:00:00. > :00:00.continues to dominate those talks at Davos. Live from London, that is our
:00:00. > :00:18.top story on Friday 22nd January. A Relief Rally for global markets -
:00:19. > :00:20.but for how long? It comes after days
:00:21. > :00:23.of heavy sell-offs. The head of the IMF,
:00:24. > :00:32.Christine Lagarde, And we'll bring you all the latest
:00:33. > :00:38.from those financial markets where the prospect of cheap money
:00:39. > :00:40.has re-awakened investors' animal And we'll be getting
:00:41. > :00:49.the inside track on the encryption wars - it's all about the ongoing
:00:50. > :00:52.battle between technology firms and governments over
:00:53. > :00:54.the use of cryptography. We'll be talking to
:00:55. > :01:07.the co-founder of Wikipedia, Let us know, how important is online
:01:08. > :01:14.encryption? If you have a question you want to put to Mr Wales, just
:01:15. > :01:16.use the hashtag. Markets have been trading higher,
:01:17. > :01:22.giving some relief after the heavy Global turmoil has been
:01:23. > :01:26.dominating talks in Davos with the slowdown in China,
:01:27. > :01:28.the commodities slump and the strong dollar all issues weighing
:01:29. > :01:32.on leader's minds. The BBC's been hearing a range
:01:33. > :01:35.of views at the summit, Let's start with the words
:01:36. > :01:42.of the economist, Kenneth Rogoff And this was the boss
:01:43. > :01:53.of BP talking about oil - While Dr Min Zhufrom the IMF
:01:54. > :02:09.is a bit more optimistic about the current climate -
:02:10. > :02:15.he says: Our Economics editor Kamal Ahmed
:02:16. > :02:27.joins us from Davos. He's been there for the past few
:02:28. > :02:31.days. Great to see you. We know you've done a lot of the big over
:02:32. > :02:36.we've been doing a lot of interviewing power brokers as well.
:02:37. > :02:39.Can I take from this, from my own experiences, it seems like nobody
:02:40. > :02:44.really knows what's going on, there. You've got half the camp saying it's
:02:45. > :02:53.going to be, hang onto your hats, it's going to be held this year,
:02:54. > :02:58.others who are more optimistic, huh? It is confusing when there are two
:02:59. > :03:00.things going on, there is a market issue about volatility and
:03:01. > :03:03.fundamentals issue which is slightly more positive, and all the business
:03:04. > :03:09.leaders and politicians have spoken to are saying that is the issue we
:03:10. > :03:12.are grappling with. On the market side, the reason for this volatility
:03:13. > :03:16.is really the fallout from the 2008 financial crisis. Central banks
:03:17. > :03:22.around the world pumped out billions, trillions of pounds of
:03:23. > :03:27.money to save the financial system, the global economy. That meant asset
:03:28. > :03:31.prices and equities went up, because all that money went somewhere. And
:03:32. > :03:36.so market participants are rather nervous about what is the real value
:03:37. > :03:39.of stocks and shares. That's why you get these huge bounces on a little
:03:40. > :03:44.bit of bad news, little bit of good news. The markets over react. We
:03:45. > :03:49.were a bit overconfident at the start of last year, probably a bit
:03:50. > :03:53.over gloomy this year. On the fundamentals, yes, China slowdown,
:03:54. > :03:58.yes, the oil price has gone down, but China is still growing, the UK
:03:59. > :04:01.is still growing, America is still growing, the Eurozone is showing
:04:02. > :04:06.some health, so there are still some green shoots of recovery. I spoke to
:04:07. > :04:10.the US Treasury Secretary and actually asked him whether or not we
:04:11. > :04:18.were heading towards a more serious global crisis. I am cautiously
:04:19. > :04:22.optimistic watching many areas where there are downside risks. I think
:04:23. > :04:27.it's important not to let down side risks become self-fulfilling
:04:28. > :04:30.prophecies. I think the state of our financial system is not the same
:04:31. > :04:34.today as it was before the financial crisis. We in the US and your
:04:35. > :04:39.government in the UK, Europe and around the world, there is a
:04:40. > :04:41.different degree of capital, there are different levels of tools in
:04:42. > :04:45.terms of transparency and the ability to not have their beer
:04:46. > :04:57.contagion that spreads through our financial system. -- have there be a
:04:58. > :05:01.contagion. There we are. I've got to ask you this, it has raised its head
:05:02. > :05:05.this week, those who are positives on the fundamentals, have they been
:05:06. > :05:10.looking at the Baltic dry index? I don't want to put viewers off at
:05:11. > :05:13.home, but that isn't indexed that tracks the shipping rates, the ships
