Return to Transcripts main page
QUEST MEANS BUSINESS
G7 Looks for Answers; Austerity Versus Growth; Canadian Finance Minister Says Don't Abandon Austerity; Co-Op Bank Sends Reassuring Tweet; Europe Markets End Week High; Little Change to Dow; Not Your Grandfather's Market; Alive in the Ruins; Bangladesh Wage Campaign
Aired May 10, 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: You can call it the Downton G7, a drama on the global stage as finance ministers take tea in an English country mansion.
Pulled alive from the disaster which has left a thousand dead. We'll hear how your loose change could double the wages in Bangladesh.
(MUSIC - "SURFING USA" BY THE BEACH BOYS)
QUEST: And there's Friday good vibrations under the hammer. The Beach Boys memorabilia is up for auction.
I'm Richard Quest. It may be a Friday, but don't fret or fear, I mean business.
Good evening. Tonight, locked away in a leafy corner of England, the G7 finance ministers are getting to grips with repairing the global economy, or at least trying to work out what still needs to be done as thing are not getting much better.
Here they are together. At only the IMF a few weeks ago. And now, they're back together again. It's not clear how much new ground will be broken. Finance ministers, central bank governors, and others, have a strong agenda over the coming days. This was the group photograph that was taken at that country house in the English countryside.
There is lots to talk about, and we'll talk their agenda. Join me over truly in the library. The issues as defined by the British chancellor, they are, of course, free trade is going to be much on the agenda. How to break down the trade barriers which stand between members of the Union.
And, of course, also crucially, they will be wanting to very much discuss the EU-US trade -- potential trade benefits and the Doha round and the new head of the WTO and, of course, how they can beat any rising protectionism.
Bank regulation and supervision will be on the agenda, and how it can be done effectively. It's been front and center since the 2008 financial meltdown, which has left governments struggling, having to prop up banks.
And then, of course, the central bank stimulus. What more can they do to boost the global recovery? There's Bank of Japan pumping money into the financial system. The ECB cutting interest rates to record lows. At the start of the meeting, the UK finance minister, George Osborne, was decidedly upbeat.
(BEGIN VIDEO CLIP)
GEORGE OSBORNE, UK FINANCE MINISTER: Well, the good news is that some stability and confidence has come back into the global economy, but we've got much more to do.
And for Britain, we know, as we've seen over the last few years, that we're very affected by what happens in our neighbors. And I'm absolutely determined to focus on nurturing the recovery and not taking it for granted, and that's what we're going to do here today.
(END VIDEO CILP)
QUEST: George Osborne talking there. Jim Boulden joins me now from Aylesbury, where there may be a nice English country house, but it's suitably raining, which of course is not a great surprise.
Jim, free traded, bank regulation, central bank stimulus, they all mask what has to be the core subject, austerity versus growth.
JIM BOULDEN, CNN INTERNATIONAL CORRESPONDENT: Exactly, Richard. Austerity versus growth, indeed. I don't know you're going to hear anybody here say, well, let's have growth without austerity, because of course, George Osborne is the host of this two-day meeting, and he still and his conservative government still sticking very much to the idea that you can have -- need to continue to have austerity.
I heard Olli Rehn, we've heard others say it as well that you still need to have this solid financial backing, you need to be able to have budget deficits back into control, and that's the long-term goal of all these countries. But how do you get the stimulus now? How can you still do that and still have austerity?
It's not an easy answer, and its' something that was put to Jens Weidmann. He is the head of the Bundesbank. And here's what he had to say about austerity versus growth.
(BEGIN VIDEO CLIP)
JENS WEIDMANN, PRESIDENT, BUNDESBANK: I guess you have two carriages, one is to attain some financial regulation, the other one is to discuss the economic policy response to the current situation.
UNIDENTIFIED CORRESPONDENT: More austerity or less?
WEIDMANN: Well, it's not about more or less. I guess we have decided the path, and it's important to deliver on these promises.
(END VIDEO CLIP)
QUEST: I'm going -- I'm going to --
BOULDEN: Of course, Richard, the --
QUEST: I'm going to interrupt you there, Jim. I'm going to interrupt you there. They can't -- the German administration cannot get away from it, can they? Even when asked more austerity or less, the can't just simply -- they've got to put it in terms of it's not a question of more, it's a question of keeping to promises.
BOULDEN: Keeping their promises, keeping to the path that's already been agreed to. I think that's what you would hear from George Osborne as well, which is that this is the plan to get us having longterm growth -- it may take a very long time to get there.
Others, of course, would like to see stimulus. Even the IMF, of course, some people in the IMF would like to see more stimulus, because that's how they see their way of getting out of this problem, where of course the Japanese are doing something different. They're having their yen weaken, and they will see that as a help for exports.
Of course, most of their companies have a big export market. So, that's their way of doing it. So, you have different ways of doing this, different competing ideas of how to do this. I'm not sure the men and women behind me having their dinner are going to be able to solve that problem tonight.
