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QUEST MEANS BUSINESS
Missing Malaysia Airlines Jet; Crisis in Ukraine; Russia's Actions in Ukraine; Cyprus Bank Chief Quits; World Market Slide
Aired March 10, 2014 - 17:00 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: The US changed its clocks over the weekend. It's actually 5:00 in New York, this happened an hour ago. The markets were down, the broader market was flat when the closing bell rang on Monday the 10th of March.
Tonight, three days on, and no trace of the missing Malaysia Airlines plane. And also no clue as to what happened to the aircraft. Also, China tells Malaysia it needs to step up its efforts. We're live in KL with the latest on the search.
And in a rare speech, a fugitive, Edward Snowden, tells technology leaders they must stop the cyber spies from destroying the future of the Internet.
We have an hour together. I'm Richard Quest. I mean business.
Good evening. We have extensive coverage tonight on Malaysia Airlines 370, recognizing what a disturbing incident it has been and the widespread interest in what happened to the Boeing 777. Because three days of searching and so far, nothing.
Dozens of planes and ships from a host of different countries on the lookout for any sign of the 777. And today, the state involved, Malaysia, widened the search area. The 777 vanished on Saturday on route from Kuala Lumpur to Beijing. There were 239 people onboard.
What authorities do know is that two passengers boarded the flight using stolen passports. Interpol says it's looking into other passports that it considers suspect.
So, let's look at what we know about the flight of Malaysia Air 370. Join me over at the super screen, I'll show you what I'm talking about.
This, we know, was the intended route of the aircraft, and this is the route it was meant to take from Kuala Lumpur all the way up to Beijing. And it left just before 1:00 AM on Saturday. Now, it should have landed in Beijing five and a half hours later.
But here is the point of last contact, which was in the middle of the ocean. As you can see now, what is happening here, here's where the authorities are searching. And this search area has been widened over the past few days.
So, let me just show you, at one point, they are searching to the west of Malaysia. Then, they were searching out towards the eastern coast of Vietnam and around the eastern side here. Now, the search is being increased to include large parts of the Gulf of Thailand. And the Gulf of Thailand itself is about 250 miles across, fairly low, shallow water, of just 120 to 150 feet.
But it is this extended search area that is actually now people starting to wonder what on Earth and do they know where the plane is? Let's go to Kuala Lumpur, where Jim Clancy joins us now. Jim, the last news conference we had was many hours ago, and that's when they announced this increase in the search area. I tweeted at the time, this clearly suggested they've got no real idea where this plane is.
JIM CLANCY, CNN CORRESPONDENT: I think that you're right. Obviously, they thought it was going to be, perhaps, an easier task to locate what would be expected at the crash scene, if there was a crash, they would be looking for some debris.
They expected to find it. I talked to a general last night, and he hung his head and he shook it, Richard, because he said that they were, it seemed, embarrassed. But they were most of all frustrated. Frustrated that they haven't been able to come up with a trace of this. Frustrated that every time they find a piece of some flotsam that they think might be tied to this airliner, it turns up negative.
QUEST: OK --
CLANCY: The oil slick, negative. A so-called door, negative. They are at their wits' end, and all they can do is expand the search area.
QUEST: Right, but you say expand the search area, but as I'm looking at this map, Jim -- you can't see it, but I'm looking at this map, and I realize these may be impossible questions for you to answer, so feel free to shove it back at me.
But why would they even be looking to the west of Malaysia, up towards the Andaman Sea when the plane was clearly heading in a northerly direction up towards Beijing?
CLANCY: We talked to the head of the air force about that, and he made it very clear that they thought that the plane made a turn. Now, I pressed him on it, and I said, well, how far did it go? How far did you track the plane after it made an indication that it was turning? And he said, well, we can't say that.
I don't quite understand the answer to that, but they thought that the plane was headed west. Thai authorities have told us that instead of searching in the area where we would expect to find the aircraft, they were searching to the west of there, because that is what Malaysian authorities told them --
CLANCY: -- they thought was the location or would be the location of any debris field.
QUEST: Now, I was just reading the regulations on search and rescue in these situations. All contracting states, nearby states, are obliged to help, and that seems to be what is happening, Jim. But the rhetoric now starting to come from China, urging the Malaysians to step up their efforts, this is getting -- what's going on?
CLANCY: I think what we're seeing here is that the Chinese do not feel like they have the access to the raw data, as do many of the journalists that you see in the briefing room. They want to see what is the radar record?
They want to see, what is the videotape? We want to see these guys getting onboard the plane with stolen passports, what do they look like? There's debate over that, it's been raging for days. They want to see the raw evidence, and the answer in Malaysia is, ah, security matters. We can't turn that over.
Now, we have a team that has arrived here from Beijing, a complete team in all facets, with a Foreign Ministry, aviation people, all have come together here from Beijing. They're in Kuala Lumpur, they arrived yesterday.
They will be asking some tough questions. They will be wondering how this entire search operation is being conducted, and they will want to see the raw evidence. That's my guess.
