CNN CNN


 

Return to Transcripts main page

QUEST MEANS BUSINESS

Los Angeles Airport Shooting; US Airport Security; Eyewitness Description; Britain's Troubled Banks; European Markets, US Markets; US Economy; US Energy Opportunities; Economist Vicky Pryce's Prison Experience

Aired November 1, 2013 - 17:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


(BEGIN VIDEO CLIP)

(NEW YORK STOCK EXCHANGE CLOSING BELL)

(END VIDEO CLIP)

RICHARD QUEST, HOST: It's a winning start to the month for stocks in New York. The closing bell an hour ago rang on Wall Street. Stocks were up, it is Friday, it is November the 1st.

We will start in a moment with breaking news from Los Angeles Airport. A suspect detained in the shooting. The details coming up.

Also on QUEST MEANS BUSINESS, it's a bad bank within a good bank. Royal Bank of Scotland keeps its troubled assets to itself.

And a pitched battle in Paris. Why all French footballers will soon be the strikers.

I'm Richard Quest, tonight, live from London, where I mean business.

Good evening from London. We start our program tonight, though, on the West Coast of the United States. A shooting at Los Angeles International Airport has left one person dead and several injured. The suspect, according to sources, is a 23-year-old man. He is wounded and in custody.

The airport says flights will be significantly delayed as police take control of the investigation and the crime scene. LAX, or "Lax" as it's known, Terminal 3, is the home to a number of airlines including Spirit and Virgin America. CNN's Deborah Feyerick is with us from New York. Deborah, the -- is this crisis over that we know of in LA?

DEBORAH FEYERICK, CNN US NATIONAL CORRESPONDENT: Police have labeled it "static," which means that now that situation is under control. This is what we can tell you. We can tell you that this morning, Los Angeles time, a gunman walked into the airport with a concealed assault rifle. He walked up to TSA screeners and then opened fire.

One TSA agent was shot and fatally wounded. Another was also shot in the leg. We were then told that he walked into the terminal and he got pretty deep inside that terminal, Richard, and that's when police officers, both from the LAPD and the LA Airport opened fire, shooting the gunman several times in the chest, what's called center mass.

We're also being told right now that law enforcement officials are looking into the possibility that he was targeting TSA officers, those who do the screening and go through all the documents as people are going through the checkpoints --

QUEST: Right.

FEYERICK: -- and that's because eyewitnesses heard him make statements asking people, "Are you TSA? Are you TSA?" And when they said no, then he would move on. All of that now under investigation. Richard?

QUEST: Deborah Feyerick is in New York and will bring us updates the moment there's more to report on this one. Please, do come straight back to us.

As to airport security in the United States, any of us who have traveled through the major airports know that it has become much more rigorous since 9/11, and the crux of the security is the Transportation Security Administration, the TSA officers.

They are not armed at security checkpoints. They do the passports, they do the body scanners, the new body scanners, of course, and the x-ray machines. Thousands of them, hundreds of thousands of them, were employed in short order after 9/11. But they do screen 1.8 million passengers every day.

And to put this into context, last year, they seized 1500 guns. I know it's extraordinary. You'd think people just by accident turn up at the airport with their gun in their bag. Obviously not in the case of today. Only air marshals are allowed to carry guns onboard aircraft.

As for the Federation of Government Employees, tonight they said "Thank you to all of our brave TSOs," transportation security officers, "who put their lives on the line every day to keep the flying public safe." The thoughts and the prayers are with those who have been injured.

Now, this is "Lax" -- those of you who have been there, LAX, Los Angeles International Airport. It's seven-odd -- seven or eight terminals, all around the Encounter, the very famous building right in the middle. It's a restaurant, actually. And of course, with its runways on either side very close to the coast.

LAX says that flights arriving and departing obviously are going to be seriously delayed. In their phrases, it's "significantly delayed." Incoming flights have been accepted at less than half the normal rate.

Now, "Lax" is the third-busiest airport in the United States behind Chicago and Atlanta Hartsfield. Officials are working to get the operations back to normal. It will take time. The mayor of Los Angeles has advised passengers who are headed to the airport not to go.

(BEGIN VIDEO CLIP)

ERIC GARCETTI, MAYOR OF LOS ANGELES: This is a situation we're being proactive. If you have a flight this afternoon, we're encouraging you at this point to stay away from the airport, not because of the safety situation, but because the ongoing investigation makes it a very difficult place to come to and to travel to.

(END VIDEO CLIP)

QUEST: So, what did happen, as seen through the eyes and voices of those who were there and saw it? An eyewitness describes what happened when the suspect opened fire.

(BEGIN VIDEO CLIP)

ERIC OCHERET, EYEWITNESS (via telephone): I heard a couple of popping noises and I just turned to look. It didn't -- it just sounded like somebody banging on something, but there was a stampede of people coming my way, and I realized that something was very wrong.

And people were panicking just seeing the stampede of people that started to run. So, people were running into the bathrooms, people were screaming, "Run into the bathroom! Get behind something!"

And actually, I was very close to the escalator that goes down to the walkway to the baggage claim area, so I decided to just head down the escalator, picked up my carry-on bags, ran down this one corridor.