But I think what George Osborne said was really interesting about nurturing the recovery. I would say the market don't want to hear anything here that will hurt the recovery that's going on right now. They want to make sure that these people don't say something or do something, like causing a currency war, for instance --
BOULDEN: -- that could actually end up hurting this nurtured and nurturing growth that we're seeing right now, Richard.
QUEST: What they're also doing, of course, is trying to find that common ground that the G7-slash-8, when it meets in Northern Ireland next month can all -- or later in the summer -- can also coalesce around. Because there you could see very firm factional outbreaks.
BOULDEN: You could, but I think what you might also see is this idea you talked about earlier, which is -- world trade, trying to get the US- European trade deal done. For instance, maybe getting some hope to getting the World Trade Organization back on the target.
Because if they can do that -- you hear this time and time again -- if they can do something that is as complex but as important as getting markets opened up, you could solve some of the problems with growth by doing that without having to worry about austerity versus growth, blah blah blah.
QUEST: Right. Very quick, do you want to take a quick bet with me that we hear something about a swift conclusion of the Doha round? No, it's an easy one to take, Jim.
QUEST: Jim Boulden, who is in --
BOULDEN: We hear that every six months for the last ten years.
QUEST: Jim Boulden, who is in the countryside in the rain. It's not only the Germans that are not afraid to continue to use the austerity word. I spoke to Canada's finance minister, Jim Flaherty, and asked why he thinks austerity is still the best route.
JIM FLAHERTY, CANADIAN FINANCE MINISTER: Well, because fundamentally I think we need to maintain our resolve, because we're not out of the woods yet. We're still struggling out of the recession. A good part of the Western world is still in recession, particularly in Europe.
And we can strike that balance, we can keep the commitments that our leaders made at Toronto and at Los Cabos by moving forward to lower debt- to-GDP ratios, making sure we have sound fiscal policy. Because after all, that's the foundation of future growth.
QUEST: The problem of course is if you look at the EU, with its 12 percent unemployment, unbelievably high youth unemployment, the feeling is that austerity has gone too far. Do you share that view?
FLAHERTY: No, I don't. I think that they're not mutually-exclusive objectives. I think that each country needs to look at its own circumstances and decide what it can do on the incentive side, on the stimulus side, if you will. But at the same time, maintain the fiscal track that gets them back on a solid fiscal plan to balance budgets over time and controlling debt.
The reason for that is uncertainty in the business community. One of our great challenges is to get business to have confidence to invest, to create jobs and economic growth, and that's the way to work ourselves out of this difficulty.
QUEST: Somebody watching you now might think you're more in the Angela Merkel camp than the Francois Hollande camp. You're still sort of calling for strong austerity measures even at this moment.
FLAHERTY: "Strong's" an adjective. We need to have spending controls. We need to have controls of what our governments spend. One can call it austerity or whatever, but really, it's just good government, that you have control of your fiscal plan.
You have a developed fiscal plan, you know where you're going to be five years from now, and that's the way you engender confidence, not just from business, from consumers, citizens spending their own money.
QUEST: The other issue, of course -- and I know that finance ministers are loathe to discuss it publicly but are happy to talk about it behind closed doors, and that is, of course, currency rates. We have the yen at 100 to the dollar, so a very week yen. We have a very strong dollar at the moment. And countries like yourself must be concerned what is rapidly turning into a race to the bottom.
FLAHERTY: Sure there's concern, and I am without doubt that we will discuss this issue this weekend. We discuss it at virtually all our meetings. Our position is simply this: we believe in market-determined prices on currencies.
That's been Canada's position for 40 years, and it's worked for us. We believe in free trade, we believe in free markets, and that includes markets and currencies. In the longer run, it's in the best interest of all of us.
QUEST: You'll forgive me if I have another bash at this, Minister. Do you now believe that some currency rates are not reflective of market conditions? In other words, we are now seeing managed currencies for purposes other than just exchange rates?
FLAHERTY: Well, I'm not going to get particular about any particular economies. But there's evidence that there's been some interference from time to time in recent years with respect to the value of currencies. And this concerns all of us because most of us believe in letting our currencies float.
QUEST: We know that Canada and the EU are awaiting to sign their -- or at least enforce their new trade agreement. The US is now putting in place its own trade negotiations. Can you see a time when basically NAFTA becomes NAFTA-EU, and these bilaterals become multilateral?
FLAHERTY: I think that would be fabulous. I'm not sure it'll be in my finance minister lifetime, but I think it would be a wonderful thing. We tried for Doha for a number of years, and all of these bilateral free trade agreements are second-best to Doha. But they're certainly better than not moving down the road toward free trade.
NAFTA has been an incredible success for the people of Canada, the United States, and Mexico, a huge job creator.
