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