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QUEST MEANS BUSINESS
Breathing Room for Portugal, Ireland; Cyprus's Ballooning Bailout; Europe's Bailouts; European Markets Down; EU Family Gathering; UK and the EU; Dollar Rallying; Viral Bandwagons; Comparing Bitcoin to US Dollar
Aired April 12, 2013 - 14:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
NINA DOS SANTOS, HOST: Reworking the rescue plan. Eurozone finance ministers tweak the bailouts to Ireland and Portugal.
A family affair. David Cameron takes the wife and kids to meet Angela Merkel.
And Psy and the Wizard of Oz. Both are headed for chart success for some very, very different reasons. We'll tell you why.
Hello, I'm Nina Dos Santos in for Richard Quest, and this is QUEST MEANS BUSINESS.
Good evening. Europe's finance ministers are taking the pressure off of Portugal and Ireland. At a meeting in Dublin, the ministers agreed to give the countries an extra seven years to pay back their bailout loans.
Even IMF officials have been ruling out contributing more money to Cyprus's bailout, though. On Thursday, Cyprus said that it would need $30 billion instead of a previously-stated $22 billion. European Commission president -- vice-president Olli Rehn says that the numbers haven't really changed.
(BEGIN VIDEO CLIP)
OLLI REHN, VICE PRESIDENT, EUROPEAN COMMISSION: The confusion is coming from the fact that two entirely different sets of figures are being compared. One net, and one gross. One based on a set of assumptions from several months ago and the other taking into account the most recent decisions. In other words, people have been comparing apples with pears and coming up with oranges.
(END VIDEO CLIP)
DOS SANTOS: Very colorful analogy there from Olli Rehn. The eurogroup president, Jeroen Dijsselbloem, says that Ireland is a living example that adjustment programs do actually work.
Let's remind you that Ireland successfully returned to the bond markets this year, managing to wean itself off of the bailout funds, which will run out in the coming months.
Portugal, though, is another country that still has some problems years on. Just last week, its constitutional court rejected some of the spending cuts attached to its own bailout. The government as such will now present new austerity measures, and those should be tabled next week.
Let's go back to Cyprus, because its bailout plan still needs to be approved by several eurozone states. Cyprus has agreed to sell the bulk of its gold reserves to contribute to the rescue package so far. That in turn will raise more than $520 million.
For some, though, it's not a surprise that countries like Cyprus will see their bailout bills swelling. Speaking on this program last month, the former Bundesbank president Axel Weber said that he -- shared his views why he thought Cyprus would be back for more cash after this.
(BEGIN VIDEO CLIP)
AXEL WEBER, FORMER PRESIDENT, BUNDESBANK: Like every rescue we've seen in the past, I'm pretty sure this is just a first round of dealing with the issue. They'll see what will happen, and what will happen is three things. There will be a knee-jerk recession in Cyprus as a result of this. Banks will delever at brute force, and you will see a rippling effect throughout the economy.
Whether that will increase the bill, and some ministers like Mr. Schauble have already raised the question at the negotiations whether actually the cost of this bailout are increasing, and my expectation is, looking at previous bailouts, it won't be the last discussion we have.
(END VIDEO CLIP)
DOS SANTOS: Axel Weber, there, former Bundesbank head. Julia Coronado is the chief North American economist at BNP Paribas. Earlier today, she told me that it's clear that the bailout concerns stretch far beyond islands like Cyprus.
JULIA CORONADO, CHIEF ECONOMIST FOR NORTH AMERICA, BNP PARIBAS: Well, again, Cyprus in and of itself is not a worry, the numbers we're talking about are not that large, but it's the reminder of the ongoing issues that are yet to be resolved and how complicated these issues are.
And we know there's a lot of other issues, not just Cyprus. There's many other countries that were facing difficult negotiations around bailout packages, so the road stretches long before us, and that's a worry.
DOS SANTOS: And it seems as though countries, even if they are small, like Cyprus, are basically getting the message you're almost on your own, even if you are inside the eurozone club. You've got to stump up the extra cash yourselves. Where are they going to find it from?
CORONADO: Well, and that's part of the worry, that's part of the ripple effect from Cyprus is that there's going to be as much bail-in, or there's going to be some bail-in that comes with a bailout and how that pain is spread in each country is going to be different. And so that makes people nervous in some of the larger countries.
DOS SANTOS: But in the meantime, Italy and Spain haven't had a bailout. There's two other countries called Portugal and Ireland that have had bailouts, and people are now expecting, in light of what's going on, that they could need a second bailout. Do you think that that realistically could be on the cards?
CORONADO: For Portugal and Ireland, there is a certain amount of willingness to work with them as long as they are moving forward and some of the structural reforms.
DOS SANTOS: Do you think, though, that there is a risk that we could see haircuts imposed upon creditors going forward for countries like Portugal or, indeed, raiding of savings accounts in Spain?
CORONADO: Well, I don't think those are realistic, front-burner options for either case, but they are a risk that people do worry about. I think that it's well understood what a haircut on deposits in Spain would do.
And in fact the structure of Cyprus is very, very, very different from the -- from what's going on in Spain. So, if there was bail-in, it wouldn't take the form, most likely, of a haircut on deposits.
DOS SANTOS: The "Wall Street Journal" has called this eurozone bailout club, if you like, "Hotel California." You can check in, but you can never actually leave. Would you say that that's a fair assessment, and where are we headed with that?
