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(generated from captions) course in time we must commit

ourselves to transferring

security responsibility to the

Iraqi security forces, but if

we do it too quickly and they

collapse, that will be a

massive victory for terrorists,

jihadists and the Saddam

Hussein supporting injury

sents. Put simply do you now

accept this is the view point

of the national intelligence

assessment of the United States

that the war on Iraq has made

terrorism worse? Well, you

know, that's rather like saying

that if you - you know when we

went to war with Japan or with

Germany they were not going to

look it very much and get angry

about it. I mean it had to be

done. I don't think giving in

to the terrorists in the end is

going to be in our long-term

security interests. But this is

the fundamental point - I'm

sorry to interrupt you there

but it's the fundamental point

and I'm wonder fg your own intelligence assessments are

the same, the national

intelligence assessment of the

United States. Of all those agencies essentially saying the

international terrorism war on Iraq is making

worse? No, look, we're not

looking at intelligence

assessments of the past,

whether I agree with them or

whether I don't. This is an

assessment of the present,

isn't it? No, it's not because the challenge for me as a

policy maker is the challenge

of what decisions we make now.

Now I do not get intelligence

assessments from Australia or

from America saying that if we

withdraw from Iraq, if we

surrender in Iraq this is going

to lead to the jihadist

movement collapsing and

everything will return to

quiet. Quite the contrary. The

assessments of the intelligence

- the American intelligence

agencies are quite clear, that

if the jihadists and insurgents

are victorious in Iraq then

that is going to be an enormous boost to their campaign around

the world and it will lead to a substantial increase in the

terrorist risks. So I've got to

deal with the decisions that we

face in the future and I am

very focussed on - I'm very

focussed on the consequences of

defeat in Iraq. I think defeat

and surrender in Iraq - and

look, I don't mind whether it's

popular or unpopular, I'm going

to say it because I profoundly

believe this and believe it to

be right, I think that defeat

and surrender in Iraq is going

to do Western and international

security enormous damage quite

apart from the awful things

that had happened to the people of Iraq in those

circumstances. I know you don't

want to talk about the past but isn't it very important to

learn the lessons of the past

and one of those lessons is

that the AFP commissioner, Mick

Keelty, was clearly correct

when he said now several year s

ago, that the war on Iraq is

going to make terrorism in the

world worse? I've made the

point I want to make about that

and I think it's just worth

reflecting on this. Of course,

when you confront evil, the

evil doers themselves will

fight back and the proposition

and Mick Keelty wasn't putting

this proposition, I hasten to

add, but the proposition that

somehow you don't get into a confrontation with terrorists

or you don't get into confrontation with tyrants

because they may not like it

very much and get angry about

it, is, I think, a proposition

that has done the world

historically enormous harm. I

think you just have to have the courage and the determination

in the end to try to defeat

these people and look, as I

said already, and doi feel very

passionate aly about that But

you now accept the position

clearly, because - No, I'm not

going to have words put in my

mouth. Do you accept - You're

just trying to get me - Do you accept the position Mick Keelty

put two years agwhich everyone

in the Government rejected

alternate time which the former

defence chief of Australia, General Cosgrove rejected at

the time has now apologised to

Mick Keelty and said he got it

wrong too and this is what he

says now, it's pretty obvious

there is has been an energising

of the jihadist movement

through the protracted war in

Iraq. Now that is the former

defence chief of Australia, not

the British defence chief. The

position that I have is that we

were at the international

community in many different

forms has been attacked by

terrorists and was attacked by

terrorists well before the war

in Iraq, including, of course,

on 9/11. In our particular

case, thinking of our country,

the most serious terrorist

attack ever undertaken, I think ever undertaken against the

Australian people in peace

time, was the Bali bombing. Now

that happened on 12 October

2002 before the Iraq war. So I

just know this, that we were

under threat and under attack

from terrorists before the Iraq

war. I know we still have a

problem with terrorists, I

think we've made a lot of

progress in South-East Asia, we

haven't solved the problem but

I think we've made a lot of

progress there and I think to

surrender to the terrorists in

Iraq now, whilst a lot of

people think that's the right

policy, and Mr Beazley thinks

it's popular, I think to

surrender to the terrorists in

IraqNow would do us untold

damage and that is in the war

against terrorism and that is

the proposition I have to deal

with, not what somebody's said

two or three years ag.