QUEST: That's Jim Flaherty of Canada. And if you now look at the place -- at the house where it is being held, look at that! A rainbow over the house. I'm guessing that they will be -- the finance ministers are in there, hopefully searching for the pot of gold at the bottom of it. Ha! After all, with the way gold prices have been, God forbid, but even so, they could make a bit of money.
If the leaders needed to be reminded that a banking crisis is far from over, Britain's Cooperative Banking Group is having to reassure customers after an agency warned it could need taxpayer support. The Co-op was given junk status by Moody's. The CEO stepped down.
And today, the bank had to tweet, "In light of today's news, we would like to reassure customers and members that we haven't sought nor do we need government support." When you start having to tell the customers you don't need it, well, you know what happens next.
Coming up next, every minute counts. How technological advancements are changing the game for professional day traders. QUEST MEANS BUSINESS, with the rainbows.
QUEST: European stock markets ended the week on another high. Germany's benchmark index set its fourth-straight record, and London's FTSE made it a seventh day of gains -- strong gains -- across the continent.
QUEST: US stocks barely moving following this week's record highs. Time and again -- just off the top -- I mean, virtually unchanged. This is a classic case of literally pausing for breath. Alison Kosik is in New York and joins me.
QUEST: They are pausing for a breath, and you and I, of course, have seen on many occasions over the years how computers, how speculators, how traders take this opportunity to make big bucks.
ALISON KOSIK, CNN BUSINESS CORRESPONDENT: Oh, exactly. You're not seeing that movement happen today. Obviously, the markets are flat. But you look at the Dow Jones Industrial Average, Richard. Right now, it's above 15,000. That means somewhere, someone is getting rich.
Most likely, though, it's not an armchair day trader like it used to be. The markets have changed a lot, and so has the face of America's day traders. This is not your grandfather's market.
QUEST: Nice one.
KOSIK (voice-over): Record highs for the stock market, and that's good news for day traders like Leo Selya.
LEO SELYA, DIRECTOR, SMB COLLEGE TRAINING PROGRAM: You're always looking and trading for supply and demand, you're always looking for panic, because panic is going to mean there's going to be substantial volume, substantial movement, and that's something we're always looking for.
KOSIK: Traders at SMB Capital, a proprietary day trading firm in midtown Manhattan, base their investment decisions on what they call catalyst events: unexpected earnings results, regulatory announcements, or a surprise in an economic report.
Their investment horizons can be measured in less than a second, buy a stock with momentum only to sell it moments later, eking out profits where they can.
SELYA: Only about $130,000 worth of the SPY. You can see the position right there.
KOSIK: Money moves fast in places like this, and when the market is hot, profits usually follow. Traders here can make tens of thousands of dollars a day, but they can also lose just as much, if not more.
Technological advancements have also changed the game for the men and women who actively trade the market every moment of every trading day.
SELY: A big part of what we're doing now is actually working with this technology, where you have signals and algorithms and gray boxes and black boxes and filters, so you can really home in on what your best trade is.
KOSIK: The dot-com bubble gave rise to companies like E*TRADE and Ameritrade, giving retail investors access to a stock market that seems to only go higher. But that, like all rallies, ended, and may armchair day traders have given up trying.
STEVEN SPENCER, MANAGING PARTNER AND CO-FOUNDER, SMB CAPITAL: I think for those who are trying to actively trade the market, 2008 was the last straw in terms of they just -- a lot of them got decimated.
KOSIK: As the S&P 500 has climbed almost 140 percent since the lows of the financial crisis, US stock ownership is at record lows. Steven Spencer, managing partner and co-founder of SMB says the average investor is right to be cautious.
SPENCER: I think it's OK as a smaller investor to get involved and say, hey, I have a longterm believe in this stock, I'm going to get involved. But to trade in and out of it on a daily basis without a technology edge? I think that's -- that's gambling.
QUEST: Alison, how is this day trading different from that which you and I saw firsthand in the 1980s, people in their bedrooms, the first computer programs, all those online trading schemes?
KOSIK: Right. And then you heard a little about that in the piece. Let me first point out that the trading floor that you just saw in this piece, Richard, it's different than what most people think of when they think about traders, like the NYSC, the CBOT, that's the world's oldest futures and options exchange.
These are -- what you're seeing are traders on the floor of the stock exchange at the CBOT. You're seeing traders take orders from clients and institutions and banks. These guys, who you just saw in this piece, they're trading their own firm's money for profit.
KOSIK: But what's happened is, since the 90s dot-com boom, you -- high frequency trading has gotten into play, and where maybe you or I or your neighbor was sitting at home with his computer and day trading, that his -- high-frequency trading has really changed the landscape.
And the fact that many people feel like they're not on a level playing field anymore because those high-frequency traders, because as fast as you can hit that button on your computer, it's not as fast as those high- frequency traders.
QUEST: Alison, we thank you. Alison Kosik at the New York Stock Exchange.