So, we'll see what the reaction of Beijing is in the coming hours. They put the planes back up here in about two hours' time, and those are the tools that are really going to be of most use when they want to conduct this.
QUEST: Jim Clancy, thank you for your reporting. Jim Clancy, who is in Kuala Lumpur. Now, these are the areas that we were just talking about that they have been looking at, and this is the new area here that they're going to.
But if you put it all together, and you start to wonder why are they looking in these areas, I spoke to Mikael Robertsson, the co-founder of the website FlightRadar24.com. It shows air traffic in real time. It's the sort of thing we use, and you may well use, too, to follow a flight plan. I asked Mr. Robertsson if he has been able to trace the route of the missing aircraft.
MIKAEL ROBERTSSON, CO-FOUNDER, FLIGHTRADAR24.COM: We traced it by the same from the ASB transponder of this aircraft. We have one receiver at the Malaysian coast, and we have one receiver out there in Ho Chi Minh City.
Since we received a signal from the transponder of the aircraft, and the last signal we received was about 150 kilometers out of the Malaysian coast, where the aircraft was flying on 25,000 feet.
QUEST: Are you surprised that they have having such difficulty finding any form of debris?
ROBERTSSON: Extremely surprised. Extremely. I -- in the beginning, this looked much easier, compared to Air France 447, but now it looks that they have much more problems, although it's much closer and the radar coverage was better here. So, I don't know what happened that makes it so complicated.
QUEST: If we look at the information that we would have expected this aircraft, the A-CAST (ph) system, the telemetry, the -- even the possibility of a mayday, and then you take into account the large search area, this is proving, would you agree, to be one of the most difficult that we can remember?
ROBERTSSON: Yes, this is for sure the most difficult accident ever.
QUEST: And to add to the complexity, the question of these two stolen passports and where the tickets were bought, paid for by cash, who was responsible for all of that. This is one of the most interesting aspects of it.
Our senior international correspondent, Nic Robertson, is in London. He's been looking into how these men boarded the plane with stolen passports. Nic, in the fullness of time, we will learn what happened here, but on these passports and on these men, do you think it's relevant, or is it a red herring?
NIC ROBERTSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: It could be a red herring. Listen, I'll tell you what I've been trying to grapple with all day.
If you get on a plane in Malaysia with a stolen passport and you're heading to Europe, Copenhagen with the Italian passport and Frankfurt with the Austrian passport, and you know in advance that the security systems or security checks in Malaysia are weak, that they don't check with the Interpol database, which registered those passports as missing.
Then what are you thinking is going to happen when you get to Copenhagen? Are you thinking they're not going to check? That they're not going to figure out you're on a stolen passport? So therefore, that begs the question of precisely what were they trying to do? Were they criminals, were they smuggling drugs, diamonds, whatever?
Or were they asylum-seekers. If they were asylum-seekers, that kind of scenario would work for them. They would get there, they would get caught, and they would say, we'd like to claim asylum.
QUEST: Right. Right.
ROBERTSON: Again, it's all conjecture.
QUEST: But -- and I hate -- I've spent all day saying we mustn't speculate, and now I'm inviting you to do exactly that, but everybody keeps coming back to this question and concept of whether it's terrorism.
ROBERTSON: Yes. And there are certain things about this that fit that scenario. Certainly, counter-terrorism officials are raising questions about the way the tickets were purchased. What do we know about how the tickets were purchased?
We know that the travel agency in Thailand sold both the tickets against these stolen passports, and they did it at the request of an Iranian, a man that they say they had known for several years, an Iranian, Mr. Kazem Ali, is the name that they knew him by, that he called them up, asked them for cheap tickets to Europe, initially didn't purchase those tickets.
Then just two days before the flight, less than two days, even, he called them back and said my two friends need to travel, give me the cheapest tickets to Europe.
ROBERTSON: And this is what they came up with. Now, counter- terrorism officials are saying, hey, last-minute tickets purchased in cash, well, that's got a scenario like exactly how terrorists would set about doing this.
QUEST: Right, but I'm going to throw the aviation side of the story, which I'm a little more experienced on than the terrorism side, the airline -- the China East Airline that sold the tickets because they were on the code share basis, would do exactly that.
It would be selling cheap tickets over its Beijing hub, in the same way that other airlines sell cheap tickets over their hub to get the extra passengers. Ultimately, we really are no further along here, are we?
Again, I'll go back to the sort of terrorism side that I would know about with aircraft, but look at Pan Am 103, that blew up at a cruising altitude over Lockerbie, Scotland. I mean, the debris field -- and you'll know this better than me -- was scattered over the north of England and all the way into Scotland.
A massive debris field, which you would anticipate would make it easier to find a downed aircraft, perhaps, because bits would be separated. Some of those bits may float on the sea better than others, cushions or whatever, whatever it may be, would make it easier to find. It's not conclusive, because maybe we're just not looking in the right area --
ROBERTSON: -- up until now. But that's another thing that's been in my mind all day.