CORONADO: It's very poetic and probably pretty fair. Clearly, the problems are not solved, and a lot of the reforms that have been promised, the oversight of the banking sector in Europe, perhaps more fiscal unity, more -- in a more formalized way, all of these things lie well ahead of us. So, I don't know if we'll never leave the Hotel Europe, but it's going to be a long stay.
DOS SANTOS: Well, you know what you get after a long stay? A pretty big bill as well, don't you? Let's have a look at how the stock markets have been reacting to all this news on the final trading session of the week.
Cyprus's main stock index is actually one of the worst performers of the day in Europe this Friday, surprise, surprise. As you can see on the chart behind me, it fell around about two and a quarter of one percent. But elsewhere across the rest of the eurozone, we saw some pretty steep falls as well, eclipsing some of the euphoria that we'd seen earlier on in the week.
We had the Xetra DAX down by one and two thirds of one percent. One of the big sectors that fell in light of all of these concerns is the banking sector. We saw a number of the big banking groups, like Deutsche Bank, listed over there on the Xetra DAX, down around about 3.6 percent. Societe Generale, the French bank listed in Paris, that went down just shy of 3 percent.
And I should point out, though, that despite the kind of loss on a Friday closed basis for these markets, a number of these indices -- in fact, all of them -- are actually up over the course of the week as a whole, which is something of a good note.
Straight ahead here on QUEST MEANS BUSINESS, fun for all the family. David Cameron meets Angela Merkel, and he brings along his wife and kids. Plus, uncovered. The viral video controversy. Why Psy could soon be stripped of his title of being the most talked-about man online.
DOS SANTOS: Welcome back. The leaders of Britain and Germany are getting together to sort out a few differences within the European family, so to speak. The British prime minister is visiting his German counterpart, Angela Merkel, at her country residence. And in an unusual move for Mr. Cameron, well, he's decided to bring along his wife and children with him.
The German chancellor's husband is also there. This is the first substantial meeting we've seen between the two leaders since Mr. Cameron committed to, as you may remember, holding an in-out referendum on Britain's membership of the European Union.
The cozy arrangements for this meeting may suggest that the German leader is now looking to try and build bridges. The usually Berlin-based Fred Pleitgen is with me in my London studio today. So, it's great to have your perspective on this, Fred, because we never see Angela Merkel's husband --
FREDERIK PLEITGEN, CNN INTERNATIONAL CORRESPONDENT: Yes.
DOS SANTOS: -- out in public. We see Samantha Cameron and the children more often, but what are we supposed to read into this?
PLEITGEN: Well, I think that it shows how important this meeting is to Angela Merkel. And you're absolutely right, Joachim Sauer, you have to realize this man didn't even attend Angela Merkel's inauguration in 2005. So, he's someone who, indeed, is never in public.
And for her to do this really is a break from the norm and it shows how important this meeting is to her, to try and get a sort of family atmosphere going. She is someone who can be quite engaging, but certainly someone who rarely ever puts her husband in the public eye.
This is not the first time, however, something like this has happened. I've read up, and apparently Helmut Kohl tried to do the same thing with Margaret Thatcher. In the 1980s, he invited her over to his home in Oggersheim, which he didn't it very well because he served her pig's stomach, which I don't think she liked very much.
DOS SANTOS: Oh, gosh, that could have been behind some of her difficult positions on the European Union --
DOS SANTOS: -- which David Cameron is trying to --
PLEITGEN: Gave her indigestion, didn't it?
DOS SANTOS: Yes, the bill certainly did, some might have said. Let's talk about he UK's position and how Germany views it. Because obviously, presumably, Germany must have been the country that was the most roiled by David Cameron's in-out referendum.
PLEITGEN: Yes. And a lot of that has to do with the fact that, of course, David Cameron is asking for more flexibility in the European Union, less European Union in a lot of national decisions. And if you recall at the outset of the economic crisis in the EU, what Angela Merkel was saying, we need more EU and not less.
At the same time, I think Angela Merkel, however, has realized that the European Union without Britain would not function. It wouldn't be -- it wouldn't be good for Germany, because it would be Germany on the one hand, this very strong country, a few other smaller countries, but then a lot of countries in the south. It's very, very difficult for the Germans to balance that.
DOS SANTOS: If you look at the economics of Germany and the UK and the political landscape we're dealing with now, well, both of these two leaders have to start looking domestically towards their domestic politics --
PLEITGEN: Yes. Yes, they do.
DOS SANTOS: -- but they still have to serve the international constituency of the eurozone, which is by no means out of the woods, and also their economy's contracting.
PLEITGEN: Yes. They certainly both have difficulty, and certainly it seems as though for the two of them, it is better to work together. Angela Merkel -- you're absolutely right. At this point in time, you can see that she's looking more and more inward.
I think the first time that you really saw that was when the Cyprus bailout, when the Germans all of a sudden had this very strong stand -- very strong and staunch stance on the whole matter.
And they said we're willing to go this far and no further, and we're not going to be -- I wouldn't say bullied into anything. You can't really be bullied by Cyprus, can you? But we're not going to be forced into anything.
So, you're absolutely right. The positions aren't that far apart that these two leaders have, and the paths that, at this point, they believe they have to go to win reelection are very similar.