And then, at the end of the corridor, where we would have had to go out through security, the security guard didn't know anything that was going on at that point. She just kept saying, "If you go out, you can't come back in."

But then, all of a sudden, the police came and said, "Everybody down on the floor." So everyone immediately went down to the floor. And police ran the other way down the corridor. And a few moments later, the police asked us to get up and run, run, run. Get out.

(END VIDEO CILP)

QUEST: Now, we will obviously keep you up to date with events as they develop on that and more information from Los Angeles when we get it.

When we come back after the break, we turn to our regular diet, and this time, of course, we are in London, and it's a good time to be here. The British banks, they're in more trouble once again. QUEST MEANS BUSINESS, good evening.

(COMMERCIAL BREAK)

QUEST: It was a rough day for Britain's troubled banks. Let's start with Barclay's Bank. Barclay's suspended six traders, and that included of the six one of the top London traders. RBS, the Royal Bank of Scotland -- now, the RBS confirmed there was a foreign exchange investigation.

Now RBS is also involved, it includes Deutsche Bank, UBS, Citi, JPMorgan, all confirming that they are now being invested for how they may have manipulated foreign exchange markets. You have got Barclay's, you've got Royal Bank of Scotland.

Oh! And more misery and mayhem for RBS, this time announced that it will create an internal bad bank. This is all part of the idea of how you get rid of the toxic assets inside a bank. Do you get rid of them? Do you create a good bank/bad bank?

Well now, the UK chancellor, George Osborne, has expressed support for the bank putting it inside the existing institution.

(BEGIN VIDEO CLIP)

GEORGE OSBORNE, UK CHANCELLOR OF THE EXCHEQUER: Determined to build a British banking system that supports the British economy, and today, RBS undertakes a new direction that will achieve that by dealing with the toxic assets in the past, by making sure it is focused on the UK, and making sure it's the best small business bank so it can support businesses like this.

(END VIDEO CLIP)

QUEST: So, the core problem for all of these banking issues is how you deal with toxic assets that are nestled. Think of the analogy of a bad apple buried at the bottom of the barrel. It could make the whole lot rotten.

So, take a look at RBS, Royal Bank of Scotland's assets. Now, lurking amongst the good and the bad, way down there, you have $60.5 billion of toxic loans. By toxic loans, we mean these are likely never to be repaid.

But not only that, they are poisoning the rest of the barrel. And that poison, it inhibits RBS's ability to lend, it makes nonsense of the capital ratios. So, you've got to get rid of it. And to keep the poison from spreading through the bank, RBS is planning to build this firewall, ring-fencing them. A capital resolution division, to be separately managed, but still legally part of RBS.

This is very different from the Irish system of a good bank/bad bank, a resolution trust type of arrangement, NAMA, as it's known in Ireland. Very different sort of organization.

The bank will run down the assets, pushing them down, and because of that, they'll be gone within two to three years, and as a result of that, the substantial losses that will be taken by RBS, but it will allow $17.5 billion for new loans, substantial money will be able to be put forward. That's the idea at RBS. It's a very interesting mix on an existing concept.

So, moving to the European markets and how they've traded. They mostly fell during the course of the day. Shares of the Royal Bank of Scotland, well, not surprisingly, they tumbled on toxic debts. Renault fell 4 percent on news that Nissan lowered its forecast. It was a positive report on China manufacturing data.

As for the United States, American factories continue to churn out good despite a 16-day government shutdown last month. Manufacturing has been growing every month, 56.4 for the ISM. It rose to -- the activity rose to the highest level we've seen in October for some time.

Putting all this together, a reading above 50 indicates growth. Stocks recovered from early losses to end higher, up nearly 70 points by the close.

Anthony Chan joins me, chief economist at Chase Private Client, a unit of JPMorgan. Anthony, these manufacturing numbers, it's all getting extremely interesting, now, isn't it? Because there is recovery. It's slow. And there's not much more that can be done to speed it up.

ANTHONY CHAN, CHIEF ECONOMIST, CHASE PRIVATE CLIENT: Well, that's true, Richard, but one of the things that I see in that report that really is encouraging is that we're starting to see the effects of a global economic recovery. You certainly saw the export component in that index really picking up a little bit more. Orders are a little bit stronger.

Remember, manufacturing is a cyclical sector, and when the cyclical sector starts to show signs of life, it's not too long thereafter before other parts of the economy start to show signs of life.

QUEST: OK. Manufacturing has been one of the, if you like, strongest points in many ways. On-shoring is now coming back. What do you think needs to happen next? Because as long as there is this overhang of January on budget, February on debt ceiling, worries about tapering, companies have that disincentive to invest medium-term.

CHAN: I think that's true. One of the things you need to see is consumers spending a little bit more, you need to see business sentiment picking up, and you certainly saw, believe it or not, the inklings of what you're saying, Richard. You saw the employment component in that index. It's still in an expansion mode, but it really did not accelerate.

QUEST: But --

CHAN: In fact, it gave up a little bit of ground. So, we're still not seeing that so-called escape velocity that you're talking about or hinting at. But that is to follow.

