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QUEST MEANS BUSINESS
Syria Crisis Causes Concerns Over Oil; Pressure on Emerging Markets; European Markets Uneasy; US Markets Steady; JPMorgan Litigation; Merkel on Greece; Bank of England Forward Guidance; Dollar Up; South Africa Strikes; Keeping the Dream Alive; U.S. Marks March on Washington; Business Traveller; Pulp Finance
Aired August 28, 2013 - 14:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
RICHARD QUEST, CNN INTERNATIONAL HOST: Tonight, as the West moves towards action on Syria, investors back away from shares and cling to oil for comfort.
Giving guidance on guidance. Mark Carney makes his first big speech as governor of the Bank of England.
And keeping the dream alive. Fifty years since Martin Luther King's march for jobs and freedom speech. We will be live in Washington in this hour.
I'm Richard Quest. I mean business.
Good evening. Tonight there is growing concern that the conflict in Syria may spread and threaten oil supplies from the region. There may have been no action so far in terms of military activity by the US and allies, but already we are seeing reaction in the markets.
As you can see, Brent Crude is now up nearly $3, it's at $117.34 a barrel. And the head of oil research at Societe Generale is warning that Brent may rise to $120 or $125 and beyond in the event of a military strike.
Now this, of course, is a great concern, Brent having traded in a relatively secure range of $100 to $107 over, say, the last few months, and that has been largely acceptable in terms of wider economic issues. Now, breaking out of that range, starting to move higher, and causing problems in fragile economies.
It's also WTI -- West Texas Intermediate -- is also up. It has gained $0.75. We have a slight situation where unusually WTI is actually cheaper than Brent. It's often the other way around, but at the moment, it's at $109.71. These are levels that have not been seen since 2012.
The conflict in Syria has put the emerging markets that we've talked about over the last few weeks under even more pressure. The Turkish lira -- the Turkish lira and the Indian rupee have both dropped to record lows on Wednesday. The rand in South Africa has also sunk very sharply.
Look at the -- let's just concentrate on the rupee, down 7.8 percent so far this week, 3 percent from the lira, and the rand at 1.1 percent. And we've already had comments, of course, from the head of the -- South African finance minister, Pravin Gordhan, saying that even though it improves export, it does create other difficulties.
Investors are reducing their exposure to emerging markets, expecting that the Fed will begin to taper in the next few weeks, and so that is why, of course, we are now seeing both sides of this equation coming along.
Let's bring in Rachel Ziemba, the head of emerging markets at Roubini Global Economics. Good to see you.
RACHEL ZIEMBA, HEAD OF EMERGING MARKETS, ROUBINI GLOBAL ECONOMICS: It's a pleasure to be with you.
QUEST: Well, I have outlined -- set out, if you like, the stall of misery that's in the markets at the moment. Any one of these issues is rather serious, isn't it?
ZIEMBA: It is. And what we have, actually, now is a toxic mix of high inflation, low growth, and a vulnerability to tighter financial conditions. And then when you add in a possible increase in oil prices for these oil importing economies, that's just fuel to the fire. But really, I think the tighter financial conditions are really what these countries are ill exposed to.
QUEST: What's the big risk for these emerging market economies as they feel this pressure? Because obviously, a country like India cannot withstand 7 percent depreciation in currency even though a $60 billion liquidity fund has been put in place.
ZIEMBA: Sure. It's really a question of choices, whether the policies that India can put in pace to stem the decline in the rupee --
QUEST: But they can't --
ZIEMBA: -- involving high interest rates --
QUEST: -- they can't. You don't -- now, let me jump in there. Because you don't believe --
QUEST: -- anymore than the market believes that actually there's anything some of these governments can do to stem this trend.
ZIEMBA: I don't -- I think they're going to have to allow the currencies to depreciate. I think we're going to see higher interest rates. But I think under the circumstance, given the inflationary pressures, given the fact that there's positive real returns in the US, I think interest rates are going to have to go up and -- in this circumstance.
And that's going to weaken growth, it's going to be particularly problematic for equity markets in many of these countries.
ZIEMBA: And I think where the RBI is concerned, the fact that they're now targeting three or four different things -- inflation, growth, the currency -- just makes it even more confusing for the markets.