:05:14. > :05:18.that carry all the stuff around the world. When that index crashes,
:05:19. > :05:22.typically the economy crashes afterwards, it happened in 87, it
:05:23. > :05:28.happened in 2000, and it happened in 2008. This week that index hit the
:05:29. > :05:35.lowest it has ever hit before. Now you are right, it is a very
:05:36. > :05:40.important marker of world trade in manufactured goods, let's not
:05:41. > :05:45.forget. But what is different from the 1980s and the 1990s is of course
:05:46. > :05:51.a lot of global trade is now technological trade and is actually
:05:52. > :05:56.high-value pharmaceutical trade. And that is either done over digital
:05:57. > :06:00.platforms or is done via aircraft. And so actually the Baltic dry
:06:01. > :06:04.index, although very important, is possibly less of a Mark Roe than it
:06:05. > :06:13.used to be 20 or 30 years ago. -- less of a marker. It relies on
:06:14. > :06:18.technology, high-value engineering, and that goes much more by air
:06:19. > :06:22.flight. I agree that it does show there are big headwinds in the
:06:23. > :06:25.global economy but still people here are saying, when they look at their
:06:26. > :06:30.own business, what they want to invest in and where they are going,
:06:31. > :06:34.they feel slightly more confident. Great stuff, really appreciate it.
:06:35. > :06:40.Are you going skiing on the weekend? Sadly not, I'm going to be working
:06:41. > :06:44.hard for the BBC. OK, OK, thanks. Do you believe him? Know, all the
:06:45. > :06:51.others are going skiing! Anyway, let's talk about some other news
:06:52. > :06:54.that's going on at the moment. The head of the International
:06:55. > :06:56.Monetary Fund, Christine Lagarde, has told French media
:06:57. > :06:59.that she will run for a second term. The UK, France and Germany have
:07:00. > :07:02.already called for Ms Lagarde to be re-appointed; however,
:07:03. > :07:04.she is due to face trial over payments to a French
:07:05. > :07:07.businessman made in 2008. Under her leadership,
:07:08. > :07:09.the IMF has made several significant reforms, including adding China
:07:10. > :07:11.to it's list of global reserve Brazil's currency closed at a record
:07:12. > :07:22.low against the US dollar on Thursday, after the central bank
:07:23. > :07:25.surprised markets by not The country is in its worst
:07:26. > :07:34.recession since the 1930s: it's been hit hard by the slump in commodity
:07:35. > :07:36.prices, a sprawling corruption scandal and attempts to impeach
:07:37. > :07:45.President Dilma Rousseff. The boss of JP Morgan Chase,
:07:46. > :07:52.Jamie Dimon - saw his total pay package rise 35% last year -
:07:53. > :07:55.to a total of $27 million. His basic salary was unchanged -
:07:56. > :07:58.the rest is tied to performance Despite the increase,
:07:59. > :08:01.his compensation package is less than those enjoyed by bosses
:08:02. > :08:19.at rival banks Goldman Sachs Hey, listen, we were talking about
:08:20. > :08:24.the whole mixed picture, here is why we are all confused, right, about
:08:25. > :08:33.it, all the stuff coming out of Davos. We've got this. We've got Mr
:08:34. > :08:37.Soros, right, many would say a genius investor. We are all doomed,
:08:38. > :08:43.this is what he is saying. Doesn't his face tell it all, really? He's
:08:44. > :08:48.seen it all and he is not happy. He says the EU was falling apart, he
:08:49. > :08:51.says you've got panic in the European asylum policy, with too
:08:52. > :08:55.many refugees to assimilate and integrate, everybody is out for
:08:56. > :08:59.himself, he says. He talks about Russia. He says it's in a very weak
:09:00. > :09:04.position, lots of people are forecasting that Russia will go back
:09:05. > :09:08.into recession for a second time. He's saying it faces impending
:09:09. > :09:14.collapse. China again, he uses the words hard landing. And he
:09:15. > :09:19.criticises the US had come he says they are about one year too late in
:09:20. > :09:25.doing the interest rates. But perhaps it happened too soon. Who
:09:26. > :09:31.knows? We are all confused. Charlotte is in Singapore and
:09:32. > :09:36.tracking the Asian markets. Better way to end the week than we started,
:09:37. > :09:43.right? Most certainly. This rally across Asia was led by Japan which
:09:44. > :09:47.bounced nearly 6%. Partly due to the higher price of oil and yen, but
:09:48. > :09:52.also comments from the World Bank that it will consider more monetary
:09:53. > :09:56.stimulus. The market was buoyed by a report that the central bank in
:09:57. > :10:01.Japan is possibly planning to ramp up its massive stimulus programme.
