04/10/2013 World Business Report

Nerves begin to fray on Wall Street amid dire warnings the US risks

Plus, from backroom website to amid dire warnings the US risks

Welcome to World Business Report. I'm Maryam Moshiri. In a moment

Welcome to World Business Report. Air France—KLM staff brace for

It's the first Friday in the month, normally a big day for financial

Department. Today, though, investors have bigger things to worry about. A

the IMF to the US Treasury, about government means no non—farm payroll

the IMF to the US Treasury, about politicians can't resolve their

stalemate over government spending. The most chilling of them came from

the US Treasury itself. In a report The most chilling of them came from

That report seemed to seemed to focus the minds of Wall Street

traders. Here's what one of them had important part. The rest of the

traders. Here's what one of them had they're putting on in front of the

cameras in Washington is something to keep the viewer is busy. The

market is more concerned on the to keep the viewer is busy. The

that the US government may default. That was put out today by the US

Treasury. The market has rebounded from its lows today because of a

suggesting he would not allow the D4 technical point of view, it appears

Twitter has published the documents after revealing its plans to float

last month. The papers give a first insight into the finances of the

social networking site. It hopes to insight into the finances of the

social networking site. It hopes to raise $1 billion in a stock market

listing next month. That might value more than 215 million active users.

And the key thing for would—be investors — growth. It made revenues

times as much as the previous year. investors — growth. It made revenues

times as much as the previous year. year. But Twitter is nowhere near

being profitable. It lost almost $80 co—founder and former CEO Evan

Electronics giant Samsung says it's largest shareholder with 12% of

Electronics giant Samsung says it's profits. Let's go straight to Rico

Hizon in Singapore for the details. Good to talk to you this morning.

Absolutely. They're expected in Good to talk to you this morning.

operating profit of nearly nine point fall billion dollars. —— nine

point fall billion dollars. The major catalyst is not more sales of

its smartphones or TV units but major catalyst is not more sales of

rebound in its business. The global chip market has rallied since late

2012 due to a supply shortage caused years of cautious investment. This

has helped Samsung plasma would line. Mobile devices that have

helped the company report a record profit every quarter since last

year, except the first three months of 2013, is stalling as sales of the

Samsung Galaxy for slows. —— Samsung To Japan now, where in the last

couple of hours the Central Bank has To Japan now, where in the last

couple of hours the Central Bank has kept its massive stimulus measures

helping its attempts to boost the economy, plans by Prime Minister

consumption tax for the first time in 16 years. Some economists fear

correspondent Rupert Wingfield—Hayes the tax rise could slow down, or

little choice. Business is booming right now. The stock market is up,

the currency value is down. Shoppers aren't back those in Japan and

consumption tax over the next two aren't back those in Japan and

consumption tax over the next two years. What be the shoppers think

about that? TRANSLATION: Taxes are difficult. Wages are not going up.

It will be really hard for people to Japan's that is so huge. There is no

choice but to put up taxes. But Japan's that is so huge. There is no

Japan's shoppers may be in for a rude shock. Analysts say raising the

taxes will not be enough. Normal estimates for the consumption tax

rise is about 20 five to 25%. —— 20 — 25%. This will be a difficult

situation for years to come. It — 25%. This will be a difficult

task made more difficult and the fact that Japan's population is

ageing and shrinking. Who is going to pay? The other thing you really

notice is that a lot of the people around me are speaking Chinese.

There is a reason for that. Japan is very cheap rate now. The Japanese

government, by pushing down the value of the currency, is getting

growth. The hope is profits of the foreigners to fuel Japan's economic

Japanese corporations will go up. If Japanese corporations will go up. If

the long run, that is what the Japanese government is hoping will

help pay off the enormous debt. Japanese government is hoping will

Dutch carrier KLM there has been talk of cuts, also the slowdown

Dutch carrier KLM there has been Europe has hit passenger numbers.

expecting to hear a significant None of this will go down well with

unions but they can do the maths as well as anyone. This is a company

that lost 1 billion euros last year and the year before. They know

something has to change. Are they similar problems to what other

European airlines are going through? If you look across southern Europe,

you see these toxic combination If you look across southern Europe,

the intense competition from the big low—cost carriers and the euro

crisis. Cargo volume has decreased by at least 5% this year. Micro—

Italian airline. —— Air France—KLM. The airline is in a worse position

than air France. And France is in the position to drive a hard bargain

of one of its cars on fire were investing cash when it is also

of one of its cars on fire were Emergency officials at the accident

personnel put forward for military electric vehicle's lithium—ion

personnel put forward for military Now for a look at the markets. The

budget deadlock in Washington is starting to have a serious impact on

the markets. There is worried the stalemate will trigger a damaging