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Those are the latest headlines from BBC World News. Now for the latest | :00:00. | :00:00. | |
financial news with Sally Bundock and world Business Report. In the | :00:00. | :00:19. | |
US, earnings season gets into full swing but while the economy is | :00:20. | :00:21. | |
stronger, are company earnings keeping up the pace? Revving up big | :00:22. | :00:27. | |
engines - as the global economy improves, the appetite for luxury | :00:28. | :00:38. | |
sports cars is back. Welcome to world Business Report. I'm Sally | :00:39. | :00:44. | |
Bundock. Also in the programme - as Japan's Prime Minister wraps up his | :00:45. | :00:47. | |
tour of Africa, we assess how successful it has been. It's | :00:48. | :00:51. | |
earnings season and today JP Morgan Chase and Wales Fargo are the first | :00:52. | :00:54. | |
two of America's largest banks that will kick off the year-end reporting | :00:55. | :01:01. | |
in America. While the US economy is clearly improving, it's not at all | :01:02. | :01:04. | |
obvious that company earnings are also on the up. Samira Hussain | :01:05. | :01:15. | |
reports from New York. JP Morgan, bank of America, Citigroup, Wales | :01:16. | :01:20. | |
Fargo, Goldman Sachs, Morgan Stanley, six of America's largest | :01:21. | :01:27. | |
banks, combined they made almost 75 billion dollars in profits. Many | :01:28. | :01:31. | |
banks have been cutting expenses and releasing money set aside for bad | :01:32. | :01:35. | |
loans. But the profits big banks made last year had not been seen as | :01:36. | :01:41. | |
the peak of the US housing bubble in Nest Labs thousand and six. In the | :01:42. | :01:46. | |
last 12 months, the share price will some of America's largest banks have | :01:47. | :01:52. | |
gone up anywhere from 25 to 35%. It was a big driver for some of the | :01:53. | :01:56. | |
record highs been in US markets in 2013. This year that good cheer may | :01:57. | :02:01. | |
not continue for financial institutions. One thing banks cannot | :02:02. | :02:07. | |
rely on that they could last year was the low interest rates and a lot | :02:08. | :02:12. | |
of homeowners were refinancing mortgages. Interest rates rose in | :02:13. | :02:19. | |
summer, banks are not getting that source of profit anymore. Further | :02:20. | :02:23. | |
hurting banks, regulators are finally going up the financial | :02:24. | :02:27. | |
institutions that sold mortgage-backed securities. Those | :02:28. | :02:31. | |
faulty lines lead to the collapse of the US housing market and the | :02:32. | :02:37. | |
financial crisis. JP Morgan is paying $13 billion to settle charges | :02:38. | :02:41. | |
and others will soon follow, including the bank of America, | :02:42. | :02:47. | |
expected to pay the steepest fine. Mortgage-backed securities, the | :02:48. | :02:52. | |
instruments that drove banks to record highs may be the same ones | :02:53. | :02:55. | |
that will temper profits this season. The US Justice Department | :02:56. | :03:06. | |
has charged three former traders of a Dutch company with fraud, accused | :03:07. | :03:11. | |
of manipulating the libel interbank lending rate over a five-year period | :03:12. | :03:16. | |
in Nest Labs thousand and 11. They played $1 million last year to | :03:17. | :03:20. | |
settle investigations into rate rigging. For other banks have been | :03:21. | :03:29. | |
punished over the scandal. Google has announced plans to buy | :03:30. | :03:32. | |
thermostat maker Nest Labs for $3.2 billion. This latest deal continues | :03:33. | :03:34. | |
a string of recent acquisitions. California-based Nest Labs was | :03:35. | :03:37. | |
founded by two former Apple executives. It produces a thermostat | :03:38. | :03:39. | |
capable of learning user behaviour and working out whether a building | :03:40. | :03:42. | |
is occupied or not, using temperature, humidity, activity and | :03:43. | :03:46. | |
light sensors. A draft law has been proposed in the Netherlands that | :03:47. | :03:48. | |
would force convicted prisoners in Dutch jails to pay rent for their | :03:49. | :03:51. | |
cell. The government wants inmates to pay 16 euros a day for a maximum | :03:52. | :03:56. | |
of two years - a fraction of the real cost. As the global economy | :03:57. | :04:06. | |
recovers, car buyers are increasingly willing to spend money | :04:07. | :04:09. | |
on more luxurious rides - a trend auto makers expect to continue in | :04:10. | :04:16. | |
2014. And the high-end buyer is getting younger, especially in Asian | :04:17. | :04:20. | |
markets. Michelle Fleury is at the Detroit Motor Show for us and takes | :04:21. | :04:24. | |
a look at the appeal of this segment of the market to both consumers and | :04:25. | :04:36. | |
manufacturers. Mix together a dash of retro with high-tech engineering | :04:37. | :04:39. | |
and you have a Porsche the carmaker vote will keep its showrooms busy. | :04:40. | :04:45. | |
Porsche and it is competitors are coming off a strong year for sales, | :04:46. | :04:53. | |
what is the secret? Brand is number one, it is supported by product and | :04:54. | :04:57. | |
