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QUEST MEANS BUSINESS

Fed Minutes; US Markets React; Exclusive: Zuckerberg's Bold Plan; Dollar Weaker; Long Hours Culture

Aired August 21, 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: Tonight, following the taper trail. The Fed minutes have been released just about now.

Also on the program, the tragedy raises questions over conditions for interns in the financial industry.

And a billion down and five more to go. Mark Zuckerberg takes on the world. It's a CNN exclusive interview.

I'm Richard Quest mid-week, and I mean business.

Good evening. The US Federal Reserve is searching for a way forward. These are the minutes from the FOMC. The latest meeting suggests that the committee is charting uncharted territory.

First of all, the number of participants were somewhat less confident about a near-term pickup in economic growth than they had been in June, according to the minutes. Not only that, they generally agreed highly accommodative monetary policy would help matters. And they said market expectations were well aligned with their own.

If we look at the detail of what they actually said, only one -- only one participant wanted a more specific time table of when the Fed would wind down its bond-buying program. The minutes have been out for just a couple of moments and the Dow Jones is off 81 points, 14,922. So, we are now comfortably under 15,000. It's a loss of some half a percent.

If you read the sort of comments that the committee said, time and again there is this uncertainty. They are -- for example, fiscal policy and restrained spending in the first half of the year more than they previously thought.

Meeting participants pointed to heightened financial market uncertainty. A number of participants remarked on the possible usefulness, on and on and on. Few members expressed the importance of this or that. Felicia Taylor is with us in New York.

As I read the notes and the minutes, they're not in disagreement by any means, but there is this level of what is happening and where do we go next.

FELICIA TAYLOR, CNN INTERNATIONAL CORRESPONDENT: Yes, the question is -- and the term "tapering" is one that we in the marketplace as journalists as well as analysts and traders have coined, it's not a phrase that the Federal Reserve chairman has actually used himself.

It's not a question, really, of whether they're hawkish or dovish on behalf of the Federal Reserve participants, it's a question of when they're going to start this tapering.

QUEST: Right.

TAYLOR: And I do want to point out one thing that is interesting in the change of language, and this is quite significant. The committee would moderate the pace of its securities purchases later this year and if economic conditions continue to develop -- that's significant -- saying that it's still data dependent, it would reduce the pace of purchases in measured steps -- measured steps -- and conclude the purchase program around the middle of 2014.

So, he's still left keeping -- Ben Bernanke has still left the door wide open. It still continues to be data dependent, but that word "moderate" is much different than the world "modest." Most of us think of that is being synonymous. It's not. "Moderate" is a bit more aggressive a term.

So, they're looking at things as being -- and hopefully the economy will continue to recover, like we saw with existing phone sales --

(CROSSTALK)

QUEST: Right, but Felicia --

TAYLOR: -- indicating we have a rebound.

QUEST: -- all right, but hang on. On this question of whether they start in September or October or whatever, here we have a few members emphasize the importance of being patient and evaluating additional information before deciding on any changes to the pace of asset purchases. So, from your market soundings, is September still the preferred time when they might start this tapering?

TAYLOR: OK. Again, it always depends on who you talk to. There are surveys out there that indicate that September is about -- a number of individual economists say that about 60 percent of those surveyed believe that September is the month. If I talk to a number of different traders -- so, economists versus traders -- traders don't necessarily believe that we're going to see that.

And again, we haven't understood or heard yet what that tapering is going to look like. What kind of mechanisms are they going to use?

Earlier, we heard some traders saying, if we saw a pullback of between $5 billion and $10 billion that would be considered bullish by the marketplace. That's a very modest -- not moderate, modest -- pace. If it was more like $15 billion to $20 billion, that would be a much more aggressive pace.

QUEST: Felicia. Pause yourself there. Hold yourself, hold yourself. Let's put this into some market interpretation. Let's take, for example, the US ten-year bond yields and how they have been reacting over the last few times.

And you can see straight away, bond yields here, we know there's been this very significant run-up in bond yields, particularly since June. Down at 2.2 percent, and now we're up at 2.7 percent, just off a little tad. In that scenario, that is what the committee is basically saying is unwarranted or, certainly, not justified by their own decision-making process.

Again, other things -- look at how emerging markets -- you and I have talked about this all this week, the Indian rupee, for example, and how this has fared. A 15 to 16 percent fall in the rupee in recent days and weeks as the tapering prospect becomes more likely.

And it's not only the rupee. The rupiah in Indonesia, a variety of other emerging market currencies have also felt the effect.

And gold. Now, gold -- gold is the odd one out in all of this, because as the dollar has strengthened in some areas, we should, of course, see gold weaken. But we see gold coming back up again from its low points in July down at $1180.

Financial markets, Felicia, whether it's yields -- yields on bonds, equities, the dollar. This uncertainty permeates everything.