Remember, employment is a lagging indicator, so the economy starts to gain traction, it's just a matter of time before we start to see employment. Not that we're not creating jobs. We're continuing to create jobs, but we need to create them at a much faster pace.

QUEST: Where do you stand, Anthony, on this question of these jobless numbers. Are you in the camp that basically says they're not telling the real picture because what they're telling -- or they're telling a picture of people not looking for work? Or do you believe that they are telling us a picture of job creation?

CHAN: I think, Richard, when you look at the employment statistics, you can't just look at the unemployment rate. You have to look at the entire mosaic.

One of the things that -- and I think you're alluding to this -- that labor force participation rate, when you see that at a multi-decade low, it automatically tells you that the unemployment rate declines are overstating how well the labor market is. That's one of the reasons why the central bank has continued to wait before they start their tapering effect.

But nonetheless, we are creating jobs. We have created almost 7 million jobs. We lost 8.7 million jobs during the financial crisis. So we definitely are creating jobs.

Now, are we creating jobs at a fast enough pace so that the economy can really go on its own and not require any more assistance from the Federal Reserve? Absolutely not. But we are making progress. We need to make more.

QUEST: OK. And we'll talk more about that when I'm back in New York week after next. Anthony Chan, good to see you. Have a good weekend, sir.

CHAN: Thank you.

QUEST: The US energy secretary, Ernest Moniz, has been visiting Japan to assist with the Fukushima nuclear plant clean-up. The secretary told our Pauline Chiou that the United States has the potential to become a very significant market for exporting natural gas. Pauline asked Mr. Moniz about a recent government study on how exports could affect domestic supply in the future.

(BEGIN VIDEOTAPE)

ERNEST MONIZ, US ENERGY SECRETARY: One of the interesting points in that study was that it expects that if we export, let's say, one unit of natural gas, let's say one trillion cubic feet, that what we would find is that would drive additional domestic production by perhaps two-thirds of that unit.

So, the production is also elastic, and the more the international market grows, the more we would expect to produce.

PAULINE CHIOU, CNN INTERNATIONAL CORRESPONDENT: The shale revolution has done wonders for the US in terms of becoming less dependent on foreign oil. Is that the ultimate goal with the shale revolution that we're seeing in the United States? And also, what's your response to critics that say it's not good for the environment?

MONIZ: The low gas cost has, for one thing, stimulated substantial reinvestment in our manufacturing capacity. The estimates are about $100 billion being estimated -- being invested in new manufacturing capacity directly tied to the low cost of natural gas, which is directly tied to the shale gas revolution. So, it's been a major benefit.

Now, in terms of environmental footprint, we believe that the impacts are manageable, but they must be managed.

CHIOU: I want to ask you about nuclear energy, which is, of course, a sensitive topic where you are right now. What is your view on the future of nuclear energy post-Fukushima?

MONIZ: Well, in the United States, President Obama has put forward what's called the "all of the above" energy strategy. This means that as we prepare for a low-carbon world, we need to invest in the technology development and deployment of all the options that could be marketplace- competitive in that low-carbon environment. Nuclear power is obviously one of those.

CHIOU: Secretary Moniz, I have to ask you about the allegations of surveillance by the NSA. Germany has been very vocal about saying we can't negotiate a free trade agreement with friends who are spying on us.

In light of this whole controversy, are you worried that when you go out to other countries here in Asia or in Europe that it's going to hurt your ability and your credibility to strike business deals and trade deals with other countries?

MONIZ: Well, I can only say that in my visits right now in China and Japan and other visits that are planned, what I am seeing is a very, very strong interest in cooperating with us on energy, cooperating with us on technology development, cooperating with us on financial investments that flow both ways.

If I take China, for example, and shale gas, we are seeing major investments in production in the United States, and similarly, we are seeing major partnerships of American companies with their Chinese counterparts looking at the development of what is a very substantial shale resource in China.

(END VIDEOTAPE)

QUEST: Coming up next, one of Britain's top economists survives a two-month stint in prison. She's written the book "Prisonomics: Behind Bars in Britain's Failing Prisons." She's Vicky Pryce, and she's my guest after the break.

(COMMERCIAL BREAK)

QUEST: Now, it has been an eventful year for the economist and author of "Greekonomics," Vicky Pryce. In March, she was sentenced to eight months in prison for perverting the course of justice. She accepted speeding points for her ex-husband, the former UK cabinet minister, Chris Hume.

Pryce was released in May after serving two months. Vicky has now published a book about her life in jail. It's called "Prisonomics: Behind Bars in Britain's Failing Prisons." Vicky, of course, is no stranger to QUEST MEANS BUSINESS. A regular guest.

Vicky, you now have gone over the fences many times, and we've discussed many issues on economics. We don't quite discuss an issue like this.

VICKY PRYCE, AUTHOR, "PRISONOMICS": No, that's absolutely true. Of course, it is to a large extent about economics in the sense that what I did when I was in there. Of course, I observed what was going on and I was shocked by the waste of money in terms of keeping so many people in jail who should not be there.

