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Business Today -

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Live.

Good morning, welcome. In

business today - facing the

music. Bernard Madoff pleads

guilty the defrauding tens of

billions of dollars. Jobs

decline - Australia's

unemployment rate hits a

four-year high. Risk

assessment - the rising

outlays for staying safe

while you are travelling.

Those stories are coming up

but first let's look the

market numbers. It is shaping

up as strong open on eyeing

session yesterday. The was a natural markets after a mixed

broad-based slide on Japan's

lows. Australian investors Nikkei sending it to 25-year

were cautious on concerns of

a gloomy economic outlook at

home and overseas. HSBC gains

helped support the Hong Kong

market and in Shanghai there

was light trade as economic uncertainty kept investors on the sidelines. I will Wall

Street - the market has

jumped for a third straight

Dayton outlook for general

electricity he trick and

consumer spending. In Europe

retailers and drug-makers

boosted markets. I will

London's FTSE ended up half a

per cent. For more on that

market action I'm joined by

Julia Lee from Bell Direct.

US stocks have risen for a

third straight day. What

trove the gains? It with a

really good day for the US

market t third consecutive

day of gains and we have not seen that since 28 January.

The US market was helped by

comment if bank of America

CEO as well as gain in

General Electricity. Mr Lewis

says he will not need any

more Federal funds and

expects to make a profit in

2009. He says the banks are

in good credit shape and are

not in dire straits as the

market expects. We did see

Bank of America shares rising

9%. General Electric, S&P

downgraded GE as well as its

finance arm so it lost its

coveted tripling A rating. GE

came out to reasure that the

market the downgrade would

not materially affect its

operation or funding so the

stock rose as well so we saw

the Dow up by a massive 3.5%.

The Nasdaq gained 4% and the

S&P 500 was up by 4.1%. We

have seen US retail sales

data out. Wrath the

specifics? The numbers are

out for February and we

expected to so a decline of

0.4% but we saw a very slight

decline of 0.1%. In fact not you drill down the number a

bit further and take

autopilot sales out of the

equation then you would so a

healthy 0.7% rise. It looks

like there was decreases in

things like motor sales, building materials as well as

food and beverages but we did

see a rise in the demand for furniture, electronics,

personal goods, clothing as

well as sporting so some

signs the US may look like stabilising but on another

front we saw the weekly

jobless claims up by 9000

last week to 654,000 so that

was a bit of a negative. Long

conditioning has awe buptly

scrapped its late trading

regulations a year after they

set them up. Request was

that? Currently Hong Kong in

than with a lot of international exchanges has international exchanges has a

closing auction but it looks

like it will scrap this and

from March #23i9 is going to

go back the its oldry GMTV

where it take the last five

trades and does a medium

price on them. It looks like

closing option has been

targeted by manipulators and

they have seen closing surges

thin market auction. Critics

saying they should be

targeting manipulation by the

market and not taking away

this step which would see it

one step out of line with

some of its international

counterparts but the exchange

saying it is designed to

inject investor confidence in

the Hong Kong market. How can

we expect regional markets to

perform today? Yesterday the

markets were mostly negative

around the region but today

with a massive surge in US

markets we expect at good

day. The Dow Jones up 3.5%

was boosted by financials so

financial stocks should

receive a boost on regional

markets today. We see the

Australian spy futures up by

1.5% so rises of 1.5 to 3%

around the he gone. Julia Lee

thank you for the update

Thank you Alicia. That was

Julia Lee from bell direct.

There let's take look at what

is happening with currencies and commodities.

For decade he got

away with it but now Bernard

Madoff is in jail not far Madoff is in jail not far if

Wall Street where he made his

name and conducted his vast

fraud. Japan's Numara Holding

has lost $360 million in

which the fund of new

investors were used the pay those already in the scheme.

Hedge funds and banks heavily invested with Bernard Madoff and totallesses could be in

the vicinity of $100 billion.

Bernard Madoff's day of

reckoning began under places

court on the short journey

from house arrest in his

luxury Manhattan apt tment the court where his fate

would be decided. The world's

media awaited had arrival.

This case has struck a deep

chord. In a hearing lasting

just over one hour Bernard

Madoff answered "Guilty" the

11 charges including fraud,

perjury and money laundering.

He has admitted to miss aprop

aide incorporated 50 billion

though the true figure may

never be known. Until

recently Bernard Madoff

exuded confidence and hubris

claiming a fraud of this type

was unthinkable It is

impossible for you for a

violation to go undetected

certainly not for a

considerable period of

time. But today in court it

was very different tune. He said -

his victims expressed mixed

feeling boss his guilty plea

and courtroom confession.