QUEST: Nic, thank you very much. Good to have your insight onto this from your perspective. And one of the things we'll be able to do in the days and weeks ahead is pull the full force of CNN's reporting capacity and the expertise that we have here.
Now, coming up in a moment, a former Yukos oil executive tells me the West should have seen Russia's aggression in Ukraine coming. He says Vladimir Putin was always testing the limits. This is QUEST MEANS BUSINESS.
QUEST: The World Bank says it will offer financial support to the Ukrainian government. It's standing by to provide up to $3 billion this year. President Jim Yong Kim says the World Bank is committed to helping Ukraine throughout its crisis.
European leaders are preparing to impose sanctions on Russia, and that could include travel bans and asset freezes in an announcement expected next week, when EU foreign ministers will meet. The British prime minister David Cameron has spoken about possible sanctions today and admitted there could be negative consequences for London and Europe.
(BEGIN VIDEO CLIP)
DAVID CAMERON, PRIME MINISTER OF BRITAIN: Here in Britain, I've ordered an urgent revue of all government business with Russia. We've already announced that no ministers or members of the royal family will visit the Sochi Paralympics.
Many other planned ministerial-level contact will be canceled in current circumstances. All bilateral military cooperation is under review, with the presumption that we will suspend it except for work carried out to fulfill international treaty obligations, such as European arms control inspections.
I've ordered a review of licenses for arms exports to Russia. It is hard to see how anything that could be used in Ukraine could be justified, but as with other measures, it is best if possible to take these decisions in concert with our European allies.
(END VIDEO CLIP)
QUEST: Mikhail Khodorkovsky, once said to be Russia's richest man, spoke to students in the Ukrainian capital of Kiev today. Khodorkovsky said Ukraine must become a European state. The former oligarch spent a decade in prison for tax evasion. His oil company, Yukos, was later dismantled by the Russian government.
I spoke to the former chief financial officer of the Yukos Oil Company, Bruce Misamore. He told me that as regards Yukos, the Kremlin's action against the company was a significant precursor to events taking place today and, more than that, the West should have realized.
BRUCE MISAMORE, FORMER CHIEF FINANCIAL OFFICER, YUKOS: I think that you're seeing a lot of the same characteristics in what's going on in Ukraine and also what went on in Georgia a couple of years ago. Mr. Putin decided to expropriate Yukos, and I think his philosophy was, well, let's see what the West does.
Obviously, he wanted to take back the commanding heights of the economy, namely, the oil and gas industry, which he's effectively done now. But he wanted to see if he got a reaction from the West. And he didn't. The West wrung their hands and then walked away.
MISAMORE: And then that's been the precedent set for Georgia and the Ukraine.
QUEST: It's a bit of a leap, though, isn't it, to suggest going from expropriating a company to invading another?
MISAMORE: Well, I think it's an interesting way to hone his skills, right? Yukos was a totally domestic situation before he tiptoed out into Georgia. And I really do think he wanted to test the waters.
But also, there are some other things that are very prevalent here. One was the series of half truths or rationalizing that Mr. Putin does. Remember, Mr. Putin is a master of deceit. He's a trained KGB agent. So, he was very competent at lying, half-truths, and you see exactly the same thing when it comes to geopolitical affairs now.
QUEST: From what you remember at that time at Yukos, what was it like?
MISAMORE: Putin always represented -- unlike the Ukraine and Georgia -- always represented that he was apart from this and that the courts were controlling it all. But over the years, Mr. Putin has admitted his involvement with respect to that.
But yes, it was a constant ramping up of pressure in the Yukos situation. That's not similar to Georgia and Ukraine, in that we incurred this over a sustained period of time. What is the same is he continues to test the West and the West resolve in terms of principles, both with respect to shareholders and now with respect to governments.
QUEST: If you're right, then that provides the West with a conundrum, doesn't it? Because you're clearly not -- or one's clearly not going to go to war over this, but at the same time, you've got to put forward measures that are necessary and sufficient to deter. So, what should the West do?
MISAMORE: The West needs to recognize that this is simply a pattern. Putin coming out, dipping his toe in the water, testing the West's resolve, and when the West doesn't do anything, he gets away with it, and then he moves onto bigger and better things, as he's doing right now.
QUEST: The markets in Europe and the United States, the Dow Jones Industrials finished the day down 34 points, so no gains there. The S&P was off just a tad, pretty much flat, so no record there, too. And if you look at the board overall, you can see quite clearly, a sea of red shows that pretty much everyone was down.
QUEST: The head of the central bank of Cyprus has resigned. Panicos Demetriades says he's stepping down for personal reasons. He was at the helm during the country's banking collapse and bailout last year. Since then, he's been severely criticized by the Cypriot government, the press, and fellow central bank directors.
The main stock exchange in Cyprus finished half a percent higher. It's up more than 40 percent so far this year, strong gains, indeed.
Stock markets around the world, though, they were much sharply -- much more sharply down. The Dow Jones Industrials were off 34 points, and indeed, as you can see from the graph, it fell -- it fell quite sharply by 11:00.