QUEST: You say you were shocked, and you talk about -- rehabilitation versus retribution and all the issues. But the only thing that I'm shocked about is that you're shocked. Because anybody who knew anything about the penal system knew exactly what you've written.

PRYCE: Well, yes, but not very many people know about the penal system. The extraordinary thing --

QUEST: Because they don't want to.

PRYCE: Well, also, they haven't been in jail, of course. And they don't have that experience, and they haven't spoken to enough people to understand, enough women in particular, which was the case with me, to understand what had actually been going on and how they found themselves in that position and what happens to their children from whom they're separated.

And the cost to society of looking after these children who are quite likely, in fact, to become offenders themselves.

QUEST: There are no votes in prison. There's no purpose other than to prevent recidivism, which may be a purpose in itself, to spend a penny more than is necessary on prisoners. So why bother?

PRYCE: Absolutely. I think the interesting thing about it is the debate that's going on out there, which is that we lock them away, and then the problem is solved. The reality is that the problem is not solved. People who go to prison come out and re-offend more than would be the case if they hadn't gone to prison. And that is a huge cost to society.

QUEST: You say at the beginning of the book -- right? -- you're quite up front about it, it's a book on economics and prison in your experience. You say this book does not dwell on the case -- your case or before it will be focus on things you learned in prison. But you didn't go to prison as an academic exercise, did you? You went to prison as a punishment for committing a crime.

PRYCE: Absolutely, and I accepted that entirely and I did my time, and now what I felt was that because so many woman couldn't have a voice, I had to tell the story -- their story, if you like. But then learn from that and use it as a way of showing that, in fact, the system is broke in some ways and it should not be putting so many people in jail.

There are alternatives that are cheaper and which, of course, link to considerable less re-offending than is the case if you send them to prison. And that prison itself is not a deterrent to crime.

QUEST: The biggest criticism -- and I've -- that I've read of your book is that you don't express remorse. You've heard this criticism a gazillion times. You don't express remorse in the book.

PRYCE: It wasn't meant to be that type of book.

QUEST: But should you have done?

PRYCE: Well, I don't think so. I think this isn't the type of book which is a sort of opening up myself and saying how terrible things have been and what I should --

(CROSSTALK)

QUEST: But you can't have it both ways, Vicky.

PRYCE: Oh yes, you can.

QUEST: You can't write a book telling about your time in prison -- it's not just an economic treatise. This is about your time in prison.

PRYCE: Well, the point is, of course, that people perhaps wouldn't read about the economics in prison if I hadn't also written about my time in prison. And this is how I've done it.

But this is the way that I've been able to bring the evidence out, by experiencing it myself, talking to other women, and then doing huge amount of research when I came out, helped by the Institute of Criminology in Cambridge, helped by other researchers who looked at everything, and by all the agencies that have been arguing for penal reform for a very long time.

QUEST: And yet, what the public wants is self-flagellation, don't they?

PRYCE: Of course they do.

QUEST: They want you to say, "I was wrong, I was this and that." And you didn't give them it. You haven't given them it.

PRYCE: Well, what I have said repeatedly is that if I could turn the clock back, then I would, of course. But we can't do that, and therefore the point is that we have to look forward and use whatever has happened to me in a positive way. And I believe that this book does that.

QUEST: Very briefly, because I -- do you -- what's the one thing you learned in prison that you never thought you would have learned having gone to prison?

PRYCE: That everyone around us, or almost everyone around us, is an offender, they've done something wrong in their lives. And there are some unfortunate people who've ended up crossing the barrier and finding themselves in jail.

QUEST: And what will you do now? Because in some areas, you'll be persona non grata, in other areas, you'll be most welcomed. What will you be doing?

PRYCE: It seems like most people find me -- very welcome back.

QUEST: Persona grata.

PRYCE: Yes, persona grata. But I'm just finishing a book on the eurozone crisis, I'm updating my economics book --

QUEST: Ooh.

PRYCE: It's coming out in a couple of weeks, and then I'm going to be doing mostly academic work, but lots of other projects, too.

QUEST: I trust you'll be coming back to talk about our normal diet of issues of economics. Vicky, good to see you, thank you very much for joining us.

Now, when we come back after the break, they're on the pitch and they are strikers, both with the ball and because of their pay. It's French football --

(RINGS BELL)

QUEST: QUEST MEANS BUSINESS. Oh, dear, the bell's a bit off.

(RINGS BELL)

(COMMERCIAL BREAK)

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

The authorities in the US are looking into the possibility that the suspected gunman who this afternoon was involved in a Los Angeles International Airport shooting was targeting TSA -- Transportation Security Administration -- officers. One person is dead, several are injured, and the suspect, according to sources, is a 23-year-old man. He is wounded and is in custody.

Now, the Pakistani Taliban leader Hakimullah Mehsud has been killed in drone strike, according to certain sources, in the northwestern part of the country. Mehsud's funeral will be, reportedly, held tomorrow. Similar claims about Mehsud's death have been made in the past and clearly have proved to be untrue.