The Currency Conundrum tonight. A historical figure appears on the front side of the 1,000 yen note. What's he credited for? Yellow fever, measles, rubella? The answer later in the program. Now, the rates.
QUEST: In Bangladesh, the words were simple: "I'm alive, please save me." They came from Reshma, a garment worker who'd been buried for 16 days under the rubble of that nine-story building which collapsed in Dhaka.
The moment was all the more remarkable -- miraculous, even -- because rescuers had given up hope of finding anyone alive in the building, which housed dozens of garment factories. Reshma is now being cared for in a hospital in the capital city.
Moments like these have been very rare over the last few days, nonexistent, in fact. The number of people who've died in South Asia's deadliest industrial disaster has now passed 1,000.
Textile workers like Reshma are paid as little as $41 a month in Bangladesh, and now Britain's Trade Union Congress says doubling it would add just 3 cents to the cost of a t-shirt. That's a tuppence piece, to pence in the UK, which of course is around 3 cents. Owen Tudor from the TUC --
OWEN TUDOR, HEAD OF EUROPEAN AND INTERNATIONAL AFFAIRS, TRADE UNION CONGRESS: Good evening.
QUEST: Why won't they do it?
TUDOR: Employers think that they can get away with paying less. Unfortunately, for the last few years, work has been cheap in Bangladesh. Now, we're seeing life being cheap.
QUEST: OK. But the fact is, if -- no company, I don't care whether it's a Primark, a Bonmarche, H&M, Topshop, whatever it is -- if you say to them, it's only going to cost you a couple of coppers to dramatically improve their standard of living, they'd say, well, yes, it makes sense.
TUDOR: Well, we hope they do, and we hope they'll settle with the unions. They're in deep negotiations at the moment. They're going to hopefully be reaching an agreement next week.
But the trouble is, they've let it go for too long, and one of the reasons for that is we've been relying on voluntary measures to deal with these problems, rather than proper agreements with unions and laws, as in Bangladesh, to make sure health and safety standards --
QUEST: But there's a bigger issue here, and I -- well -- there's no bigger issue than life and death. But there's an issue here that if we were to pay two or three pence or cents for a t-shirt or a pair of pants or whatever, what guarantee have we got that it doesn't just go into the margins of the shop, the company who makes it, a middle man, or corruption en route?
TUDOR: Well, that's why you need trade union agreements with the companies.
QUEST: No, that's not going to be sufficient.
TUDOR: No, no, no. Because we've got --
QUEST: That's not going to be sufficient.
TUDOR: No, no. It is, because we've got people all the way down through the supply chain. They're people right up at the global level who are doing the negotiations at the moment right the way down to the shop floor.
The figures that we've produced are from the factory workers who were in those factories, who've been in the factories that have been set on fire over the last few years.
QUEST: So, how do they not stop this?
TUDOR: Because they have been stopped by the Bangladeshi government from organizing properly. There was a trade union organizer killed a few months ago whose murder has still not been addressed by the Bangladeshi government. They say that these things are just normal accidents.
We need to have proper democracy, we need to have proper rights, and the people who can really influence that are the people who buy -- who place millions of dollars --
TUDOR: -- million dollar and million pound contracts. Look, they can't control what happens --
QUEST: But that change --
TUDOR: No, no!
QUEST: -- that change goes all the way down to you and me buying stuff on the High Street or Oxford Street.
TUDOR: Yes. But unless you haggle, you're not going to be in control of that price. It's the buyers who are in charge --
QUEST: So are they immoral?
TUDOR: -- and they can control how the stitching is done on each thing. So, they can make sure that what happens in the factory is what is --
QUEST: Are those buyers immoral, or do they just don't -- or are the amoral?
TUDOR: The system they're working for, and the system that allows companies to do this amoral. The individuals concerned are simply products of that system and having to drive it through to its logical conclusion. What we need to do is change the way those companies operate.
QUEST: Thank you very much --
TUDOR: Thank you.
QUEST: -- for joining us. Coming up next, concerns -- I've still got my tuppence -- but on a much larger scale, perhaps, of a currency war. Japan's yen continues to slide. In a moment, what does it mean for Brand Japan?
QUEST: QUEST MEANS BUSINESS.
QUEST: Hello, I'm Richard Quest. There's more QUEST MEANS BUSINESS in just a moment. This is CNN, and on this network, the news always comes first.
In Bangladesh, a woman has been pulled a live from the rubble of a factory building 16 days after it collapsed. It's an isolated piece of good news. More than 1,000 people are now known to have died in the disaster.
At least four people have been killed and some 20 injured on the even of Pakistan's election. Bomb attacks targeted party offices in remote parts of the country. Saturday's vote marks Pakistan's first entirely democratic transition of power.
The crew of the International Space Station are getting ready to conduct an unscheduled space walk to make a repair. There's an ammonia leak in equipment cooling system that could shut down unless something is done. The crew is not in any immediate danger.
