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Business Today -

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Live.

Good morning, welcome to the

program. I'm Whitney

Fitzimmons. In Business Today -

bonus fury, AIG's CEO, he says

he told executives to give

their big pay-outs back.

Slipping target - the World

Bank predicts China's brot will

slow even further this year,

China's growth. Downturn

strategy - retailer David Jones

cuts its cloth for the times.

First let's take a quick look

at the markets. regional

markets may open in positive territory led by Wall Street.

Yesterday there was a mixed

decision at the close of trade.

Japan's NIKKEI rose. hitting a

five-week closing high.

The market took confidence by

moves of the Federal Reserve

Bank in Wall Street.

In Europe, trade was

mentioned with London's FTSE

and France's KAK lose - CAC

losing ground. More on the

market action I'm joined by

Chris Westen from IG markets.

US markets have surged off the

back of those moves from the

Federal Reserve. Yeah, very

aggressive steps from the Fed.

We saw them start their quantitative easing process

buying $300 billion worth of

long dated ush treasuries,

trying to bring the yields down

and make borrowing much cheaper

for the US consumer. Certainly

the market's responded %tively

to that. We saw the Dow trade

up about 1.25%. The S&P traded

above 800. certainly aggressive

steps enlightening the market.

Still in the US, there has

been positive news for one

computer software giant. What

can you tell us? That is Or

akle. We saw them report thaird

third quarter profit beating

analysts expectations, their

Preece rallied just over a

dollar. That relates to the dif

dep we saw them paying a

dividend of 5 c per share,

whereas before they didn't pay

one. That leads for a new type

of appetite for investors, who

who want to buy stocks for

their dividends. Over in the

UK, there is fresh data showing

unemployment has risen at its

fastest pace since 1971. We saw

their job list benefits rise

about 138,000 in February, that

was worse than most people

expected. We had expected an

increase of about 84,000

swrobs. We we is it see the

sterling come off a bit. This

is the biggest number on the

job list queue since 1971.

Still not quite that big an unemployment read. Their

unemployment rate is of 6.1%.

The US and Europe 8%. How will

regional markets cek start the

day?. That good gains should

trans late to good gains on our

market. Just below that 3500

mark. The NIKKEI we're calling

up 1.457%, the Hang Seng should

have quite a good day, we're

calling that a further 2..2%.

Checking currencies, how is

the greanback performing? It's

still trading high. We saw from

the last night with the Fed, we

saw the euro put oun about 3.1

against the dollar, the

Stirling put on about 2.9%.

Australian dollar traded above

that. The dollar has come off

against pretty much all curnies

in quite a big fashion. Let's

look at what's happening with

currencies and commodities.

It was always going to be a

full and frank exchange. The

chief executive of the troubled

US insurer AIG found himself under sustained criticism when

he appeared before a cop

gregsal committee. Edward Liddy

agreed the million dollars

bonuses paid to AIG's

executives and traders were Des

tasteful and maintained he did

ask for them to give the money

back. Mr Lid y told the

committee he understands the

intense public anger that

surround the payment of more

than $165 million in bonuses to

AIG executives. Americans are

asking why pay these people

anything at all? Here is why.

I'm frying desperate ply to

prevent an uncontrolled collapse of that business. This

is the only way to improve

AIG's ability to pay taxpayers

back quickly and completely.

And the only way to avoid a

systemic shock to the economy

that the US Government help was

meant to relieve. Mr Liddy says

he's told his employees to step

up and do the right thing, some

have already paid back their

bonuses. Accordingly this

morning I've asked the

employees of AIG financial

product it step up and do the

right thing, specifically I've

asked those who receive

retention payments in excess of

$100,000 hor more, to return at

least half those payments. Some

have already stepped forward

and offered to give up 100% of

their payments. AIG's financial

products are being blamed for

dragging the company into

turmoil. Eventually requiring

the Government to either lend

or invest $170 billion in

taxpayer funds. He has continued to defend the

original payment of the bonuses

describing them as an essential

business tool. Meanwhile,

critics say regulators are

already partly to blame for

AIG's situation as they failed

to predict the risks involved

with credit default swaps. Even

so, serious questions remain

about the conduct of the

management team at the helm of

the insurance giant. In an

August 2007 conference call Joe

cas anno, then lead of AIG

financial products reassured

investors AIG was financially

sound, despite his involvement

in a growing house ing

meltdown. It's hard for us

answer without being

flipability to have been -

- flippant it even see a scenario

InDecember 2007, more confidence

from the AIG CEO, despite

darkening economic clouds.

