tv World Business Today CNN June 13, 2011 1:00am-2:00am PDT
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person and anybody who doesn't understand the unique pressures of being a member of the royal fam and coming into what you did, doesn't real understand what you went through, and i do, and i think you're coming out other end. i wish you all the best. >> thank you, piers. thank you very much. >> nice to see you again. >> thank you. hi. i'm zain verjee at cnn london. here are the headlines this hour. the new zealand christchurch has been struck again by a powerful earth quake. eyewitnesss report power lines and phone lines down as a result. about a hundred people were killed there back in february. groft troops have stormed a town in syria. syrian state media reports that
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at least three people were killed in the fighting. authorities say they have found a mass grave there. the party minister once won an easy victory in turkish elections. he won 551% to win the votes. it's causing air travelers problems throughout the southern hemisphere. the ash is spewing more than a week after it's erupted. it's led to the cancellations of all flights from the cap and caused a delay in flights from new zealand to australia. those are the headlines. i'm zain verjee from cnn in london. "world business today" starts now. good morning from cnn london. i'm charles hodson. this is "world business today," and these are the top stories.
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new zealand is rocked by a series of earthquakes rattling the dollar. three are a crowd as the imf hopefuls try to strengthen their support. and we'll look at the economics transforming the country. we'll bring you up to speed on the stock markets f lit's start here in europe where trade has been going for the start of the week for about 61, 62 minutes. investors clearly still concerned about the global economy and the great debt crisis, but we are seeing very cautious gains there across the board with the exception of the zurich smi, which is off about 1.2%. otherwise up by one and a third percent. some difficulties for the euro
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and seesawing around. euro, 1.4354. and the japanese yen, still i suspect uncomfortably high for japanese exporters, just a shade over 80 on the dollar. for more on, that let ee go to ramy inocencio. >> over in neighbored new zealand, the market finished just a little bit lower. that's after the two earthquakes hit christchurch, measuring 0.et 4% in magnitude, that comes after they're rae covering from the last one. today's events were enough to send the new zealand down nine-intelligents of a percent against the greenback.
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the nikkeis with down 0.7%. one was a fall in machinery in april. that was combined with a stubbornly strong yep and the yen down three-quarters of a percent. toyota and hyundai were the two big companies taking a tumble. here in hong kong the hang seng suchered losses but that came after tighter mortgage rules were introduced. the hang seng did bounce back later in the day. it's a fraction of a percentage higher. fashion label prada is set to float on the city's stock exchange one week from this friday and rumors are also around that football club manchester united will join later. fin finally across the border in china, it finished down more than 0.1%.
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charles, back to you. >> okay. ramy and associates, thank you. anne unknown party has set its sights on infiltrating the fund's i.t. system. on sunday they confirmed the institution had been involved in a cyber attack. the fbi is investigates that incident which they say is the work of a nation state intend of gaining knowledge on the funds and the workings. a world bank said it was temporary employ forced to cut its network from the imf can you shed any light on this attack? i mean it seems remarkable that they should have had any degree of success for one thing. >> the thing that we need to think about here, charles, is that this is a targeted attack. it's been a concerted effort.
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it's taken some time to build intelligence for that kind of attack and usually this kind of thing where a case of them knowing unwittingly or knowingly. >> that givings us a clue is the fact they had to sell the connection between the imf and the world bank. they're essentially sigh medium twins. they look different on the outside but they have to be similar. >> well, i think, charles, that's fairly speculative. at this point in time i think the sensible thing for them to do was to sever that tie just in case, and think the thing to be aware of is that no one really knows exactly what data has been targeted and what data has been taken, but everything in the imf
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is obviously very sensitive. there are 187 countries represented there. it could be any one of the countries where anything was affected by. >> clearly, a lost this information is market-sensitive information. probably every one of the countries sell its own bonds. it's an intense market incident. rather worrying that this kind of thing can be allowed to happen. >> well, i think it's a sign of the times actually, charles. we're saying this is not the first in a string of cyber attacks that has been directed, targeting, focused, where whoever has targeted has put a lot of information into it. and they're nopable of the network and runnings in order to advance that cyber attack. >> the interesting thing is the imf is a nation state and we are talking about cyber wars, cyber
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terrorism. how effective can internal systems be against this kind of attack? >> absolutely very, very much so. we're actually finding that the bulk of the series of attacks are involving both an internal party and exterior. >> so partly an inside job. >> absolutely, absolutely. the question is the insider know lig doing what they can to help the outsiders or are they unknowing. one is called spear-fishing where it's a targeted approach where we might be colleagues but i don't know that there's an e-mail being sent to you from my e-mail address falsely representing certain things and you respond to that, and that allows the piece of malware being able to attack the network and go to work.
