09/08/2017 BBC Business Live


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This is Business Live from BBC News with Ben Thompson and Sally Bundock.


It was ten years ago - exactly a decade after


the credit crunch began - have we really learnt the lessons


Live from London, that's our top story on Wednesday, 9th August.


Stock Markets are at record highs and personal debt is soaring


We will assess what's changed and what hasn't.


Also in the programme, Disney's Frozen relationship with Netflix.


The media giant says it's going pull all its movies off the streaming


And as President Trump threatens North Korea with "fire and fury


like the world has never seen", markets and others remain on edge.


And we'll be getting the inside track on the controversial business


The founder of Nosh Detox will be in the studio with us.


And ten years on from the beginning of the credit crunch,


we want to hear your memories of the crisis and how


Let us know. Use the hashtag BBCBizLive.


Get in touch with your memories. I know for us, it was the start of ten


long years of covering the stories and the repercussions of it.


This week the main stock markets in the US have had another record


run and London's FTSE 100 flirted with breaking into record territory.


It's a far cry from ten years ago when the global credit crunch began.


Ten years ago today - 9th, August 2007 -


banks suddenly found that they had billions of dollars in toxic


debts that customers couldn't afford to repay.


So overnight, they stopped offering loans.


The financial crisis that followed cost the British economy over


?7 trillion in lost output - that's close to $10 trillion.


For the US economy, the cost hit a staggering $22 trillion.


So with traders now celebrating a record breaking run


on the Dow and other markets, have we really learnt


lessons from the mistakes of the financial crisis?


On Monday, new figures showed that consumer credit card debt in the US


had risen above its previous record, set in 2008, to just


In the same month unsecured consumer debt here in the UK


topped ?200 billion - that's $260 billion.


Again, the previous record was set in 2008.


So do the stock markets have it wrong or is this level of debt


Ann Pettifor is a Director at Prime Economics and was one


of the key voices at the time that said the crisis was coming.


Nobody was listening then, were they? No, they thought I was a bit


crazy actually. I had some rude comments. I kept being called


"Chicken licin" On social media. You saw it coming and you were analysing


the levels of debt that countries were exposed to. You weren't looking


at sub-prime in particular, were you? No. Just explain what you


thought would happen? I was working on the debt of the poorest countries


which is really small and I looked up and I looked at the debt of the


Anglo-American economies and realised that the overhang of debt


massively exceeded the income of those countries and people don't


repay their debts by selling their properties. They repay their debt


out of income and there wasn't enough income to deal with that.


Today, those levels of debt are even higher, global income, GDP is about


$77 trillion. Global financial assets are $225 trillion which makes


$1 trillion that Ben was talking about in consumer credit tiny in


proportion. Our real problem is we have had this mass jiff overhang of


debt, but income, which we repay our debt in terms of wages and so on is


shrinking. Today, for many of us, debt is very cheap. Interest rates


are so low and so actually, it pays to borrow in some senses. Right. Are


we in for another nasty shock? I think we are. Central banks have not


put up rates almost since the crisis, but they're going to at some


point. We don't pay Central Bank rates on our debt. We pay market


rates. And if you're running a business and you want an overdraft,


you gopbt get 0.25% on your overdraft. You would probably get...


Have banks learnt a lot of lessons and make sure that they are not


subject to bad debt again? The central authorities have ensured


they have more capital to shore up their banks, but mainstream banks


are peripheral in terms of the global economy. There is a lot going


on in the shadow banking system which we don't know and understand.