QUEST: Right, but --
ZIEMBA: And that, in our mind --
QUEST: I want o strike --
ZIEMBA: -- probably means even tighter policy.
QUEST: Forgive me, with the satellite today --
QUEST: Forgive me interrupting you. I just want to throw into this mix the Syria aspect of it, because yesterday -- and yesterday we saw some very sharp falls across European markets, down to six week lows, 2 percent in this market or that market. A bit of a rebound today on the Dow.
But fundamentally, if the firing begins, as it's expected, what would you expect the markets to react? Or how?
ZIEMBA: I'd expect if -- I'd expect there'd be a knee-jerk reaction, sell- off, in many risky assets, and probably rise in oil prices. If it's limited and surgical and this sort of small response, we might see that mostly priced in even before activity goes on.
But here's the issue. We think -- our view is that it's unlikely to be very limited. That we could see a deterioration and regionalization of the conflict. And in that case, we could see more extensive pressure on regional assets.
QUEST: Do you --
ZIEMBA: But ultimately --
QUEST: Do you think in any shape or form this -- what we are now seeing, either in emerging markets or in Syria in this aspect, will influence a Fed that might be looking at Sep-tapering?
ZIEMBA: Sure. I think whether it's September or December is not sort of the question too much at this point. The real question is that the Fed is going to taper, they are going to start reducing stimulus, and timing does matter.
But ultimately, what's going to move the Fed, the Fed is going to be moved by -- by financial contagion to the US and affect on US growth.
ZIEMBA: So, what we're seeing here at this point, we have -- we've seen US markets performing quite well. We've actually seen more flows into US treasuries --
ZIEMBA: -- and a flight to safety. And so I think it's really about, if we were to start seeing a big correction in the S&P 500 that feeds in -- or if we started to see a greater correction in the housing market because 10- year -- 30-year treasuries are increasing and mortgage rates are increasing, that's the kind of thing that would delay the Fed.
QUEST: Thank you.
ZIEMBA: We still think it might be a December tapering.
QUEST: December. It's on its way, just a question of when. Thank you very much for joining us, Rachel. Good to see you --
QUEST: -- many thanks, indeed. Now, Christiane Amanpour is live in France in less than an hour, 50 minutes from now, with all the latest developments on the Syria aspect. The crisis in Syria, that's "Amanpour," live tonight at 8:00 PM in London. Only, of course, on CNN.
European markets and indeed around the world continued that unease, uncertainty, which is so disliked. Have a look at the markets.
QUEST: They are monitoring what's happening in Syria, and not surprisingly, European markets closed down. We didn't see the sort of losses we saw yesterday, but that loss of 1 percent in Frankfurt is still serious enough. Even Athens, of course, managed to -- wasn't too grim despite the fact and despite the question of whether there'll be another bailout for Greece.
In contrast, the US markets are steady nerve. The Dow and the S&P have moved slightly higher, oil stocks are performing well in the market, and the Dow Jones Industrials is holding their own.
To the New York Stock Exchange and Alison Kosik joins me. Alison, a very sharp fall, 170-odd points on the Dow. What the difference a day makes.
ALISON KOSIK, CNN BUSINESS CORRESPONDENT: What a difference a day makes. Don't be fooled here, though. Worries about Syria and possible US military action there, those worries are still present. But you're seeing investors kind of buy back in because stock fell so much yesterday.
In fact, one analyst said, what we saw happen yesterday, that 170-point drop, was really more a profit-taking after this huge run-up that stocks had made lately.
But another trader says what's happening here with the market is it's basically playing a game of headline roulette and that once events, like the situation in Syria, begin to take place that they could accelerate and become a bigger problem.
What's lifting the Dow? Oil companies, energy shares. We are watching --
KOSIK: -- Mobile up 2 percent, Chevron shares up almost 2.5 percent --
QUEST: All right.
KOSIK: -- those are some of the leaders on the Dow. Richard?
QUEST: And JPMorgan, misery, mischief, and mayhem, and there's still more to come, by all accounts.
KOSIK: Ah, yes. More lawsuits. More lawsuits against JPMorgan Chase, and these add up to a big possible penalty. "The Financial Times" is reporting that the US government wants JPMorgan to pay more than $6 billion to settle allegations that it misrepresented the securities that it sold to government-backed mortgage companies.
