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Live.

Good morning. Welcome to the

program. I'm Whitney

Fitzsimmons. In 'Business

Today' - mining shape-up.

Shrinking options for China's

iron ore supplies. Court date.

Chrysler fights legal

challenges to its restructuring

plans. Margin call. Day traders

riding the peaks and troughs of

the market. Those stories

at the markets. shortly, but first a quick look

For more on the market

action I'm joined by Alicia Barry from the ABC. Good

subdued close on Wall morning. It was a fairly

Street? Good morning, Whitney.

It was. It started off as a

choppy session on Wall Street.

The stock market initially

started higher, but investors reassessed their position after

that jobs report came out, and

sold off stocks, so markets

consolidated a bit of their

gains. The Dow Jones finished

up 0.2% higher while the Nasdaq

was .3% higher, as was the S &

P 500. Can you take us through

that US employment report? We

saw the spallest drop-off in

the number of jobs since September, fueling homes the

worst of the recession is over.

Employers cut only 345,000

jobs, much less than the half a

million expected, but that

didn't stop the unemployment

rate rising to a 20 (2) 5-year

high of

high of 9.4%. The Labour

Department says 600 million

jobs have been lost since the

beginning of the recession in

2007. In regional markets what

can we expect today? It should

be broadly positive across the

region. The futures markets are

predicting that the Nikkei will

the Hang open up 50 points higher, while

the Hang Seng in Hong Kong

should open about 300 points

higher while the Australian

market is closed for a public

holiday today. Turning to commodities, where did oil

finish up? On Friday, the crude

oil price fell from a

seven-month high. That's

because the collar rose on that

jobs report, and we saw oil

small 37 cents or 0.5% to 68.44

a barrel in New York.

a barrel in New York. Oil is up

5 #% this year, and there are

signs the global economy is

picking up, and that could

support higher oil prices going

forward. Before we go, any

economic data we should look

for this week? The Central Banks of New Zealand and South

Korea are meeting on interest

rates. We'll also see investors

get data on Chinese consumer

price inflation, retail sales

and exports, as well as

Japanese machinery orders.

Alicia, thanks for the update. Now let's look at what's

happening with currencies and

commodities.

The immediate future of

troubled US car maker Chrysler

could be decided by the country's Supreme Court as

early as today. Those opposed

to Chrysler's sale to the Fiat

group have filed an appeal to

block the proposal from going

through. Three large pension

funds from asked for a

temporary hold on the sale in

the hope of securing a better

price for Chrysler's assets.

Last Friday a lower court

dismissed the funds challenge

and upheld an earlier decision

which approved a government

plan to create a new entity to

buy the company's assets.

Meanwhile part of the plan to

turn around the struggling

Chrysler brand Saturn may

include plans to import cars

from South Korea. For this Saturn dealership outside

Chicago and more than 300

others across the country, the

deal means a second chance at

survival. What kind of a day is

this for you? Jubilant.

Absolutely fantastic. Riding

to the rescue, Roger Penske,

the automotive tycoon and race

car driver whose racing team

just won its 15th Indianapolis

500th. He plans to sell Saturns

but not make them. Where can

you walk into a motor place and

have so many consumers already

using their product? The deal

will save 13,000 jobs for now.

After that Penske hopes to find

another partner, perhaps

Renault to, to make the cars.

How will Roger Penske succeed

where GM failed? He will be

able to sell these cars without

all the expense ive baggage

that weighed GM down. We don't

have the legacy costs, the overheads associated with an organisation like General

Motors. He doesn't have UAW contracts, factory

overcapacity, he doesn't have

retiree pension

obligations. Gonna be a great

feelin'. 20 years ago Saturn

was GM's answer to Japanese imports, making a splash with

its no haggle pricing and no

team approach at a fabled

factory in Tennessee. Sales

peaked in 1994. Saturn never

made a profit. This is a much

smaller, leaner organisation.

Saturn suffered as the sad

step-child in a really huge

bureaucracy. Now Saturn gets

another chance with a man who understands his cars and knows

something about winning.

