CNN.com - Transcripts

CNN.com - Transcripts

Return to Transcripts major page QUEST MEANS BUSINESS Turkey Mine Disaster; "New York Times" Executive Editor Replaced; UK Runway Rivalry; PfizerAstraZeneca Offer Questioned Aired may 14, 2014 - 16:00 Ă‚ ET THIS IS The RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED. (NEW YORK STOCK EXCHANGE CLOSING BELL) PAULA NEWTON, HOST: Oh, these record highs were tantalizingly close today upon Wall Street, nevertheless it we had not been for you to be. the Dow flirting together with triple- digit losses, individuals not convinced that will a recovery will be underway. It's Wednesday, your 14th associated with May. Rescuers in Turkey are generally desperately looking for countless miners trapped underground.

CitiGroup sackings. Eleven employees are generally fired for alleged fraud.

And "The new York Times" are usually a-changing. Your editor, Jill Abramson, is actually suddenly replaced.

I'm Paula Newton, and in addition this is QUEST MEANS BUSINESS. Two hundred and also seventy-four folks are already killed in the worst mine disaster Turkey features ever seen. Outside your website in Soma, a huge assortment of folks are awaiting information concerning their particular loved ones. These are stay images you're considering now.

As many as 120 miners may still be trapped. It can be agonizing with regard to everybody available today. Your research pertaining to survivors, continues, though, as hope will be fading. Bodies always emerge from your mine -- that's not survivors -- bodies are generally continuing to emerge.

Rescuers say conditions within the burning tunnels are absolutely horrific, filled with smoke along with deadly carbon monoxide. Your blaze began Tuesday after a power transformer exploded.

Turkey's prime minister declared three times of national mourning. Erdogan visited rescue workers along with victims' households today. He ended up being met, though, by some angry crowds, like this one outside a new food store in Soma, chanting demands his resignation as well as calling him names, like "thief." Opposition leaders the government had not done adequate in order to ensure safe operating conditions.

Meantime, anti-government demonstrators furthermore took to the streets inside Istanbul and Ankara. Police fired teargas as well as h2o cannons to disperse protesters. Ivan Watson now joins us stay via Soma throughout Turkey.

Ivan, you've been there pertaining to therefore many hours, so grim. I've been watching, obviously, the bodies emerge today. As Well As what you wanted to see were people which would come out alive, and also that simply didn't happen.

IVAN WATSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: Yes, certainly. And Which I think what was quite chilling ended up being to listen to some associated with the miners have been doing this grim vigil, the particular miners by themselves saying we really think there are little in order to simply no chances whatsoever that our friends, which our cousins, that our relatives, will emerge alive from this mine.

And that features been coming from the people who be aware of shafts, which understand the depths regarding this complex certainly much far better than the actual rescue workers themselves, who are toiling here, late right directly into a second night, truly patiently waiting hope in which possibly they can find somebody whom would've created their own way to locate a few type of way to always be able to obtain oxygen, of clean air to survive the particular poisonous fuel that will seems to have killed therefore many in the unfortunate workers that are already killed through this terrible, terrible, fire. Paula?

NEWTON: from a technical perspective, now, Ivan, what can always be done within terms of browsing there to try in order to find these survivors and actually get to the 120 nevertheless trapped?

WATSON: Well, the workers that will I've talked to, they say the depths, the miles which have to become traveled are quite large. These People say, regarding example, in which workers with an ordinary day would have were needed to possess traveled at least 45 minutes to obtain to the locations where these people would then end up being mining coal itself.

So, there are already descriptions regarding approximately ten kilometers regarding tunnels here that the folks have to function through. And Also the actual circumstances that the rescue workers are generally employed in tend to be fairly difficult. They're emerging covered throughout soot. They Will say you can easily find enormous levels of smoke down there, in which you may find high temperatures as well.

So, most of this can easily be combining to make this procedure far more difficult, involving course.

And Also it also assists explain the enormous death toll, now, again, your deadliest mining disaster within Turkish history. Along With Turkey really does have a significant poor record associated with deaths in its mining industry.

In 2009 as well as 10, dozens of men and women killed within a couple of separate incidents associated with fires in which erupted at various coal mines round the country. This particular is a nation which has were built using a problem with deaths.

And your Turkish prime minister, when he had been trying to defend the particular government's record here, attempted to argue that you can easily find deadly mining disasters throughout other countries, too. for example, he cited deadly mining disasters inside the United Kingdom -- inside 1930 as well as in 1860 -- as justification for that horrors that will we've seen inside the mountain powering me here.

And I think that these arguments have fallen upon rather deaf ears, certainly on their email list of family members that are suffering tonight. A number Of of these miners were earning about the equivalent associated with $500 US a new month pertaining to doing this dangerous perform in the mine powering me. Paula?

NEWTON: That's certainly not lost about anyone throughout terms of how much cash they were truly creating and putting their own life about the series each time they went directly into in which mine. Ivan, quickly here, inside terms of the solution to why, we realize it will be not safe there. anything about this specific accident, why this, why now, why therefore many miners?

WATSON: Well, the particular Turkish prime minister, the actual Turkish government have argued that will there have got been inspections done associated with this mine as recently as last March, along with all of the inspected guidelines had been passed.

However, there's a new lawmaker elected through this district that just April 29th had submitted the motion within the Turkish parliament calling with an investigation of the mines about Soma, the actual various coal mines here, citing any quantity of fatalities throughout 2012 and 2013, saying that the safety guidelines had to be inspected.

There were dozens involving some other lawmakers from different opposition parliament -- events in which signed to in which petition, yet it had been voted down in the Turkish parliament through the ruling political party upon April 29th.

And that's currently becoming a topic regarding debate here. Presently there were protesters whom gathered outside involving the headquarters in the company, Soma Holding, which owns the mine at the particular rear of me. and these folks were dispersed simply by police reportedly making use of teargas today inside the commercial richesse regarding Istanbul.

