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QUEST MEANS BUSINESS
NASDAQ Trading Halt; Trader Reaction; Fed Minutes Fallout; Bo Xilai Trial; Fukushima Alert; Dollar Up; Make, Create, Innovate: Microchip Evolution
Aired August 22, 2013 - 14:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
MAGGIE LAKE, HOST: NASDAQ nightmare as all trading is halted.
A trial for China. Bo Xilai tests the country's potential to reform.
And no tripod, no lens? No problem. Award-winning photography with a very modern difference.
I'm Maggie Lake, and this is QUEST MEANS BUSINESS.
Good afternoon from New York. An unexplained technical error has halted trading on the NASDAQ, bringing a huge chunk of the US stock market to a standstill, paralyzing tech giants like Apple, Google, and Microsoft.
This is what trading on the NASDAQ looked like today. It started flatlining at about midday. Maribel Aber joins us live from the NASDAQ with the details. Maribel, do we know what happened?
MARIBEL ABER, CNN MONEY CORRESPONDENT: Maggie, we don't know at this point. Right now, there is an investigation happening now. Again, as you mentioned here, NASDAQ OMX exchange halted trading across all securities in early afternoon Thursday, so about 12:20 is when this happened.
They're saying it was a technical issue. They're halting it until further notice. Trading was halted due to issues with quote dissemination, that's what the exchange said in alerts that were sent out to traders.
So, this is important because, Maggie, this is the data, of course, that's used to determine the prices for quotes. There was a breakdown there. It's important because that's how traders, of course, use quotes for those orders to determine the value of stocks.
And as you said, we're talking about big stocks here at NASDAQ. We've got Apple, the likes of Google, Yahoo!, Staples, also think about those big ones.
The other thing is, NASDAQ stocks represent over 20 percent of the S&P 500, not to mention how many ETFs or mutual funds out there that might have NASDAQ stocks in them. And the larger issue is that buy and sell orders are not being matched in general. This could have a bigger impact, and it really brings to question, Maggie, the reliability of electronic trading.
Now, NASDAQ is saying that the halting in trading is only halted in options, but traders on the floor of New York Stock Exchange saying they can't access NASDAQ-listed stocks.
And the SEC spokesman, John Nester, said that the agency is monitoring the situation and that it is in close contact with the exchanges, the New York Stock Exchange, that it halted all NASDAQ securities at the request of NASDAQ. So, that's all we know right now, Maggie. It's pretty fluid.
LAKE: It certainly is. And I know everyone trying to get to the bottom of it, figure out what went on. The other thing everyone wants to know, Maribel, of course, is do we know when they're going to open? If they are definitely going to reopen today?
ABER: We don't know if they're going to reopen today. What I've been hearing from NASDAQ is momentarily. But I've been on calls all afternoon since this happened, and "momentarily" from 12:40 until now, we're still moving.
LAKE: Unbelievable. And of course, this comes after that -- a lot of problems with the Facebook IPO, NASDAQ had hoped that they had put that behind them, but clearly this is another black eye at the very least, at the surface, until we get to the bottom of exactly what happened.
All right, Maribel, thank you so much for bringing us up-to-date on the very latest. The outage may also skew the calculation of other major market measures, like the Dow and the S&P 500. You just had Maribel explaining that some of these big stocks that trade on the NASDAQ also part of those composites.
Zain Asher joins us live from the New York Stock Exchange. Zain, what are you hearing down there? How are traders reacting? Is there a sense that this is having a major disruption in the broader stock market action?
ZAIN ASHER, CNN BUSINESS CORRESPONDENT: Hey, Maggie. Well, you look at it, obviously the Dow has NASDAQ stock in it. You think about HP, you think about Intel, you think about Cisco, these are obviously all Dow components.
As Maribel mentioned, the S&P 500, 22 percent of the S&P 500 is made up of NASDAQ stocks, so obviously the problem is here is that the market hates uncertainty, and that's what's happening right now.
I actually just ran down to talk to traders down here at the New York Stock Exchange, but interesting enough, they're telling me that they're not really going to be too badly impacted by this. They're saying that it's only going to really impact their retail customers who specifically request access to NASDAQ stock, and that's obviously not happening right now.
But what's going to be interesting is to see what happens when everything sort of changes and everything sort of reopens. How are they going to handle the reopening of this. The guys downstairs say they don't think it's going to be too chaotic.
But NASDAQ did actually send out an e-mail saying that -- and I'm quoting here -- "Customers who wish to -- not to participate in the reopening should cancel their orders prior to the resumption of trading. So, they are giving people a way out.
But as Maribel mentioned, we don't necessarily know when things are going to come back, when the NASDAQ is going to reopen, so everyone's guess is -- your guess is really as good as mine. We don't really know too much in terms of what's going to happen here. Maggie?
