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QUEST MEANS BUSINESS
Kremlin Critic Khodorkovsky Pardoned; Khodorkovsky's Son on Father's Release; Obama Calls 2014 "Breakthrough Year"; US Q3 GDP Revised Upward; Dow Breaks Another Record; Central Banks' Accommodating Policies; US Growth Surge; BlackBerry Loses $4.4 Billion Yet Stocks Soar; Stocks and Stockings; India-US Diplomatic Row
Aired December 20, 2013 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
(NEW YORK STOCK EXCHANGE CLOSING BELL)
RICHARD QUEST, HOST: They look happy, and with good reason. It is the Friday before the Christmas week, and yes, there it is, Friday December the 20th.
There's lots of joy in a sense. After a decade in prison, tonight Mikhail Khodorkovsky is a free man. We will have the latest from Moscow.
Merry Christmas and a breakthrough new year. President Obama has high economic hopes for 2014. The president spoke in the last hour.
And BlackBerry gets burned in Q3. So the question: why did the share price rise so sharply today?
I'm Richard Quest. It may be a Friday, but of course, I still mean business.
Good evening. We will have the president's comments for you in just a moment, but we begin tonight with an extraordinary story. The former tycoon whose oil company was dismantled by the Kremlin is out of prison, but after serving ten years.
He is Mikhail Khodorkovsky, and you will be very familiar with his plight ever since he was arrested, convicted, imprisoned, and now he has been flown and released, and he is know in Germany. You can see him on the left being greeted by a German official, a former German finance minister.
Khodorkovsky is the former Yukos Oil chief, he was once Russia's richest man, serving an 11-year sentence. He was convicted of fraud and tax evasion.
Khodorkovsky always denied the charges, and critics and he always claimed the prosecution was part of a Kremlin plot not only to take control of Yukos Oil, the big oil company, but also because of the opposition that Khodorkovsky financed and supported, opposition to President Putin.
In the time, incidentally, that Khodorkovsky was in prison, Putin has been president, prime minister, and now back as president again. Khodorkovsky has continued to criticize the Russian leadership from behind bars. It seems Vladimir Putin no longer sees him as a threat. Our correspondent in Moscow is Diana Magnay.
DIANA MAGNAY, CNN INTERNATIONAL CORRESPONDENT (voice-over): Ten years behind bars, now Russia's most famous prisoner, the one-time oil tycoon Mikhail Khodorkovsky, a longtime critic of Vladimir Putin, is free and on German soil.
In a statement on his website, Khodorkovsky wrote, "On November the 12th, I asked the president of Russia to pardon me due to my family situation, and I'm glad his decision was positive. The issue of admission of guilt was not raised." And he thanked Germany's foreign minister during reunification, Hans-Dietrich Genscher, for what he called his "personal participation in my fate."
Khodorkovsky was jailed in 2003 for fraud and tax evasion, his sentence extended after a second conviction for embezzlement two years later. Even from his prison cell, Khodorkovsky kept up his critique of Russia's president, in a letter to "The New York Times" on the tenth anniversary of his incarceration, calling Mr. Putin "an irremovable and out-of-control central power."
Some experts believe Mr. Putin feels his power is such that the likes of Khodorkovsky no longer pose a threat.
MARIA LIPMAN, CARNEGIE MOSCOW CENTER: He can boast at least three major foreign policy successes this year. Syria, Edward Snowden, and of course, quite recently, Ukraine. On all three counts, he has every reason to regard himself as a person who prevailed, who won the upper hand.
And inside Russia, there is no challenge to him and he is not threatened, even by releasing a person who was regarded as his nemesis.
MAGNAY: Khodorkovsky's son, Pavel, spoke to CNN from New York as he was about to board a plane to see his father for the first time since he was jailed.
PAVEL KHODORKOVSKY, SON OF MIKHAIL KHODORKOVSKY (via telephone): Tomorrow's going to be a very happy moment, and probably the best Christmas gift I could have wished for in the last ten years.
MAGNAY (on camera): And perhaps for President Putin, Germany is the best place for him, away from Russia's political sphere, even though Khodorkovsky has always maintained from prison that he was not interested in entering politics.
Diana Magnay, CNN, Moscow.
QUEST: Now, Khodorkovsky emerges into a world -- a business world, particularly, perhaps almost unrecognizable from the one he knew when he first entered prison. In 2003, he'd built Yukos Oil. It was the most powerful oil company in Russia.
Ten years later, Rosneft, the state-owned company, snatched up Yukos's assets after it was dissolved. It's Rosneft that's now the world's biggest oil producer.
A decade ago, Russia's economy was surging ahead, growing at an annual rate of 7.3 percent at the World Bank. This year, now, Russia's growing, the projections are of just 1.8 percent.
And one very important thing, of course remains, the same president. Putin is the man running Russia.
As Diana mentioned, Pavel Khodorkovsky spoke to my colleague, Michael Holmes, about his father's release. Pavel described a short phone conversation he had with his father. Let's listen to a little bit more of what he told Michael Holmes.