:10:02. > :10:04.Investors don't have this new round of spending in Japan confirmed but
:10:05. > :10:08.they are hopeful it might be announced as soon as next week.
:10:09. > :10:21.So we have seen the Nikkei with its best performance in recent months.
:10:22. > :10:24.So yes, investors in this part of the world are breathing a sigh of
:10:25. > :10:27.relief at this positive end to a volatile week. The elixir of life on
:10:28. > :10:29.the markets, cheap money. For most of 2016 we've been talking
:10:30. > :10:43.about falling markets. According to me, what I think is
:10:44. > :10:55.going on. Investors who rode out the financial
:10:56. > :10:57.crisis have become conditioned to rally at any sign of additional
:10:58. > :11:00.central bank stimulus - and the prospect of the European
:11:01. > :11:02.Central Bank making another move in March has triggered
:11:03. > :11:04.that muscle memory. So we're seeing risk assets
:11:05. > :11:07.and local sovereign debt becoming European stocks love
:11:08. > :11:09.a weakening currency. So when the euro weakened
:11:10. > :11:12.against the dollar off the back of those comments from
:11:13. > :11:14.Mario Draghi on Thursday, we saw the value of export sensitive
:11:15. > :11:16.indices like the DAX The FTSE at the moment
:11:17. > :11:20.is trading about 1.6% higher. And it's the mining stocks and oil
:11:21. > :11:23.services firms leading the way Now, Neda can tell us what's
:11:24. > :11:31.going on in the US today. Another day of earnings, and it is
:11:32. > :11:35.the turn of General Electric to impress investors when it reports
:11:36. > :11:38.fourth-quarter results. The company is undergoing a massive
:11:39. > :11:41.restructuring to slim down its portfolio in order to focus on
:11:42. > :11:47.manufacturing in the digital age. It recently agreed to sell its
:11:48. > :11:51.appliance business for $5.4 billion and plans to hire more coders to
:11:52. > :11:55.transform the way it runs its engines, power turbines and medical
:11:56. > :11:59.equipment. Wall Street will have more US economic data to absorb. The
:12:00. > :12:03.National Association of Realtors will put out its report on existing
:12:04. > :12:09.home sales through December. Compare to a sharp drop of 10.5% in
:12:10. > :12:13.November, sales are expected to have risen by 8.9%. We will get a look at
:12:14. > :12:14.the strength of US manufacturing in January.
:12:15. > :12:17.Paul Kavanagh, CEO, Patronus Partners.
:12:18. > :12:29.Paul, always good to see you, thanks for coming in. So, Mario Draghi
:12:30. > :12:33.speaks, throws out the hint of more stimulus to come, and the markets go
:12:34. > :12:37.up. Isn't the problem with the central banks pumping out that cheap
:12:38. > :12:40.money, but all it does is end up propping up the market, it doesn't
:12:41. > :12:44.prop up the economy as it supposed to be, that was the whole idea.
