03/03/2016 BBC Business Live


Similar Content

Browse content similar to 03/03/2016. Check below for episodes and series from the same categories and more!



Latin America's largest economy is being battered on all sides.


Brazil was once a star of the emerging markets


but the global slowdown, commodities slump and corruption


Also in the programme...we're taking a look at the economic plans


of Democrat Hillary Clinton - this time yesterday it was all


about Super Tuesday and we picked apart the economics


of Republican Donald Trump as the race for White House hots up.


And are we seeing a turning point for financial markets


Oil is rising - emerging market currencies are strengthening -


having that conversation in about five minutes.


Today we'll be getting the inside track on Scott Scott -


a US law firm - specialising in class actions that has


We have its managing partner David Scott on the programme.


All week we've been hearing from businesses giving their view


on whether Britain should leave the EU.


Do you think that it's a decision for the individual or is it helpful


We start in Brazil - as it struggles with the worst


In a few hours' time official figures are expected to confirm


the once booming economy shrank last year at the steepest rate in more


Analysts including the International Monetary Fund think Brazil's economy


contracted almost 4% last year - the worst performance of any


1.5 million jobs disappeared last year - the fastest pace of job


Part of the reason is the slump in commodity prices.


The slowdown in China means there's far less demand for the minerals


and other raw materials Brazil produces.


And as an oil exporter - Brazil's been hit hard


And back at home - a big corruption scandal


at state-run oil producer Petrobras has implicated key politicians


and business leaders - shaking the government


of President Dilma Rousseff and the confidence of foreign


Himena Blanco is the Head of Americas analysis at Verisk


Thank you for joining us. We ran through those numbers, up to 4%


contraction in the economy, and to almost 11% in


inflation. This is not just numbers, this is major changes in


the way that people live and what they can afford to eat, the jobs


they can do and the access to sanitation, how long they can


stay in formal education, what is this like on the


ground for people in Brazil? This is the main risk the legacy of Dilma


Rousseff's party. success in improving the standards


of living of millions of Brazilians. We're talking about people losing


their jobs, struggling to pay rent and for transport while at the same


time seeing the cost of those services continuing to increase. But


we are also seeing a much more profound or structural struggle,


deliver basic facilities, so for example we


will see a delay in sanitation programmes and connecting households


to storage systems, and that can have a very important impact on for


example the health of the population and the spread of


communicable diseases. Like the Zika virus,


is a relatively new democracy. It has


from where it was in the 70s as a military dictatorship. What chance


is there that we will see any kind of income redistribution? Is there


any chance Brazil might improve itself at all or is it so tied to


commodities that think there's a silver lining to


what we've been talking about especially in terms of the


corruption scandal and democracy, we are seeing Brazilians much more


interested in how the state is managing the tax money that


they are paying. That is why this corruption scandal is so important


for many Brazilians, many have taken to the streets demanding justice.


The interesting thing, something that sets Brazil apart from its


neighbours is that corruption allegations are being investigated,


the judiciary is independent, we are seeing a moderate improvement in the


strength of institutions in Brazil through the investigation of this


case and a case before it. There is a slight silver lining.


This is not good news for everyday Brazilians going out looking for a


job now but I think the company is looking to invest in Brazil, and


that is the answer to the country's problems investment, that will


return growth in the long term. The companies looking at the country,


this provides a silver lining because institutions are becoming


stronger. Very briefly, can Brazil bounce back from this? I think so,


eventually, we won't see it in 2016, we might see


very low growth in 2017 but I think that Brazil will remain the largest


market in the region. It is very difficult for any business


wanting to operate in Latin America not to have some form of


presence in Brazil, even if at the moment they may be


struggling with an increase in social unrest and political risk.


Thank you so much for joining us. the news about growth, or not, as


the case it be, we will update you. Let's move on.


The mining company Samarco has agreed to pay $1.1 billion


in damages following a major environmental disaster in Brazil.


In November, two of its dams ruptured - causing the mudslide that


destroyed the town of Mariana in southern Brazil and killed 19


A new train station opens later on Thursday -


on the site of New York's World Trade Center.


A new train station opens later on Thursday -


on the site of New York's World Trade Center.


the cost has spiralled to more than $3.8 billion -


making it the most expensive railway station in the world.


Shares in Toshiba have closed 7% higher on reports the firm


is about to secure substantial new loans for its restructuring efforts.


The company is in talks with several Japanese lenders over raising funds


in the wake of a massive accounting scandal.


Let's take a look at the Live page on the BBC website -


and one story is dominating this morning - it's the comments


from the French economy minister - Emmanuel Macron.


We have them here. He says that France would


relocate its migrant camp from Calais to Britain and roll out the


red carpet for bankers fleeing if the UK leads the EU. He's headed to


a summit with various leaders and economy ministers will be meeting.


This is one of the key discussions going on in Europe with many


arguments for and against. We will cover some of them later. We will.


And the German finance minister will be speaking in London today, no


doubt giving his views on the EU question as well.


