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tv   World Business Today  CNN  February 27, 2012 4:00am-5:00am EST

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thank you very much. i'm zain vergee at cnn in london. here are the headlines this hour. new shellings been reported in the syrian city of homs this monday. activists say at least 55 people were killed across the country on sunday. the weekend violence came as syrians cast ballots to change the constitution. results of the referendum are expected on monday. police in afghanistan say a suicide attack outside a nato base at jalalabad airport has killed at least nine people. the taliban is claiming responsibility. they say it's in retaliation for the burning of korans at an american base last week. the u.s. says the holy booked were burned by mistake and has apologize. with russia's presidential election less than a week away,
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russian state media says a plot against the number one candidate's been foiled. prime minister vladimir putin's about id to return to the presidency has stirred widespread protests. and now russian tv says two suspects in an alleged plot to as nature him have been arrested in the ukraine. they attempted a number of attacks in moscow, plus one on mr. putin right after the march 4th presidential poll. those are the headlines from cnn, the world's news business leader. i'm zain vergee and "world business today" starts right now. good morning from cnn london, i'm nina dos santos. >> and a very good afternoon from cnn hong kong. i'm andrew stevens. you've watch be "world business today." our top stories this monday, february 27th. the world bank issues a stark warning to china, free up the markets or face some dire economic consequences.
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>> g-20 finance ministers say europe needs to beef up its bailout fund. they're ramping up the pressure on germany to lead the way. >> and the numbers say it all. 71-31. julia gillard remains in power but the australian prime minister must now restore unity within her own party. first up, though, european stock markets have been open for a touch over an hour now. it's not get off to the best week so far. it wasn't much different in asia where the trend was overwhelmingly a downward one. let's go over to andrew. zblf that's right, nina. our top story today, the world bank plus a chinese think tank issuing a stern warning to the chinese government. in a report entitled china 2030, the two institutions say china has to move to a freer, more commercially driven economy if it wants to sustain its rapid
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growth path. estimates suggest that state-owned enterprises, the soes like an oil giant, account for some 40% of china's total economic output, total gdp. the new report recommends an overhaul of the powerful state-owned companies, turning them into commercial enterprises. growth is largely govern driven. it calls for greateren innovation and greater competition. china's economy is the world's second biggest and growing at a rate of 10% a year and it's been doing that for the past three decades. certainly enormous growth in china. the critics do question whether such a high rate of growth can be sustained under the current economic model. already we've seen signs a slowdown. the report says china can maintain its strong growth but there are some risks. stan grant joins us now with
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more on that. you've been looking at this report. it's a huge overhaul of the system they're talking about, land reforms, financial sector reforms, labor reforms but the state-owned enterprises. >> it probably doesn't come as a surprise to be honest. it's no the as they're living in a vacuum. they know what's happening in their own country. the old saying about stage play, the gun in the first act always goes off in the third. we already saw the gun 350 years ago. now it's in danger of going after. this is a country where the ground is shifting beneath its feet. the economy has been in transition. we're starting to see it slow down. we know internationally some of the export markets, u.s., europe, not as deep as they once have been. not likely to come back soon. you have an economy very much in transition. there's an economic reality and then there's a political will. do they have the political will to carry this out? we know they know what the economics are. are they going to be able to
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free up, is the government going to feel comfortable enough to take its hands off the wheel? that's what they're asking for here, away before being directly involved to more indirectly involved. they want to see the government to be able to set more rules and guidelines without directly interfering. >> and then stepping back, basically? >> stepping back. as you pointed out before, we know there's been a preference for the state-owned companies. they know how to work with state-owned companies. they're the product of the government. now they want to step back from that, open up more to private companies, allow them to more freely in the marketplace, give them the access to the funding from the banks that the state-owned companies have enjoyed. that will mean freeing up the labor force as well. one of the things of this is focusing on the heco system. that's the ability for people to move where and when for work. you can't control people when they start to move out around
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the country. economic reality and political will is what we're talking about. >> they're being asked basically to tear up the playbook, aren't they, and say you start again and do it this way, which is a huge thing. stan, as you pointed out, obviously they see stresses and strains in the system they've created so far. what do you think of the key points they're going to be focusing on? what needs to be fixed first if you like? >> look at the report. the real key is more freedom, more economic freedom. the government stepping back, allowing private companies to operate more freely. allowing the people to be able to move around more freely. really key part of this to me is focusing on domestic consumption. the old model, relying on high exports, having a big, cheap labor force, a lot of investment, that model is tapped out. i know that, they know that and you know that. what are they going to replace it with? domestic consumption. a lot of people i speak to say
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they should have started this process 15 years ago. now they're trying to catch up. if you were to get to where consumption needs to be, at the moment it's 30% of gdp, it only goes to 50%, people need to feel secure. they can't stash their money under the bed. they have to know they'll be provided for in old age, there has to be health care. people feeling confident to spend, they have to be able to take care of the social welfare system in the country as well. that will mean upheaval, a cost to the government at a time when there's international turmoil as well. >> the timing is curious, because we have a change of leadership in beijing this year. do you think this report is some sort of marker, perhaps, being put down by the incoming leaders to say, this -- these are the sort of steps we're going to take? >> what a parting gift. here you go, it's all yours, you can take it from here. look, hu jintao has been lucky.