There is a lot going on in that area within China? Absolutely. There is


real concern about the level of debt there, the kind of debt within the


banking system in China and what that could mean if they have a


financial crisis? China is not a free-market economy. It is run by


the Communist Party and it is a top down economy and they do a lot to


manage their system. They will bail out their banks and we know that


they use capital controls to manage flows and so on and so forth. It is


hard to judge whether or not they will be able to manage it, but they


are being more proactive in managing in than central banks were before


2007-2008. Ann thank you for coming in and sharing your warnings acht


the time. So you went from the crazy economist to the one that got it


right? Yes. Who had ever heard the word, "Sub-prime" Before 2007? It


suddenly entered the dictionary. And quantitative easing. That one as


well. Plenty of them. Let's take a look at some of


the other stories making the news. The media giant Disney says


it will launch its own It will show movies,


TV shows and sports and will mean the end of Disney's current


distribution deal with Netflix. Some sports will also be removed


from its US TV channels. It comes as Disney announced a 9%


fall in profits for the three We'll be getting more


on this later in the show. The Australian bank accused of more


than 50,000 breaches of anti-money laundering laws has


admitted its reputation is at risk. It comes as Commonwealth Bank


of Australia reported record profits of more than US $7.8 billion


for the year to the end of June. The big safety scare in the European


egg industry mean Belgium's Parliament will interrupt its summer


break for a summer hearing. Ministers will have to answer


questions about why the country didn't act faster when it was found


that traces of a banned pesticide had been found in eggs which ended


up in several other European countries.


The United States says it is imposing tariffs on imports


It's the first case of its kind since Donald Trump became president


and raises fears of a trade war between the world's


So Monica Miller is in our Asia Business Hub in Singapore.


Monica, really, we're going to have a trade war about foil? Is that the


case? Well, yes. The US foil makers lodged a pedestrian tuition. They


say the foil makers are subsidised by their own country and they get to


sell their product in the US at low prices. The US Commerce Department


made a preliminary decision to tax Chinese imports that could range


between 16.5% and.81% based on the subsidies that the Chinese


Government gives. Now, US data shows that imports of foil from China last


year were worth almost $390 million. That's just, this is the first case


since President Trump took office and he did make repeated promises on


the campaign trail that the US would tighten trade against China to bring


back jobs. We will talk more about those.


Well, ten years on from the financial crisis,


This time those escalating tensions between the


That's shaken investors in Asia with markets mostly


The falls on US markets continued after President Trump warned


North Korea that they would face "fire and fury like the world has


never seen", if they continued with their attempts to build


a nuclear warhead that's able to hit the western US.


That's translated to an open like this across Europe,


mirroring that weaker close on Wall Street last night.


A raft of earnings of some middle-of-the-road players.


We'll talk more about those in a moment.


Well, as we've talked about, shares in Disney and Netflix likely


Earnings continue with media company 21st Century Fox


The Rupert Murdoch-led company will likely report


a rise in revenue, helped, of course, by a strong performance


Now, the company is also seeing strong growth in its domestic


But Fox is likely to be weighed down by its weak box office results.


What investors will be looking for is any updates


Now you may not recognise the name Mylan, but the drug company came


under intense regulatory scrutiny recently over the price of its


Now, the company will be reporting earnings, but what investors will be


looking for is comments on the falling price


Richard Dunbar is Investment Director


We want to update you on a story that's developing in France. The


mayor is talking about what happened earlier today where a BMW drove into


soldiers and the mayor said this is no doubt it was a deliberate act.


