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Fed Proceeds With Caution; Central Bank Policies; US Stock Markets Give Back Yesterday's Gains; Digital Innovation in France; Possibility of Winter World Cup in Qatar; Potential Fallout of Winter World Cup; Greece Leaving Crisis Behind; Eurozone Economic Freeze; French Sales; London Style Update

Aired January 8, 2014 - 16:00   ET



NINA DOS SANTOS, HOST: Stock markets stumble as the closing bell rings on Wall Street this Wednesday, January the 8th. Hello and welcome to the show.

Here are headlines this hour. Proceed with caution. The Fed explains how it decided to taper.

Moving the goal posts. FIFA's director general wants a winter World Cup.

And the price of recovery in Europe. It looks to shop its way out of a recession.

Hello, I'm Nina Dos Santos and this is QUEST MEANS BUSINESS.

Well, good evening, hello, and welcome to the show. The Federal Reserve plans to proceed cautiously as it gently eases its foot off of the stimulus pedal. That's according to the latest minutes that have been released from the Fed's last meeting last month.

The central bank announced that it will be trimming back its asset purchase program by $10 billion per month from $85 billion to $75 billion. This decision rested, it seems, almost entirely on the rate of improvement in the US jobs market.

Some Fed officials voiced concerns that the markets might overreact, fearing an abrupt end to the stimulus that we've seen for years rather than instead a gradual easing back. So, what happened? Well, the Fed decided to move forward slowly and also carefully on the issue.

Ken Rogoff is professor of economics and public policy at Harvard University and joins us now live with his thoughts on the minutes of that first Fed taper. What did you think, Ken?

KEN ROGOFF, PROFESSOR OF ECONOMICS AND PUBLIC POLICY, HARVARD UNIVERSITY: Well, Nina, I think you summarized it well that they've decided to move cautiously. However, their thoughts of the various members were all over the map. Some of them wanted to do it faster, some of them didn't want to do it at all. I think they're a little uncertain of how it's working.

Most of all, they want to keep policy easy. They're not looking to tighten. But they'd like to shift gears. They'd like to do it a different way without rattling the market.

DOS SANTOS: So, what exactly does this mean, now, that we have a new person in charge of the Fed in the form of Janet Yellen taking over from Ben Bernanke this very month. If she's got so many different people pulling in different directions, how is she going to manage to get them working together?

ROGOFF: Well, she's a pretty powerful person, and I think a good consensus builder. And I think she's going to try to be careful not to tighten to fast, to keep the Fed focused on the fact, look, inflation's really low, it's well below what you're aiming at, it's well below 2 percent.

Unemployment is improving, but part of that's people are dropping out of the labor force. So, I think she'll try to keep them focused on that.

The difficult thing is they've kind of given up on this experimental quantitative easing. They want to do something else, and they're sort of fumbling around for exactly what it's going to be.

DOS SANTOS: Well, the real message that comes across in these minutes to me is more or less the US jobs market has improved to such an extent where it's now stable. And you're now seeing evidence of that, especially in the latest ADT private jobs figures released today.

We've got the big number coming out on the public front on Friday. What's that going to mean for the Fed's policy going forward in the US economy?

ROGOFF: Well, presuming that it comes in at about the level it's been coming at, and that's what forecasters say, I think we'll continue to see this gradual tapering off of this experimental quantitative easing policy.

But I don't think any big sign of real tightening in the interest rates itself, that's what they're going to try to communicate. I don't think we're going to see a big shift, of course, unless the numbers surprise.

Frankly, if they're really good, I think the challenge to the Fed is to communicate to the market, you know what? We're nowhere near the economy's potential yet. We're not ready to move even if the numbers are pretty good.

DOS SANTOS: If you're looking at the world of central banking, here, and I'd really be interested to get your view on this, Ken, we seem to have the world's major central banks going in completely different directions. We've talked about where the Fed is today. We've got the ECB and the Bank of England deciding tomorrow on interest rates. And they're in very, very different predicaments.

ROGOFF: They are. The Bank of England's kind of where the Fed is headed towards. The UK recovery is surprising people, it's stronger than expected. And the Bank of England is saying no, we're not raising interest rates yet.

We're going to take our time, we're going to wait until the recovery is a lot stronger, and the markets don't completely believe them. So the longer interest rates are racing out ahead of what they're promising.

Over in the eurozone, I think the problem is that the euro is awfully strong. Even though their policy has been easy, it's not been as easy as the other central banks. And I think you're right, absolutely, that they're going to tilt, if anything, in the other direction, finding ways to make policy even easier.

DOS SANTOS: Which is going to be quite difficult for them, isn't it? Negative interest rates on banks, parking money with the ECB to try and dissuade them from doing that, to get the money out into the economy. Is that the kind of thing that we could continue to hear? At least it's what the markets want to hear, there, from Mario Draghi.

ROGOFF: Yes. I don't know if the ECB has any great confidence in any of these things, but we may see it. I think what they're hoping is that when -- as they take over as the banking regulator, which is happening now, they can heal the system more quickly and start getting the money flowing out there.

Every time they try to do something to get money out into the economy, it gets bottled up in a very, very over-leveraged, debt-laden banking system. So, hopefully, as they take over as regulator, things will go faster. That's the big plan for the ECB. Not so much these smaller maneuvers on negative interest rates.

DOS SANTOS: All right, Ken Rogoff, thank you so much for that, joining us there, professor of economics --

ROGOFF: Thank you.