So, in which gives you a feeling of how a responsibility for this disaster goes being a new major point involving contention, certainly inside the weeks ahead. Throughout your meantime, the grim function carries on involving pulling out these victims involving this mine disaster inside the mountain at the rear of me. Paula?

NEWTON: OK, CNN's Ivan Watson, whom carries on to be there, hour following hour, as in which search continues. Appreciate it, Ivan.

Now, the particular incident raises significant questions regarding safety standards within Turkish mines. Earlier, I spoke along with Martin Hahn, mining specialist for the International Labour Organization, and also I questioned him if Turkish mines are generally notoriously unsafe.

(BEGIN VIDEOTAPE) MARTIN HAHN, MINING SPECIALIST, INTERNATIONAL LABOUR ORGANIZATION: Occupation safety as well as well being has always been an issue throughout Turkey. the government may be using steps inside the last many years to truly remedy this, plus it seems in which you will find even now a large amount of what to do, though.

NEWTON: but do you know the specifics involving that? are they only not putting the cash needed?

Will Be there certainly not your oversight? We have got government officials proclaiming that that mine ended up inspected.

HAHN: There's the lot of various elements that require being in position to acquire a country to become capable of have a excellent safety along with well being record throughout mining. and it can always be a system that needs both, actually, action. About your national level, it needs inspection, it needs an agency that may oversee mines, that will be able to guidebook employers, also, throughout taking choices upon how a person can cope with OSH challenges.

And it requires, also, worker participation. They are just about all elements that will occur together.

Collectively with, regarding course, investments in technologies which are necessary.

NEWTON: Your prime minister continues in order to be fairly dismissive. Within fact, he says which explosions like these inside mines occur all the time, along with it can be not like it doesn't take place elsewhere in the world. Is the particular fact that true? Is Actually he just highlighting in which this is inherently an business that can be not very safe?

HAHN: That is a very dangerous sector generally terms. However, within the last 20 years, there has been a clear move in a variety of countries to actually attain zero fatality. and they're countries that truly have a big mining business which is of importance as well as who have really been trying to transfer in your direction of making a possibility pertaining to this in order to happen.

Australia in particular may be taking the particular lead role in this, and so get various other countries, especially in the European Union, whom actually have been trying very tough within improving the situation inside having this objective regarding zero fatalities.

Accidents, regarding course, can occur along with accidents often take place inside a context that is so complicated, just like underground coal mining. but in the same occasion the particular issue of how big these accidents then come out to have repercussions and also what these repercussions are, which includes a great deal to accomplish with almost all the management in the particular mine and additionally the management associated with the means you deal with OSH inside a country.

NEWTON: Yes, and in fact, mining disasters even in that region regarding Turkey are somewhat frequent, even if they're not on this scale. Can Be -- do you think the know-how can be missing, or possibly there the government -- will the federal government not hold the willingness to boost it, to obtain to that zero deaths?

HAHN: Because for the willingness in the government, I could simply speculate. I must claim that we happen to become able to be throughout touch, your ILO has been talking towards the Turkish government inside the past on occupation safety and well being issues.

The Turkish government has brought an essential step throughout 2005 within ratifying certainly 1 of the two central conventions upon occupation safety and health, as well as they've ratified the second of those two conventions just early inside January this year.

I understand that they're inside the middle of implementing as well as wanting to figure out how anyone can adapt it towards the country. So, so way as this is concerned, this might not necessarily always be the primary problem.

However, should you are generally originating from a challenging circumstance relating to OSH, it's really difficult for you to actually improve, since there's a great offer of various things that require to be in place. you have to have a legal framework, you have to get institutional support. you need to really hold the knowledge as well, and you require to create sure that people exchange which knowledge.

(END VIDEOTAPE) NEWTON: Now, if you need in order to know how you will help inside the aftermath regarding this disaster, you are generally able to visit our Impact Your Current Globe site. The idea offers information concerning the organizations which are previously operating to find survivors, such as the actual Turkish Red Crescent. Merely head to cnn.com/impact.

Now, coming up, surprise departure at "The The Large Apple Times." We'll explain following your break.

(COMMERCIAL BREAK) NEWTON: Now, in a main surprise move, your executive editor of "The The Huge Apple Times" is getting replaced effective immediately. Jill Abramson has been your paper's first-ever female executive editor. her departure was just announced any number of hours ago.

And CNN senior media correspondent, Brian Stelter, joins me now to talk concerning this, as the girl had been the boss until not long back -(CROSSTALK) BRIAN STELTER, CNN SENIOR MEDIA CORRESPONDENT: Right, until with regards to six weeks ago.

NEWTON: -- I'm happy to say you're here together with us, now, she was your current former boss.

Investors aren't happy, stock can be down. Precisely what is that will this about with its core?

STELTER: Well, your stock had been down before this was announced. The idea slipped a bit extra right after it had been announced. Then it delivered up. I think they closed the afternoon down with regards to three as well as 4 percent for your day, which usually says more about the "Times" like a business then about the newsroom.

Jill Abramson ended up being the extremely first female executive editor inside the good popularity for the particular "Times." she had been editor for about 3 years, along with now she'll end up being replaced simply by Baquet, whom will probably be the first African-American editor associated with "The The Large Apple Times." both historic transitions for that "Times."

NEWTON: Within relation to as an historic transition, though, 3 a long time is actually shortly in the helm associated with this, can be it, Brian?

STELTER: That's right. That's right.

NEWTON: Everybody's saying -STELTER: Although, on the other hand, we are experiencing a digital media transformation. The Particular entire news business is. Along With these work opportunities may end up being harder than inside the past with regard to which reason. Exactly what the publisher of the "Times" mentioned in a hastily-called newsroom meeting about one hour in the particular past will be he determined to produce this change simply because of a quote-unquote "management issue."