P. KHODORKOVSKY (via telephone): He is doing well. He's very happy to obviously be out of prison. He can't wait to see us, and my family and I are going to be going over there later tonight.
MICHAEL HOLMES, CNN INTERNATIONAL CORRESPONDENT: Was it a surprise to you and the family? Did you expect him to get out early?
P. KHODORKOVSKY: It was a very tumultuous past 24 hours. I did not know what to expect following the announcement by President Putin yesterday, but it has happened very swiftly, and I'm very glad that my father is released. Obviously, it's a very good kind of shock for all of us.
HOLMES: He has always been very critical of the system, if you like what he calls the Putin system in Russia. Would you expect he would maintain some sort of profile when it comes to talking about Russia, or does he have any political ambitions you know about?
P. KHODORKOVSKY: No. We've spoken about this before, and it very much remains the case right now, my father doesn't have politics ambitions. It's up to him, of course, to decide what he wants to do, but I think first items on his list are his family and his friends right now.
HOLMES: And I know that your contact has been limited so far, but can you see him back in the world of business?
P. KHODORKOVSKY: I don't know. I don't think so. We've talked about this even before he went to prison. That's something that he has already achieved prominence in, and I don't think he would probably go back to that.
HOLMES: When --
P. KHODORKOVSKY: I don't know. Ultimately, it remains up to my father to decide what he wants to do.
QUEST: Now, it's been a very interesting day when it comes to the US economy, several strands to bring to your attention, not least of which, the market, which has closed at an all-time high, the president has been speaking, and we got good numbers on the US economy. The market up 42 points, 16,221.
It's a good time to reflect on one's achievements and regrets, says President Obama. He admitted he's has his ups and downs in 2013, and he's predicting next year will be different.
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Next year, with an economy that's stronger than it was when we started the year. More Americans are finding and work and experiencing the pride of a paycheck. Our businesses are positioned for new growth and new jobs, and I firmly believe that 2014 can be a breakthrough year for America.
(END VIDEO CLIP)
QUEST: So, put this into perspective. That breakthrough year may be next year, but this year, Wall Street had a surprise when it came to the economy. GDP in the last quarter was revised up --
QUEST: -- for a second time. The economy grew at 4.1 percent. Now, this was third reading. You'll remember, you get three readings. You get the initial, the second, and the final, or the third. And I want you to get right in there and you'll see how it changed. The first reading, 2.8 percent. Second reading, 3.6. But this is the number that we focus on, it's the final reading of 4.1.
And there are several reasons for the improvement. Consumer spending was higher. More companies invested in property and new equipment. The world's largest economy is improving with each and every report. Just look at how the year has played out.
You go to the end of last year, just a smidgen of growth, barely any at all. We were really worried about what was happening. But then you get a 1.1, followed by a 2.5, and you end up with a 4.1, and that shows the sort of sustained economic growth that allowed the Fed to consider -- well, to begin its tapering. And today, of course, that was underway.
Investors gave the same reaction on Wall Street. The Dow -- and let's have one more look at that, it's not every day you see a number --
QUEST: -- well, actually, I'm quite wrong. It is every day you see a record. Sorry about that. It's up a quarter of a point, 16,221. Probably going to be looking at 16,500 as being the next strategically important level.
So, as we pull the strands together of what happened, the Fed started tapering, we've got good economic growth, investors now have a pretty good idea of what to expect in the coming months. The forward guidance from the US Fed laid out a clear, crystal plan for next year. And that's also the case with other central banks. Join me at the QUEST MEANS BUSINESS crystal ball.
Now, remember what the Fed said. The Fed -- and in the statement afterwards, the Fed made it quite clear there will be modest tapering to continue. That's going to go right the way through 20-4 (sic), and interest rates will be low until unemployment falls. And in the statement afterwards -- in the statement, it said quite specifically that it will be until it's well below 6.5 percent.
But it's not the only one. The ECB's forward guidance has told us interest rates will remain low, an accommodative monetary policy will continue for as long as necessary.
The Old Lady -- the Gray Lady of Threadneedle Street, the Bank of England, Mark Carney has told us rates and stimulus remain until unemployment falls. Remember his target of 7 percent. The three knockout conditions remain, but none of them are close.
Although the UK is now growing faster than expected, and it's highly like that an interest rate there will be earlier than was first thought.
And finally, to Tokyo. Against complicated forward guidance is the Bank of Japan, but the stimulus remains, and here in Tokyo, unusually, we go that. We got the 2 percent inflation, so we started to get some targets.
Put it all together, and you can see that the world's central banks are very firm on what they are aiming to do. Let's talk more about this. I'm joined by Robert Shapiro, the chairman of Sonecon. He was the US undersecretary for economic affairs between 1997 and 2001. Robert, good to see you.
ROBERT SHAPIRO, CHAIRMAN, SONECON: Pleasure.
QUEST: Let's talk US economy first, and then we'll broaden it out, 4.1 percent, tapering has begun, the president says it's all going rather well, and he's right.