The Iraqi prime minister, Nouri al-Maliki, has been meeting Barack Obama at the White House. Mr. Obama says he and the Iraqi prime minister discussed how to push back against al Qaeda's Iraq organization. It's Prime Minister Maliki's first visit to Washington in two years.

The NSA leaker Edward Snowden says he would like to testify in front of US lawmakers in Washington, according to a German MP, Hans-Christian Stroebele, who met Snowden in Moscow on Thursday.

Good evening from London. France's highest paid footballers may be considering moving abroad. The French government has refused to exempt teams from a planned 75 percent super tax on big salaries. The salaries of course and the taxes - the taxes will be paid by the club. Two of French football's top earners, Ibrahimovic and Valco, will join a league-wide strike against the movement later this month. Team leaders have failed to convince President Francois Hollande to drop the tax when they met last night.

(BEGIN VIDEOCLIP)

JEAN-LOUIS TRIAUD, PRESIDENT, FC GIRONDINS DE BORDEAUX, VIA TRANSLATOR: The president listened to us at length, but we are not convinced of having been heard. We are leaving this meeting without any guarantees, without having made particular progress. So our action will go on.

(END VIDEOCLIP)

QUEST: French football teams are some of the biggest spending clubs in Europe. It's in thanks part to their foreign ownership. According to Deloitte's Sports Business Group, England's premier league spent around - oh, look at the numbers -- $637 million during the summer transfer spend, it's a lot of money. Now, if you then go back to the next France's Ligue 1 then followed with $207 million, so quite a lot less, but it was thanks to significant investments from the (Cataris) and the Russians. I mean, frugal is the best way to describe Germany's Dundas Liga, with a mere $79 million. And if you look at Serie A in Spain's La Liga, well they generated surpluses, they sold more players and brought in more revenue. What a difference - enorme -- between the half a billion from the English premier and everybody else. I spoke to Patrick Mignon from France's National Institute of Sport in Paris. I needed to know what would happen to French football if the planned tax is passed.

PATRICK MIGNON, NATIONAL INSTITUTE OF SPORT: The risk is that the club said that we won't be able to play the player that we recruited this recent years. And that player, Zlatan Ibrahimovic, like they all (inaudible) will go to Spain or go to England. This is what the football authorities are afraid. Provisional (inaudible) authorities are saying bad things.

QUEST: There's going to be a strike. The Professional Union of Football Clubs announced a boycott of matches in the top two divisions between November and December. How will a strike, or how will not playing, or boycotting matches - how will that help the cause?

MIGNON: In my opinion, I don't think it will help the cause because the situation of football in France, it's not the same situation in term of popularity like in (Inaudible) or Britain or in Italy. And it seems that a lot of people in France are not interested in football, and it seems that for people who are not interested, to be ashamed if there is a strike from - coming from the clubs.

QUEST: For football in France and the quality of football in France, what do you believe be the effect?

MIGNON: Well, you know the effect will be that the football club - the risk that their best player will go to Spain or England - this is a risk the quality of football will be lower. In this case, the club will be obliged to recruit more along their training. They (inaudible), they're turning center in provisional football club. And it seems that it will take more times to produce some very good players, skilled player.

QUEST: The first ever YouTube Music Awards are being held in New York this weekend. It's a chance for artists to get recognized for their digital breakthroughs. Russell Simmons knows all about YouTube's power. Now, Russell Simmons started out - well, you probably know this - as a music promoter. He went on to co-found his own record label, more than just a label - Def Jam Records - iconic. Broke artists, made news. Now, Simmons has added a YouTube Channel called "All Def Digital" to his musical empire. When he joined me a few weeks ago in New York, I asked Russell Simmons the significance of digital, and, lets' face it, a man of a certain age, how he got into digital.

(BEGIN VIDEOCLIP)

RUSSELL SIMMONS, FOUNDER, ALL DEF DIGITAL: I was going to buy a T.V. network, and the more I looked at this shrinking industry, you know - I realized it was not a good idea, and so YouTube offered me a channel, I took the channel. So All Def Digital, ADD, which is what I have, is the name of the company - All Def Digital and we do all this comedy, All Def Comedy, All Def Poetry, and music.

QUEST: But the beauty of digital - with the YouTube Channel --

SIMMONS: Right now. Do it now.

QUEST: Why do you do it now? But you can get and cut out the middle man you can cut out in many ways, you can get your point out -

SIMMONS: From a business perspective, it certainly is the future. The great -

QUEST: But those are the people - you can find talent that you couldn't find before because they come to you now in a different way.

SIMMONS: Oh, my goodness, there's so much online. So, there's opportunity and I don't have to make it. An artist comes, you know, with his life savings. He makes two videos, brings them to me and he's already showed me a lot more taking the step himself, a lot further than he could do on his own before.

QUEST: The down side is with more access and more availability, you get more people who never even have got close to it. How do you get rid of the rubbish?

SIMMONS: Oh, it's exciting to hear it all.

QUEST: Oh, come on.

SIMMONS: No, it's exciting to hear it all. And things also bubble up on their own. You understand that the people are smart enough to choose what's hot, and so if you -

QUEST: But does that take away your previous power of choosing what was hot?