A day after Moody's cut China's outlook to negative,


the credit rating agency has now cut the outlook of 38


Everyone will be looking to the China National People's


Congress this weekend to see what new stimulus measures


How worried are people about what is going on with the downgrades


it is part of an ongoing narrative that we have been hearing from


analysts in China over the last couple of months.


As you rightly say, the downgrade from Moody's yesterday on the


outlook of China took a lot of people by surprise. The fact that it


has downgraded its outlook on 38 state owned firms, including China's


largest firm in some of its banks, is going to deal a further blow to


the country's state owned enterprises sector. The outlook has


been reduced to negative from stable. This will also put pressure


on Beijing as it attempts to clean up its sector and reform what are


known as zombie films, massive companies that are living of debt


and struggling to stay alive. The problem is that these companies


employ millions of people, so if they are shut down, where do these


people go? It is a theme we have heard frequently recently and it


will be top of the agenda when China's leaders meet at the National


People's Congress this weekend. Thank you. Certainly a big focus at


the end of this week. All that news is not enough to tempt investors off


financial markets today. The yen has been weak in the last


few days. That has helped. Wall Street ended the day keeping hold of


the gains they made the day before. Let's look at Europe. Where we are


down slightly the fact that perhaps the appetite for risk is back. We've


got the price of oil going up, gold going down, safe havens like the yen


off the boil. That kind of sentiment seems to be on the market. First,


news of another story in the US. The man who helped to kick-start


America's sale revolution died in a car crash on Wednesday one day after


he was accused of conspiring to rig bids for oil and gas leases. The


former boss of Chesapeake Energy is credited with helping change the


energy world, yet controversial business practices helped cost him


his job. Hewlett-Packard enterprise which is made up of the hardware,


software and servers side of the business, turns in its first-quarter


earnings this Thursday. You may remember that last week HP


Incorporated, the business side of the company, reported decent


earnings, yet investors were not too happy with the company's outlook.


And has the largest books dare - book store chain in the US changed?


It is now selling toys online as it tries to compete with retailers like


Amazon. Joining us is Richard Dunbar,


Investment Director We will go through some market


stories. We have seen the biggest rise in the Asia-Pacific region in


terms of shares since August. I wonder if this rally is sustainable


or will it fade? Markets have been spooked in the last couple of months


about the US and we've seen better numbers from there. They've been


spooked by China, and things are not getting any worse there, and they've


been spooked by the oil price and we've seen some stability and that's


that it is encouraging to see more stability in markets, generally come


in Asia in particular, taking into consideration some of the currencies


which have been selling in the last few weeks. Interesting to see the


oil price rising and also metals like iron ore going up a lot. In


terms of what moves first, when things improve, like sentiment about


the global outlook for the global economy etc, what tends to give


signs first in markets that things are going to improve? Markets are


doing what they are meant to do, every day into the office I see a


mining company stating that it is reducing capital expenditure and


digging fewer holes and we will see less production. Similarly, we are


seeing better news from the US, which should fill demand for these


products, better demand or expectations thereof, and less


supply, so arise in metals prices, the invisible hand of the market is


doing its job. For once! Richard, thank you very much. We'll have you


and later to look at the newspapers. Still to come is brash US style law


coming to British shores? There is a gulf between the British legal


system and the one in the US. We will be talking to the boss of the


US law firm about how to take on big business here. You are watching


Business Live from BBC News. UK car workers at Rolls-Royce have


been sent an e-mail from German parent company BMW, highlighting


what it sees as the risks of a vote Meanwhile, Lord Rose,


the head of the campaign to keep Britain in the European Union,


suggests that wages of low skilled workers could rise in


the event of a Brexit. We knew the debate was going to get


more and more intense. Today is quite a big thing, isn't it?


That's right and it is achieving some focus. Both sides are looking


at exactly what the results would be of Britain leaving the EU. The


difficult part is nobody knows because it would be a question of


renegotiating Britain's position towards the EU. That is the


difficulty many companies face. What would that period of uncertainty be,


and for how long, and what would be the final result, would they gain a


preferential position, or not? That is the question. BMW has written to


its workers a Rolls-Royce explaining that it feels Britain would be


better inside the EU. It makes it plain to its workers that isn't a


decision to be handed out by the employer. What it is trying to say


to car companies and workers here is that it wants to stay part of it.


Many work very closely together. I should say, though, that there are


200 small companies, and I find this interesting, who are saying they


would like to leave the EU. These are British companies. Slightly


counterintuitive. You would imagine small companies would feel


particularly exposed. But in some cases what they resent is some of


the regulation they are forced accent as part of the EU. Some of


them presumably trade outside the EU and they feel they wouldn't have to


accent that if Britain were not within the trading block. -- forced


to act set -- accept. We have to wade through all of the


arguments before the referendum. This is dominoes results. They have


done really well and they think they have been helped by record cheese


prices. -- Domino's. INAUDIBLE


You're watching Business Live - our top story - we're bad news


-- You're watching Business Live - our top story - we're expecting more


bad news from Brazil, expected to confirm Latin America's


largest economy is slipping deeper into recession,


in 2015 at the steepest rate in more than two decades.