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he's been able to preside -- not just lucky. he's been competent as well. he hasn't had to do a lot. economy has continued to function. he's been swept along by the growth. xi jinping is not going to be as fortunate. you look at this report, by 2030, china will probably be the biggest economy in the world if it stays on track. it will be growing at 5% to 6%, not 10%. it will have a gross national income of $16,000, $17,000 per person. that's very different to today. how do you manage the expectations? how do you manage a more wealthy country? how do you manage a country that the economy is starting to slow? you can't rely on the old leaders of growth. he's going to have a huge economic problem to deal with. i would argue, perhaps, even a greater political problem. you can't have free market without a free country. and when the government has such tight grip on the reigns as it does and feels insecure about
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letting that grip drop, releasing that grip, it's a recipe for uncertainty. one thing we do know, they don't like uncertainty. >> absolutely. i guess another key point which isn't mentioned in this, stan, is to have more openness, you need a much more freer press. we can't see that haing for a while either. >> look at the past year, andrew. we've seen an extraordinary crackdown on the movement of the press in the lead up to this leadership change, expect to see the same. >> stan, always good to talk to you. >> nice to be here. >> good to have you back down from beijing. stan grant, our international correspondent based in beijing. nina, it's an interesting question, because this is such a big issue for china facing the next 20 years or so, how do they grow? the old system isn't working. they're not comfortable with the new system yet. this is going to be a story we'll be talking about an awful lot over the coming weeks, months, years, decades. >> it certainly is, andrew, stan, with the weakness we're seeing here in europe and even
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though the united states' economy ticking up, the concerns remain in china. let's have a look at how this is affecting the stock markets here. europe, basically they've been falling like a stone. since the beginning of the trading day. very much taking their cues from what happens in asia and in light of the concerns surrounding china. if you look at the cac currant in paris, it has been following steadily throughout the course of the day. one stock in particular we're keeping an eye on in this market, the ftse 100, hsbc, europe's biggest bank has reported a net profit equivalent to $21.9 billion. hsbc's earnings include a $3.9 billion gains for re-evaluation of its own debt to try to mitigate the effects of all
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sorts of things many a bank has been contending with these days. it's stock not that much moved in the uk market. down to the tune of 0.2%. on a day when many of the markets are down in excess of 1%. andrew? >> certainly a stock that was watched very closely here. a lot of people own hsbc shares. it is the stock that's always been the one to have in portfolios in hong kong. this is how the asian markets ended today. we have one green arrow amidst the red. the shanghai is up about 0.3%. you'll see the nikkei down a fraction, though, that was the -- the losses were muted somewhat by the exporters. they made gains on hopes that the weaker yen which we've been seeing recently will boost over to these profits, obviously. the yen is down 4.5% against the dollar over the past month or so. there's a bit of ray of light there for the japanese exporters which have been hammered so much. elsewhere, though, it was a high
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oil price story. this is a story we'll be talking about for a while. certainly for the rest of this week. the nymex light crude getting to $110 a barrel. that sparks fears, obviously of what it's going to do for growth in not just the u.s. but the global economy, still so dependent on oil. in australia, even a decisive victory for the prime minister julia gillard in the leadership battle. stocks trading weaker as investors also reacted to those higher oil prices. let's just quickly tell you what the new york markets are looking like. this is the futures obviously. see there, all red arrows as well, the s&p, down about 0.5%. the nasdaq down by about the same, the dow, a fraction less. i suspect it's going to be oil-dominating in the u.s. as well this day. speaking of oil, the millionty billion dollar trial to determine civil liability in the gulf of mexico has been delayed for one week. it was originally due to start