DOS SANTOS: Fred Pleitgen, who's usually based in Berlin, thank you every so much for that, bringing us that insight there into that interesting meeting between David Cameron and Mrs. Merkel.
Time now for a Currency Conundrum for you out there. The US Mint has launched a competition to design a commemorative coin for the National Baseball Hall of Fame. What would be so unique about this item?
Would it be A, that the coin will be shaped like a baseball? Well, that could be difficult. Would it be B, that it could feature a large baseball, or could it be also that it could be used as a -- at baseball games. That could be an interesting one. We'll have the answer for you later on in the program.
Well, speaking of currencies, the US dollar is actually rallying against the British pound and the single currency, the euro. We've got weak US retail sales figures boosting the bet that the Fed could now continue its program of quantitative easing, despite the fact that the minutes that were released recently seemed to indicate it could be cooling off on that.
The yen is also on the way up. It's up nearly two-thirds of one percent against the US dollar. We'll be back after this.
DOS SANTOS: Two songs will be unleashed to the world this weekend, driven largely by some pretty important social media campaigns. The Korean rapper, Psy, will be performing his new song tomorrow, eagerly anticipated. It'll be streamed on the web and it's called "Gentlemen." Let's actually have a listen.
(BEGIN VIDEO CLIP)
(MUSIC - "GENTLEMEN" BY PSY)
(END VIDEO CLIP)
DOS SANTOS: As we all know, that was the follow-up to "Gangnam Style." Who can forget that one, which had so many, so many followers. Let's have a listen.
(BEGIN VIDEO CLIP)
(MUSIC - "GANGNAM STYLE" BY PSY)
(END VIDEO CLIP)
DOS SANTOS: Funky stuff. Well, this video actually had 1.5 billion views on YouTube, 50,000 fans are expected to watch Saturday's comeback performance by the South Korean rap artist.
Now, here's another interesting one. Another viral song which is a little bit more controversial. "Ding Dong" was sent into the charts as an irreverent response to Margaret Thatcher's death, fueled by a pretty intense Facebook campaign. The tune came, of course, from "The Wizard of Oz." It has caused quite a bit of consternation and support.
And what I want to show you hear is the front page of the right- leaning "Daily Mail" newspaper. As you can see, the decision whether to play this song by the BBC has obviously hit a lot of headlines. Obviously it's got quite a bit of criticism, as you can see there. "The BBC witch song is an insult to Maggie," that's what's been on the front page of the "Daily Mail" newspaper.
Both songs were actually promoted by viral marketing campaigns, and to discuss all of this, I'm joined now from New York by Anthony Decurtis, who's a contributing editor for "Rolling Stone" magazine. Great to have you on the show, Anthony. Do you think that this "Wizard of Oz" --
ANTHONY DECURTIS, CONTRIBUTING EDITOR, "ROLLING STONE": Pleasure.
DOS SANTOS: -- "Ding Dong" song should actually be played in light of the fact that this is a very significant UK politician, an elderly lady, who died just a few days ago?
DECURTIS: Well, look. Margaret Thatcher without question was a consciously divisive figure. She was somebody who was very aggressive in her own politics, very aggressive in her own point of view, and I don't think anybody should be surprised that her death incited this kind of response.
So, playing the song and commenting on it and talking about, I think in a lot of ways, this is very much part of Margaret Thatcher's legacy.
DOS SANTOS: So, in effect what you're saying is that she was a witch to some people and therefore -- what? -- it rings true these days? Years on?
DECURTIS: No, I think -- I think what's new about this, obviously, is the technology involved. It's like a new form of social protest has evolved, in terms of getting this song out there.
So, playing the song as part of a discussion about Margaret Thatcher, a discussion of this phenomenon, that doesn't seem like a problem to me. It seems to me a part of what -- look. If you're called the Iron Lady, I think Margaret Thatcher is the first person who would've been able to stand up to something like this.
So, all of the people getting outraged on her behalf and appalled by it, I think this is part of the effect of what her policies have been. I think if they were a lot less effective, people wouldn't have cared, and a phenomenon like this never would have happened. It's only happening because people felt the effect of Margaret Thatcher.
DOS SANTOS: Well, the music scene has for years been a forum for political debate, hasn't it, in a very different manner? Let's move along and talk about the social media --
DECURTIS: Well, exactly.
DOS SANTOS: Yes. Let's talk about the social media aspect of both of these two songs, though, because we've got Psy coming back in the charts, and that has been largely a sort of YouTube-led phenomenon, not the traditional charts like what we're talking about with regards to Margaret Thatcher.
DECURTIS: Well, there's a sense -- I think what kind of links both of these things -- in the case of Thatcher, for example, what somebody would have done in the past is maybe write a protest song or have a benefit concert for a -- the opposite point of view from which -- that she held.
But doing something like that captures the sort of antic quality of the internet, as does someone like Psy. Those songs are pretty good songs, and they're fun. So people are just enjoying them and passing them around.
The term "viral" is used for a reason. It kind of -- it spreads from one person to the next, and there's a kind of pleasure in that very thing. And that is the new phenomenon, that's the new part of how these kind of pop music trends take place. It takes place -- the internet makes that possible.
DOS SANTOS: Anthony Decurtis from "Rolling Stone" magazine in New York, thanks ever so much for taking the time to join us this Friday on QUEST MEANS BUSINESS.
DECURTIS: Thank you, Nina. It's a pleasure.