And these are the bonds that were backed by sub-prime mortgages that the US government says didn't meet investors' criteria. So, as borrowers couldn't pay their mortgage bills, the value of these securities fell --
KOSIK: -- and on and on. So, of course, JPMorgan, Richard, saying we don't want to pay it. A lot of it was --
QUEST: It's a lot of money. It's a lot of money, $6 billion.
KOSIK: It is a lot of money, and it would be the biggest --
KOSIK: -- that JPMorgan -- the biggest penalty for JPMorgan Chase, yes.
QUEST: Alison, thank you for that, Alison Kosik at the New York Stock Exchange. And of course what we are looking at with JPMorgan is a series of miseries. The possible penalty is just the latest setback as the regulators are really mounting an assault on the company from various different sites.
If you look at the super screen, two former traders are accused of sweeping millions of dollars in trading losses under the carpet, allegedly filing false statements to them. So, we have, of course, the Whale scenario, that is one particular incident that JPMorgan is facing at the moment. There are criminal prosecutions, extradition proceedings. That's the tempest in a teapot that suddenly became a rather nasty incident overall.
We have what's happening in China. Did JPMorgan -- did they give jobs to relatives of -- or internships, to be more precise -- to relatives of big companies and banks in China hoping to curry favor and win contracts?
You've got the mortgage inquiries. Were they misselling of mortgage inquires? And you have the California markets issue and you have what we're talking about at the moment.
Now, Jamie Dimon always said that there would be a bevy of regulatory issues coming his way. Perhaps he never quite realized there'd be quite as many overall for the house that Morgan built.
Coming up after the break, we have much more to talk about. She tells German voters that Greece should never have been allowed into the euro. Well, she might have been speaking the truth that dare not speak its name.
QUEST: QUEST MEANS BUSINESS.
QUEST: In Germany, the political rhetoric has turned personal. Angela Merkel told voters Greece should never have been allowed to join the euro, and she put the blame squarely on her predecessor, Gerhard Schroder. As our correspondent Diana Magnay now tells us, the election is the first since the eurozone crisis erupted in Greece.
DIANA MAGNAY, CNN INTERNATIONAL CORRESPONDENT: It's perhaps not the most helpful of comments, especially given the fact there's so little love lost between Greece and its German paymaster, but it has been said before, German chancellor Angela Merkel mentioning on the campaign rally that she thought it was a mistake to have accepted Greece into the eurozone back in 2000.
ANGELA MERKEL, CHANCELLOR OF GERMANY (through translator): This crisis has been formed over many years through mistakes that were made when the euro was created. For example, one should not have accepted Greece into the eurozone.
This crisis will not be overcome overnight. I won't be lectured on how to overcome this crisis by those who created it and made those mistakes.
MAGNAY: The opposition Social Democrat party, the SPD, has charged Merkel in recent days with not having been straight with the German public about the true cost of a bailout. This after the finance minister said that Greece would be needing a third bailout.
Here, Merkel clearly responding by saying that these were mistakes not of her own party's making. And so far in this election campaign, Europe has not played particularly high. According to opinion polls, most Germans fairly satisfied with the way that their chancellor has tried to preserve their interests while also trying to keep the eurozone intact.
QUEST: Diana Merkel reporting -- Diana Merkel. Diana Magnay, I do beg your pardon. I suppose I was quite taken by what Mrs. Merkel was saying. I think that's the first time we've ever heard such bluntness from a European political leader on the question of Greece's accession to the eurozone.
Mark Carney is the governor of the Bank of England, and he insists that the Bank of England's new policy of giving forward guidance makes sense. Well, he would do, it's his policy. On Wednesday, he gave his first major speech as governor, hoping to win over the skeptics. They don't believe the bank will leave interest rates at record lows until 2016 as he has indicated.
Jim Boulden is with us. Jim, look, Carney's forward guidance, besides the knock-outs, forward guidance is clear. 2016 -- I'm sorry, unemployment has to reach 7 percent --
JIM BOULDEN, CNN INTERNATIONAL CORRESPONDENT: Yes.
QUEST: -- it's 7.7, 7.8 percent now. And it has to get to 7 percent before they will countenance an increase in bank rate.
BOULDEN: And that's why he was giving this speech again today, Richard, this idea, just reminding the markets of the 7 percent magic number before the central bank here in England would even begin to think about raising interest rates.