Actually, the end of the day was nearly the best of the session -- almost the best of the session. Asia markets ended significantly lower. China trade data and revised Japanese GDP numbers came in weaker than expected.
You've got here the overnight numbers from Japan down 1 percent in Tokyo, Hong Kong's Hang Seng down 1.75. And Europe as well off, down a third of a percent and 1 percent.
So, all-in-all, except for Paris, which went on a frolic of its own for some reason -- back to China -- Japan -- it's raising fears growth in the world's third-largest economy is stuttering. This is what's happening at the moment.
Let's discuss this with Richard Clarida. He is the former assistant secretary of treasury for economic policy. Good to see you.
RICHARD CLARIDA, STRATEGIC ADVISOR, PIMCO: As always, good to see you, Richard.
QUEST: And an advisor to the bond company -- investment company PIMCO. I'm going -- since I've mentioned PIMCO, let's get it straight out there. Anything you can tell me about the changes at the top of PIMCO?
CLARIDA: I'm here to talk about the global economy and I'm just not going to have anything to say on that, Richard.
QUEST: You can't blame a man for trying.
QUEST: Now, let's talk about these numbers and what we make of these economic numbers. Should we be concerned?
CLARIDA: Well, Japan is trying to do something quite difficult. They've now had three consecutive loss decades. Under Abe, they're trying to turn around with monetary policy and fiscal policy. The trouble is, they're in a big hole with their budget deficit, so they're going to be raising taxes this year, later, and that's the challenge for Japan, trying to grow past that tax increase.
QUEST: But if you're raising taxes at the same time as you're trying to stimulate the economy, Economics 101 is not going to work. So, which deficit are they most concerned about, the budget deficit or are they concerned about growth, or are they concerned about getting inflation?
CLARIDA: Well, they actually want to do all three.
QUEST: You can't.
CLARIDA: Well, they're trying, and they've gotten the inflation rate up. They had some decent growth last year. They may get some decent growth this quarter as people try to get ahead of that tax increase. But longer term, they need a growth agenda. That's the so-called third arrow of Abenomics is to get more rapid and sustainable growth in Japan. And the jury's out on if they can pull that off.
QUEST: Do you believe the inflation that he has managed to get back into the system is sustainable inflation? Or the moment it's back to business as usual, that inflation will evaporate?
CLARIDA: Well, and that's very important. I think the short answer is I don't know. I've looked at it, others have looked at it. A lot of it's due to the one-off effect of the weaker yen. You can't keep weakening the currency forever, although they may try to do a bit of that this year.
And obviously, it'll depend on whether or not you get self-sustained growth. So, I think the jury's out on the inflation story, too.
QUEST: We're getting some very, very difficult economic times.
QUEST: The United States, 2.5 to 3 percent, but this unemployment issue still there. The European Union has started growing again, but who knows exactly whether that's --
QUEST: -- how sustainable that is. And now you've got Japan and China. So, pull the strands together for where we are.
CLARIDA: Well, the interesting strings is that the richer countries are probably doing better than we would have thought two or three years ago. And China has obviously slowed down. China has a huge credit bubble, they have their own shadow banking system, the new leadership is having to have to clean that up. And the emerging economies have also slowed. So, you have a bit of the change in the growth dynamics.
QUEST: But can the -- in those dynamics, as you look for the rest of the year --
QUEST: -- can it be sustainable, in the sense of can the developed economies pull everybody along, or do we still need to have this emerging market faster growth?
CLARIDA: I think ultimately, you need to have the faster growth in emerging --
QUEST: Which isn't there.
CLARIDA: -- economies. And it's not there, certainly, this year, in many of them.
QUEST: Good to talk to you.
CLARIDA: As always.
QUEST: Thank you very much, indeed. Now, in just a moment, we'll focus on the search for the missing plane. The woman who is Washington's chief air safety investigator will tell us exactly what officials are looking for. QUEST MEANS BUSINESS.
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.
Searchers looking for a missing Malaysia Airlines jet widen the area of their search in the Gulf of Thailand. Dozens of aircraft and ships are now looking for the missing 777, which disappeared off radar screens three days ago. Officials say sightings of oil on the water and debris proved to be unconnected to the missing aircraft.
A lot of attention is focusing on two stolen passports connected to the flight manifest. Thai police say an Iranian man bought the tickets used by two men who boarded the plane using those passports. It's not known if they had anything to do with the plane's disappearance.
As Russian or pro-Russian forces tighten their grip on Ukraine's Crimea region, the United Nations Security Council is meeting to discuss the crisis. UN Secretary-General Ban Ki-moon said he was increasingly alarmed by the situation.
Peru and the United States reached an extradition agreement for Joran van der Sloot, the prime suspect in the disappearance of the American teenager Natalie Holloway. Van der Sloot cannot be extradited to the US until 2038. That's when he completes a 28-year prison sentence for the murder of a Peruvian woman. In the US, he faces charges of extortion and fraud.