DOS SANTOS: -- at Harvard University, great to have you on the show this evening.

Now, as we were saying before, the quantitative easing put forward by the Fed has had a massive effect on the markets. Just before coming to air, I was calculating the amount of gains that we've seen on the S&P 500 throughout the three rounds of QE in the United States. It works up to a whopping 173 percent and counting.

Let's have a look at how the markets fared in today's session, and to do so, we go over to Alison Kosik who comes to us live from the New York Stock Exchange. Alison?

ALISON KOSIK, CNN BUSINESS CORRESPONDENT: Hello, Nina. It looks like the rally may have been a one hit wonder, at least for the time being. After the rally yesterday, it looks like investors decided to give back almost all of the gains from yesterday.

As far as the Fed minutes go, nothing really that investors haven't heard before, few surprises there. So the focus really remains on the job picture. This is the week where we get three job reports.

We get the -- we got the ADP report today showing that the private sector added 238,000 jobs in December. Tomorrow we get jobless claims numbers, and then on Friday, we get the government jobs report.

Now, as far as how investors view all this, they're very cautious. They are waiting on Friday's number. But then, if you look at the final tallies for jobs growth in the US for 2013, it's actually been pretty good, 2.2 million jobs were added in 2013. However, if you look at the fact that we lost 8 million jobs over 2008 and 2009, we've still got a ways to go. Nina?

DOS SANTOS: All right, Alison Kosik, thanks so much for that. Alison Kosik there, joining us live from the New York Stock Exchange with today's action, and as she was just saying before, the issue with the Fed, its minutes, Ken Rogoff saying that various people pulling in different directions certainly weighing on the back of investors' minds during this week.

The Consumer Electronics Show is currently underway in Las Vegas, featuring the latest gadgets from right around the world. Now, when you think of tech start-ups, you might think of places like San Francisco, New York, perhaps even Tel Aviv.

But Samuel Burke sat down with the woman in charge of boosting innovation in France, the digital economy minister Fleur Pellerin. He asked her how established the start-up scene was in her country.


FLEUR PELLERIN, FRENCH DIGITAL ECONOMY MINISTER: We have a great start-up scene in France in technology and the digital economy. But I think we need to do a big job of better communicating on them. We are --

SAMUEL BURKE, CNN BUSINESS CORRESPONDENT: How come we don't know about those companies? I know a few, but not very many come to mind when I think of start-up companies. We know Dailymotion, but how come we don't know the bigger names out of France?

PELLERIN: Well, maybe because until now, French companies have lacked the means to finance their growth and to project themselves internationally. And I think what we need to do right now is to help our start-ups, which we are in great numbers, actually, to grow, finance themselves, and go worldwide.

BURKE: How? How are you going to help those start-ups?

PELLERIN: That's a big job, actually, because what we need to do is to work on the financing aspect, and we have a big job to do in Europe, not only in France, but in Europe in terms of venture capital. Because the venture capital industry is too weak in Europe. So, I'm trying to make France a great place for venture capital and trust funding, also, which is a new means of financing.

BURKE: So, if you meet a young French person right now who has a great idea for an app, they've started building that app, but they're maybe looking to move to New York or San Francisco, what would you tell them? How are you going to make them stay in France?

PELLERIN: Well, we have many incentives to keep them in France. We have a very status -- tax status, for instance, that encourages young, innovative companies to settle in France for the first years of operation.

And also we have a great education system in France. And we're talking with some CEOs of big American companies, and they know that our engineers are the best -- almost the best in the world in mathematics and algorithms and also in design.

So, we need to take advantage of all these assets and develop digital systems in France. So, we need to give them the means of their growth in France. That's what I'm working on.

BURKE: When we start -- when we talk about tech start-ups, we're also talking about just new businesses, building a new business. France is putting into law a tax, a 75 percent tax on companies that have salaries over a million euros. Many people don't see France as a business-friendly place. Do you see that as a major challenge for you in your role?

PELLERIN: My challenge, as I envision it, is to make the best environment for entrepreneurs and for investors. And of course we have a difficult situation in terms of public finance, and we need to make special efforts for two years. So the tax you were mentioning is only an exceptional effort for two years --

BURKE: And is it --

PELLERIN: -- for most and for the parts of the population who has the means to afford it. But it will be only for a limited duration. But the most important thing for me is to create the right environment in terms of financing, in terms of incentives given to innovation, in terms of creating a dynamic environment for the ecosystem, and that's exactly what I'm doing now.


DOS SANTOS: So, that's Fleur Pellerin, there, of France, speaking to Samuel Burke.

Well, more from the CES to come later on throughout the course of the program. We're going to be hearing about how you can track your baby's breathing even when you're not in the same room as them. Samuel Burke talks to the president of Intel, Renee James, later on throughout the course of the show.

And if you can't stand the heat, get out of the summer. The 2022 World Cup in Qatar could be put on ice until the winter, according to one official. We'll have more on that after the break.


DOS SANTOS: Hello, welcome back. FIFA's secretary-general thinks that the 2022 World Cup will be played in the European winter. The tournament is traditionally held between the months of June and July.

Concerns over Qatar's searing, intense summer heat during those kind of months have sparked a rethink, it seems, by football's world governing body. Jerome Valcke told a French radio station that he thinks the Cup will be staged later on in the year.


JEROME VALCKE, SECRETARY-GENERAL, FIFA (through translator): Frankly, I think it will be played between November 15th and the 15th of January at the latest. If you play between the 15th of November and, let's say, the end of December, that is the moment when the weather is most favorable.

