12/12/2012 World Business Report

Godfather of world music. A those are the latest headlines.

Now, for the latest financial news, with World Business Report.

Hello, and welcome. You are with World Business Report. The

headlines: Billions more dollars could be deployed today as the

United States Federal Reserve continues its efforts to boost

growth. What downturn? Success continues for Zara, and its owners,

despite Europe's depression. Singapore Airlines off loads its

49% stake in Virgin Atlantic to America's second biggest carrier,

for $360 million. Good to have you with us. Since the

financial crisis hit in 2008, the US Federal Reserve has spent

trillions of dollars propping up the American economy, and despite

that spending unemployment remains stubbornly high, at 7.7%. When

officials wrap up that latest policy meeting today, they are

expected to approve another round of bond buying. They will pump

billions more into the US economy and keep interest rates low.

When America's Central Bank talks about freeing up money in the

economy, this is where the impact is felt. This community bank in New

Jersey to lend money to small businesses and homeowners. When

interest rates are low, it means more can borrow. That has given a

real boost to the local economy. People were scared of the economy,

scared of the fact that growth was not substantial. Now they are

starting to see that there are opportunities in the market place.

Money is relatively cheap, and they want to go out and make investments

in the economy, knowing that the US economy is going to continue to

grow in the future. I believe that the Federal Reserve's low interest

rate stance has done all the things that they wanted it to do. One of

those things was reviving an ailing housing market. Local property it

developer Peter saw his business grind to a halt during the

recession. But with a low interest rates and easier lending, every

dollar counts, so if I cannot find a property for a good price, I

cannot buy it. If I cannot get a low interest rate loan to develop

his property, I cannot do it. What is completely on our side is that

the mortgage rates are at the bottom right now. But there is

light at the end of the tunnel. While prospects are brighter, that

confidence rests on what the Federal Reserve does next.

Operation Twist is planned to swap short-term debt for long-term debt,

to keep interest rates low. It runs out at the end of the year. It is

already committed to more quantity of easing. That should keep rates

low off for longer, but many have questioned its effectiveness, and

its impact on inflation. The Federal Reserve's policy of keeping

interest rates low has helped to kick-start the economy, and means

that many Americans, like those here in Ingall would Cliffs, are

feeling better off. But that could be short lived. At the end of the

year, a package of tax cuts and spending rises comes into force,

and that has the power to plunge America back into recession. That

is something the Federal Reserve cannot control.

And it is that meeting that is dominating markets. We will look at

the numbers later. But these, as you are aware, are buried lean

times for many European retailers. With unemployment high in Europe to,

and the future looking uncertain, many shoppers are staying home. But

one retailer continues to thrive. That is Inditex, the Spanish owner

of the tsar and other brands. Its profits were up by one-third in

September, and its latest results, released in a few hours, should be

very strong as well. Sea and you look unveiled on the

catwalk of any ready-to-wear fashion show in London, Paris or

New York, and the chances are that ten days later, it will be here, in

the windows of a Tsarist off. Not only are its designers and cutters

quick off the mark when it comes to the latest fashions, but Zara or

change has the stock in its stores almost once a fortnight. This

attempts fashion lovers to pop in regularly to see what is new. That

is the appeal of fast fashion. But it takes a lot of organisation to

Porlock. Zara is Meek -- is unique in still controlling a significant

production of its control in house. It can respond to what happens on

the shopfloor. On the other hand, managers are trained to actually

feed back what is working and what is not working. It is an immense

feedback loop that goes back to production, and there is a lot of

flexibility to respond to what happens on the shop floor. Zara is

the largest in the stable of brands owned by Spanish Fern Inditex. It

has 5,700 stores worldwide, and is pushing even further into China,

Latin America and India. Sales have increased by 7%, showing that

Inditex is still managing to grow its business in recession-hit

European markets like its homeland, Spain. Obviously unemployment is

high, especially in Spain, but there is still a large number of

people working and spending money. Has our is able to succeed where

others cannot, because of the weight it reacts to sales and

problems in the high street. -- Zara is able to succeed. It can get

stuck in very quickly. Inditex's chief executive says that to run

his last fashion operation, he keeps five fingers on the customers

and another five on the factories. But with ever more customers to

cater for, and ever more clothes to bridges, will the boss had enough

fingers to go around? After weeks of speculation,

Singapore Airlines has sold its stake in Virgin Atlantic. As

expected, and the buyer is the US- based Delta Airlines. So, the deal

is done at last? It is a done deal, and Singapore's

flag-carrier offloaded its entire 49% stake in Virgin Atlantic to

America's second biggest airline. Dolled up will be paying $360

million in cash for the entire state. -- Delta Airlines will be

pain. The deal may not be a great one for Singapore Airlines, because

it paid about $970 million in 1999 to buy from Sir Richard Branson,

and if you did the mathematics, that is over $600 million in lost

from its initial investment. But the struggling carrier needs the

cash infusion, after first-half net profit fell by 30% from last year.

The outlook was looking quite bleak for Singapore Airlines, as the

eurozone debt crisis continues to impact global business confidence.

For its part, Singapore Airlines says it is selling its stake duty

increased competition in the Asian market. As for Delta Airlines, it

took advantage of the opportunity to expanded transatlantic network.

Virgin and Delta Airlines both said the deal would allow them to

overcome slot constraints and offer more flights from Heathrow Airport.

But it is not a done deal, because it still requires regulatory

approval from both the US and the European Union. If it is smooth

sailing, it is expected to be approved by the end of next year.

We will squeeze in some other business stories for you. Microsoft

is increasing the output of its Surface tablet computer, and says

it will sell the device in more stores. Since the law to end-

October, it has so far sold a Surface on mind and to rid its own

stores, but from today, the US chain store Staples will start

selling them as well. Other stores will be added in the coming months.

A oil ministers from OPEC meeting DNA today. Usually they squabble

over oil production targets, but today they are also discussing who

will be the grid's next Secretary General. OPEC is struggling to

agree on a replacement for Libyan Abdullah al-Badri, who has been in

the job for five years now. Saudi Arabia, Iraq and Iran are all

pushing Darren candidates. We will be getting the latest

reading on the British labour market in the next few hours. The

number claiming unemployment benefits is expected to have risen

by 7,000 in November, adding to the rise of 10,000 in October. The

unemployment rate is expected to have remained at 7.8% between

August and October. The markets in Asia are having a

good session again today. This is actually leading to the longest run

of winning streaks for Asian markets in its three years. It is

quite something. Japanese factory orders and machinery orders