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>> thank you very much. that attack on the imf's i.t. system. we'll have more on the race to replace dominic strauss-kahn later in the show. meanwhile powerful earthquakes rattle new zealand, the same place where a killer earthquake struck another more than four months ago. we'll have more another volcanic ash cloud is disrupting flights in a different part of the world. a live report is just ahead. is. e recommended most by dermatologists. neutrogena®, with technologies like helioplex... it provides the highest average spf and unsurpassed uva protection. neutrogena®. get the best. and unsurpassed uva protection. luck? i don't trade on luck. i trade on fundamentals. analysis. information. i trade on tradearchitect. this is web-based trading, re-visualized. streaming, real-time quotes. earnings analysis. probability analysis. that's what opportunity looks like.
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with aveeno nourish plus moisturize. active naturals wheat formulas target and help repair damage in just 3 washes. for softer, stronger... ... hair with life. [ female announcer ] nourish plus. only from aveeno. welcome back to "world business today." here are the other top business stories at this time. the finance minister christine lagarde is the clear imf runner.
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mexico's bank steen augustine cause tans is also in the running and the bank of israel governor stanley fisher entered the race at the week end. he and his justice and development party took 50% of the vote. the ak party is strong over economic growth and a drop in employment. and new zealand has been hit by earthquakes, the strongest of magnitude, 6.0. they're still recovering from a deadly earthquake in february. huge cloud of ash that's drifted more than 9,000 kilometers from a volcano in chile. while the cloud is on the move, thousands of passengers on two continents are not australia or
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new zee land, dealing with the second day of con celebrations. volcanic ash is affecting many flights in south america itself pretty much bringing air travel to a standstill in buenos aries. let's get more. good day. how are things there? has it basically ground all flights or are some flights getting into the air? >> it's had a huge impact. tonight air flights are trying to clear a backlog of tens of thousands of passengers p they're putting on extra flights, putting out bigger planes to get people where they want to go. the main flight was melvin at the international terminal. hundreds of flights in and out today were cancelled. but slowly as i said disht air fliefts have co s have come on.
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the first, virgin airlines start out this morning by going under the plume and around the flum. qantas weren't going to go anywhere near the plume and they decided to hold off and get more information. they didn't take off until 1:00 this afternoon. >> i'd like to come back to that in a moment to the idea of kind of getting around the plume. whau are people saying about how long this volcanic plume is going to affect flights. let's get serious about this. if it's been drifted 9 through, they must be out of it by now. >> yes. in melvin tonight we're expecting it to clear over the next 12 hours. but as you say, it could linger for days or weeks. we understand the cloud could move and start affecting flights
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out of add el lay. passengers hearsay it has not become as explosive. so the ashes are not getting up as high in the atmosphere so it's not able to travel as far. we're expecting a second major cloud to move over the southeast part of the straits. it may end up intact further south. was fascinated about what you were saying earlier that some airlines are flying below and around it and ones like qantas refuse to go anywhere around it. that's causing quite a debate. passengers are giving them some stick because they're not fwlieg virgin are. >> reporter: yes. you are quite right. you're wondering is one airline not safe because they decide not
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to fly and one more safe. qantas is a very conservative company arc very conservative airline. people who fly qantas know they put safety first as do other airlines but qantas has a policy that it just will not fly into an ash cloud whereas virgin and other aircraft, all the international air flieft outside of qantas, they feel they can pinpoint where the ash cloud is, how high it is, how thick it is, and they can take on more fuel to get around it or under it. >> okay. ellie southwood joining us live from sydney airport. many thanks to you. let's stay on it. ivan has been tracking this from the world weather center. that's happening 9 through kilometers away, but on the other hand, it seems it was a
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more dense cloud but still affecting flights. >> exactly. affecting those clouds trying to get to cruising altitude. those are the flights that are having issues. domestic flights are okay. they're flying below the ash. the concentration, chafrls, not as significant as it was with the iceland volcano. iceland, very close to europe as opposed to this flum that erupted from the valg that had to travel 9,000 kilometers around the planet. so, sure, the concentration is not going to be as heavy. the ash is not as heavy, so there's no danger of it falling to the ground. it stays suspended in the upper atmosphere. we have the westerlies that are screaming. there are undulations here but generally it's a west-to-east movement and that's why we were able to transport the ash from
