10/10/2013 World Business Report


10/10/2013

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clear a system of pay—outs were delayed or cancelled flights. ——

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China ups the pressure on the US to get its financial house in order.

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We start with a very big news that we would usually —— were previewing

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for you yesterday. President Obama nominated Janet Yellen as the next

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head of the US Federal reserve. nominated Janet Yellen as the next

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approved, which looks likely, she will become the first woman to have

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the world 's most powerful central markets, but as we report, not

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He knows what it is like having markets, but as we report, not

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shoulders. She is about to find markets, but as we report, not

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67 —year—old Janet Yellen has been lined up to run the central bank of

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the world 's largest economy. Her decisions will reverberate around

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the globe, affecting us all. She made it clear whether priorities

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lie. Many Americans still cannot find a job and worry how they will

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pay their bills and provide for their families. The Federal reserve

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effectively. The daughter of a doctor and teacher from Brooklyn,

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she has served at the third longer than any other senior official.

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she has served at the third longer has been the number to there since

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2010. Back in the 90s she chat Bill impressive academic career as a

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professor at Berkeley and holding teaching positions at Harvard and

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the London School of economics. teaching positions at Harvard and

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to Wall Street to make loads of spent her time between this place

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to Wall Street to make loads of money and the Democrats like that.

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There is something of a keen on money and the Democrats like that.

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— that it has the job of balancing unemployment and inflation. She

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— that it has the job of balancing or is put the stress on policies

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that create jobs. Her husband won the Nobel Prize for economics in

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Keynesians. He has been a consistent advocate that when unemployment

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Keynesians. He has been a consistent high that is one of the main points

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think what she will bring is a kind lacking in the years before the

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crisis. The markets seem to like her as well, bouncing back this morning.

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Many think she will put on hold as well, bouncing back this morning.

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plan is to reduce the amount of money they are pumping into the

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plan is to reduce the amount of economy. The thought of a cutback

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makes them nervous. If it happened it could shape —— sent shockwaves

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around the world. Not everyone will be pleased with her though. If

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you're in the Senate voted against forgetting her current job and they

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will be more nervous now. Flooding the financial system with liquidity

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is always popular. It is when you take the punchbowl away. I think she

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has the fortitude to do that is necessary. The question is will

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has the fortitude to do that is I am a sceptic that when the time

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comes she is going to make the really hard choices. She has been

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given a tall order and have started measures adopted that will not

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bankers from the G 20 are meeting in Washington later ahead of this

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weekend 's annual meeting of the IMF government services shut down for

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nine days now and raised fears America could be forced to default

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discussions. They are joined by on its debts is likely to dominate

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discussions. They are joined by Sarah Huon. It is true, isn't it

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that the —— isn't it, that the situation in the US will be pretty

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much talked about in most of these situation in the US will be pretty

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much talked about in most of these meetings because it is not just

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much talked about in most of these deadlock in the budget and the debt

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appointment. There is so much going ceiling crisis that is around the

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appointment. There is so much going on, isn't there? There is a huge

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subjects, even though the G 20 finance ministers are trained to

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focus on the longer term. What is finance ministers are trained to

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economy and how can global growth be economy and how can global growth be

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dominate everywhere else. There economy and how can global growth be

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immediate concerns, if we reach economy and how can global growth be

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17th of October without an agreement between converse in the White House

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then there is a risk of the US defaulting on its debt or at the

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spending very sharply in order to pay its investors. From the point of

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view of those going to Washington, i.e. Global finance ministers and

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central bankers, in terms of the deadlock in Washington there isn't

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really much they can do about that apart from complain about the impact

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it is having, I guess? That is really all they can do. There is

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very little influence, there is really all they can do. There is

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influence that they can bring on the politicians. I think that they can

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discuss, probably the scenes, the implications, if there were to be a

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crunch or get past into late October without an agreement, it could have

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repercussions for the world 's financial markets. Tell us about the

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Federal reserve minutes that we financial markets. Tell us about the

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analysing to get a sense of when tapering might happen will stop

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analysing to get a sense of when might happen. For —— what is your

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thinking on when they might pull back the stimulus? I think that

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thinking on when they might pull will probably wait until March to

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pull back the stimulus. This could well be one of the first actions

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that is taken by Janet Yellen in her well be one of the first actions

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that is taken by Janet Yellen in her new role. The economy is ticking

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of the current problems is likely to over. It is certainly not forging

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of the current problems is likely to reduce growth. I don't think the Fed

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is going to be in any hurry to begin tapering and reduce its quantitative

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easing. In our view they can afford to wait until March before they

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here at BBC World News to keep you Thank you very much indeed for your

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here at BBC World News to keep you across all those events taking place

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Washington to enter the budget in Washington in the next few days.

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Washington to enter the budget leaders at the ASEAN summit in

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The person missing at these summits is Barack Obama, the US President,

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understand he's getting a talking to the Chinese as Denmark absolutely.

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The Chinese are very concerned. the Chinese as Denmark absolutely.

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Premier, who has been diplomatic so far with his views, said that China

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is indeed paying great attention to the US debt ceiling issue. These

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remarks from the Chinese leader the US debt ceiling issue. These

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more pressure on the Americans to resolve the impasse as the mainland

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is the biggest foreign holder of US Treasuries. His comments add to

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earlier retreat from the Debbie finance minister who said that

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America should prevent a default and ensure the security of Chinese

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investment in US Treasuries. China has become more outspoken about

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investment in US Treasuries. China this political impasse has affected

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them. A default could slow down this political impasse has affected

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slowing Chinese economy. Japan, this political impasse has affected

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the —— second biggest holder, is also on edge. The Finance Minister

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said the US must consider the impact cancelled flight in Europe, then you

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European transport ministers are cancelled flight in Europe, then you

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European transport ministers are talking in Brussels about how to

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it forces them to pay out huge sums talking in Brussels about how to

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a mess. Getting compensation from —— aren't even their fault. The

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a mess. Getting compensation from to clarify many grey areas. They

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proportionate and they want to out want to encourage better rerouting

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proportionate and they want to out clear rights. The fact there are so

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many European court judgements and challenges overflight regulations

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and rights would suggest the rules reason is they were first assigned

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airlines argue they should not be penalised for events beyond their

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control. If you can imagine an aircraft with 400 passengers on

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control. If you can imagine an if it encounters a problem and each

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of those passengers is entitled if it encounters a problem and each

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600 euros, then we are talking about an event with a potential liability

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of $250,000. —— 200 50,000 euros. So regulations. If they go for the

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of $250,000. —— 200 50,000 euros. So generations compensation, airlines

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may have few incentives to offer a wider risk —— wider range of routes

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It showed in the markets before wider risk —— wider range of routes

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say goodbye. A mixed picture in Asia. These markets are in and out

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of positive territory depending Asia. These markets are in and out

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what is going on. The Janet Yellen News has helped markets. Very flat

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