Then in March 2008, with the

housing market collapsing AIG

leadership told investors not

it expect significant losses, despite the economic

uncertainty. But the company

was losing billions.. FBI and

and other investigators have

subpoena ed documents. Did AIG

lie to investors about the

company's strength? The

Government wants to know whether what people were saying

inside AIG was the same as what

they were telling the American

people. Company officials again

addressed investors in an

August 2008 conference call.

This time they acknowledged

challenges that AIG CEO said -

Wrong again. Just day es

later in September, taxpayers

were asked to provide $85

billion to bail AIG out. At the

centre of the federal

investigation AIG financial

products group which presided

over the meltdown now receiving

millions in bonuses. The people who caused the problem are being rewarded for their bad

behaviour.? The Government's

investigation may not stop AIG

from building out those huge

had bonuses but it may put some

officials receiving them at

risk of going to jail. The US

Federal Reserve has taken new

steps to bring down borrowing

costs and stimulate the

recession hit economy. It will

buy nearly $1.2 trillion worth

of long-term government debt

and expand purchases of

mortgage related debt. It hopes

the move will boost the

struggling housing market by

lowering interest rates on

mortgages and other forms of

consumer debt. The size of the

action surprised investors and

boosted Wall Street. The US

central bank has also kept

interest rates unchanged at

clos to zero after its two-day

policy meeting. P Japan's

central bank is making similar

moves, it has left benchmark

interest rates unchanged and

announced it will buy more

government bonds to kick start

the economy. The bank of Japan

left rates ob hold at 0.1%, it

will buy $18.3 billion of

government debt each month and

also says it is considering

strengthening commercial banks

by providing them with loans.

Japan's economy contract ed by

over 3% in the last quarter of

last year. The World Bank says

China won't be able to escape

the impact of the world recess.

In quarterly report the bank

cut its prediction for the

country's economic growth in

200 # 9 from. 7.5% to 6.5%.

The collapse in demand is seen

as the main reason for the cut.

The bank added China's economy

was still holding up well

compared to other countries and

remained a bright spot. There

has been a bleak assessment of

the global economy by Morgan

Stanley's Asia chairman Stephen

Roach. He is stiping anaemic

growth for at least the next 3

years. One of the reamen's top

investment banks says there

needs to be massive rebalancing

of the world economy. He doubts

there is the polit political

will to do it. for most of this

decade Stephen Roach has been

warning about debt and asset

bubbles. While he doesn't think

there will be a global

depression his outlook remains

sobering. I think we're in at

least a 3-year global slump

where the world GDP will grow

at roughly 2% average annual

rate. That's wellened the IMF's

recession threshold of 2.5%

growth. Stephen Roach says the

solution will come from

rebalancing the global economy,

that means lifting consumer

spending in nations that are

big savers, especially in Asia,

and boosting saving rates in other economies like the US.

Consumers are smart, they'll

figure it out. They didn't

save. Thy directed their

savings strategies at asset

bubble that is have burst. And

now an ageing generation of 77

million baby boomers is waking

up to a nightmare. But he doubts whether some governments

have the stomach for change and

cautions western economies

against stimulus packages that

encourage consumer demand.

While reluctant to comment on

Australia, he also has a

warning for resource based

economies. This global slowdown

does for the point to a sharp

snap back - that will continue

to raise some questions about

the commodity economyings and the commodity currencies in countries like Australia. countries like Australia.

Stephen Roach says capitalism

is not dead but argues the

current crisis will require a

rethinking of governments.

While that may mean tighter

regulation, investors are also

being called on to play a

greater role in hold ing

companies and directors to

account. Providing a challenge

to... On its capital structure,

it's risk management and social

and environmental ethical risks

as well as corporate Gough he

werance broadly defined to the

way companies are directed and

controlled. Colin mel ven

advises # 1 of the word's - 11

of the world's biggest pension

funds. He says institutions

need to become more actively

engaged with the companies they

invest in. Simply casting a

vote then not telling the

company why you've done is it

is rather a waste of time yet

that's the position most

companies find themselves in.

It's a Tech ed - ticked box,

that's a poor use of the vote

of a financial asset. Tighter

restrictions on executive pay

might just be the first step in

encourage ing a mouch more activist fund management

industry in Australia as

investors become increasingly anxious about where their money

has gone. Massive job cuts

across the globe have been well

domed. - documented. What

should job seekers do in this

now highly competitive

employment market. To discuss

some of the strategies that can

be used to stay tonne your feet

I'm join by Philip Guest. Good

morning. Rge good morning. How

competitive is it for job

seekers at the moment? We've

seen a complete reversal of market conditions from last

year. It is very competitive.