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today with thousands suing bp in an effort to try and establish kulpaability for that april 2010 explosion. this explosion killed 11 people and led to the worst u.s. spill in u.s. history, oil spill i should say. they have another week to try and reach an out of court settlement. bp has earmarked 20 billion u.s. dollars in settlement money to be distributed to the victims of this spill which is the worst in the entire u.s. history. live from cnn hong kong and lon dob, you're watching "world business today." finance leaders say the eurozone rescue fund may be in need of a boost. we'll have the full story, just ahead. [ male announcer ] it's simple physics...
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the price of oil has been in the spotlight in recent weeks as tensions grow with iran.
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about supply plus the potential of closing down the straits of hormuz. this is european crude, $124 a barrel. it's come off highs on friday, down by $1.17. you're watching "world business today." we're live on cnn. finance ministers from the world's leading economies are piling the pressure on germany to boost the fund that's supposed to contain the eurozone's debt crisis. g-20 ministers met in mexico city over the weekend insisting that europe must increase the size of that bailout fund before it receives further assistance from the imf. europe's rescue fund, the so-called european stability mechanism currently has around $670 billion at its disposal these days. officials from inside and outside the european union have suggested that that figure should be substantially boosted, maybe even doubled here to contain the problems.
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however, germany says that beefing up this fund would remove the incentive for such countries like italy and spain to reform their economies. speaking of which, germany plans to announce a decision on the eurozone in march. the lower house of germany's government is preparing to vote on the second bailout package. the bundestag is planning to vote on this on monday. david, first of all, we really do need to boost this esm, this bailout fund, don't we? how much would be your guess? >> it's a little bit of a finger in the air. it's one of those things where maybe now the other countries around the world are taking a much more cautious and conservative view and saying we need to make sure there's more money in the coffers just in case there's monday down the
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line. just the greek situation has mushroomed. it always seems to be a few steps ahead of the politicians. it's maybe not too surprising that other countries are saying we need to increase the buffer. also, not too surprising clearly that the germans are saying, no, we don't want to commit any more funds to this at the moment. >> they're more or less advocating the same argument we saw when lehman brothers went down in 2008, this issue of moral hazard. if you put more on on the table, it's a disincentive for other countries to reform their economy. do you buy that theory or are things too acute at the moment and they need to put more money aside to calm people's fears? >> i'd probably side with the germans on this one. let's not make it seem too easy for countries to get bailouts and elevate down the line. let's try and view greece as the absolute -- the pinnacle of the crisis and hopefully things can get better from here. politicians will get their house in order, hopefully. the worry is, because maybe it's
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politicians and more worried about the popularity rather than a business, worried about its p & l, they may see the bailout as the easier option. i think the germans have a fair argument. i don't think they're being antagonistic for the sake of it. >> where do you think the markets are going with concerns now surrounding china which seem to be steaming ahead? obviously the eurozone is a huge export market for the likes of china. and as the eurozone continues to be sluggish, well, even the power houses of the world are in trouble, aren't they? >> it's very true. i think it's quite telling the reaction we had in financial markets last week to the fact that the greece was done and things like rosier. markets rallied on a sunday night asian trading but spent much of the week treading water. today we got off to a fairly weaker start this morning. even though there are signs of strengths in certain areas and certain months, the u.s. economy looks better than this month.