But he won't say what he's talking about, and also I'm sure within the times to always be able to

come, we're planning to locate out. It's obvious she ended up being abruptly pushed out, however for what reasons, we do not exactly know. I have to say, the lady was carrying out a fairly steady occupation transitioning the actual newsroom via print as its core to digital as its core.

But I'm positive individuals will look as regarding this as well as say she could have got done more, the girl could possess done it sooner, and individuals will now wonder what Dean Baquet will do to maker sure this newsroom, among the most treasured within the world, will make this transition to the web.

NEWTON: As Well As you hit which nail about the head. The Majority Of treasured -- one of one in the most treasured within the world. Obviously, entirely in this storm, in this disruption to the media landscape since it sits correct now. Will Be there something strategic inside this?

What are usually papers similar to "The new York Times" need to do together with those executive editors, now, to produce certain they're front and also center along with folks are clicking? because let's face it, they are not studying the particular paper anymore.

STELTER: most editors are nevertheless print editors. Dean Baquet, who'll end up being taking over, will be still any print editor at heart. He ended up being from "The Los Angeles Times" pertaining to years, and he was really forced from his task within 2006 since the publisher demanded he make much more job cuts, and that will he refused to do it. He thought he couldn't cut any closer towards the bone from "The LA Times."

He had been replaced. others came in, much more cuts continued. Regarding virtually any editor who's in the top role in among these newspapers, among their particular jobs is always to protect their newsrooms, preserve their own newsrooms, at a time when income are already fewer and fewer along with fewer.

At "The Ny Times," there's a complete strategy underway today in order to introduce new digital goods to obtain much more individuals to pay more money for your "Times." Since as advertising income declines, whether as well as not it's from "The Ny Times" or even "The Washington Post" or elsewhere, they have got to get subscribers spend much much more of your bills.

NEWTON: and in terms of getting these subscribers pay really your bills, this provides got to be unsettling. In the event that you're sitting in the newsroom, just not really throughout "The The Huge Apple Times," yet you're because previous media, which could be wanting to transition to become able to new media -STELTER: Right.

NEWTON: -- it's unsettling. A Person consider exactly where is the way forward for this industry?

STELTER: one with the reporters I saw wrote on Twitter she was "gobsmacked" through the announcement today, as it has been therefore surprising, since it wasn't something that had been telegraphed for 6 a number of months or maybe a year. That's how many of those newsroom transitions are.

And "The Ny Times" is definitely looked for you to since it does even now set the actual agenda, even from locations such as CNN, for your purpose needs to always be able to be inside the information in a provided day. The Actual "Times" has which value. but they aren't making a dramatic change.

Since they're taking Jill Abramson's amount 2 and making them amount one, it will not feel like a

dramatic change.

NEWTON: Well certainly, when you say, an invaluable asset to possess in the journalistic world, and also we'll still watch.

STELTER: Regarding sure.

NEWTON: That is actually still, though, a enterprise with its heart.

STELTER: Absolutely.

NEWTON: and it's got a bit of challenges ahead.

STELTER: Absolutely.

NEWTON: Maybe we're much more interested inside the individual drama, but that's OK, we kept it clean, here, Brian.

(LAUGHTER) NEWTON: Appreciate that.

STELTER: Thank you.

NEWTON: Thanks regarding coming in. Appreciate it. Subsequent about QUEST MEANS BUSINESS, a pair of airports and yes, only 1 new runway. We'll take a look at each of the contending plans pertaining to a new spot to territory in London. That's when we arrive back.

(COMMERCIAL BREAK) NEWTON: three rival plans to build a manufacturer new runway in Britain make it on a final short list. 2 airports near London are generally vying to become able to get the go-ahead to construct a fresh place to land planes. An impartial group can be putting forward a plan.

Now, the particular UK airport's commission must now decide which with the fighting proposals in order to choose. Heathrow Airport, London's main hub, can be west of the city. Now, managers wish to create a third runway and also divert a nearby stretch regarding motorway -- which is a highway for the rest folks -- by means of any 14-lane street tunnel.

Heathrow says the particular program would allow approximately 260,000 additional flights a year.

Now, these tend to be flights residents there don't automatically want. Now, inside addition, the actual Heathrow Hub group has developed a second proposal for the airport to always be able to extend a preexisting runway and possess one side one with regard to take-offs then one for landing.

As Well As that's sort of ingenious proposal that will some individuals say will work, others say won't.

Now, we visit Gatwick, because of south of London. It provides just one runway with the moment and it is putting forward three selections for an additional one. Gatwick officials say their own strategy would be cheaper, faster, produce more jobs, and also impact fewer residents in contrast with all the expansion plans at Heathrow.

John Holland-Kaye takes over as CEO associated with Heathrow just this July. Earlier, I questioned him why his airport needs to be able to be the main one to always be able to expand.

(BEGIN VIDEOTAPE) JOHN HOLLAND-KAYE, INCOMING CEO, HEATHROW AIRPORT: Individuals have a a lot far better knowledge of the value of connecting most regarding Britain for you to global growth, which can be particularly in the Americas plus Asia and in China, as you know.

And the sole way that you can do that is by means of any hub airport. We've got a huge advantage in this country using Heathrow Airport, among the world's excellent global hubs. We connect for you to 81 long-haul destinations across the world, a lot a lot more than every other airport in the world.

But Heathrow is actually full. We're completely with capacity. Unless we add new capacity, we will not always be in a new position to connect towards the new markets associated with the entire world that people have to in the wedding the UK can be likely to remain at the greatest industry of the particular global economy.

And this is a means for us to deliver which growth for your UK, nevertheless do it in a approach which may help make certain we possess been not really creating noise. We're having the minimal influence on our local economy, and we spread the benefits of the growth, 100 billion pounds for that British economy, in your neighborhood and also over the UK. NEWTON: We realize how pricey it is often to fly straight into Heathrow, which can easily be why people are saying, you will want to fly in to Gatwick? Along With we've currently had the issue concerning the government looking at competition involving the airports. That just hasn't been there.