There is a lot more candidates

in the marketplace than we've

seen before. In order to

maintain employment, are we

seeing instances of people

taking pay cuts or even being

forced into lower paying less

skilled jobs? Yes. Employers

are taking and using a variety

of tools to dress and

restructure their businesses

before making employment or

employee job cuts. I think

we're seeing annual leave,

forced annual leave, leave

without pay, and all sorts of

different measures in order to prevent companies from having

to let people go. And letting

people go is the sort of last

resort in many cases. Philip

Guest, for those who were put

into lower paying or less

skilled jobs essentially being

demoted, what sort of impact

does that have down the line on

company morale? Are people just

happy they still have a job or

is there a negative impact

there? I think it depend on the

business and the way these

messages are communicated by

the business. It's very

important it talk to your

staff, to talk to your business and to your team about what's

going on. I think most people

in the marketplace understand

and read about the economic

conditions that we're currently

experiencing, so they're aware

of challenges that corporates

and businesses are

experiencing. I think the key

thing that employers or

companies need to do is

communicate them clearly and be transpairn about what's going

on. And the impact that those

conditions are having on the

business. In your experience

are companies doing that? Yes,

I think on the whole they are.

I think the better performing

ones are definitely

communicating well with the

staff that they're retaining.

Let's move on - in this

climate, look ing at people

seeking jobs, in this climate

how do people approach the

job-seeking process? What sort

of strategies should they be

looking at?. I think they need

to be - write a CV, prepare a

CV that is redetailed and

thorough, not long. and tailor

that to the role or the

particular job opportunities

they're applying for. They also

should work with recruitment

company that is specialise that

their particular job class and

they should canvas all the

different avenues to seek new

employment. So be very broad,

tailor your CV and research the

market and the jobs very well.

Another important tool is in

looking for a job is a positive

attitude and having confidence

that you'll eventually get

there. Give.that it is now

likely it will take several

months to find another position, particularly if

you're in management, what are

the best coping strategies for

people? I think remain very

positive. I think one thing is

certain, that is that this

market will turn. So I think remaining very

positive. Research and canvas

all different chams and all

different avenues to seek employment: The first priority

should be to regain employment.

So if that is in a role that

you held last year or a more

junior position consider that

first anticipate consider that

carefully. The preert should be

to regain employment first and

foremost. And canvas the market

well. Also with time you can

enhance and improve your

technical cells or job kills -

skills. Further training and

development can make you more

attractive to an employer in a

longer period of looking for a

job. I'd like to touch on that

point you make remaining

positive, but in this

situations main people feel

isolated and that can often

lead to depression, are there

certain techniques that you're

giving to your clients to help

them Three through those dif

dull times and to help them not

feel so isolated? The most important thing is

communication. Talking about

what's going on in the market.

We're all in this together. We

need to work together to our

way through trk the most

important thing to avoid long

periods of unemployment or

depression is to continue to

communicate and talk to

recruiters, to employers, to

fellow colleagues and fellow

employees that are looking for

jobs, like you are. I think

very, very important to

continue to communicate with

those various groups and that

should enable you to remain

positive. The up employment

rate in Australia stands at

5.2%, what's your prediction

for the jobs market as we move

into the second quarter? Very

difficult to say and as a

non-economist, I'd be loathe to

pick a number, but I think it's

very well - widely reported

that people are expecting it to

go to 7%. I think one thing is

certain, this market will

turn. Even if the up employment

rate does get to 7% there will

be still opportunity in the

marketplace, there are still

businesses that are continuing

to grow, and the market will

turn at some stage. remain

positive. Thanks for your time

today. As corporate losses

mount one business that might

be the enswri of its

competitors is Australia's

upmarket retailer David Jones.