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nobody is really kidding themselves about how much economic recovery has stuttered in the last six to eight months. if you look at how far the likes of the ftse 100 have come, the s&p 500 in the u.s., maybe there is a feeling that we're back up to where we are ten months ago, are things really that good? have things recovered that well? there is definitely an element of caution that's crept into markets the last couple weeks. if we get disappointing numbers out of china, disappointing numbers there, it could be the catalyst to put a bit of pressure on what have been positive markets this year. >> david from ig index, always good to see you. still ahead here on the show, nina, we'll be heading to hollywood and of course, anyone who is anyone was in tinseltown last night for the 84th annual academy awards. we'll tell you who went home
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frenchman to win an acting oscar. he thanks douglas fairbanks in his acceptance speech. meryl streep won for "the iron lady" and christopher plummer won for best supporting actor in his film "the beginners." he's the oldest person ever to win the award. and the award for best supporting actress went to octavia spencer for her role as mini in "the help." previously won the golden globe and the critics choice award for that role as well. >> meryl streep looked to me like an oscar herself at the show. certainly that win was well deserved and it 34e7b meant she took home her third best actor oscar. aserafin told us, it came
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as a shock. >> meryl streep was a big surprise. everyone thought viola davis had this in bag. >> let's hear what she had to say. >> thank you, thank you. i -- when they called my name i had this feeling i could hear half of america going, oh, no. oh, come on, why? her? again? you know. but whatever. >> she even -- even she seemed surprised she won. everyone was talking about viola davis winning. she just really seemed shocked which was great to see someone who has been nominated 17 times be shocked that she won. she joins that very elite club of people who have three oscars. jack nicholson, ingrid bergman. she ends this 29-year drought of no oscars but lots of nominations.
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the australian prime minister has beaten kevin rudd in a labor party leadership vote. but her next challenge to reunite the party might not be quite so easy. the full story ahead on "world business today."
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cnn hong kong, i'm andrew stevens. >> and i'm nina dos santos at cnn london. a warm welcome back. you're watching "world business today" on cnn. now, let's have a look at what's going on in europe when it comes to the equity trade. we're about 90 minutes into the trading day and the trading week. as you can see, it's a bit of a downbeat day.
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largely these markets taking cues from asia where there's a lot of concern about how china will have to revamp its economic policy and change its main export driven economy. a lot of people saying if china's having these troubles, the eurozone really has been having these kind of troubles for quite some time and is in a worst situation to whether this kind of storm. hsbc reporting its earnings here. that's one the reasons the ftse 100 isn't doing quite as badly as the other markets. that one is down to the tune of 0.6%. other markets across the european continent down in excess of 1%. if we hone in on hsbc figures, it reported a net profit of 2011 off some 21.9 billion u.s. dollars. that represents a 59% rise on the previous year and their earnings included a $3.9 billion gain for the revaluation of its own debt. it is something of an anomaly, let's say, because it includes that gain but it is still slightly better than expect,
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andrew. >> certainly gives a healthy boost to the bottom line. nina, here in asia, you're talking about china also the focus today on oil prices. as that's just about everywhere, i suspect. the nikkei held up by exporters, exporters making gains again. the yen continuing to weaken, down about 4.5% against the dallas. elsewhere, australia being dampened by the high oil prices as well. hong kong concerns there. only shanghai making a gain to that by about 0.3%. just want to quickly go back to corporate news just coming across the wire out of japan now. the chipmaker, the dram chipmaker elpida just filed for bankruptcy protection. it reported a debt of $5 billion. now, elpida has been struggling for quite a long time, too,
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against more established competitors. it was set up in 1999 as a join the venture between nec and hitachi to take on the established interest there. it has struggled $5.5 billion in debt, elpida now in receivership or bankruptcy protection i should say. staying here in asia, switching to politics now is certainly a tense day in politics in australia where the prime minister julia gillard has convincingly defeated the leadership bid by the man she ousted from the prime ministership, kevin rudd. guillard won the leadership ballot 71-31 in a defeat that humiliated the former foreign minister. she now faces a tough task of uniting a fractured labor party. we have this report. >> reporter: for a second time, again, surrounded by a loving family, kevin rudd has had to concede defeat to julia gillard. >> i congratulate julia on her strong win today. >> reporter: the prime minister