By expanding from Heathrow, aren't shoppers just likely to become led down that identical runway again? It's planning to expense us more, eventually, simply because things are centered at that one, huge hub.

HOLLAND-KAYE: Not Really at all. Your competition is not between Gatwick along with Heathrow.

Gatwick is actually a low-cost, point-to-point airport carrying out a very excellent job associated with taking tourists for you to markets round the world, for the Caribbean, along with getting enterprise travelers for you to Europe. That's the items they do extremely well.

What they are doing not really do would be to connect UK company in order to world markets. That Will is just able to always be delivered through the hub airport.

Our competition just isn't with Gatwick, it's using Paris and it is actually along with Frankfurt. As Well As it's really a competition, really, between the UK -- Britain, France, as well as Germany regarding that will acquire the actual race regarding growth to those new emerging markets around the world. And Also that's why expansion at Heathrow is indeed crucial towards the British economy.

NEWTON: As Well As even the critics claim that that's a concern correct now. That They think they could use a harder occasion blocking this proposal. Because the CEO heading forward here, isn't it terrifying when you take a peek at the price tag?

You're referring to $17 billion, having to make the move more than 200,000 people. having to always be able to basically rebuild a highway and also tunnel it. is it not, as associated with this point, the

kind of the project which in turn proposes, really, a lot of danger over the particular subsequent decade?

HOLLAND-KAYE: Well, we now have expended $16 billion, $17 billion within the final a decade entirely rebuilding Heathrow Airport. We've built Terminal 5. We've built Terminal 2, which will open up throughout just several weeks' time, the home towards the regular lines and United Airlines.

Heathrow is really a totally changed airport. It's any wonderful airport. It's a real national asset for the UK. We recognize how to accomplish this. We realize how you can raise money. And Also just to remind people, this can easily be totally private money. Our shareholders, sovereign wealth funds, pension funds about the world are investing simply because they think in the good results associated with Heathrow inside the lengthy term.

And the particular opportunity here is not only to build a lot more capacity in the UK, it's in addition to produce certain that Heathrow turns in to a transport hub for your UK, regarding roads, pertaining to rail, along with connecting cities across the UK together with cities over the world, within particular, US cities.

(END VIDEOTAPE) NEWTON: The Actual war involving words more than Pfizer's proposed takeover regarding AstraZeneca escalated today. UK lawmakers around the Commons Science as well as Technologies Committee questioned Pfizer's CEO regarding his company's dedication to British work along with research.

(BEGIN VIDEO CLIP) ANDREW MILLER, CHAIRMAN, HOUSE OF COMMONS SCIENCE AND TECHNOLGOY COMMITTE: both companies possess got teams involving absolutely brilliant scientists. I acknowledge that, along with Equestrian Property And Land For Sale Columbia Heights DC I'm certain you're proud regarding individuals that really work for you.

Wouldn't it create more feeling in order to go even deeper directly into these places along with give a commitment to maintain the R&D at the level of the sum of the 2 parts in the really least, if not even develop it?

IAN READ, CEO, PFIZER: An Individual know, we're certainly not in the position to help make virtually any -(CROSSTALK) MILLER: Bringing inside -READ: -- we're not in a new position to make any commitments since we get not seen his or her science. So, whenever we get throughout as well as examine his or her science, I suspect -MILLER: you recognize adequate with regards to the company being able to place a really significant variety of nods about the end of one's proposed offer. So, you are doing recognize a significant quantity concerning the business. Don't figure out you have absolutely no idea their own science.

(END VIDEO CLIP) NEWTON: Now, which was committee chairman Andrew Miller. I spoke with him after the hearing and also inquired him regardless of whether he had heard anything new that might convince him to guide this deal.

(BEGIN VIDEOTAPE) MILLER: There's obviously been several movement since your original announcement has been designed a number of weeks ago. However nevertheless, my committee had been truly concerned in which there remains some enormous uncertainty concerning the safety in the science-based work opportunities inside the UK and, indeed, the complete science portfolio of the proposed merged company. Along With that that you heard did not really really convince us in which sufficient continues to be carried out thus far.

NEWTON: Along With when you say what you've heard, it seems which every time someone will come back and hints that, look, this isn't good enough, the organization arrives again and says, OK, we'll do that instead.

Do -- have anyone been further across the street with getting concrete markers pertaining to Pfizer to always be able to hit, which usually means that any of their particular promises can't be taken again with a later date, that will there will be legal, financial consequences if they don't really arrive via with these promises?

MILLER: Well, for example, we questioned Mr. Study through Pfizer whether as well as not his letter via him towards the prime minister ended up being a dent gambit, or perhaps maybe it was a final offer. Along With he refused to resolve that. So, one assumes that will there ought to be a lot more within his locker to end up being able to offer.

But I consider it's very important that people quit playing what is actually a really silly poker game with all the essential science base in our a couple of countries, and let's focus on what is better for the science base.

NEWTON: How are we likely to find compared to end up being able to that point? Within thus many countries, we have seen mergers, some not as essential throughout terms of getting as strategic business because this one. A Person possess this all horse trading, the politicians appear to get what they want, the businesses find whatever they want.

As Well As then in the end, once you examine your sector 10 years on, your tasks are lost, the particular R&D funds are lost.

MILLER: Well, we've seen this when Pfizer took more than Wyeth, regarding example, yet another US-based company. the net results of which was the shrinking with the R&D base in the Wyeth

section of Pfizer.

Now, we've heard these days in which that's likely to be the same in the merged organization along with AstraZeneca. Your net -- the general balance regarding R&D would shrink. As Well As the business have been absolutely obvious concerning that. An Individual can't accuse all of them of not really becoming straight, they've been very straight with regards to that.

Frankly, though, I don't think that's great enough. And Also that which usually you ought in order to be taking a peek at is precisely what is in our joint national interests within terms of hugely crucial areas regarding research directly into drugs along with long term molecules that could transform your lives of our own citizens.