The company has lifted first

half earnings by 2.5% despite a

large fall in sales. Profits

may be up at David Jones,

mainly due to cost cutting, but

trade and conditions are tough

and they won't be getting

better any time soon.. We see conditions deteriorating for

the whole of calendar 09. DJ's

is predicting the downturn will

be longer and deeper than the

last recession in 1991. Which

is why the taking measures such

as cutting staff and slashing

invepry. Net profit was up 2.5%

in the first half last year

despite sales dropping nearly

657% to - 6.5% to just over a

billion dollars. To deliver

profit growth in this

environment is a strong

credible result. It was a

strong performance on cost,

that saved that EBIT margin and

kept profit in the black. DJ's

is standing by its full year

earnings guidance of up to a 5%

increase in net profit but Tom

Hodson believes the the cost

cutting strategy will become

harder the longer the downturn

continues. There are some cost that is can still come out of

the business, but our view

would be that the lion's share

of the easy costs have been

taken out, now it's just about

squeezing out those increment

al dollars where you can and

continuing with that program. A

bright spot for David Jones was

the performance of its American

Express branded store card. It

contributed $20 million to

overall profit and importantly,

according to Mark McInnes it's

an alliance which has allowed

the retailer to restructure its

balance sheet.. we transferred

debt funded receivables to

American Express, we released

$35 million worth of working

capital, we've transferred the

operation of our store card to

American Express,ing we

awheeved 7.5% EBIT growth.?

While many companies are

struggle under a mountain of

debt which has led to a rash of

capital raisings in recent

months David Jones isn't one of

them. Mark McInnes has been

quek to point out DJ's net debt

stands at just 1 mun million

dollars which means the company

will ride out the economic

downturn in excellent shape -

$100 million. We're the only

company to use the upside to

pay down debt rather than load

up debt. Famous companies like

neemen Marcus, Debenhams in the

UK, they went through a debt

fuelled expansion stage and we

did the exact opposite. Having

the lowest debt of department

store peers worldwide is a

strong selling point in this

environment. Mark McInnes is

confident there will be no more

job cuts at David Jones

although there is a wage

freeze. DJ's has maintained its

interim dif den at 11 c a

share, fully franked. The head

of the European central Bank

says it's ready to take

additional member usual to

tackle the global economic

crisis. The comment come as the

late es unemployment figures in

Britain spark more concern the

recession there is deepen ing.

The jobless rate hit a 12-year

high of 6.5%. Finding work in

Oldham is tough for every

vacancy advertised in job

centres there are 24 people

chasing it. Jenny woo has

experienced many sole

destroying - soul destroying

days hunting for a job since

last outum. She's a regular

visitor to this recruitment

agency. She's experienced in

secretarial work but she says employers just aren't

interested. They're not getting

back to me on anything. I sent

my CV off, a covering letter,

hope to get a response and I

don't get anything back. How do

he feel about that? It gets

really frustrating when you are

taking the time to fill the CVs

in, to go through the correct

channels then they don't even

say thanks but no thanks. I

talked to one of the bosses of

a lekal hotel. He told me there

had been a surge in the numbers

pursuing job vacancies. This is

response from one advert in the

job centre for 3 positions for

a bar assistant. There are over

50 application forms there.

It's a brilliant response.

Generally you wouldn't get that

many people responding to just

the one advert so there is a

lot of people and a lot of

choice of applicant for the one

job. The local Council says

it's doing all it can to help

people back into work. But

there is no doubting the

economic chill now gripping the

town. It's a sadly familiar

theme in many communities like

Oldham, the number of people

looking for work far

outweighing the number of job

vacancies, but the not the same

story every where - in some

areas jobs are still being

created and there are posts

which are still unfilled. An

hour's drive around greater

Manchester heading south-west

answer you find somewhere with

a number of claimants not much

more than the number of adverts

in job centres. This cafe in

Chester opened 2 weeks ago, the

owners, a a husband and wife

team were surprised by how few

people applied for jobs. We

expected floods of applicants

and they just never

materialised. It was over a

four-week period so it wasn't a

quick notice in the window and

it was gone people he - were

aware of it. Chester is an

affluent city, perhaps no

surprise there's little sign of

recession on the shopping

streets, but it's a reminder

that experiences of

unemployment are by no means

the same every where. Now let's

look at what's making headlines

in the region - the stoorned

reports on more weak results

from developing countries.

Carey properties said profit

dropped 54% after real estate

Preeces fell and revaluation

gains declined. AIG chief executive Edward Liddy was confronted by colourful

protesters as he arrived to

testify on Capitol Hill amid

public fewerity over the large

bonuses paid to senior staff.

The Wall Street George

journal looks at how China's

move to preveb takeover of a

juice company by Coca-Cola may prevent investment in the

country. If you'd like to look

over some of our stories, visit

our web site. Thanks for

joining me, enjoy your day. Closed Captions by CSI