DOS SANTOS: Great to have you on the show. Right. Well, there's another online craze that's also doing pretty well in terms of gathering headlines, but not all that well in terms of its value. The price of bitcoins has actually been collapsing by around about 70 percent over the past two days, as our regular viewers may remember. We were talking about this yesterday.
The exchange Mt.Gox says that new customers slowed their servers down, and that in turn caused panic selling and a freezing of the system. Let's just show you how the bitcoin actually compares to the world's reserve currency, which is, of course, the US dollar.
So, as you can see, as we well know by now, the dollar is printed by a central bank, in this case, the Federal Reserve, whereas the bitcoin is a virtual product. It's not actually backed by anyone. And in fact, it's so secretive that the inventor's true identity still remains a mystery.
The Fed controls the supply of dollars, or the money supply, as it's called. Effectively, that means the more dollars it creates, the less their worth.
Bitcoins, on the other hand, though, are made by cracking a complex formula, and there's a limited supply. They're free of interference by banks, governments, or anyone else. Hence the appeal, some might say. And they're also worth whatever people actually are willing to pay for them.
Let me also move on and show you this, because as we well know, we use money to buy anything we like. Say, for instance, going to get your groceries every other day, don't we?
But bitcoin traders mainly use this for a different reason. They trade with each other or else they sell these bitcoins for traditional currency. People like them because the deals are largely anonymous and also, crucially, unregulated with some pretty low transaction costs.
Maggie Lake in New York found a bar which actually takes bitcoins as currency, but after the recent slide, she found out they won't get much bang for your virtual buck. Take a look.
CHARLIE SHREM, CO-OWNER, EVR: Can I get a Macallan 25? And I'm going to pay with bitcoin.
MAGGIE LAKE, CNN INTERNATIONAL BUSINESS CORRESPONDENT (voice-over): You don't have to whip out your wallet to pay for a drink at this bar. At midtown Manhattan's EVR, bitcoins are now accepted.
SHREM: 0.2855 bitcoins? Send payment.
LAKE: EVR began taking bitcoins with the help of this group of early adopters. The owners were quickly won over.
LAKE (on camera): Can you explain to me how this works?
UNIDENTIFIED MALE: They pin the amount in US dollars. You go to your wallet on your phone, your bitcoin wallet --
UNIDENTIFIED MALE: -- and you simply scan the QR code. All you do is press "send," we get the bitcoins, which are then converted into dollars within minutes for us. You get your drink and --
LAKE: And you get paid.
UNIDENTIFIED MALE: So, I get a gin and tonic.
LAKE (voice-over): EVR is one of the few brick-and-mortar places to accept the payment system.
(BEGIN VIDEO CLIP - BITCOIN PROMOTIONAL VIDEO)
UNIDENTIFIED MALE: Bitcoins are transferred directly from person to person via the net.
(END VIDEO CLIP)
LAKE: The virtual coins are bought and sold through a limited number of online digital exchanges, like Mt.Gox. You can't buy them with a credit card, but you do need to link a bank account or cell phone.
Charlie Shrem is an investor in EVR and the co-founder of exchange Bit Instant. He admits the currency has a reputation to overcome.
SHREM: In the beginning, bitcoin was, I would say, over 80 percent volume was for all illicit activities, drugs, things like that. Fake IDs.
LAKE: The boost in popularity came on the heels of the crisis in Cyprus, where people had little access to traditional banking. Some say bitcoins would have offered a workable currency alternative.
LAKE (on camera): You may not want to take your real cash out of a real bank just yet, though. Although there are now places in New York City where you can spend bitcoins, there are real concerns about consumer protection.
There's a reason that people started putting their money in banks, that you get some sort of -- you have some transparency, you have recourse. You don't get any of that with this new currency.
SEBASTIEN GALY, SOCIETE GENERALE: No, you don't get a regulator. And there's a reason why we have regulators and we are not in the wild west.
UNIDENTIFIED MALE: Could I pay for this with bitcoin?
LAKE (voice-over): Despite the stomach-churning swings, EVR's managers say they're convinced bitcoins have real benefits for businesses and are here to stay.
UNIDENTIFIED MALE: If everyone would use bitcoins, that would -- I would love that. I wouldn't have to deal with waiting for a credit card, it would be a much smaller processing rate.
LAKE: People find a way to pay for a good drink one way or the other, but EVR hopes its payment experiment will raise the currency's profile --
UNIDENTIFIED MALE: Thank you very much, ma'am.
LAKE: -- at least in this New York bar.
Maggie Lake, CNN, New York.
DOS SANTOS: Starting this very Sunday, CNN will be serving up food and culture as the main course of its new series. The world-renowned chef and best-selling author Anthony Bourdain goes off the beaten path as host of "Anthony Bourdain Parts Unknown." He sat down with Christiane Amanpour to talk about the new show.
(BEGIN VIDEO CLIP)
CHRISTIANE AMANPOUR, CNN CHIEF INTERNATIONAL CORRESPONDENT: Is it about the journalism, or is it about the tourism? Is it about the people? Is it about the food?
ANTHONY BOURDAIN, "ANTHONY BOURDANE PARTS UNKNOWN": Well, I'm not a journalist, but I guess it's -- I'm looking at these places from the point of view of someone who's interested in how people live, what they eat.