SIMMONS: Well, in the music industry, they stopped doing that a long time ago. They (stopped/start) counting on what's playing the most on the radio and they were signing acts that already - when I signed Jay-Z years ago, Jay-Z was on fire in the street. He made a record which I put on my Nutty Professor sound track. The record was already hot. So I signed a hot artist.

QUEST: So, how do you now run a business where the listeners are basically - you've got the people putting their own stuff on the YouTube Channel, you've got people coming in and the listeners choosing what they want to hear, and you have to somehow negotiate that too?

SIMMONS: Well, this is the thing - artists are (hard) stuck online. They need to be moved across media. They demonetize their musical space more than they have to necessarily monetize their music. They may give their music away, and then at some point they can decide to sell. So, there's a lot in giving. I'm a yogi anyway. I like this idea that good givers are great getters, and that's how the space works.

QUEST: Your idea this things can bubble up.

SIMMONS: Yes.

QUEST: It makes it - it makes it a new world and a new era and it's changed the rules for everybody in the game.

SIMMONS: Everybody. Better own up to it. Because it's either evolve or die. And that's for television, that's for music, for pretty much everybody. Evolve or die.

(END VIDEOCLIP)

QUEST: The line from tonight's program, the line of the night - "When I signed Jay-Z." The world's latest gizmos are now available to test drive at the London Gadget Show, so we sent our own millennial, Samuel Burke, to try them out.

(BEGIN VIDEOCLIP)

SAMUEL BURKE, BUSINESS CORRESPONDENT: There are bikes on boats, cars on tracks and people under water taking smart phones to new depths. If it's snowing in London, especially if it's snowing inside, it can only mean one thing that the holiday season is here and time to figure out what to buy. Everybody's gathering around the 3D printer that we've heard so much about. It's actually printing something right now, but this is a scanner here, right?

Male: Yes. This is the MakerBot Digitizer and it's designed to scan to laser scan and to create a 3D model of anything that you put in here.

BURKE: And is it true, can I scan my face?

Male: Yes indeed. This guy has done it.

BURKE: So I could literally put my face right here like this and scan it?

Male: Yes.

BURKE: I've noticed there are a lot of gadgets here that allow you to record everything that you're doing. This one is called Narrative. It takes one picture every 30 seconds, about 2,000 photos a day so it's capturing everything I'm doing right now. It's taking a - it's the guy from One Direction. Smile. So, this one cost about $249 but it's not the only one. Also over here there's one called Sunny Cam. Kind of like Google Glass a little bit, but this one is only 149 bucks. You turn it on like this, wait a couple of seconds, it's already (go-ming), so now everything that I'm doing, everything that I'm seeing, these glasses are seeing and it's keeping it inside a little memory stick that you can later connect to your computer. I'm recording everything that I'm doing right now with the other devices. Hopefully I'll lose some calories because I was eating a lot of snacks earlier. This one, whoa. So what do you have here? It's an airplane that connects with your iPhone.

Male: Yes, I just (inaudible) and I lead to plane with the air.

BURKE: There it's flying. (Inaudible). It's working. It's working. I'm a good pilot.

Male: Yes, yes.

BURKE: OK, what do I do now?

Male: I don't know, perfect, perfect.

BURKE: Oh,

Male: It's recovering.

BURKE: Yes. No. We've got another flying device that works with a Smartphone. These aren't like the American drones that we've heard about flying over the Middle East?

Male: No, no, they don't shoot missiles, but they are fun, though. I'm playing with my phone. Look at that. You got the pilot's viewpoint, so you can see where you're going. There we go.

BURKE: Wow.

Male: (Inaudible), see it?

BURKE: Oops, sorry, sir. Do you have insurance?

Male: No, but watch this. Even if it - no. That's all right.

BURKE: Sorry. So the big themes we saw at the London Gadget Show - 3D printing, using your Smartphone to control aviation devices. I think I might take off on one of these things. It's called a Stigo. You just unfold it like that, and then you hop on I came in a car but I think I'm going to be leaving in one of these things. Chow.

QUEST: That's precious. All right Jenny Harrison's at the World Weather Center. Jenny, what would you like for Christmas?

JENNY HARRISON, WEATHER ANCHOR FOR CNN INTERNATIONAL: What would I like for Christmas? Oh, the list is very long, Richard. Very, very long indeed. But lots of fun things there. And I see you're back in beautiful, blustery London. Get ready for it because there's lots of windy weather on the way. I know you said you were heading over on your broomstick - I think you had a bit of help though with the wind. You can see on the satellite there's been (inaudible) clouds, especially the last few hours. More of those showers being blown in by these winds, and I have to say that the wind is going to be the main feature again over the next few days. (Delivery) active jet stream. More of these disturbances on their way to go through Saturday on into Sunday. And really, I have to say, as we go to the weekend, sunshine I'm afraid is a no - well a bit of a deficit really when it comes to that. These are the winds, look, we're going to go through Saturday on through Sunday and Monday. Look at these wind gusts - 112 kilometers now there in Cork, 91 in Dublin. We've got very high wind gusts as we continue through the next couple of days. I've just paused it again as we get into Monday. So all of this this, you know what it means? It means delays yet again most likely at the airports, possibly across the English Channel as well and maybe on the roads too. So, all of that coming as we go through the weekend, and of course, on the roads as well it'll cause some problems. We've got really nothing in the way of sort of warnings as it comes to sort of weather conditions, apart from this - look at this. Just the far south there. In the Med we've got maybe just some heavier cells of rain, but it's a very unsettled picture. Lots and lots of clouds, and more snow across the Alps. Temperatures not too bad, just be prepared for the delays that begin to kick in the latter part of the weekend, Richard, so enjoy yourself despite the blustery conditions.