You're playing in temperatures that are equivalent to a hot spring in Europe, so playing in an average temperature degrees, perfect for playing football.


DOS SANTOS: Moving the tournament to those dates may help the players and the spectators to beat the heat, but it will create some pretty major challenges off the pitch. It'll certainly have an impact on television broadcasters in the United States and also in Europe.

Particularly in the States, the American network Fox has paid $425 million for the rights to air the 2018 and 2022 World Cups. It previously expressed concerns that a winter World Cup would clash with the NFL's regular season and, of course, the Super Bowl.

And then, there's Europe's lucrative football leagues, as well, to consider. If the World Cup was to be held between January or November, perhaps even before, during that particular window, it would likely create a logistical headache for many major European leagues, such as, for instance, the English Premier League, not to mention others as well in continental Europe.

FIFA has already said that it will also consult the World Cup's business partners before it decides to make a decision on the date, but any move away from the traditional summer event, which is when it's normally held, towards winter will, of course, have massive implications for all of the stakeholders involved in these games.

Let's now get some analysis on what the fallout could be, and to do so, we bring in Stefan Szymanski. He's a professor of sports management at the University of Michigan, and Stefan joins us now live via Skype.

Great to have you on the show, Stefan. First of all, we're told that it may move, according to the musings of Jerome Valcke. He is the number two in this particular organization. That was swiftly rebuffed by his boss. But really, it seems as though it would be logical to move it towards winter.

STEFAN SZYMANSKI, CO-DIRECTOR, MICHIGAN CENTER FOR SPORT MANAGEMENT: Well, and his boss has already said, actually, that he thinks it's the most reasonable thing to do as well, so clearly -- it's very clear that FIFA want this move.

What they've also said, though, is they want to take the next year talking to stakeholders and reaching a final decision. And what they're concerned about is really if anybody can come up with any serious, major reason why this shouldn't happen.

And I think -- you have to think that actually -- it's not so impossible to do this, because you have to think about where the games will -- the games that in the regular seasons that won't get played, where they will be played. They will have to be shifted into the summer.

And whether that's an attractive package or not, that could -- if you think about it, in some ways, it could actually work out quite well.

DOS SANTOS: Stefan, though, this could really clash with all sorts of financial decisions that have already been made, not to mention, as I was saying before, the NFL. Fox has forked out a huge amount of money there.

It could also clash with the Bundesliga, Premier League, La Liga over in Spain, Serie A in Italy. That could raise the specter of financial compensation by each of these individual bodies and boards and companies.

SZYMANSKI: Well, bear in mind, we're talking about something that's eight years out from here. So, we've actually got quite a long way to -- a long time to think about this. And none of those contracts with the Bundesliga and the Premiere League, the current broadcasting contracts don't actually cover that period. So, that may not be as big a problem.

But imagine this, Nina. This would mean if the season were shifted, the regular season was just shifted a couple of months later to fit this in, then you'd be playing soccer in Europe in June and July. That might actually be quite attractive, for a change. It doesn't normally happen, it's a different kind of experience.

There would be -- there clearly would be losers, and clearly there would be a lot of disruption, but all I'm saying is that actually you can imagine that there are ways in which this could be smoothed over if that's really what FIFA and the FIFA constituency ends up wanting to do.

DOS SANTOS: Well, let's talk about who FIFA's constituency really is as well, because we've talked about things from a player's perspective, from the clubs' perspective, from the broadcasters' perspective, but what about the fans? What would they say to a move here at this point?

SZYMANSKI: Well, again, it's really quite hard to say. Many fans like -- traditionally like things being the way they normally are. And say, for example, in England, it's a great tradition to go to watch a football game on the day after Christmas Day and on New Year's Day, and that would be a big loss.

On the other hand, it's also clear that when football is taken out of its normal environment, when soccer's taken out of its normal environment, often it's quite popular. So, for example, being able to play the games in the middle of the summer, that actually might be quite attractive to a lot of fans.

So, I think -- I think the fans might come around to it, although to be honest with you, I don't think it's the fans that FIFA are going to consult with. It's really the national association. It's the big guys who actually run the big national associations who are going to have the final say in this, I think.

DOS SANTOS: It's the big guys and it's also big business, as well, they're going to have to listen to as well. Thanks so much for that. That's Stefan Szymanski, there, who is a professor of sports management at the University of Michigan joining us live via Skype, giving us his view on the fallout that we could see if that decision will eventually to be made.

Now, classic style never goes out of fashion, does it? But you can't ignore modern trends. One of London's best-dressed streets is in need of a little bit of an update, and Jim Boulden will be bringing us its new look after the break.


DOS SANTOS: Hello and welcome back. The head of the European Commission says that Greece is is leaving its financial crisis behind. Jose Manuel Barroso made the comments as the country took on the EU's rotating six- month presidency. He also held 2014 as the year when Europe would finally get past its money worries.


JOSE MANUEL BARROSO, PRESIDENT, EUROPEAN COMMISSION: I sensed precisely one year ago that the existential crisis of the euro will be behind us, and I believe this is the case now. We are, generally speaking, emerging from recession, and I hope that this year, Greece will get out of the recession.


DOS SANTOS: So, let's have a look at the forecast that lies ahead. Like much of Northern America, Europe's recovery appears to be on pretty, pretty icy ground at the moment. Eurozone unemployment remains frozen at around about this level, we're talking 12 percent. It's been that way since the best part of the last nine months or so, since, in fact, April.