LAKE: That's right, we're still trying to get to the bottom of it. Zain, I just want you to give us a sense of the mood. I spoke to someone earlier who said, listen, this helps that it happened on a summer day when volumes were relatively low, the markets were quiet, it wasn't in the middle of a very sort of fast-moving day that could have caused some concern.
And that frankly, no one likes to see this happen. But it's not like it's the first time. There is a little bit of a drill in place, people understand that it's technical in nature and not something else. Are things very calm down there? Is there any sense of great concern or panic or anything like that?
ASHER: Maggie, it's interesting. I took a walk down on the floor just a few minutes ago, and there really is. You wouldn't really know necessarily that anything was wrong here. I was walking up to traders, I was asking them, hey, what is the mood down here? Obviously, the NASDAQ has halted trading, how is that affecting you guys?
People were saying that it hadn't really impacted them at all. Everyone I spoke to said that they hadn't really noticed any difference in terms of the way their day was going, so I think it really is something that is separate, only affecting the NASDAQ. The guys down here aren't really seeing too much of an impact at all, Maggie.
LAKE: It is very important to put that in perspective. Thank you, Zain. As that manager said to me, this is part of the -- doing business in the high-tech, high-frequency world that we live in. Zain Asher down at the New York Stock Exchange for us.
Well, China's great courtroom drama. Disgraced political star Bo Xilai begins his corruption trial, and he comes out blazing. We'll have the details after the break.
LAKE: A perceived lack of clarity on the timing of tapering US stimulus is lingering despite the details released Wednesday in the Federal Reserve's minutes. That sent US bond yields up once again. They touched two-year highs this morning. Yields on the benchmark ten-year note are close to 3 percent now.
Emerging market currencies are also under pressure. India's rupee set a new record low against the dollar for a fifth straight session. Indonesia's rupiah slumped to a four-year low against the dollar. It has now fallen for six straight sessions, losing close to 7 percent.
And Brazil's real is also suffering. The country's central bank president has pulled out of the annual Jackson Hall gathering of top monetary policymakers because of the crisis. Brazilian airlines are calling for government aid to help them curb losses stemming from the plunging currency. The real has fallen 15 percent so far this year. That is a very big move.
Nathan Sheets joins us now from New York. He is global head of international economics at Citigroup. Nathan, thank you so much for being with us. Boy, a lot of uncertainty in the markets today. Not only are we dealing with the NASDAQ halt, but people still trying to get their head around the Federal Reserve.
Tell us what you expect. Are we going to see, first of all, see them start to pull back on those bond purchases in September? Is that a done deal now?
NATHAN SHEETS, GLOBAL HEAD OF INTERNATIONAL ECONOMICS, CITIGROUP: I think that the Federal Reserve has made very clear that they are seeing positives signals in the US economy. And as the economy recovers, the Federal Reserve doesn't feel that it needs to continue with this significant asset purchase program that it's been pursuing.
Whether that happens in September or that happens in December is an open issue, but I do expect very much that over the next few months, we're going to see the Fed slow the pace of its securities purchases.
LAKE: Nathan, the Fed has said that this is going to be gradual. Whatever they do is going to be gradual and they're going to constantly look at the economy for clues. Why are we seeing such an outsized reaction in the emerging markets if this is going to be a gradual shift? Does it make sense? Does it add up?
SHEETS: I think that, indeed, the Fed will be gradual with its policies, but the markets are very much looking and saying, well, as the Fed starts to reduce the pace of its asset purchases, soon that means the Fed is going to phase them out altogether.
And eventually, that means the Fed's going to be hiking rates. So, the markets are looking out a year or two in advance and saying we're going to have a much less stimulative Federal Reserve.
Then at the same time, the markets are also looking at the emerging market economies, and the emerging markets have very much benefited from the global stimulus that's been coming from the major central banks.
And in a world with a bit less stimulus, that is a world where it will be tougher, say, for the emerging markets to fund themselves, and there are some real financial risks, I think in the emerging markets as a result of that.
LAKE: And do those financial risks continue? We heard people saying today we've seen bond yields move in the US. There's a sense that maybe the reduction of Fed stimulus is already priced in. We've sort of seen the move happen. Is that the case in emerging markets as well, or does this have more to play out? Are we going to see more sellings, see more movements in those currencies?
SHEETS: My feeling is that we are very much in a transition. The ten-year treasury yield in the United States is now around 2.9. But over the next several years, I think we're going to see that somewhere between 4 and 5 percent. So, there's still a long way to go for US long-term interest rates.
And I think that that's going to mean an ongoing adjustment for the emerging markets. And not only will they have to -- they, the emerging markets -- have to deal with some of the challenges associated with a less- stimulative Federal reserve.
But also more globally, there are question marks about China and global commodity demand is weak, and global exports are soft. This is a very, very challenging outlook for the emerging market economies at present.
