Browse content similar to 02/08/2011. Check below for episodes and series from the same categories and more!
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Now it is time for World Business Report. | :00:12. | :00:16. | |
A deal is struck on Capitol Hill but that does not mean that the US | :00:16. | :00:21. | |
is out of the woods. They still have a huge deficit to consider and | :00:21. | :00:25. | |
the rating agencies are lurking in the wings. | :00:25. | :00:34. | |
Japanese markets on the alert for a possible intervention in the | :00:34. | :00:36. | |
currency. Asian stock markets are on the | :00:36. | :00:42. | |
downturn as investors digest more weak economic data from the US | :00:42. | :00:52. | |
:00:52. | :00:54. | ||
despite the debt agreement. As many have predicted, the debt -- | :00:54. | :01:02. | |
deadlock over the US debt ceiling was broken out the last minute. | :01:02. | :01:06. | |
However, as the fears of the default on US debt have receded, | :01:06. | :01:11. | |
America faces the task of dealing with its deficit. Rating agencies | :01:11. | :01:15. | |
have not made a comment on the deal and their threat to downgrade | :01:15. | :01:21. | |
America's credit rating remains. America's politicians may have | :01:21. | :01:25. | |
averted one crisis but the country is unlikely to default on the steps | :01:25. | :01:34. | |
Saines to a deal that would increase borrowing. -- default on | :01:34. | :01:39. | |
its debts as a result to a deal. will avoid default. But they could | :01:39. | :01:44. | |
be another problem around the corner. America still owes | :01:44. | :01:49. | |
trillions of dollars and faces losing its triple A credit rating. | :01:49. | :01:54. | |
That would be bad for Wall Street and the US economy. This would be | :01:54. | :01:58. | |
very bad for a number of reasons. The credibility and standing of the | :01:58. | :02:03. | |
US on a global basis. Despite the spectre of a credit downgrade and | :02:03. | :02:08. | |
rising interest rates, investors are still eager to buy US debts in | :02:08. | :02:14. | |
the form of Treasury bonds. The US needs to keep the confidence of | :02:14. | :02:18. | |
investors. The US relies heavily on overseas investors to finance its | :02:18. | :02:25. | |
budget deficit. If those investors find the US to be a poor place to | :02:25. | :02:31. | |
invest, they will lose faith and go home. America is still the most | :02:31. | :02:36. | |
powerful global economy, the holder of the world's reserve currency. | :02:37. | :02:41. | |
But with these unsustainable debts, the fight over cutting spending and | :02:41. | :02:46. | |
increasing taxation is only just beginning. | :02:46. | :02:50. | |
The strength of the Japanese yen has turned into a problem for the | :02:50. | :02:53. | |
government there as they struggle with reconstruction after the | :02:53. | :02:58. | |
earthquake and tsunami in March. On Monday, the currency traded at a | :02:58. | :03:02. | |
record high. There are concerns about a possible intervention to | :03:02. | :03:06. | |
force the currency down. The finance minister of Japan has said | :03:06. | :03:12. | |
that Tokyo is in close communication with eurozone and US | :03:12. | :03:15. | |
counterparts in relation to the strength of the yen. And what have | :03:15. | :03:21. | |
you been hearing? Certainly there are reports in Japan that the | :03:21. | :03:25. | |
government is considering some sort of intervention. There is the | :03:25. | :03:30. | |
possibility that when the Bank of Japan convenes later this week, it | :03:31. | :03:36. | |
will expand an easing policy to purchase assets, a form of quality | :03:36. | :03:42. | |
to be easing. The government is not confirming those reports. The | :03:42. | :03:46. | |
finance minister has said that it is desirable that the market rate | :03:46. | :03:50. | |
reflects the economic fundamentals. He says that when you look at it | :03:50. | :03:55. | |
like that, the yen is stronger than it should be. The problem is for | :03:55. | :04:01. | |
Japanese companies. At the moment, the currency is trading at 77.5. On | :04:01. | :04:08. | |
average, companies have been hoping for betting and that the yen would | :04:08. | :04:14. | |