And some of the world's top finance chiefs are meeting in England to discuss revitalizing the global economy. The G7 meeting near the town of Aylesbury is discussing trade, currencies, and how central banks can better support the economic recovery.
(END VIDEO CLIP)
QUEST: As the G7 delegates tuck into their dinners tonight, they're residing at Hartwell House. This is the leafy Birmingham just stately home. Now Hartwell House -- dare I say it? It could well double for Downton Abbey.
QUEST: Welcome to the Downton G7 and in this, who is starring tonight? Well, of course, head of the household is Lord Grantham of Crawley. He is the master in charge. He has all the cards, which is a bit like Jack Lew, the new Treasury secretary of the United States.
The newest member of the G7 and incidentally, of course, with the strongest economy, the lowest unemployment overall and probably in the best shape.
Then we have the Dowager Countess. Now she's strict. She likes things done the old-fashioned way. In other words, she likes austerity, which is just like Wolfgang Schauble, the German minister of finance, who would find a lot of similarities with the Dowager Countess, wanting to keep things properly austere.
Matthew Crawley, he, of course, is the heir. He is elite, well- brought up and he seems to know his way around the top board rooms, which is just like the British Chancellor of the Exchequer, George Osborne, who similarly went to top schools and top universities. A warning though: Matthew Crawley was written out at the end of the last series. What happens to George Osborne?
Mrs. Hughes is the mistress of the household. She's in charge of running the house. Christine Lagarde is in charge of the IMF and is in charge of good housekeeping all over.
Now if you're looking to be in charge of the pantry and you're the most senior person, it has to be the butler, Mr. Carson. Well, in the Downton G7, Mr. Carson would have to be Jose Manuel Barroso, who is, of course, the president of the European Commission.
One thing on the G7's agenda that will have no doubt: the yen's fall to a four-year low. Yesterday, the dollar rose to 100 yen for the first time since April 2009, now 101 and a half. Investors will have welcomed the move by the Bank of Japan to bolster the economy. It's given shares of leading Japanese companies much-needed boosts to their exports.
Kit Juckes is the head of foreign exchange research at Societe Generale.
It's always tempting when you see these sort of stories, Kit, to say was lowering the exchange rate a byproduct or the product of the policy?
KIT JUCKES, HEAD OF FOREIGN EXCHANGE RESEARCH, SOCIETE GENERALE: They definitely want to tell us it's a byproduct, you know, an accidental thing that happened.
But they definitely want a weaker currency as well. You know, the Japanese know that their currency's been the strongest in the world over the last 10-15 years, so over a longer term period. They know they're stuck in deflation. They know that their exporters are struggling; lots of household names in Japan that you can remember that aren't doing so well over -- at the moment.
QUEST: But if we go back before 10 or 15 years ago, and you look at - - you know, take a 30-year range for dollar/yen, and you see a very different picture.
JUCKES: You do, although the yen was a lot higher in 30 years ago now, 1983, we were higher. It was -- you know, so the yen has appreciated. It started from being weak; they used a competitive currency on which to build an export machine.
QUEST: Now let's talk about that because at these rates of 100-101 yen to the dollar, tell me how it does affect this export machine.
JUCKES: Well, it gives it half a chance of coming back to life. I think that's the fair thing to say. So you will see Japanese exporters of televisions. If you think about the flatscreen television, you might have gone from, say, Samsung in recent years rather than Sony in recent years. There's been a huge move of the yen strengthen against the Korean yuan.
And the context is relevant. The yuan has been a currency that's benefited by being close to Japan and being a major competitor. You will see those exporters able to benefit, maybe in a way that the pound being weak hasn't really helped (inaudible) exporters because the Japan have a huge manufacturing base. They've been crippled. The question is how far is it fair to come back?
QUEST: And also, of course, if you take car manufacturing, a lot of Japanese car manufacturing with Japan companies is now outside of Japan. So that necessarily -- that's a two-edged sword, isn't it, because it's selling in local; but it has to repatriate at the higher rate.
JUCKES: And they have two problems, one with that and the other is, of course, their biggest import is oil, and that's priced in dollars. If that goes up --
QUEST: But oil, of course, is a -- has now come down.
JUCKES: Yes, and we welcome that, all of us, at every single level.
So what happens, the first thing in Japan, for financial market people, is profits of Japanese companies even if they're making things around the world, the profiting yen goes up so the Japanese stock market benefits first and hugely -- I think that's important because sentiment in financial markets may with the follow (inaudible) help the economy.
QUEST: Right. Final thought: do you believe Abenomics and the latest policies put in place by the Central Bank are going to cure deflation this time?
JUCKES: It'll certainly weaken the yen and they might, partly because Abenomics is about three -- a three-pronged policy, a three-arrow policy. Fiscal policy, working with monetary policy, working with structural reform -- nobody else, not the U.K., not the Europeans, not the Americans have actually pushed on all three to have the three arrows working together at the same time.