What did you make of Bernard

Madoff's statement in court?

Well he says he was under

oath so maybe we have to

believe him. He said he was

sorry and deeply ashamed, do

you believe that No I want

him to be taken away in cuffs

for the rest of his life Would that be enoughus is

the? There can never be enough justice for somebody

who December industries your

life not just ours but

thousands. From taking money

from Hollywood royalty. The

case has held up mirror the

certain unattractive aspects

of American societies

Bernard Madoff is the new

face of freed in this country

and a lot of people believe

in greed on every level is

partially responsible for the

economic trouble we are

in. The court demands in. The court demands that

Bernard Madoff pays

restitution the his victims.

In fact most of the money as

disappeared and the are up

are unlikely to get anything

back. There is fresh Stynes

the global downturn is

tightening its grip on us's economy with the unemployment

rate jumping to a fur-year

high of 5.2%. Not surprisingly job agencies

report a surge in demand for their services. But perhaps

what is surprising is the

range of people now looking

for help. 22 years with for help. 22 years with the

same bank did not matter.

Doug Russell was laid off a

week before Christmas You

are given 10 minutes notice

of "Can I have your corporate

card, your mobile phone on the spot, on the table now

and don't bother going back

to the office" A two-month

intensive search has so far

yielded nothing. Luckily

Doug's wife found work so he

an his three children can

hold out for three months

before serious

belt-tightening begins. Jo

has land add teaching job but

feels far from secure. All

Uni students coming out went

a job and it is becoming

really hard so we have been

based on contracts or casual

work. Youth unemployment took

big jump up and today's

numbers suggested employers

are shifting down he policing

full-time work part Tim and

there is an increasing number

of part-timers turning up at

places like this, the

Salvation Army's Employment

Plus offices In recent Plus offices In recent weeks

we have seen an alarming

number of new people who are

coming through our doors for

assistance. Demands is up 15%

t biggest jump in five years

as the client base broadens

if the long-term unemployed

with few skills to the

mainstream. As misery

indexes go some say

unemployment under estimates

the problem because at times

like this there are many

like this there are many in

working go backwards whereas

recently the working poor has been a relatively stagnant

category I would expect that

category of employment to

increase over time Is not a category Doug Russell expect

its to be in I'm always

optimistic and I will just

leave it at that. In the

meantime there is plenty of

time the reflect. Official

figures show Japan's economy has contracted at the fastest

pace since 1974. Revised GDP

figures for the figures for the December

quarter show Japan's economy

slang slately less than only

estimated registering annual

fall of 12.1%. The pain

reason was a further rise in

manufacturing inventories.

However the figure still took

the country's growth rate to

a 35-year le as exports,

output and business spending

collapsed. Some economists

say the revig does little to

change their gloomy forecasts

and they believe Japan's

economy is falling off a

cliff. Companies including

Toyota and Sharp are

forecasting their first losses in decades while

Nissan plans to shed 20,000

jobs. Currency investors have

responded the those GDP figures by reducing the risk

being and seeking relative

safety. To discuss this and

other major overnight

movements I'm join by John

Noonan senior currency

strategist at Reuters. The

Swiss National Bank decided

to interseen the weaken the

Swiss franc and that move

appears to have affected

every currency That is right. It was a surprise

move. The Swiss National Bank

met overnight and as expected

lowered interest rates and

they were somewhat expecting

to ease 'quantitative easing'