LAKE: Nathan, last question. Where's the best place to put your money, given the changing landscape we see? The change in central bank action. Where would you be investing right now?
SHEETS: Well, when I speak to global investors, I would say the one asset class that's universally loved -- and it's one that's performed very well over the last six to twelve months -- is US equities.
The US equity market is still reasonably valued and should benefit from a recovery in the US economy even in the face of reduced monetary stimulus from the US -- from the Federal Reserve. I guess my answer would be US equities is probably the best bet.
LAKE: That means a lot of us have to go and look at our portfolios because a lot of people still underweight and still have an awful lot of bonds in their holdings. Nathan Sheets from Citigroup, thank you so much for being with us. Appreciate it.
Well, the fallen star of Chinese politics isn't going down without a fight. Day two of the corruption trial of Bo Xilai is set to begin in just a few hours. On Thursday, he insisted he was forced into confessing to a bribery charge in the country's biggest political scandal in decades.
It has gripped the world and revived debate about Beijing's ability to reform. David McKenzie followed the proceedings from outside the courthouse.
DAVID MCKENZIE, CNN INTERNATIONAL CORRESPONDENT: They've blocked off access on the street around this trial because this is being called the trial of the century. In this courtroom behind me, the prosecution of former political boss Bo Xilai, who was once one of the most powerful men in China. Now, he's being prosecuted for bribery, embezzlement, and abuse of power.
MCKENZIE (voice-over): In the courtroom, the first images of Bo since vanishing from public view, flanked by police, but uncuffed, facing the full might of Communist Party power. It's the most sensitive trial in decades in China, as CNN learned during our broadcasts.
MCKENZIE (on camera): We're not going anywhere. We have to cover this trial somehow.
(MAN SHOUTING IN CHINESE)
MCKENZIE: So, it seems like they're escalating the situation. Please don't take this.
(MAN SHOUTING IN CHINESE)
MCKENZIE (voice-over): But also, an unexpected information flow. According to court proceedings released on social media by the Jinan court, a first for China, Bo heard evidence against him of bribery, embezzlement, sometimes in salacious detail.
But Bo stood firm, systematically denying the charges leveled against him, even calling the testimony by his wife, Gu Kailai, ridiculous.
The US State Department says China has a nearly 100 percent conviction rate of criminal cases, and the party controls the courts, judges, and police, so it's unlikely to take any chances. Still, for some, Thursday's hearing went off script.
MCKENZIE (on camera): Many people online and on the ground here in Jinan seem to think that Bo Xilai gave a strong and coherent defense compared to the prosecution. It's early days yet, though, in this trial that's going to move onto a second day and perhaps even beyond.
David McKenzie, CNN, Jinan.
LAKE: Tonight on "Amanpour," a closer look at the trial of Bo Xilai, specifically how it exposes the fault lines in China's leadership. Where does it put Xi Jinping, and what does it mean for the rest of the world? That's at 8:00 in London, 9:00 in Berlin, and 11:00 in Abu Dhabi.
Well, officials at Japan's crippled Fukushima nuclear power plant have scrambled to inspect more than 300 holding tanks after one of them leaked 300 tons of highly radioactive water. Regulators are poised to raise the danger level there, as Paula Hancocks reports.
PAULA HANCOCKS, CNN INTERNATIONAL CORRESPONDENT: It is "like a house of horrors." That is the way that Japan's nuclear watchdog is describing Fukushima nuclear power plant. It says there is just a series of mishaps happening one after the other.
This latest mishap, though, is the most serious we have seen since 2011, when that massive earthquake and tsunami knocked out the power at the power plant and caused three of the reactors to melt down.
Three hundred tons of highly-radioactive water have leaked from one of the water tanks. The plant operator, TEPCO, says it has now secured the rest of the water, but it says water may have seeped into the ocean. There are high levels of radiation in the trenches that actually lead to the ocean itself.
There are also concerns that if this particular water tank leaks, then what's stopping others from doing the same? So, Japan is proposing to increase this incident from a level 1 to a level 3 on the international scale, classing it a serious incident.
MICHAEL FRIEDLANDER, FORMER NUCLEAR POWER PLANT ENGINEER: A 3 puts you pretty much in the middle. In the differentiation between a 3 and 4, a 3 and a 4 differentiates between things that are going on within the property boundary, within the power plant itself, which are largely contained to issues going on in the plant. People outside the plant boundary really shouldn't necessarily worry about -- what's going on in the plant won't affect them.
Once you go to a 4, what it means is what's going on in the plant could potentially expand beyond the plant boundary. So, it's a very significant event, but it's limited to its effect inside the plant.
HANCOCKS: Just last month, TEPCO admitted that 300 tons of highly- radioactive water is actually seeping into the Pacific Ocean every day. The prime minister, Shinzo Abe, has said that the government will try and work out a fresh strategy to try and work with TEPCO to save this crisis. At this point, though, there's no clue as to what that would look like.