trade at 82.5. That underlines the quality of exporters. Why has the | :04:14. | :04:17. | |
currency been so strong considering all the troubles we have seen in | :04:17. | :04:22. | |
that country over the last few months? There are a number of | :04:22. | :04:27. | |
factors. Japan is being seen as a safe haven. Even if a deal is done | :04:28. | :04:32. | |
on the debt in the US, there are signs that the US economy is | :04:32. | :04:36. | |
slowing down. Companies that want to diversify their holdings are | :04:36. | :04:41. | |
looking at Japanese bombs. The disaster in March, the earthquake | :04:41. | :04:46. | |
and tsunami actually serve to strengthen the yen. Rebuilding will | :04:46. | :04:49. | |
cost hundreds of millions of dollars and that money is going to | :04:49. | :04:54. | |
have to come from Japan pulling out of its foreign investment abroad. | :04:54. | :05:00. | |
That has helped to make the yen stronger as well. That is what is | :05:00. | :05:06. | |
happening in Tokyo, but what about the Asian markets? Our | :05:06. | :05:13. | |
correspondent is in Singapore. It is a negative day for most of | :05:13. | :05:22. | |
the regional markets. Investors are not focusing on the debt ceiling | :05:22. | :05:28. | |
agreement passing in the US House but on this native US data fuelling | :05:28. | :05:33. | |
fears that the economy might be sliding back into recession -- | :05:33. | :05:43. | |
:05:43. | :05:44. | ||
negative. And these markets are being shared by -- scared by the | :05:44. | :05:48. | |
sell-off. Analysts are saying that investor sentiment has shifted from | :05:48. | :05:52. | |
focusing on the debt issue to the states of the American economy. | :05:52. | :05:57. | |
They will also examine the US monthly jobless numbers this Friday. | :05:57. | :06:02. | |
The economy generated only 1,000 -- 100,000 jobs in July and that is | :06:02. | :06:09. | |
not enough. Barclay's, the world's sixth- | :06:09. | :06:15. | |
biggest bank, has announced its own in today. Its bond trading | :06:15. | :06:19. | |
operations have taken a big hit because of the European sovereign | :06:19. | :06:24. | |
debt crisis that we have seen over the past few months. | :06:24. | :06:33. | |
Barclays has gone from being -- has become the world's sixth largest | :06:33. | :06:41. | |
bank. It is expected that they will announce profits of $4 billion | :06:41. | :06:47. | |
compared to $6.4 billion last year. They had to set aside money mis- | :06:47. | :06:51. | |
sold a law and insurance. Other aspects of its investment arm have | :06:51. | :06:56. | |
been hit by volatility in a European bond markets. Barclays is | :06:56. | :07:01. | |
exposed to European sovereign debt. They hold a $2 billion worth of | :07:01. | :07:09. | |
government bonds in Spain and others in Portugal and Ireland. | :07:09. | :07:16. | |
will see banks like this and German banks taking cuts on their | :07:16. | :07:19. | |
expenditure. The concern for Barclays is going to be their | :07:19. | :07:24. | |
particular exposure to Ireland, Portugal and Spain. If those | :07:24. | :07:29. | |
companies -- countries in any shape or form renegotiate their debt... | :07:29. | :07:34. | |
With these pressures facing the Bank, there is talk of a possible | :07:34. | :07:38. | |
split up between its risky and unprofitable international | :07:38. | :07:43. | |
investment banking Into -- investment banking operations and | :07:43. | :07:49. | |
is risk free and profitable UK retail operations. A split up of | :07:49. | :07:53. | |
Barclays would be made more likely if the UK government goes ahead | :07:53. | :07:57. | |
with ring-fencing the money of retail banking operations so they | :07:57. | :08:02. | |
cannot be lost in investment banking operations. That would | :08:02. | :08:07. | |
result in some major structural changes. There are already rumours | :08:07. | :08:11. | |
that the investment bank as a whole might be split off if the | :08:11. | :08:17. | |
government is too harsh in terms of this ring-fencing of capital. | :08:17. | :08:21. | |
Analysts say Barclays will try very hard to avoid a break up but to | :08:21. | :08:25. | |
restore its profits, it may not to slim down both its foreign holdings | :08:25. | :08:34. | |