SHAPIRO: Yes, he is right. The fact is, and I remember saying this to you about six months ago, Richard, that the conditions for a strong recovery were in place. Consumer debt was down to normal levels, business debt was down to normal levels. We were seeing the beginning -- the housing cycle had ended --
SHAPIRO: -- and we were in the beginning of a rising housing cycle. We were waiting for all those conditions to actually pop up and into the growth rate. And in fact, we saw it in the third quarter --
SHAPIRO: -- though we didn't realize it --
SHAPIRO: -- at the very end of the third quarter.
QUEST: Things are speeding up. But we've just been talking about the four big central banks -- the ECB, the Fed, the Bank of England, and the Bank of Japan -- all of which are committed in their forward guidance in some shape or form --
QUEST: To low interest rates for the foreseeable future.
SHAPIRO: Yes. There are two factors here, Richard. One is that the fiscal stance of most countries remains restrictive and the central banks are trying to offset the impact of milder than it used to be but still fiscal -- budget austerity in weak economies.
The other concern remains the banking system. The fact is that they - - there's a lot of problems with the major banks of the world, and the central banks are still trying to rebuild their capital, rebuild their reserves.
QUEST: Isn't that a bit of a disgrace, that five or six years into this crisis, when we've already -- we've had stress tests galore, and I'll agree with you, the US banking system's better than, say, the Europeans --
QUEST: -- but we're going to get more stress tests. They should have got this -- their balance sheets right by now.
SHAPIRO: You're absolutely right. But the problem was that in the midst of the crisis, they were afraid to take really drastic steps, that is the steps that would have taken pulled all the bad assets out of these institutions. There wasn't the political support for it and -- because it would have been a different approach to a bailout.
And consequently, a lot of those securities remain on the books of these banks, and even -- and since then, there's been a reluctance to force them to do it, again out of the fear of weakening recoveries that were already pretty anemic. I think it was the wrong decision. I think you take your medicine at the beginning, and then we'd be in a stronger recovery today.
QUEST: And we'll talk early in the new year, hopefully you and I, about what it all means. Have a good festive season, whatever you may --
SHAPIRO: You, too, best of holidays, Richard.
QUEST: -- whatever you may be celebrating in this year, we can all enjoy a festive season. Because let's face it, the way things have gone this year, we've just got to get to the end of it.
One company -- now here's an interesting fact. BlackBerry -- all right, you take your BlackBerry out at a party or at an office meeting, and everybody -- some people laugh. Well, BlackBerry's share price was on a tear, and we'll explain why. QUEST MEANS BUSINESS.
QUEST: OK. I'm still a lover of this device, there's no getting away from it. I find it probably the best e-mail device that I use. It is the BlackBerry. You may laugh, but I still think it works.
Well, 2013 has been a dismal year for BlackBerry. Its Q3 financial report out today, it was horrible. I don't think there's any way to say it. Look at that, a $4.4 billion loss in the quarter that ended November.
Worse -- it gets worse! Sales plummeted 56 percent over the year, much worse than expected. And yet, the shares soared on the announcement. All right. It's only $7.23, $7 and change, but it is up 15.6 percent by the close, around 13 percent for the day.
So, just look at these two statistics and try and make sense of it. Sales down 56 percent, share price up 15.6 percent. Paul La Monica joins me.
PAUL LA MONICA, CNN MONEY ASSISTANT MANAGING EDITOR: How's it going?
QUEST: Good to see you, sir. Assistant managing editor of cnnmoney.com. Square that circle for me.
LA MONICA: You've got to love the Wall Street casino. But there are two reasons, I think, why the stock surged. First -- here's the interesting thing -- shares were down a lot in pre-market trading when the numbers came out, because people did what you did, they looked at the numbers and said, oh my gosh, this is awful.
But then, during the conference all, interim CEO John Chen really talked a good game about the turnaround, how he was optimistic, how the company's cash level did increase. Everyone's worried about them running out of cash. Cash went up from $2.6 billion to $3.2 billion.
QUEST: How? What did they do?
LA MONICA: Well, they got an investment from Fairfax.
QUEST: Oh! That doesn't count.
LA MONICIA: Well, it's --
QUEST: That doesn't count.
LA MONICA: -- it's real money. It's real money. They'll probably burn through it eventually.
QUEST: It's not. It's an investment.
LA MONICA: For now, it's an investment that increases their cash. And I think in some respects, the bar is so low, it's kind of like with Marissa Mayer taking over Yahoo!, she is doing a great job of talking turnaround and the Street loves her. And I think the Street respects Chen because he turned around Sybase. Sold it to SAP.
QUEST: OK, let me jump in here, because I also notice, they've had -- I want to say a respectable pick up on Android and what they've been offering to other operating systems.
LA MONICA: Correct.
QUEST: That's got to be part of their big future.
LA MONICA: Definitely. I think that why people like Chen is that he's not a BlackBerry lifer. He's going to do things that may not necessarily make them as wedded to the hardware business. They're going to do more things in software.
