21/10/2013 World Business Report

called Maria, was found in a Roman camp in Greece last week, had DNA

testing shows that she was not the child of the couple. Now it is time

for World Business Report. More than 1000 soldiers are deployed

onto the streets of rear vision mirror, he encountered

demonstrations against Brazil auctioning off a giant offshore oil

field. The biggest fine in US history, JP Morgan Chase reaches a

tentative deal with the US Justice Department. A very warm welcome to

you. In just a minute we will be going live in New York for the

latest on that JP Morgan Chase story. At first, the Brazilian

government has deployed more than 1000 soldiers around the Hotel at

Rio de Janeiro, where one of the world's biggest auctions takes place

later today. The auction for the rights to develop a huge offshore

oil field has been criticised, and anti`government protesters have

threatened to disrupt the event. Whoever wins the rights will have to

share most of its profits with Brazil, and operate under tight

regulations. With me now is an oil expert from the centre of the global

energy studies. He explained to me how important and how big these

offshore field is. There is up to 12 billion barrels of oil and gas

equivalent, which is a major field. But it also requires huge

investment. And I think it is that issue of investment requirements,

the petrol price, a national company, and they have realised they

needed foreign investment to take on these projects. That has been a

policy approved by the Brazilian Congress, and debated for several

years. Of course, now there are tensions within the domestic

economy, and there are many sectors of the population who are

protesting, wanting higher salaries for teachers, lower prices for

tickets for public transport and so on. An economic boom which lasted.

Many years, of these growing economies like Brazil, Russia,

China, the recession is now hurting the people. Within society, those

who have aspirations do not receive that. I think this is part of that

as well. Emotions clearly running very high in Brazil. And yet,

whoever wins the auction isn't actually going to own any of the

deposits, are they? Told me through the model, and how attractive you

think it is for investors? I don't think it is that attractive. That is

why many major companies did not take part. But the oil is a huge

prize, and around the world there are not many areas open to these

companies which billions of barrels of oil potential to be there. That

is why these terms are not as sweet as the international companies want,

it is still attractive. And no big US companies have come to the

option, have they? So took me through the companies who are there.

Well, there is Shell. And I think many months ago, when this issue was

being discussed, Shell said that they were interested despite the

conditions. Think it is about the corporate policy of each country.

Shell said that even though the government would be the operator,

the cut for the company would be small, but Shell decided they wanted

to be in Brazil. They have decided the technical and economic

challenges ahead are large. Now, a warning for all chocolate

lovers out there, you are soon going to have to pay more from your

favourite snack. It has got chocolate in it, and that is because

of the soaring cost of cocoa beans, which are shot up by more than 20%

since the start of the year. Chocolate lovers seem to be

celebrating a slight easing in the economic crisis by eating more

chocolate. The colder it gets, the more we shop

for chocolate. Christmas is coming, and here in the northern hemisphere

we can't seem to get our hands on enough of this. Lindt says its sales

are up 14% in Europe. Higher prices may be good news for countries like

Ghana, but they seem to be too low to continue generation of farmers to

take over the old plantations. Producing rubber and palm oil is

more profitable. It may be a fight for the beans. Now, this event,

which happens in several countries, has shown how the demand for luxury

and fine chocolate sellers has upset the balance between supply and

demand for cocoa beans. This chocolate bar, being readied by one

exhibitor, would have cost thousands. We buy directly through

intermediaries or directly from the planters. But that is not the case

for the mass produced stuff. They have to go through brokerage

agencies. The doubling or tripling of the price will have a huge impact

on them. It will be much more expensive. So, a sustained flow of

investment into cocoa farming and communities may serve grow with and

proper lovers test. `` chocolate lovers.

Now, JP Morgan Chase has tentatively agreed to a $13 billion deal with

the US Justice Department to settle investigations into its

mortgage`backed securities. It relates to the sale of securities

based on home loans, which led to the near collapse of the banking

back in 2007. It is the largest deal ever between a single company and

the US government, but it doesn't release the bank from criminal

liability for some of the mortgages it packaged into bonds and sold to

investors. Even with the deal finalised, JP Morgan chief executive

will have 20 of regulatory issues to deal with. Many thanks for joining

me. Was JP Morgan Chase expecting a fine of this size? It is difficult

to tell. Before the shutdown happen of the US government, there was talk

about 7`11 billion. So we are around about that area. It sounds like that

has been folded in, but we're not what else is involved. 13 billion is

a bit more than we thought a few weeks ago, but it may be slightly

less. It is a big number, but isn't big enough to do any real damage to

a bank the size of JP Morgan? It depends what you mean by real

damage. If you look back over the previous three years, 2010 `2012, JP

Morgan had to set aside 18 or $19 billion for other legal costs. If

they hadn't done that, they may have had 20% more earnings. That is a

cost in itself. Nonetheless, JP Morgan is one of the best performing

banks in the US. If you strip out the great costs they have set aside

for this settlement, they still had a 5% growth in their core earnings,

which is way better than any of their peers. It is important to

remember that throughout this entire mortgage`backed security scandal, no

one has faced any criminal charges, have they? Absolutely not. They

tried a few times, but got nowhere. They tried to indict some managers a

few years ago, but they got. When it comes to actually isolating very

senior individuals, there has been nothing. Fascinating, thank you for

that. Japan's trade deficit allude to a

fresh record for September as cost for food outstripped other issues.

`` ballooned. What does this mean for Japan? The weaker yen has had a

dour impact on the economy. Imports have become more expensive, and the

growth in exports has not been sufficient enough to offset the

higher import bill. Rising imports have been partly due to higher fuel

demand, triggered by the shutdown of all of the country's nuclear

reactors following the Fukushima disaster. Also, the recovery is also

spurring domestic demand, and imports outperforming exports mean a

gap of $9.5 million, which translates into 15 months of trade

deficits. They are likely to see a trade deficit. Time to come, and

this is not necessarily a negative sign for the overall economy. So the

weakness of the Japanese yen has been a double`edged sword for the

Japanese economy. A key witness in the case of a

British family murdered in the French Alps last year has spoken

publicly for the first time. He told Panorama that he saw a BMW with a

British numberplate heading towards the crime scene shortly before the

attack. Three members of a family from

Surrey are murdered in a car while on holiday. And a French cyclist is

killed, by what is thought to be an experienced hitman. Bovary a `` a

year later, a man has been