product as technology. The chief executive of Daimler pointed to the | :04:58. | :05:03. | |
new Mercedes C class to prove his point. This vehicle has lots of | :05:04. | :05:08. | |
assistance systems which include stop and co-pilot which allows you | :05:09. | :05:12. | |
to go up to 20 miles an hour, hands-free. Without feet on the | :05:13. | :05:17. | |
pedal. The card will do the job for you. That has been science-fiction a | :05:18. | :05:24. | |
few years ago, it is reality now. A few miles from the Detroit Motor | :05:25. | :05:27. | |
Show, this dealership has seen Land Grover sales jumped 35%. It comes to | :05:28. | :05:32. | |
luxury, not just science that brings people through door. Definitely an | :05:33. | :05:38. | |
emotional purchase. Not something that people need to go out and buy | :05:39. | :05:43. | |
because they have to get transportation to work. People | :05:44. | :05:46. | |
become attached to these cars. That is a status symbol that is very | :05:47. | :05:52. | |
important to them. Emotions do not know borders as car makers see | :05:53. | :05:55. | |
plenty of opportunities in emerging markets. The outlook generally is | :05:56. | :06:01. | |
very good. We have emerging market that have got an appetite. You look | :06:02. | :06:10. | |
at markets like China, and the Asia is very strong. Even though car | :06:11. | :06:15. | |
companies will not say it too loudly, the most of thing about | :06:16. | :06:21. | |
luxury models are that they are the most profitable that manufacturers | :06:22. | :06:25. | |
sell. In the car business, the most expensive ride is the one that puts | :06:26. | :06:36. | |
you in the fastest road to riches. Japan's Prime Minister, Shinzo Abe, | :06:37. | :06:39. | |
is in Ethiopia for the final stage of an African tour which has also | :06:40. | :06:43. | |
seen him visit Mozambique and Ivory Coast. It's the first time a | :06:44. | :06:45. | |
Japanese leader has visited the region since 2006. For more, we're | :06:46. | :06:49. | |
joined by Babita Sharma is in Singapore. Tell us more about this | :06:50. | :06:58. | |
trip, when he set off a week ago, lots of expect patients, deals, lots | :06:59. | :07:08. | |
of investment, how how has gone? Analysts are saying that in the | :07:09. | :07:12. | |
whole, looking at it, the trip has gone reasonably well. It is a three | :07:13. | :07:22. | |
nation 's tour. But already the Prime Minister has extended a | :07:23. | :07:25. | |
five-year loan of $600 million to Mozambique, to help boost | :07:26. | :07:27. | |
development in its coal industry and in total he's expected to pledge | :07:28. | :07:30. | |
more than $14 billion in aid and trade deals during his trip to the | :07:31. | :07:36. | |
region. Why is Japan doing this? The country is keen to push back against | :07:37. | :07:39. | |
a growing Chinese presence on the continent as China currently stands | :07:40. | :07:41. | |
as Africa's largest trading partner - that partnership was worth $200 | :07:42. | :07:49. | |
billion in 2012. Something Japan is hoping to tap into it. And as we've | :07:50. | :07:54. | |
been hearing, Mr Abe is the first Japan Prime Minister to visit Africa | :07:55. | :07:58. | |
in eight years and he's looking for investment opportunities for | :07:59. | :08:00. | |
Japanese companies so they can secure much needed natural | :08:01. | :08:09. | |
resources. The proof of course is in the pudding - so we will see in the | :08:10. | :08:12. | |
coming months and years how economically beneficial Japan's | :08:13. | :08:14. | |
injection of cash in this region will be. You will be seeing him | :08:15. | :08:35. | |
presenting from the studio, on Thursday. Ricoh he is in. He is with | :08:36. | :08:44. | |
us at the moment. These are the markets in Asia. It has been quite a | :08:45. | :08:49. | |
dire session today. Japan down over 3%. They have had some pretty bad | :08:50. | :08:55. | |
news, current account deficit for the month of November. Underlying | :08:56. | :09:00. | |
the fact of the challenges facing Shinzo Abe as he returned from the | :09:01. | :09:05. | |
tour of Africa. He has has economic reform programme, it is a three | :09:06. | :09:10. | |
pronged programme, the third prong is going to be an act of this year. | :09:11. | :09:15. | |
This -- that is not necessarily why the markets are down today. Losses | :09:16. | :09:18. | |
across the board, following suit from Wall Street. Wall Street set | :09:19. | :09:23. | |
the tone last night will stop losses across the board. The yen relatively | :09:24. | :09:28. | |
strong versus the dollar which is hitting Japan today. Among the | :09:29. | :09:34. | |
stories to watch today, US retail sales start out today. European | :09:35. | :09:41. | |
industrial output today. In the French President's speech on the | :09:42. | :09:46. | |
economy. We will talk about that in the paper review in a moment. Thank | :09:47. | :10:03. | |
you to Sally. The amount of money being spent on temporary doctors in | :10:04. | :10:05. | |
Accident and Emergency departments has soared by 60% since 2009 - the | :10:06. | :10:09. | |
bill runs to tens of millions of pounds. | :10:10. | :10:10. |