Markets endorsed it, but the

collapse of Chinalco's deal

with Rio Tinto has left China

with fewer options for crucial

iron ore contracts. In a unsomething turnaround last

week, Rio ditched the bid by

Chinese interests to buy an 18%

stake in the company. Rio will

now try to repair its debt

ravaged balance sheet by

raising more than $15 million

through a heavily discounted

sale on new shares. The official line from China is

that Chinalco is very

disappointed at Rio Tinto's

spurning its $19.5 billion US

offer to buy the mining giant

out of its alarming debt. Prime

Minister Kevin Rudd was quick

to reassure the Chinalco

Chairman that doors are still

open to Australia's vital trade

partner but despite the

diplomacy the fact remains BHP

Billiton not only gazumped

Chinalco but did so with a

proposal that will see China's

two key iron ore smirs paired

up as joint venturers in the

Pilbara. Happy with your

meeting with the Prime

Minister? The Chinese will be

very disappointed, upset that

the deal has fallen over, and I

think that will be augmented by

seeing what they see as the two

monopolists in the iron ore

getting together and possibly

working prices up again. This

is very bad news to Chinese

steel factories because Rio

Tinto and BHP are competitors,

but now they're becoming one

family. That means competition

in the market will be reduced

significantly, and that's a big

disadvantage to the buyer.

It's a relationship that's

taken years to get this close

according to BHP Billiton CEO

Marius Kloppers. While this

deal has been more than 10

years in the making, I believe

it has been worth the wait. We

are possibly quite obviously

delighted with the various

announcements we've made today.

We think we're in a very good

place. The deal was made while

Rio Tinto was also being

courted by Chinalco, with BHP

admitting they made the first

move and are paying almost US

$6 billion to make the venture

a 50/50 partnership. Clearly

the events unfolded over the

last couple of months since the

Chinalco bid happened. At that

point in time the obligation

shifted to me to make an

approach as opposed to the

other way around. We've long

recognised the industrial logic of bringing the two businesses

together and are delighted to

be able to realise vision which

offers significant value for

both companies. Very wuch a

win/win situation for everyone

other than Chinalco. The

Chinalco deal would've seen it

increase its stake in Rio to

18% and secure two seats at the

boar table. Ree yos' other

shareholders which include John

Robinson, had never been happy

with the bid. Initially the

fact that Chinalco was dealt

with to the exclusion of other

shareholders, the structure of

the deal was also not well

regarded, the selldown of some

of the key assets within Rio

was obviously not welcome. The

convertible bond issue right

from the outset looked to be

overly generous. Chinese

probably made a mistake in the

beginning by biting off more

than the public could digest.

And they went for too much in

terms of seats on the board,

representation on the various

committees and the strategic

alliances of the particular

operations. This man a former

Rio executive and consultant to

Chinese resource companies,

says the bid's failure let

Kevin Rudd and Treasurer Wayne

Swan dodge saying whether it

would've been allowed to

proceed under foreign

investment rules. The

government have been saved from

making a decision that may not

have pleased large sections of either the Australian community

or Chinese business. However,

news of the joint venture and

the US $15 billion capital

raising at least pleased

investors. On the AS comm., BHP

and Rio both shot up more than

8%, meaning the rights issue,

priced at 28.29 is being

offered at a hefty 60% discount

to Friday's close. It is a

discount but it's still the

amount of money that's been

tacked on to the value of Rio.

Rio still will have $20

billion-odd of debt. You still

have the management team in

place effectively that a lot of

people including myself have

question marks over. Rio has

churned through three chairmen

this year. That leaves CEO Tom

Albanese bearing the weight of

three controversial decisions,

first the costly Alcan

purchase, then the refusal to

consider BHP Billiton's $160

billion merger proposal and now the collapse of the Chinalco

bid. For the last 18 months,

the Rio management have shown absolute incompetence, and

arrogance. The other $64

question is just what the

Chinese make of it. The Chinese

have effectively come into Rio

right at the top of the

commodities boom, prayed a big

price for t they've been mucked

around with the deal before.

Peter Morgan, principal of fund

manager 452 Capital also warns investors that while ree quo

yo's joint venture with BHP

Billiton is sensible, markets remain volatile and he's not

about to plunge into the buying

spree. Lets a' not forget both

companies also have - BHP has a

large exposure to nickel, both

have an exposure to coal and

copper. Iron ore is sure

probably the roast lamb of the

dinner, but there are other

commodities there that are also

going to impact upon the

valuation of the company and the actual share price of the

company. Regulators here and

in Europe are also yet to

approve the 50/50 Pilbara

partnership which stops at the

docks. Chinalco has some time

to consider its next step

because even with all going to

plan, it will take about a year

to complete the BHP/Rio joint

venture in iron ore.

