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lightning struck the coast of southern California. Those are the | :00:00. | :00:00. | |
headlines. Now for the latest financial news. | :00:00. | :00:19. | |
The Argentine debt default looming as time runs out for a deal later | :00:20. | :00:26. | |
this week. Will there be a last`minute agreement? Latin America | :00:27. | :00:31. | |
plays host to another leader from the east. This week, the Japanese | :00:32. | :00:36. | |
Prime Minister, who has already struck a series of energy deals in | :00:37. | :00:48. | |
Mexico. Welcome to the programme. Also in the programme, we focus on | :00:49. | :00:52. | |
how the internet is radically changing the way we work. But is it | :00:53. | :00:58. | |
always lucrative? It is an important week for Argentina. It must either | :00:59. | :01:03. | |
pay up or default on money owed to a group of hedge fund investors due on | :01:04. | :01:09. | |
Wednesday. It harks back to 2001, when Argentina found itself in | :01:10. | :01:14. | |
financial turmoil. A majority of bondholders agreed to a debt swap | :01:15. | :01:20. | |
deal at the time but some held out Andy `` and if Argentina fails to | :01:21. | :01:32. | |
pay up... Argentina is rich in resources, has a well`educated | :01:33. | :01:35. | |
workforce and is one of South America's largest economy is full of | :01:36. | :01:41. | |
it has also fallen prey to a boom and bust cycle. In 2001, more than | :01:42. | :01:45. | |
half of the possible `` population were living in poverty, triggering | :01:46. | :01:50. | |
unrest. The country struggled with debt default and currency | :01:51. | :01:55. | |
devaluation. By 2003, a recovery was under way and the IMF agreed to a | :01:56. | :01:59. | |
vital new loan. Since then, Argentina has restructured most of | :02:00. | :02:03. | |
its massive debt, offering creditors new bonds for the defaulted ones and | :02:04. | :02:09. | |
has repaid the IMF. But some investors have not been willing to | :02:10. | :02:12. | |
accept the debt swap offer and are instead insisting that they are paid | :02:13. | :02:17. | |
in full. Argentina has until the 30th of July to find a solution or | :02:18. | :02:23. | |
possibly default again. It also fears that a settlement would prompt | :02:24. | :02:27. | |
claims from other investors, who felt shortchanged by the original | :02:28. | :02:31. | |
debt restructuring. In the meantime, the economy is still struggling, | :02:32. | :02:36. | |
poverty remains rife and unemployment high, with many | :02:37. | :02:40. | |
Argentines still awaiting the benefits of the economic upturn. | :02:41. | :02:51. | |
Thank you for joining us. Who are these so`called vulture investors? | :02:52. | :03:00. | |
What is the likely outcome of this? This is a group of mainly hedge | :03:01. | :03:08. | |
funds who have bought up the debt since the economic turmoil of 2001. | :03:09. | :03:13. | |
They refused to participate in previous debt exchanges that place | :03:14. | :03:19. | |
in 2005 and in 2010, when investors took a 65% loss on their holdings. | :03:20. | :03:23. | |
And they have pursued Argentina in the courts for the last ten years, | :03:24. | :03:31. | |
almost. This long`running saga has now come to an end. The US Supreme | :03:32. | :03:38. | |
Court declined to hear Argentina's appeal and now Argentina faces | :03:39. | :03:41. | |
possible default as soon as this Wednesday. Wednesday, they could | :03:42. | :03:47. | |
default if they do not strike a deal with a small number of holdout | :03:48. | :03:54. | |
lenders. Why would they choose to default when actually, it is a small | :03:55. | :03:58. | |
number of people... The bill they would have to pay to them is not | :03:59. | :04:03. | |
that large. Argentina is reluctant to make the payment because of a | :04:04. | :04:09. | |
clause that was part of something that was written into the original | :04:10. | :04:12. | |
debt exchange. This basically entitles the restructured | :04:13. | :04:17. | |
bondholders to better terms if Argentina voluntarily makes a better | :04:18. | :04:22. | |
offer to the holdouts. The definition of voluntarily is up for | :04:23. | :04:30. | |
grabs, really, but Argentina said it could be open to a series of other | :04:31. | :04:36. | |
demands and further litigation, which would be extremely costly, and | :04:37. | :04:39. | |
it simply does not have the resources to pay everyone else who | :04:40. | :04:42. | |
would cascade on from this holdout campaign. Briefly, if Argentina | :04:43. | :04:48. | |
chooses to default on Wednesday, what then? The main impact would be | :04:49. | :04:55. | |
domestic. This would deepen a recession that is already under way | :04:56. | :05:00. | |
in Argentina, exacerbating some of the existing economic imbalances in | :05:01. | :05:04. | |
the country such as inflation. It would put pressure on the currency, | :05:05. | :05:09. | |
the reserve. The risk of economic contagion is actually fairly | :05:10. | :05:14. | |
limited. There would probably be an impact on Brazil because it is an | :05:15. | :05:18. | |
important trading partner for Argentina but really, this has | :05:19. | :05:21. | |
already been priced in. Some form of default has been priced in by the | :05:22. | :05:27. | |
markets already. Thank you. Very clear analysis. Something we are | :05:28. | :05:32. | |