:12:45. > :12:52.That's the lesson we learned from the first time they had a go at
:12:53. > :12:55.quanta easing in 2008. That reduced interest rates and the return you
:12:56. > :12:59.will achieve on your safest assets, the US Treasuries, and it we priced
:13:00. > :13:03.every other asset out there, whether it be property, stocks or bonds. But
:13:04. > :13:08.that game is over. We've had the full benefit of that. And it has
:13:09. > :13:14.made things palatable for us during a very difficult period. And
:13:15. > :13:18.markets, yes, I responding to Draghi's comments that he may be
:13:19. > :13:24.doing more in March. But have we lost the effectiveness of QE? China
:13:25. > :13:32.becomes the central story for us in the next 18 months, is that showing
:13:33. > :13:38.the effects of QE. I want to ask you about China, because George Soros
:13:39. > :13:42.says a hard landing for China is unavoidable and already happening.
:13:43. > :13:47.Oldman sacks are coming out and disagreeing saying we are just
:13:48. > :13:54.overreacting, what are you hearing? Somewhere in the middle of those
:13:55. > :14:00.too. I think it is a timing issue. Goldman Sachs sees that China can
:14:01. > :14:05.continue to keep the game going, whereas George Soros is positioning
:14:06. > :14:08.his trade to say there is an endgame in China that will be ugly and
:14:09. > :14:12.devastating for financial markets. I think what we are seeing within
:14:13. > :14:16.China is the effectiveness of their policies is starting to wane. See
:14:17. > :14:21.the devaluation of the currency at the moment. We've seen anecdotal
:14:22. > :14:24.evidence. We were talking about the Baltic dry index and commodity
:14:25. > :14:28.prices. All commodities are really going very badly wrong in the past
:14:29. > :14:31.six months, and I think it's giving you more of an indication about what
:14:32. > :14:38.is beginning to unwind within China than necessarily what is happening
:14:39. > :14:41.with financial stimulus. We will come back because we've got papers
:14:42. > :14:44.to go through, but we've got a bit more news before then. See you,
:14:45. > :14:46.Paul. Still to come - how important
:14:47. > :14:49.is online encryption? We'll be talking to Wikipedia's
:14:50. > :14:52.Jimmy Wales about the ongoing battle between technology companies
:14:53. > :14:54.and governments around the world. You're with Business
:14:55. > :14:59.Live from BBC News. And now a look at some
:15:00. > :15:02.of the stories from around the UK and what impact has this weeks
:15:03. > :15:07.market turmoil had on our pensions? Tom McPhail is a pensions expert
:15:08. > :15:18.at Hargreaves Lansdown. Tom, I don't know if you can see us?
:15:19. > :15:22.Good morning. With a great beard! Let's talk first about what is going
:15:23. > :15:27.on with the markets, is anyone not affected by what's gone on this
:15:28. > :15:31.week? Clearly it is all scary news. Some people are looking at it from a
:15:32. > :15:36.pensions context, just ignore it, tune out, it does not affect you. If
:15:37. > :15:39.you are in a final salary pension scheme, the turmoil is your
:15:40. > :15:45.employer's problem, nodules. You will get it promised pension every
:15:46. > :15:54.time, there's no immediate cause all worry. If you are in your 20s, 30s,
:15:55. > :15:57.40s, even your early 50s, if you are away from retirement, this
:15:58. > :16:00.volatility will be in the past before you get to retirement. It
:16:01. > :16:05.means you are buying assets cheaper than you would have done a year ago.
:16:06. > :16:09.Keep putting money into your pension, don't worry. For a lot of
:16:10. > :16:14.people, from the pensions point of view, the turmoil is not a concern.
:16:15. > :16:19.For most people, it is not a cause for concern, who will it be trouble
:16:20. > :16:23.for? For people who are already in retirement, if you rely on a
:16:24. > :16:28.portfolio of assets to pay an income if you draw dividends from the
:16:29. > :16:32.shares or portfolio committee had to be mindful as to why the turmoil is
:16:33. > :16:36.going on. People worry about earnings, we've heard about oil,
:16:37. > :16:42.gas, natural resources, earnings hit there, they could hit dividends. You
:16:43. > :16:46.need to look at investment and think if you are in the right place and if
:16:47. > :16:51.you will get an income stream coming through into retirement as the year
:16:52. > :16:53.progresses. It's a link to be mindful. The people who have to pay
:16:54. > :16:58.attention are the ones just approaching retirement. If you have
:16:59. > :17:03.money in the market and are planning to sell investments to generate cash
:17:04. > :17:06.or by a guaranteed income for life, it could be a problem and you might
:17:07. > :17:10.have to readjust expectations as to how much money you have and the
:17:11. > :17:14.income it might provide you with. Tom McPhail, pensions expert and
:17:15. > :17:26.all-round guru, thank you very much! Do you note on, right? Of course I
:17:27. > :17:38.do. What was the beard thing? -- do you know Tom McPhail?