Ago. Just to round off on this

subject. That does that mean

that Australia will

unflinchingly stick to this

particular course without

changing it all because now we

find that even the President of

the United States is saying

there needs to be change and if

there is a need for change to

the plan in Iraq it will

change? But look, if I may say

so, throughout this whole Iraq

issue there has been a constant

endeavour to try to find quotes

and additional quotes and find

people who will support some

particular proposition. I think

it's fair to say that the

United States Government, the

President, of course, but the

United States Government, the

British Government, and most

other governments that I have

talked to about this issue,

think that a premature

withdrawal from Iraq just a cut

and run from Iraq, is going to

give terrorism a massive boost.

I think they realise that. We

know it is difficult in Iraq

and obviously the Americans

want to continue to adjust

their tactics on the ground to

try to maximise the efficacy of

their effort there but the

proposition that somehow people in positions of responsibility

just for political reasons for

opportunistic reasons, as is

the case with Mr Beazley, think

we should surrender to the

jihadists in Iraq, I don't

think they're prepared to go

along with that. Mr Down down,

change of subject, what's your

response to the UN commission

of inquiry into the recent

violence in East Timor? Well

look, I think it's a credible

commission of inquiry and it's

something that the East

Timorese have been presented

with during the course of the

this morning and have had the

opportunity to look at during

the day. I understand the

President and the Prime

Minister and the President of

the parliament have disgon on

television tonight and they've

called for calm in response to

this, which is important. It's

important there is calm. I

understand from our ambassador

in Dili that the situation is

calm, at least at the moment

we're speaking and hopefully it

will remain so and that the

East Timorese follow their

normal legal processes in

dealing with the conclusions of

the UN commission of

inquiry. They found no direct

evidence against the former

prime minister Alkatiri, it

talks however of suspicions, recommends further

investigation of his role but

here's a problem, if no

evidence is found, could bit

that he was removed from office

inappropriately? Well, he was

removed by the East Timorese

through the processes of their

political system. I wouldn't

dare to comment on whether they

did the right or the wrong

thing. We worked successfully

with Mari Alkatiri when he was

the prime minister. We, as you

know, work very well with Horta

as the prime minister but who

they choose as their prime

minister and how prime

ministers rise and fall in East

Timor it must be their

business. Why is it that one of

the key culprits targeted by

the commission, the rebel Major

Alfredo Reinado has been

allowed to remain free and that the Australians are in regular

contact with him? The East

Timorese are in regular contact

with him. I don't want to go

into all of the details of this

but there have been discussions

between him and the East

Timorese and - And the

Australians. Well Australians

have been involved but I'm just

making this point, it's a

sensitive issue, it's a

sensitive issue for the East

Timorese and I think it's been

quite well handled by the East

Timorese but it's difficult and

potentially inflammatory and

obviously the East Timorese are

working through this issue in a

manner designed to ensure not

only that justice is done but

the country remains quiet and

stable. So it's difficult. It

may be a difficult issue but if

the Australians know where he

is and he escaped from jail

after all and he's now been

targeted as one of the key

culprits of inciting the

violence in the first place,

why have we allowed him, the

Australians that is, to remain

free and we have the military

on the ground? The UN has only just produced that report and

the implementation of the con krution collusions of that

report is a matter for the East

Timorese so we'll leave that to

them. With is it sensitive

because he could reinstate

somehow violence? Obviously.

The real concern that the East

Timorese have is further

outbreak of serious violence

and so they have been - they've had communications with him and

they're endeavouring to try to

resolve this issue in a

peaceful and a tranquil way and

I think that's understandable.

We are not central players in

all of this but we obviously do

what we can to help. It's difficult. Alexander Downer, we

thank you very much for taking

the time to come and talk to us

tonight. It's a pleasure.

A quick look at the ether

now:

It will be on the website

shortly. You can also download

individual stories from the

site or view the entire

program. And for now it's over

to'Lateline' biz with Ali

Moore. Thanks, Tony. Tonight we

examine why James Packer is

selling off PBL's media assets

and look at how me might spend

the almost $4 billion he's

likely to get for them. I think

in that final round of lobbying

for the media reforms everyone

was screaming blue murder

except for PBL. That's an

indication that the media

assets are going to be hived

off which is going to lead to

greater transparency on the

gambling side. To the markets

and Australian shares had an

off day today as the market

succumbed to a bout of profit

taking led by the banks. Both

the all ords and the ASX 200

trimmed back their gains of

recent days. In Japan the

Nikkei was also in retreat as

shares in big exporter like

Honda were sold. With trading

due to begin in New York

shortly, all eyes are on the

Dow, which yesterday came

within three points of hitting

the 12,000 benchmark before

slipping back to 11,981. Still,

a record. Well to see what's

likely to happen tonight, and

what's happening in Europe,

we're joined now by Gary Dugan.