TAYLOR: Absolutely. There's no question about it. And we're talking about "U" words. Uncertainty is never good for the marketplace. What traders and analysts want to see is that the Federal Reserve is united.

As you mentioned, there's one dissenter within the members of the committee -- and the members are the voting members, as opposed to the participants, which encompass all 19 governors of the Federal Reserve Board.

So, when we don't have that kind of united belief as to when this -- or how big this tapering should begin, that's what the market doesn't like to see.

However, this debate has been going on for such a long time that pretty much most traders believe it's already baked in. But you can see when you take a look at certain parts of the stock market, take a look at utility stocks.

Those yields have already started to creep up, as the yields on that tenure that you were pointing out have also started to creep up. That's of concern, and when you see those things start to switch in terms of how traders are playing this marketplace, that's what's key as to what the Federal Reserve is going to do.

Don't forget, though -- and this is so important -- this is still very data-dependent. That labor number that we're going to be taking a look at in the beginning of September, is key to what the Federal Reserve might do and how big this tapering might begin to be.

QUEST: And -- and I'm going to just join in the discussion on that data number because that data number very clearly, the Fed saying again and again -- I'm just looking for it here -- not to get hung up on this 7 percent unemployment rate or this 6.5 percent unemployment rate --

TAYLOR: Right.

QUEST: -- for Fed funds. But 7 percent in terms of the tapering.

TAYLOR: The reason for that is, as you've seen, the unemployment rate has now dipped to 7.6 percent. But the key here is not because jobs have necessarily been created. That's not the point A lot of people have left the workforce looking for jobs within the workforce.

QUEST: Right.

TAYLOR: And they're also a -- a large amount -- I was going to use another adjective. A large amount of jobs that are low-paying jobs or people have to have multiple paying jobs that don't necessarily add up to the kind of income that they used to have. That's the crux of where the job market hasn't come to fruition yet. We really need to see growth --

QUEST: Felicia?

TAYLOR: -- of $250,000 to be satisfied that it's moving in the right direction.

QUEST: We'll see that growth in the future. Felicia Taylor, who's in New York. And it's very excited, it's quite extraordinary, really, isn't it? Felicia, we thank you for that.

The markets are open and doing business in New York. We've already given you a foretaste of how they're standing the prospect of reduced liquidity. Let's turn to Zain Asher. We're down 83 points on the Dow at the moment. You're on the floor of the Exchange. People are looking at graphs all around you. What are they making of these minutes?

ZAIN ASHER, CNN BUSINESS CORRESPONDENT: Hey, Richard. The thing is is that in theory, investors should be breathing a sigh of relief, but if you look at the Dow right now, we're down 83 points. People are sort of digesting what these minutes are saying.

And it's the question is, if we're not going to be tapering now, then when is tapering going to begin? Is it going to be in September? And we've seen so much volatility these past few days with the markets.

People are sort of nervous about when tapering is going to begin, and we saw about five previous sessions have lost. The S&P was down 2 percent last week. Bond investors yanking money to of bond mutual funds, yanking about $20 billion from bond mutual funds in the first few weeks of August.

But I do want to mention that these minutes, the idea that QE3 is going to continue, is sort of good and bad for the markets. It's good news because yes, we know the Fed is going to keep shoving money down our throats.

But it's also bad news because what does this say about the state of the economy? What does it say about the economy's ability to stand on its own two feet. You look at the fundamentals, Richard. Unemployment is about 7.4 percent, and the only reason why it actually went down is because people were dropping out of the labor force.

You look at consumer spending, that's not great either. You see these big retailers disappointing on earnings. That just shows that discretionary spending isn't quite where it needs to be.

And obviously, the Fed knows that you sort of increase mortgage rates, and obviously, the housing recovery might not be strong enough as well. So, I think all eyes are now going to be on what happens in September, Richard.

QUEST: September's FOMC meeting, we'll be watching closely. Zain, we thank you for that. Zain Asher joining me from the floor of the Stock Exchange.

When we come back, the founder of Facebook speaks exclusively to us about his bold new project. Mark Zuckerberg tells us why the social media site will last.

(BEGIN VIDEO CLIP)

MARK ZUCKERBERG, FOUNDER, FACEBOOK: To everyone at Facebook, I just tell them, come in and try to make the biggest impact that you can have. And if we keep building a service that people love and that more and more people use every day, which we seem to be doing pretty well at, then we're going to be fine over time.

(END VIDEO CLIP)

QUEST: Making his mark. Zuckerberg on CNN is next.

(COMMERCIAL BREAK)

QUEST: In 1928, the presidential candidate Herbert Hoover promised a chicken in every pot and a car in every garage. Today, the founder of Facebook, Mark Zuckerberg, wants to go a bit further and will try to provide internet access to every person on Earth.

He's leading a project called Internet.org, and its mission is to connect the billions of people currently without web access. CNN's Chris Cuomo sat down for an exclusive chat with the Facebook chief.