More detail coming through to us. Reports that this car hit soldiers


who were on patrol outside Paris. It says it injured six people. Two of


them were seriously injured. The vehicle just drove off after that


incident. That took place at 8am this morning. That's 6 o'clock GMT


in the northern western suburb of Paris. We'll get much more on that


for you and bring it to you here on BBC News. When we hear more, we'll


update you. The markets across Europe. They are


edging lower. Richard Dunbar is


Investment Director I know you were listening to our


conversation about the ten year anniversary. Your thoughts on that


and the decade we've experienced? Well, I'm hoping it is a quieter day


than it was this day ten years. I suppose at that time we didn't fully


realise the interconnectness of the financial world. We didn't realise


the implications to the borrowing that it had been attached to that


interconnectedness and we didn't understand fully some of the


sub-prime lending you've touched on and the other lending that had been


pursued. The domino-effect was quite phenomenal really. The eurozone debt


crisis started. It was just incredible, wasn't it, we couldn't


have predicted any of that? It was a freezing of the markets that we


thought were broad and deep. The wholesale market were many of the UK


and global banks were borrowing, moving away from borrowing from


customers to borrowing from the wholesale markets. Investors thought


the markets were broad and deep and would always be there, and quickly


the markets were turned. It has been about regulation and trying to put


right what went wrong there. We talked about the Disney Netflix deal


or no deal. Disney going it alone. We will see their shares being


volatile as investors try and work out what it means. It is great to


have a stand alone service, but then you end up having to subscribe to


every one of them? It is interesting. Netflix has been one of


the darlings of the US stock market. It has been leading the Nasdaq and


tech heavy index up and investors thought it was a one-way bet that it


could only get better and better for Netflix, but it is a bump in the


road for Netflix. It will be interesting to see how investors


react and that model isn't as bullet-proof as some investors


initially thought. All right, Richard, thank you very much. He


will return a lull bit later in the programme as we unpack some more


stories in the news at the moment in business.


We will get the inside track on the juicing business.


You're with Business Live from BBC News.


Global security firm G4S has announced increased revenue


and profits in its half yearly report The strong results come


despite an ongoing fraud investigation by the Serious Fraud


Theo Leggett has been looking through the figures for us.


Tell more about the results. They look pretty strong, 7.6% rise in


first-half profit compared to last year earned ?128 million from


continuing businesses. Important to say continuing, because it is in a


restructuring programme and is trying to get rid of some of its


subsidiaries. It is a global company and the biggest increase in profits


came from the US where it recently negotiated a contract for handling


cash with Walmart. That was up almost 19%, so solid results, except


in India and the Middle East where the monitor I is a nation and a fall


in the all price have taken their toll. The share price, down more


than 6%. Investors who have favoured this company, its share price has


risen a lot since the start of the year, they are not overwhelmed by


the results today. A brief word on the Serious Fraud Office


investigation. What does that mean for the business? It has been going


on since 2013, about an electronic tagging contract. Allegations G4S


was overcharging the government by charging for the tagging people who


had left the country, were in jail, or actually dead. That investigation


is ongoing. The company acquired a new contract for 25 million, links


to tagging earlier this year, the. This is a story you might agree


with. It is an anonymous story released to the Daily Telegraph from


a cabinet minister who wants to be anonymous. He says that he or she


believes stamp duty must be reformed because it is exacerbating the


housing crisis. Apparently it does save the rate of house moves is


reduced by one third because of the cost of stamp duty, just putting


people off from buying or moving up the ladder. It is creating a


mismatch in the market. More details on the live page.


You're watching Business Live - our top story.


Today's the tenth anniversary of the beginning of the credit crisis.


Banks are now in better shape of quarrelling is once again hitting


record levels, personal debt levels, record highs, and stock markets


soaring through new records and we are talking about whether it could


be the start another crisis. Thanks for your memories we will


talk about those in a few minutes. Let's now talk about the idea of


health. The idea of making yourself feel


healthier is something most people It can mean anything


from eating better to exercise It's such big business


that the global wellness economy is now worth $3.7 trillion,


according to the US based One business tapping into the trend


is London based Nosh Detox which produces freshly made,


non-pasteurised juice diets as well as detox


and nutritional plans. Geeta Sidhu-Robb is


the founder of Nosh Detox. It is nice to see you. Welcome.


Before we get into the business itself, how did you start this? I


understand you used to be a lawyer. Corporate. Telecoms, tax, really


corporate. My first child, I think for many mothers, you get derailed


when you have children. My first child was allergic to vaccinations


and the second and third he ended up with patches of eczema and then


covered in it and when he went into remission with the eczema, he had


asthma, said he was either scratching himself and leading every


night, or not able to breathe. He spent many days in hospital in his


first year which was awful. At the end he got cardiorespiratory arrest


and stopped breathing and died in my arms. We ended up in a coma, in


intensive care in St Mary's, who were lovely. I sat there looking at


this, and I was so young, and he was about this big with tubes everywhere


and I thought, never again. There was no medicine, nothing to treat


him with. What you treat eczema and asthma? It is supposed to be


incurable. I thought nothing would help him. When he finally woke up, I


took him out and said, we are never going back. I went searching for


alternative ways and I am a lawyer so I know how to read boring


information and pull a fact. Have you fixed your son? That is


debatable because he is a teenager. He is completely eczema free and


100% asthma free. He has not had asthma since I do not know when.