The Oscar Pistorius trial was interrupted today by the South African athlete vomiting in court. A pathologist was testifying about the gunshot wounds received by Pistorius' girlfriend Reeva Steenkamp. Pistorius shot and killed Steenkamp but claims he mistook her for an intruder.
There are more than 30 aircraft and 40 ships that so far are searching and they've failed to find any sign of Malaysia Airlines flight number H370. Ten countries from neighboring regions are involved in the search for the aircraft which vanished. Here's what they are hoping to find. First of all, the so-called flight data recorder and the cockpit voice recorder. Now, these actually have beacons on them, emergency beacons known as ELTs, on them. Investigators say that these beacons, these ELTs, are not pinging from any of the boxes which is giving cause for concern as to why they can't because that's supposed to be the way you trace them.
Next, radar data from the Malaysian airspace. As you heard earlier in the program, the flame was moving this way, but they seem to be searching all over the map to try and find where that plane was. And then of course, the debris field. If the plane had broken up at high altitude, there would be a large debris field over a wide area. But, for example, oil slicks -- there's no real oil on the aircraft. Jet aviation fuel would create a sheen on the water. But that might evaporate quite quickly. Let's bring in Mary Schiavo, the former inspector general at the U.S. Department of Transportation. Good to have you, Mary, to help make sense of all of this.
MARY SCHIAVO, FORMER INSPECTOR GENERAL, U.S. DEPARTMENT OF TRANSPORTATION: Thank you. Thank you.
QUEST: Let's take it bit by bit.
QUEST: As you and I have been all day on this, why are we not hearing from the pinging from these data recorders? This is -- it's -- they've got mechanisms that are supposed to do this.
SCHIAVO: Yes, but they're -- when they're in very deep water -- and it's happened on other accidents -- it's difficult to pick them up on the surface. Sometimes they've had to send submersibles, sometimes divers or it's possible that they were damaged in whatever took the plane down. But submersibles and divers have had to be used in the past.
QUEST: Right. So it could be pinging but it's just underwater.
SCHIAVO: Right. Right.
QUEST: Next question, this radar track -- explain this. I mean, we were told that planes may be turning 'round, but I wish we could just bring up the map because it's not clear why they're looking where they are.
SCHIAVO: Exactly, and I'm starting to believe -- I mean, now, our government doesn't tell everybody everything either -- but because of the places that they're looking and they've changed their -- there are different perspectives -- and they have made a few comments, and they're not official comments about well, you know, this is what we're thinking now or we can't tell you all that. I think that perhaps there's additional clues that we don't know, and we' hope there's additional clues that we don't know. But again, on radar tracings at parts of the ocean and that's just not this, it's all over the globe. Unless the air traffic controller or the radar person is watching, they might miss some of the signals.
QUEST: But the CEO of Flight Radar 24 said earlier on the program he was very surprised that they have not -- that -- the method that they're looking. So it does beg the question that they must know something.
QUEST: I mean, you don't look to the west and then go to the east.
SCHIAVO: Exactly. Exactly. And you also don't say well it was turning, it might've been coming back when they also say they don't have clear radar tracings. So, I'm hoping that this -- these changing of the -- of where they're searching -- is because they do have additional information. Because the wreckage is so important to find and sooner rather than later.
QUEST: The debris field -- are you surprised -- because I heard you earlier just speaking on the network -- there are -- there are items on the aircraft that are deigned to float.
SCHIAVO: That's right.
QUEST: And they are normally in -- the items that you first see -- you normally see the life raft, you normally see the life jackets -- nothing.
SCHIAVO: Right. That's right. The seats float, the service carts will float, parts of the wing -- the tail that came off American 587 -- floated, part of the wing floated on TWA 800. So, parts of the plane will come to the surface. It is extremely odd -- but there have been other accidents where it took two, three, four days to find the debris.
QUEST: 447 -- it took them -
QUEST: -- five -- nearly five days before they saw the first debris.
QUEST: But that's much deeper and middle of the ocean.
QUEST: I guess we'll try -- is this one of the most difficult you've seen.
SCHIAVO: This is very difficult because you have nothing to go on. Now it will -- it could be immediately not difficult if you get the black boxes with the cockpit voice recorder and the data recorder, and you start getting a debris field, it could turn from the most impossible-sounding accident ever to one that the authorities -- especially the NTSB -- can solve very quickly with that black box. So it could turn around in literally in a day if they find it. And if they don't find it, it could be a mystery for a very long time. I think the record unsolved for the NTSB was over seven years. So, TWA was four years.
QUEST: Will they -- well I've, I mean I sort of nail my colors to the mast with you this morning we were saying -- I don't say if they find it, I say it's when they find it. They have to find it.
SCHIAVO: They have to find it and they will find it, there's just too much at stake here not to find it. They will not quit until they do, and the U.S. will be a partner in that until the day that do find it because we have so much at stake, whether it's an accident or whether it's terrorism, the U.S. has a tremendous amount at stake.
