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Good morning. In business

today, spending downside, the implications of massive

stimulus packages. Positive

focus, GM's ambitious plans

for the Chinese market. Trade

exchange, why bartering is

growing the in the downturn.

Those stories shortly. First

let's take a look at the

markets. Regional markets

eased back as investors

worried about the US economy.

The Nikkei was boosted by

hopes that Japan has hit the

bottom. In Australia a fall

in business investment in the

March quater and higher bond

yields in the US put a dent

in the ASX200. In Hong Kong

the Hang Seng was closed. And

trading will resume on Monday

in Shanghai. To oil street

where rising oil prices

pushed up stocks, the Dow

Jones climated and in Europe

the indice se, ended lower

pulled down by financial

stocks. I'm joined by Julia

Lee from Bell Direct. Those

worries about US government

debt seem to have eased

overnight? We saw a positive

session in the US which was

great to see because Treasury

bounced back. We saw a lot of

concern on Tuesday about

Treasury yields rising and

what impact they would have

on economic growth. The

supply of Treasury fears they

would overwhelm demand but we

saw Treasury prices bouncing

back and yields falling which

was good news for the US. The

Nasdaq gained as did the

Standard & Poor's. There was

economic data out? A lot out

of the US. In terms of mortgages and foreclosures a

record number for the first

quater. Home loan rates rose

to the highest level since

March. Initial jobless claims

fell down to 623,000 which

was better-than-expected.

Still continuing claims are

at a record high for the 17th

consecutive week coming in at

6.78 million and US durable

orders a rise of 1.9% so bad

housing numbers but the rest

looking good. Another rise in

the price of oil ahead of

today's OPEC meeting? We

have seen oil prices - OPEC

keep production quotas on

hold for the second

consecutive month which was

good news for oil. We saw oil

hit a record for 2009 trading

at 65US a barrel. The US inventory numbers were good.

We expected to so a rise in

in convenient tries but when

saw a surprise drop which was

good news for oil prices so a

which was good news for oil when saw a surprise drop good session for ventories but

prices so a good session for

oil. HSBC was down 1%. Man

Group dropped by 6.9 so the

FTSE was down. The Dax lost

double this and France was

off by 1%. How do you expect

regional markets to perform

today? Yesterday we saw

China, Taiwan and Hong Kong

closed for a holiday. Today

it is expected to be positive

on the back of that

performance. We saw the

Nikkei futures rise by 15

pointt spy futures up by 31

points. We could see the

North Korea situation shaky

but it looks like a positive

session for the regional

markets. What local data is

out in the region? If we

look at India growth is

slowing 5% in the first quater. In Japan industrial

production is expected to

rise by 3.3%. Jobless numbers

are expected to come in at 5%

in and which is the highest

since 2003. Household

spending is expected the fall

by 0.7% and in Australia

private credit numbers as

well. Let's look at what is

commodities. happening in currencies and

Australia's Central Bank

has rejected claims it was partly responsible for the

country's recession. New figures show business

investment plunged for the

first time rain year and a

half but one of the Cancer

Research UK's top officials

One of the Reserve Bank's

top officials has defended

its policy for raising

interest rates. Governments

around the world have poured

trillions in the their

economies to stop recession turning in the depression. It

has created a major challenge

the global economy over the

next 5 to 10 years. The word

is facing a substantial rise

in Government debt relative

the world output, something

like a third of annual GDP.