Business in Australia's

preparing for new carbon emissions targets. A lift last

week the Lower House of Parliament passed the government's carbon pollution

reduction plan, and it now

needs Upper House approval when

it hits the Senate later this

month. The government is hoping

to have the new system in place

before the world environment

talks in Copenhagen in

December. 'Business Today''s

Alicia Barry spoke to economic

consultant Adrian Kemp from

Mera, who says business is

gearing up for the

changes. Look, I think to start

with it's pretty important to

understand that the CPRS is the

most important and biggest

piece of economic policy

infrastructure we've sheen in

Australia since the GST and

even before that since the

floating of the Australian

dollar. The overall

implications are actually quite

enormous for business. So I

think business currently are actually quite excited and

pleased we're actually getting

to this point of actually

seeing the details around what

is CPRS might actually mean and

how it might actually be

applied. But that said, there's

really sort of two groups of

companies out there. The ones

that what I would describe as

the environmental innovators

and Australia has a wonderful

history of businesses that are

leading edge businesses, global

renowned and certainly we're

starting to see now they're all

starting to come home and see

where the opportunities are for the environmental technology

type game. I'm talking about

companies like Osra, a solar thermal based company. They're doing a lot of work in the

States and now looking to do

much more here in Australia.

But then there are other

businesses that are large carbon emitters and clearly

they're trying to understand

what the implications will be

for their bottom line. Is the

government's scheme then creating opportunities for new

types of businesses to

emerge? Oh certainly. Without a

opportunities in a a program of doubt. There's enormous

this sort of size but it's not

only just the CPRS . What we're

seeing of course is the

government's putting in quite a

bit of money in the clean

energy initiative to actually

promote and encourage solar

technology, to promote

investment in the carbon

capture and storage, and so

businesses are responding to those signals and they're

really getting out there and

trying to make most of it.

That's positioning Australia

pretty well to deal with these

new challenges. The carbon

trading scheme has been put on

hold. But heavy industry still

has to adapt? Look, the carbon pollution reduction scheme, it

will create a whole new avenue

for competition. Any business,

including heavy industry, they

are - they know they will have

to be able to respond to that.

So people aren't waiting for

the CPRS to come out. They're

certainly investing and

investigating in opportunities

and where there are cost effective sustainable practices

to implement they're going

ahead and doing that. I think

it's instructive to look at the

energy intensity figures for

Australia and most OECD countries. Can you see that

emissions as a proportion of

Australia's GDP has fallen

dramatically since the early 8

0s. It's gone down by about

20%. Part of that is structural

changes in business but part of

it is certainly industries like

heavy industry, who represent

about 50% of emissions actually

investing in more sustainable

practices. They will do that whether that's cost effective

to do. Now, among heavy

industry, is it there a

concerted effort towards

sustainable practices, or a

move toward just obtaining carbon credits? That could become a risk couldn't

it? Yeah, look, certainly, but

at the end of the day, these

businesses are looking for

areas to compete in, and energy

efficiency will be one of

those. Where there's cost effective means they'll do

that. But this is a emerging

and new area. There's likely to

be areas of general market

failures so there might be opportunities for government to

intervene to actually encourage

some businesses to undertake

more energy-efficient type

practices. That might be

through innovation provision,

through energy type audits or

even just providing access to

finances to invest in these

things. That might be even more important for small businesses

as well. Some would argue the

scheme has been designed for a world in which every country

has a similar scheme. Would you

agree with that? I think what's

really important is to make

sure our scheme is flexible

enough such that as other

schemes develop we're able to

engage in some form of international trade. I think

that's universally acknowledged

as being critically important

but that said, waiting for

everyone else to come on board

isn't what we should be doing.

If you look at the emissions

trading scheme in Europe, that

covers about 30% of global GDP.

So the rest of the the world

and many countries are

obviously moving towards these

types of systems. Clearly

Australia can be l well placed to gain the experience

necessary so when the time

comes we can engage in trade on

a carbon level across countries

and gain the benefits from

doing so. Looking ahead to

Copenhagen in December, what

are we expecting to be tableed there? It's important to put

the Copenhagen conference into

perspective. The Kyoto Protocol

is soon to be running out. It's

got a couple of years to go.

Clearly that means is that

Copenhagen really provides an

opportunity for people to start

thinking about.. What are

appropriate and reasonable

emissions reduction targets that countries can adopt and so

I think we can expect that

people will start the debate on

that. I'm not certain we'll get

resolution on those things at

Copenhagen. But that said, with

the changes we've seen in the

governments in the United

States and clearly here in

Australia, I think there's

scope to be optimistic there's

some wonderful opportunities

ahead in terms of seeing

movement on the carbon policy

front in the near future.

Thanks very much for your time

today. Thank you very much.

They're often labelled

gamblers or risk takers. Day

traders are investors who buy

and sell shares within the same

trading day, with some trades

only lasting a few minutes. And

growing confidence in the

market has made trading from

home even more appealing to a

lot of investors. The blue chips. I buy mining

stocks. Backing

stocks. Whatever your passion,

those in the know say it's

discipline, discipline and more

discipline that makes a good

day trader. The stock jock who

often works from home tracking

the slightest movement in

stocks for an income. Share

trading does have the potential

for unlimited profit, and

unlimited loss. It's thought

80% of day traders fail. So

what's the key to

success? Success day traders

really live and breathe it. If

I can make money in it, I will

invest in the stock. Three

years ago, Mark Kawecki gave up

his job as a financial planner

to focus tonne trading full

time. I was working very long

hours at my previous

employment. I was travelling a

long distance to work. And I

came across or discovered a

strategy that I thought I could

make more money than what I was

earning as a paid employee.