Paula Hancocks, CNN, Tokyo.
LAKE: A Currency Conundrum for you now. Several bridges feature on euro notes. What I want to know is, where are these bridges located? Is it Copenhagen, Rotterdam, or nowhere because they're fictional? You didn't notice them, did you? That's right, get your wallet out, they're right there. I'll have the answer later in the program.
Meanwhile, the dollar is up against the pound and the yen and flat against the euro. We'll be right back after this short break.
LAKE: On Make, Create, Innovate today, the unsung hero of the information age: the microchip. It's development in the 1950s ushered in the electronic revolution. Nick Glass went to Intel, the world's biggest chip maker, for a lesson in microchip evolution.
NICK GLASS, CNN INTERNATIONAL CORRESPONDENT (voice-over): Rarely do we think about the microchips that power our machines. Even less so the microscopically tiny transistors inside those microchips that perform each and every function our computers do for us.
KAIZAD MISTRY, DIRECTOR OF TECHNOLOGY, INTEL: A transistors is the tiny electronic switch that controls the ones and zeros of the information age.
GLASS: At the headquarters of the computer giant Intel in California, they're constantly having to think small. Kaizad Mistry leads the team developing a new generation of 3D transistors. The challenge: how to pack more transistors onto each microchip. The more transistors you can cram in, the more powerful the chip can be.
MISTRY: The 3D transistor is a new concept, a new architecture for making these little tiny transistors. They're more power efficient, and it's just fundamentally a better switch.
GLASS: Dubbed tri-gate transistors, the 3D transistors are unbelievably tiny, just 22 nanometers across, and densely-packed in astronomical numbers.
MISTRY: So, if you take these tri-gate transistors, and you take a human hair, you can fit thousands of them across the width of a human hair.
GLASS: Pretty hard to visualize, but Mistry tells me he can fit a hundred million transistors on the head of a pin.
GLASS (on camera): Why did it need to be 3D?
MISTRY: What we've done with these 3D transistors is created these pillars or fins on the surface of the wafer. And now, the current can flow on all three sides of that fin. So any given footprint, you can have more current conduction.
GLASS (voice-over): Intel's original microchip, the world's first from 1971, is now exhibited at the company museum.
GLASS (on camera): This looks like the beginning to me.
MISTRY: Yes, this is artwork for Intel's first microprocessor, the 4004, that we introduced in 1971. At that time, we had only about 2,000 transistors on this microchip.
GLASS: A mere 2,000.
MISTRY: And of course, these days, it's over a billion transistors on a modern chip that's in a PC.
GLASS (voice-over): The compulsion has always been to go forth and multiply, all governed within these walls by Moore's Law.
MISTRY: Gordon Moore, the founder of Intel in 1965, made the observation that the number of components on a chip doubled every 18 to 24 months. So, the first Pentium processor in 1993 had about 3 million transistors.
GLASS (on camera): So, does the -- chip itself stay about the same size?
MISTRY: The chip itself stays about the same size, but we're able to increase the computing capability, the compute power of the chip by squeezing more and more transistors. The ability to process more and more ones and zeroes into a given chip size.
GLASS (voice-over): Intel's latest chip to use 3D transistors is called Ivy Bridge, and it has 1.4 billion transistors.
MISTRY: The first product went into PCs and servers, and over time, we're going to bring the power efficiency of this new technology to other segments, like tablets.
GLASS: Intel's factories produce over 5 billion transistors every second.
GLASS (on camera): Do you think the public understands it?
MISTRY: I think transistors really are the unsung hero of the information age. Those are the things that make our computers and our servers and our SmartPhones and our tablets, they all depend on that. The entire information age depends on these little tiny transistors that get every smaller every two years.
LAKE: Straight ahead on QUEST MEANS BUSINESS, another misselling scandal in the British banking sector. A lot of customers will be compensated. We'll have more in just a moment.
LAKE: Welcome back, I'm Maggie Lake. The news headlines. The United Nations says it is asking the Syrian government to allow its inspectors to investigate opposition allegations of a chemical weapons attack. Opposition groups say more than 1300 people were killed Wednesday in what they call a massacre in the Damascus suburbs.
Former Egyptian president Hosni Mubarak has been transferred to a military hospital in Cairo following his release from Tora Prison. Local media say the ousted leader will be under house arrest at the hospital. He still faces charges related to the deaths of protesters during the 2011 revolution.
In the US, the jury in the case against army major Nidal Hassan is about to start deliberations. He's charged with 13 counts of murder for the 2009 shooting attack at Fort Hood Army base in Texas. Hassan has been acting as his own attorney. He didn't call any witnesses and declined to make a closing argument. He faces a possible death sentence.