(BEGIN VIDEOTAPE)

CHRIS CUOMO, CNN HOST, "NEW DAY" (voice over): When you visit the Facebook campus, you get the sense that anything is possible.

ZUCKERBERG: We want the campus to feel like a little -- like a little city or village.

CUOMO: And now, Zuckerberg wants to make the entire world like the Facebook campus -- in a way -- by providing internet access to the entire world. The idea is called Internet.org, its target, the 5 billion people around the globe without access to the net.

ZUCKERBERG: Here, we use things like Facebook to share news and catch up with our friends, but there, they're going to use it to decide what kind of government they want. Get access to health care for the first time ever. Connect with family hundreds of miles away that they haven't seen in decades. Getting access to the internet is a really big deal. I think we're going to be able to do it.

CUOMO: And the word "we" is the key word here, because this isn't just about Facebook. Zuckerberg has done something extraordinary to achieve the extraordinary: reached out to the biggest players in social media and mobile data -- aka his competitors in part -- to work together.

CUOMO (on camera): How did those calls go?

ZUCKERBERG: It probably varies.

(LAUGHTER)

ZUCKERBERG: But in general, these are companies that we have deep relationships with and have worked with on a lot of things for a long time. So, this kind of came out of a lot of the discussions that we had.

CUOMO (voice-over): So, a team of the best in the business is coming together, but for a task this size, uniting five times the global presence Facebook has already, it's going to take a lot more.

CUOMO (on camera): What about the how? How do you do this? How developed is the plan?

ZUCKERBERG: We have a plan -- a rough plan for what we think we're going to need to do to pull it off, and of course, the plan will evolve over time and we'll get better ideas, but if you look at the trends, data is becoming more available to people, right? Apps are getting more efficient to run. There are new business models to help more people get online.

CUOMO: It's also good for Facebook and these other companies, right? Because mobile access to the internet is where your business lies, right?

ZUCKERBERG: If we were just focused on making money, the first billion people that we've connected have way more money than the rest of the next 6 billion combined. It's not fair, but it's the way that it is. And we just believe that everyone deserves to be connected and on the internet. So, we're putting a lot of energy towards this.

CUOMO: People see you as somewhat of a comeback kid right now. Forget about the "kid" part --

(LAUGHTER)

CUOMO: -- but just as a phrase, right? That you took some lumps, and you found a way to come back. Are you aware of that? Do you feel that in yourself, that some people thought it wasn't going to happen, that you'd had your run, but look at me now? Do you get a sense of that?

ZUCKERBERG: Yes, we've always just focused on building something great over the long term, right? So, everyone at Facebook, I just tell them, come in and try to make the biggest impact that you can have.

And if we keep building a service that people love and that more and more people use every day, which we seem to be doing pretty well at, then we're going to be fine over time. And that's our focus, in terms of building the company.

CUOMO: Hard to do, though, when you hit the bumps in the road, though, right? It's a great message when everything is OK --

ZUCKERBERG: It's especially important when you hit the bumps.

CUOMO: So, when not trying to connect the world to the internet, you have to run one of the biggest companies. And when you want a distraction from that, you've decided to take on the easy task of immigration policy --

(LAUGHTER)

CUOMO: -- in the United States. Why are you wading into those waters?

ZUCKERBERG: When we were first talking about doing this, a lot of people actually were worried that it was going to be a problem for Facebook, and I just decided I think that this is too important of an issue for the country.

There are 11 million undocumented people who came here to work hard and contribute to the country. And it's -- I don't think it's quite as polarized as people always say.

CUOMO: What would be your advice to the people in DC who are trying to balance these two almost diametrically opposed positions? One is immigration policy is about what you're talking about, let's bring in our human potential. And the other one is, let's find a way to get them out.

How -- if you had to enter that, this is your new team, you have these Democrats and Republicans come together. What advice do you think you'd have that's not going on down there now?

ZUCKERBERG: Well, I -- I can't really tell anyone how to legislate. That's -- everyone understands this stuff way better than I do. So, my goal in this is just to try to help support folks who care deeply about getting his done on both sides, and hopefully we can make a difference.

CUOMO: In terms of the politics of it, you think it's just important enough where you're going to do it anyway.

ZUCKERBERG: Yes. I think that there are some things in life that if you believe that it's such a big problem, you just stick your neck out and try to do it, right? And a lot of people think that it's going to be really challenging to connect 5 billion people, too. It is.

But I think it's one of the biggest problems of my generation, to get everyone in the world to have internet access. And similarly, 11 million undocumented people, that's a lot of people whose lives we can improve and make the country stronger.

CUOMO: Good luck with everything --

ZUCKERBERG: Thank you.

CUOMO: You're not even 30 yet. You're doing great.

ZUCKERBERG: Thank you.

CUOMO: You're doing great. Good luck with everything.

(END VIDEOTAPE)

QUEST: And that's Mark Zuckerberg. Tonight's Currency Conundrum for you now. How long can the flu virus live on a US bank note? Is it 12 hours, 10 days, or 3 weeks? The answer later in the program.