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emerged from the leadership ballot today as she predicted. it wasn't even close. >> the ballot has now taken place. julia gillard has won the ballot 71 votes to 31. >> reporter: the ballot box might as well have been a coffin. the result was so emphatic kevin rudd was left a full 40 votes adrift. >> the leadership question is now determined. >> i accept fully the verdict of the caucus and i dedicate myself to working fully for her re-election as the prime minister of australia. >> reporter: his public campaign since quitting as foreign minister last week counted for nothing. all the promise and history, the glory days of 2007 now never to return. the worst defeat by a labor leadership contender in 45 years. >> absolutely. we must. >> reporter: this time, no tears from one k. rudd, the recognition not just the large
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but his globetrotting life as foreign minister are now gone. >> i will continue as the federal member. >> reporter: his move, at least in public, is for making peace. >> i bear into grudges. i bear no one any malice. if i've done wrong to anyone in what i have said or in what i have done, to them i apologize. >> reporter: the prime minister says she accepts kevin rudd's promise he won't try again. tony abbott is less convinced. >> it's not so much a new start for this prime minister but merely a stay of execution. >> reporter: julia gillard, he says, is more isolated than ever. >> one-third of the parliament colleagues and fully one-quarter of her cabinet don't have confidence in this prime minister. >> reporter: julia gillard, however, claims to have been strengthened by this experience. her first promise for all the pain it's caused her, there will be no turning back on the carbon tax. >> how can anyone seriously
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doubt my commitment to this policy? i got it done. >> reporter: the polls may say voters have turn her face from her but she's not going to get all lady-like to try to win them back. >> i intend to be a forceful advocate of the government's policies. any other questions? thanks very much. >> reporter: during the last hour, another bombshell, the ultimate faceless man, assistant treasure is quitting parliament. >> it was a difficult decision but it is the right decision. the decision i hope will play a part in helping the party to rebuild after the ballot, helping the party to heal. >> reporter: he helped organize the numbers when kevin rudd got the leadership before switching two years ago to back julia gillard. he says that decision saved the party from certain defeat. but now, he's leaving. as a senator, it won't affect the parliamentary numbers. however great her triumph today, winning the vote where it really counts is still a heck of a task
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for julia gillard. key remington, 10 news. they're focusing on the relationship between the press and the police following last year's phone hacking scandal at the news of the world. despite the turmoil that surrounds the media mogul rupert murdoch, he launched the new tabloid the "sun" on sunday. despite this latest exercise in damage control, the question many people want answered is, has anything actually changed? cnn's dan rivers now reports. >> reporter: with its trademark red top head and bursting with celebrity gossip, it bears similarities to news of the world which it has replaced. rupert murdoch flew into britain ten days ago to announce the launch of new paper and has
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remained in the country to oversee its first print run. many were furious as an internal investigation into a bribery scandal resulting in sensitive journalistic sources being handed over to the police. the commentators say murdoch's troubles aren't over yet. >> the presses are free and available because they're not going the news of the world in in commercial terms the market is there. what it doesn't do is give him respite at all from the things which are really causing the trouble and that's three criminal inquiries, 30 arrests, the possibility of charges. >> reporter: the wife of former prime minister tony blair is the latest person to start civil legal proceedings against news international for allegedly hacking her phone. other cases have settled but the police are still probing possible criminal offenses at murdoch's papers. the "sun" is britain's biggest
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selling paper. the news of the world had britain's biggest sunday reedership. analysts will wonder if the "sun" on sunday will capture the same sales despite the scandalle. >> the writers themselves probably are no different than the news of the world writers, probably rehiring some of those writers again. one of things that begs as a consumer are we actually just having a news of the world under a different guise? if so, who has said the culture has changed? fundamentally, the product is no different despite the fact the name may be. >> reporter: so a new name but similar content and even some of the same staff. it is a bold attempt by rupert murdoch to try and recapture some of the sunday paper market. but he must now know his troubles lie in the u.s., his journalists may have landed him in big trouble by allegedly paying police officers here in the uk, which is an offense in
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the united states. dan rivers, cnn, london. and sticking to the world of print media, you might have noticed your copy of "the economist" has gotten fatter. it's just made an expansion to one of its sections in 70 years the details 0en that. plus an exclusive with the economists editor in chief when we come back. @
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hello and welcome back. you're watch be "world business today" live on cnn. earlier this month, "the economist" expanded its regular coverage of china. its editor in chief said there was no singular event that prompted the decision, just china's rising economic fortunes over the past few decades. ramy inocencio sat down with the editor for his reaction about today's china 2030 report from the world bank and sounded him out on what it could take for china to invest in europe.