And then there was this deal they announced with Foxconn today where Foxconn's going to make devices for them, try and get them into other emerging markets --
LA MONICA: -- like Indonesia.
QUEST: But in the way that -- let's take Microsoft with Windows -- with Phone 8, or whatever they call it now. You can remind me what its correct name is. It -- Microsoft no longer has the stench of death about it, with its Nokia deal and its new Windows phone. It's -- people have got -- said some very charitable and good things about. BlackBerry's still got the stench of death about it.
LA MONICA: I think that's definitely true, and we're going to really need to be very careful to -- and hesitant to say that today is the beginning of a turnaround.
But I think the real key here is that the bar was just so low -- I mentioned in a column last week saying that BlackBerry's stock may have bottomed even though the company still is in dire straits because they can easily ooze over the bar as long as Chen talks a good game.
And then the other thing that's really important, this stock is still very heavily shorted.
LA MONICA: So, you had a short squeeze today. As soon as Chen talked the stock up, a lot of shorts had to rush in and cover their positions. It's like, oh, no! Look, we're going to get crushed here.
QUEST: Paul, thank you for joining us.
LA MONICA: Thank you.
QUEST: We'll talk more BlackBerry in the year. Have a good festive season --
LA MONICA: Thank you, same to you.
QUEST: -- whatever you may be celebrating. Now then, I'd like you to join me over in the library, because I have something to show you here on QUEST MEANS BUSINESS.
(MUSIC - "DECK THE HALLS")
QUEST: We've been making our list, and we've been checking it twice, and we're going to tell you which stocks have been naughty and which stocks have been nice. Now, we don't claim it's the most comprehensive of all, but of course, it's our Stocks and Stockings moment. And indeed, we've really got to get things going properly with an ice roaring fire. A nice crackling, roaring fire.
Despite its rise today, we think that BlackBerry probably ends up going into the Naughty Stocking, because fundamentally, it's still got a long way to go before it gets its recovery.
As for those that go into the Nice Stocking, how about Netflix? Now, it soared -- the stock has soared about 306 percent this year. It's the top performing stock of the S&P 500 so far. And the stock chart for 2013, if you take a look at it, it started at about $92 a share. Today, that's $375 a share. Oh, how we all wish we had bought it at the beginning of the year.
Subscriptions for Netflix now about 30 million users, increasing success with original programming, which includes, of course, "The House of Cards," which is why I have some cards. Netflix goes into our Nice stocking for this year.
As for another one, how about in the retailing sector, JC Penney. Oh, dear. Not only did it lose another CEO, undergo another restructuring, apologize to its shoppers and its consumers and its customers, the stocks dropped 57 percent this year.
Look at the chart. It started at $19.70 at the beginning of the year. Today, it is at $8.30. Third quarter earnings down, investors increasingly concerned about the retailer's failure and, indeed, its very future. So, if BlackBerry is in our Naughty Stocking, it is joined by JC Penney.
While we warn ourselves on the crackle of the log fire, in a moment we'll be back with more QUEST MEANS BUSINESS. Don't forget, we'll have some more Naughty and Nice next week.
QUEST: Indian protesters are calling for a ban on US goods as anger rises over the treatment of the Indian diplomat in Washington. On Friday, a Domino's pizza branch in Mumbai was attacked by protesters. Police say no one was injured in the incident.
And anti-US sentiment has been rising. There have been a number of protests like this one in Bhopal since the arrest last week of the diplomat. She was strip-searched by police and charged with visa fraud.
The Indian government is demanding charges be dropped. CNN's Mallika Kapur interviewed India's external affairs minister and asked how he would like to see the standoff resolved.
SALMAN KHURSHID, INDIAN EXTERNAL AFFAIRS MINISTER: I think it's important that we understand that this is a valuable relationship for both sides. There's a huge amount of investment, both public and private, into this relationship. And I don't think the world wants a relationship like this to deteriorate at all.
MALLIKA KAPUR, CNN INTERNATIONAL CORRESPONDENT: You say you won't lay out conditions, but there is a lot of talk that India will ask the US or is asking the US to withdraw all charges against Devyani Khobragade.
KHURSHID: I'd imagine -- yes, if we think the charges are unwarranted, unjustified, then how would we say but you can carry on? The charges have to be withdrawn.
KAPUR: What if she is proven guilty of visa fraud, of underpaying her nanny? Those are serious charges?
KHURSHID: Well -- you think the United States has picked up everyone where there may be infractions of labor regulations? Have they? I know New York a little bit as well. But that's the reality of life. There are a lot of practical considerations that you have to look at.
And then, if you have a problem -- you have a problem about compliance with a labor law, just tell us. What would we do? Either withdraw the person, the employee, or just negotiate some exceptions. And they are possible, they can be done.
The problem is between an Indian diplomat and an Indian citizen working for that diplomat. And an Indian citizen can trust an Indian judicial system and somebody else is to tell us that they can be trusted more? I think that's a bit uncalled for and unfair.