:17:39. > :17:41.You're watching Business Live, our top story - markets trade higher
:17:42. > :17:48.after days of steep falls, buoyed by a rebound in oil prices.
:17:49. > :17:51.Let's take a look at online security - and the so-called 'encryption
:17:52. > :17:53.wars' playing out between governments and technology firms
:17:54. > :17:56.After the mass spying revelations by Edward Snowden -
:17:57. > :17:59.firms have been determined to appear to be giving control of data
:18:00. > :18:08.But unbreakable encryption has been opposed by many authorities,
:18:09. > :18:14.arguing access to information is needed to fight crime.
:18:15. > :18:16.The UK's Prime Minister, David Cameron, has vowed to close
:18:17. > :18:19.what he calls the 'safe spaces' used by suspected terrorists
:18:20. > :18:28.Well, online security has been a big topic at Davos.
:18:29. > :18:30.Let's go to Jimmy Wales, the co-founder of Wikipedia,
:18:31. > :18:41.Good to have you on the programme. Apart from the possible financial
:18:42. > :18:45.collapse around the world, cyber security is a big topic where you
:18:46. > :18:50.are in Davos. I want to ask you before we talk about encryption,
:18:51. > :18:54.generally, we've seen Hack attack after hack attack, we've talked
:18:55. > :18:58.about it on the programme and a lot last year, big corporations
:18:59. > :19:03.attacked, governments... Do you get a sense in 2016, that corporations
:19:04. > :19:06.are finally getting it and realise this is a new battle ground and
:19:07. > :19:13.spending the right money needed to build the walls? I think they're
:19:14. > :19:19.starting to. I think it is a relief fantastic thing. We are seeing
:19:20. > :19:24.corporate networks being hard and -- a really fantastic thing. Consumer
:19:25. > :19:27.software is hard on. All around, we see the percentage of Internet
:19:28. > :19:32.traffic that is secure, or encrypted, it's more than doubled in
:19:33. > :19:35.the last year. We'll probably double it again this year. We are looking
:19:36. > :19:40.at many more than 80% of traffic on the Internet encrypted. That's a
:19:41. > :19:45.good thing because it means credit card numbers are safe, identity is
:19:46. > :19:50.safer. Hopefully we won't see as many attacks in future. We will
:19:51. > :19:57.probably still see attacks but hopefully we won't be as one ball to
:19:58. > :20:02.them. Between encryption data, as a layman, that's who you are speaking
:20:03. > :20:07.to, I'm trying to get my head around it -- vulnerable. Tech companies are
:20:08. > :20:12.being very supportive of the consumer. They are saying, to the
:20:13. > :20:17.government, if you are serious about data protection, we want to make it
:20:18. > :20:26.easier for you. We have two making correction even more difficult, even
:20:27. > :20:32.stronger? Yes, we need to have strong encryption, we have to make
:20:33. > :20:36.sure that, as much as possible, all personal information is protected.
:20:37. > :20:41.It's not floating loose on the Internet where it can be stolen.