Gary, thank you for your time.

London is weaker this morning,

what's driving sentiment? Well

firstly it was inflation news

from the stat titions this morning showed inflation above

expectations and I think the

markets were prepared to take a

breather after such a sharp

rally over recent sessions Indeed you talk about

inflation numbers in the UK

which came out but also we've

had some key economic numbers

out of the States produce a

price figures which were a

bigger fall than expect bud the

core price numbers are still

higher than forecast, what's

the reading on that? That's

right, the headline numbers

were better than expected but

unfortunately the core numbers

were substantially higher at.6

month on month rather than 0.2.

So I think the markets will

take that as a disappoint mentd

because most of the central

bank had simply been saying

forget headline which will art

officially fall. Watch the core

number, that's what we're

watching and that may dictate

an - increase in interest rates

going forward. At the moment

though do those core numbers

still uphold the argument of no

change in interest rates next

meeting? Likely so, next

meeting is next week u so

perhaps these numbers have come

too late to force their hand at

this stage but with the

inflation on the consumer

prices numbers coming up

tomorrow, again if those came

above expectations then people

might start to expect the fed

to be doing something the other

side of Christmas but probably

nothing for this year. We've

also seen a bit of corporate

news in your part of the world

today which involves one of our

company, Macquarie Bank, it's

won the battle for. The haemes water? Market rumours prior to

announcement were that someone

was prepared to pay around 7

billion, so that's coming at a

premium to that but the sector

has been so bubbly of late with

considerable deals being done

across the world and people see

these as safe assets on still

quite low valuations

particularly if interest rates

remain at generally low levels

around the world. Consistent

earnings growth is something

people are prepared to pay a

big price for. We talked about

the economic news in the States

but what are the futures

telling how how the Dow is

going to open near that record? I think it probably

starts down but some of the corporate news we've been

having this morning has been better than expected, good

earnings numbers. That will

give us maybe a bit of a safety

net on a quiet day. Thanks for

bringing us up to date. Thank

you. Back home and as we've

already heard, Australia's

media sector is set for a big

shake up. The latest player,

the Seven Network's Kerry

Stokes, who tonight bought a

strategic stake in West Australian Newspapers.

Citigroup has secured a 8 ppt 5

per cent stake in the news

paper group offering $11 a share. It's reported that

Citigroup had been looking for

a 14.9 stake in West Australian

Newspapers. Well PBL went into

a trading halt today amid talk

the company will spin off it's

media assets and sell a half

share to foreign private equity

firms. We'll hear more about

the market reaction shortly but

first we'll take a look at the

legal implications of any

sale. Australia's proposed new

media laws haven't even passed through parliament but already

there's movement in the sector.

PBL, which owns the Nine

Network and a stable of

magazine, went into a trading

halt today. Newspaper reports

suggest the company will sell a

half share in its media assets

to an international consortium

taking advantage of the

proposed removal of foreign

ownership limits. It may well

be that the sale doesn't depend

on the - on any changes because

they might well be able to

operate within that requirement

and sell to interests that

don't offend that requirement

of a limit of 20 per cent

foreign ownership. The proposed

laws will scrap that limit but

require a foreign buyer to pass

a national interest test and

new owners will also have to

satisfy the communications authorities that they're a

suitable person. They look at

the past record of the

individual in situations

requiring trust and candour. If

it's a licence to be held by a

company, they look at the past

record of the company. The

rumoured sale of PBL's media

assets reflecting its

continuing shift into the

gaming business. Those

operations now make up almost

half of PBL's revenue and James

Packer has flagged a bigger

push into overseas markets.