When we have that news, I'm sure it will be on the website, so check it


out. Now let's get the Inside Track


on the battle between When you think of class action


lawsuits, perhaps the US movie Erin Brockovich comes to mind -


ordinary citizens taking Or do you see ambulance chasers -


lawyers making a fast buck specialising in class actions,


often against big companies. The firm is currently involved


in anti-cartel litigation in the US against 12 banks, achieving


$809 million in settlements to date. The firm has just


opened their London office, in what they've described as "a move


to prepare for a possible European front in the forex battle


against the world's largest banks." With me now is the firm's managing


partner, David Scott. -- welcome to the programme. The


foreign exchange and the reading investigation going on right around


the world first. Libel has been tough to prove and it has been very


difficult litigation all over the world, why do you think Forex means


you will have a better chance of success? -- Libor has been tough.


Libor Has been tough. In the other case we allege that in addition to


fixing the 4pm fix, there was also a conspiracy to manipulate. One would


have been injured, regardless of what side of the trade you were on.


That is the difference between the two.


Just explain to those watching, you are representing who in this, and


who are you chasing for damages? In the US case we represent everybody


who has been impacted through the conspiracy fix foreign exchange.


Because of the mechanism, it means we represent everybody who was


trading. That, by default, is generally very large investing


companies. In the European slashed UK market, we are representing large


multinational pension schemes, large traders, who have been impacted


again by the alleged conspiracy. -- Europe/Uk market. Do you see a


difference in the level of litigation? When times are good


people do not sue each other as much. On some level there is a


correlation between what happened in 2008 and the drying up of the


market. What seems to me, at least, on almost a daily occurrence, some


new governmental investigation into financial institution misconduct.


You have the foreign exchange scandal, the Libor scandal, the


sovereign debt scandal... I think what happened was when it dried up


banks needed a new avenue in which to seek profit. Unfortunately a lot


of banks appear to have been engaging in conduct which is


questionable. To be clear, you will be going after the banks themselves,


the banks will argue it was individuals behaviour that we were


not aware of, we were not across, they were secretly doing what they


were doing. -- individuals' behaviour. How will you go about it?


If you look in the US, I believe four banks pleaded guilty to


anti-trust violations at the corporate level. The corporation


themselves has pleaded guilty to the conduct. Moreover I think it was the


FCA, in their report, they found a systemic failure to have policy and


procedures in place to prevent this type of conduct. In fact, some of


the employees were meeting with the compliance officers and general


counsel to ask if the conduct they were engaging in in chat rooms was


violating the internal policies within the corporation. To argue it


was rogue employees, I don't think really has... I don't think it has


legs to stand on. So interesting. We could keep talking about this, but


thank you very much, and best of luck with all of your cases. Thank


you very much. We will keep an eye on this, I'm sure it will be one


about stories again. If you were watching on Wednesday


as we analysed the results of Super Tuesday in the US -


the economics of Republican Donald Well today, we're taking


a look at the economic plans of Democrat Hilary Clinton


as the race towards the White House Jeremy Howell explains the thinking


behind "Clintonomics". Hillary Clinton says ordinary


American wage earners are disillusioned with the economic


system. Wage rises are scarce, jobs are insecure. She has a three


pronged strategy to restore their says in it. The first is a push for


strong economic growth. -- faith. She wants to improve America's


infrastructure including airports, roads, and bridges. She wants to


help more young people go to college by lowering their tuition costs. The


second problem is fair growth. She wants to increase the minimum wage


to $15 an hour. And she would impose a fair shares tax on people who earn


over $5 million a year. The third prong is long-term growth. She would


use the tax system to punish investors who hold shares only for a


short while, and reward those who hang onto them the long term. But


even by her own calculations, her new spending measures would cost $25


billion a year more than her new taxes would raise.


Buber has big plans for the world. -- Uber. If the chief executive is


to leave, which I think you will, they could be losing even more


money. It talks to the ambition and the scale of the ambition of Uber.


They are hated by those with whom they compete. Is it sustainable if


their expansion plans are as big as they say they are, and we don't


doubt that, and yet the money is going out extremely fast, how will


it continue? Will it get some people who believe in them? It isn't


sustainable. Companies have to make profit and generate cash. That will


have to come. Looking at their accounts, it seems they are able to


attract significant equity capital investors. And they are able to


attract very significant debt from the banks. They are able to finance


it. The scale of ambition is clear when you look at the results. A


force to be reckoned with. Keep your eyes on Uber. It has been great to


have you on the programme. And thank you for your company. As ever, there


is a lot more going on in business which we don't have time to mention


in the programme. Do have a look at the website.


There will be more business news throughout the day on the BBC Live


web page and on World Business Report.


After another cold start, Thursday will be a half reasonable day for


most. Fewer showers than yesterday and the winds will be lighter. For


that we have to thank the fact this area of low pressure which gave us


Download Subtitles