08/08/2011 World Business Report


08/08/2011

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welcome to. Europe's central bank is ready to spend billions to help

:00:02.:00:09.

drive down borrowing costs for struggling nations.

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A leading publication in china says the financial problems in the US

:00:13.:00:23.
:00:23.:00:27.

and Europe are a showcase of their There have been sharp losses for

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Asia's main stock markets. Investors are getting their first

:00:31.:00:34.

chance to react to the news that the credit worthiness of the US has

:00:34.:00:39.

been cut by the ratings agency, Standard and Poor's. There have

:00:39.:00:43.

also been important developments in Europe's debt crisis over the

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weekend. The European Central Bank says it is ready to start

:00:46.:00:51.

intervening in the financial markets again.

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Also, finance chiefs from the G7 group of nations pledged to do

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whatever is needed to steady the markets. We get more on the Asian

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Let's talk about the markets in Asia. The Hang Seng index is down

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significantly. Why is that? Is it because of the US credit

:01:23.:01:32.

downgrading or is it because of the eurozone turmoil? It is basically

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birds -- both. Investors in Asia are worried e worried ll have a

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significant impact on the state of the global economy. On one hand,

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the fee is that the US economy will slow further and enter a double dip

:01:46.:01:52.

recession. Growth prospects are to remain sluggish over the next 2.5

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years. This would hurt the region. It relies Undy US to buy billions

:01:58.:02:03.

of dollars of exports every month. One expert I spoke to has said it

:02:03.:02:08.

is still a fact that Asia is very dependent on demand from the US and

:02:08.:02:13.

Europe. A slowdown there will see a slump in consumer demand and it

:02:13.:02:18.

takes away a big support pillar for Asia's economic growth. Economists

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say that despite the risks, Asia's growth outlook was better than the

:02:23.:02:27.

US and Europe. Investors would have to shift their focus back on to the

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regional markets. The slowdown would hurt consumer and business

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sentiment. That is the weight on the shoulders of Asian markets

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today. We have had comments from China, indicating that they are not

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happy about the way Western governments are coping with the

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crisis. What exactly was said? is a big issue. Europe is now the

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mainland's number one trading partner. The Chinese have become

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dependent on you by importing technology infrastructure to

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maintain its breakneck development. It is also a large trading partner

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with the US. What happens in the US and Europe will have an adverse

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effect on the Chinese economy. The comments say that they want to make

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a point. The troubles facing the US and beat the European Union are

:03:27.:03:31.

grown out of political dysfunctions of the Western democracies. For

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China, this is a challenge. It suggests that the US and European

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assets are not as safe as they were. The government needs to explain to

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its people about it. On to some other news. The European

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Central Bank will flex its muscles in an effort to hold the attack on

:03:55.:04:01.

European debt. On Sunday, it said it would make major purchases of

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eurozone government bonds. It is hoped that he will help drive down

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the borrowing costs for countries like Italy an Spain. Both countries

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are facing dangerously high interest rates. Will that be

:04:10.:04:16.

enough? We were here for the next boat shortly, but first the debt

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crisis is having serious implication for Europe's banking

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industry. In southern Europe, banks are struggling to raise finance.

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Some think the loss of confidence in the baking industry could cause

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a repeat of the 2007 financial crisis.

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It is four years ago this week that panic first hit the markets as

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banks across the world realised that many of the instruments they

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held wobble Office. A credit crunch followed and in 2008, women

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brothers as one of several large beggars to collapse. This was

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followed by the biggest recession in 70 years. This is why talk about

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banks being unable to raise finance causes so much worry. If banks

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cannot borrow money, they cannot lend money. That is a dinner last -

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- disaster for economic growth. Some have warned that banks in

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Italy and Spain are vulnerable. There is likely to be a drag on

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their lending and economies. Overall, it is argued that a risk

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of another credit crunch in southern Europe is growing. Others

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believe the funding problems could easily spread elsewhere throughout

:05:28.:05:38.
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Europe. You'll see banks are less willing to lend to each other. You

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see the punning at the heart of the system dry out. It has not happened

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yet, but it could be a risk. To try and avoid such an out, the ECB is

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extending its program of borrowing government bonds. Solving the

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sovereign debt crisis remains the key priority.