The dollar is slightly weaker, trading higher against the euro and the yen.

(RINGS BELL)

(COMMERCIAL BREAK)

QUEST: There are serious concerns now about the working hours being expected from interns in the banking industry following the death of a German student who was on a seven-week internship at the Bank of America Merrill Lynch in London.

The cause of death has not been released. The police say it is not suspicious. CNN's Jim Boulden now takes a look at the long-hour culture in banking.

(BEGIN VIDEOTAPE)

JIM BOULDEN, CNN INTERNATIONAL CORRESPONDENT (voice-over): Moritz Erhardt was a 21-year-old German student finishing off an internship at the London office of Bank of America Merrill Lynch when he was found dead in this building, housing for interns or trainee employees trying to establish a career in London's financial district.

While his death is currently unexplained, the police say it is not suspicious. But it has sparked concerns that interns work too many hours trying to break into the financial world.

ANDRE SPICER, CASS BUSINESS SCHOOL: What's wrong is that it creates an unhealthy kind of work environment where people are pushed to the limits, but it's also unproductive. After 12 hours, people stop focusing and start making dangerous decisions.

BOULDEN: Hedge fund manager Paul Hawtin was a trainee stockbroker six years ago.

PAUL HAWTIN, CAYMAN ATLANTIC LTD.: It was very tough. It was hard to get the position. Went through a rigorous process of a lot of interviews, and then the hours were extreme to say the least. In the city is where a lot of money can be made. I'm an ambitious person, I work hard, and I wanted to be in the mix, as they say.

BOULDEN: Unsubstantiated claims on social media say Erhardt worked very long hours in the days before he died, including overnights, and that he may have had an underlying health issue. Bank of America won't confirm that, saying he was a popular intern with a promising future. Career counselors say support would have been available.

ADAM POWLEY, CAREER RELATIONSHIP MANAGER: Big firms will have procedures in place to sort of make sure that the interns have the support that they need in order to be successful in the internship, but also have that person to talk to or have those procedures in place should they need to use them.

BOULDEN: Those who have been through it, even while being paid, say there is little room to complain.

HAWTIN: It was almost impossible to bring it up with the senior -- your seniors, because they'd almost laugh at you, really, and say, look, there's the door. If you can't take the heat, go somewhere else.

BOULDEN: Erhardt was close to graduating and had completed other internships. A promising career cut short for a man quoted as saying he was looking forward to working in strategy consulting.

Jim Boulden, CNN, London.

(END VIDEOTAPE)

QUEST: Pretty much sums up the whole concept: if you can't take the heat, get out of the kitchen, which is why Britain's trade unions are so concerned about this. Earlier, I spoke to Paul Sellers, the Working Time Policy Officer for the Trades Union Congress, the umbrella organization, and asked for his concerns of what he'd heard.

(BEGIN VIDEOTAPE)

PAUL SELLERS, WORKING TIME POLICY OFFICER, TRADES UNION CONGRESS: We absolutely know that working too long regularly can kill. Though more often, the long hours aren't quite so extreme, and it means the onset of heart disease, stress-related illness, depression, and diabetes rather than death in most cases.

Secondly, in the individual case we're talking about, where we're talking about interns in long hours industries, one of the facts that mitigates those health impacts is where you have control over your job. Clearly, an intern has the least power in the firm and finds it difficult to say no when the expectations that they work for excessive hours. And that's the problem

QUEST: But many companies, our own included, now pay interns because as a policy decision, it was decided that was the right thing to do. But the intern idea of letting people experience the workplace, surely you support that.

SELLERS: We support good work experience. And indeed, we may support good internships as well. What we need to make sure is that they're properly paid and their not exploitative in terms of things like dangerous long hours.

So, yes, of course, it's great to get a taste for the workforce of what life at work is really like. But let's make sure it's done properly.

QUEST: Finally, as you look at this particular case and what happened and how the bank involved will now have to respond and react, one imagines there's some very hard, soul-searching going on about whether youngsters were being asked to do the unreasonable and unacceptable.

SELLERS: Well, I think that's absolutely right, and it will have shaken quite a lot of other institutions who have these kind of working arrangements. So, of course there'll be some soul-searching going on.

But we need to make sure as a nation, as employers, as workers and, indeed, the government needs to make sure that people are protected, treated properly, and helped to work in a good way.

Because frankly, actually, if you work excessive hours, apart from your health, you don't do good work. Of course you don't. You get tired, you make mistakes, and your productivity drops off.

(END VIDEOTAPE)

QUEST: Many of us did internships, whether it was of one description or another, and worked long hours, @RichardQuest, the intern culture. Not only do we now have interns, of course, where they are -- where interns are now paid, is it right to ask the intern to get your coffee or do the photocopying? Never mind the long hours or the serious stuff of what we're talking about here.