More than 90 million people across this currency bloc are out of work. These are the numbers, and as you can see, for November, though, and they don't include December and January's numbers, because what we're going to see is Latvia joining the bloc and adding its numbers, too, for the month of January for 2014 and onwards.

And adding to this wintry picture, inflation. It's running a bit chilly, 0.8 of one percent. That suggests that consumer prices are rising at a relatively slow, painfully slow, glacial pace. And it's also well below about half of the 2 percent target that the ECB would like to see price rises being at. That's the sort of sign of a healthy economy going forward.

However, there is at least one sign that the picture may be improving later on throughout the course of the year. Retail sales rising 1.4 percent for the month of November, that was what we saw, according to the latest reading. That's the fastest monthly increase we've seen in around about 12 years.

The strongest rises also coming from these sunny destinations, as you can see. The likes of Portugal, also Spain, Germany, and France in the middle.

And speaking of France, right now is actually the busiest time for French retailers as they launch their annual winter stales. The state-regulated discounting period is, of course, crucial to this country's economy. Jim Bittermann is doing some shopping of his own in Paris.


JIM BITTERMANN, CNN SENIOR EUROPEAN CORRESPONDENT: Nina, these sales are a particular French institution that people wait months for, two sales periods, one right after Christmas, the other at the beginning of the summer.

And people line up outside the stores to get in and get the first crack at some of the items on sale. It was no exception this morning. At one store, it began with a countdown and a special French touch.

CROWD: Trois! Deux! Un! Zero!



BITTERMANN: With that, the scramble was on. The veteran shoppers here say you've got to either shop during the first five days when there's more merchandise out there or wait for the very end when you might get deep discounts.

What do you think, these are good bargains here do you think? I don't know. There's a lot of almost panic here as this ritual begins. This is the kind of thing the French do almost every year in the spring time and later on in the summer. At the sales, you can save up to 30, 40, 50 percent.

And so about three quarters of the French say they're going to take advantage of the sales over the next five weeks and do their shopping.

The number that the shopkeepers are looking at mostly is 40 percent. There are estimates that they get about 40 percent of their turnover for the entire year during these two legally-defined sales periods.

I asked the director of one of the largest department stores in Paris why the French are so wed to this idea of periods of sales instead of having sales all during the year?

UNIDENTIFIED FEMALE (through translator): I think our customers are used to having this type of rendez-vous. Waiting for the sales is like everything else -- the longer you wait, the more you want. And at some point, the pleasure will be greater.

BITTERMAN: Nina, I should say that some of the shoppers get very attached to the kinds of things they're buying, as I found out this morning.

You don't need another handbag do you?

UNIDENTIFIED FEMALE: You never need another one.

BITTERMANN: Ah, but you're going to get one anyway.


BITTERMANN: Just because of the sales.


BITTERMANN: Oh, that's fantastic. So what have you found here?

UNIDENTIFIED FEMALE: I'm just looking at these colorful ones here.

BITTERMANN: Oh, right. Do you think that's a good idea?

UNIDENTIFIED FEMALE: I don't know. I'm having a look, having a browse right now.

BITTERMANN: Actually, I was going to take that one. This one --

UNIDENTIFIED FEMALE: Oh, no, no, no, no!

BITTERMANN: No, no, no, I was -- no, I was going to help --

UNIDENTIFIED FEMALE: Right, they're in your size.


BITTERMANN: I might just add that politeness prevailed. I let the lady have her handbag, Nina.


DOS SANTOS: It's a good job you didn't learn about the lesson that a lady always has -- can never have too many shoes in her wardrobe, either. So, I'm glad he let her have her handbag.

Now, we're moving onto men's fashion, because here in London, a classic name in men's fashion is about to receive a little update. Jermyn Street, a star destination for generations across this capital will get an $800 million boost. It's a place where men can buy handmade shirts, ties, and hats. But it's become a little bit ragged around the edges of late. Jim Boulden went down to take a look.


JIM BOULDEN, CNN INTERNATIONAL CORRESPONDENT (voice-over): It dates from 1664, and for the discerning man, this part of London has never gone out of fashion. Jermyn Street and the whole St. James's area south of Piccadilly is where men get their handmade shirts, shoes, ties, hats, and cufflinks after, say, being measured for a suit on Savile Row.

ROBERT JOHNSTON, EDITOR, BRITISH GQ: It's not Downton Abbey. It's not a theme park. This is a living, breathing quarter of the most exciting city on Earth.

BOULDEN: It's a far cry from nearby New Bond Street, with its high fashion boutiques, and Oxford Street, with its department stores catering to tourists, and newly-renovated Regent Street, with its luxury brand stores, like Apple and Burberry. St. James's is a little cozier and more discrete.

JAMES COOKSEY, THE CROWN ESTATE: Fundamentally, St. James's is different to Regent Street. It has a different heritage and it has different brands. So, Jermyn Street, for example, we would regard as very much a man's street.

BOULDEN: This man couldn't agree more, none other than the Fonz himself, actor Henry Winkler.

HENRY WINKLER, ACTOR: I have been coming here since 1978.

BOULDEN (on camera): Wow.

WINKLER: I have had shirts made here. I buy my shoes here.

BOULDEN: Why, as an American, do you want to be on Jermyn Street. What is it about the tradition here?

WINKLER: You know what? You feel the craftsmanship on this street. I feel that everything that I buy on this street is made well.

