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Live. Good morning. Welcome to

the program. I'm Alicia Barry.

In 'Business Today', rallying

call - Gordon Brown urges the

US to join moves to boost the

global economy. Numbers game - Australia's sliding towards recession despite Government

efforts. And fresh injection -

China to unveil a new round of

infrastructure spending. Those stories are coming

stories are coming up shortly

but first let's take a quick

look at the market numbers:

For more on the market action

I'm joined by Chris Weston from

IG Markets. Good morning,

Chris. It seems optimism has

returned to Wall Street today.

What's driving the gains? It's

great news. We saw the Dow up

2.2% to close. It had been up

as much as 4% but the last half

an hour we saw big declines to

close up 2.2%. We saw the& and

P trading well above the 700

mark which was good for the

markets. It was the speculation

the Chinese are going to come

up with an additional stimulus

package on top of the 4

trillion yuan they've already

come up with that drove the

market. Caterpillar were up,

BHP and Rio were tradinging as

high as 13%. That was the big

driver. We saw good reports

from a private company called

challenger grey and Christmas

showing planned job cuts in

February, a future-looking

indicator, was down since the

first time it's fallen since

December. That was good and

showed the market rallied. We

saw GE down 9% but it rallied

later in the session and came

out with a note saying they

weren't planning to do capital

raising and that's why we saw

the US market rally. That

rally came despite the Federal

Reserve's influential beige

book said US conditions had worsened in January and

February. Yes, we heard from

the US conditions there deteriorated further in all

corners of the country with

consumer spending slumping,

manufacturing decliening, 10

out of 12 Federal district

banks reported weaker

conditions in their economy, credit availability became

tighter, showing the market is tight at the moment there but

the bad news was overlooked by

the China story which saw the

markets rally. Can we expect

regional markets to build on

yesterday's gains? We can

indeed. I think it's going to

be a positive day on our

markets. Certainly in the ASX

today we're calling up 75

points on the open, trading

around the 3244 mark in the

Nikkei in Japan, open 105

points higher around the

7365mark, the hang seng, we're

calling it up a nice 361

points, opening around the

121.65 mark. Should be a good

day. Thank you Chris Weston.

That was Chris Weston from IG

Markets there. Now let's take a

look at what's happening in

currencies and commodities. British Prime Minister Gordon

Brown has challenged US law

makers to resist calls for

protectionism and work with

other countries to revive the

global economy. In a speech to

the US Congress, Mr Brown again

raised the need for an overhaul

of the international financial

regulatory framework. And

today's financial institutions,

they're so interwoven that a

bad bank anywhere is a threat

to good banks everywhere. But

should we succumb to a race to

the bottom and to a

protectionism that history

tells us that in the end

protects no-one? No, we should

have the confidence - America

and Britain most of all - that

we can seize the global

opportunities ahead and make

the future work for us. Barack

Obama agreed on global

cooperation to handle future

financial crises but just what

approach will be taken to

tackle the global downturn?

Renewed calls for protectionism

will become clearer at the G20

summit hosted by Mr Brown in

London next month. The welcome

overnight rebound on the Dow

only slightly reversed what

been a series of negative jolts

over recent months. Many

investors are still sitting on

the sidelines, unwilling to put

their capital into companies

which are now wholly or partly

owned by the Government. For

all the efforts to stimulate

the economy and jumpstart

lending, stop the housing

crisis and bail out banks,

investors don't seem to like

what they've been hearing.

Dwroo I'm not picking on any of

the new administration or the

old administration but so far

we don't have any feeling that

somebody knows whether there's

one more shoe to fall or

whether Imelda mar cos's closet

is about to come down on

us. Art has been on the floor

of the New York stock exchange

for 35 years, and is one of

four veteran traders we talked

to today. Is the message of the

market, these wrenching

declines that Washington is not

spending the taxpayers' money

in the right place? President

Obama has done what he things

is the right plan in putting it

in place. We know it's going to

take time. Are investors

impatient the Very impatient.

They want instant results. But

instant results or good results

are hard to come by. Stocks are

down almost 19% since the Obama administration took office,

down more than 50% from their

peak. One thing we keep hearing

is that after the bail-outs of

Citigroup and AIG, investors

will continue to sell stocks

until they're convinced they

know the new rules of the game.

Who will be bailed out? And on

what terms? As far as the investment community is

concerned, it's very difficult

to ask people with their own

money to step into the equity

marketoon long-term basis when

the ground rules for investment

keep changing based on whatever

the Government says one day or

the other. This stock trader

for more than 25 years says the

trillions of dollars now

sitting on the sidelines will

not come back until investors

see some proof the Government's

plan is working. As consumers,

as investors, we need to see something positive actually

happen. We have been told it's

going to happen, we're told

we're going to recover, we need

to start seeing bits and pieces

of that recovery fall into place. If everything goes

right for the administration,

that's not expected to happen

until the end of the year.