Elizabeth Beal worries that

that will mean cuts to PBL's remaining television

interests. The concern is that

if there's a foreign owner that

there will be changes to local

production, production of

content is the most expense ive

part of running a media organisation. The rumoured sale

is expected to be worth $4

billion to PBL. So what's

likely to be the strategy

behind a sale of PBL's media

assets? How would it change the Packer empire and what would

James Packer do with the almost

$4 billion the sale could earn? To look at those

questions I was joined earlier

this evening by Roger

Montgomery and media analyst

Peter Cox. Thank you very much

for coming into the studio. At

the out set, of course, this is

all still speculation, we're

yet to hear from PBL, but

Roger, if I can start with you,

how do you see this deal? How

much will be spun off and how

much will they get for it? Let

me say this, I think that the

deal is quite brilliant on the

part of the James. They've sold

an asset that they had - his

father had previously sold for

$1 billion. He's now selling it

for what appears to be $4

billion, admittedly with a few

extra things thrown in but

what's striking is he's

effectively bought a call

option and sold a put option on

it. He'd have first right of

refusal? My guess would be if

it it was me selling the

business f it goes badly then I

would like first right of

refusal to buy it back. You've obviously jumped the gun of

course here, because you're sag

he's sold, he hasn't sold, we don't know what the deal is,

what do you think will be part

of the deal? Do you think all

the media will be hived

off? Look, it was my view that

he was - he appeared to be less

interested in Channel Nine in

that last round of lobbying on

the media reforms. In fact,

Channel Nine wasn't present and

he - I think he was overseas at

the time wh indicated he really

wasn't that interested so it

was no surprise to me and to my

firm that in fact he was

selling that. So Channel Nine's

going to go. That seems clear.

What else goes, well I think

it's those assets that are

related to media. So that's the

magazines, that's Foxtel,

that's the Internet sites. 27

per cent of Foxtel, car

sales.com. Possibly Hoyts, I

don't know, of course nobody

does but that's possible. I

think what you do is put

together a stable of media

assets that you can then use as

leverage to back into something

else. Let me ask you Peter Cox,

what do you think will be

included? Well, I think they

will include obviously the two

major ones, the television and

the magazines, as to how they

structure the deal, I don't

think it's really quite so

important. The main thing -

objective for James really is

to reduce his exposure to

traditional media, an area that

I think has got low growth in

the future and of course Roger

comes from everyone is looking

for high growth and our is

industry does not offer that

and instead he's going to be

able to cash up f you like, get

greater value than out of his

media site, to be able to

invest in the gaming and the

Internet site which is really

where he sees the future for

himself. But let me ask you

Peter, before we look at what

James Packer is going to do

with his money, in essence, are

we looking here at a deal where

it would seem on what we know

so far, private equity will be

paying top dollar for not

getting control? Well I was

here last time around rkts 1989

when we had a Bond and Skase

come along and pay those

ridiculous prices and of course

they fell over in the end. When

the dot come boom came in the

late '90s we had the same

thing, people paid unrealistic

price disgls but this is not

private equity style to not

want control. They may pay top

glar but they want their say on

the board. They do and they

will pay top dollar. They're

going to be young and ambitious

and I think they will over pay

th. Industry was different now

to what it was back in '89.

It's much more tightly run now.

The fat's been taken out of the

industry. Indeed are they

already as lean and mean as

they can be. Private equity

usually comes in, they're no charity, they come in and they're looking for big change

and they're looking for big upside. Peter's comments and

your suggestions there indicate

to me that this is not the end

game, this is a first move for

the private equity consortium

and I think they will be using

this vehicle to do other

things. Peter Cox, do you think

that this private equity

interest could be because this

would be provide a plank for

what could come in the future? I'm not as enthusiastic

as Roger. The radio industry,

for example, is only about a

third or a quarter size of

television and it's far more

competitive than television. To

go into the newspaper business,

they've either got to buy

Fairfax or Western Australia

News. Both of those are in a

very traditional, low growth

industry where they're against

heavy op zition in the future

from the Internet come an

taking away from both their

revenue and the profitability.

So I don't think it's easy for

them. If I was James I would be

looking at the fact am I bet

tore get the maximum price ki

get at the moment in what's

going to be an overvalued

moment and take that and spend

it somewhere else where I

believe I qu do better. So wres

the somewhere else? There's

plenty of opportunities in the

gambling and the gaming

industry, is that what we're

talking about? Well I have

grave concerns on the gaming

side F you look at Australian

companies that have gone

overseas over the last two

decades, very few have been

successful. But you'd have to

say the casino business has

done very well for the Packer

empire to date. Where do you

see them spending this almost

$4 billion if the numbers are

what we think they are? I think

James will head in the way of

the casinos. I think it should

be cautionary. There's no

shortage of opportunities in

the gambling world but given

the size of this pool of money do you think there's something

else potentially in

wings? There's of course the

pra additional thing, you pay

down some debt, you use the

money for where you think

you're going to get the highest

return and the reality is that

the new businesses have the

potential of generating much

higher rates on equity than the

businesses that are being

partially sold. Do you take PBL

private? Look everything's a possibility. I wouldn't at

these prices. It would be too

expensive to do that. I think

the market is because of what's

happening in the media industry

is paying a premium over what

the business is actually worth.