But the markets, as we know, have been betting for the last month or so that interest rates will go up in 2015. It looks more like 2016, 2017 to the banks. So, the Bank of England is actually more pessimistic about unemployment rate than the markets are.
And in fact, Richard, in this speech today, he said not only is that 7 percent number something that they should continue to stick to, but also, the bank is ready to do more stimulus. Take a listen.
(BEGIN VIDEO CLIP)
MARK CARNEY, GOVERNOR, BANK OF ENGLAND: The MPC will be watching those conditions closely. If they tighten and the recovery seems to be falling short of the strong growth we need, we will consider carefully whether and how best to stimulate the recovery further.
Our forward guidance was clear that although we would not reduce stimulus until the recovery is secure, we would, if necessary, provide more stimulus.
(END VIDEO CLIP)
BOULDEN: Bottom line is they're trying to people, Richard, here in the UK to spend money, to have confidence, for companies to invest, to not worry about interest rates for another couple of years, Richard.
QUEST: Here's the question, though. If growth is slow, or growth -- sorry. If growth starts to pick up but unemployment doesn't come down that quickly, which I suppose is perhaps an economic oxymoron, but if that does happen and they find themselves in the position of needing to raise interest rates for inflationary purposes, what do they do then?
BOULDEN: He has some get-out clauses. Remember his press conference a couple of weeks ago saying the 7 percent is the target number, wait for unemployment to get to 7 percent, then we'll talk about raising interest rates.
But he's always had caveats, which he has said, if there's -- if price stability goes out the window, if there's a major shock in the world economy, if there's something that fundamentally destabilizes the UK economy, obviously they would have to look at that.
But raising interest rates, just when you're getting back into a recovery, a very slow, painful recovery after obviously economic shock, he wants to have assurances that they don't think those caveats will be needed to be enacted, so just keep looking at unemployment.
He said today, actually, you're going to need something like a million jobs in the private sector created in this country before interest rates go up. That's an extraordinary number of jobs after all the losses that this economy has had, Richard.
QUEST: Jim Boulden in London for us tonight. Jim, thank you. Tonight's Currency Conundrum.
QUEST: Which country has named its currency after a warrior? Honduras, Gambia, or Mozambique? You get a bonus point if you tell us which warrior it is. How about that for you?
Tonight, the dollar's up against the pound and the euro and the yen. In other words, the dollar's the gainer, everyone else on the loss. Those are the rates --
QUEST: -- this is the break.
QUEST: Earlier we were talking about how the South African currency is under serious pressure. The rand has been hit quite badly. Well now, the South African government is urging mining industry leaders to embrace change as their workers prepare to walk out over pay.
The country's deputy resources minister told bosses they must rise to the challenges of the industry, and this week's challenge, an ultimatum from the main mining union. The NUM has given major gold producers until Friday to agree to higher wages or face a strike.
South Africa's large economy is currently facing a wave of industrial action, stoppages are in construction, and the auto industry are also planning strikes for next week.
The labor disputes continue to hit the economic growth. The GDP figures are below expectations. Errol Barnett is following the story. Errol, we've seen recently, of course, disruption. We've seen strikes. And now, we're seeing the currency under pressure, and still more strikes to come.
ERROL BARNETT, CNN INTERNATIONAL CORRESPONDENT: And all of that, Richard, equals a very dangerous picture and scenario for South Africa's economy. It's not as strong as it appeared even 12 months ago.
And with this latest round of wage negotiations, which happens twice a year hear, analysts are saying for all of these reasons, South Africa really cannot afford the worst-case scenario, which is the National Union of Mineworkers saying their strike would begin Sunday.
And they say they're prepared to go as long as three months. By one estimate, that would cost $35 million per day in lost output. And you mentioned the strikes from last year in the platinum and gold sector, that ended up costing the industry half a billion dollars.
So, the situation is quite scary at the moment. Let's just go through some of the facts that you've mentioned. You had the downgrade from the World Bank of South Africa's economic growth. Of course it's happening in many BRICS nations, perhaps not a good -- as good an investment as expected.
And you also have the value of the rand. One year ago, Richard, $1 would buy you roughly 8.5 rand. Well today, $1 gets you 10.5 rand, so that's almost a 20 percent drop in its value.