And, I don't know, the myth is three arrows are stronger than one. You can break them one at a time. But I -- I mean, I hope -- we've been calling for this kind of policy for 15 years. I hope it works.
QUEST: Thank you very much indeed. Have a good Friday. Thank you very much.
Now when we come back, QUEST MEANS BUSINESS --
(BEGIN AUDIO CLIP, "CALIFORNIA GIRLS")
QUEST (voice-over): They're still kings of the summer and soon a lucky bidder will own a piece of Beach Boy history, a major collection -- in a moment. QUEST MEANS BUSINESS.
(BEGIN VIDEO CLIP)
QUEST (voice-over): Tonight's "Currency Conundrum": what did the man on a 1,000 note yen, what's he famous for and what was his research into? Yellow fever. Hideyo Noguchi, a bacteriologist who devoted his life research to his researching yellow fever.
(END VIDEO CLIP)
QUEST: For 50 years the music of The Beach Boys has defined a summer feeling. Now you may have noticed it could be getting warmer in the Northern Hemisphere. Jenny Harrison will tell us a bit about that. And I'm ready for some flip-flops and some suntan lotion.
In the spirit of that, a long-lost stash of original Beach Boys memorabilia is to be sold in London. Richard Roth reports.
(BEGIN VIDEO CLIP)
RICHARD ROTH, CNN CORRESPONDENT (voice-over): The California sound of The Beach Boys, "Surfin' U.S.A.," classic American rock 'n' roll, you may have missed the '60s, but you can now see treasures from the band's rise to fame.
ROTH: 1962, this is The Beach Boys first.
JIMI MASTRONARDI, THE FAME BUREAU: Royalty check.
ROTH (voice-over): A $990 payment for "Surfin' U.S.A."; the check is one of 1,000 pieces of Beach Boys history up for auction online.
BARUCH HALPERN, MEMORABILIA COLLECTION REP: I think it's the largest memorabilia collection that's been auctioned off. As I understand it, this collection, if it were The Beatles, would be over $100 million.
ROTH (voice-over): In fact, The Beatles at one point were the only group to outsell The Beach Boys. Included in the sale, 150 original music manuscripts of The Beach Boys' greatest hits.
MASTRONARDI: And we have like "Good Vibrations," probably the most influential song that The Beach Boys ever wrote. This changed music.
(BEGIN VIDEO CLIP, "GOOD VIBRATIONS")
ROTH (voice-over): The collection was found in a Florida storage locker. And after a long legal battle for control, it's finally available to the public.
MASTRONARDI: "I Get Around."
ROTH: I mean, this is as big as it gets.
It's the 50th anniversary. I mean, so they've been around for that long. It --
ROTH: They get around, you mean.
MASTRONARDI: They get around, exactly.
(BEGIN VIDEO CLIP, "I GET AROUND")
ROTH (voice-over): After binding arbitration, The Beach Boys receive a small piece of the sale. It's rare that a rock band's early history is saved and available for purchase.
ROTH: Here's "Fun, Fun, Fun."
MASTRONARDI: "Fun, Fun, Fun."
(BEGIN VIDEO CLIP, "CALIFORNIA GIRLS")
ROTH (voice-over): Before you start dancing, The Beach Boys' treasure trove is being sold as an entire collection with bids expected to fetch at least $6 million. Time for some "California Dreamin'." -- Richard Roth, CNN, New York.
(END VIDEO CLIP)
QUEST: And that summer weather feeling, Jenny Harrison is at the World Weather Center. Good evening.
JENNY HARRISON, CNN METEOROLOGIST: Hello, Richard, what a week it is, ABBA a couple of days ago; now we're talking about The Beach Boys, my goodness, and California, some lovely weather out there, Richard, very nice indeed.
Not so good across the South; Texas, you've had some thunderstorms here the last few hours. More of them on the way, rolling along the Gulf Coast. You can see them there, the yellow warnings in place. Some delays at the major airports -- Chicago, Houston, San Francisco -- that, of course, is out west. We've got the warm weather in place as well.
This is why we're seeing some of those thunderstorms. It's 26 Celsius in New York right now. Remember, I was saying a couple of days ago that once the storm systems came through earlier in the week, the temperatures would rebound.
And as we go through the weekend, it's actually going to be quite cool across the north. And then out across the northwest and pushing down in through California, actually well above average, and that heat is going to hold on as we go through the weekend and really the first part of the week.
So where we've got those severe thunderstorms across the south, we've got some warnings in place, large hail, strong and damaging winds, two little pockets of both of those Friday into Saturday and more of those thunderstorms as we continue through the next 48 hours.
So as we go on another 24 hours, Saturday into Sunday, we've got more warnings in place this time, as you can see, across the mid-Atlantic. So for Saturday, temperatures pretty nice; not quite as warm as this Friday, 20 Celsius in New York and 23 in Atlanta. So feeling better actually in the wake of that system with those thunderstorms.