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We have had this comment from the ECB that it is ready to start

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purchasing Italian and Spanish bonds. That is what everybody is

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reading into it. Is this going to be enough? On Thursday, they said

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the data by Irish and Portuguese bonds and that the market into a

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frenzy. The do not know what they're going to do. They had not

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told us what they will buy and how much. We are reading a lot into

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this at the Merchant -- moment. The implications are that if they do by

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the dead, you see a fall on the interest rates on those debt

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securities over the next two or three weeks. Will there be enough?

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When he said that, I year thinking that the bond markets were likely

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to see more action. We have heard from Angela Mark Goult and Nicholas

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Varcoe as the saying that there is a need for countries to sign that

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off in the parliament spice of them off. Did the bond markets were to

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see that fund extended? There will be a pressure on that fund to be

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extended. That is not the key issue here. What these key figures are

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trying to achieve is some kind of price facility within the sovereign

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bond market. The key issue is not the price of the dead, but the

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quantity of the dead. the dead. in the case of the Greek situation, it

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started with pressures on yields, but it ended with pressure on Greek

:07:39.:07:49.
:07:49.:07:50.

debt. The market is pushing the ECB the Portuguese, Irish, Italian and

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Spanish debts. Let's gs. Let's g go to the American markets. What do

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you think about the strategy by the US government to try to discredit

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Standard and Poor's? It is always easy to shoot the messenger. That

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is what is happening here. All they did, was to do what everybody else

:08:13.:08:18.

had been thinking. What is also important about their statement was

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the emphasis they put on the political process in their

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judgement and not just the debt dynamics. What do you think is the

:08:27.:08:37.
:08:37.:08:38.

way forward for the US? I think we will not see very much. One of the

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objectives of the debt ceiling was to defer the question until after

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the presidential elections. What Standard and Poor's did over the

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weekend was insurer that the objective has failed. We are going

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to have two pine -- president of candidates under intense scrutiny.

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The debt crisis is a fast-moving story. If you want to keep up, go

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:09:12.:09:17.

That's all the business news For Today. No, there is more coming

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through. The US Treasury Secretary has confirmed that he will remain

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in his post. There was speculation that he was planning to leave after

:09:25.:09:30.

the conclusion of negotiations over the debt ceiling. That does round a

:09:30.:09:40.
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More news from the UK now. Deaths from farms and other agricultural

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businesses have risen it over the past two years. In the past, power

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tools and tractors, even farm animals have been stolen.

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This family has farmed in the cosmos for 60 years. Before, we

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have to be the Keehan. He has had two tractors stolen. Only recently,

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this immobiliser stop to this vehicle from being stolen as well.

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Most of detractors have a generic K that fits all of them. This is

:10:24.:10:29.

where his tractors were stolen from. �70,000 worth. Is this the you have

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to worry about? Yes. It is constant. The latest figures show 17% rise in

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Baroque Rome over the last two years. In 2010, it cost UK

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agriculture nearly �50 million. figures were a big shock. The major

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impact is tractors that are being stolen and in -- exported across

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the globe. There is also a big rise in might stop theft. Life is harder

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for a criminal here in an urban error -- career. There are people

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around NAD CCTV is. In the countryside, it is harder to keep

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track of what they are doing. areas that we cover are so much

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greater. Response time is longer because of the fact that it is

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further away. The important part is that we work with the community to

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make sure we are using the resources effectively. Future

:11:26.:11:28.

budget cuts mean those resources will have to be stretched even

:11:28.:11:38.
:11:38.:11:54.

Here are the latest headlines: Stock markets across Asia have

:11:54.:12:01.

fallen because of nervousness about government debt.

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It is clear that they will buy Italian bonds and Spanish bonds if

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needed. Actively implement is the phrase they used for bond buying.

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The markets will take that as them buying the bonds if they have to to

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reassure the markets. There had been for that looting and

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vandalism across parts of London for the second successive night.

:12:29.:12:33.

Police blamed it on copycat criminal activity. The violence

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original started after a peaceful protest over over a fatal shooting

:12:36.:12:41.

by a man by police. Saudi Arabia's King says the

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violence by these -- searing government is unacceptable. In what

:12:45.:12:50.

appears to be a co-ordinated move, the Arab government has released

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its first statement over the actions. Turkey's Prime Minister

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says his country is running out of patience with Damascus.

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The typhoon in China has been downgraded to a tropical storm. It

:13:03.:13:13.
:13:13.:13:21.

is expected to make landfall within Time for our newspaper review now.

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