Add on top of that those horrific strikes from last year, which the worst culminated in the massacre, killing of 34 people at the Marikana Platinum Mine. That reverberated round the world and really made investors quite leery. There was a political inquiry into what took place, but no real resolution, making many believe South Africa can't deal with these issues peacefully.
QUEST: But Pavin Gordhan's always said -- and I interviewed him earlier this year, he's still sort of maintaining his 2, 3 percent growth rates or forecasts, which even then many were saying still is not possible and won't come to fruition.
BARNETT: Well, certainly, because in order for these numbers to really -- develop and grow, you have to have what's called a sustainable system. And unfortunately, what appears to be the case in South Africa, not just in the mining industries, but as you've mentioned, there's strikes in the auto, the aviation industry --
QUEST: OK --
BARNETT: -- as well. That these low-paid, low-skilled labor have to keep up with inflation. And currently, the wages being earned aren't keeping up with that inflation. It's causing a lot of frustration on the lower levels. And the mines, meanwhile, say, well, we can't afford to do this. And some politicians that we've seen involved in these talks say new ideas must be presented.
QUEST: So, in this respect, with elections coming up in the next 12 months, in this respect, the president as such is under -- or at least, the party, the ANC -- is under no threat in itself, is it, for reelection?
BARNETT: Well, it depends on who you ask. The ANC, the party of Nelson Mandela since ushering in democracy has seen its share of the parliament shrink. There are other parties emerging, and really, what people are looking at is a sustainable system.
You mentioned President Jacob Zuma. Listen to what the deputy president said just a few days ago while speaking at one of these mining wage negotiations. The deputy president said over the -- quote, "Over the years, the mining industry, supported by discriminatory legislation, has developed methods of making super profits by relying on the super exploitation of unskilled workers."
He went on to say the mining sector is a prisoner of the apartheid past. Unions were a big reason that the apartheid system was undone. The ANC, some argue, is too cozy with these unions and must take a harder line against them in order for these low-skilled workers, many of whom are the - - had eight dependents they're providing for.
Some are saying more must be done on the part of the ANC pushing against the mining industry to get those low-skilled laborers the money they believe they deserve.
QUEST: Errol Barnett joining us from Johannesburg this evening. Thank you for that. Now, in the second half of QUEST MEANS BUSINESS tonight, a very different theme and thought. That's President Jimmy Carter, obviously. He's talking at the March on Washington to commemorate the 50th anniversary of the famous "I Have a Dream" speech by Martin Luther King.
(BEGIN VIDEO CLIP)
JIMMY CARTER, FORMER PRESIDENT OF THE UNITED STATES: For quite a while, I might say. And Coretta was in the hotel room with me and Rosalynn when I was elected president. My Presidential Medal of Freedom citation to Coretta for Dr. King said, and I quote, "He gazed at the great wall of segregation, and saw that the power of love could bring it down." He made our nation stronger.
(END VIDEO CLIP)
QUEST: Hello, I'm Richard Quest. There is more QUEST MEANS BUSINESS in a moment. This is CNN and, on this network, the news always comes first.
(BEGIN VIDEO CLIP)
QUEST (voice-over): Russia's foreign minister, Sergey Lavrov, says the U.N. Security Council should not consider a resolution on Syria until chemical weapons inspectors report their findings. The U.K. presented a draft resolution to the U.N. that would authorize, quote, "all measures necessary to protect civilians."
In an exclusive interview with CNN, Syria's information minister says the U.S. does not have a convincing argument for launching military action against Syria. Omran al-Zoubi, he rejected claims that the Syrian army was behind last week's alleged chemical weapons attack and he called on the United States to provide evidence to the contrary.
OMRAN AL ZOUBI, SYRIAN INFORMATION MINISTER (through translator): The United States administration has a proof that we used chemical weapons, then they should present this proof to the rest of the world. If they don't have proof or evidence, then how they are going to stand up to the American public opinion and to the world public opinion and explain why they are attacking Syria?
QUEST (voice-over): At least 49 people were killed and 180 people wounded today in a string of bombings in Iraq. Most of the attacks occurred in the primarily Shiite areas of Baghdad. The latest violence comes as the country's security forces are conducting an operation that targets members of Al Qaeda in Iraq's capital.
