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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