the same as England did a few

weeks ago but was what

surprising was they announced

they would start to buy

foreign currencies to intentionally weaken the

Swiss franc and the reason is

they see a weaker Swiss franc

helping them in the battle

against deflation which a lot

of European bank are worried

about and they want to make

the country exports

competitive. This has set off

a chain of event within the

your than say markets where

you saw a lot of weaker

currencies whose Central Bank

is looking to support the

currency because of debt only

gaze s strengthening against

the stronger currencies and

this is a suspicion in the

markets their Central

Bankless take measures to

weaken their currencies to

help them in the exports and

fight deflation so we saw a

huge move t biggest in the

euro Swiss t biggest one-day

move in the euro Swiss

move in the euro Swiss over

the last 24 hours the dollar

rose over 3% against the

Swiss frnc so it really shook

up the markets. Moving on the

to the report which showed

Japan's economy shrank less

than analysts expected that

we have just mentioned, how

did the yen respond? It had a topsy-turvy day. It

strengthened on the move

partly due the technical

reasons. The dollar-yen as

been flirting with the 100

level for a few weeks now,

couldn't quite get through it

is in the 2-day moving averages so invest averages so invest doors

decided to buy in and book

the profits using the GDP as

an excuse and the elevate

level of risk aversion had

investors coming back into

the yen so the dollar-yen

fell to 95.5 and the euro-yen fell as well but after the

move by the Swiss National

Bank overnight there is a

suspicion maybe the bank of

Japan tan MOF will take a page out of the page out of the Swiss

National Bank's play book a

be a take measures to weaken

the yen because they the yen because they too are

faced with the threat of de

flition and are having

trouble in their export

sector stow the yen sector stow the yen weakened

going into the US close back

up to 97.5 level against the

US dollar and the euro-yen

moved up about 2% from the

low so very volatile

low so very volatile market

in the yen overnight. As you

say, the yen may weaken further. Looking at the trend

the yen has fallen against 8

of the 16 major currencies

since the start of 2009 so

can we expect further

weakness in the medium term?

I think so. I think the investors, there is a bit of

evidence that investors are

pulling out of Japan. I think

there is a view this the Japanese authorities are not

doing enough to fire up their

economies, stimulus package

are having trouble, difficulty getting through.

There is a political

stalemate in Japan now stalemate in Japan now where

you have an unpopular PM and the Leader of the Opposition has been tainted with scandal

so there is a belief that

perhaps maybe the Japanese

authorities are acting a bit

paralysed at the moment, not

doing enough the fire up the Japanese economy leaving foreign investors the foreign investors the pull

out of Japan. We had a bit of a correction yesterday

because we could not get

through the 100 level but I

think once the dollar-yen

break the 100 we will make

the 1and I think trend for weakness will weakness will continue

particularly as the market

factors in the ability of

Japanese authorities

potentially weakening the

yen. Closer to home it was

not just at flight the safety

that accident the Australian dollar lower. How did it

react the the rising un'em

preliminary numbers? Funnily

enough the foreign exchange

market did not really react

too much the unemployment

numbers. Think because the

data around the world has

been so weak, poor data out

of Australia is not that surprising even though the

full-time job number fell the

net employment was net employment was slightly

positive so the Australian

dollar weakness yesterday was

more to do with Aussie yen

selling. We saw overnight the

Australian dollar brick above

the 65.5 level in the first

time in weeks so the

Australian dollar opens today

at a stronger level because

the RBA, their last action in

the market was to buy Australian dollars because

they want the see the Australian dollar stabilised

and as I say, we are seeing

stronger currencies having

Central Bank intervention to

weaken currencies so we may

see a convergence where the Australian dollar will

strengthen a bit despite some

of the poor data coming out of this region. Unfortunately

we will have to level it

there for today John but

thank you of my pleasure.

Japan's biggest bank will

shore up its capital base

through a $1 billion issue of preferred securities. The

move will allow Mitsubishi to

top up its capital without difficult lugs difficult lugs as the

security will not be able to

be converted to common stock.

The bank spent $14.2 billion

on acquisitions last on acquisitions last year taking a 21% stake of more

begun Stanley. It is also bidding for the Japanese

brokerage arm of Citigroup.

Japan's bank haves been hit

by the company's deepening

reso and sliding markets. NAB

has become the second of the

big four the slash its

dividend. Shares closed

dividend. Shares closed 3%

higher as investors expected

the move. They are now betting the bank will not

need the rays new capital the

offset bad debts. Australia's

big four banks are giving the rest of the world a lesson in

how the ride out a crisis but new National Australia Bank

boss Cameron Clyne is not

complacent It will be a challenging period. By the

same token we do see some

opportunity for us to grow

our market share as well. Mr

C lyne has unveiled the

strategy for a year ahead

which includes a new which includes a new member of the board and in a

concession to the challenge

ahead a flagging of a big reduction in dividend We

felt it was appropriate

having done the strategy

update the significant that

our intention is a 25% cut

the man train Conservative

balance sheet settings. Which

makes NAB the second of the

majors the cut its payout to

shareholders after ANZ I

thought they would cut it as

much as 30% and maybe they

will ultimately but it is important the conserve capital in times like

capital in times like these.

You do not want to go to

share holders asking for more

capital. Clydesdale and

Yorkshire may need more dap

tall down the track. But

there is no choice because

no-one would want to buy them

in the current climb. If he

puts the business into

run-off then they will just

wither and Diane destroy more

value than if he supports them. Hopefully support he

gives them will actually one-day bear fruit but that

will take a lot of time

before that happens. A view

Cameron Cliff agreed with as

he said the bank's primary focus incoming months will be

Australia the reality that is

the markets we operate in

outside Australia all are

less attractive in Australia

t right thing for us in the

short-term is to focus on

Australia, let's maintain the

option offshire an see how

the marketplace out. One of

the biggest changes in the

restructuring of the market division NAB Capital including the closing of some

parts of that business. It is

work Brett believes should

have been done by John

Sewart. He should have done

more and faster. It looks

like what they were talking

about was something more than

what they actually executed. Costs will continue

to come under scrutiny this

year and Cameron Clyne

year and Cameron Clyne has refused to rule out job

losses. At least three

companies have expressed

taking - interest in taking

control of the fraud-hit

Indian outsourcing company

Satayam struggling for

survival since January when

in visitors learnt assets

were overstated. The managing director has quit and has

been arrested. Three Indian

countries have expressed an interest intaking a stake in

the company which employs

50,000 and has 60,00 client

including Qantas the and GE.