BOULDEN (voice-over): Now, the owners of most of this property, the Crown Estate, which is managed by the queen, is giving the place a facelift to blend traditional with modern and attract more brands and more customers.

BOULDEN (on camera): The Crown Estate says it'll spend some $800 million over the next ten years to refresh and rebrand the Jermyn Street and St. James's areas, but it promises the character will not suffer.

BOULDEN (voice-over): Specifically, the Crown Estate says it's not about to bring in the big chains and push out the one-man or one-woman designers. Emma Willis makes shirts and ties here.

EMMA WILLIS, SHOP OWNER: First, sir, if you can undo your top two buttons --

BOULDEN (on camera): -- so I can measure.

BOULDEN (voice-over): The smoke shirts take a few weeks, and of course, all are hand-sewn in England.

BOULDEN (on camera): Do you think the renovation of Jermyn Street's going to bring more people here, or is it just about helping the area keep what it already has?

WILLIS: I think it definitely will bring -- it'll bring -- it's going to get more international awareness, and also it brings it more as a fashion street rather than -- it's a bit too traditional.


WILLIS: Young people think that it's not for them, that it's not exciting.

BOULDEN (voice-over): The new Jermyn Street could appeal one day to those Emma Willis calls "young fogies."

Jim Boulden, CNN, London.


DOS SANTOS: Now, a silent protest outside the headquarters of Southwest Airlines. It's over the carrier's partnership with Sea World. We'll tell you why activists are so mad, next.


DOS SANTOS: Welcome back, I'm Nina Dos Santos. You're watching "Quest Means Business." Here's a check on the main news headlines that we're following for you this hour.

CNN's Ivan Watson is reporting heavy fighting between the border of Syria and also Turkey. He and his crew witnessed huge fireballs rising from a Syrian border town there. It's been the scene of intense clashes between Syrian rebels and hardline fighters linked to Al Qaida. The trial of the ousted Egyptian President Mohamed Morsy has been postponed until February. The second session was supposed to take place today but he had failed to appear in court. The judge says that bad weather prevented Morsy from being transported to the courtroom. The former president is charged with inciting the murders of at least three protesters.

A fatal police shooting that triggered widespread riots in England in 2011 has been ruled lawful. Mark Duggan was killed after police stopped a taxi in which he was a passenger. The inquest jury found that it was likely that Duggan had thrown a gun from the vehicle just moments before he was killed. Duggan's death sparked the worst unrest in England in a decade.

And FIFA says that it has not made the decision to whether to move the Qatar 2022 World Cup scheduled to winter despite comments from its secretary general. Jerome Valcke told French radio that the event will be moved from its traditional summer slot due to heat concerns.

The backlash against SeaWorld and its alleged cruelty towards killer whales is now on the doorstep of Southwest Airlines. Protesters have rallied outside the carrier's headquarters in Dallas, Texas, calling for it to end its partnership deal with the marine park. After the release of CNN's film "Blackfish" which was today nominated for a BAFTA Award, activist groups have been trying to pressure a number of organizations to break ties with SeaWorld. Today a petition was signed by some 27,000 people was delivered to Southwest Airlines, and that is why people are protesting outside. Martin Savidge is following the story for us from the CNN Center.

Martin, just first of all remind us exactly why these people are so irate - - what the allegations that came out of that "Blackfish" film were and why people are so upset and what they're saying.

MARTIN SAVIDGE, ANCHOR AND CORRESPONDENT FOR CNN BASED IN ATLANTA: "Blackfish" is a documentary, Nina, that has received a great deal of praise and a lot of notoriety in the United States. And it's focused solely on SeaWorld and primarily paints a very negative image of how the company takes care of its stars which are the killer whales. And it also looks at the death of one very significant trainer who was killed in 2010, Dawn Brancheau. She was the most senior of trainers and was killed by a whale by the name of Tilikum. So, that's in the backdrop of the criticism. Animal rights activists have been emboldened by the fact that so many people have gotten concerned about SeaWorld and this issue.

Today, they kind of leveraged that notoriety and decided to try and go against the business of SeaWorld, and to do that, they went after one of SeaWorld's big partners -- that's Southwest Airlines. Southwest, SeaWorld have had a 25-year relationship and makes sense. Southwest flies to cities where SeaWorld has marine parks. So today you had about a dozen protesters. Not that big, but they had 27,000 signatures that were gathered from an online petition. And they were delivering it to Southwest, and basically, the words they're trying to say is that this relationship is not really a good one in the long run for Southwest. Here's one of the protesters.


EDDIE BARZA, PROTESTER: We want Southwest to take our actions seriously. Actions have consequences and these animals are suffering them. So we would like them to end the state park of SeaWorld (inaudible) free in the wild.


SAVIDGE: I think the implied message here, Nina, is that the protesters want to suggest that Southwest customers might be turned away from the airline because of their relationship with SeaWorld.

DOS SANTOS: (Inaudible) this begs the response from the company itself -- Southwest and also SeaWorld. What have they been saying in response to all these people protesting outside?

SAVIDGE: Right, well let's start with Southwest. They were present of course when these petitions were delivered to their headquarters There was a spokesperson who gave us a statement. Here's what she said.


MARILEE MCINNIS, SOUTHWEST AIRLINES SPOKESPERSON: We absolutely recognize this group's right to be heard and we understand they're passionate about this issue. We are currently in a multi-year contract with SeaWorld, so we don't plan to do any changes right now. But we're happy to hear what they have to say.