This is a very major increase

and it will be interesting

the see how that is

accommodated without causing

major changes in relative

prices in asset markets. In

other words reignite

inflation but having slashed the Official Cash Rate by

half in the last few months

the Reserve Bank is ready to

move quickly to head off that

inflation. The latest business investment figures

point to economic growth in

March being negative which

would put Australia

officially in recession but

the suggestions have been

rejected after the bank rose

interest rates last year as

storm clouds over the

financial crisis were

gathering. As late as

September last year real

demand in Australia was still

growing 4%, faster than

average. That pointing point

he says was the collapse of

Lehman Brothers. While he is

handling the interest rates,

the global financial crisis

is being discussed the other

side of hid any. The dangers

of Australia going it alone

when the garages the that are

propping up the banking

system are removed. In the

current environment it would

be a very macho thing for our

Government the say we have

survived we will remove the

gurn tee because others may

not do so. Which he believes

would leave the financial

system exposed. At the heart

of what started at the the US

sub-prime racy were the

ratings agencies which turned

out to be worthless. Those

agencies have a strong

supporters in the chairman of

ASIC who will seen be in

charge of regulating them in

Australia. I do not share

the view the credit rating

agencies are to blame. I

think they played a role but

there is did you diligence, invest doors and there needs

to be a much greater

understanding of howes the

products work an much greater

due diligence. A sue not all

the panel shared. They

failed, they got self

interested, they were dealing

for the issuers rather than

for the investors. One thing

everybody did agree on was

that risk needs to be better

disclosed in all areas where

in investors are asked to put

their money. The problems in

the US car industry have

deepened this week. A former forward subsidiary and

another parts supplier have

filed for bankruptcy

protection but the road for

recovery has become easier

for General Motors. Major

bond holders have accepted a seatened ownership plan and

General Motors is pushing ahead with Lance to dominate

the Chinese market. General

Motors is now becoming the

No.1 car-maker in the

Communist country. Consumer

advocate Ralph mader warns

General Motors is on its way

to saying goodbye to the US

and hello the China. Where

is our self respects a

nation? After taking

billions in bailout money and

announcing thousands of lay

offs General Motors has plans

to ramp up production in

China to build cars for US

consumers. This recently

amended agreement between the

auto workers union and

General Motors says both

parties discussed the

company's plan to import

certain vehicles from China.

Mader says General Motors and

bankruptcy would allow the

car-maker to shift its China

plans into overdrive Do we

want the US export its auto

industry to a dictatorship in

a country like China? In the cars General Motors is

building in China are the very vehicles Barack Obama

would like to see stay in the

US. The path I'm laying out

today is our best chance the

make sure the cars of the

future are built where they

have always been built, in de

it there and across the

Midwest. Industry analysts

say General Motors is simply

focusing on what is working.

The main thing General Motors

plants in China are shipping

to the US are not cars, it is

money that they - there are

profits being made in China

which are being used to

support the company here.

The recent disappointing data

on the US housing market has

analysts predicting any sustained recovery remains a

long way off. But there are

encouraging signs in an

important part of the sector.

Home sellers will be glad

the hear the buyers are back

this spring and the are a

motivated group. Around

country home sales are up

including here in out town

New York where volume has

picked up noticeably. What

has gotten buyers back into

the market? Pricers are

lower. Much lower. People are

coming out because they feel

they can get a good deal for the first time in a long

time. The median price of a

home in the US dropped more

than 15% in the past year to

$170,200. Add that to 30-year

mortgage rates below 5% and

an $8000 Federal tax credit

for first time home buyers

and many say the stars have

aligned for buyers. The No.1

good news that is after 6 or

7 years where home prices

were not affordable for most

people unless they took out a

risky mortgage, now they

are. 25-year-old Adam and

his wife just bought their

first home. First time home

buyers drove almost half of

and sales. Something saved

enough money to have a good

down payment on a home it was

a great opportunity for

Tuesday really become

homeowners. For now the

homes that are selling

fastest are the small starter

homes especially those in foreclosure. Foreclosures

accounted for a whopping 45%

of sales in and. They are

like for something they can

get at rock bottom prices

because there is still

uncertainty about jobs and

the market. Malay Shah's

economy will shrink by 5%

this year.ylasia's economy

will shrink by 5% this year.

The new forecast came out

after data showed that Asia's

third most export-dependent

economy shrank from a year earlier. Singapore's

Government has defended the

performance of its sovereign

wealth fund, it has made $38

million in the six years of

March in 2003 or 15% a year

but the result has been

tarnished by a loss-making

early exit from the Bank of

America, a figure which

remains undisclosed. The

Government has come under

fire from Singapore and law

makers over the write down.