(END VIDEOTAPE) NEWTON: CitiGroup is actually trying to bounce back from a bad begin to 2014. The Actual CEO says he understands your company's image continues to always be able to be damaged. We'll talk about what steps he's getting to help it recover. That's next.

(COMMERCIAL BREAK) NEWTON: Welcome back, I'm Paula Newton as well as they're the many notable information headlines we're following this hour. two hundred as well as seventy-four people have died in the mine explosion and also fire throughout Turkey. Since many as 120 miners could still be trapped in the burning tunnels. Rescue workers get to date saved 88 people. The Particular research with regard to survivors continues. Prime Minister Recep Tayyip Erdogan provides declared three events of national mourning.

Nigeria's government features confirmed the particular arrest of your man suspected to become powering final month's bombing within Abuja. the alleged terrorist is actually captured in Sudan. the blast within April killed almost 100 people along with wounded many others. Roundtable talks have were simply obtainable in Kiev targeted at trying to resolve the continued crisis in Ukraine.

Politicians and also civil teams tend to be meeting and it's been overseen simply by international monitors. but pro-Russian separatist teams aren't participating.

In South Africa, the actual murder regarding trial regarding Oscar Pistorius will be becoming wear maintain 'til your defendant can undergo a new month-long psychiatric evaluation. Now, the judge's unusual selection came in the request in the prosecution. Which was after a psychiatrist testified that will Pistorius suffers via generalized anxiety disorder.

"The new York Times" features unexpectedly replaced its executive editor Jill Abramson along with that's effective immediately. Abramson had been the initial woman to keep the actual prestigious post when she was appointed throughout 2011. Managing editor Don (ph) Baquet will substitute her.

He will become the first African-American to always be able to fill the particular position.

Citigroup has fired 11 personnel such as 4 managing directors over the particular bank's loan fraud in Mexico. Late last February $565 million within fraudulent loans were discovered inside Citi's Mexican subsidiary Banamex. Now, in the memo in order to staff, Citi CEO Michael Corbat said that the actual impact for the bank's credibility is difficult for you to calculate. He vowed though that the investigation will be ongoing. A Lot More bank employees are anticipated being disciplined. Citi believes in which so what happened inside Mexico was an isolated incident. And Also it features been a rough going for Citi lately. Within March the particular Usa Federal Reserve quashed Citi's

dividend plans. CNNMoney's Paul La Monica joins us now. Paul, that was embarrassing -- the extremely fact which they couldn't hand out this dividend along with that was quashed. but we have been starting to get to become able to issues similar for you to this one inch Mexico in which go to the very core involving what Citi's doing of course, if they've integrity more than what they're doing.

How significant is it in which 11 people had to become allow go?

PAUL LA MONICA, ASSISTANT MANAGING EDITOR, CNNMONEY.COM: It's quite significant. I mean, I guess you'll end up being in a position to spin it in the positive mild along with state that Corbat the actual CEO can be getting the required actions to have rid involving the people that were behind some of the, anyone know, your fraud. Yet at any time the bank has a reputation hit, which is something that is extremely problematic, and I believe what we're going to wait and locate out can be whether you will find more people that will get fired. Has Been the actual scandal even worse as compared to initially reported? I mean, any kind of time you have a lot more news coming out of your woodworks, that's very troubling.

NEWTON: Yes, and they warn in which there could be much more negative information forward upon that will front I mean, in April we discovered the FBI ended up being involved, there'd be considered a full-blown investigation to see when the internal workings of the lender permitted this for you to happen. That's rather significant, isn't it in along with associated with itself.

LA MONICA: Oh without having question. and the big difficulty that's facing Citigroup today can it be can be widely believed to be certainly one of the more poorly- performing banks associated with the big U.S. monetary firms out there. A Person talked about how the Fed wouldn't allow Citi to spend a higher dividend as well as that's incredibly frustrating for shareholders who're stuck with this penny-per- quarter dividend. Actually D associated with Any wound up getting approval whilst they had to suspend having for you to pay in which dividend following a math error. Nevertheless just banks get these issues right now. It's extremely difficult to trust the large quantity of what the important banks are usually saying.

NEWTON: Yes, and many people say after the monetary crisis, it's definitely which popularity is well earned. Just what goes to adopt Citi forward coming from this, though? I mean, do they have a strategy to test and also move out of this even if inside the short-term their status has a hit?

LA MONICA: Yes, the particular short-term they have to actually be, an individual know, just upfront along with investors concerning this scandal. In your event that there are a lot more heads that must roll throughout Mexico, then like a results of this, then that's probably going to require to take place. but I feel you're planning to begin to wonder if Corbat did enough. I mean, Citi's gone by means of numerous management changes and also the investors are usually waiting for that correct individual to end up being able to really lead all of them into glory. and it simply hasn't happened.

NEWTON: White inside -- knight throughout -- shining armor nowhere around the horizon, huh, Paul? (LAUGHTER).

LA MONICA: Doesn't seem that will way.

NEWTON: Thanks, I appreciate an individual coming in.

LA MONICA: Thank you.

NEWTON: Now, Citigroup shares meantime fell on Wall Street and U.S. markets have got slipped through his or her record high. The Actual S&P 500 has also fallen from its record high. Stores had

been the culprit this time. Macy's fell right after revenue fell brief of anticipations as well as Sears has been down following declaring it absolutely was considering offering component as well as almost all of its Canadian operations. Now, high- speed trading implies high-speed regulation. In Which has been the verdict of your U.S. senate committee hearing Tuesday. Senators the Commodity Futures Trading Commission that regulates areas of this sector needs "the proper authority as well as the correct tools."

Now, the CFTC alongside using the Department regarding Justice and the SEC and also the new York Attorney General's Workplace are usually almost all investigating these murky waters and also thinking about new regulation. Now, Michael Lewis throughout his e-book "Flash Boys" claims your markets are usually rigged together with high-frequency traders going over billions of us dollars from ordinary investors. Now, your hearing heard vehement denials involving individuals claims.