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>> reporting about the china 2030 report, basically the world bank is saying the china free up your economy or else. what do you feel about this? >> i think it's interesting, not left, because bob zoellick. i think it's a message from someone who has sympathy for what china is trying to do. you have a state capitalism. in a way it's saying don't forget about the washington consensus of privatization. don't forget about the economic freedom and what those can bring. i think actually the message is right. >> what is the one most important thing that china can do? >> the one most important thing from an economic point of view is to move more towards that consumption model.
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i think in general terms what china is doing is the correct thing. it is powering ahead in the world economy. we're not one of those people, this comes through very strongly whenever i go to america, we're not one of those people who see the world economy has a zero sum game. china doing well is good for everybody. >> in terms of china contributing to any bailout fun for europe, they have, what, $3.2 trillion in foreign reserves? they indicated that they may put in but what will it take for them to put in and pull that trigger and say we will? basically european incentives? >> i think they're looking for slightly greater european commitment. the answer is there is a degree of self-interest in this. go and see the americans. if you're president obama trying to get re-elected you have a degree of interest in about what's happening in europe. in the same way, xi jinping, coming in next year, you are worried about what is happening in europe because that could have affects on the chinese
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economy. i think fundamentally the chinese would be prepared to come in, to some extent, that they very much want to see the your yen europeans coming in first. we are in a connected world. there has to be some commitment from the people who are in the same currency zone. i don't think the chinese are being unreasonable. for the first time in its history, the daytona 500 motor race was fully postponed due to rain. they'll try later on today to get the race up and running. will weather conditions force another delay after that? let's go over to our meteorologist ivan cabrera at the cnn weather center with all the details. >> we're keeping our fingers crossed here. nina, good to see you. what a disappointment for the organizers, for the fans yesterday. just a complete washout. 54 years and they've never had to completely move the race. they had to yesterday because of this system here in the gulf
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that is bringing very heavy rainfall to florida. let's take you to the scene and show you. on the track it was wet all day. they were waiting and waiting and in fact, the drivers were in uniform the entire day. waiting around to see if they were going to be able to get it in. at some point the organizers decided we're not going to run this thing in the middle of the night. those guys are happy. that's a good shot there. but, yeah, it's going to be more rain for today. i think we're going to get some breaks in here so that the race has been rescheduled for noon. hopefully we'll get some of it in, my goodness, for today. a daytona 500 monday. that just sounds weird. it's never happened before. here's, again, the fle. we're not in clear skies here by any means. we're still raining across the same area here. there's cape canaveral, daytona, further to the north. we're in the same pattern. if we had to go to tuesday. that would be my choice. that's when the drier air moves
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in. but every day we're talking millions here that are lost. imagine the folks that are holding their tickets, waiting to get in. tv ratings, just the whole thing has been turned upside down here. here's the forecast as we take you through the day. light to moderate showers. if we get enough of a breakthrough for the afternoon, we have to get the race in. i think that by, say, 3:00, 4:00, 5:00 we're going to explode with heavy showers and thunderstorms here. we'll have a bit of a window here to race. and hopefully we'll get most of it in. there's your forecast there with more rain in central florida. so many times, nina, in central florida here whether it's a space shuttle or races or golf, the weather sometimes can postpone and cancel events indeed. >> that's something we're very familiar with here in britain as well. fortunately the weather isn't quite as warm but rain,
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wimbledon, there's never a year without rain. >> exactly. >> ivan cabrera, many thanks for that. see you soon. certainly the brits know a thing or two about rain. billionaire investor warren buffett told shareholders in berkshire hathaway that a successor has been chosen to take over the helm at the company when he steps down. but he stopped short of naming that person. and he made it clear he was talking about the long-term rather than the short term. he said that he and his 88-year-old vice chairman, buffett is 81 years old, they're both in excellent health and love what they do. berkshire hathaway reported a 21% fall in net income in 2011 to $10.3 billion. buffett's company is sitting on more than $37 billion in cash. buffett made it clear he is looking to spend some of that saying he is, quote, on prowl. warren buffett with $37 billion
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to spend, nina. that's a story worth following. >> it certainly ask. it's going to be keeping some people guessing for some time as to who his successor may well be. coming up on "world business today," we talked to the investment banker who swapped the pressures of finance to the profits from fighting. do stay with us here at cnn. matt's brakes didn't sound right... ...so i brought my car to mike at meineke...