QUEST: Mary, good to see you. Thank you for making sense on this. Thank you very much. Still to come on "Quest Means Business." Exchanging your details with a friend could soon be as easy as high-fiving them. I'll be speaking to the CEO of a firm who's going to have us wearing all sorts of things before long.
QUEST: Time for today's "Executive Innovator." And a lot of tech innovation right now is coming in the wearable tech field. The hardware company Razer is preparing to launch its Nabu wrist band. It says the device will display messages and notifications from your phone and let wearers exchange information. Razer's chief exec Min-Liang Tan joins me in the C Suite. Sir. Just stay there exactly where you are.
QUEST: This is what we're talking about, isn't it?
MIN-LIAN TAN, CEO, RAZER: Absolutely. This is the Razer -- now well let me just pop this out for you so you can have a closer look -
QUEST: Oh, right -
TAN: -- to that. And there you go.
QUEST: So, let's -- have a seat, have a seat.
TAN: Sure, thank you.
QUEST: What does it do?
TAN: Well, in essence it's a -- it's not a smart watch or a fitness band that you might have heard of. This is a smart band. It streams all the notifications from your phone right to your wrist.
TAN: Well, you know, have you been to, you know, a dinner and you see everybody in the restaurant -- everyone's looking at their phones or someone walking down the street about to fall into a manhole looking at the phones? This solves everything. It basically puts all the important notifications from your phone right to your wrist so -- let me just -
TAN: -- so, let me see it -- so this kind of faces yourself. It's got two screens. So really quickly, there is a screen on top with an icon -
TAN: -- if you've got a call, the icon -- call icon will appear. And I can just flip it to myself and I can look at what's going no -- you know, who's calling me -
QUEST: But it's parasitic to your phone? It still needs the phone.
TAN: Absolutely. Absolutely.
QUEST: Designing this, how crucial was this to your strategy of management in terms of innovation? Because you have a particular way in which you encourage your staff to come up with ideas which is the lifeblood of your company.
TAN: Pretty much. Well, you know, we design products for gamers, and essentially that's our focus. And we're one of the largest brands in the world for gaming. And what we wanted to do was to allow gamers to have well pretty much a way to you know stream all the notifications to their wrist.
QUEST: But how do you encourage your staff to be innovative? What's the goal for it, I mean you have this basic idea, don't you that people -- anybody can suggest anything?
TAN: Absolutely. Well, you know, as one of the companies -- we are one of the top companies in the world to get all the best of CSs (ph) for the past couple of years -- the pop show/tech show in the world. What we've been able to do pretty much is to encourage everyone -- it could be somebody from finance, it could be somebody from operations -- anyone could come up with an idea, and we will listen to them, it's a flat structure. We listen to everyone.
QUEST: How many ideas have your staff come up with that you've followed through on?
TAN: Well, quite a number. The key thing is this, we try all kinds of ideas -- you know, it's not just -
QUEST: What percentage do you think you -- might go to the next stage?
TAN: Well, depends on what the next stage is. We actually go to full production for many of the products, but we don't ever launch them. It's really done over and over again -- and that's -
QUEST: Isn't that wasteful?
TAN: It is, well, but on the flip side, it gets the perfect product. And that's what we're really focused on -- the absolute perfect product every time. I mean, look at us -- we're a 500-man company and we are winning more best of CSs than any other company in the past decade.
QUEST: Well what for you, though in innovation describes perfection? Describe perfection in innovation.
TAN: I think it's a constant process of iteration over and over and over again. Doing with good products is easy -- 90 percent you think you got a good product.
QUEST: All right, but you've got your thingamajig -
TAN: Sure. The Razer Nabu.
QUEST: The Razer Nabu. But I've got my fountain pen.
QUEST: Now I think this is pretty innovative -
TAN: Yes, OK. It is.
QUEST: Because I -- so, what I -- one's classic and one's modern.
QUEST: What I'm trying to understand from you, sir, is what is innovation? What's the core of it?
TAN: I think the core of innovation in everything is very simple. It's a single liner. It does its job, it's a single function and it has to do that function perfectly well. It's simplicity at its finest moment.
QUEST: And you as the chief exec -- what's your role to make that innovation flourish?
TAN: I think I enable the team to be able to do that. I clear the path all the time -- of everything. You know, whether it's concerns about revenues, concerns about business model -- I just the team we just need to design and build and engineer the best possible product at any point of time. And that is really difficult.
QUEST: Let me have a look at that again.
TAN: Sure, absolutely. There we go.
QUEST: I guess he's not going to let me take it home.
QUEST: Oh, according to this you've got a flight to get to. Right. When we come back after the break -- you'll never miss it. The NSA leaker Edward Snowden says Americans need a watchdog that watches Congress. It's a rare public appearance. Snowden spoke via teleconference at Austin's South by Southwest Festival. He called for a public oversight of U.S. government surveillance programs and for Internet users to be more vigilant. CNN Money's tech correspondent Laurie Segall reports.
