the south at 10, -4 at best in Chicago, Richard.
QUEST: By jingo, there's chills out there.
Jenny Harrison, she's at the World Weather Center with seagulls or sea birds or --
HARRISON: (Inaudible), sea birds.
QUEST: -- yes, sea birds. See you tomorrow.
A "Profitable Moment" is next.
QUEST: I promise you if I said it was a real story, you'd say it was a movie. But it is true and there will be questions tonight in Brussels, how a $50 million worth of diamonds disappeared in the space of a matter of minutes.
No trade gone wrong, an audacious robbery got altogether right. It remains extraordinary in 2013, a gang of masked, heavily armed men can penetrate supposedly impenetrable security at the airport perimeter fence, go right up to a parked plane with passengers waiting to depart and get away with a haul of diamonds.
No shots were fired; no need to blow any doors off. The gang had prior knowledge -- that much seems obvious about the transaction and what the diamonds were. And they also engaged in a bit of crude dressing up, pretending to be policemen to cause confusion.
And that is 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.
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QUEST (voice-over): The headlines at the top of hour on CNN:
The Tunisian prime minister, Hamadi Jebali, is resigning because he says he's failed to form a new government. The country was recently plunged into political turmoil after the assassination of a prominent opposition leader. Tunisia was the birthplace of the Arab Spring.
Syrian activists say a Scud-type missile has destroyed an entire neighborhood on the eastern edge of Aleppo. Reports of the death toll range from at least 20 people to as high as 90. Video posted online shows dozens of people scouring the rubble, searching desperately for survivors.
A bail hearing for the South African track star Oscar Pistorius will resume on Wednesday. Pistorius has been charged with premeditated murder after the shooting death of his girlfriend, Reeva Steenkamp. He says he loved his girlfriend deeply and never intended to kill her and mistook her for a burglar.
A group of eight heavily armed thieves has carried out a daring diamond heist at Brussels Airport. The robbers took advantage of a security breach and stole $50 million worth of polished and rough diamonds. The police say the theft took just moments to complete.
(END VIDEO CLIP)
QUEST: You are up to date with the news headlines. Now to New York, "AMANPOUR" is live.