KAPUR: It really seems that at the heart of this public outrage that we're seeing here in India is the issue of respect.
KHURSHID: Well, I -- anyone who deals with India knows that one thing that is very important in India is self respect and to be respected by friends. And I think there is -- it's not difficult to factor that into our relationship.
QUEST: That was Mallika Kapur talking to the Indian external affairs minister about the Indian diplomat who, of course, was arrested in New York, not Washington, as I'd sort of misspoke a moment ago.
A roof collapse at a top London theater has left dozens of people bloodied and shaken. We'll take a look at whether those scenes in the West End have put people off seeing a show in a moment.
QUEST: Hello, I'm Richard Quest. There's more QUEST MEANS BUSINESS in just a moment. This is CNN, and on this network, the news always comes first.
The former Russian oil tycoon and the Kremlin critic Mikhail Khodorkovsky is enjoying his first night in freedom after a decade behind bars. He flew to Germany following a surprise pardon by the Russian president Vladimir Putin. Khodorkovsky was once Russia's richest man. His empire was dismantled by the Kremlin.
President Obama his biggest mistake of the year was the rollout of signature health care reforms and problems with the website. He said, "We screwed it up." He was speaking at a year-end news conference where he also reflected on the recent spying scandal, saying American trust in the NSA had been diminished.
The UN says two of its peacekeepers have been killed and a third wounded in South Sudan. Fighting this week has killed hundreds of people, and thousands more are seeking refuge at UN facilities.
Indian protesters have gathered in front of the country's consulate in New York, where they are joining the foreign minister in calling on the United States to drop all charges against one of its diplomats. Prosecutors claimed she lied on visa forms and underpaid her housekeeper.
Tonight the show goes on in London following the roof collapse at one of the city's theaters. Nine people were seriously hurt when part of the ceiling came down during a live performance at the Apollo Theatre. Thankfully the events of last night haven't dampened people's appetite for theater. Nic Robertson with this report from London.
NIC ROBERTSON, SENIOR INTERNATIONAL CORRESPONDENT: Well it's very much business as usual this Friday on Shaftesbury Avenue with the exception of course of the Apollo Theatre remains closed. It's still not clear what brought the ceiling down during that performance Thursday night, but we do now know from police it was not the result of a criminal action. We also understand from the Westminster City Council -- the council here -- that the building is structurally safe, otherwise I don't think we would be seeing people walking past the front of the building. But the ambulance services said now that nine people were seriously injured, two of those remain in hospital. But this is theater land here in the heart of London. We've been talking to people going to the theater today, and they say that what happened really was just a horrible accident.
Male: It's a horrible accident, but unfortunately things happen.
ROBERTSON: What are you going to see tonight?
Male: (Inaudible). Very excited.
Male: Well I think we were quite confident that that sort of thing was just a one (often), it couldn't happen again. In fact, a close friend of mine jokingly suggested that we both wear tin hats and even buy hard hats from a builder's shop. But we didn't go that far.
ROBERTSON: So very much people taking this in their stride but the real key question what did cause the ceiling to come down? That's not clear, but the police have said it could be several days before their people who were in the theater who had to rush out, leaving behind possessions, are able to get back into the theater to get those possessions, and that does appear to be as a result because the investigation is ongoing, the theater will remain closed during that period. So, several days before the investigation is complete and maybe longer before we find out precisely what went wrong Thursday night. Nic Robertson, CNN London.
QUEST: There's a rather splendid picture of the Apollo Theatre from 1919. I was just looking see what was playing then. Apparently playing was "Tilly of Bloomsbury" which was later made of course as you all well know in 1931 into a movie. Well just thought I'd mention that. West End theaters are absolutely crucial to the image of London - the West End's Soho is part of the cultural city and center of the British capital. They swell the city's coffers by billions of dollars every year, and Jim Boulden has been investigating.
JIM BOULDEN, CNN INTERNATIONAL CORRESPONDENT: The pictures were dramatic and dozens were among the walking wounded. Come Friday and the collapse of the ceiling at the Apollo Theatre in London's West End appears to have had limited immediate impact on audiences.
MARK RUBINSTEIN, SOCIETY OF LONDON THEATRE: The theatre's doing extremely well in London. We have an amazing array of musicals and plays and entertainment. The theater is booming. I don't expect it's going to change things. All of the other theaters are open tonight, we're expecting business as usual.
BOULDEN: And business as usual has been fantastic. In 2012, almost 14 million tickets were sold. Some 32,000 see a show each day in any of London's 52 main theaters. The West End contributed more than $3 billion to London's economy each year. Add to that, $41,000 jobs connected to these theaters. Despite what happened, few theater-goers are shaken.
Female: No, I'm not really worried that much. I mean, it's not like every theater in London will collapse now.
Female: It's made us think about what we're doing. We saw (Inaudible) and "Charlie and the Chocolate Factory."
Female: Things like that can happen, people continue to go on cruises, people continue to fly and you have to continue to live.