Now, to know existence because frequency fast lane, appear absolutely no further, yes, than motorsports. one new York trader has lifted your lid in this much-misunderstood aspect for the market.

(BEGIN VIDEOCLIP) EZRA RAPOPORT, HIGH-FREQUENCY TRADER: It's necessary to constantly become refining your own cutting edge and staying as well cutting edge. sources involving edge, sources associated with gain could be highly ephemeral. Just being relevant you'll need to become fast. Just like the System 1 the actual thought will be (inaudible) design 1st as well as you have the same group of restrictions. technology will go 1st in this industry. Right now there may be the greatest draw regarding higher technology along with we are the very first to end up being able to deploy it inside terms of actually interacting with the marketplace. There's any trickle-down impact to the rest of the marketplace. A Person notice banks as well as brokerages having usage of some involving these technologies that were pioneered merely in high-frequency trading.

This may end up being the U.S. Treasury curve. An Individual could start to determine the high level of correlation between your items here. Generally there are a quantity of things that keep me awake in night. generally speaking, it's the undeniable fact that we're deploying large levels of risk via automated processes. Thus you will find choices with enormous consequences being made, probably a significant quantity of occasions any second by simply machines essentially, as well as that's a extremely scary thought.

High-frequency trading is just greatest performed through small, flexible groups, highly-motivated teams with the proper backing along with proper usage of technology. I discover myself heading up your pit. We're an F1 team, a person know, we're constructing a brand name new auto and, an individual know, it's likely to become something which is unlike anything your world's actually seen.

(END VIDEOCLIP) NEWTON: Coming up, how hotel innovation begins inside a room seems much more like a dollhouse than a corporate office. Much More following your break.

(COMMERCIAL BREAK) NEWTON: Now, can't be "Quest means Business" with out Quest, right? Thus which means it's period with regard to today's "Business Traveller" update together with Richard. Now, to make sure about redesigning the particular standard hotel room also it involves a new bit a lot a lot more than relocating the actual tables along with chairs around, although that's definitely an excellent start.

Richard heads to Marriott's style middle using the most recent in resort chic.

(BEGIN VIDEOCLIP) RICHARD QUEST, CNN INTERNATIONAL ANCHOR AND REPORTER HOST OF "QUEST MEANS BUSINESS" SHOW: Nowadays resort visitors are usually demanding more. no lengthier just a good bed, a new clean room in a fair price. Right now we wish excellent design. Marriott has generated these full-size rooms within the basement associated with their own headquarters building outside Washington, D.C. Here they're able to construct different resort rooms, they are in the position to play around with assorted ideas. Feel involving it as being a dollhouse regarding hotel rooms.

ARNE SORENSON, PRESIDENT AND CEO, MARRIOTT INTERNATIONAL: We think involving it as an innovation lab, and incredibly it's regarding turning our own efforts about and elevating all of them around innovation along with making certain our teams have a location where they tend to be able to experiment, play, attempt issues out.

QUEST: That's what this area is actually almost all about.

KARIM KHALIFA, SENIOR VICE PRESIDENT OF ARCHITECTURE & CONSTRUCTION, MARRIOTT INTERNATIONAL: Therefore that which you developed here is concerning 10,000 square feet, double height space. 1 thing we did in order to rapidly become able to transfer our furniture around as well as mock up various layouts can be we place almost all of our closets and every thing about wheels.

QUEST: Exactly what would you do with this?

KHALIFA: Consequently we really -- we do a paint -- any paint line -- regarding the room layout -QUEST: Yes. KHALIFA: -- along the -- around the ground. As Well As we truly use a bed, your desk, the restroom -all the components, the actual toilet, every small thing on wheels and we are generally in a position to arrange it once we wish. Will Be that certain any good? Oh we're creating a pillow fight now?

QUEST: so how often -- oh, I similar to end up being able to this one. Well, have that will one. Many of the significant hotel teams allow us their particular variation involving innovation labs. The Particular purpose can be clear. Rapid adjust to meet consumer demand.

KHALIFA: The Particular whole world today will be based on speed, right? Along With people are quickly innovating along with expect things to obtain for you to market. I can easily require a supplier, possess him come in here, have him test a fresh item with us and in which we get that product development with regard to manufacture into our hotels inside rapid time.

QUEST: Here within the underground, the particular examples regarding alter are generally everywhere.

KHALIFA: Individuals are simply taking roller boards after they journey today. they don't truly unpack, therefore we accommodate it. It's an empty closet. We were able to pull this together within just 6 months. That's a new speed to promote motion.

QUEST: Would an individual retrofit some thing inside -- similar for you to this -- in to a current

room? Or Even could you only do it whenever you redo the entire room?

KHALIFA: An Individual do it when you are usually doing the whole room. However don't forget we've 4,000 hotels in the marketplace and thus they're constantly renovating. every resort renovates every 3 to 6 years, and thus there's often an chance to inject new things in for you to the pipeline for them, as well as that what's speed to advertise for us will be almost all about. It's capturing the particular 4,000 hotels because they renovate.

QUEST: There's zero better illustration of what we're discussing than the sockets. and not merely virtually any sockets -- sockets next to the bed.

KHALIFA: you need sockets subsequent for the bed, you will need sockets subsequent to where you sit, you'll need your sockets in which in turn you initial come for the closet simply because just about all people travel using devices that are battery-powered which are constantly losing charge. so we position them everywhere. We don't want to tell you where anyone should plug in. We believe while you roam around the room and also you obtain comfortable, a person must discover one.

QUEST: How did it require so long to function out we necessary much more sockets?

KHALIFA: Well, really it doesn't just take us that long. We understand it's really a huge trend, nevertheless when you have present hotels, you have to maneuver all the wiring and also all involving the infrastructure at your rear of it. but it's very compelling, everybody requirements to do it.