:20:42. > :20:46.It's an important thing and I think we are starting to pay attention,
:20:47. > :20:53.finally. Jimmy, Victoria here. We are seeing increasing levels of
:20:54. > :20:57.security, being stepped up by these companies. Quite frankly, they are
:20:58. > :21:02.low barriers of entry to anyone who wants to come in and say they can
:21:03. > :21:06.provide data solutions. Anyone who can speak computer jargon can set up
:21:07. > :21:10.and do this. A lot of CEOs do not know the difference between
:21:11. > :21:13.different products. Do you think some companies are being taken
:21:14. > :21:18.advantage of? There are so many different products out there. I'm
:21:19. > :21:23.sure that some of them are. That is always true. I would advise
:21:24. > :21:27.companies to look for industry-standard solutions, open
:21:28. > :21:31.source software. That can be examined. There are standard
:21:32. > :21:37.solutions, very strong. Anyone selling and encryption that is
:21:38. > :21:48.supposedly inventive and new but is not studied by the community... They
:21:49. > :21:53.need to be careful. I have to ask, anything new? What is next for
:21:54. > :21:59.Wikipedia? I think the biggest thing for us is growth, we are really
:22:00. > :22:03.excited about things going on there. We are nonprofit, a charity, we'll
:22:04. > :22:07.raise money from the general public and we just announced we are looking
:22:08. > :22:12.to create an endowment, we are becoming more like a university,
:22:13. > :22:18.cultural institution, we want to keep Wikipedia say. We are doing a
:22:19. > :22:22.good job of raising $100 million for the endowment -- say. We aren't
:22:23. > :22:26.close but we had a lovely gentleman who left as $1 million in his well
:22:27. > :22:34.and maybe here in Davos maybe someone has some money! You are in
:22:35. > :22:40.the right place -- will. At the weekend, apparently they all go
:22:41. > :22:44.skiing. Hang around at the weekend. Unfortunately, I'm from Alabama and
:22:45. > :22:47.I don't like snow! That's what you have to do, sit in the bar and
:22:48. > :22:56.weight, ply them with booze! Thanks Jimmy.
:22:57. > :22:59.In a moment, we'll take a look through the Business Pages but first
:23:00. > :23:02.here's a quick reminder of how to get in touch with us.
:23:03. > :23:09.We'll keep you up-to-date with the latest details, insight and analysis
:23:10. > :23:15.from the BBC's team of editors around the world. We want to hear
:23:16. > :23:27.from you, get involved on the BBC Business Live web page. On twitter,
:23:28. > :23:28.and you can find us on Facebook. On TV and online whenever you need
:23:29. > :23:30.to know. Paul is back to take us
:23:31. > :23:39.through the stories in the papers. Let's begin with this in the Wall
:23:40. > :23:47.Street Journal. It turns out the US Treasury Department wiped $1.7
:23:48. > :23:52.billion -- sent. To run the same time as five Americans were released
:23:53. > :23:58.from jails. The Wall Street Journal is talking about whether that
:23:59. > :24:03.amounts to a ransom payment? It's dates back to the late 1970s, at the
:24:04. > :24:08.time, Iran was a big purchaser of defence missiles from the US. At the
:24:09. > :24:15.time of the overthrow of the government at the time. The US owed
:24:16. > :24:19.Iran money. It was peeling fought through the courts, President Obama
:24:20. > :24:28.has indicated it could run into sums of billions of dollars. -- being
:24:29. > :24:31.fought. It seems he has resolved this particular case but it comes at
:24:32. > :24:36.a time when the relationship has been much better, the best for over
:24:37. > :24:39.30 years, particularly surrounding the nuclear programme and, in the
:24:40. > :24:44.mix, this could mean the release of hostages. You could probably argue
:24:45. > :24:48.there is a lot going on within this agreement. To pinpoint that it is a
:24:49. > :24:55.ransom for the release of hostages would be unfair. The Financial
:24:56. > :25:03.Times, we saw the US banking numbers, the big bucks are back.
:25:04. > :25:11.Jamie Diamond, JP Morgan Chase, some would say that yes, he deserves
:25:12. > :25:15.this, up by a third? -- Dimon. Not quite the peak that was achieved in
:25:16. > :25:19.the good old days, where it was over $30 million. The main difference is
:25:20. > :25:25.that it is about the three-year plan. The question is, do these
:25:26. > :25:29.three-year plans work? At the moment, we have enough evidence to
:25:30. > :25:34.suggest it changes the dilemma between all of the employees and
:25:35. > :25:35.Chief Executive is at the bank. Bang on time, thank you.
:25:36. > :25:36.Have a great weekend. There will be more business news
:25:37. > :25:41.throughout the day on the BBC Live webpage and on World
:25:42. > :25:53.Business Report. We did not mean ice scraper is this
:25:54. > :25:58.morning, we needed windscreen wipers. Even the rain for most will
:25:59. > :25:59.clear quickly. Milder air has replaced the