That is through what he is eating? 100% what he eats, when and how Pete


and the way he approaches nutrition. He is the only child at university


who cooks all his meals in the salad! We talked about detox in the


introduction. It is a misused word. Detoxes is going cold turkey or


needing treatment for alcohol addiction. It has been used by the


nutrition industry, everything is detox. Ultimately you are offering


healthier eating. I am yelled at a lot but the reason the company came


around I wanted to call it Nosh, which is natural and healthy and


then had to call it Nosh Detox. We should be looking at what we eat


which impacts how we are, we look, wrinkles, skin quality, everything


is about what goes in your mouth. Detox has a bad name because of the


emotional connotations of alcoholism and things like that. Doctors,


scientists, say... How would they know? They do about three hours


nutrition in their medical career. There has been research and analysis


into this process of detox and many argue it is not, there is no


scientific basis to say it is the truth as such in the sense it will


cure eczema or asthma. But you are what you eat, it will help you and


make you healthier, perhaps, do you see what I mean? Many people look at


you and think you are making a massive industry and profit out of


something that is not necessarily realistic. It is such a shame


because what happens is I do not have the big budget to fight a


pharmaceutical company who will say it is scientifically proven to work


like this. If you drink a bottle of vodka... It is academics... If we


spent more time eating better and living better, we would spend less


time using up NHS resources. We should look at a diet and the way we


eat and live long before we go anywhere near a doctor. I look at


people who look really tired, they are grey and obese and nobody is


saying what you eat doesn't matter. I think most people would agree you


are what you eat and what you eat is important. What would be the


argument against it? I think they are saying you do not replace one


with the other. I think we do much. We should eat less. But we are


talking about medicine and eating. I say wellness and illness are


different things. There is a huge category of wellness way before you


get sick. ! And asthma, supposedly incurable but if you support the


body's natural process, what will happen is you would get so much


better and understand what to do about illness. We look at businesses


and I know celebrity endorsement is important because that will get you


headlines and get people to notice. Are we gullible? We see a celebrity


uses this, but if you look at the peer review and evidence, we get


blindsided by the celebrity. We are careful because around 24% of my


business is global household names that I make everybody pay, because


it is how we earn a living so we cannot talk about who is on the


database. Celebrities are obligated to look amazing and functioning.


Filming is hard work, starting at 4am and going to ten o'clock and you


cannot afford to get sick. Celebrities look for the newest and


most effective ways to look good and feel good and that is why we should


follow them, not just because they are a celebrity. When did a


celebrity last look tired and horrible? We know this because on


social media and anywhere, they will look beautiful, photographs, great


make-up. You meet them in person and they look amazing. They look amazing


all the time. I don't know, we get a lot of celebrities. It depends how


and when you meet them. My programme at 5am, they go to make up. How


accessible is what you are finding and providing in the marketplace to


those who really need it, the mum who has the child that has bad


eczema, and cannot afford what you are supplying. I am aware of that


because I have been a single mother and my business was set up to feed


my children, because there is a ten year gap between learning and


applying. We give away so much free information, free books, recipes and


ideas, everything. It is committed to helping people, Nosh Detox, not


just because you pay us. Really nice to see you. So much to talk about


that time is tight. A very good discussion. We can throw


out some of the memories. People getting in touch about the


global crisis. Matthew said he graduated after the crash and big


problems for employment. Pamela said she was made redundant and went back


to study and is happy in a new career so a good ending for Pamela.


Goodbye. Good morning, it is a wet start


across many parts of


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