Having said that though, you

know, listening to what's being

said tonight, it strike mes as

curious you poined out that

private equity firms don't

normally give 50 per cent

control to somebody else.

Clearly PBL's insisted on it. I suspect that that's an

indication that there's going

to be some very interesting

things happening on the - after

PBL is spun out - sorry, after

the media assets are spun out

of the PBL. Indeed there's so

much we don't know and

hopefully we'll get some more

information on this. Is the

unbundling now of the gaming

and the media a Fay complee I

think it will happen. I think

the work James has put into

getting the act changed and the

legislation in Australia to go

through that suited his

purposes which of course was

opposed by Murdoch and Fairfax.

It show he particularly wanted

that way for a purpose and I

think we're seeing the outcome

of that now. I think in that

final round of lobbying for the

media reforms everyone was

screaming blue murder except

PBL, that's an indication that

the media assets are going to

be hived off which is going to

lead to greater transparency on

the gambling side. Thanks for

coming into the studio. Thanks,

Ali. Still on the Packer media

interests and the judge hearing

the copyright case taken by

Channel Nine against media

start up Ice TV has urged the

parties to mediate. Nine says

Ice TV has breached its

copyright by compiling a

digital. As Sue Lannin reports

Ice says it puts its guide

together using publicly

available information. It's a

battle about who owns the

rights to the TV guide. The

Nine Network has taken Ice TV

to court accusing it of

breaching copyright by including information about

Nine's program in its

electronic program guide which

subscribers can download fl.

The Federal Court lawyers for

Ice admitted that it gets some

program information from

websites including Yahoo! And

your T str. Dotcom which is

owned by HWW. But Ice says once

it gets to HWW Nine's TV guide

is changed because it's

incorporated into a TV guide

for all stations and is not

copied word for word and

therefore not covered by

copyright law. Quoun sill for

Ice TV told the court that

information can't be

copyrighted. He says while Nine

owns its TV guide it doesn't

own the information in TV schedules compiled by other

companies. Mr Ireland told the

court that Ice wrote its own

program descriptions by using

the Internet, books an other

publicly available information.

Counsel for Nine Richard

Cobden SC says the use of

websites that Nine licences its

material too is a breach of

copyright.He you'd Ice of using

Nine websites and magazines to

make last-minute changes to its

program guy saying in a 6-week

study of program earlier this

year, Ice got 1,066 correct W

the likelihood of the case

being appealed Justice

Annabelle Bennett urged both

sides to negotiate. She says

Channel Nine has already

licenced its program

information to Foxtel and could

consider a negotiated outcome

with Ice. For a cleeser look at

what happened on local markets

today I spoke earlier to Warren

Hogan the head of market

economics an strategy at the

ANZ. Thanks for joining us. It

was pretty much a case of the

market being dragged down today

by the banks despite resources

going up? Yeah, the Australian

market had a good start early

this morning as taking a lead

from high commodity prices and

a good move high ner the US

market and we actually got very

close to the record high from

May 11 earlier this year. But

then the market faded slowly

throughout the whole day to be

down half a per cent at the

end. The turning point came

when speculation mounted that

North Korea was getting ready

to do a second nuclear test and

that impacted markets across

the region. There's probably

some lingering concerns about

higher rates affecting the

banks but it was banks that led

the market down and Telstra was

down 7 cents. Of course another

big focus of the day was PBL

and there's a lot that we don't

know but if part of the media

assets or all of the media

assets are sold to offshore

private sekity players that

could have an impact on our currency, couldn't it? Yeah,

the currency's actually had

quite a firm tone to it over

the last three das. The

speculation has certainly been

a part of that. If PBL's media

assets are sold to an offshore

investors, that will probably

bring flow into the Australian

dollar of about a billion to a

billion and a half. We've had a

couple of other announcements

today. Macquarie Bank is buying

assets in the UK and we've had

Orica announce a purchase in

the UK and that's going to work

the other direction. So

although the market is

benefitting from positive sentiment from this activity

the flows through the currency

have been pretty much two way. Support for the dollar

also comes from the market

pretty much fully pricing in a

rate rise in November. But

what's the outlook past

November? The market now is

virtually fully priced the RBA

going 25 points in November but

the market doesn't expect any

move after that. There's a 10

per cent probability that we'll

get a follow through 25 and

that may, you know, may see the

currency sort of put a cap on

the currency in terms of the

positive effect of an interest

rate story behind it. But of

course, as we've seen this year

tRBA's moved twice and this

will be the third move and each time the market only expected

the move to be a sort of a one

and done only for a few months

later for the market to be look

down the barrel of another rate

hike. So it's going to be interesting to watch but I

wouldn't assume this is the

last rate hike yet. A new

number, a change in sentiment.