China's Premier Wen Jiabao is

expected to announce a new

range of initiatives to

stimulate the country's economy

extra spending on today. The package will include

infrastructure as well as a

boost to the manufacturing

sector. Some economists are

pricking the measures could

match the US $585 billion

contained in last November's

package. Of the world's top

five economies, China is the

only one still growing but the

rate of expansion has slowed

for six straight quarters. Wen

Jiabao will also outline

China's economic goals on the

opening day of the people's

Congress and it'sopied he'll

restate a target growth figure

of 8% for this year. The global

recession has finally caught up

with Australia's economy. For

the first time in eight years,

the nation's economy shrank.

The 0.5% fall was set out in

the national account figures

for the December quarter. They

also show consumers are in the

mood for saving not spending.

After eight years of sunshine,

the economic weather has

definitely turned. Were in the

mid Os fr a global economic

cyclone. Australia cannot

continue to swim against the

global economic tide. We are

in an economic storm. We will

get wet but we won't sink. But

even though you're in a storm,

even though you're in a storm

and it may not be the skipper's

fault you're in the storm

thrnish skipper nonetheless has

to tear the boat effectively

and wisely and prudently and

that is what for Mr Rudd has

not done. The weather-beaten

stats were laid out in the national accounts from October

to December. The economy clank

by half a per cent , the first

- shrank by half a per cent ,

the first negative growth

figure in eight years. Over the

year growth was 0.3%, pointing to Australia's first recession

in two decades. We're halfway

to meeting the technical

definition of two consecutive

quarters of sagging growth but

by other accounts we may be

there. It means a significant

period of economic contraction,

exactly the sequence of

quarters you get I think is

less relevant to that but a

recession is a significant

period of economic contraction.

We think growth will slow to

about zero over the period to

June 2009, so on that basis we

would be borderline by the

definition that I gave you.

The figures have given

definition to a key question

facing the Government, over

whether its first round of cash

handouts did anything to

stimulate the economy. There

are signs that some of the

recipients did not follow the

Prime Minister's advice to

spend it. While consumer

spending rose just 0.1% in the

quarter, household savings

soared to the highest rate in

20 years, $15 billion was

squirrelled away. Government

can't mandate how individual

consumers use their money,

whether they spend it, whether

they save it or what they spend

it on. The Opposition Leader

says the bulk of the money was

saved for that now imminent

rainy day. It's sense frble

families to do that but it

doesn't produce the economic

lift that Mr Rudd has

promised. The Treasurer

insists that could still

stimulate the economy, just

later on. Yes, it may be that

there is some part of the

economic security strategy

which has been saved and we

said at the time that wouldn't

be a bad thing because to the

extent that people saved to

repair their domestic balance

sheet f you like, it takes them

one step further towards

consuming at some stage in the

future. Well, business has backed the Australian

Government's approach to

dealing with the financial crisis despite the evidence the

economy's slowed. And the

margin for error in the

official figure is up to half

of 1% on the down side so in

theory at least, the December

quarter's figures could end up

being revised later in the

year. It's getting hot in the

kitchen with December quarter

GDP much worse than many

pundits had predicted but those

at the 41 line of the economy

are taking the official inwise

a grain of sol. It's not

doom and gloom. Pam and

Victoria say their bar and

restaurant still enjoys strong

turnover, maintaining its

regular clientele of business people during the week and

social diners on the weekend.

As a comparison from last year

to this year, certainly our

customers are making different

choices when it comes to wines,

different choices when it comes

to the length of their meals

and things like that and the

average spend per head but

thankfully we are still seeing

lot of people. However, they

have made some changes,

introducing recession-friendly

menu items to keep the cash

registers ticking and while

pate rnds are searching harder

for value, on the other side of

the equation, Lamaro's

suppliers are lifting their

prices. We're seeing

notification of them lifting

prices 5 or 10% quarterly and

we have to make the decision

whether or not we pass it on to

customers or absorb the costs.

In more cases than not we're

absorbing the costs so running at tighter margins than

ever. While some businesses

face shrinking profit margins,

car dealers are struggling to

make a sale. Figures from the

chamber of automotive industry

show new vehicle purchases in

February were 21% lower than

the same time last year.