Like other sovereign wealth

funds the company ploughed

billions into Western banks

in the early phase of the

credit kissies and was hurt

by the meltdown. It remains a

long term investor not a short-term trader of

assets. The head of ANZ Mike

Smith remains confidence his

back will pick up the Asian assets of the Royal Bank of

Scotland. ANZ raised more

than $2 billion to portly

fund any purchase but Mike

Smith refused to be drawn on

media reports the ANZ was the

last bidder starting for the

RBS assets. He would not say

if ANZ would reconsider buying parts of

Queensland-based bank and

insurer Suncorp. Obviously

there are significant things

coming up in Asia-Pacific but

there will be further opportunities in Australia. In a sobering

outlook on the economy Mike

Smith warned the worse of the

recession is yet to hit


As the global recession

kicks in small and medium-sized businesses are

suffering. In Australia Banks

have scene a big increase in

bad debts from corporate

loans. Unemployment has

jumped as firms go out of

business or scale back. But

some of the newly jobless are

fighting back by buying

companies that are selling

up. Robert Hirst runs

Melbourne-based business

brokers and consultants Hirst

Partners. He says there is a

number of increases in people wanting to buy small

companies. In the last month

there has been a most

noticeable increase. The 12

months before that it was

slow but certainly the last

few months we have seen quite

an upturn in the interests

being shown. Do you think

that is because of rising

unemployment? I don't think

there is any doubt about that

because I think people are concerned about their future

jobs and if they are not

looking to buy they are

certainly having a bit of a

look around to see what might

be available if it should

happen the them. Given the

credit crunch it must be hard

to get a back loan in this

environment business it a

good time to buy? It is

certainly difficult to get a

bank loan but if you are able

to find it, it would be a

good time the by a business.

There are a lot of people

looking to exit and it would

be a good move but it depends

on the seller. What are we

talking about? Vendor finance? Vendor finance.

There are an earn-out

situation where the business

is paid out over a period of

time out of the actual

earnings of the business

which is a form of vendor

funding I ge.s there are that

type of alternative available. Hat type of

business are being bought and

sold? I guess all types But

the ones that are most

sought-after I would suggest

would be the ones where they

are mainly - something with a

trading component. Most

people under the by and sell

situation where it is a

distribution or a whole sale

type business, they are the

one thanks are most

sought-after we experience. Retail is not as popular as

it used to be for many type business, they are the one thanks are most sought-after we experience. Retail is not as popular as it used to be for

many reasons. There must be

lots of panic selling, are

buyers getting good value or

are we seeing panic sales? There are businesses in a

situation where they must be

sold. Panic a bit of a strong

term perhaps. There was always situations where

people do have to sell for

various reasons but probably

today where businesses, where

the owner of the business has

a bit of, a bit over-later

with debt that might be effecting the business

function and they need to

exit it, sometimes there is

nothing wrong with the

business it just means the owner does not have enough

funds the properly fund the

business operation. And they

do need to exit. There are

usual reasons with health

factors, that sort of thing.

There is some panic around,

panic selling but not a huge

amount. How risky is it to

get into business to buy a

business in this climate?

Well I suppose it depends

upon the individual. What

their own ability is. I do

not think the risk of is any

different than it as been if

that is the right word. The

- they need to properly

carefully assess the market

the business is in and their

own abilities too A lot of

people do not fully

understand their own

capabilities and they have a

misapprehension about hat

they are capable of and that is where the risk of comes

in. If you under your own

capabilities and survey the

market properly I do not

think there is a greater risk

today than at any time in the

past. Robert Hirst you have

been in the business for 30 years. What type companies

stand the test of time?

Look, businesses are provided

basic commodity or basic

service, something that has a

business that has, um,

supplies a need a basic need

really and if - things like

perhaps - and you do Ned

skill for these, chemist

shops, hair dressers, beauty

sal cons, that sort of thing,

retail food, grocery ons, that sort of thing, retail food,

grocery stores and And the

small groceries seem the

survive. Do you think

franchise are more likely to

withstand a downturn than

smaller operators? Well it

will depend on the franchise.

To some extent they would

because they have a partner

in business. The franchisor

is able to guide them if they

are finding difficult in

managing the business, their

experience should be able the

assist them whereas the

individual does not have that

availability of a mentor if

you hike to go and assist

them to get through the hard

times. Franchisors can buy

better in group buying

whereas a individual does not

have that opportunity.