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chile over 9,000 kilometers to the east over toward australia and new zealand. this is the latest advisory. again, this is where aircraft are advised it could be dangerous. it's up to the carriers themselves to decide what to do here. that's where qantas is flying. this is the largest ash advisory i've ever seen. it goes around the globe. of course, it doesn't go this way because by then concentrations are low enough that it shouldn't cause a threat to air travel. we'll keep you posted. we'll have to watch that as additional eruptions could lead to more travel chaos. >> okay. we'll be watching. ivan cabrera, thank you very much indeed joining us from the cnn national weather center. next, a huge population and booming economy, but not brazil
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stabilizing democracy. so all this week on "world business today" we'll be taking a look at how rapid economic growth is transforming indonesia. right now the country is hosting a meeting of its economic forums on east asia. andrew stevens is looking at how the country is planning on flexing its economic muscle in the near future. >> i'm at the economic forum in indonesia being held for the first time in this country. it's a big story at the moment. it's got a young and secure democracy and a government that's open for business. remember this is the world's fourth most populous country. what i want to know is where this country should be considered for the most exclusive of economic clubs, the brit country. to coin the phrase in 2001 to describe the big emerging powerhouses. brazil, russia, india, and
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china. they now account for 45% of the world's population, a quarter of the land mass, and about a quarter of global economic output. so where does indonesia fit into all this? >> well h it's a member of the other club, the n-11 or next 11 which are countries with brit-like qualities. do they deserve a position at the top table. we put that question to them. thank should. they've got the growth potential an economy that can grow faster than it is now. would say it is. it accounts for 80% of the growth. >> definitely, yes. stan carter has just assured a report where he states they'll be ahead of the world by 2030.
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>> certainly there's a lot of support here in indonesia. let's now take a look at some of the numbers. in sheer economic size, indonesia has a long way to go. china is still the big beast of the brics weighing in at a 5.1 trillion indonesia is still less than half of russia at less than $7 billion. the growth is 6.4% this year and rising compared to the similar rise of the brics. and the size of the population as well. put the idea to the bric godfather jim o'neill himself. an economy that is already likely to become a 3.5% of global gdp. indonesia could but would
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require years of consecutive 10% growth. >> if he comes to jakarta, he'll see what i'm talking about. i think we deserve to be a bric or briccee. >> a lot depends on this man to lay a bedrock for this country's long-term growth. he faces tough challenges from building a new infrastructure network to tackling what the wef calls widespread corruption. what's impossible to ignore is the sense of optimism and confidence this country has at the moment. andrew stevens, cnn, jakarta. >> well, it is a place of altruism indeed. and all week long andrew stephens will be looking at the economic development. that's this week. well, still ahead on this edition of the program, a long-time contender gives the
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from cnn london, i'm charles hodson. welcome back to "world business today" today. let's see what's going on in europe where the markets are about 90 minutes into the first trade dag of the week. despite the fact that there aren't many optimists around the market, the bulls do have it actually. at the moment we're looking at gains of right around a third of a percent for the london ftse. just a fraction of a percent for
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the xetra dax and paris cac. friday's wall street slump clearly weighed on investors' minds at the start of the day and we stayed in negative territory. and continuing strength of the yen harming exports is just a shade above 80 yen to the dollar. there we are. the nikkei up by two thirds of a percent there. some gains for the hang seng. loses for shanghai and small losses for seoul. u.s. markets are on course for lower market as they get under way. let's see how things are looking in the premarket act. we are seeing a little bit looking forward to perhaps what could be another big selloff with losses there of 1.4% pretty
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much across the board. easterly days even for the eastern u.s. market futures and we tend to get a much clearer read in the hours ahead. there's a deluge of data on the way in the united states. investors on wall street really weary from some six consecutive weeks of losses. well, ramy inocencio with a look at the week ahead. hello, again, ramy. >> hi, charles. we're going to kick things off in asia with japan, basically the bank of japan's two-day policy meeting is now under way. on tuesday the boj will announce its latest policy condition. and as they continue to struggle it's expected to hold the rates steady at between 0 and 0.1%. heading over to tuesday,
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glencore will give us a commodity report. it's considering an almost $20 billi billion bid for the kazakhstany miner. economists are forecasting those retail sales will have fallen by 4.7% in mail compared with a half a per end rise on tuesday. we're going to take a look at best buy. they're going to be reporting fiscal first quarter reporting before the opening bell. on wednesday, the u.s. labor department is going to be releasing its may consumer price index markers. economists are expecting a slight growth of inflation of 0.1% in may. that's down from the 0.4% rise in the month before. final on thursday, june 16, we'll get the latest on about