I'm not reporting hard news. I'm introducing audiences to people, cultures, so you can get a little -- get to know a little bit about them, so when hard news happens, you know who we're talking about.
(END VIDEO CLIP)
DOS SANTOS: You can see that full interview tonight on "Amanpour." That's in half an hour's time from now.
After the break, the fallout from Facebook's IPO continue the pace. It's cost this man, the CEO of the NASDAQ, half a million dollars.
DOS SANTOS: Hello and welcome back. I'm Nina dos Santos. These are the main news headlines this hour.
(BEGIN VIDEO CLIP)
DOS SANTOS (voice-over): U.S. Secretary of State John Kerry is in Seoul, South Korea. It's the first stop on a diplomatic tour of the region, dedicated to diffusing tensions with North Korea. (Inaudible) raised the possibility of talks with Pyongyang but at the same time he also said that the world would never accept North Korea as a nuclear power.
European finance ministers meeting in Dublin say that they won't be giving any more bailout money to Cyprus other than what has already been promised. On Thursday, Cyprus said that it will need to find an extra $8 billion to balance the books. The country will sell some gold that's worth more than $500 million in an effort to help close that gap.
(Inaudible) presidential candidate Newt Gingrich will be among the guests at Margaret Thatcher's funeral next Wednesday in London. Gingrich was closely allied with the late American president, Ronald Reagan, who was a strong Thatcher ally himself. The Canadian prime minister, Stephen Hopper, and the former Australian prime minister, John Howard, have also accepted invitations.
The French Senate has approved a controversial bill that would give same-sex couples the right to marry and adopt when it becomes law. That could happen within weeks once the lower house, of course, approves some technical amendments introduced by the Senate, though.
(END VIDEO CLIP)
DOS SANTOS: The Nasdaq botched handling of the Facebook IPO last year costing its chief executive more than half a million dollars. (Inaudible) bonus for this year is being slashed by 62 percent. The Nasdaq says that that's directly linked to the bungled offering. Zain Asher joins us now live from CNN in New York with more on this.
Tell us all about it. It sounds painful.
ZAIN ASHER, CNN CORRESPONDENT: Yes, basically, it does sound painful and I'm sure it is for him. Essentially, somebody had to pay and it turns out it's going to be the CEO and, by the way, the chief information officer, Robert Greifeld's bonus for 2012 is going to be $1.35 million, still a huge number, yes. But when you think about it, pretty small when you think what CEOs actually make.
The debacle in the Facebook IPO last year cost CEO Greifeld more than half a million dollars. Essentially was a nightmare for investors. You had a glitch in the Nasdaq systems, which led to a delay in the trading of Facebook stock. Many brokers' orders didn't go through or they received no confirmations once they did.
So people were left in the dark. The glitch cost some investors and companies a lot of money as the price dropped. UBS Bank, which said it lost 356 million from the Facebook debacle last year, sued Nasdaq for the full amount along with other banks. So far, by the way, Nasdaq is saying it's only going to be paying 62 million.
And you know, Nina, we're starting to see more CEOs being held accountable for these costly mistakes. Jamie Dimon saw his salary cut after the London whale lost his. Also after JCPenney's share price tanked, former CEO Ron Johnson got a 97 percent pay cut as well. So there does seem to be somewhat of a trend, Nina.
DOS SANTOS: Yes, speaking of those banks, though, we've also got a whole raft of banks earnings coming out, the likes of JPMorgan, Wells Fargo. Tell us about that.
ASHER: OK, so we've got those earnings earlier this morning. And essentially, it's basically another factor that's dragging the market today. JPMorgan Chase's first quarter profits are at an all-time high, right? So $6.5 billion. Wells Fargo not that far behind, $5 billion.
And you think that investors would be pleased at such huge numbers, but unfortunately, investors are not that easy to please because some of the things that really mattered to the bank over the long term are not doing that well. For example, profit margins on loan are shrinking; mortgage earnings, not doing that great.
That's because of these low interest rates that benefit consumers but are bad for the banks. Also credit demand isn't that strong, either. So a core part of their business is essentially still struggling. Shares are actually declining on the news as well.
Wells Fargo, as I mentioned, did record a record profit, but revenue again fell short of forecast, again interests rates to blame for that. And the CEO, John Stump, he's the CEO of Wells Fargo, he actually said that it's because of the challenging economic environment and JPMorgan shares and Wells Fargo shares are both down, roughly around 1 percent, give or take, Nina.
DOS SANTOS: Yes, Zain, just briefly, we did have some evidence of that challenging economic environment with retail sales coming out a bit of a downbeat note, also same thing for (inaudible) consumer sentiment index, et cetera, but it seems that the markets are still shrugging all this off.
Is that largely due to the Fed pumping more money into the system?
ASHER: Yes, and Nina, that's exactly right; the Fed is pumping $85 billion a month into the system. And so as you saw this week, we got record highs day after day. Yesterday the S&P 500 and the Dow both ended at record highs. Today we got the pullback, and that's partly because, as you mentioned, those retail sales numbers, retail sales numbers down by 0.4 percent.
Consumer sentiment as well, showing that people are basically pulling back on spending, on things that they don't deem necessities, things like electronics, books, that kind of thing. So you know, as long as the Fed keeps on pumping money into the economy, we probably will see the markets still climb somewhat more, Nina.