QUEST: Jenny, thank you very much. Jenny Harrison at the Weather Center. And that's "Quest Means Business." I'm Richard Quest in London. Whatever you're up to in the hours ahead, hope it's profitable.

(COMMERCIAL BREAK)

(BEGIN VIDEOCLIP)

QUEST: This month on "CNN Business Traveller."

Female: There's a tendency for you to need to slow down.

QUEST: We're learning how to chill out.

Female: Music.

QUEST: With experts in packing.

Female: The tighter I roll them, the less wrinkle.

QUEST: Organization.

Female: Everybody feels overwhelmed.

QUEST: And meditation.

Male: Just let go.

QUEST: It's the road warrior guide to the art of (inaudible). Good night.

(END VIDEOCLIP)

(END QUEST SHOW)

ARWA DAMON, CNN INTERNATIONAL BEIRUT-BASED SENIOR INTERNATIONAL CORRESPONDENT: Hello, and welcome to "Marketplace Africa." I'm Arwa Damon in this week for Robyn Curnow. Kenya and Egypt, among the Continent's two main tourist meccas, but a tragic terrorist attack in Kenya and the revolution in Egypt followed by a more recent period of significant instability, that's done some pretty significant damage to the tourism industries in those two nations. So, what's being done to try to lure visitors back to some of the world's most iconic destinations? We start with Egypt. Key to really ensuring long-term stability there is economic growth. And central to that, is tourism. Here's Ian Lee reporting.

(BEGIN VIDEOCLIP)

Male: Keep your regulators by your hand and keep your two fingers on your mask, one hand on your weight belt, put air in your BCV and then we drop one by one. Let's go.

IAN LEE, FREELANCE CORRESPONDENT: Divers venturing off into deep. It isn't the image you likely associate with Egypt nowadays. It's usually pictures like this that come to mind. Police and protestors squaring off in a vicious cycle of violence that began with the 2011's overthrow of President Hosni Mubarak. Travel bans followed, tourism fell dramatically. And it's felt in places like Hurghada where fewer tourists are enjoying the beaches, kite surfing and 365 days of sun. And the merchants who relied on their businesses do what they can to get by.

TAMER RIAD, PRESIDENT, PIRATES DIVING NETWORK: Every owner had to overcome the crisis by his way. Some people they give them holidays, some people they give unpaid vacations, other people they're out of business unfortunately.

LEE: Tamer Riad is lucky. His company Pirates Diving is staying afloat because of loyal customers.

SVEN EAMBECK, TOURIST: The short time I have been here, very nice.

LEE: These German tourists aren't worried about their safety. They say they're more concerned about getting the right pictures for them and many enjoying Red Sea resorts, the chaos of the country is hundreds of kilometers away.

DETLEF ENGLAND, DIVING GUIDE AND INSTRUCTOR, PIRATES DIVING NETWORK: I receive a lot of e-mails, special from our diving guests of Pirates. So they are scared. Exactly what are you are seeing? Is it safe to come to Egypt? We are a little bit not knowing well. There is nothing happening in (inaudible).

LEE: But this is a side of Egypt that few see. Tourism's worst enemy is headlines of violence, even affecting places like Hurghada or perhaps the only thing really to worry about here, is getting a bad sunburn. The head of security in the region says they are making sure it stays that way.

HAMDY EL GAZZAR, GENERAL, HEAD OF HURGHADA SECURITY DIRECTORATE, VIA TRANSLATOR: Police troops were spread extensively as did the moving checkpoints says General Hamdy El Gazzar. The army joined us in securing the city. We target all rentable apartments to search. We search taxis here and passing through. The security measures are much more than they used to be.

LEE: Security also comes from the locals. Most, if not all of the city's 40,000 residents work directly or indirectly in the tourism industry. Ensuring the safety and security of visitors is important for embassies and tour operators in lifting travel warnings. Resuming flights and putting idle boats back out to sea. Like those of Ihab Barrag whose cruise ships cost them almost $8,000 a month to maintain.

IHAB BARRAG, OWNER, MIRAGE MARINE FLEET: We are trying to communicate to - with our clients, explain the situation, offer them some, let's say some cheap programs to - just to send people in to see what's happening here, see that it's very, very calm.

LEE: There are rays of optimism here, though. More tourists are filling sunbathing chairs as at least 13 countries ease their travel bans. Some hotels also say they're seeing an increase in bookings. They hope it will continue.