SAVIDGE: SeaWorld has remained silent about all of this. In the past, they have stated that they provide only the best of care of all of the animals at their parks. Nina.

DOS SANTOS: All right, thanks so much for that. That's Martin Savidge bringing us the latest there on those protesters. Now, coming up next, cars without drivers. It might seem like science fiction but they could be on a street near you. Pretty soon.


DOS SANTOS: Driverless cars were made famous in Hollywood movies like "I, Robot," and now these dream machines are heading for real life manufacturing lines probably somewhere near you. Rosie Tomkins gets behind the wheel.


ROSIE TOMKINS, SENIOR PRODUCER/REPORTER AT CNN INTERNATIONAL: It's the stuff of science fiction. The car is moving but no one's behind the wheel. The driverless car brought to life in science fiction movies like "I, Robot" is set to become a reality sooner than Hollywood predicted thanks to a technological race among today's carmakers. This is Volvo's first major step, planned for release at the end of 2014.

ERIK COELINGH, TECHNICAL PROJECT MANAGER, VOLVO: This vehicle is a prototype for adaptive cruise control with steer assist. And what it does, it allows you to follow the car in front of you almost completely automatically. The car will accelerate automatically, brake automatically and also steer automatically. The only thing that you have to do is to supervise that the system is working fine. And there's two crucial sensors in the car. The first one is the camera. The camera is behind the wind screen -- you see here?


COELINGH: And it's able to recognize the shape of the car in front. The other sensor is in the front. Here, you see a radar sensor. We use that sensor information to also automate steering.

TOMKINS: This follow-the-leader technology is designed to (bubble) some motorway driving. We're taking it out on London's busy streets.

COELINGH: So the first thing I do is I activate the cruise control. Now it brakes and accelerates automatically. Now I can feel on the steering wheel that the car steers automatically.

TOMKINS: This is weird, actually. It's a weird feeling.

COELINGH: My feet are on the floor, so as long as the corners are not too tight, it will just follow.

TOMKINS: (Inaudible) hand control over to the car. It's a bit of a weird feeling initially, but actually you quickly start to feel safe and you can see that the steering wheel is constantly making little adjustments to keep in line with the car ahead. Oh, gosh. You have to (inaudible) that.

COELINGH: No, I didn't, my leg reacted (inaudible)

TOMKINS: For a brand long built around selling safety, that's the (inaudible) for Volvo.

COELINGH: We know that in almost all accidents, human error is the major contributor. A car that is driving autonomously or automatically, is paying attention all the time. A car is not getting distracted.

TOMKINS: This is the first of many steps in driverless technology. The driver's attention can be elsewhere, but legally his hands must still maintain light contact with the wheel in case of emergency.

COELINGH: Maybe ten years from now we can allow drivers to be out to loop on certain roads, but it will take even longer before you really have the door-to-door in city traffic completely automated.

TOMKINS: So for now, baby steps. But not long ago the stuff of movie fantasy -- self-driving cars -- seem to be more reality than fiction. Your feet on the brakes?


TOMKINS: Rosie Tomkins, CNN London.


DOS SANTOS: The wheels of technology just keep on turning. Driverless cars are just one of the inventions that are currently on display at the Consumer Electronics Show. Samuel Burke joins us now live from Las Vegas with plenty more. We've talked wearable tech, driverless cars -- what've you got today for us, Samuel?

SAMUEL BURKE, BUSINESS CORRESPONDENT: Well I really want to take a look at Intel. It used to be, Nina, whenever you would open up a laptop, you would see that Intel sign right there. But computer sales are down, laptop sales are also down, and tablets are up. So Intel has now had to figure out how to get their chips into tablets. But they're also seeing that they can get their chips inside to wearable technology, and I had a chance to speak with the president of Intel, Renee James, about how they can get this technology even into baby clothing.


RENEE JAMES, PRESIDENT, INTEL: The sensors aren't in the baby.


JAMES: The sensors are in the wearable which is the onesie. This little electronic turtle has a very small computer in it, and that computer -

BURKE: That's your computer?

JAMES: That's right. And it looks like this, I'll just show so your viewers can see how small.

BURKE: There's that Intel chip.

JAMES: It's a little computer that's inside the turtle, it's called Edison, and it allows for you to program the sensors that are in the onesie, so that from a remote device, any one of these tablets or phones, you can know what's happening with your baby. Is the baby breathing? Is the baby hot, cold?

BURKE: The baby is in the nursery, the nanny's watching the baby -

JAMES: Baby's in the nursery.

BURKE: -- I'm at work and I can monitor the heart rate of my baby, --

JAMES: Right.

BURKE: -- the breathing of my baby?

JAMES: Right.

BURKE: I thought this was nuts when I heard it. I said, "Who needs a wearable device to know if your baby is breathing?" But I remembered taking care of my niece and nephew when they -

JAMES: Exactly.

BURKE: -- were infants and saying -- going in and saying -- are they breathing --

JAMES: Touching them.

BURKE: -- and checking. I don't know what instinct that is, but it comes in all of a sudden. So I could see maybe someone would want to know when they're at work for their own whatever, whatever that is inside of us.

JAMES: Well, and in fact, I mean, that's the number one thing that people worry about with infants, so this is but one of many (LAUGHTER) -- maybe you're ready for babies -- wearable kinds of devices that are -- that people are showing here at the Consumer Electronics Show. This is you know a very interesting application. But in fact this small computing can go anywhere.