and investment banking operations. Ford is recalling 1.2 million pick | :08:34. | :08:39. | |
up trucks in the US and Canada over fears that their fuel tanks could | :08:39. | :08:49. | |
:08:49. | :08:53. | ||
fall off and start fires. It is feared that the straps holding the | :08:53. | :08:56. | |
tanks could be corroded by road salt. | :08:56. | :09:02. | |
The Harry Potter franchise has lost none of its magic with the final | :09:02. | :09:06. | |
film rising to the top spots in the international box-office ratings | :09:06. | :09:16. | |
:09:16. | :09:17. | ||
this weekend. The American markets closed down | :09:17. | :09:22. | |
low over worries about the debt ceiling and at the prospect of a | :09:22. | :09:28. | |
downgrade from credit rating agencies. That's all we have time | :09:28. | :09:38. | |
:09:38. | :09:47. | ||
for on BBC World Business Report. Thank you for joining us. | :09:47. | :09:53. | |
In the UK, a report from the Trade Unions Congress suggests that more | :09:53. | :09:57. | |
than 2000 charities across England have seen their funding cut by | :09:57. | :10:02. | |
local councils. More than �10 million has been cut from the | :10:02. | :10:06. | |
charity's budget but the final figures are likely to be higher | :10:06. | :10:11. | |
because some charities have not yet finalised their savings plans. | :10:11. | :10:17. | |
An autograph book containing signatures from RAF pilots who took | :10:17. | :10:21. | |
part in the Battle of Britain went up for auction today. Winston | :10:21. | :10:27. | |
Churchill referred to the art of that as a book of heroes. Never in | :10:27. | :10:34. | |
the field of human conflict was so much owed by so many to so few. | :10:34. | :10:40. | |
Winston Churchill said it was their finest hour. Today, a unique | :10:40. | :10:43. | |
memorial of the Flying officers of the Battle of Britain does under | :10:43. | :10:48. | |
the hammer. An autograph books signed by 107 men as they returned | :10:48. | :10:55. | |
from duty. Many of these people never survived the war. To have | :10:55. | :11:02. | |
their signatures is very unusual. Page after page, named after name, | :11:02. | :11:08. | |
some of the true heroes of the Second World War. Not least the man | :11:08. | :11:12. | |
who is said to have found the book would never he cut from a chair in | :11:12. | :11:20. | |
his mess hall. The story is immortalised on the silver screen. | :11:20. | :11:24. | |
Despite losing two lanes in flying expeditions, he returned to duty | :11:24. | :11:30. | |
and flew in the battle. When told about the book, Winston Churchill | :11:30. | :11:38. | |
described it as not a book of names but a book of euros. | :11:38. | :11:46. | |
-- heroes. Breakfast is next. And we will be | :11:46. | :11:54. | |
looking at one of Britain's biggest secret gardens. | :11:54. | :11:58. | |
This is BBC World News. The headlines: The US House of | :11:58. | :12:03. | |
Representatives has voted in favour of an agreement that would raise | :12:03. | :12:13. | |
:12:13. | :12:14. | ||
the debt ceiling. The legislation was passed by 269 votes to 161. The | :12:14. | :12:21. | |
tension over future cuts and possible tax rises are due to | :12:21. | :12:25. | |
intensify. These new members of Congress, these so-called Tea Party | :12:25. | :12:29. | |
people, believe in smaller government and lower taxes and they | :12:29. | :12:34. | |
are extremely influential. They are shaping this debate. Bear in mind | :12:34. | :12:37. | |
that there are still large decisions to be taken about the | :12:37. | :12:42. | |
nature of these cuts that have been agreed upon. That debate will | :12:42. | :12:46. | |
continue over the months ahead. UN Security Council has held | :12:46. | :12:50. | |
emergency talks over the situation in Syria following reports that | :12:50. | :12:54. | |
tanks have been shelling residential neighbourhoods. | :12:54. | :12:59. | |
The African Union has announced it will hold a summit to plait held | :13:00. | :13:05. | |
for victims of Somalia's drought. The crisis is spreading across the | :13:05. | :13:10. | |
country's southern regions. 25 people found dead in a boat that | :13:10. | :13:14. | |
landed on the island of Lampedusa in Italy were killed by | :13:14. | :13:18. |