When we come back, the US Federal Reserve united in its approach to stimulus, divided on the time table. The July meetings, the minutes, after the break. More on that. QUEST MEANS BUSINESS.

(COMMERCIAL BREAK)

QUEST: Hello, I'm Richard Quest. There's more QUEST MEANS BUSINESS in just a moment. This is CNN, and on this network, the news always comes first.

The UN Security Council is set to meet behind closed doors in around half an hour to discuss the allegations of a new chemical weapons attack in Syria. An opposition leaders says as many as 1300 people were killed in a government attack in the Damascus suburb. CNN can't independently verify the claim. The Syrian regime strongly denies the accusations.

The former Egyptian president, Hosni Mubarak, may be out of detention within the next 24 hours. Prosecutors are reportedly not planning to appeal against a court order for his release. A prison official says if Mr. Mubarak is let go, he will be required to stay in Egypt while his multiple court cases continue.

Meanwhile, the European Union is suspending the export of military equipment to Egypt following a deadly crackdown on protesters by the government there. The EU foreign ministers met in Brussels, where they reviewed financial aid programs to Egypt. European humanitarian aid will continue.

Bradley Manning's lawyers are appealing to President Barack Obama to pardon his client, or at least commute his sentence to time served. The US army private was sentenced today to 35 years in prison for giving classified files to WikiLeaks. Manning will have to serve one third of that sentence before he's eligible for parole.

Media reports in Britain say the order to pressure the "Guardian" newspaper to give up the Edward Snowden files came from the UK prime minister David Cameron. His office says it doesn't comment on specific cases, but acknowledged a duty to protect the public.

Meanwhile, the domestic partner of "The Guardian" reporter who broke the Snowden story is suing the British government. Authorities detained David Miranda at Heathrow Airport for nine hours using anti-terrorism laws.

(MUSIC PLAYING)

(END VIDEO CLIP)

QUEST: Bonds are falling after the minutes of the Fed's latest meeting were released at the top of the hour. The market had been off some the best part of 80 points. It's pulled back some of those losses now and we're off just 41 points now but still under 15,000.

And this shows you exactly how the markets are grappling with what will be the first step toward the trimming of monetary support.

Diane Swonk is with me; she's the chief economist at Mesirow Financial, joins me from Chicago.

The -- they are agreed, with the exception of Resta George (ph), they are agreed that no more needs to be done and that need to wait and see. But they are not agreed on really how to move forward.

DIANE SWONK, CHIEF ECONOMIST, MESIROW FINANCIAL: That's exactly right, Richard. We're really seeing a lot of dissonance in how the Fed feels about moving forward and that's because there is no clear path on how do you taper as our tapering, as we've been calling it. I think what we're going to see, given how much disagreement there is within the FOMC and among the participants, which are not always the same things, although they're all in the same room, is that we're going to see the Fed move very, very gradually at this first move in September.

I think there really is a push to move and do something because Ben Bernanke has to lay the groundwork for the next chairman.

That said, he doesn't have to do much and I don't think he's going to be doing very much. They're concerned about the housing market right now.

QUEST: You see, that was the interesting thing as well. If we get rid of tapering, they are surprised at the fiscal tightening is having a much great effect. There's a lot of uncertainty on the unemployment numbers. You can I could debate it till next week, next Thursday, about -- you could put one number out and I'll pick the exact opposite and we go backwards and forwards.

The economy's growing, but there's not, to quote Mark Kearney, velocity speed.

SWONK: Exactly. And this has been the ongoing issue for the Fed. And one of the problems of the Fed as well is that the idea that Ben Bernanke first laid out in 2002, when he did this road map of unconventional easing, which we're in the middle of, almost to the note of what he laid out in 2002, was complementary, not competitive fiscal policy.

And what you do have is fiscal tightening at this stage of the game, an economy that has not as -- not reached anything near escape velocity, or any velocity of money in the economy, either, not that churning that we'd like to see of the money supply, where it comes back and sort of gets out of trees that has been dropped by helicopters and reaches us all.

And that's where the real problem for the Fed is, because they're trying to continue to ease, but less aggressively and not quite sure how to do that in a targeted way that will still have any bang for the dollar.

QUEST: OK. In that scenario, what do you still expect a September toe in the water?

SWONK: I expect a toe in the water; no body, no ankle, no foot, no nothing else. I think it's going to be extremely gradual. I think that was a good way to put it, Richard, is that it'll be just a very small testing the market. But they've got to move a little bit. I think there's a sense and a pressure on them to move a little bit.

I think they're going to be more willing to taper on the Treasury side, although I do know they're very worried about all high Treasury yields have gotten. I think they're going to do it with a very -- much less than people expect. I think they're going to reinforce this message of, hey, we're not taking the punch bowl away. We're still selling spiked drinks on the side (inaudible).

(CROSSTALK)

QUEST: You see, I was looking at this. I was looking at the yield. If you look at the yield increase, in percentage terms -- all right, it may --

SWONK: It's huge.