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...we inspected his brakes for free. free is good. free is very good. my money. my choice. my meineke.
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welcome back. live from cnn london and hong kong, this is "world business today."
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when you're knocked down it's not always to -- not always easy to pick yourself up and change your life. one hong kong investment banker has pulled it off pretty successfully. after being laid off from lehman brothers he left finance and followed his passion. starting a mixed martial arts company. pauline chiou takes us ringside. >> reporter: you could say this championship matchup is really a metaphor for getting knocked down and picking yourself up. we're not talking about the fighters. but the founder of the company that puts these championships together. michael haskamp was an investment banker with lehman brothers when he got laid off in 2009. >> that was a period when i was beginning to think what do i really want to do? >> reporter: he was 30 at the time. he decided to leave finance and focus on his passion, mixed
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martial arts which say combination of wrestling, boxing, judo and other martial arts. he started the company, legend fighting championship, with a friend, chris pollock who left his career at mckinzy consulting. they pulled their assets together and developed a plan to put together championships made up from fighters from the asian-pacific region. >> i think starting your own business, regardless of what industry, it comes with a lot of anxieties. i knew this was a good idea. >> reporter: but this was the summer of 2009, in the middle the global economic downturn. what made him believe investors would like his idea and the public would pay to attend the matches? >> you know, for us, what we saw was that asia was doing better than the rest of the world, looked to be recovering faster, and just the trends, the trends in entertainment, in the growth of the middle class, in the
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deregulation of media. >> reporter: nearly three years later, legend has put on seven championships. the company has signed broadcasting deals to air the fights in ten countries. china has the biggest fan base where the fights air on television and ad-supported internet portals. he believes the mixed martial arts industry will be worth a billion dollars in the next five years. he will not say if his young company is profitable yet. >> we make our money through a combination of ticket sales, tv licensing and sponsorship. and that skew is different depending on what country you're in. >> reporter: while the championship fighters grab the spotlight, the founder is perfectly happy to celebrate his victories quietly behind the scenes, having faced his own tough battles. pauline chiou, cnn, hong kong. okay. going from the school of hard knocks to a slightly less dramatic sport. before we go, though, drama, though, still on the red carpet
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at last night's oscars that we want to show you. the comedian, sasha baron cohen showed up as the character from his latest movie "the dictator." in a nod to the late libyan leader, moammar gadhafi he brought along two female body guards and an urn with the face of kim jong-il on it. he later spilled some fake ashes from the urn on to interviewer and tv personality ryan seacrest who was quoted later as saying, i was a little dusty but i'm okay, nina. i must admit, he always has to push the boundaries, sasha baron cohen. i still think the comedy line of the night should go to billy crystal. his line was nothing takes the sting out of an economic recession like watching rich people giving each other gold statues. >> that's a very apt one.
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given the fact that the price of gold is well above $1,700 an nou ounce is a pretty expensive gift to be given as well. i'm nina dos santos in london. >> i'm andrew stevens in hong kong. you're watching cnn, the world's news leader. we'll be back with ali velshi later in the day. hopefully we'll see you then.
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