BOULDEN: In fact, this man found it hard to get tickets.
Male: -- today and Mojo, but there weren't any tickets left anymore, so I'm going to pick another one.
BOULDEN: The Apollo was built in 1905. Many others are in fact older. The beautiful Victorian and Edwardian interiors are part of the attraction. Journalist Simon Usborne was in the Apollo Thursday night when the ceiling came down.
SIMON USBORNE, JOURNALIST FOR "THE INDEPENDENT": A lot of theaters on this street -- many of them have a similar vintage. We'll inevitably now be looking at their structures.
BOULDEN: Theater owners are assuring ticketholders that their buildings are inspected and have up-to-date fire and safety procedures.
RUBINSTEIN: They've spent enormous amounts of money across what London's West End on restoring, maintaining and up keeping - keeping the theaters safe and beautiful.
BOULDEN: The Apollo Theatre will stay shut until at least the second week in January. However, as a sign of goodwill, those with tickets for the Friday and Saturday showings can exchange them for free tickets at any other show in the West End. That's if they can find seats. The holiday season is a very busy time here for these theaters. Jim Boulden, CNN London.
QUEST: The big push for made in America. U.S. retailers hope that homegrown translates into (inaudible) sales during one of the busiest shopping weekends of the year. After the break.
QUEST: It is that time of the year. If you haven't done it by now, it could well be too late to do it. What am I talking about? Retailers across the United States going up for one of the year's busiest shopping weekends. The sector is crucial to the economy and there's a big effort to buy goods that's made in America. Paula Newton is with. I'm just to mean to buy full stock but -
PAULA NEWTON, INTERNATIONAL CORRESPONDENT FOR CNN: You are a Grinch, everybody knows that Richard.
QUEST: But people are about the - this is the weekend. If you haven't done it by now, isn't it a bit late? * NEWTON: No, absolutely not. And in fact, everyone knows that the best deals you're going to get are now. What are the retailers looking for? And it doesn't matter if you're across the Pond, Richard, or right here in the United States. They're looking for that last-minute impulsive buy. They want to be able to have that track - that track of people - line of people - going through the stores. Let me finish. That means their projections will be on the mark. Don't ring the bell. Will be on the mark. Seriously, it's a big issue right now. They kind of had a Thanksgiving that was a bit weak. They opened up early, didn't quite work. They want those Christmas numbers to come in.
QUEST: But when they decide where they're going to buy, what's more important - where it's made or the price that they pay?
NEWTON: Right now everything is on price which is why the story that I'm about to show you is even more shocking. You know, just a few blocks from here is that historic Garment District. I'm going to show you now, Richard, how it was basically had almost gone bust, and now we're just seeing the beginnings of a resurgence. Take a look.
NEWTON: Soho, New York City, the flagship store of designer Nanette Lepore. Forget the browsing and instead take a good, hard look at the label. The read is remarkable - 'Made in New York City.' Nanette Lepore has passionately -
Female: You're going to have to fill in - there's going to be a blank spot.
Female: I know.
NEWTON: -- some might say stubbornly -
Female: Where is my dress?
NEWTON: -- hung onto her design studio and manufacturing hub in New York's (Storey) Garment District.
NANETTE LEPORE, FASHION DESIGNER: I really wanted it to survive. I didn't want to have to change the way I do business. I don't like working with my factories as far away as China - which I do a little bit of that - and it's very difficult. What the Garment Center was, was a heritage that we needed to preserve and pass on to future designers.
NEWTON: For decades, the Garment District in New York City nurtured creative talent and fine craft, to become the most dynamic fashion center in the world. But times changed, and just a few years ago, the garment industry here had all but gone bust. As wages increased, jobs were sent overseas. But Lepore led her own Made in the USA campaign to keep the sewing machines humming in New York.
LEPORE: There's been a real change of heart. People are embracing the cause. Other designers are stepping up - they can afford to step up.
NEWTON: It's a turnaround few experts saw coming.
HAL SIRKIN, BOSTON CONSULTING GROUP: I've made a statement many times that I didn't think we're going to see a reverse of the U.S. apparel market, and I'm happy to say I think I may have to be eating those words.
NEWTON: Although it's been modest, as foreign wages now increase, so does American productivity, and that could make the garment industry here much more competitive in years to come and make the Made in America label a solid sales pitch for consumers.
SIRKIN: They know if it's made in America, it will be of quality. They also recognize that this means jobs for their friends, their families and their children, and that's very important.
NEWTON: Lepore's company always saw the value in that, even when others couldn't. Fair trade for clothes means fair and higher pay for garment workers. Why are you passionate about the 'Made in America'?
LEPORE: Every person that works in here with me on my clothing, they all came with a craft that is a skill that's something to be proud of. And it gives them the ability to get a higher-paid wage than a service industry job. I think that we need to reignite that passion for craftsmanship.
NEWTON: She says this is not about bringing fast fashion from overseas markets to the streets of New York. And as Lepore has found, American fashion can be innovative enough to support a thriving garment center in New York City and beyond.