DOS SANTOS: Great stuff, Zain Asher. Have a great weekend, thanks ever so much for joining us with the latest there on U.S. trading, and in particular, that interesting story with regards to the bonus for the chief executive of the Nasdaq.
Well, let's have a look at those U.S. markets, because as Zain was just saying before, they have actually fallen from their record highs on Thursday's session, the Dow finishing -- poised to finish up on the week. But as you can see, on the day, it is poised to finish down around about a quarter of 1 percent, 14,831 is where we stand at the moment.
It was a dangerous power struggle underway at one of the world's most famous ballet companies. We look at the battles within the Bolshoi next here on QUEST MEANS BUSINESS.
(BEGIN VIDEO CLIP)
DOS SANTOS (voice-over): Let's get you caught up with the answer to today's "Currency Conundrum" now. Earlier in the show, we asked you what will be unique about the national baseball (inaudible) commemorative coin that they're making? And the answer is A, the coin will be shaped like a baseball with (inaudible) interestingly enough.
The U.S. Mint is asking people to take a swing at designing the heads side of the coin. The winner will receive $5,000 and see their initials put on the coin. That's (inaudible) an interesting figure, isn't it? If you'd like to make a pitch, just head to the U.S. Mint website, which is usmint.gov.
(END VIDEO CLIP)
DOS SANTOS: Now changing tack now, one of the top dancers at the Bolshoi Ballet has won a court battle that could have cost him his job. Nikolai Tsiskaridze is in a bitter dispute with the ballet's management at the moment in a row which some of -- which has -- some have linked, I should say, to the acid attack that was conducted on its artistic director a number of months ago.
He was, in fact, reprimanded for giving interviews denying his involvement in that and now a court has overturned that decision. As Phil Black now reports, that's only just the start of it.
(BEGIN VIDEO CLIP)
PHIL BLACK, CNN CORRESPONDENT: Russian police say they've solved the mystery of the Bolshoi acid attack. The company's traumatized dancers are getting on with their jobs of rehearsing and staging productions. But this world-famous institution is still very much in a state of crisis. It's being torn apart from within as two men battle fiercely to control it.
BLACK (voice-over): The opponents are very different people. Anatoly Iksanov is a long-serving bureaucrat. He's been general director of the Bolshoi Theater for more than 12 years. Nikolai Tsiskaridze is one of the Bolshoi's principal dancers and a superstar of the ballet world.
Tsiskaridze tells me he's fighting for his job and the future of the Bolshoi.
NIKOLAI TSISKARIDZE, BOLSHOI PRINCIPAL DANCER (through translator): If they fire me, Tsiskaridze, the most famous artist, it means evil will completely win.
BLACK (voice-over): The bitterness between these men became very public in January after someone threw sulfuric acid in the face of the Bolshoi's artistic director, Sergei Filin. Police always suspected it was connected to his work.
Tsiskaridze was interviewed. It's no secret he and Filin don't get along. But another dancer was arrested, Pavel Dmitrichenko. He's confessed to organizing the attack but says Filin was only supposed to be beaten, and he was shocked when he heard about the acid.
Iksanov the general director said the attack is the result of a lawless atmosphere within the dance company created by Tsiskaridze.
TSISKARIDZE (through translator): Dare I did to say any nice thing to give the perception I could be involved in a criminal case.
BLACK (voice-over): Tsiskaridze says Iksanov has been trying to get rid of him ever since he criticized the Bolshoi Theater's $760 million renovation. He says other debt is why (inaudible) signed a letter against him. He says his students are punished by being overlooked for important parts. He's now received official warnings for speaking publicly without the theater's permission.
TSISKARIDZE (through translator): I don't walk in a separate organization where I cannot divulge. I'm entitled to my opinion.
BLACK (voice-over): His opinion is President Vladimir Putin should step in to settle this and fire Iksanov. Tsiskaridze says he's ready to take up the job if he's asked.
TSISKARIDZE (through translator): The president himself should get involved because the Bolshoi is the face of the country. This is the flagship of Russian art. A bureaucrat with no musical education cannot be allowed to get even with a dancer.
BLACK (voice-over): Iksanov dismisses Tsiskaridze's allegations and he's not ready to leave the Bolshoi.
ANATOLY IKSANOV, BOLSHOI GENERAL DIRECTOR (through translator): If Tsiskaridze thinks he can have the theater, that's his personal matter . I don't think he because you need a few more qualities than just scandalousness and fame.
BLACK: Both men to have support from different factions within the government, but so far President Putin hasn't declared any view on the rivalries which are steadily tearing away at the credibility, one of Russia's most iconic international brands -- Phil Black, CNN, Moscow.
(END VIDEO CLIP)
DOS SANTOS: Time now for an update on the weather. It's over to Jenny Harrison at the CNN Weather Center.
JENNY HARRISON, CNN METEOROLOGIST: Hello there, Nina. Yes, well, I was talking yesterday about the temperatures that finally had broken with - - we worked our way finally out of winter across central and northern Europe. But it's a very unsettled picture, I'm afraid, because with the moving away of that high pressure, it's allowed all these areas of low pressure to move in.
Now let me just show you that what is happening with those temperatures, finally, I said, we've broken that spell of cold weather. But look at these temperatures, the warmest day on Friday, as you can see, since October in most cases November in Moscow, look at the temperatures, this is actually on Thursday, 15 degrees in Prague, 9 there in Moscow, 14 Celsius in Berlin.