LARS GEWEYER, CHIEF OPERATING OFFICER, SAMI SAAD HOLDING: We are bullish, we are optimistic that tourism here in Hurghada is coming back very soon and in Egypt - and Egypt as such is coming back very strongly.

LEE: In fact, some are betting on it. Across the street from their Steigenberger Hotel, they're expanding. The over $50 million project will boast 705 rooms when completed. In the end, it's Egypt's legendary hospitality they hope will lure tourists back.

RIAD: Come back. We miss you. Waiting for you with a big smile. We're waiting for you because we miss you.

LEE: The promise of a warm welcome. But will it be enough to bring tourists back to the beach if there's still violence in other parts of the country. Ian Lee for "Marketplace Africa," Hurghada, Egypt.

(END VIDEOCLIP)

DAMON: The Kempinski Hotel Group has used Nairobi as its gateway for expansion in sub-Saharan Africa. Will it continue? Zain Verjee sits down with Simba's CEO Adil Popat in this week's "Space Time."

(COMMERCIAL BREAK)

DAMON: Welcome back. The Westgate terror attacks shocked not only Kenyans but the entire world. Kenyans pride themselves on being a warm, friendly welcoming nation. Now amidst growing fears for their own security, there's also grave concern that the attack has tarnished the nation's image. In this week's "Space Time," Zain Verjee sits down with Simba's CEO Adil Popat and asks the owner of the Kempinski contract just how long it's going to take to rebuild Nairobi's reputation.

(BEGIN VIDEOCLIP)

ZAIN VERJEE, CO-ANCHOR OF CNN INTERNATIONAL'S EUROPEAN "WORLD ONE" SHOW: How do you think the tourism industry is going to be impacted because of this attack?

ADIL POPAT, CEO, SIMBA CORPORATION: I think tourism is going to hurt for sure. It's a pity that the United States has now given a travel advisory, and I think one of the things that we as Kenyans feel is that it's very easy to get a message of condolence and support from the West, but with the same hand, you know, you put a travel advisory out there. And these kind of things have happened in the United States many times. You've had people being killed in schools and offices, and I believe this is a random event. And having a travel advisory really doesn't help us. We need a time for solidarity many people to say, look, we're really going to support you and that kind of travel advisory does nobody any good. So, it's going to hurt us.

VERJEE: What do businessmen like yourselves, other people in the hotel industry and others in the tourism industry in general, what can they do to kind of offset the negative images, the travel advisory - what kind of actions do you take? Lower prices?

POPAT: Well, lowering prices I don't think will help in any respect. I think what we need to do is work with the government, learn from lessons in other countries.

VERJEE: How much does the Kenyan economy rely on the tourism industry?

POPAT: Oh, I think it's a kingpin of our economy. If tourism is doing well, then people come in and invest in this country. You know, it all connects. And I think tourism is really a crux that we need to look after. There are so many people that come to this country as tourists and come back as investors.

VERJEE: Do you think that the way that Kenya has been an attractive country, all of Eastern Africa, for investment, is going to be hit in the long-term? Or will investors see this as a kind of a blip in the - you know - the blip on the map because there's infrastructure here, energy exploration, housing, like all these macro industries that are becoming very attractive to investors?

POPAT: I think Kenya's attraction to the West - to the Chinese to the East - is always going to continue. Because this is a great environment in which to invest. Our people are our biggest asset. So if you now invest in Africa, where would you look? You'd look at where the opportunity lies, but where the people are great. And that's the one thing that I can say that you can't get in other parts of the world. At least other parts of Africa. The Kenyan people. We've got a great resource. There's some people who will come. This is I would not say a blip. It's a big blip, but eventually people will realize and I think the government needs to play a very critical part to show that as I mentioned before and then people will come back and invest. Because great opportunities in this part of the world.

VERJEE: What would your message be to people that want to come to Kenya now but are changing their plans, who are feeling scared?

POPAT: Kenya is a safe country to come to. I mean, you know, we've had fewer and few incidences on a normal basis. We have one of the most beautiful countries in the world, and like I said, I'm sure our government will really take the mantle and say, 'We're going to protect you and it's safe to come to Kenya.'

VERJEE: What are some of the conversations that you've had with other people in the tourism industry?

POPAT: Well, I think the tourism industry's kind of in shock. Because we've had this happen quite a few times.

VERJEE: Right.

POPAT: We all believe that people will come back. People will realize that you know we really do want to visit this beautiful country. We're a little upset that we're not getting clear direction from the government. I think that's important. The (inaudible).

VERJEE: What direction do you want?

POPAT: (Inaudible) that we will provide the right level of security in the future and this is how we're going to do it.

VERJEE: On a personal level, when you look at everything that's happened, as a citizen of the country, how do you - how do you feel?

POPAT: I think the first thing we feel is sadness. Sadness that people can do these kind of things. And I think we really feel that at some point you know, I think our country has to do better. We have a show a better (card) that, you know, we're going to do a better job in looking after our citizens.

(END VIDEOCLIP)

DAMON: A reminder you can catch all of our shows online at cnn.com/marketplaceafrica. I'm Arwa Damon. Thanks for watching.

END