A day after being sentenced to 35 years in prison for leaking classified information, Bradley Manning apparently wants to live as a woman. According to a statement from the former soldier, he wants to be referred to as Chelsea. He says he intends to begin hormone therapy for gender reassignment, but an official says the US Army doesn't provide that to prisoners.
A London high court has ruled that electronic items confiscated from David Miranda can't be touched unless he is being investigated for ties to terrorism. He's the partner of the journalist who broke the Edward Snowden NSA leak story. Miranda spent nine hours in detention at Heathrow Airport on Sunday.
LAKE: There's still no activity on the Nasdaq, an unexplained technical issue halted trading about two hours ago. The outage paralyzed tech giants like Apple, Google and Microsoft. It could also skew the calculation of other major market measures like the Dow and the S&P 500. The Nasdaq is urging customers who do not want to participate in the reopening of trade to cancel their orders before it resumes.
Well, efforts to clean up British banking accelerated today. The Financial Conduct Authority, Britain's new financial watchdog, said banks and credit card companies will have to set aside over $2 billion. That's to compensate customers who were sold credit card protection policies they didn't need. The policies came from an insurance firm called CPP, which has been fined.
Jim Boulden joins me now from CNN London.
And, Jim, I guess it's better late than never. But why are we seeing this action now?
JIM BOULDEN, CNN CORRESPONDENT: Well, this company, CCP, had been fined already. But the money that's owed to these people, CCP certainly couldn't pay. So the financial regulators asked the banks to do this. And they're being good citizens because the banks here have a terrible reputation, Maggie. So they're having to put up this $2 billion, or up to $2 billion, to pay these people.
Let me explain real quickly what happened. Is when you got a new credit card from one of these very big banks, let's say HSBC or Barclays, Santander or JPMorgan, you get a little sticky label on the front. It would call this number. When you call the number to activate the card, they'd say how about some insurance in case your card gets stolen? Or you have fraud?
Well, that was already covered. So anybody who said yes to this extra insurance did not need it, says the regulator. Now I talked to the regulator earlier today to find out if she thinks this will actually help rebuild the reputation of the banks because these banks are helping. Take a listen.
TRACY MCDERMOTT, EXEC. BOARD MEMBER, U.K. FINANCIAL CONDUCT AUTHORITY: I think it's a worldwide problem. I think financial services, banking has lost confidence and trust across the world. And there are institutions, not just in the U.K., but all over the world that has -- we have seen things , skeletons coming out of the cupboard, which frankly don't make anybody terribly proud of them.
In relation to the position in the U.K., there has been a clear recognition by the banks and by the regulators that actually restoring trust in financial services is only going to happen if people put their houses in order, if they start focusing on what they're there for, which is to treat their customers properly to (inaudible) products and services they need and to ensure that people's financial needs are properly met.
We are on a journey, I think, to get there. But certainly there's been massive change at the top of banks. The language and rhetoric that people are using within these institutions has significantly changed. But clearly it's not going to happen overnight. And we need to remain vigilant to make sure that it actually does happen.
BOULDEN: People always say regulators are looking at the past, because you're looking at previous issues of the banks, previous misselling, for instance, in this case.
What about now? Do you have enough authority? Do you have enough power to look at the people in these towers around here, to make sure it doesn't happening again?
MCDERMOTT: Inevitably, particularly in relation to action and redress (ph) or definitive action, you are talking about things that have happened in the past.
But one of the things that we are focused on as a regulator is being more forward-looking, at looking towards what are the new risks that are coming across the horizon, how can we nip those in the bud earlier.
We have quite an extensive suite of powers. There was also -- you may be aware that the parliamentary commission on banking standards, which was a U.K. parliamentary commission last year published a report with some recommendations for further changes to the way we regulate to legislation, which will give some additional powers. But broadly, I think, we're very clear on our remit and we have a wide range of powers in order to enforce it.
BOULDEN: You say it's a journey when it comes to the banks and restoring confidence with consumers.
Where do you think we are on that journey when it comes to consumer confidence in the banks here?
MCDERMOTT: I think restoring confidence in consumers' minds will take a long time --
BOULDEN: SO you're not there yet?
MCDERMOTT: Yes, in order to rebuild trust, it's very quick to be (inaudible), but it will take time to rebuild. And people will want to see time and time again that actually banks and other financial institutions are doing the right thing.
BOULDEN: Now, Maggie, $2 billion is not a lot of money to these huge international banks that do business here. And remember, there have been other misselling scandals here, one costing them more than $22 billion. But the point is, that the British public have very little confidence in their banks, the regulators hoping that maybe by this deal they can start to rebuild confidence. It's going to take a long time.
LAKE: It certainly is, but it sounds like a small down payment for the banks in that direction.
All right, Jim Boulden, thank you so much, good to see you, Jim.
Well, positive economic data from both China and Europe have turned around the European markets' losing streak. We've seen some solid gains off the back of European PMI data, which points to a stabilization in the Eurozone economy.