QUEST: Merely as it's out with the outdated and in with the new with regard to design, so which it will be with the guests. The Actual new designs tend to be almost all directed at the particular next generation millennials.

KHALIFA: This specific is the format of our own smallest Marriott space inside the portfolio. We had to produce it really feel bigger. We removed your desk. We think that we had been the extremely first ones in order to truly put any major desk to the rooms when we wished to work upon their own laptops while they traveled. Along With now we're the initial ones really, really removed your desk entirely. Consequently we offer a operating surface that will may be floating round the room.

QUEST: Your lab itself is merely one more innovation within an intensely- competitive industry.

There's pressure for you to innovate, strain in order to increase the innovation cycle along with strain in order to remain one step before the particular competitors.

SORENSON: A Person do it through turning loose the folks who are designers as well as basically say, 'All right, let's ensure it is a thing that will be memorable.' and let's figure out how much of the may be elevated, replicated across our system. Certainly Not automatically in the cookie-cutter way, but in the way which in turn says, 'This is actually fabulous, try it.'

(END VIDEOCLIP) NEWTON: Wish which could happen a little more. Jenny Harrison are at the particular CNN International Weather Center. Jenny, I need to say he said he desires to make expertise memorable. every hotel room I've stayed in, bar being a handful, utterly forgettable. Forgettable, forget it.

JENNY HARRISON, WEATHER ANCHOR FOR CNN INTERNATIONAL: Yes. You're right, Paula, although I must say if this comes if you ask me staying in hotels, I usually think the particular

lighting will be appalling. They Will don't manage to think about women having to discover lighting inside the proper places. But, hey, that's all pertaining to yet another day. Things I must speak about now needless for you to say is the poor weather specially in the United States. There's a pair of main places associated with weather. We've got the particular extremely severe storms as well as the hefty rain across locations of the east. An Individual can see the tornado watches about it as well since the severe thunderstorms.

And then out in direction of your west exactly where there's no rain, it is incredibly dry, suprisingly low humidity. As Well As what we're viewing certainly are a variety of large and incredibly worrying fires. This particular is a from -- that truly began to become able to burn on the Sunday. This particular may end up being the Bernardo fire, very close to San Diego. I mean, look how shut this fire series would end up being to just about all of these houses here. but there's another fire now that is additionally burning. This may be named the Poinsettia fire as well as it's about 20 or even consequently kilometers for the north associated with San Diego, and, again, it is appropriate here.

This is correct in this area. Throughout fact, front of most of these hills here. As Well As anyone are in any position for you to see they're just houses every one of the way around this plus it features really, really been caught up in the dry conditions, the strong winds very, extremely rapidly. Within fact, more than 11 and also 1/2 thousand homes along with business people happen to always be able to be notified to produce the particular evacuations as it is so extremely dangerous. They've got a massive variety of firefighters working in this certain fire. Now, your fire warnings are generally set up all regarding the means on the West Coast, further inland as well. We've got winds with with regards to 60 kilometers an hour, more than that. Almost zero moisture in the air in all. As Well As you've got this offshore flow, therefore the winds are very, really dry very fast along with coming from the interior. So, you've got the 2 extremes about both sides in the country. This specific rain function its method east even as carry on through Wednesday in to Thursday. A Lot cooler at the actual rear of -- that isn't always any very bad thing regarding course. The Majority Of folks glad to determine a range of cooler weather now regarding year. Warnings are generally in position Wednesday 'til Thursday. It'll most likely shift eastwards about Thursday since we have got this big area obviously under the actual gun with the potential for a few severe weather inside and any few thunderstorms that're likely to be strong, maybe several tornados along with that is the particular range of rain as we carry on about Thursday directly into Friday.

Warnings are in position for your flooding simply because examine the actual amount involving rain that's potentially likely to come down -- 83 millimeters in Columbus inside Georgia after which crossing for you to Columbia, we have 106 millimeters involving rain and it carries on all the way up in in order to the northeast too although your rain totals here not that hefty -- regarding 38 millimeters there throughout Washington. Therefore we've got the actual flood warnings and watches within place, and therefore they extend once again up into the mid-Atlantic and additionally the northeast. Therefore which is the real distinction with what goes on. The Actual rain across the east and then we've got these very, really dangerous dry circumstances out west. Therefore the actual fire danger very, very high indeed along with will be for the subsequent number of days.

Temperatures still well higher than the typical -- 35 the forecast in Los Angeles on Thursday.

Meanwhile, within the wake of that system, just 18 Celsius in Atlanta.

And throughout Europe we've got the particular extremely warm, dry conditions inside the southwest, specially Portugal and also Spain, and this region in the southeast, this may be giving rain for the last few days. Much More of it once again within the final twenty four hours -- Sarajevo 73 millimeters, again warnings in position here, Paula. This specific system not heading anywhere specially quickly. It's a cutoff low, therefore it can easily extend toward the east as well as they've got really heavy rain along with thunderstorms imbedded within that. so we could involve some localized flooding.

NEWTON: I know you will end up keeping an eye on it while you are with the fires there. It's incredible how quickly that they spread within the United States.

HARRISON: Oh, terrifying Paula, absolutely terrifying. Anyone must start to see the pictures.

NEWTON: Thanks, Jenny, appreciate it. Now, apps which make your messages disappear are multiplying Samuel Burke will, yes, reappear following the break and explain what's behind the actual craze.

(COMMERCIAL BREAK) NEWTON: Yahoo features joined the actual craze regarding apps in which delete messages proper right after an individual read them. Now, the company bought Blink, an app which lets senders set a period with regard to their own message in order to self-destruct. Now, regards to the offer were not disclosed. Apps such as Blink are used to transmit everything from racy pictures in order to company secrets. Samuel Burke explains.