And then meanwhile across in Europe, look at this curl of cloud across the northwest, bringing things, I'm afraid, a little bit cooler. Got temperatures below the average. Friday, it's not been a bad day at all, not across the southeast. Kiev, 28; the average is 18. So again temperatures above the average. Not so across the northwest, 14 in London.
We've seen the rain come through; we've seen some thunderstorms across in Germany. And these temperatures will be below the average as we go through the weekend. So we've got this east-west split, warm in the east, below average, rain showers across the west.
And, Richard, you are heading to South Africa. You couldn't have picked a better time of year, sunny and dry, temperatures in the low 20 Celsius.
QUEST: We thank you indeed. I'm looking forward to it already.
Now this programming note: tonight on "AMANPOUR," an unforgettable image with an equally unforgettable story. Aisha, the Afghan girl whose nose and ears were cut off to settle a debt, Christiane's been following her story since she went to the U.S. in search of a new life and face. It's 15 minutes from now, that program.
And that is QUEST MEANS BUSINESS for tonight. Thank you for making the time and trouble to join us for our nightly conversation. I'm Richard Quest. Whatever you're up to in the hours ahead, I hope it's profitable and there's gold at the bottom of your rainbow.
ROBYN CURNOW, CNN HOST: This week we're in Cape Town at the World Economic Forum, a gathering of the biggest names in business and politics on the African continent. It's a chance to ask what if and, more importantly, what's next on Africa's ever-changing economic landscape. (Inaudible) discussions are taking place in that building over there.
And as I found out, one of the key points of discussion is what does it mean to be made in Africa?
(BEGIN VIDEO CLIP)
RICH LESSER, PRESIDENT AND CEO, THE BOSTON CONSULTING GROUP: We would say that the first priority is about building strong, robust businesses here in Africa, that historically for too long Africa was viewed almost with a trading post mindset, that you take resources out and you send finished products back in.
And what we really want to achieve is Africa as an ecosystem, Africa where it's not just about the resources; it's about investing to build manufacturing infrastructure, strong brands, high-quality educated workforce and to really create robust businesses. And that that will take time and effort.
And when you look at China or other places, you see that it's started by building strong businesses there and then, over time, taking them to the rest of the world.
CURNOW: And I think the key to that is Africans themselves; they've got to be able to say, listen, this brand is African and it's not substandard.
Adewale Tinubu, what's your experience (inaudible) creating your own empire in West Africa, when it comes to oil and gas? But I mean, it's been a tough road, hasn't it?
ADEWALE TINUBU, GROUP CHIEF EXECUTIVE: It was tough. But I think being one of the first things we decided earlier on in building the business was that we wanted to stay local but act global. We wanted to create a business which had global standards in all we did down to something as simple as our business cards, our presentations or the letters we wrote or the service offering we gave to people.
And it was a mentality which we drew right through the company.
What I actually look forward to seeing is the continent brand itself as a place for investment, a place for good returns, a place for good corporate practice, such that we can at least get that soft barrier broken and we can actually start to frame within ourselves as a -- as one trading group, you know, build local brands and then face the international community.
CURNOW: Mauritius, in a way, has become the poster child of a place, you know, to ease -- the ease of doing business. It's a regional economic hub when it comes to South African companies trying to set up businesses. You, in a way, have very, very blatantly rebranded yourself away from being just a high-end tourist destination.
How did you do it and what was the real key in terms of trying to change the narrative?
XAVIER-LUC DUVAL, VICE-PM, MAURITIUS: Yes, I think a country's brand is, in fact, what it lives, you know, what is the reality.
CURNOW: It's not just hiring a PR company and saying, listen, we got a strategy?
DUVAL: As I say, it's not what people say about you, you know, it's not what you sell, it's what people say about you. So we've actually diversified the economy considerably.
CURNOW: In a way, you bring up a good point, that in branding your country, you're branding your company as world-class or quality or, you know, do you have to be honest about all the negative stuff? I mean, there has to be very much perhaps (inaudible) brand. You've got to be sincere and true to yourself.
And that way, if a brand is going to be honest, (inaudible), you know, there are issues. There are challenges. There are faults here and you know, do you include that as part of the story?
UNIDENTIFIED MALE: I think transparency in today's world is at such a premium. It is so different that it was even with social media and all the things out there, that to think that you can hide issues that people won't notice, it's not the world we live in right now.
And it is far better to be direct, obviously portraying a positive (inaudible) steps that are being taken to address things, but to try to instill quality wherever you can and be transparent. It's -- it is the world we live in and it's critical.
UNIDENTIFIED MALE: Actually, I think for a brand to be sustainable, you have to be based on the truth. You don't have to necessarily (inaudible) the truth, but what you say is it has to be truthful. It has to be something that people really experience when they actually come to your country.
