:00:00. > :00:00.Now for the latest financial news with
:00:00. > :00:18.Over a barrel: Russia set to slash public spending
:00:19. > :00:27.Plus: Turmoil on the markets, chill winds from China
:00:28. > :00:39.Can the giants of Wall Street carry on raking in the profits?
:00:40. > :00:56.Plenty going on. Milton tells me that I have about eight minutes! You
:00:57. > :00:57.give me that and I will give you a snapshot of what's exciting in the
:00:58. > :01:01.news of business and money. No relief on the market at the
:01:02. > :01:05.moment. We start in Russia,
:01:06. > :01:08.where the collapse in the price of oil is taking an increasing toll
:01:09. > :01:11.on the country's finances. Later today the Kremlin is expected
:01:12. > :01:14.to slash government spending for this year to try and plug a
:01:15. > :01:17.growing gap in the public coffers. Crude prices staged a small recovery
:01:18. > :01:26.on Thursday. But they are still close
:01:27. > :01:30.to a 12-year low of $30 a barrel. That's providing little relief for
:01:31. > :01:36.Moscow. Today we are expecting Russia to cut
:01:37. > :01:41.its budget for 2016 by 10%, Over half of all the money
:01:42. > :01:46.the government gets is from oil, so as the price drops there is a direct
:01:47. > :01:54.knock on effect for the country. The current budget was based
:01:55. > :01:57.on oil price being $50 a barrel, but of course crude prices have
:01:58. > :02:09.since slumped to around $30. That's compounding the economic pain
:02:10. > :02:13.for Russia, which has been in There had been hopes that 2016 would
:02:14. > :02:17.see an upturn in its fortunes But that is looking
:02:18. > :02:22.increasingly unlikely. Oleg Kouzmin is an economist
:02:23. > :02:34.at Renaissance Capital. Good to see you, as always. Let me
:02:35. > :02:41.start by this. A cut of 10% may not be enough? One report suggests the
:02:42. > :02:47.Kremlin would need oil prices to rise to $82 a barrel just to balance
:02:48. > :02:55.its budget and UNIDO that is not going to happen. -- and you and I
:02:56. > :03:00.know. Good morning. Indeed. If the price stays as low as $30 for the
:03:01. > :03:07.next few months, then a 10% cut would not be enough to bring their
:03:08. > :03:11.death -- the figure to 3%. It could bring the budget to pretty good
:03:12. > :03:22.shape if it reaches $40, but not $30. As for the $82 oil price, this
:03:23. > :03:32.could help to bring the budget 20 deficit. -- to zero. Let me ask you
:03:33. > :03:38.this. This is serious stuff that Russia is facing. You talk about $40
:03:39. > :03:45.might be OK, but the oil price continues to go south. It will go
:03:46. > :03:48.lower than $30 a barrel, especially when a worm goes online and starts
:03:49. > :03:55.putting its oil into the market. I was reading that if oil stays at $30
:03:56. > :04:00.for all of this year, it will wiped out Russia's financial reserves.
:04:01. > :04:04.Indeed, if the oil price stays at $30 for the full year Russia would
:04:05. > :04:10.face another painful year with continued recession, boosted
:04:11. > :04:15.currency and high inflation. As for the reserves, it could be pressures
:04:16. > :04:19.on reserves of the government but overall
:04:20. > :04:24.reserves are still in place. They would not spend a huge amount of
:04:25. > :04:28.money this year, even if the price was $30. How much hardship are
:04:29. > :04:33.ordinary Russians feeling on the street? You mentioned inflation.
:04:34. > :04:39.Food prices have gone through the roof. Fruit and vegetables are up by
:04:40. > :04:47.nearly 30%. Yes, indeed, Russia this year faces the highest inflation
:04:48. > :04:53.into -- inflation. In 2015 it was the highest in seven years. Russian
:04:54. > :05:02.citizens have to get through a 10% cut in their wages. This is the kind
:05:03. > :05:06.of crisis Russia needs to adjust to, and generally it is better to have
:05:07. > :05:15.this controlled cut in domestic spending, in consumption by 10%,
:05:16. > :05:22.something like 5% in 2016, for example, this is better than trying
:05:23. > :05:24.to keep it flat and go through some uncontrolled cut in consumption by
:05:25. > :05:28.50% or something like this. Always a pleasure. Thank you for joining us.
:05:29. > :05:30.The plunging price of oil has been adding to turmoil
:05:31. > :05:35.Let's go straight to Asia and see whether there is any
:05:36. > :05:44.Great to see you. Happy Friday! But not a happy time on the markets.