LAURIE SEGALL, TECHNOLOGY CORRESPONDENT FOR CNN MONEY: A rare appearance here at South by Southwest by Edward Snowden. A lot of folk waiting to hear from him. You know, and I should mention this conference is full of tech folks, so there was an audience of 3,000 entrepreneurs listening to hear him talk. And Edward Snowden essentially opened up by saying that the NSA is setting fire to the Internet and he called on these entrepreneurs who went to see him via videoconference to say we need to build out better solutions to protect our data. He talked a lot about encryption and building out stuff that, you know, folks like me could use. And it was also a Q and A, so people had the opportunity to ask Edward Snowden questions. The first question fittingly came from Tim Burners-Lee. He's the founder of the Worldwide Web. And he said how can we change the system, and what Edward Snowden essentially said was we need a watchdog to watch the Congress which was pretty interesting. And he ended up talking quite a bit about his problem with the type of surveillance that's done today. Listen to what he said.
EDWARD SNOWDEN, NSA LEAKER: That lack of focus has caused us to misuse that we should have. General insomnia about the Boston bombers. The Russians (inaudible) us about it. But we did a very poor (inaudible) they said we didn't (inaudible) the resources, we had people working on (other) things, if we hadn't spent so much on mass surveillance, if we followed traditional models, we might have caught that.
SEGALL: And Snowden encouraged folks to protect themselves. He talked about using plugins and using something called the Tor Network which automatically encrypts your web activity. He also said that the United States still doesn't know the extent of what he has from the NSA. And, you know, one question that he took that was very interesting. It was the last question. Someone said was it worth it? Listen to what he said.
SNOWDEN: I took an oath to support and defend the Constitution, and I saw that the Constitution was violated on a massive scale. The interpretation of the Fourth Amendment had been changed (APPLAUSE) in (inaudible). Thank you. The interpretation of the Constitution had been changed in secret from "no unreasonable search and seizure" to 'hey, any seizure is fine, just don't search it.' And that's something the public ought to know about.
SEGALL: You could hear the applause there. Obviously a lot of folks in this room at this tech festival view him as a hero. But you know, what you're seeing and hearing at South by Southwest is there's a growing tension between Silicon Valley and Washington, and although he's calling out these entrepreneurs to build out these tech solutions, it's also up to Washington to help as well. It's obviously an ongoing conversation, especially at a tech festival like South by Southwest where people come to talk about what's next in technology and the conversations that'll shape the future.
QUEST: Laurie Segall reporting. Still to come on "Quest Means Business," severe weather threatens the shipping industry on America's great lakes. A live report from the coast guard's icebreaker and your weather (inaudible).
QUEST: The weather forecast now. Tom Sater is at the World Weather Center. Tom.
TOM SATER, METEOROLOGIST FOR CNN INTERNATIONAL: Yes, Richard, to get to your international viewers up to speed on the time zone around our search zones, currently in Ho Chi Minh City, same time zone as Bangkok. It's 4:50 in the morning. Sunrise is at 6:03 in the morning, so shortly thereafter the sun will be up. I mean, our conditions have been good. China has now tossed in the largest patrol vessel in the operation. It left and departed its port over 24 hours ago. It joins the USS Kidd and USS Pinckney. Both of these U.S. naval vessels have the Seahawks.
The Seahawk helicopters have infrared cameras, they can search during the evening ours and most likely have been and will continue to do that. Our conditions are just the same way they've been the last couple of weeks. This is the dry season. So the chance of thunderstorms are down, which means visibility is high, it means the ocean wave heights are low as well, only maybe a meter to a meter and a half high per as far as sea heights.
As far as the zones and of course Richard has been talking about this -- how it's been expanded. We've tossed a satellite picture on top of here so you can see really the high ceilings, the strong and good visibility is all something that is a positive. No foreseeable rough weather in the near future. Again, it's the dry period.
We're going to shift gears into Europe where we have clear skies from the Azores all the way to Siberia. The storm tracks well to the north. We do have one area of low pressure that's been providing some snow showers that'll drop in the northern areas of Turkey but then it gets unorganized, loses its strength. So a lot of fair weather really to provide across much of Europe thanks to high pressure -- one area of high pressure after another. And it's not just a large dome of clear skies, it is warmth. In fact, it is so warm -- and fabulous news coming out of many cities as they're experiencing now some of the warmest temperatures they've had all year. Paris reporting that the last time they had frost was the middle of December, meaning no temperatures dropping below the freezing mark in all of January or February in Paris. That rivals 1988, even back to 1936. Paris, 20 degrees, 18 in Berlin. Warmest temperatures so far this year. Brussels at 18, London 15. You actually had 20 yesterday and 19 in London, those are your highest temperatures so far this year. Paris is 12 currently, Berlin's at 7, Vienna 4, Bucharest 4, Istanbul 6. Enjoying the beach -- Domburg Beach up in the Netherlands. Again, a little bit of a -- almost a hint of summer breeze really coming off the water. Your high temperatures Tuesday -- Bucharest 12, Istanbul 7 and Paris another great day, London too at 14.