Thank you very much for joining

us. Thanks, Ali. To the major

movers and top mover today was:

Funds management group per

pet wall is forecasting a 10

per cent rise in first half

profit with a growing number of

funds flowing into the group's

new asset classes including

cash. The group held it's AGM

toold telling shareholders the

long-term drivers of growth are

favourable. Total funds under

management was $34.5 billion at

the end of September up 5 per

cent on the previous quarter.

Per pet wall CEO David Deverall

joined me in the studio earlier

this evening . Thanks for

joining us. Thanks. If we can

start with the profit forecast

that you gave today, up 10 per

cent for this half, fair to say equity markets are not quite

what they used to be? Yes, well

it's the first year in a number

of years where we haven't had a

strong start to the year in

terms of increases in the major

ASX indices. Having said that,

we're very happy with the ability to forecast continued

growth in profits. How much

more difficult though is this

investment climate? Well, it

varies. The investment climate

does come and go in cycles. We

have this situation at if

moment where the world is

trying to decide whether we're

in a stag flationary

environment ie low growth and

higher inflation in interest

rates or a more benign

environment which is good

growth with lower interest

rates an inflation. And where

we seem to be breaking through,

at least recently s a view that

maybe the world is a good place

to invest from those

perspectives. So do you see the

second half being stronger than

the first half? Well, I see the

market having moved up,

particularly over the last

month or so as investors have

got more comfortable with the

inflation outlook, the interest

rate outlook and the global

growth outlook. There's still many other things that need to

go into that mix but

nevertheless markets have

continued to move upwards in

recent times and that's

pleasing for investors an pleasing for per pet

wall. There's a lot of takeover

talk that drive ing this market

and you've taken advantage of

some of it recently to sell out

of Suncorp. Does that indicate

that you didn't like the story

of a Suncorp takeover of

Pronina. It's probably easier

for me tot the talk so much

about that particular transaction particularly since

it's still under way.

Nevertheless we've been pleased

with our investments in both

Suncorp and Pronina. The other

topic of conversation today of

course is PBL. You told PBL,

any view on the deal that's

been mooted? I'd like to be

able to watch the deal unfold

and we'll be able to provide

more perspective on that as we

see things progress in coming

weeks. Can you make a call as

to whether you see logic

separating the gambling from

the media? It's too early to

say at this stage although what

we would say the gambling

business is a very attractive

one for PBL. There's good

global growth opportunities

there, some of the activities

have been taking blas

particularly in Asia are very

encouraging. So we've been

supportive of that

strategy. How much of an impact

is this wash of private equity

having on the market? Yeah t

private equity phenomena is a

really interesting one. It's

taken root in a big way in

recent times and I recall a

transaction that we did when we

sold one of our businesses

around about only 12 to 18

months agthat private equity

was not really so much on the

radar screen and that was, as I

said, only 12 to 18 ago. It's

now moved to centre stage and

that may be for very good

reason. We'll only be able to

look back at the benefit of

hindsight but one of critical

things with private equity is a

belief that the leverage that

you can put into those

transactions will never become

too excessive and that will

rely heavily on the direction

of interest rates. So for the

sake of those people putting

those private equity deals

together, I'm sure they look

forward to benign interest rate

environment for the years

ahead. Are you sounding a

little warning bell there? Not

necessarily a warning bell but

just be aware that interest

rates do go up and down, inflationary environments do

change and Reserve Banks all

around the world or central

banks all around the world have

a duty to try and keep

inflation under control and if

they need to trigger increases

in interest rates they will do

so. Thank you very much for

joining us. Thank you, Ali.

To currency markets and as

we said earlier in the program,

the Australian dollar firmed.

Now for a brief look at

tomorrow's business diary:

Before we go, a look at

what's making news in the

business sections of tomorrow's

newspapers.

And that's all for tonight.

As I leave you, the FTSE is

down 27 and the Dow is down 31

points. If you want to watch

any stories from tonight's

program or from previous shows

just log on to our website :

You can now watch the program

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cast and if you would like to

write to our our email address

is: I'm Ali Moore,

goodnight. Captions provided by Captioning and Subtitling

International.