QUEST: Paula, is this - is it niche cottage industry versus volume? I mean, obviously it's never going to rival the Malaysias, the Chinas and the Vietnams.
NEWTON: Absolutely not and that's not what this is about. It's not about fast fashion coming back to the United States. But seeing those shots, Richard, you saw Made in Los Angeles for the shoes, there are many different things that can be made in America now - productivity going up - but also it's the consumer, the consumer wanting something that's a little bit more unique and going - stepping away from the fast fashion. And that's where those American innovators move in.
QUEST: But that price differential - you cannot manufacture -
NEWTON: No, look though -
QUEST: -- we learned this with the Bangladesh factory collapse and factory fire. You cannot manufacture and sell in some of the stores $3.50 if it's made up the road or down the road in the Garment District.
NEWTON: Absolutely not, but that is not the point.
NEWTON: The point is that you can still have what you'd call a fair price paid for a piece of clothing with a person earning a fair wage and it not cost, let's say, $50 for a tee shirt. OK, it's not 10. It might be $15, it might be $17. But they can make it for that price in this country. (Inaudible) here, Richard, what they're saying is that - you know -- we've talked about these innovation incubators all over the world. It's the same thing in this industry. They gather in one area, productivity goes up, creativity goes up and they really can jump-start the entire industry.
QUEST: Between all of us on the program tonight, I think you and I both lose out because by far and away -
NEWTON: I agree.
QUEST: The most --
NEWTON: I agree.
QUEST: -- stylish person tonight on the program in that jacket is Jenny Harrison at the World Weather Center.
QUEST: It's knocking us all into a - into a (inaudible) -- whatever that phrase is.
JENNY HARRISON, WEATHER ANCHOR FOR CNN INTERNATIONAL: Well, very nice. Thank you, Richard. Paula, that's your influence, isn't it, on him?
QUEST: Hey, stop ganging up. (RINGS BELL).
NEWTON: You don't need two, Richard. One is fine.
HARRISON: Anyway, let me tell you what's going on weather wise. Very mild for New York of course at the moment but be prepared because the weekend we're about to see things change at the beginning of the week. But a good storm heading in there, and unfortunately, the same for the story in Europe as well, particularly across the northwest. The U.K.'s really seeing the brunt of these storms - one after another. We still have a 24-hour breather in between. This is the last few hours. Very heavy amounts of rain had been coming through as well, and also, just look at some of these wind gusts that are reported in the Isle of Wight in the past 24 hours - 151 kilometers and also in (Inaudible) and Wales 38 millimeters of rain.
Now, these are the current wind gusts that are being reported. And look at this in Dublin - 96 kilometers an hour. These are the winds that will certainly delay your air travel - make it very dangerous on the roads as well. It's staying mild, so ice and snow not really a consideration, but look at this as we head through the weekend - there's yet another storm coming. There's actually one to really come through properly in the Friday overnight hours into Saturday. And you can see the warnings in place as we continue through the weekend. And so this is the forecast for the next 48 hours showing you those wind gusts that are expected, and as soon as you see these dark red shadings, you know across much of northern Europe that again much of the same is going to come through. Very, very strong gale- force winds and of course rain and some snow with it as well.
The white and the pink is showing you that Scandinavia particularly Norway picking up quite a bit as well. But the rain continuing to lead to some flooding concerns - 27 millimeters expected in Glasgow as we head onwards, and 30 millimeters in Cork over there in Ireland. And this is what I mean about delays at the airports on Saturday - particularly long possibly in Glasgow, also across into Amsterdam, Dublin, Copenhagen, so you really do begin to get the general idea. It will stay mild across the west, and even across central and eastern Europe where conditions are a lot clearer and dryer. It is still not particularly cold. These are the highs on Saturday - so 3 Celsius in Kiev and 2 in Vienna.
Now, talking about all this Christmas shopping and everybody heading everywhere for the holidays, it's obviously a very busy time all around the world, certainly as you're celebrating this time of year. But look at this - 29.7 percent of the U.S. travelers actually traveling, and that actually works out as 94.5 million people - 85.5 million - nearly 86 million of them traveling by the roads. So again, huge concern, very severe thunderstorms just beginning to erupt out of Texas. It is very warm indeed, all the way across the eastern seaboard. That will begin to change as this system slides through some very heavy thunderstorms, heavy amounts of rain and the warnings are certainly in place across the south for that and then further to the north as we go through the weekend, Richard, it'll be turning over to ice and snow as well. So, we're going to keep you well updated with all of that.
QUEST: I shall be in Atlanta at the CNN Center with you over the next week. I trust -
HARRISON: And I look forward to it.
QUEST: -- you (inaudible) making them into pies (inaudible).
HARRISON: Is that the request? I will get onto it this weekend, Richard. I will certainly make a batch.
QUEST: Mince pies. Thank you very much. Jenny Harrison, the World Weather Center. Now, still to come on the program tonight.