Barclays and HSBC actually made gains today, despite that misselling problem Jim had just been talking about.
Well, taking award-winning photos can cost thousands of dollars in kit. Well, maybe not any more. After the break, the art of taking snaps on a shoestring.
(BEGIN VIDEO CLIP)
LAKE (voice-over): And now the answer to tonight's "Currency Conundrum," early I asked you where the bridges are located on some euro notes, and the answer is Rotterdam. I'll give you a half-point, though, if you thought they were fictional, because originally they were. After the notes came out, a Dutch designer built the seven bridges featured on the notes in Rotterdam.
Here's some monetary inspiration for you.
Well, listen, it's very gloomy where I am, so gloomy we can't even show you out the window.
But let's join Jenny Harrison at the CNN International Weather Center.
Jenny, I feel like we're sitting in stereotypical London here in New York, very wet and clammy.
What's happening elsewhere?
JENNY HARRISON, CNN METEOROLOGIST: You see, that's not fair, Maggie. (Inaudible) about time you had some cloudy weather. We've got the sunshine finally down here in Atlanta. But look at -- oh, my goodness, you weren't exaggerating were you? Look at that. It's about time you had it. We've had it for days and days down here.
But you know, they've had a pretty good summer across much of Europe it has to be said. The weather has been fine. There has been some rain and in fact in the last few hours, there's been a bit of a line of showers and thunderstorms particularly pushing off the East Coast of Spain and actually further south off the northern coast of Africa as well. But there's been quite a warm-up again across the southwest, coming in with those showers, of course, it'll actually turn conditions a little bit cooler.
But I want to show you what's going on because as that front sweeps through later on this week, probably by about Saturday, it'll actually turn things quite noticeably cooler. We've got some scattered thunderstorms in the mix as well, because it has actually got quite a bit warmer. Still staying hot and mostly dry across the southwest.
And believe it or not, it's still pretty warm through the Med and in particular across the southeast. And for once, you've got some good high pressure across Scandinavia as well. So look at what will happen to the temperatures over the next few days. I wasn't exaggerating. Friday in London, the expected high, 29 Celsius.
But by Saturday a drop of 10 degrees down to 19. (Inaudible) better by Sunday because hopefully the cloud and the rain should actually go by. Similar story in Paris as well, Thursday on Friday, down to 20 on Saturday, 22 on Sunday.
Meanwhile in Madrid, temperatures in the high 30s but actually beginning to cool by about Sunday and stay cool off, 33 which is still above the average. So jut be prepared for that. It'll feel as if you need your winter woollies after a drop of 10 degrees Celsius. There's the cloud, there's the rain coming through with that front.
And as I say, it will cool things off quite dramatically. But it just doesn't really reach the far southwest and staying nice throughout the Mediterranean. And as for the temperatures elsewhere, Rome 29, 31 in Athens and 25 Celsius in Kiev.
Now I've been talking about travel problems the last few days, particularly across in Asia, nothing by the way to talk about across in Europe. Things gradually improving across first of all in Manila, still some fairly dense delays on Friday, as you can see. The morning, the evening as more of those scattered thunderstorms, Hong Kong as well, some fairly long delays in the morning, Kael (ph) as well in the morning hours.
And then Tokyo, similar sort of conditions, although the delays not as long and we've got some scattered thunderstorms in the vicinity. But look at the rain that's come down just incredible, in Taiwan since Tuesday, more than the monthly average of rainfall, 342 millimeters of rain. All this, by the way, is the wettest month.
And in fact, in southern Taiwan, 369 millimeters of rain. And across in mainland China, 230 millimeters. It's an improving picture, Maggie, over the next couple of days, but still seeing off the remnants of that typhoon Trami over the next 48 hours.
LAKE: Well, that's good to hear relief is at least in sight.
Thank you so much, Jenny Harrison, at the Weather Center.
We want to bring you up to date on a story we have been following throughout the show, throughout the afternoon, and that is a technical problem that caused trading on Nasdaq to come to a grinding halt.
Well, Nasdaq says it now will resume trading in about 10 minutes. It will start with two securities as a test. If all goes well, the rest will follow. Just after 3:00 pm Eastern time, again, an unexplained technical issue halted trading about two hours ago.
Well, an unprecedented marine salvage operation is set to begin next month in Italy. The Costa Concordia ran aground off the coast in January of last year, killing 32 passengers. Erin McLaughlin has the story.
ERIC MCLAUGHLIN, CNN CORRESPONDENT: It's been 19 months since the luxury cruiseliner, the Costa Concordia, ran aground off the west coast of Italy, killing 32 of the people on board. Now news that the crippled ship will finally be lifted from its side in September.
An American and Italian company are working around the clock to repair the infamous wreckage for its journey from the Tuscan island of Giglio and avoid an environmental disaster. Engineers say it's a naval salvage operation like no other in history.