BURKE: So, this small computing -- it could go in something like --

JAMES: (Inaudible) something like this.

BURKE: -- you can't charge the baby in the bowl -

JAMES: No, you can't.

BURKE: But you can just take a device, even a device -

JAMES: That's right.

BURKE: -- that doesn't have an Intel chip and just drop it in the bowl -

JAMES: Correct.

BURKE: And let it charge.

JAMES: That's right. Because the bowl is a smart bowl and it's made with the Edison product that I just showed you -- the little chip -

BURKE: Yes. Yes.

JAMES: -- we drop it in the bowl and it's going to charge. And it's made with this product and the bowl just allows -- it's you know fully functional and you can go ahead and just put the stuff in and then charge -

BURKE: Spoons, tablets -

JAMES: OK, not -- if it fits.

BURKE: If it fits you can charge it.

JAMES: Exactly.

BURKE: And is this out on the market yet? How much is it?

JAMES: It is not. This is a prototype, but a partner of ours will be doing that. I don't know how much they're going to charge for it.


BURKE: So, I've got the baby here, Nina -- well, neither you nor I actually have kids, but everybody has an interest in this technology going right into the clothing. So many people gathering around it. Also I did see a lot of tablets this time around with the Intel chip in them -- lower- end tablets. I think they're going for the market for -- not the high end market, but some of the cheaper tablets for $99, and that chip right in there.

DOS SANTOS: Yes, I suppose the irony here is, Samuel -- left holding the baby some might say -- is that little people from his age, when they grow up, will be the real customers for all of these kind of products that have been on show there at the CES this week. What's really tickled your fancy so far?

BURKE: More than anything, it is the wearable technology, but it's not just that it's wearable, it's the fact that it connects with something else, just like this baby can connect with a tablet or a phone. It's really all the bracelets I've seen that can collect your health information. You see it on a phone. A basketball I saw that connects with a Smartphone and it helps you improve your dribble, and shows you how you're doing better day-by-day. So it's not just the wearables, but the fact that the apps in Smartphones can speak with them. That's the biggest trend that I saw here, and what really caught my fancy.

DOS SANTOS: Also, the little fellow there looks terribly cuddly. (LAUGHTER). And it sounds as though he cries as well, doesn't he? (LAUGHTER). Even if he isn't a real baby you might say for our viewers. Thanks so much for that, Samuel Burke, bringing us the latest wearable technology for all ages as you can see there from the Consumer Electronics Show. "Quest Means Business" will be back straight after this break.


DOS SANTOS: Welcome back, you're watching "Quest Means Business" this hour. As we were telling you before, we were talking about wearable technology at the Consumer Electronics Show. We just had Samuel Burke bringing us an interesting interview and demonstration from the CEO of Intel, now less, about wearable technology that can help mothers and father -- new parents -- to monitor their baby's breathing patterns and all sorts of other vital statistics. And we'll be trying to get back later on the Consumer Electronics Show to talk hopefully to the U.S. Commerce Secretary.

But first, let's talk about the big freeze that has been enveloping North America for weeks now. Jenny Harrison is standing by to tell us -- perhaps -- at the CNN International Weather Center that the thaw has begun. Jenny?

JENNY HARRISON, WEATHER ANCHOR FOR CNN INTERNATIONAL: Oh, you know the (inaudible). This is very much a cold snap and that snap has already beginning to really show some very positive signs of actually being over. These are the kind of temperatures right now. If you start in the South, 8 Celsius Atlanta. So, I'm not joking, feeling positively balmy outdoors today. Minus 1 in Washington, -6 in New York and even when you factor in the winds, you'll see you it has no effect across the South. Just -4 in Washington, and yes, a little bit colder in New York at -10, but this really shows already how that warm air is pushing in from the South, and of course it'll continue to actually work its way northwards over the next couple of days.

Now what we will continue to see is this of course, the lake effects. You know it's typical for this time of year anyway, but because of the severe temperatures in the last few days, we have seen a great amount of snow -- lake-effect snow developing. And in fact you can see again in the forecast there's some more. Always across to the Eastern shore, the prevailing wind's coming in from the West, and as I say, we've had some very heavy amounts of snow. Look at this -- both in the state of New York -- Watertown, over half a meter since Tuesday, and Hamburg, 45 centimeters. They're very close to half a meter. So how did this occur? What is actually going on?

Well it's when you get of course this time of year, the water that is quite a few degrees warmer than the air that is traveling across it. So, that air as well is lifted up, and of course it is moisture-laden, and it comes down in the form of snow -- it condenses. It has to come down some way. So, it doesn't -- it does vary though, of course, the amount of snow depends on the direction the wind is coming in and also for how long those winds are blowing. And, as I say, the difference in temperature in particular between the water and the air, and there has to be some sort of elevation to get that air to rise. But as I say, that will continue to be the case for the next few days. Nothing like hopefully the amounts we saw in the last 24 hours.

And then the amazing thing is, by Friday into the weekend, pretty much all of the U.S., or certainly across central and eastern areas, we should be seeing temperatures not only back to the average, but actually a few degrees above. So, there's just going to be such a wide variety of temperatures from the beginning of the week to the end of the week. But you'll notice again that certainly means in the South that the air is warmer. We've got all this moisture coming up, so again, quite a line of severe thunderstorms developing in the next couple of days, and temperatures on Thursday, pretty close to what they are today. In the South, 8 in Atlanta. But a fat +4 in Washington. And look at that -- just a degree above freezing in New York. So that'll probably feel a bit colder at night again with the winds in place.