Despite the constant flow of

bad economic news, advertising

agent Simon Burrt is surprised

by the half a per cent drop in

GDP during the December

quarter. It looked to me what

we're learning is just how much

the country was riding on the

back of the mining boom because

in the retail sector in

particular or manufacturers

I've been speaking to as well,

it just hasn't been bad enough

to have given the sort of bit

of a surprise result. He

points toa recent report by the

Australian centre for retail

studies. It says consumers are

willing to make major household

purchases although saving

remains a high priority and

Simon is confident that the

slow-down in the economy won't

translate to a reduction in

advertising. I see that most

businesses understand the

smarts of continuing to steer

the ship on an even course and

that that means they've got to

keep putting their message to

the consumer. Get through the

downturn, companies are also

urging the Government to do

everything it can to make doing

business as easy as possible.

Hospitality operators are

concerned about award

modernisation proposals which

would if crease hourly rates

for casual staff after 7:00pm

on weekends and public

holidays. If this does go

through, we will see a lot of

bes choosing to close on

Sundays and my heart goes out

to regional areas who rely on

weekends and public holidays

for 75% of their trade. But

Victoria Wilson says provided

consumers keep supporting the

economy, businesses like hers

can enjoy a bright

can enjoy a bright future.

There's no doubt that the

global downturn has shaken

investors sentiment and rocked

markets worldwide, but slowly,

as confidence begins to creep

back into the minds of those

looking to invest, there's an

emerging trend for alternative

investment strategies. For more

on this I'm joined by Mark

Johnston, founder of Investment

Trends. Good morning, Mark

Johnston, welcome to 'Business

Today'. Good morning. Firstly,

how has the current economic

climate affected investors'

prenchsz s? Are they sticking

to their long-term game plan?

What we've found over the

course of last year is investors became progressively

more worried about what was

going on and tended to move

away from their long-term

strategy. So back in May -

around two-thirds of investors

were saying, "I'm ignoring the

downturn and sticking to my long-term plans," but by

November we found that figure

was down to about 4 out of 10

so 6 out of 10 had moved away

from their long-term plans.

How are financial advisers then

managing these changing

expectation of their clients?

Advisers have been trained to

reassure their clients and get

them not to react in the wrong

way to what's going on. The

issue I guess is that over time

a lot of investors have really

stopped listening to that

advice so we find, frarchl,

that only about a third of

financial planning clients say the financial planners at the

moment is having the main

influence on their investment

decisions. Quite often they're

making decisions based on what

they're reading in the paper,

seeing on TV, their own

research on the Internet, for

example. And are financial

planners finding they have to

be more hands-on with their

clients? They are but their

they also note lot of money is

building up in cash so a lot of

investors have gone to the

sidelines. Financial planners

collective ly as an industry

when we asked them in November

how much excess cash is built

up that would normally be going

into growth assets put into growth assets put the

figure at $58 billion. Another

issue I suppose, has trust or

the perception of financial

advisers become more negative

in this downturn? Yes and no.

We find there's a slight

decrease in people's intention

to used avisors going forward

so there's some people saying,

"I've lost money on my own

account t proves I need more

advice, I'm going to increase

my use of advisers," however

there's more people saying

they'll stop the use of

advisers. There is a net

decrease in adviser usage, the

only group we found who were

planning it to increase adviser

usage were the high-end

usage were the high-end

investors. Let's look at the

types of alternative investment opportunities investors are

looking for. They're not

necessarily looking for risk y

vems but one that are off the

beaten track? Yes, we find

there are two distinct groups

of people when it comes to

using alternative non mainstream investment. The

first is looking to increase

returns within a part of their

portfolio so they're looking

for things that have more up

side and they're prepared to

adopt a bit more risk. Some

leveraged investments, things

like CFDs, installment warrants

and so on there, a bit of

demand there although it will

take a while to get traction.