A U.S. law enforcement official tells CNN that the FBI has begun looking into Tuesday's suspended hacking of "The New York Times" website. The newspaper believes the shutdown was caused by a cyber attack perpetrated by hackers who appear to be associated with the Syrian electronic army.
President Obama is marking the 50th anniversary of the March on Washington. This, of course, is President Clinton and we've already heard from President Carter. All the presidents, former and present, are there to remember exactly the day when, of course, Martin Luther King Jr. made that speech on the steps of the Lincoln Memorial. It's come to represent a call for equality.
(END VIDEO CLIP)
QUEST: So the March on Washington, 50th anniversary of the revered Martin Luther King Jr.'s seminal "I have a dream" speech. Let's listen to President Clinton.
BILL CLINTON, FORMER PRESIDENT OF THE UNITED STATES: -- white Americans with an outstretched hand, not a clenched fist, and in so doing to prove the redeeming power of unearned suffering.
And then he dreamed of an America where all citizens would sit together at the table of brotherhood, where little white boys and girls and little black boys and girls would hold hands across the color line, where his own children would be judged not by the color of their skin but by the content of their character.
This march and that speech changed America. They opened minds, they melted hearts and they moved millions, including a 17-year-old boy watching alone in his home in Arkansas.
It was an empowering moment, but also an empowered moment. As the great chronicler of those years, Taylor Branch, wrote, the movement here gained the force to open, quote, "the stubborn gates of freedom," and out flowed the Civil Rights Act, the Voting Rights Act, immigration reform, Medicare, Medicaid, open housing.
It is well to remember that the leaders and the footsoldiers here were both idealists and tough realists; they had to be. It was a violent time. Just three months later, we lost President Kennedy -- and we thank God that President Johnson came in and fought for all those issues I just mentioned.
CLINTON: Just five years later, we lost Senator Kennedy. And in between there was the carnage of the fight for jobs, freedom and equality. Just 18 days after this march, four little children were killed in the Birmingham church bombing. Then there were the Ku Klux Klan murders, the Mississippi lynchings and a dozen others until in 1968 Dr. King himself was martyred, still marching for jobs and freedom.
What a debt we owe to those people who came here 50 years ago.
CLINTON: The martyrs paid it all for a dream, a dream, as John Lewis said, that millions have now actually lived.
So how are we going to repay the debt? Dr. King's dream of interdependence, his prescription of wholehearted cooperation across racial lines -- they ring as true today as they did 50 years ago. Oh, yes, we face terrible political gridlock now. Read a little history; it's nothing new.
Yes, there remain racial inequalities in employment, income, health, wealth, incarceration and in the victims and perpetrators of violent crime. But we don't face beatings, lynchings and shootings for our political beliefs anymore.
And I would respectfully suggest that Martin Luther King did not live and die to hear his heirs whine about political gridlock. It is time to stop complaining and put our shoulders against the stubborn gates holding the American people back.
CLINTON: We cannot be disheartened by the forces of resistance to building a modern economy of good jobs and rising incomes or to rebuilding our education system to give our children a common core of knowledge necessary to ensure success or to give Americans of all ages access to affordable college and training programs. And we thank the president for his efforts in those regards.
CLINTON: We cannot relax in our efforts to implement health care reform in a way that ends discrimination against those with pre-existing conditions - - one of which is inadequate income to pay for rising health care --
CLINTON: -- a health care reform that will lower costs and lengthen lives; nor can we stop investing in science and technology --
QUEST: President Bill Clinton with the thoughts of the day.
Joe Johns is with us from Washington to talk.
Can you hear me? Can you hear me, Joe, first of all?
JOE JOHNS, CNN CRIME AND JUSTICE CORRESPONDENT: Hi, yes, I can, Richard.
QUEST: We are hearing such wonderful, lofty rhetoric about the day. But it's difficult to put it into exact context, when you hear Presidents Carter and Clinton and still to come Obama.
So give me a feeling of the day from where you are.
JOHNS: There are a bunch of themes, and I think the theme that's been running across the last week or the month in Washington, it's been all about where we are on Dr. King's dream. And you hear a variety of different people speak about it most eloquently, John Lewis, Congressman John Lewis, a Democrat of Georgia, who actually spoke at the first march in 1963. He was a big civil rights leader in those days. And he pointed out the obvious, that if anybody tells you things have not changed in the United States over the past 50 years, they're wrong, because back in those days, you -- dogs were set upon minorities; black people were thrown in jail all for simply asking for their rights.