QUEST: If you got -- it may only have gone from 2.2 to 2.7 (inaudible). But in percentage terms, you're looking at a 30-40-50 percent gain or a 30 percent gain on the 10-year, which is a significant yield increase if that continues.

SWONK: And it's not been ignored, what we've seen. I know many on the Fed that participate in these meetings and vote at them -- and I won't say who they are -- but I know many of them feel the move from 1.7, 1.8 or even 1.9 up to 2.5 is too much.

And we've exceeded that at this point in time. And that's not something that they feel good about. They see -- you see the headlines today about existing home sales. Well, they were revised down for the month of June. They're higher in July, but the realtors are saying, well, people are running in to take advantage of what they thought were the last in low rates.

And it's certainly not a panic that the Fed wants to vet the rest of the economy on that we're going to continue to see home sales that people are just trying to lock in rates rather than looking at homes as a good value.

QUEST: Very good to see you, making sense as always on this issue of what happening next.

And some of you have been tweeting on this question of what is actually happening. And the long and short of it, whichever way we cut it, the U.S. Fed is deciding at this moment when it is going to start reducing this vast amount of money that it's been pouring into the economy.

But it is reducing the amount it is not taking it away completely. And that's the discrepancy that I think often confuses the issue in this way.

Europe has been watching very closely. Growth is back. You'll know that, of course, because we had got growth numbers from the European Union last week. This is how the European markets -- they've had some very down sessions, and we still have three down with the biggest loss of nearly 1 percent just under in London where the FTSE was off and it's now at 6,390.

So over the last five or six weeks, Europe has continued to show losses as there are uncertainties on the way forward.

One notable exception: the Greek exchange, Athens General, was up -- the number ,1 percent, very low level, but it's -- this is on the possibility that's now becoming talked of more frequently that actually Athens may get a third bailout or Greece may get a third bailout in 2014. It seems the German finance minister is now actually saying that it's highly likely.

When we come back after the break, celebrate one and all and then go for a ride in the sky, where you'll be weightless. They call this the vomit comet. You'll find out if our reporter held onto her lunch, after the break.

(MUSIC PLAYING)

(COMMERCIAL BREAK)

(MUSIC PLAYING)

QUEST: Extra leg room, a designated quiet zone and no children. That's worth two dings on the bell. It's a business traveler's dream come true. Join me at the luggage carousel. In fact, members of BIB, Ban Babies in Business Class, where we've all talked about that many times, well, now in Singapore, that might actually be happening because Scoot, which is the low-cost carrier that's operated by Singapore Airlines, is now banning children under the age of 12 from sitting in the first five rows of the cabin.

Those rows have extra leg room -- just a bit extra leg room. And there's a strict silence policy, Scoot Silence, I think it's called or something similar, whilst you will be able to enjoy your flight. It follows on from other airlines, Malaysia's done something similar on its A380s on the upper deck, Air Asia X has banned children from the first few rows. So Scoot is now the latest, that it is banning children from parts of the aircraft.

Now I think we can all agree that might be a good thing, unless, of course, you're the parent with the child. To Brazil, where the organizers of -- well, the Brazilian hotel association, the Brazilian tourism board is now seriously worried about sky-high prices for the hotels during the World Cup in Brazil. This isn't a new problem.

We had this in South Africa; Match is the organization that basically buys up or gets the concierge for all the hotels and all the rooms and then divvies them out.

Average rates are now heading towards $400. So that, of course, is considerably higher at the moment, $461, twice the average (inaudible) in Johannesburg in the World Cup at the same time last year.

And to the U.K., where passengers could have access to high-speed broadband in the skies sooner rather than later as soon as next year. (Inaudible) are considering new technologies that would allow that to become possible before too long.

While these all added extras -- no children, high-speed, extra, are all in the way of travel. Sometimes you've just got to go that little bit further. You need to get up into space. Well, it's too expensive as we showed you earlier this week. But there is a way that you and I can have a space experience of being weightless -- provided, of course, you can keep your lunch down.

Rosie Tomkins went on the vomit comet.

(BEGIN VIDEOTAPE)

(MUSIC PLAYING)

ROSIE TOMKINS, CNN CORRESPONDENT (voice-over): Seat belts fastened, bags stowed, sitting on the runway at Border (ph) Airport an ordinary plane with an extraordinary purpose. On board, a group of international scientists and me.

For the 13 teams of scientists invited here by the European Space Agency, it's a chance to explore what happens when gravity is removed.

JEAN-LOUIS THONNARD, PROF., CATHOLIC UNIVERSITY OF LOUVAIN: It gives us the opportunity to ask or to answer, to formulate questions related to the impact of gravity on movement.

TOMKINS: It already feels like an unusual flight, very steep (ph). Everyone's a little bit off balance, but nothing like what it's going to be like.

