16/05/2012

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:00:22. > :00:27.The headlines: The price of democracy with Greek membership of

:00:27. > :00:36.the eurozone hangs in the balance. Widespread reports of the FBI

:00:36. > :00:42.launching an inquiry into $2 billion loss at JP Morgan. Beat

:00:42. > :00:52.India in intervention by the bank in the currency market. The markets

:00:52. > :00:54.

:00:54. > :00:58.get a boost. Another election is on the cards for Greece after nine

:00:58. > :01:03.days of failed Nicosia Asians to form government. The leading

:01:03. > :01:08.parties will now hold talk for a caretaker government before a fresh

:01:08. > :01:18.election. It means further uncertainty for people and

:01:18. > :01:19.

:01:19. > :01:24.investors. It may determine the fate of the eurozone. The election

:01:24. > :01:30.will take place in the middle of June. It's a critical month for the

:01:30. > :01:40.eurozone? And salute the point We see Spanish bonds rising to the

:01:40. > :01:41.

:01:41. > :01:46.critical level of six %. We see stress been peripheral markets. We

:01:46. > :01:54.also see the anti- bail-out party support gathering momentum. That

:01:54. > :02:00.may in effect spell the end of the Greek membership to the eurozone.

:02:00. > :02:06.Can the authorities prevent this contagion? Exposure to Greece is

:02:06. > :02:11.manageable but not easy. The big thing is, can may prevent the

:02:11. > :02:18.stress going throughout the eurozone especially with Spain.

:02:18. > :02:23.the big picture, focusing on Greece, the anti- bail-out parties, some

:02:23. > :02:28.argue they will vote on whether they will stay in the eurozone.

:02:28. > :02:34.Those parties, if they were to get into power, what do they hope to

:02:34. > :02:40.achieve? They do not want to exit the eurozone. They want some middle

:02:40. > :02:46.ground? Are think so. They will bet that the authorities do not want to

:02:47. > :02:51.see Greece exit the eurozone and potential chaos that would him by.

:02:51. > :02:57.They want to remain but see the softening of the bail-out

:02:57. > :03:04.conditions. The Incas hardly dried on the bail-out deal. These

:03:04. > :03:11.tortuous negotiations to lead to the stage mean that they would not

:03:11. > :03:16.ease out easily. They were no sign after the meeting between Angela

:03:16. > :03:23.Merkel and Francois Hollande to even broker us off Dean of these

:03:23. > :03:30.measures. They were both together on this. They are concerned that if

:03:30. > :03:35.they soften stand on Greece, that may throw up a can of worms in

:03:35. > :03:40.terms of a contagion within the eurozone. It may set a bad example.

:03:40. > :03:45.They do not want to do that. They want Greece to take their medicine

:03:45. > :03:51.to remain in the eurozone. Brief fling, what do you think will

:03:51. > :03:57.happen? We will have another election. After that, where will we

:03:57. > :04:01.be? Will they exit the eurozone? Potentially indications are that

:04:01. > :04:08.the anti- bail-out parties may gather Waltzer port. If they do

:04:08. > :04:14.manage to put together a coalition, I think the risk is that we may see

:04:14. > :04:18.authorities cut off the current bail-out and not lend any money to

:04:18. > :04:24.the Greek banks and the banking system would collapse forcing an

:04:24. > :04:32.exit to the eurozone meaning they would need to prevent that

:04:32. > :04:36.contagion from spreading. Needless to say we are on the case here with

:04:36. > :04:43.all of the details. On Tuesday there was widespread reports that

:04:43. > :04:49.the FBI will inquire JP Morgan following revelations they suffered

:04:49. > :04:55.their $2 billion blunder. They have not said it yet but it's widely

:04:55. > :05:01.reported that the FBI has begun investigating the huge loss at JP

:05:01. > :05:07.Morgan. That is significant because the at the Ida's criminal

:05:07. > :05:14.investigations. The first hint that some rumbling may be involved. It

:05:14. > :05:24.may be just a routine precaution. All this came hours after the boss

:05:24. > :05:30.of the bank faced shareholders. It was not a stormy affair. He

:05:30. > :05:36.apologised profusely and saw off a motion that may have challenged his

:05:36. > :05:42.authority by splitting the role of chairman and chief executive. The

:05:42. > :05:48.biggest container ship group will report a slide in earnings. The

:05:48. > :05:54.profits have halved in the trading year. The downturn means fewer

:05:54. > :05:58.people are buying goods and shipping them around the world. Too

:05:58. > :06:04.many ships means the Giants of the shipping world have taken on a

:06:04. > :06:14.price war between Asia and Europe. Possibly the worst timing as fuel

:06:14. > :06:21.cost is increasing and the global economy is weakening. These ships a

:06:21. > :06:27.slow trying to save fuel. Here at this exchange in London, the index

:06:28. > :06:34.which measures the cost of shipping, coal, iron ore and rain is down to

:06:34. > :06:39.its lowest level in 25 years. With more ships coming, experts say the

:06:39. > :06:46.rates that set to stay low meaning staging a rebound will be difficult

:06:46. > :06:50.for this industry. No matter how many container ships try to

:06:50. > :06:55.diversify and cut costs, almost all of them have awarded more ships to

:06:55. > :07:02.be built before this financial crisis. They are now expanding

:07:02. > :07:06.their fleets but with less cargo. It will be a very long slog. Its

:07:06. > :07:13.overcapacity. It's across the industry. There are many ships

:07:13. > :07:19.coming and that is slowing down. In the next two years it's a big. To

:07:19. > :07:25.see if many will make it or not and many companies are in trouble with

:07:25. > :07:31.bankruptcy is forecast. It's a cyclical industry. This boom and

:07:31. > :07:38.bust has long been a bugbear. It's a question of the right decisions

:07:38. > :07:41.at the right time and how you operate through the bad times.

:07:41. > :07:48.supply of ships in excess it will take a long time for there is sheet

:07:48. > :07:54.in lines to close the line between supply and demand. Many may put

:07:55. > :08:00.their prices up by $100 per container. But it needs to work in

:08:00. > :08:03.the favour of the companies and this will be very difficult. The

:08:03. > :08:12.Indian Central Bank has intervened in the currency to prop up the

:08:12. > :08:21.rupee. Explain what has happened here. Why has the rupee been

:08:21. > :08:31.propped up? According to the dealers, this intervention was

:08:31. > :08:32.

:08:32. > :08:40.conducted by the state run bank to the tune of $500,000. This has

:08:40. > :08:47.pushed the rupee higher. There's no doubt about her Central Bank being

:08:47. > :08:56.able to defend the rupee as the economy is impacted by the were

:08:56. > :09:02.some global environment. Also the widening budget deficit. The bank

:09:02. > :09:08.is wasting resources in putting up -- propping up this currency

:09:08. > :09:18.because it may go to the level of 55 against the US dollar which

:09:18. > :09:23.favours the exporters. Some people say the Reserve Bank as close to

:09:23. > :09:30.$300 billion in reserves. They also use other measures to convert

:09:30. > :09:40.foreign currency to buy bonds to keep the currency from the

:09:40. > :09:41.