RICK SLOANE, SALVAGE MASTER: Teams swelled up to 500 plus people with the additional welders joining us. So we still have 100 divers in the water every day. We have 55 coded welders on the project 24 hours a day.
MCLAUGHLIN (voice-over): The plan to remove the Costa Concordia began with steel platforms built under the water. Thirty-six cables will help hoist the ship upright in a series of enormous flotation devices attach to the ship's sides will help the cruiseliner float away to a nearby port. Hopefully all in one piece.
SLOANE: Around about the 20th of August, all the grouting and the mattresses should be underneath the belly of the Concordia.
MCLAUGHLIN (voice-over): What makes the maneuver so risky, engineers behind the project say they only have one shot to make the deteriorating Costa Concordia float again.
LAKE: It's extraordinary.
Well, now take a look at these images. They're beautiful, aren't they? These are the top finalists in an international photography competition, attracting entries from nearly 40 different countries.
What I want to know is what else do they have in common. If you haven't guessed it already, that's right, the photos were all taken with one of these, an iPhone, absolutely incredible to think -- I tell you, I take a lot of pictures; they don't look like that. But I'm getting inspiration from it nonetheless. And you can find it on the website.
And that is QUEST MEANS BUSINESS for today. I'm Maggie Lake in New York. MARKETPLACE EUROPE continues on CNN.
NINA DOS SANTOS, CNN HOST: Hello and welcome to the Netherlands, the Eurozone's fifth largest economy. This is MARKETPLACE EUROPE and I'm Nina dos Santos in the historic city of Delft.
This country's economy is stuck in its third recession since 2009. And official statistics show the output is likely to contract again this year. So as tax hikes and spending cuts come into force, we've come to see how two very different established Dutch businesses are faring.
(BEGIN VIDEO CLIP)
DOS SANTOS (voice-over): Coming up, the Japan appetite for Delft ware that's painting a profitable future for this centuries-old craft.
And the boss of the nutrition health and materials group, DSM, calls on Europe to get competitive.
UNIDENTIFIED MALE: Europe has a too expensive and too inflexible labor market. And Europe is not investing enough in innovation.
(END VIDEO CLIP)
DOS SANTOS: Products like these are synonymous with this city. Blue and white Delft ware has been made here for centuries. Nowadays, businesses are only too aware of the threat of cheap counterfeit goods coming from Asia.
But back in the day, plates like these were actually the ultimate copycats, because in the 1600s, it was a Dutch love affair with Chinese porcelain that gave rise to an entire industry set up to imitate items brought back from the Far East.
Isa Soares went to the last remaining 17th century earthenware factory in Delft.
ISA SOARES, CNN CORRESPONDENT (voice-over): For 12 years the Sistine Heights profession the nestling (ph) caressing and inspecting each piece.
HUIB VAN DER ENDE, CRAFTSMAN: We make a product from beginning to the end. So you see something growing, developing and becoming something, from clay to something beautiful. It needs to be perfect. And you cannot do it 90 percent . It needs to be 100 percent for sure.
SOARES (voice-over): The craft behind Royal Delft has changed little since 1653. Today their concerns are financial with the economic crisis forcing them to seek new sources of revenue.
HENK SCHOUTEN, CEO, ROYAL DELFT GROUP: For 30-40 years, of course, this was only a production company selling its product to shops all around Holland. But because we only produce our product in Holland, because of the weight, the price is very becoming too high.
Here now at our visitor center, and with our own shop, also with megime (ph) and also an attraction where people can see how this product is made.
UNIDENTIFIED MALE: (Speaking foreign language).
SOARES (voice-over): For the visitors, the tour of the manufacturing plant is an eye-opener.
SCHOUTEN: There are 130,000 people visiting here, are buying stuff, of course. And that's roughly the half of the income of this part of the company. And the other half is mainly selling to other shops. And also business-to-business.
SOARES (voice-over): For Royal Delft, survival in the 21st century is all about staying small.
SCHOUTEN: We just want to produce high-level products and not en masse, because there are many other factories who produce the mass product but that's not our aim.
SOARES (voice-over): It all begins with a pouring and molding. After an hour, it's cleaned up, smoothed down and ready for firing. Then the time-consuming work starts, as the artist's brush brings it to life.
SOARES: To become a master painter requires patience and craftsmanship. It is a painstaking process. In the first year, the painters learn the basic techniques. The next four to five years is spent learning the different Delft decorations, the different tones of blue. Soon after an additional 4-5 years you can call yourself a master painter.
SCHOUTEN: The main cost, of course, for our product is wages. Three- quarters of the price is craftsmanship and only a quarter of the price is the cost price of all kind of material.
SOARES (voice-over): The CEO is one of eight master painters. He's been here for 15 years.
SOARES: You go out to the shop, can you tell just by looking at the plates, which ones are yours, which drawings are yours?