Now, meanwhile Europe, it's been a very, very mild picture we know, but also really has been about these series of funnels coming through -- these areas of low pressure bringing of course some very, very strong winds and also the heavy rain. Bit of a break it looks like over the next couple of days which won't come a moment too soon. But what you'll also notice in the next 48 hours, the wind's pretty strong across northern mainland Europe, but there is that break finally across the northwest. Now, the rain will continue to come down, and in the next 12 hours -- you can see the last 12 as well -- some very, very hairy amounts of rain, particularly through Wales, northern sections of the U.K. and of course remember France is also seeing some flooding.

But this inflatable dam which is amazing of course, hoping to prevent those flood waters. Unfortunately in Somerset in England, this is very much a picture with the flood waters that have managed to reach all areas. And then with the high tides which has exacerbated the situation with the rain and the strong winds. Look at this in Aberystwyth in the U.K. -- it's just absolutely demolished the seafront there. There's more rain in the forecast there is still, Nina, nearly 300 flood warnings (inaudible) in the U.K. But hopefully in the next couple of days finally the first signs of a reprieve from all of that wet and very wild weather.

DOS SANTOS: All right, Jenny Harrison joining us from the CNN Weather Center. Thanks so much for that. Now, let's go back to the Consumer Electronics Show currently underway in Las Vegas, as promised. And we have a special live guest joining us from there -- the U.S. Commerce Secretary Penny Pritzker is live at the show to showcase the United States' digital innovation agenda. Great to have you on the show. What exactly is the initiative that you've been putting in place this year?

PENNY PRITZKER, U.S. COMMERCE SECRETARY: Well, you know we're really focused on a number of things at the U.S. Commerce Department. First is trade and investment. One of the things we're really trying to accomplish is encouraging foreign companies to invest in the United States. We had our first "Select USA" Summit in October where we invited foreign companies -- we had about 5- or 600 companies from around the world come to the United States and meet with our economic development officers. What we want all of these companies to know is America is open for business. So, trade and investment, one, is our priority, second is we're supporting innovation in many ways. We're very much focused on advance manufacturing on making sure we have good, skilled work force in protecting the digital economy. And finally, our third initiative is around data. We have lots of data, the Commerce Department -- everything from census data to weather data. We were just talking about weather, and how do we make that available so that innovators and entrepreneurs can use that data to be able to create new products, to create new companies.

DOS SANTOS: Now this is an interesting one -- data. The digital industry in America must be going through a pretty tough time these days with allegations of spying by the NSA that are being made by Edward Snowden -- I'm sure you're aware of this. This could affect a number of U.S. telecommunications and internet companies.

PRITZKER: Yes, well, the President has asked for review of that situation and we both have undertaken -- and external reviews are under -- are being undertaken as well as internal reviews. And obviously since they're ongoing, I have to be limited in what I discuss, but I would say the following couple of things which is that the review does include an emphasis on what are the costs and benefits of surveillance as well as taking into account national security which absolutely has to be a paramount concern, as well as privacy. Privacy to the President and to me -- an absolutely important issue, something that we're really focused on and respect people's privacy.

And then there are commercial interests and what is the impact of this on commercial interests. So the review is ongoing, and shortly the President will be making his decisions and those will be made public.

DOS SANTOS: Yet privacy is also an issue that comes up time and time again when also both parties start negotiating an enormous free trade agreement with the European Union and the United States and that in turn will give bilateral commerce a huge, huge boost. The issue of privacy, the issue of royalties and various things digital come up time and again and they are very much on the negotiating table. How much is each side willing to give on this?

PRITZKER: Well, you know what, the TTIP agreement which is the trade agreement that is being negotiated between the United States and the E.U. is a very important agreement. It's something that -- and I -- my -- you know, it 's early in the negotiations and so it's too soon to know exactly where things will turn out on what privacy and the digital issues at issue. But what I would say is that everyone centered the negotiation in good faith to try and create really a high standard agreement and one that will allow greater trade and more free trade between the E.U. and the United States.

DOS SANTOS: All right, Penny Pritzker, the U.S. Commerce Secretary. Thanks so much for coming on the show this hour. Great to see you.

PRITZKER: Thank you.

DOS SANTOS: Thanks for joining the CES over there in Las Vegas. Please stay with us. We'll be back with the final check on the stock market after the break.


DOS SANTOS: By the end of today, many of the U.K.'s top executives will already have made the same as the average person does in one single year. (Inaudible) 100 chief executives are paid an average staggering annual salary of -- wait for it -- $7.1 million. That compares to 'round about $43 and 1/2 thousand for the ordinary worker. So, a top (inaudible) in Britain who works a 12 hours a day has already earned the equivalent of an average annual wage. The High Pay Center which is the think tank that came up with this research says that executive pay (inaudible) 74 percent in just the past decade alone.

Now in American stocks finished this session on a mixed note as investors mulled over the minutes from the last month's Federal Reserve meeting. They were also waiting for Friday's all-important (T) December jobs report. And as you can see the Dow Jones Industrial average ending the day down around about 68 to 69 points at the end of trade, just shy of round about half of one percent on the down side, at a level of $68,462. And that's it for "Quest Means Business." Thank you so much for joining me. I'm Nina Dos Santos, in for Richard Quest. Thanks for joining us. We'll see you again same time tomorrow.