Robert Hirst from Hirst

Partners thank you for

joining Business Today.

Thank you. Singapore's Prime Minister

is expected to press his Australian counterpart Kevin

Rudd for greater access to

domestic air routes when the

pair meet in Singapore later

today. Mr Lee wants Singapore

airlines to be able the fly

to the US from Melbourne and

Sydney. They expect to

discuss trade and other

issues but so far the air

lane has not been granted

permission. Mr Rudd speck at

the Asia security summit in

the city last night. Prime

Minister Lee says he is keen

the hear Mr Rudd's

perspective on Australia's strategic role in the

region. A then Chris lesson

for accounting work or hair

cut in exchange for printing, not your traditional business

model but as the recession

Bates many enterprise are

turning the the age-old

practice of Barter to pay

bills and cut costs. Racquet

sales may be falling but

Scott Riley is fining other

ways to stay in the game.

Customers at his Tennis

Centre and hotel complex are

cutting back on their spending so he trades

services make-up for cash

flow short follows a says

baerting has strengthened his business while others are

suffering. We increase our

sales which are up by 20% and

on the other side sin staefd

spending a hard or a cash

dollar that we may need to

use to papers knell or

interest rates to the banks

we actually use our trade

dollars to pay our

expenses. Mr Riley is a

member of the Barter card

network in Australia which

has been operating since

1991. It already has over

20,000 members on its books

and it is seen inquiries and

new client jump by 20% in the

last quater. CEO says the

growth can be directly

attributed the the financial

downturn. We do better in a

counter cyclical market so

when the times are tough

Barter play as more important

role than the SME market in Australia. Angela has been

drawing up a new marketing

plan for a restaurant in

Singapore. In return she has

received thousands of dollars

of advice in home design. I

thought it was good business

idea because if you under the

mechanics of thou financials

work it should only take up

20%, 1% of your capacity. I'm

not fully mixed up all the

time in a PR company. The

owner got a sophisticated

marketing campaign that cost

them 70% less than its cash

equivalent. The concept is

relatively new in the city.

The local web site has only

400 members but is expanding.

Ply printer, one of my

members, bar her trade his

capacity in return for staff

benefits. From services

supplies it seems there is something for every business

and without the hefty

up-front cost. Life has come

full circle for many people

who thought they had left

homework back at school. In

Britain they are the

so-called ?25,000 people who come home from a

5 to 9ers. By day Edward

works at his office

organising education material

for schools. He was made

redundant laster and now

earns less money doing his

new job here in Manchester.

These days the work does not

stop when he gets home. Hi

Pop. Edward is sun onto his

laptop doing free Lance

marketing and Ray search,

work that he has found online

to boost his wages. It is

probably - well I would spend

a couple, 2 to 3 hours on

average a night to doing

extra work which has

contributed 20% 30% to the

overall bills and running of

things. During the last recession most people had

never heard of the internet.

This time round much more

technology is available and

it is helping a growing band

of workers like Edward to

survive the downturn. And

they are all doing it from

home. Thousands are

buildings for work on this

web site. The projects are

posted by companies keen to

keep costs down by

outsourcing. It is like eBay

but for business and the man

behind it told membership has

soared in the last year

Right now 70% of the people

on our site are either people

who have been made redundant

or what we call 5 to 9ers

working around the clock to

enhance their income. The

extra money has been a life

line for The Smith Family

near High Wycombe. Peter had

to take a big cut in pay when

he was forced the find a new

job so his wife Zoe is back

at work but this time from

home. I think my only option

would have been what a lot of

my friend are doing which was

to go and work innes the

Scotland or do a night shift

at the local share home. Tesco or do a night shift at

the local share home. The

Standards looks at improving

relations. The 'Financial

Times' says General Motors

hopes of finding a fast exit

from bankruptcy rose after

some of its biggest bond

holders agreed to a sweetened

Eleventh Hour offer. The 'Wall Street Journal' reports

on General Motors saying the

company has won backing from

key creditors for a

bankruptcy plan that would

give the US Government a 72.5% stake in the revamped

company. That is all for this

week. I'm Sue Lannin. Have a

great day.

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