keeping a close eye on as this week progresses. We will update you on | :05:33. | :05:37. | |
any deal done. This week, we are taking a look at the working lives | :05:38. | :05:40. | |
of the Next generation, especially the ones who have been able to put | :05:41. | :05:46. | |
their passions into paid work and are creating entirely new careers as | :05:47. | :05:49. | |
a consequence. In India, the internet is changing the way many | :05:50. | :05:54. | |
people work. While millions of people write blogs for fun, some can | :05:55. | :05:58. | |
make a living for it, as long as they choose the right topic with a | :05:59. | :06:03. | |
large audience. And in India, Bollywood blogging is a pretty | :06:04. | :06:07. | |
popular activity. We report from Mumbai. Every week, this woman chats | :06:08. | :06:19. | |
with Bollywood celebrities and asks them anything she likes. She is not | :06:20. | :06:24. | |
a television presenter and this is not a television show. It is a | :06:25. | :06:28. | |
Google hangout, a live event broadcast across the internet and a | :06:29. | :06:33. | |
spin`off from her job as one of India's most famous bloggers. Her | :06:34. | :06:39. | |
blog covers news and gossip mainly about the world of show business, | :06:40. | :06:43. | |
especially Bollywood. Started as a hobby six years ago, she decided to | :06:44. | :06:50. | |
go full`time in 2011. Now, there is so much web traffic that she has a | :06:51. | :06:54. | |
small team of people working for her. If you want to be a good | :06:55. | :06:57. | |
blogger, your passion should be for your art and your blog. You cannot | :06:58. | :07:03. | |
decide to choose any topic and just get money from it. There has to be | :07:04. | :07:09. | |
depth and content. There are millions of bloggers around the | :07:10. | :07:11. | |
world, writing on anything you can imagine on the latest fashion trends | :07:12. | :07:17. | |
to technology and tattoos. Some try to make money by accepting | :07:18. | :07:23. | |
advertisements on their blog or by offering paid reviews. But the | :07:24. | :07:25. | |
reality is that relatively few people make good money out of it. | :07:26. | :07:30. | |
Not that it stops people from trying. Every week, you will find | :07:31. | :07:35. | |
this 24`year`old woman in the colourful streets of Mumbai, getting | :07:36. | :07:38. | |
her photograph taken in different outfits for her fashion blog. She | :07:39. | :07:43. | |
has been doing this for almost one year and even though her blog | :07:44. | :07:46. | |
receives 10,000 visits per month, she cannot make a living from it. | :07:47. | :07:55. | |
They tend to think that I do not have enough comments on my blog | :07:56. | :07:59. | |
sections, so they would not pay me for my opinions. I have been working | :08:00. | :08:05. | |
for free. I have not made any money. Back in the office, we are | :08:06. | :08:10. | |
discussing ideas with the team. Right now, only about 20% of Indians | :08:11. | :08:17. | |
use the internet but that is increasing all of the time. While | :08:18. | :08:20. | |
online trends are always changing, you can expect plenty more people | :08:21. | :08:25. | |
will launch blogs about subjects they are passionate about, even if | :08:26. | :08:30. | |
turning that hobby into a flourishing career remains a | :08:31. | :08:35. | |
struggle. If you are watching us, you will | :08:36. | :08:39. | |
know that last week, Japanese President `` you would know that | :08:40. | :08:50. | |
last week, Chinese Premier Xi Jinping was in Latin America. And | :08:51. | :08:54. | |
this week, it is the turn of Japanese Prime Minister Shinzo Abe. | :08:55. | :09:00. | |
There is no Argentina on this itinerary but Shinzo Abe has been | :09:01. | :09:03. | |
very busy nonetheless. He arrived in Mexico on Friday, signing a whole | :09:04. | :09:08. | |
series of deals including in the energy sector. Since the shutdown of | :09:09. | :09:13. | |
the country's nuclear reactors, energy has been very high on the | :09:14. | :09:17. | |
agenda or Japan. And it comes very hot on the heels of a visit to the | :09:18. | :09:25. | |
region by Chinese Premier Xi Jinping. They are wondering whether | :09:26. | :09:29. | |
the billions of dollars of agreements signed by China can be | :09:30. | :09:32. | |
matched by Japan. I do think it is more coincidental than anything else | :09:33. | :09:38. | |
because Japan, while it is interested in the resources of Latin | :09:39. | :09:41. | |
America, it is looking for a number of different things than China is. | :09:42. | :09:45. | |
Certainly Shinzo Abe is after oil and gas deals but he is also looking | :09:46. | :09:50. | |
for investment opportunities, new markets and Japanese exports, | :09:51. | :09:52. | |
remembering that Latin America is home to some 600 million potential | :09:53. | :09:58. | |
consumers, and it is also about diplomacy. Shinzo Abe is expected to | :09:59. | :10:02. | |
try and rally support for Japan's bid to gain a permanent seat on the | :10:03. | :10:06. | |
UN Security Council. Lots of areas for Shinzo Abe to cover. That is all | :10:07. | :10:14. | |
for now. I will see you soon for the newspaper review. | :10:15. | :10:29. | |
Thank you. And we will get to that review in a moment. First, | :10:30. | :10:30. |