LEO DE GROOT, MASTER PAINTER: Definitely, yes. The style is like handwriting. If you write something, and you point it between others, you can easily pick it out.
SCHOUTEN: (Inaudible) the DNA of the artist's craftsmanship. It's the old figures, who everybody knows, of course. But what we try to do is not everybody likes the old figures. So what we do is at one hand, keeping the DNA, keeping the old craftsmanship and at the other hand, use that to develop new product.
SOARES (voice-over): For those only just learning this art, there's much more to Delft ware than just blue and white.
DOS SANTOS: Isa Soares there, following a traditional craft that's underpinned Delft's fortunes for more than three centuries.
Coming up, we look at one business that's steering away from its coal mining roots towards a brighter future in high science. The boss of DSM after the break.
DOS SANTOS: Welcome back to MARKETPLACE EUROPE from the Dutch city of Delft. This is DSM's onsite bakery, one of the number of food labs where they're developing methods of lengthening the shelf life of food products.
Looking at these loaves in front of me, it's hard to imagine that this firm actually started out as a mining company in 1902, but now it's a major player in the worth of health, nutrition and material.
FEIKE SLIJBESMA, CEO AND CHAIRMAN, DSM: Our company reinvented itself twice, from coal mining to chemicals and again from a petrochemical company we were not so sure that we would be an important player with the Middle East coming into this field. So we transformer ourself (sic) again, looking enough time to a life sciences, nutrition and farmer and a material science company.
DOS SANTOS: What's really interesting about your business is that it's literally huge. But not many people know your name. Why?
SLIJBESMA: This is a typically B-to-B company. We supply to other companies. Maybe 1 billion or 2 billion people in the world every day use or eat products of DSM whilst not knowing DSM because our products are in many food products. People eat unconsciously every day DSM products into their finished products, into yogurts, into milk, into cheese, into all kind of different products.
But also in our material science products range, we have materials; we have product people use every day into their car, into buildings, into electronics like tablets, et cetera. And our philosophy as DSM is that we should have a triple autumn mind (ph).
Do we have one? We need to take care of profit, we need to take care of people, we need to take care of the planet itself. That is not something nice; that's not only doing good, that is a necessity of the company, to take care of people, planet and profits. And I think that all companies in the world should do the same.
DOS SANTOS: Where do you think the growth is going to come from, because obviously Europe's having a difficult time. But we seem to be having a bit of a renaissance here. Is it going to be here? Is it going to be the States? Is it going to be China?
SLIJBESMA: Well, the European economy at this moment is not growing. It's already 4-5 years of almost stagnant economy. In terms of growth, Europe is the worst performing continent in the world for the last five years. That's not good. Need to be addressed.
It need to be addressed by another addressing only the deficits of countries, but also the structural issues of Europe and, according to me, that is a competitiveness issue of Europe.
DOS SANTOS: But as a company, operating with 20,000 staff based in the Eurozone, what do you think of the economic challenges of this pivotal time for this region?
SLIJBESMA: Europe has too expensive and too inflexible a labor market. Europe is not investing enough in innovation. We do, as a company. We just invested in two new laboratories. But Europe as a whole is not doing enough. And that need to be addressed because this competitiveness issue, as I call it, for Europe is maybe even a bigger issue than the whole issue around austerity and corporate -- and company deficit.
DOS SANTOS: What do you think that governments across Europe can do, really, to try and solve the ills that we're seeing here?
SLIJBESMA: Europe is the biggest economy in the world. It's not the United States. It's Europe. But we have divided that into 27 pieces. So we need to work closer together. There's work to be done here in Europe.
DOS SANTOS: You're such a diversified company. How do you make it work?
SLIJBESMA: Well, basically, you can see we are a life sciences and material science company. In life sciences we address nutrition and in material sciences we address the issue of climate change.
And food, energy, climate are issues which are become increasingly interrelated. And therefore the portfolio of these might look diversified but has more synergy.
And for example, it provides opportunities in new fields, like biomedical materials, where we use our life science experience to develop materials (inaudible) electronics, but inside the human body. And see here, some synergy we have between our life science and material science business.
DOS SANTOS: (Inaudible) a big cost-cutting program though. Why exactly do you feel the need to implement a program like that?
SLIJBESMA: Well, every company from time to time has to look to its cost position. And especially also in the areas where there is less economical growth, like in Europe. And cost is like grass. It grows from time to time. We need to look to that from time to time, where you can further streamline that in your company. And that's what we're doing.
But the fundamental growth driver of our company has to do with our businesses. In nutrition and in materials and the organic growth is the real driver of our profit increase.
DOS SANTOS: Feike Slijbesma there, the head of DSM, bringing this week's MARKETPLACE EUROPE from Delft in the Netherlands to a close. Join us again next week if you can. But in the meantime, it's goodbye and thanks for watching.