25/06/2013 World Business Report

infection. Those are the latest headlines.

Central bank Chiefs blame investors for market turmoil as they herald

the end of easy money in China and the US.

Brazil's President unveils a referendum and big spending plans

after days of protests throughout the country.

In just a moment we will have more on those protests in Brazil, but

first this our one of America's top central bankers has called them

feral hogs, investors to risk causing turmoil in the financial

markets. Last week they sparked a sell-off around the world and on

Monday Shanghai sort of -- Shanghai's stock market was hit by

the sharpest fall for four years. The violent reactions followed

signals from the US and China but the era of cheap and plentiful

money that followed the financial crisis is now drawing to an end.

Our correspondent has the latest from Shanghai. What is happening on

the markets in China today? More pain following those large

Woolworths yesterday -- those large falls yesterday. The market is

definitely seeing and reading things more and more Cloverleaf

day-by-day. This is now the 5th straight day of falls on the

Shanghai composite benchmark index. What triggered this last week were

these reports of a credit crunch, China's very own version of what

happened during the financial crisis a few years ago. There are

headlines today talking of China's Frankenstein economy. The shock

last week that China now may be ending the Iraq of easy money,

pouring in liquidity and following the shock that it may not be able

to. It cannot wean its economy of the supply of easy money. All this

really highlighting the very difficult position that China's

economic policy makers are now in. As you say, the central bank

sending out this clear message that the era of cheap money is now over.

But his is also part of a plan to try and read out these poorly-

performing days in China? The so- called shadow banking industry?

Everybody now recognises that there is a real risk. China's credit

bubble has grown up to an extraordinary level over the last

five years. Much of it is off balance sheet in the shadow banking

section. People have been saying for a long time that it is very

difficult to assess the real risk. Nobody can really have a clear idea

of the quantity of Credit but also the quality of it as well. It was

that sort of accounting declared debt being shifted to places where

it was much harder to get a sense of it and it caused the global

financial crisis. People are beginning to worry that we could

see something similar unwinding here in China. The government is

trying to get on top of it. It is making that very clean some of its

policy statements. The difficult thing is that it is the model of

China's economic growth. Pouring big money into infrastructure

projects has kept the economy ticking along. They have to move

into something more sustainable, Aiken -- an economy based on

consumer spending for example. The transition will be difficult and

painful. It will be very pain on the market does continue

Let's move on to another of the top stories. One of the world's most

famous gun makers access it has been a record year. Smith and

Wesson is expected to report bumper profits late on Tuesday, but

renewed calls for stricter gun legislation in the US could make

the success short-lived. During -- this man runs this New

York City gun range. They is is a little bit newer. It is the 1911

series. More less designed to be like a government weapon. They also

sell guns. This been more among their more popular brand. People

know the names to some Western and they trusted. These are definitely

police officers use them. It is not just Smith and Wesson that is seen

record profits. Interest in guns is on the rise. In 2012, more than 19

million people applied for a background check to purchase a gun

here in the US. That is an increase That despite the shootings at a

cinema in the aura Colorado last July. And an elementary school in

Newtown, Connecticut last December. Since then the Obama Administration

has repeatedly called for stricter gun legislation. If you want to buy

a gun, whether it is from a licensed dealer or a private seller,

you should at least have to show you're not a Phelan or somebody

legally prohibited from buying one. This is common sense. The threat of

tougher legislation doesn't appear to be harming gun makers. We have

seen this before. Think about tobacco. There has been all kinds

of threats about tobacco and these are still among the most probable

companies in the market. While it might have the stock price, they

are making lots of money in terms of cashflow and economic profit

from revenue. We're Americans. This country was founded upon the gun.

It is another item that we like to have. It is our right to have

firearms. With so many Americans believing gun ownership is a right,

companies like Smith and Wesson will always have customers. The

President of Brazil has unveiled plans for a $23 billion programme

to improve public transport and a referendum on political reform.

Dilma Rousseff may be announced that late on Monday following a day

of proof -- following days of protests across the country.

Brazilians are angry about the escalating costs of hosting the

football World Club and the Olympics. We seem to have something

of a contradiction here. Presidential elections coming up

next year in Brazil. On the one hand, the President is promising to

cut spending and yet here she is promising to pump more money into

the public transport systems and infrastructure across Brazil. Matej

Vanko I think the President has put herself in a difficult position.,

one end she has unveiled this pact which includes increasing the

amount of spending for the transport sector, but on the other

hand she has also promised fiscal responsibility and controlling

inflation. In 2014, when elections come in, you expect the Government

to increase public spending and that would have an impact on

inflation. It is something that would be very difficult for the

government to balance. Of all, the key issue with this proposal that

she made yesterday is that she would also need to deliver fast.

The President proposed a referendum for the calling of a constituent

assembly, which in theory will gather all the concerns of the

protesters, including corruption, transparency and better spending

from the Government. The problem is this will need to go through

Congress and the President doesn't manage to get disapproved in

Congress and if this resident -- referendum is not organised before

the elections, it could look as if she is not in control of the

proposals she is making. For her to get through, she would need to pass

is very fast. All of these proposals really need to be seen in

the political concepts of these are looming elections in 2014. Here is

what -- is what she is putting on the table what Brazil needs?

Definitely. Infrastructure bottlenecks has been one of the

main constraints for economic growth in Brazil. There are not and

the problems related to public transport, but also a key shortages

in terms of highways, ports. One of the big problems is there are

several on paved roads in Brazil and this is what heavy taxation,

bureaucratic bottlenecks. And the issue of corruption. corruption is

That's all from me. I think we have That's all from me. I think we have

a quick look at the market for you now. This is the view in Asia at

the moment, as we were saying. The Chinese market and did their