Browse content similar to 02/08/2012. Check below for episodes and series from the same categories and more!
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BBC News. Now for the latest financial news with Alice Baxter | :00:01. | :00:11. | |
and World Business Report. Hello and welcome to World Business | :00:11. | :00:15. | |
Report. Looking for the shock and awe factor - investor hopes are | :00:15. | :00:17. | |
high for today's European Central Bank meeting. And events in Europe | :00:17. | :00:21. | |
are set to take another chunk out of profits from the American car- | :00:21. | :00:31. | |
:00:31. | :00:32. | ||
maker GM. There's a lot on the line at today's European Central Bank | :00:32. | :00:42. | |
:00:42. | :00:46. | ||
meeting. In the Milun sells a stake to a European Investment Group. | :00:46. | :00:50. | |
Hopes are high that the ECB will act to help out eurozone woes - | :00:50. | :00:53. | |
specifically by announcing that it may buy up Italian and Spanish | :00:53. | :00:57. | |
bonds therefore bringing the countries borrowing costs down. If | :00:57. | :01:02. | |
there is no action, some analysts have warned of market chaos. The | :01:02. | :01:05. | |
head of the ECB, Mario Draghi, lifted expectations at a conference | :01:05. | :01:15. | |
:01:15. | :01:17. | ||
last week. Here's what he said. Within our mandate commander the | :01:17. | :01:25. | |
CBD is ready to do whatever it takes to preserve the euro. It will | :01:25. | :01:31. | |
be enough. Believe me. So what are the options open to the ECB? Well | :01:31. | :01:34. | |
there is some speculation that interest rates could be cut again | :01:34. | :01:37. | |
by a quarter of one percent - from 0.75 to 0.5% - although most | :01:37. | :01:40. | |
analysts expect a cut later this year What markets really want to | :01:40. | :01:44. | |
see is the central bank re-start its bond buying plan - as we | :01:44. | :01:54. | |
:01:54. | :01:57. | ||
mentioned earlier - but that is not without its problems. The | :01:57. | :02:00. | |
Bundesbank is against the idea. Germany's Bundesbank is against the | :02:00. | :02:04. | |
idea - with the head of the central bank warning that the ECB must not | :02:04. | :02:08. | |
overstep its mandate. I'm joined by Tom Rogers, senior economic advisor | :02:08. | :02:16. | |
at Ernst and Young. Many analysts saying this is the most exciting | :02:16. | :02:19. | |
meeting and a long time. Expectations running high following | :02:19. | :02:24. | |
his comments last week. There was a rally on the market. Using the | :02:24. | :02:31. | |
expectations have been wrapped up to high? There is a danger that | :02:32. | :02:36. | |
people have interpreted his comments too literally. If you | :02:36. | :02:40. | |
think about the the first of what he might say, difficult to imagine | :02:40. | :02:43. | |
him not saying they would do everything to preserve the | :02:43. | :02:51. | |
stability of the euro. We have been saying for some time that the SNP | :02:51. | :02:57. | |
rien -- reactivated would find it fun solution to the crisis going on | :02:57. | :03:04. | |
with the eurozone. There are some other options open to the bank. | :03:04. | :03:10. | |
Another cut in interest rates, is that likely? Reading nothing there | :03:11. | :03:15. | |
will be a cut in interest rates. All the signals from the previous | :03:15. | :03:19. | |
meetings and press conferences suggest they want to wait and see | :03:19. | :03:25. | |
how previous interest rate cuts will impact be, the before cutting | :03:26. | :03:32. | |
rates again. The other option open to the bank is the resumption of | :03:32. | :03:37. | |
its bond buying programme. We already know Jimmy's Bundesbank | :03:37. | :03:44. | |
feelings on that. How likely is that as an option? It is the most | :03:44. | :03:50. | |
likely option. The Bundesbank published the interview on its | :03:50. | :03:54. | |
website this week, with the Governor of the Bundesbank rarer it | :03:54. | :04:00. | |
raided his opposition to that. The compensate -- the conversations | :04:00. | :04:07. | |
that they have behind the scenes and policy makers may its move over | :04:07. | :04:13. | |
some of the objections. Some people have taken his comments last week | :04:13. | :04:20. | |
too literally. What it out the third option about giving the | :04:20. | :04:29. | |
rescue fund licence to borrow money from the CBD? They will be an | :04:29. | :04:34. | |
option for the EC it to take the 500 billion US it has and use that | :04:34. | :04:40. | |
as collateral to borrow from the CBD. And expand the money it has. | :04:40. | :04:48. | |
There is a measure that would needs to be approved by leaders. Cannot | :04:48. | :04:57. | |
