04/06/2012 World Business Report

Now it is time for World Business Report.

Another turbulent week on the markets as investors fear the

European crisis could drag down the global economy.

Asian stock markets fall as investors remain worried about the

eurozone break up. There is a sharp slowdown in China.

A criminal or a scapegoat was met Jerome Kerviel is back in court

asking the questions back... -- scapegoat?

Economic data from China and India is adding to fears of a slowdown.

In Europe, a report suggests that Europe is pushing Spain to accept a

bail-out to tackle its crisis. Let's check the Asian markets. I

will go to the Singapore office. This is the first chance they had,

of course, to react to those jobless figures and they don't like

it, do they? Absolutely - a big disappointment.

69,000 jobs created in the US in the month of May is a very big

disappointment. Now it goes to show, according to analysts, that the US

economic recovery might be shifting into reverse. There is more

evidence that China's economy continues to slow down. There is

also a nightmare scenario considering a eurozone break up.

Markets of the world are in-cell mode.... Indices are hitting a 28-

year low. Hong Kong stocks are retreating back to 2012 lows. No

Asian market has been spared from the downturn. One analyst I spoke

to said the only way for markets to bounce back it is for the US Fed

Reserve to implement another quantitative easing and for China

to announce a stimulus package for their economy, which could slow

down between 7.5 -8 % this year. Investors are moving to bonds and

buying back gold, causing prices to spike 4% up, or $50 per ounce.

Talking of those fears, the yen, often perceived as a safe currency

is retreating from its highs against the dollar?

Yes, we are seeing the euro falling against the dollar and the Japanese

yen. You also have the price of oil below $100 per barrel. That is a 16

mum for a low. -- 16-month low. Analysts are saying to keep you

have money in cash or in your savings account.

I'm speaking to an investment manager. Good morning.

Let's return to those job figures. They were much worse than expected.

Are they really just a confirmation of what markets and investors were

fearing? We had a fright when figures for April came out one

month ago. Markets got a little carried away with the buoyancy of

the US economy in the first quarter. It was receiving some strength on

the back of better demand... The markets had been overestimating the

strength of the American economy. To some extent we shouldn't be

surprised that the second half of this year will be more difficult

for the US economy than the first half. The problem is there is a

huge monetary and fiscal stimulus already propping up the US economy.

It doesn't grow more than 1.1% - how will it grow if, for example,

next year government spending in the US will be cut severely because

the deficit is too high? President Barack Obama was very keen to point

out that these problems were caused by the eurozone. Is that there?

That is not fair. It is unlikely that you s employers were scaling

back on recruitment divisions -- US employers were scaling back on

recruitment decisions because they were reading about the eurozone in

the papers. We have the European Central Bank and the Bank of

England - it seems they are running out of ideas. There is very little

they can do. You talk about quantity of easing, we have had two

rounds of that and it seems not to have worked to the extent they had

hoped. Is there anything they can still do? Yes, the effectiveness of

quantity of easing is wearing out visibly.... In Europe, the Spanish

government would very much prefer direct aid being provided from the

rescue funds to its banks without the country itself having to

undergo the humiliation, if you want, of an austerity package

imposed by the troika. They also want the ECB to purchase government

bonds, that is quantity of easing. -- quantity of -- quantative easing.

Up Jerome Kerviel is appealing against his sentence today.

He claims he was made a scapegoat. Jerome Kerviel was found guilty in

October 2010 of single-handedly mastermind in one of the biggest

rogue trading scandals in the history of banking. --

masterminding. He says he doesn't know why this case was brought

against him and not Societe Generale as a whole. He repeated

his claim that his superiors knew what he was doing and the bank also

knew what he was up to. The court heard that as a trader he was

supposed to hedge any big deals with an almost equivalent bet on

the opposite outcome. It emerged that he did not make those covering

Betts's and by 2008 he had staked nearly 50 billion euros of Societe

Generale's money without its knowledge. Whatever the outcome,

many banking analysts say the case has been a wake-up call for the

sector. There have been rogue traders in the past, there will be

rogue traders in the future. Risk controlling needs to be tightened

up, particularly in the areas that Jerome Kerviel was working in.

There have been lessons about separating the back office from the

front office and making sure the people who check and approve the

Trades are not under the control of the people who are doing the trades.

How has the Bank cope with this huge loss? On the day it was

announced they raised a lot of money from their shareholders to

plug the hole. That actually put them in reasonably good shape for

the crisis that came later. What happened later in 2008 across the

banking sector was much worse than the rogue trading at Jerome Kerviel

left behind. Societe Generale has said that it has learnt lessons and

reinforced its control systems. His appeal hearing is expected to last

until the 28th of June. In Spain, employment figures are

revealed. At close to 25%, it has the highest jobless rate in the

eurozone. On Friday, official figures confirmed that unemployment

across the nation's using the euro hit 17%. The figure has heightened

the policy split in Europe, with Germany pushing for a continued

austerity and France demanding Japanese market. Sony has been hit

by concerns that it has failed to react convincingly to products by a

Apple and said son, despite releasing its own tablet computer