(BEGIN VIDEOCLIP) SAMUEL BURKE, BUSINESS CORRESPONDENT: Throughout the particular disappearing apps world, 1st there was Snapchat. Launched within 2011, it was the pioneer. the app claimed that the messages would self-destruct and disappear. Regulators say these people did not really have to check way to find out that wasn't the particular case. Snapchat settled using the FTC, along with now they've up-to-date their privacy policy along with notification for you to users, and Snapchat -even now one with the most popular application in the disappearing world. Competitors are piling in this space now. where Snapchat reeled within the younger user, the particular Confide app which usually says it's screen encapsulate proof because merely a couple of words seem at a period -- now they're going after the business user.

Wickr furthermore moved throughout claiming to help to make use of military-grade encryption on your messages. The Particular final ephemeral messaging app to have focus is Blink. Yahoo just acquired it, but just like its messages, it too is disappearing. Yahoo's expected in order to shut it down now. The Particular main point here -- should you want to reveal with somebody a new secret, your most sensible thing to do just isn't to set it on the actual market in all.

(END VIDEOCLIP) NEWTON: If simply lots more people would adhere to that advice! I've been telling folks just don't put it out there. OK, yet some people do and a few individuals feel which they could potentially get away with putting it out there and then it -- poof! -- disappearing. Will Be it crazy to believe that that can be what truly happens?

BURKE: Needless to say it's crazy. nothing is one hundred % around the internet, Paula, yet I consider a new great offer of individuals mocked teenagers once they started using Snapchat, along with they were saying, 'Oh, these youngsters. Exactly what do they find out about sending these racy photographs to each other, sometimes believing that they can disappear, but the truth can be I believe young people really been with them correct in which a minimum of they're attempting to accomplish something that puts in some stops within place. But, now, absolutely nothing is one hundred percent.

NEWTON: And, hey, if it's your mother and also father considering the actual racy pictures, we don't

know what tend to be the heck we're doing to have straight into there anyway, so that it functions as way as they're concerned.

BURKE: Right now there anyone go.

NEWTON: A Person know, yet acquiring onto a really significant topic. We had a range of safety breaches. We discuss target which consists of credit cards breached there, we had the incident, very recently, using Heartbleed which basically left the federal government of Canada merciless throughout its government programs. This kind of is quite significant now. With what point do -- are usually individuals getting into this industry and consequently are likely to become able to supply on those promises involving encryption, of security?

BURKE: Well, it's intriguing simply because a new lot of folks are already embracing government, hoping that will maybe they might put some sort involving regulation in place. but clearly, it didn't perform for your Canadian government as well as any kind of government with regard to which make the difference since nothing will be one hundred percent. And Also what a person are seeing the next is the company community, private enterprise, transferring along with attempting to fill this space. But, Paula, every expert which I speak with, they state that there is nothing that's 100 percent along with they aren't surprised. Simply Because for each wall, there's a new ladder that will any hacker or even somebody along with great intentions finds to get more than it. Nevertheless I consider little through little, they're locating various ways to test and allow it to become able to be safer. Pertaining To example, a lot of these new apps, they don't save the particular apps upon his or her server. Therefore it will not make any difference if the servers are generally hacked.

Consequently you see people small by small creating these technological advances. Therefore maybe we might obtain to a point eventually exactly where we're safe, but Coronary Heart Bleed, the Goal breach, most of these security experts are not surprised because they know it may happen. Right now there is definitely in which .1 percent.

NEWTON: And In Which I want to suggest out that will allegedly your Heartbleed -- the person -certainly 1 of the folks responsible for Heartbleed -- was obviously a 16-year-old youngster in Canada who'd always be among the same people who would become taking a peek at Snapchat something like that along with thinking, 'Hey, this truly is great, this message will self-destruct.' Individuals tend to be within this area and so they believe they're able to manage it. A Person know, it is actually not lost to become able to anyone that maybe you as well as also I are usually operating around trying to save details all the particular time and everybody different is trying to make it disappear. Are Generally we getting into a point exactly where this marketplace will finally mature as well as do that which usually you need it to complete regardless regarding whether it's use a message disappear or even keep these images intact?

BURKE: Well, I consider folks are searching for winners correct now. Obviously this companies are planning to hit saturation soon as well as we're going to -- I feel the winner though this time about isn't essentially the particular one that will get the most quantity associated with users first. The Particular winner will be the principal one which has your safest system. Consequently soon the marketplace will begin picking which your winners are generally and it is going to be the safest ones. Certainly Not only for these sorts of messaging, but throughout addition e-mail soon. you see individuals moving into each one involving these different spaces to try and protect information.

NEWTON: OK. Therefore the particular best approach to protect details are don't put it available in the 1st place.

BURKE: Regarding course.

NEWTON: Thanks, Samuel. Appreciate it. Now, the conflict between the U.S. as well as Russia reaches, yes, the ultimate frontier -- space. That's next.

(COMMERCIAL BREAK) NEWTON: Well, many people noticed this coming. the war regarding phrases in between Washington and also Moscow has become being fought about the ground or over within space.

Russia says it's likely to bar the particular export associated with RD180 rocket engines towards the United States. Now, your engines certainly are a important element of the Atlas rockets used by the United Launch Alliance. It's the collaboration between Boeing as well as Lockheed Martin. Now, these rockets have military satellites in to orbit. Your ULA is actually blaming Elon Musk's SpaceX Organization for that ban. Now, SpaceX that is trying to boost its very own enterprise provides argued which the method accustomed to pick launch companies will be unfair. The Actual company sued to avoid the particular ULA from buying Russian rocket engines, arguing that they might violate U.S. sanctions upon Russian officials. Now, the ULA says the particular lawsuit angered Russia, leading towards the export ban. As Well As it is not just with regards to rockets, sadly.

Russia denied a U.S. request to be able to continue using the actual International Room Station past 2020. Yes, with just about all the finish of shuttle launches, the U.S. is dependent upon Russia to obtain its astronauts up for the International Area Station, and lots of I can inform you might be hoping that will will change inside the weeks as well as year in order to come.

Now, that's "Quest Indicates Business" along with I'm Paula Newton. Thanks for watching.

END