TOMKINS (voice-over): To achieve the weightless environment, the aircraft climbs gradually to an angle of 47 degrees as in this image of a similar flight. Gravity increases to 1.8 G, making you feel twice as heavy as your natural weight and then something amazing happens.

(LAUGHTER)

(MUSIC PLAYING)

TOMKINS: Oh, my goodness. The aircraft if flown into people and gravity is being canceled out. (Inaudible).

UNIDENTIFIED MALE: Gravity does not disappear (inaudible). But we are in a state of freefall. So we reach an angle of 47 degree up, isolating with full thrust of the engine and then the pilot turns off the engine cut the engine so nothing (inaudible) gravity acts on the plane.

TOMKINS: How is your experiment going?

UNIDENTIFIED MALE: OK.

TOMKINS (voice-over): Experiments range from the behavior of objects to human judgment.

THONNARD (from captions): So we are measuring the impedance, the resistance of the joint from the muscle's activities.

TOMKINS (voice-over): I, meanwhile, conduct my own experiments.

TOMKINS: It's so hard to control where you go.

UNIDENTIFIED MALE: On a flight, you get born again into a new environment.

Words are not enough to describe what it is. You have to live it by yourself.

TOMKINS (voice-over): It's a humbling realization, like so many things in life we take for granted, gravity can only be felt and appreciated when we have it taken away -- Rosie Tomkins, CNN, Bordeaux, France.

(END VIDEOTAPE)

QUEST: I've always wanted to try that. I was quite jealous of Rosie getting the opportunity to do it.

Jenny Harrison is at the World Weather Center.

JENNY HARRISON, CNN METEOROLOGIST: Richard, I'm going to talk about Europe, very, very quiet picture. For the first time in probably two months, we've got a very quiet picture. But not only that, we have got temperatures actually close to the average, nothing untoward apart from maybe the end of the week, that hot air you can see across the southwest actually following out towards western areas of France, up into the U.K.

And so what that means is look at this for London. Now Thursday into Friday, the temperatures maybe 26, maybe a bit warmer than that on Friday. So above the average, save for Madrid. It has actually stayed warm here and Paris by Friday maybe 29 Celsius, the average is 24.

That is probably about it. By Sunday those temperatures back down to the average. We've got one or two showers pushing in from the west and one or two scattered areas of rain across areas of Europe. But for the most part, it is fine and dry for the next few days. No travel problems at all. And as for the temperatures, you can see for Thursday, 29 in Rome, that warm weather in Madrid, 37 and 26 in Vienna.

Now fine and dry there. Not so fine and dry elsewhere. Really need to tell you about what is going on over in Asia, in particular this. This is actually what is going on still in the Philippines. This is actually Pass (ph) City, now 50 percent this city is now underwater. You can see people are stranded in their homes. This is actually another state of emergency. This has been called upon by the mayor here.

Let's go back to my graphics. I want to tell you what's going on with this particular typhoon now. It is now making landfall. It is actually across the eye. It's across Taiwan, pushing across into mainland China. The rain is still coming down in torrents in Taiwan. This storm is not yet done, all sorts of travel problems, Richard. Yesterday, certainly on Wednesday in Taiwan, we actually had over 190 inbound and outbound flights canceled, also the high-speed rail was canceled as well.

QUEST: Well, I'm supposed to (inaudible).

HARRISON: Several days.

QUEST: Several days. Jenny, thank you very much. Update us tomorrow please. Thank you very much indeed.

When we come back, QUEST MEANS BUSINESS, public speaking and shivers down the spine. As viewers this week have found out, after the break, the final part of "Facing the Fear."

(COMMERCIAL BREAK)

QUEST: The answer to tonight's "Currency Conundrum," earlier I asked you how long can the flu virus live on a U.S. dollar bill? The answer, how long do you think? Ten days, in some cases scientists found paper money could transport the flu virus for up to 17 days.

I think we'll leave this just where it lies.

This week we've been featuring a phobia of mine, speaking in public. (Inaudible), one of the world's best known drama schools, helped me relax and even change the way I speak. In tonight's final part of "Facing My Fear," reeducation draws to a close with some advice about the day job.

(BEGIN VIDEOTAPE)

(MUSIC PLAYING)

QUEST (voice-over): Previously on "Facing My Fear":

QUEST: I hate public speaking.

CLAIRE DALE, COMMUNICATIONS SKILLS COACH: In none of this am I expecting that suddenly we're going to land on something that becomes a new style for you. Not at all.

QUEST: It's a lot to think about (inaudible).

DALE: Yes.

QUEST: I've done a lot of thinking and quite a bit of practicing. And all that on top of the day job has taken its toll.

DALE: Whenever one of those comes along, really use it, OK? And the more the merrier.

QUEST: There was a late night last night and an early start this morning.

DALE: OK.

QUEST (voice-over): And today, the final session. And we take the concepts of "think, breathe," and we add the final one, "speak."