The second group of investors

are looking for products that

reduce the risk in their

portfolio, things that give

them more disversification,

maybe manage tax issues. We

maybe manage tax issues. We

find a growing demand for

things like exchange traded

fund which hasn't to date been

a big feature of the Australian

market but also capital

protected products. Can we

expand on that? What sort of

different products with we

seeing hitting the market

during this downturn? I think

the pace of new products being

launched has actually sloed off

a little bit. A lot of our

institutional clients we talk

to have take an hit in revenue

so new product development has

slowed a bit. There's almost a

vacuum for certain types of

products. There's a lot of

people that see now would be a

good time to gear into the

market while asset values and

vyts are low but they're

hesitant to do that so they're

looking for the traditional

nonresource products like

self-funding installments but

we find it's difficult for

product issuers to manufacture

the products because the cost

of protection is so high. There

is a bit of a vacuum while

people find new solutions to

those issues. The company that

do offer these product that are

in demand, are we seeing them

act quickly to take advantage

of the opportunity? I think

there's actually a little bit

less development. Weak

certainly seen a lot of

companies that had new products

in development put those plans

on hold just until they see how

on hold just until they see how

things settle down. The

exceptions to that, I guess we

are hearing of companies

looking at new types of

installment warrants where the

risk for the issuer is managed

so they essentially hand over

the share when you reach a certain price. There's certainly a lot of development

happening in the structured

product space so capital

guaranteed products with a

fixed duration is one thing

where we'd expect to tooee a-A

lot of new products hit the

market. Are we seeing the

tradition types of products

that were popular two years ago

no longer appropriate for this

type of clime isn't I guess

use of ol aroundative

investment - alternative

investments across the board is

down. People who use

nonmainstream investments two

years ago might have had 21% of

assets in alternatives and now

that's down to 14. The demand

is down but people are

comfortable with maybe 17%

being in there. There is growth

in certain areas like ETFs,

like structured predicts, Mr

$is demand for growth in things

like CFDs. I guess some product

areas have suffered more than others, things like

others, things like fund of

hedge funds, hybrid securities,

we've seen much, much lower

demand for some of othese

areas. Mark Johnston, we have

to leave it there today but

thank you very much for your

time. Thanks, Alicia. Well,

India's Tata has unveiled an

upmarket version of its small

car the Nano, which it hopes

will find a market with

budget-minded European

consumers. The more refined

Nano Europa sporting leather

trim and air bag s went on

display at the show hoe. It

will be - at the Geneva Motor

Show. It will be in showrooms

within the next two years.

There is a market in Europe for

a low-cost car with very good

fuel economy and while we have

considerable market in India,

we feel that in course of time

this car could have an

application in other geographies. The European Nano

could have a price tag of over

$6,000, nearly triple the

projected cost of its Indian

cousin. New designs

incorporating green

technologies featured strongly

at the show. India's Central

Bank has indicated it may keep

cutting interest rates after

economic growth slowed to a

5-year low last quarter. The

Reserve Bank of India has

reduced the benchmark

repurchase rate to a record low

of 5% from 5.5%. The reverse

repurchase rate was also

lowered to a 3.5% from 4%. The

bank says it will maintain

ample liquidity in the banking

system. Well, with traditional

sources of credit either unable

to or unwilling to lend to

consumers, other alternatives

are picking up the slack, one

option in the US offering

embattled home owners long-term

fixed loans is proving very

popular. In this


neighbourhood on Chicago's

south side, Teresa Moore's

story is a ray of hope. Just a

year after buying her first

home, her husband lost his job

and their adjustable rate

mortgage jumped to an

unaffordable 11%. Six missed

payments later, the bank

foreclosed. You were days away

from losing your house? Very

close. All the way to at the

end of the day. At the last

minute she found neighbourhood

housing services and counsellor

Sandra Wells. She told me, "I

want to save my house." That's

all I needed to hear. NHS is

just one of a growing number of

so-called ethical lenders. In

neighbourhoods like this one,

these lenders are thriving,

dealing with the same group of

low income borers at the heart

of the financial crisis. How do

they do it? By offering only

30-year mortgages at fixed

interest rates their clients

can afford. We've been

profitable but we're not profit

maximising. We don't go outlet

and try to make the most profit

off a transaction. In recent

years these groups have lent

more than $2 billion. Much of

the money comes from private

investors and banks and nearly

all of their low in come

borrowers, 98% of them, pay on

time. It's huge. It is huge

and it tells you it's not the

borrower, it's the loan. The ethical lending movement began

with nuns willing to invest

some of their retirement

savings to provide loans to the

working poor oo. When I invest

in you, we're now in relationship with each other so

I'm asking you to pay that back

so now your good and my good

are linked. Good thing for

Teresa Moore whose affordable

new mortgage rescued her

family's home. When you first

buy a home its argood feeling

but when you almost lose it and

get it back it's a great

feeling. Yes. Thank you, God,

for this day and not letting

the house go into foreclosure.

Thank you for everything.

Amen. Well, now let's take a

look at what's making headlines

around the region. The Standard

reports one of Hong Kong's biggest investments has - in

vestors has fiercely denied he

rigged a vote on the

privatisation of PCCW. The

'Financial Times' covers

expectations of a second China

- Chinese stimulus package and

the boost given to global

markets and the Wall Street

journal take said a look behind

the scenes at the gathering of

China's leaders in Beijing

where the stimulus package is

expected to be announced today.

That's all for this edition of

'Business Today' but if you

would like to look back over

any of our interviews, please

visit our website.

We look forward to your

feedback. I'm Alicia Barry.

Thanks for joining me. Enjoy

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