In the U.S., we've got another winter storm system -- not something that's going to cripple the major cities, but it will provide more snow for a record snowfall for parts of Chicago, in towards Detroit. Rainfall in New York City late Wednesday should change over to a dusting Wednesday night before some cooler temperatures, but you can see from Detroit and Toronto to Montreal -- the big story really in the U.S. is the coverage of ice over the Great Lakes, even Lake Michigan. This is an all-time record. But when you look at the Great Lakes overall, 1979 takes the record followed now by 2014 -- 92 percent, Richard across the Great Lakes of frozen tundra and the frozen water. Atlanta, nice and springy at 24, Dallas 27 degrees as well, New York 15. Rain is heading in your direction.
QUEST: Oh that's very kind of you, thank you I wish you well on that. All right, let's leave -- let's stay with the Great Lakes that you were just talking about. The Coast Guard's working around the clock to keep Lake Michigan shipping channels open. CNN's Ted Rowlands is on board the Macinack (ph) icebreaker and joins us now from Sturgeon Bay in Wisconsin. That is absolutely picture-perfect, and judging by the fact you haven't got winter woolies on your head and your hands, it doesn't look that chilly.
TED ROWLANDS, GENERAL ASSIGNMENT CORRESPONDENT FOR CNN/U.S: It's a beautiful day, Richard. Absolutely. We're technically -- we are on the Mobile Bay coastguard cutter. It is an ice breaker. The Mackinaw is coming tomorrow because -
QUEST: Oh, oh.
ROWLANDS: -- they need the help and you referenced it. There's a lot at stake here. Take a look at how gorgeous it is, but it's causing major problems as well as you can imagine. With this amount of ice cover in the Great Lakes, there's a big fear that the shipping season which should be getting underway in the next few days when they open up the Straits of Sault Sainte Marie, it may be delayed. And the big job ahead for the coast guard is to create shipping lanes. Today we were out all day long and there were a couple of times where we got -- not stuck-stuck but kind of stuck. We had to go back and forth just to ram through this stuff -- four feet deep in some areas, Richard. It's just incredible. Ninety million tons of freight went through the Great Lakes last season. It -- there's a lot on the line -- there's iron ore and other materials that have to be brought down from places like Duluth, Minnesota -- the Iron Range up in that area, and there's a real fear that the shipping season's going to be delayed because of this enormous amount of ice. As beautiful as it is, it's a pain for the shippers.
QUEST: This is fascinating because I -- you anticipated my question beautifully. I was just about to say -- I mean, it looks gorgeous. But what gets shipped across the Great Lakes? What shipping is that?
ROWLANDS: Its, yes well there's some fuel, but the bulk of it -- 40 million tons of iron ore, and this is iron that they use for everything. It comes from the -- it's called the Iron Range up in northern Minnesota. And it comes through to port in Duluth off of Lake Superior and it comes down all the way through to Gary Indiana in the Chicago area -- the bottom of Lake Michigan. Lake Superior right now is completely locked in ice and that is a concern. The only way these -- the big ships can get through is when -- if -- these little guys go with them and create a path. So that's what they're starting. There's a ship here at Sturgeon Bay called the James Oberstar (ph) that is heading north tomorrow. The Mackinaw, the one you thought we were on -- a much bigger one -- is going to escort it because otherwise it wouldn't be able to get up, get its load ore -
ROWLANDS: -- and bring it down. So, the big one is iron ore but they ship pretty much everything. It's cheaper than rail and it's cheaper than trucking.
QUEST: Good to see you, Ted. Thank you very much indeed. And go and clear a bit more ice and keep warm. We'll have a "Profitable Moment" after the break.
QUEST: Three days of searching and so far seemingly nothing. Dozens of planes and ships from a host of different countries on the lookout for any sign of Malaysian Airlines flight 370. And now they've widened the search area. The Boeing seemingly just vanished. I've been covering plane crashes of one description or another -- maybe incidences better -- for the best part of 20 years. And honestly, can never really say we've seen one quite like this. With Air France 447, there was a lot of material that had come down from the plane before it crashed -- the so-called telemetry from the (inaudible) system. And indeed in other cases, it usually became quite clear quite soon. TWA 800, even Egypt Air -- there was some indications before too long. This one there's absolutely nothing so far. But as Mary Schiavo said on this program earlier -- all it'll take is the debris field to be found and the black box recorders to be retrieved, and certainly this mystery will be no more. They will know what happened. And to anyone who thinks it's a question of if they find the debris and if they find the black box recorders, I've got a simple message. It's not if, it's when. Because there really is no doubt there's too much at stake. There's the 1,100 triple 7s in the air, there's the flying public's confidence in the plane and in aviation and of course there's the governments around the world on the question of terrorism. There's no question they will find this plane and they'll find out what happened. And that's "Quest Means Business" for tonight. I'm Richard Quest. I'll see you tomorrow.