QUEST: I think the best holiday was one of the -- (inaudible).

We didn't get very far with that, did we?

The holiday that comes to mind was my first trip to Australia.

QUEST (voice-over): For me, there is one more concept with which to grapple: doubt.

DALE: How did it feel in comparison to what you would normally do?

QUEST: It feels more staged.

DALE: Right.

QUEST: It feels like it's lost the enthusiasm, which, of course, will come with practice, but it feels like it's lost the authenticity.

DALE: Yes, yes, it's the -- I know exactly what you mean.

QUEST: It's managed.

DALE: (Inaudible) where we are, it's managed. We need to train this away from when you're performing.

QUEST (voice-over): I began this process thinking -- or perhaps hoping I might be able to leave broadcasting out of it. I was wrong.

Claire wants to bring a QUEST MEANS BUSINESS staple into the classroom.

QUEST: If you'd join me over in the library, you will see what I mean.

This is how it would normally be done.

Blah, blah, blah, markets revise down very sharply today. And join me in the library.

And as you can see, straightaway, one of the most important aspects, the markets fell sharply.

DALE: OK. So there's a point in there where you need a breath. It feeds the communication down --

QUEST (voice-over): The point of this is not just the breathing, it's about engaging with the auctioned. According to Rada (ph), this is something with which many business people struggle.

QUEST: I'm relatively comfortable with leaning into the camera. Now if I can do that without it tensing up.

DALE: Let's see if there's a way to do that without the voice going, you know, doing, yes. That's what we need to find, isn't it?

QUEST: Yes.

Now if you look and see exactly how the day progressed...

DALE: Good, good. Just stop there. Let's just do "now, if you look and see exactly..."

And so just remember doing that NG slide? That's really good there. Just see if you can --

QUEST: No, if you look and see how the day progressed...

DALE: Good. That's quite fine, isn't it?

QUEST: That.

DALE: That is quite fine of the day. That's the find of the day. And I really want to communicate with you.

QUEST (voice-over): My biggest fear when embarking on this course was not failure but the opposite, that someone else's way might prove better than mine. That is one lesson I will remember.

DALE: It's wonderful watching you work. Now through your voice and through the taking the time to breathe, we just get more of you. Feels more -- I don't know. I'm not --

(CROSSTALK)

DALE: -- just feels more generous, more open. And I love it.

QUEST: (Inaudible).

DALE: Well done.

QUEST: Thank you. (Inaudible) test.

(MUSIC PLAYING)

QUEST: Good afternoon. (Inaudible), please. Good afternoon. Excellent. We have people who are alive and kicking.

(END VIDEOTAPE)

QUEST: I'll have a "Profitable Moment" -- I'll have a "Profitable Moment" after the break.

(MUSIC PLAYING)

(COMMERCIAL BREAK)

QUEST: Tonight's "Profitable Moment": the Fed minutes from the meeting of July the 30th and 31st, they make absolutely fascinating reading, not because of any great decisions that they've taken or direction that they've given, but because it is the clearest evidence of the uncertainty that now exists in international economics.

We're seeing it all around the world, in the U.K. you have Mark Kearney at the Bank of England. You have, of course, Mario Draghi at the ECB in Frankfurt, with worries about how he's going to deal with his OMT in the periphery.

And here in the Fed, in the United States, well, Ben Bernanke with a panel and a board that frankly are undecided, yes, they know the way forward and they've agreed what needs to be done now, but there is still so much uncertainty about what happens further down the road, how much tapering is right, how far they need to go.

And that's why, although the crisis of 2008 and '09 is in the past. we're very much still in the trenches of the economic crisis.

And that's QUEST MEANS BUSINESS for tonight. I'm Richard Quest. Whatever you're up to in the hours ahead, I hope it's profitable.

(MUSIC PLAYING)

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

QUEST (voice-over): It's the top of the hour; these are the headlines.

The U.N. Security Council is about to hold a closed door meeting to discuss allegations of a new chemical weapons attack in Syria. An opposition leader says as many as 1,300 people were killed in a government attack in a Damascus suburb. CNN can't independently verify the claim. The Syrian regime strongly denies the accusations.

The former Egyptian President Hosni Mubarak may be out of detention within the next 24 hours. Prosecutors are reportedly not planning to appeal against a court order for his release. A prison official says if Mr. Mubarak is let go, he will be required to stay in Egypt while his multiple court cases continue.

Bradley Manning's lawyer is to appeal to President Barack Obama to pardon his client or at least commute his sentence to time served. The U.S. Army private was sentenced today to 35 years in prison for giving classified files to WikiLeaks.

The minutes from the latest Fed meeting have cast doubt on whether the U.S. central bank will start to curtail bond buying in September as anticipated. A summary of the July meeting indicates purchases may not slow as soon as some had thought.

(END VIDEO CLIP)

QUEST: Those are the headlines. Now to New York, Hala Gorani is at "AMANPOUR."

END