So huge things have changed in this country.
However, there are some things that have reverted back; there are some other things that haven't moved forward as well for minorities in this country. Most interestingly, Richard, and I won't filibuster here, the issue of voting rights has come up again and again and again because the Supreme Court not far from here overturned a key part of the Voting Rights Act just a couple months ago.
And a lot of minorities say that seems like a step backward from the 1960s, Richard.
QUEST: Joe, Bill Clinton just referred to the Civil Rights Act, the Voting Rights Act, desegregation, the equality. He then talks about the Birmingham church bombings and lynchings. And we're going to hear a bell ring at the top of the hour, the moment when Martin Luther King spoke.
So put that into context for me.
JOHNS: As far as the president appearing and all of that, is that what you mean, Richard?
QUEST: Yes, yes.
JOHNS: I'm sorry; a plane was flying over.
QUEST: Of all the presidents there.
JOHNS: Right. That's the big symbolic moment here, the notion that 50 years ago, Dr. King came before a very similar crowd that you see out here -- only it wasn't raining and there weren't so many umbrellas.
But he came before this crowd and petitioned the United States for basic rights, for African-Americans in this country; 50 years later the first African-American President of the United States appears in the very same place around the very same time.
So that's very symbolic and very important.
On the other hand, it's important to say that White House aides are telling me that he's not going to try to recreate the King speech, of course. He's going to pay honor to Martin Luther King and talk about his legacy. But he's not going to try to outdo him in terms of rhetoric. I think it's very smart for the White House to try to downplay expectations, if you will.
The key question for Barack Obama is what he's done for minorities. And now that very much includes not just African-Americans in the United States. It's Latinos, it's Asians, it's even the gay and the lesbian community, to some degree.
So that's the long-term discussion for this administration, and that book will not be written until this president leaves office.
QUEST: We'll pause there for a moment and we'll go back to the speeches; one of Dr. King's (inaudible) is now speaking.
UNIDENTIFIED MALE: -- so that she can appreciate this history and continue to participate.
There are two quick other things that I want to say. I've been speaking all week, as many of us have. But I'm reminded that Dad challenged us. That's what he did, challenged our nation, to be a better nation for all God's children.
I'm reminded that he taught us the power of love, agape love, the love that is totally unselfish. You love someone if they're old or young, rich or poor, black or white, Native American or Hispanic American or Latino. It does not matter. You love them because God calls us to do that.
Love and forgiveness is what we need more of, not just in our nation, but really throughout the world.
And so I want to rush to tell you, Dad said the ultimate measure of a human being is where one stands, not in times of comfort and convenience, but where he stands in times of challenge and controversy.
He went on to say that on some questions I would just ask, as the physicians, say, speed is the ask of the position politic, vanity ask is a position popular. But that's something deep inside called conscience, ask is a position right.
So he often talked about sometimes we must take positions that are neither safe nor popular nor politic. But we must take those positions because our conscience tells us they are right.
QUEST: And there we leave the events. You can see the bell that will be being rung. It is the bell we'll explain all about that (inaudible) the top of the hour, 3 o'clock Eastern time. That is the moment when Dr. King started making that famous speech, the "I have a dream" speech. We'll explain more about that as we move forward.
This is QUEST MEANS BUSINESS. Let's take a short break.
QUEST: Britain's competition watchdog has ordered Ryanair to sell most of its stake in its rival Irish carrier, Aer Lingus. The budget airline has been told to slash its current share holding from 30 percent down to just 5 percent. The competition commission says there's been a substantial reduction in competition on some routes because of the arrangement. Ryanair's rejected and says it will appeal against the decision. Today's (inaudible) also prevents Ryanair from seeking additional shares or board representation in Aer Lingus.
Now when you've been to the moon, earthly travels must seem rather mundane. Buzz Aldrin is the second man to walk on the lunar surface; says most of his time now is spent on the road. CNN special correspondent Philippe Cousteau caught up with the former astronaut and found out his biggest travel grip.
NEIL ARMSTRONG, ASTRONAUT: That's one small step for man, one giant leap for mankind.