Look at these temperatures. This is October the 24th, the 18th of November, the 6th. Now on the downside, and you know there always the downside, an example would be Warsaw, where it was actually 14 degrees Celsius.
That was a huge jump from the day before on the Wednesday. It was actually only 4 degrees Celsius. Now the problem is the amount of snow that is still on the ground. There's a huge threat of flooding from this sudden melt, sudden thaw, of course, because of so much snow there.
Normally at this time of year, the snow is right the way up here, but look at all this snow that we've got across central areas of Europe. And it's because, of course, it's been so cold; we've seen so much snow. So as I say, that will be the next concern.
Right now, it's mild as well; it's 8 Celsius in Warsaw, 11 in Munich, 12 in Berlin. We've got 9 (inaudible) in London and in Paris. And then when you add on all this rain that is also coming through, not only of course is it adding to the totals that are already sitting there, but it's helping to melt the snow as well. Well, you can see why there are so many concerns because of that snow melt.
The last few hours, again, we've seen a bit of sleet and extending across the Highlands of Scotland, also to the mountaintops, of course, across the Alps. And as we go through the weekend, very unsettled picture again, but very mild air coming in across the west of Europe.
At the same time, they could have some pretty severe thunderstorms and the winds are going to be quite a feature, some very strong gales across the northwest, across the U.K. in particular.
So, Nina, it's a mild weekend but it's certainly a wet and wild one at the same time.
DOS SANTOS: Ah, the British weather, always gives us mixed signals, doesn't it?
On that note, Jenny Harrison, have yourself a great weekend.
And for all of you out there, thank you very much for watching QUEST MEANS BUSINESS. Have a great weekend as well. Whatever you're doing, I'm Nina dos Santos in London. MARKETPLACE AFRICA continues on CNN.
ROBYN CURNOW, CNN HOST: Thank you.
Well, for many of us, grabbing a coffee on the go is a morning ritual. I'm Robyn Curnow and you're watching MARKETPLACE AFRICA. Now they say that breakfast is the most important meal of the day. But for many people all around the world, they don't have enough time to sit down and have a healthy meal.
The solution? Breakfast on the go, just like your coffee. Vladimir Duthiers now meets the man who's made a business out of feeding hungry commuters.
(BEGIN VIDEO CLIP)
VLADIMIR DUTHIERS, CNN CORRESPONDENT (voice-over): He's known as Ghana's Koko King, Albert Osei's passion? Delivering a wholesome breakfast to hungry Ghanaians on the go.
ALBERT OSEI, PRESIDENT AND FOUNDER, KOKO KING: The idea was to make it convenient, wholesome, hygienic, make sure that they can enjoy it and have access to it quite easily. And that was the whole -- that was the whole premise behind Koko King.
DUTHIERS (voice-over): This is the capital, Accra, a bustling city. People on the move, vendors hawking their wares and workers racing to the office. Few have time to sit and enjoy a leisurely breakfast, so they eat on the go. And in Ghana, the breakfast of champions is Koko.
UNIDENTIFIED MALE: It's convenient, it's healthy and, frankly, it's delicious.
DUTHIERS (voice-over): Koko is porridge made from millet flour and spices. And from security guards to clerical staff to well-heeled business men, it's what many typically enjoy.
Traditionally, koko is sold on the street corners by women cooking the meal in huge cast iron pots.
OSEI: Usually you go there and there are some queues there. And so I realized that, well, there's a queue for this here and then I can just imagine if it's done much more conveniently and accessible, easy to get, affordable, I could see the potential there.
DUTHIERS (voice-over): So in 2007, Osei quit his high-flying banking career and, with two partners, launched Koko King. Initially they offered just one flavor from the boot or trunk of a taxi.
OSEI: And we opened the boot of the taxi; the food will be there and then the staff come in and they pick it up one by one. And there was one Ghana cedi, which is about 50 cents basically, at that time.
DUTHIERS: Did anybody look at you and go, hey, Albert, you're crazy, like you're a successful banker?
OSEI: Loads, loads, loads. Loads of friends. Even some (inaudible).
DUTHIERS (voice-over): Part of the reason for the skepticism, Ghana's legal hurdles and bureaucratic red tape when it comes to launching new enterprises.
According to a study by the World Bank that measures the ease of launching a small business, Ghana ranks 112 out of 185 economies, right behind fast-growing economies like Rwanda, Sierra Leone and Mozambique. And Osei says access to funding is even harder.
OSEI: We didn't get much attention from the banks in the beginning, you know. Some of them have been burnt a lot and some of them, too, are not very happy about high-risk issues. So I can understand them.
DUTHIERS (voice-over): In spite of those challenges, Osei discovered what Ray Kroc of McDonald's fame and Harlan Sanders, the founder of KFC, learned.
OSEI: We saw a local product that people enjoyed and we decided this is a product that we can let a lot more people try it out.
DUTHIERS (voice-over): And Ghanaians are doing just that. In just five years, Koko King has gone from three employees to 200, with vendors in 70 locations selling close to 10,000 meals a day. His product range has also expanded. He now offers nine koko flavors.
DUTHIERS: So I know that everybody loves (inaudible) koko, but somebody told me that (inaudible).
Not bad. Not bad at all.