:05:45. > :05:52.This whole mess continues, doesn't it? That's right. A turnaround in
:05:53. > :05:56.fortunes in late Asian trade and the gains on Wall Street, which inspired
:05:57. > :06:05.Asian equities initially, are starting to wain. And more
:06:06. > :06:13.disappointing Chinese data keeping investors nervous. Brent and US
:06:14. > :06:18.crude trading at about $30. You talked about this with your guest,
:06:19. > :06:27.regarding more oil in the market, particularly from the likes of
:06:28. > :06:32.Iran. Also more poor data from China showed their currency was down. And
:06:33. > :06:39.also worries that a depreciating yuan could spark problems across the
:06:40. > :06:43.region and this will hit shares today. Most
:06:44. > :06:49.retreating from the likes of China, Japan, Korea, Hong Kong, Australia
:06:50. > :06:52.and Singapore. Indeed. The currency war. That's what we will keep our
:06:53. > :06:56.eyes. Thank you. Talk to you soon. Cheers!
:06:57. > :06:59.From Moscow to Wall Street, where America's banking giants are
:07:00. > :07:06.The biggest beast of them all, JP Morgan Chase, provided some much
:07:07. > :07:09.needed cheer to investors on Thursday after it reported
:07:10. > :07:12.better than expected profits for the three months to December.
:07:13. > :07:27.That took profits for last year to a record of almost $25 billion.
:07:28. > :07:33.Banks are facing a cocktail of challenges from the slowdown
:07:34. > :07:36.in China, plunging commodity prices and financial market turmoil to
:07:37. > :07:52.JPMorgan was the first to report fourth-quarter profit and they
:07:53. > :07:56.actually beat expectations. The income rose both in the investment
:07:57. > :07:59.banking side and on the commercial side, their main business. With
:08:00. > :08:02.other big banks predicted to also impress, but will help ease fears
:08:03. > :08:12.that a weaker trading market, low oil prices and a slowing global
:08:13. > :08:18.economy will affect profits. All of the US banks have been cutting back
:08:19. > :08:23.these last few months and increase costs -- increased costs from
:08:24. > :08:26.regulatory reform. Under pressure from financial
:08:27. > :08:29.having to shed assets, the real concern because in the start of the
:08:30. > :08:34.financial crisis, when they were deemed too big to fail, tanks had
:08:35. > :08:39.actually grown larger. Citigroup is perhaps the most exposed to the
:08:40. > :08:43.slowdown in China. -- banks. It relies on Asia and emerging markets.
:08:44. > :08:47.So investors will be especially interested in their performance.
:08:48. > :08:50.While the Fed's rate rise in the December did allow banks to
:08:51. > :08:57.immediately charge more for loans in the fourth quarter, in 2016 we will
:08:58. > :09:01.see a bigger boost from that. Let me leave you with some other
:09:02. > :09:01.stories making headlines around the world.
:09:02. > :09:03.Goldman Sachs says it's struck a deal with the US Department
:09:04. > :09:06.of Justice to pay $5.1 billion in fines and compensation over
:09:07. > :09:12.its marketing of subprime mortgage bonds before the financial crisis.
:09:13. > :09:15.The three biggest banks in the USA, JPMorgan Chase, Bank of America
:09:16. > :09:21.and Citigroup, have already paid out some $37 billion in settlements.
:09:22. > :09:24.US banks have taken much of the blame for the 2008 crisis after
:09:25. > :09:26.granting mortgages to unqualified borrowers, then repackaging those
:09:27. > :09:35.loans as safe investments and selling the risk on to others.
:09:36. > :09:37.Fiat Chrysler Automobiles is denying allegations that it encouraged
:09:38. > :09:45.The car company is being sued by the owner of two US dealerships, who
:09:46. > :09:47.says it offered financial incentives to dealers to report unsold vehicles
:09:48. > :09:51.as sold and then cancel those sales the following month.
:09:52. > :09:54.Fiat Chrysler says it has carried out an investigation and found
:09:55. > :09:59.Shares in French carmaker Renault plunged 22% on Thursday
:10:00. > :10:01.before recovering to close 10.3% lower, after it confirmed there had
:10:02. > :10:04.been police raids on the company's facilities to investigate
:10:05. > :10:15.Investors are worried Renault might also be involved in cheating
:10:16. > :10:21.emissions tests, following the Volkswagen scandal last year.
:10:22. > :10:32.Comments backed up by French Energy minister.
:10:33. > :10:35.A quick look at the markets. Lots going on. Marketing Asia down
:10:36. > :10:38.A quick look at the markets. Lots going on. Marketing Asia down in the
:10:39. > :10:42.dumps. China closed down and of course that affects elsewhere.
:10:43. > :10:44.Don't forget you can get in touch with me and some
:10:45. > :10:49.I will be back shortly to have a look at some of the papers from
:10:50. > :10:54.around the world.