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research in motion. it goes on sale in the uk then. already on sale in the u.s. since april. charles. >> thank you very much. ramy inocencio. jean-claude will be delivering major address about the financial crisis and the role of the european central bank, and we're also looking forward to the week ahead on the european markets. joining me is david jones, chief market analyst at ig index. david -- you're over there. sorry about that. i was in the wrong place. there you are. elusive but now with us. tell me. what do you think. we're looking at a bit of a change. a bit of boston bruins. are we seeing a sense that the market's a little bit oversold at the moment? >> i tlifrpg's an element of
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that but of course we could say up to six weeks of slide. i think the problem is we're seeing some upper small relief rally this morning, but so much ground has been lost in the last six weeks. they're still very skeptical of any sort of strength. we even seen plenty of rallies. so i think at the moment it's a little bit too soon to get overexcited about any sustainable gains in the next few days in the stock market. >> let's have a look at what mr. trichet is going to say or at least the subject matter of the european debt crisis. i think clear perception is that's going to put a dump on european markets for quite some time to come, isn't it? >> of course, we've now got this spat between the ecb and the germans about how the bailout of greece is actually going to happen. we saw a couple of weeks ago the second bailout of greece, but as we've seen in the past, these things are never cut and dry until they're done. i think the european debt and of
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course concernings portugal is going to really weigh on the sentiment probably for some months to come. i think the markets are very skeptical now, after all we've been through in the past year, that the problem is going to go away in any time soon. >> i think the broader picture is one of an economy really in the united states, a weak labor market. this is something we always rather predicted. we thought, didn't we, that 2010 would not be too bad as a result of government money being pumped in and central banks. 2011 was always going to be a difficult year going into 2012. in a sense, this isn't a surprise, is it? >> this is very true. you may be a bit surprised by the stock market reaction to the stuttering economy. as you said, at the beginning of the year, it's no secret it's going be a bit of a struggle. i think what has been expressed
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as sentiment was no announcement from the u.s. about a possible qe3 stepping up and baling out the economy a little bit longer, pushing the problem further away. i think perhaps that has sort of come crashing down as investors in the last coupling of weeks. i think that's why we've been not so heavy in the stock markets. >> do you see qe3, a third round of quantitative easing is ahead or is it a dim distant possibility given the fact that they've not made an announcement thus far? >> i think if the stuttering of the economy continues for the next month, couple of months, i think they probably will be forced into making some sort of move to try to pump more money in. but, again, as we all know, it's not really a solution. it's pushing the problem further away. it's going have to be dealt with at some point in the future. we are due some sort of pause. i think we have to unfortunately
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just accept facts and maybe for the next six months to a year we'll see very little progress by the economies's own stock markets. >> many thanks. i just want to recap quickly on the stone we were talking about earlier on. the international monetary fund has launched an investigation after a cyber attack. few details are known about the incident and they would not confirm whether confident chan information has been compromised but they believe hackers were sophisticated in their approach and the breach serious enough to warrant the involvement of the fbi which was to try to find out who was behind it. switching gears they say two's a company and three's a crowd and the decision by stanley fischer to run for the top job at imf may come as a surprise with the pairing of christine lagarde or agustin
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carstens. fischer is a former number two at the fund, known to be a popular figure there. a few things stand in his way. his age, he's two years beyond the maximum age for a umd. the executive board would need to waive that rule. fischer may be seen as a de facto u.s. candidate, that could prove internal for the imf plan and the asian markets, the latter thought to hold grievances about his handling of the asian financial crisis of the late 1990s but as mentioned he was the imf's first financing managing director at the time. christine lagarde is kind of old
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guard. given her relative detachment to issues faced by emerging markets. the main issue for karstens, europe accounts for more than a third of all executive board votes and also lagarde has won the endorsement of some key developing countries including places like egypt. meanwhile she denies that she's ill-equipped to take the top job. >> translator: the if i'm elected i would have all southern states taking account of the diversity of economic development. >> christine lagarde there. up next on "world business today," from fashion to football we'll look at the big names with designs on asia. am disappears but your wrinkles don't. ♪ introducing neutrogena® rapid wrinkle repair. it has the fastest retinol formula available. in fact, it's clinically proven to smooth wrinkles in just one week. so all you have to do is sit back and watch your wrinkles go away.