DUTHIERS (voice-over): He's no longer selling koko for 50 cents, either. Prices have risen, now ranging from 75 cents to $1.50. And business costs are kept low. You won't find the Koko King spending money on flashy billboards or TV ads. He relies on word of mouth, flyers and the branding offered by ubiquitous red and white vendor stations. These days, he can barely meet demand.
How many did you order and how many did you get?
UNIDENTIFIED FEMALE: I order 42 meals of koko and I was given 15. Yes. So he got finished and he -- people like it. Even if I want more, not get it. They would not get it.
DUTHIERS (voice-over): Which is why Osei is planning on expanding business operations rapidly.
OSEI: If you want to produce a million packs of breakfast meals, you have to have a system. We know the system already. We have the system. We just need the automation to actually fit the system that we have. And then that's it because instead of feeding 10,000 people, now you can feed a million people.
That's the difference. The more you produce, the more locations you have, the more workers you have to recruit. So instead of 200 workers selling for you now, you probably need about 500 workers selling for you now. With expansion, we probably would triple the workforce.
DUTHIERS (voice-over): Osei isn't worried that he may have made it easy for competitors to enter the market, backed by the very banks and investors who envy his success. He says Koko King will always have a competitive advantage.
OSEI: We know what we are good at. You have to be extremely efficient and organized.
DUTHIERS (voice-over): Entrepreneurs, he says, are the drivers of economic growth and prosperity in the emerging markets and the field is wide open.
OSEI: There are a lot of talented people who have good ideas. That's so want to sit in the office and a salary. I think -- I think they should reconsider.
DUTHIERS (voice-over): But for now, Ghana's breakfast empire belongs to the Koko King -- Vladimir Duthiers, CNN, Accra, Ghana.
(END VIDEO CLIP)
CURNOW: Vladimir Duthiers there on the business of breakfast.
Well, whether you're delivering breakfast or cargo, transferring goods in Africa can be challenging. Stay tuned for more of that after this.
CURNOW: You're watching MARKETPLACE AFRICA. Now just how important are ports to facilitate trade in Africa? More importantly, what systems are in place to combat illegal trade? Well, I recently sat down with the general secretary of the Port Management Association of East and Southern Africa to find out.
CURNOW: Give me some sense of the challenges that ports in East and Southern Africa face.
FRANKLIN MZIRAY, PORT MANAGEMENT ASSOCIATION OF EAST AND SOUTHERN AFRICA: The biggest challenge is capacity. There is -- the economy is growing; the infrastructure is not growing at the same pace as the economy is pushing us.
CURNOW: So you pointed to backlogs, bottlenecks here. Just give me some sense of where the cargo is coming from. Am I correct in saying that a lot of these manufactured goods, to supply Africa's growing middle class, is coming from the East?
MZIRAY: Yes, it's coming from the East and particularly China, Japan when it comes to motor vehicle and electronic parts; Korea and Singapore, all these sources of manufactured goods imports into East and Southern Africa.
CURNOW: Let's be blunt, though. I know that many Africans are worried about the porous nature of some of these ports, about crime, about contraband, about drugs, ivory being smuggled in and out of places like Mombasa or Maputo. How much of a problem is it and how much of a concern is it for you?
MZIRAY: We are -- it's quite a problem but the government has taken it seriously as well. (Inaudible) various measures to counter the actions, activities of these illegal operations. There are no bodies inside the port which do several things.
One of them is screening the containers, screening all types of cargos that are going through. The other one is physical inspection, randomly or by selective arrangements. And also they're even bringing in sniffer dogs just to sniff around, see if there's anything illegal that is going out of the country.
CURNOW: But there is concern that some of Africa's ports, of course, are being used as sort of conduits for drug routes, for all sorts of contraband coming in and out of the continent. There's just not enough control at the port.
MZIRAY: There is control at the ports, but --
CURNOW: Not enough.
MZIRAY: -- not enough, because these people are also working very hard to go around what we are trying to protect. And it's not really drugs which are the big problem. It is banned exports, like ivory or timber and some agricultural products, which --
CURNOW: So Africa's natural resources, essentially --
MZIRAY: Africa natural resources --
CURNOW: -- smuggled out of the continent.
MZIRAY: Yes, the protected -- the protected species (ph). There are some people who still (inaudible). But with collaboration of the destination ports, we've been able to arrest men of these incidences.
CURNOW: Hong Kong particularly, I know (inaudible) right there with ivory recently.
MZIRAY: There was ivory. And some have been going to Vietnam. These have been arrested as well. And many other places, Dubai. So people are working really hard to try and counter these illegal activities.
CURNOW: Real concern along Mozambique's coast, of course, that's Mozambique timber. Its natural forest have been shipped out to China, isn't there, as well?
MZIRAY: Exactly, (inaudible) --
MZIRAY: Yes, but they're also working on -- you can export timber, but timber which is not endangered species. But the precious logs cannot be taken out.
CURNOW: Lot -- a lot to keep an eye on.
MZIRAY: I admit, yes, if you do not work closely with all the bodies involved in (inaudible) trade is legal, whatever is going out is just illegal, yes, indeed, you're going to face an uphill task. But all efforts are bearing a lot of fruit, I must say.
(END VIDEO CLIP)
CURNOW: Well, you can watch that interview and many others on our website, which is CNN.com/MarketplaceAfrica. Also, if you have your own fun, quirky or unusual stories about Africa, please do click on this iReport page. But for me, Robyn Curnow, here in Johannesburg, see you again next week.