(END VIDEO CLIP)
CURNOW: So what's it like attending one of the World Economic Forums? Well, for one, it's an opportunity to rub shoulders with and talk to some of the continent's most promising young people. Well, after the break, I sit down with one of them, a young entrepreneur from Cameroon, who's bringing the tech industry to West Africa.
(BEGIN VIDEO CLIP)
REBECCA ENONCHONG, FOUNDER AND CEO, APPSTECH: The availability of Facebook and other social media has introduced different types of technology, new technology to Africans. And they've realized that they can develop their own, you know, that Facebook is great, but I want to make my own (inaudible).
(END VIDEO CLIP)
CURNOW: Welcome back. Well, Rebecca Enonchong has worked for the American tech giant Oracle. But when it came to starting her own company, she came back home to Africa. For this week's "Face Time" interview, I sit down with the founder and CEO of AppsTech. And I started off by asking her about the promise of Africa's burgeoning tech sector.
ENONCHONG: You know, I've been involved in technology in Africa for the last over 10 years. And I've seen tremendous growth, I mean, where when I started talking about technology, you know, 10 years ago, today it's happening. You know, some of the things that we were dreaming of before are actually happening on the ground. You know, there are some huge success stories across the African continent.
CURNOW: This is all piggybacking on this leapfrogging of mobile technology in the last 10-15 years --
ENONCHONG: It's had a huge impact. But I think other things have had an impact as well, is the availability of Internet, a little bit of a lower cost; the availability of Facebook and other social media has introduced different types of technology, new technology, to Africans.
And they've realized that they can develop their own, you know, that Facebook is great, but I want to make my own Facebook, you know. And, so yes, mobile technology has -- it's given people the idea that you can succeed in Africa, in technology; you know, whereas people didn't really believe in mobile in Africa.
You know, I think that there's some studies that showed that you could get 100,000 -200,000 mobile users in some of these countries. Well, you know, today Africa has 700 million mobile telephone users. And that -- those statistics, nobody dreamed of them. And so now that you can dream, you know, about mobile, you know that mobile is a success. Now you can dream about other types of technology.
CURNOW: So you mentor young entrepreneurs, young tech entrepreneurs. I mean, what do you tell them? And what's the biggest challenge that they face?
ENONCHONG: Survival is the biggest challenge. You know, I was -- I was surprised because you know, some of the challenges that I saw were, you know, people needing transportation money to get from their home to the --
ENONCHONG: -- yes, the tech hub. And those are -- because you can have the best idea in the world. But if you can't get from point A to point B, you'll never be able to execute on that. You'll never be able to get the funding. You'll never be able to go to the meetings that you need to go to. And so there's a very basic, basic problems that need to be addressed.
But once you can overcome that, I think that the challenges are getting these entrepreneurs to think outside of their immediate community, to think global. You know, you can build local, but think global. You know, think of a solution that will address a market that's larger than your own country because that's how you'll make money.
CURNOW: But how difficult that must be if you're struggle for bus fare into town.
ENONCHONG: Yes, and I think that's why it's so important for organizations to help build that ecosystem. We've seen a lot of support from some foundations, from Google, from some companies that have invested in projects that support this ecosystem of technology entrepreneurs. And so they have a place to go to.
They don't have to rent their own office because they have -- there is an office. There's the Internet. There's -- you know, so -- and they have mentors and they have advice. And those are the things that we can -- that will help bring these entrepreneurs from idea to business.
CURNOW: And you like you said at the beginning of this interview, you know, this is not a dream; this is happening.
ENONCHONG: This is happening. This is wonderful --
CURNOW: And it's revolutionary because it's changing lives in this continent.
ENONCHONG: Absolutely, absolutely. There are different ways. You know, the technology isn't a means for everybody to succeed. But it's -- at least one category of people can come out of poverty, using technology.
And I support -- I mean, there's -- you know, I'd like to see more tech millionaires on the continent because that's where we have to get to, you know, where there are so many tech millionaires that people will say, I want to be a techie. You know, I want to be -- I want to be one of them. You know, it shouldn't just be seen as some nice thing they get out of poverty. No, let's make millionaires out of these people.
CURNOW: It can happen.
ENONCHONG: It has happened. It has happened. There are examples of African tech millionaires and huge success stories, especially in South Africa, I would say, where some companies have sold for several -- hundreds of millions of dollars. That's huge. That's huge.
In Nigeria recently, there's an online merchant that received a $26 million investment. That's real money. You know, that's real money. And if these investors are putting in that amount of money, it's because they know that they will make money in return.
(END VIDEO CLIP)
CURNOW: Business leaders like Rebecca, all talking about opportunity, about innovation here at the World Economic Forum. I'm Robyn Curnow in Cape Town. Please do catch us again next week. In the meantime, go online. We're at CNN.com/MarketplaceAfrica.