(SINGING CLIP - EXCERPT FROM "THE TWELVE DAYS OF CHRISTMAS")
On the first day of Christmas my true love sent to me --
QUEST: It's not what you might be expecting. "Quest Means Business." We take a musical journey through the economy in 2013. Stay with us.
QUEST: It's nice to take five minutes at the library. Now we're going to recap the year in business news. And the best way that we know how - it's called the "Quest Means Business" Twelve Days of Economic Christmas in 2013. And it's beautifully performed and arranged by the St. Barts Singers here in New York. All together.
On the first day of Christmas, my true love sent to me a recovering economy.
QUEST: How are things in Midland at the moment?
Female: They're great. They're booming.
Male: The glass is half full.
Male: There is light at the end of the tunnel.
On the second day of Christmas my true love sent to me two new iPads --
Male: Thinner, lighter, more powerful, unlike anything that has come before.
-- a recovering economy.
On the third day of Christmas my true love sent to me three new Dow components -
QUEST: Alcoa went and we had Nike, HP went and in came Goldman Sachs and Bank of America became Visa.
-- two new iPads and a recovering economy.
On the fourth day of Christmas my true love sent to me four new central bankers -
Male: Good morning everyone.
Male: We have focused on fundamental sources of growth.
Female: Recovery is fragile.
-- three new Dow components, two brand new iPads and a recovering economy.
On the fifth day of Christmas my true love sent to me five years since Lehman.
Male: Breaking news - Wall Street on red alert this morning.
Male: A lot of things happened that led to this crisis, among them was the failure of regulation.
Four new central bankers, three new Dow components, two new iPads and a recovering economy.
On the sixth day of Christmas my true love sent to me sixteen thousand for the Dow.
JIM ROGERS, CHAIRMAN, ROGERS HOLDINGS: And the reason it is going on is because there's an artificial sea of liquidity which is flooding the world.
Five years since Lehman, four new central bankers, three new Dow components, two new iPads and a recovering economy.
On the seventh day of Christmas my true love sent to me a seven-year E.U. budget -
HERMAN VAN ROMPUY, E.U. COUNCIL PRESIDENT: It's perhaps nobody's perfect budget but there's a lot in it for everybody.
-- sixteen thousand for the Dow, five years since Lehman, four new central bankers, three new Dow components, two new iPads and a recovering economy.
On the eighth day of Christmas my true love sent to me Windows 8.1 -
QUEST: Where to do you start? There's no folders as such, it's not in the store, in the Explorer, music, video -
On the ninth day of Christmas my true loves sent to me Chapter 9 for Detroit -
DAVE KING, DETROIT MAYOR: It's a tough day for all us here in Detroit. I believe since I came to office with the crisis that we had, this was inevitable.
-- Windows 8.1, a seven-year E.U. budget, sixteen thousand for the Dow, five years since Lehman, four new central bankers, three new Dow components, two new iPads and a recovering economy.
On the tenth day of Christmas my true love sent to me a Q10 flop for Blackberry -
SHELLEY PALMER, AUTHOR, "DIGITAL WISDOM": Too little, too late. The metaphor is complete - it's just not a phone that's going to do the job.
On the 11th day of Christmas my true love sent to me, an 11th hour debt ceiling deal -
QUEST: But of course it was only done by kicking the can into next year.
-- a Q10 flop for Blackberry, Chapter 9 for Detroit, Windows 8.1, a seven- year E.U. budget, sixteen thousand for the Dow, five years since Lehman, four new central bankers, three new Dow components, two new iPads and a recovering economy.
On the 12th day of Christmas my true love sent to me twelve years of the Doha Round -
ROBERT AZEVEDO, DIRECTOR GENERAL, WTO: We are aware that it's going to be absolutely impossible to conclude the Doha Round the way that we originally conceived it.
-- 11th hour debt ceiling deal, a Q10 flop for Blackberry, Chapter 9 for Detroit, Windows 8.1, a seven-year E.U. budget, sixteen thousand for the Dow, five years since Lehman, four new central bankers, three new Dow components, two new iPads and a recovering economy.
QUEST: Genius. Sheer genius. By (inaudible) of our senior producer who put that together. We'll have a "Profitable Moment" after the break.
QUEST: Tonight's "Profitable Moment," it's always difficult to know what to say at this time of the year. After all, just think about it, from tonight it being a Friday night and the Friday before Christmas - large parts of the western world, particularly the Christian western world, will be closing down, people going off for their vacation and for taking a long two-week break. In fact, pretty much you're not going to get anything done between now and January the second. There's nothing wrong with that. It's been one year that we'll all wish to maybe put behind us and in that regard, there's still a bit of shopping left to be done, so I'm very grateful for this little gift that I've been given - a brand new wallet. And when you open it, (SHRIEKS). That should help me save a bit of money between now and the new year.
And that's "Quest Means Business" for tonight. (SHRIEKS). I'm Richard Quest. Whatever you're up to in the hours ahead, I hope it's profitable. I'll see you next week.