However analysts say without

detailed access to the

business it is unlikely any other company would risk

buying a controlling

stake. Credit car providers

are suffering from twin hits

the their revenue. Consumers

are cutting back on purchases

and bad debt levels are

rising. In view of the

greater risks with unsecured lending credit card companies

are rethinking how they do

business. Does plastic pose

the next threat to the

economy? Prominent banking

analyst warns in a Wall

Street journal opinion piece

that credit crunch are the

next crunch. She estimates $2

trillion of credit card trillion of credit card lines

will be cut this year. 2.7

trillion by the end of nexter

and a pull back could slow

already weak consumer

spending tmpbility question

is will it be the fast and

affect individuals who are

good borrowers able the pay

their loans, their credit

card but the bank are being too cautious and go to go

cutes the as well. With

people falling behind on port

payment and losing their

payment and losing their jobs

there is worries about

customers not paying their

credit card debt. American Express recently offered the

by some customers to close

their accounts if they paid

off their balances. Those who followed the credit followed the credit card industry say companies like

American Express are trying

to protect the direct against

risky customers. Credit card

issuers as a whole are trying

to cut down the risk being

and this is another way the

do it. Thoughtful leadership

is to be called on for a 57% contraction incredible lines

but another economist says at

the same time these companies

are cutting credit lines to

protect against risk they

also make money by loaning it

to consumers most often at double-digit interest rates

There is certainly a tug of

warring go on between these

are competing issues. He

tell security in India has

been stepped up after the

terrorist attacks in Mumbai

last year. The he tells that

were under siege have

reopened and guests appear

reassured by the increased

safety measures. The. The aj

and Oberoi both iconic hotels attacked by terrorists last

November working hard the put

it behind them and making

their guest feel well,and

safe. We can ill afford that,

we can only create barriers

and create as many checks as

we can but we can never fight

back something as severe as

what we experienced on

26/11. Since then the he tell

has added new security

measures. No cars allowed onto the porch of the hotel.

All bags and parcels are

screened and guests must

enter by walking through a

metal detector. The security

you and I can see is just

part of the story. It could

be discrete patrolling of

floors, it could be a

discrete check on everybody's

credentials, it is the level

of training of the staff. The

Mumbai attacks were the first

of its kind in India but it

is not the first time hotels

have been targeted. Hotels

in these hubs need to be

protected and it requires excellent cooperation from the Government and the

private sector. And it takes

resources. Business traveller

Ken yin was staying at the.

The aj hotel during the

attacks and is at favour of

increased security at hotels

as long as it is discrete

Hotels cannot put in place

security arrangements one can

not find at airports which is

what you need, you need the

scan everything, every time

you come in and out it will

not be practical. No hotel

can garage the a guest's

safety unless you end up at

this hotel in Berlin said the be the world's most secure

and expensive. $25,000 a

night will get you a room

with bullet-proof windows,

armored doors and walls but

the security can come down

basic measures Keep your

phone on your, do not leave it charging because you do

not know if you are going to

get back the that room as I

discovered with some of my

colleagues which was a vital

piece of equipment in keeping

contact with the firstly

family but also with our

colleagues trapped indifferent parts of the

hotel. There is one more item

Kevin always carries, his

room key whether the tag

hotel, a con stnt reminder of

how lucky he was. Now let's

look at what is making

headlines around the region -

the Standard reports on the

controversial closing option

system of the Hong Kong stock

exchange saying it has been

scrapped after the plunge in

HSBC shares. The financesal

times says Jack Welch the

executive regarded as

executive regarded as father

of the shareholder value

movement says the obsession

with short-term profits over

the past 20 years has been a

dumb idea and the Wall Street Journal' looks at the jailing of the disgraced financier

Bernard Madoff whether has

admitted to running a massive

decade-long scope that milked

investors out of billions of

dollars. That is all for this

edition of business today but

if you would like the look

back at our interest sues

please visit our web site.

We do look forward to your feedback. I will thank you

for joining me. Enjoy your day.

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