be done by the CBD in isolation. General Motors, which last year | :04:57. | :04:59. | |
regained its position as the world's largest car maker, is | :04:59. | :05:04. | |
expected to report a drop in quarterly profits later today. The | :05:04. | :05:06. | |
firm's biggest problem is its business in Europe which is losing | :05:07. | :05:16. | |
:05:17. | :05:18. | ||
money. But perhaps more worryingly, this week GM reported a six percent | :05:19. | :05:21. | |
slide in July sales as high US unemployment and weak consumer | :05:21. | :05:24. | |
confidence kept would-be buyers on the sidelines. So is GM's revival | :05:24. | :05:29. | |
under threat? Mark Gregory reports from New York. GM nearly went under | :05:30. | :05:34. | |
in the global financial crisis. It was saved by a huge government | :05:34. | :05:39. | |
bail-out. Since then, it has gone back to health, leaner and more | :05:39. | :05:43. | |
efficient with lower costs and fewer deaths. Sales are up and up | :05:43. | :05:49. | |
profits restored. But recently, the clouds have appeared. Here at this | :05:49. | :05:54. | |
GM Chevrolet branch in Brooklyn, the business environment is like | :05:54. | :05:59. | |
the weather. Damp and gloomy and overcast. Sales are holding up | :05:59. | :06:04. | |
reasonably well. But with the US economy on the slide, this is not | :06:04. | :06:09. | |
an easy moment to be selling expensive items like new cars. It | :06:09. | :06:12. | |
is getting more difficult because people are conscious about losing | :06:12. | :06:18. | |
their jobs, how can they make the car payments. If their car is | :06:18. | :06:22. | |
running, they would rather spend a few hundred dollars to get it | :06:22. | :06:27. | |
maintained then go through the transection of buying a new car. | :06:27. | :06:30. | |
Thanks to cost-cutting and efficiency gains, GM does not need | :06:30. | :06:36. | |
to sell as many cars in its core US market as it once did. The | :06:36. | :06:40. | |
company's biggest problems are at its factories in Europe we are it | :06:40. | :06:45. | |
has yet to wield the axe on costs and sales have slumped due to the | :06:45. | :06:52. | |
economic crisis in the region. There is a lack of demand in Europe | :06:52. | :06:58. | |
and it has come bounding oversupply. What we have seen from Ford and | :06:59. | :07:04. | |
other auto makers deep discounting going on and it's a direct hit to | :07:04. | :07:11. | |
profitability. We would expect similar results for GM. Also some | :07:11. | :07:17. | |
anxieties that home. The latest US figures show GM and Ford sales | :07:17. | :07:22. | |
slightly down what Japanese rivals like Honda and Toyota have seen big | :07:22. | :07:28. | |
gains. A few more months of data like that could be deeply worrying. | :07:28. | :07:31. | |
China is getting into the olympic spirit - it's investing in an | :07:31. | :07:41. | |
:07:41. | :07:42. | ||
Italian football team. Sharanjit Leyl is in our Asia business hub in | :07:42. | :07:48. | |
Singapore. Sharanjit, why the interest in Italian football? | :07:48. | :07:56. | |
Football of all sorts is huge in Asia. Asians love European football. | :07:56. | :08:01. | |
We're seeing a group of Chinese set to become the second largest | :08:01. | :08:07. | |
shareholders in the top Italian football club into an alarm. They | :08:07. | :08:13. | |
have many fans and will parts of Asia. They are holding the parent | :08:13. | :08:20. | |
company and the group would require a stake but the main family would | :08:20. | :08:30. | |
:08:30. | :08:36. | ||
retain control of the team. The Italian said the club wants to | :08:36. | :08:44. | |
increase its presence in Asia. Three players would become members | :08:44. | :08:54. | |
:08:54. | :08:59. | ||
of the board of directors. It wants to enhance its future development | :08:59. | :09:04. | |
and future perspectives. This is not the first time Asians have | :09:04. | :09:09. | |
taken stakes in soccer clubs. A former Thai Prime Minister had a | :09:09. | :09:17. | |
founder of air Asia took over another English club, Queen's Park | :09:17. | :09:27. | |
:09:27. | :09:31. | ||
Rangers earlier this year. In other news - the New York stock exchange | :09:31. | :09:34. | |
is investigating trades in at least six stocks after a technical glitch. | :09:34. | :09:36. | |
An electronic trading system is thought to have malfunctioned, | :09:36. | :09:40. | |
causing prices to fluctuate wildly in the first 45 minutes of trade. | :09:40. | :09:43. | |
The Japanese electronics firm Sony is expected to report a sharp drop | :09:43. | :09:46. | |
in profits this morning - hit by the on going eurozone problems and | :09:46. | :09:50. |