PHILIPPE COUSTEAU, CNN SPECIAL CORRESPONDENT (voice-over): Space: the final frontier -- to most. But for former American astronaut Buzz Aldrin it was the first step in a long journey. More than 40 years since he and fellow astronaut, Neil Armstrong, were the first humans to walk on the moon, Buzz has seen almost every corner of the globe.
COUSTEAU: Philippe Cousteau, very nice to meet you.
COUSTEAU (voice-over): We caught up with the legendary space man in Washington, D.C., where he's meeting with U.S. government officials about the future of the country's space program and how to make space more acceptable to everyday people.
COUSTEAU: The government has driven space exploration for a long time. But you're starting to see the rise of space tourism.
ALDRIN: Tourism, yes. Yes.
COUSTEAU: Do you think that's a viable (inaudible)?
ALDRIN: Absolutely. (Inaudible) 20 -- Virgin Galactic wants to call its passengers astronauts.
COUSTEAU: But they're not astronauts?
ALDRIN: (Inaudible) searching for a different term than astronaut. So 100 kilometers, 62 miles is what? It's space. Why is it space? Because Richard Branson said it was space. OK?
It's dark; nothing will stay in orbit at 62 miles. You've got to get 100 or 150.
COUSTEAU (voice-over): Sparking interest in space exploration and granting civilians access to lunar travel has been Buzz's mission for years.
ALDRIN: My hope for the future is based on U.S.S. Enterprise, to boldly go where man's not been before.
Orbiting Mars and landing on Mars off in the future.
COUSTEAU (voice-over): Even for the man who's logged more than 280 hours in space and has literally seen the world, the inconveniences of earthly travel can still get to him.
COUSTEAU: So do you spend most of your time on the road?
ALDRIN: Unfortunately, yes.
COUSTEAU: What do you think is your biggest travel pet peeve?
ALDRIN: It didn't take a second. TSA.
I'm over 75; obviously, so I don't have to take off my shoes. But I get so irritated at taking a belt off.
COUSTEAU: What's worse, space food or airplane food?
ALDRIN: First class and business class is pretty good.
COUSTEAU: So space food is worse than airplane food?
ALDRIN: Yes. You go into a museum and you can buy a little space ice cream.
COUSTEAU (voice-over): But when he's circling the globe in a plane and not a rocket, there's one thing he can't leave without.
ALDRIN: This is my man purse -- murse.
COUSTEAU: Your murse, OK.
ALDRIN: Hair spray, hand washer, toothbrush, mouthwash, a bunch of --
COUSTEAU: I see some mints -- plugs and adapters in there.
ALDRIN: Oh, yes; I got to have everything.
COUSTEAU: (Inaudible) international traveler.
Where haven't you been?
COUSTEAU: I haven't been to the South Pole. I've been to the North Pole, been to the Titanic. Been to the moon. But I haven't been to the South Pole.
QUEST: Now that is what you call traveling -- haven't been to the South Pole, but been to the Titanic, been to the moon. Yes, tick those off and, by the way, the TSA is, of course, the security organization here in the United States that is now responsible for airport security.
In a moment, one of Spain's most loved festivals survives being squashed. You wouldn't want to wear a cashmere sweater of any form in this particular arena. (Inaudible) something white.
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QUEST (voice-over): The answer to tonight's "Currency Conundrum," I asked which country named its currency after a warrior. The answer is Honduras, which uses the lempira as its currency. I'm sorry if I mispronounced that; I apologize. Lempira was a 16th century chief who managed to unite more than 200 rival tribes together in a battle against Spanish conquerors.
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QUEST: The fans of tomato puree, take a close look at this, this fevered food fighting festival happens every year in the Spanish town of Bunol. It's held over the space of an hour -- just one hour. Every last Wednesday in August. Now Spain's (inaudible) this event was in the red and may not have taken place.
The festival cost the city of Valencia about $200,000 to stage. A way had to be found to cover the costs. So this year for the first time, (inaudible) had to pay $13 tourists. Locals were free; tourists had to pay $13 if you wanted to buy a prime position on a truck. That would cost you $1,000 for the locals, as I say, it was free to take part. The new charges didn't entail warriors or visitors alike. All 15,000 tickets were sold with another 5,000 allocated to the locals.
This has been one big squeeze; no one seems to mind.
We should now return to the events taking place in Washington, the anniversary of the speech.
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