Despite the global market slump

he has never considered going

back to work. These days, he's

busy making up to 30 trades a

day. Risk management is his mantra. Wherever possible I try

to mitigate risk through using

CFDs or using put

options. They're both forms of

price hedging. You have to

expect bad patches your'

earning relatively no amounts

of income or even small losses. With the market

looking like it's on the road

to recovery those wanting to

jump back into the game are

being warned about the risks

involved with day trading It's

not for everyone. It is a

full-time job. The people who

are successful at day trading treat is like their own

business. There's no-one there

to make sure you don't sleep in

all day, you miss the open, you

miss an important trade. What

keeps me disciplined is I often

think if I miss an opportunity

it could cost me up to

$100,000. Many traders work

ahone. Understandably they

aren't too keen to give all

their secrets away. I wouldn't like to go into the specifics

of how I trade. But most agree

you cannot have too much

information.

He's the newspaper

industry's most successful

owner, but even Rupert Murdoch

concealeds the future of the

industry is digital. However t

may 10 to 15 years before

readers go fully electronic.

The News Corp chairman says as

newspapers are faced with

eroding advertising revenue and

dwindling circulation, many

outlet also have to charge

their on-line customers.

This is an absolutely crucial

moment in the history of

information.

The business model that has

sustained newspapers for all

these years is broken. It's a

world the global financial dire prediction but across the

crisis is shaking the

foundations of newspapers which

have been bringing the news to

their readers for more than a

century. In the United States

alone, during the past six

months, the publisher of the

Los Angeles 'Times' and the

Chicago 'Tribune' has failed

for bankruptcy while even the

'New York Times' has reported

record losses. It's prompted a

US Senate committee inquiry

into the future of journalism. High end journalism

is dying in America. Unless a

new economic model is achieved

it will not be reborn on the

web or anywhere else I think

people who think that the

Internet is responsible for the

death of newspapers are

searching around and blaming

the wrong person. Poor

management, poor newspapers, I think, are responsible for the

death of some newspapers.

News Limited has the

advantage of a 70% share of the

Australian newspaper market. Editorial director Campbell

Reid argues News Limited has a

more diverse mix of display,

retail and classified

advertisements. Many of the

newspapers that are under

serious threat don't have all

of that mix. They rely

incredibly heavily on

classifieds. Or they have no

classifieds and display

businesses, and we have all

three. But the economic

downturn has hit News Corp's

global newspaper empire hard.

Last quarter, profit collapsed

by more than $267

million. There's no doubt that traditional newspaper business

model has to change. Rupert

Murdoch now says the age of

free on-line newspaper content

is over. And News is

considering variations on the

paid on-line subscription of the 'Wall Street Journal'. To

get people to pay for

something, you have to offer a better service. That's what

we're focusing on. How do we

take what we do now, make it

better and package it and make

it available in such a whey

that people say, you know what?

I would pay for that. In the

United States, some titles like

the Seattle 'PI' have gone

exclusively on-line. At the

recent US Senate inquiry into

the future of journalism, the

proposition was put that all

newspapers should be able to

charge for Internet

copyright. The Internet is a

marvellous tool and clearly it

is the information delivery

system of our future. But thus

far it does not deliver much

first-generation reporting.

Instead it leeches that

reporting from mainstream news

publications. In short, the

parasite is slowly killing the

host.

David Simon is screen write

yert of the critically

acclaimed TV series ''The

Wire''. He is a former

journalist with the Baltimore

'Sun' which he says endured

cutback after cutback in

journalist ranks even when

making a 30% increase in

circulation. Even as News

Limited cuts back in Queensland, Campbell Reid

remains adamant the presses

will continue to roll. There's

a sweet spot about a newspaper

printed on newspaper in your

hand that people like. So we

aren't even going to

contemplate turning them off.

Now let's look at what's

making headlines around the

region. The business section of

the 'Standard' focuses on the

Hang Seng, saying it's in for a

chop y week. The companies and

markets section of the

'Financial Times' looks at the emerging markets this year

which has reignited the

decoupling debate. That's all

for this edition of 'Business Today'. I'm Whitney Fitzsimmons. Thanks for joining

me. Enjoy your day. Kevin Rudd kred Closed Captions by CSI