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names to float on the city's stock exchange. mark your call dollars. that's june 17th. and trade willing start a week later. that's friday the 24th. ramy inocencio is follow oing the money in hong kong. ramy, how much is prada's share sale expected to pull in for the company? >> back again. prada's hoping to fill its purse with at much as $2.6 billion. that's based on figures and the prospectus released over the weekend. the milan-based fashion house says it will share over 143 million shares. it's pricing each share of between the range of $36.50 and 48 hong kong dollars. in u.s., 48 dlp on the low end to $56 on the high end. if the shares sell at the low
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end, they could pull in about $2 billion. but we get the 2.6 billion dollar figure if they go to the high end. that would value them at more than $10 billion in total. it's the latest in the series of luxury brand listings koling here. it will be the first of the italian luxury maker. just last week samsonite raised it. we've got coach, jimmy choo thinking about it as well. it's the place to be, charles. >> you can say that again, ramy. ramy inocencio joining us again, live, from hong kong. okay. so, ramy, it seems like it may not be fashion, but football is heading to hong kong too. i gather despite some of the blues they've had, man chester united could be heading there as well. >> thinking about it, it's a
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little bit of a strange idea, isn't it. basically the shares of a football team might be traded is one thing. the second is you might consider an ipo here in hong kong of all places. but, that, again circumstance because of the huge team fan base across the region and that could help it rake in more money than it could in a london ipo. talks are in the early stages but we're looking at an early stage of 1.7 billion pounds. it could be an easy sell based on a forbes 2010 ranking. that said, manu was the second most valuable sports brand in the world after the yankees. and the manchester united supporters trust gave it official support but said it should be also listed in london. remember man u has been owned by malcolm glazer in america.
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if an ipo does value menu at the 2.7 million dollar tag the glarzs would more than double their money in six years, charles. >> although it has to be said that the value of the brand is one thing and the value of the company is another. up next we'll take you to south africa to see where the country has reaped the benefits of hosting the world cup. that's just ahead on "world business today." i love the sun. past sun goddess. every line has a story. [ female announcer ] we all age differently. now there's roc multi-correxion 4 zone moisturizer with roc®retinol and antioxidants. a lifetime of stress lines, sun damage, and worry wrinkles will fade in just 4 weeks. -crows feet... -belong on birds. [ female announcer ] roc multi-correxion. correct what ages you. -aging... -bring it on. correct what ages you. luck? i don't trade on luck. i trade on fundamentals. analysis. information. i trade on tradearchitect. this is web-based trading, re-visualized.
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is "world business today." well, it's been a year since the last world cup kicked off in 2010. the talent brought new economic promise to host countries like south africa. have those been fulfilled? we find out. a year on, what's the conclusion where you're sitting, nkepile? >> there's no question that the world cup hosting here in south africa raised this country's profile. capabilities and capacity to host an event of such magnitude. i think on that level, south africans did manage to silence their critics but the government
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did promise economic spin-offs from this event and it's always going to be against those promises that the overall success of the event is measured, charles. the view view view zell la made it a noisy tournament. i opened the opening game on june 11 right here in alexandria township where some of to country's poorest citizens. they wore the colors and really got into the spirit of the event. the euphoria didn't fool them. they weren't expecting the world cup to change their life. some of the benefits included improved infrastructure, tourism, and jobs but many of the targets set were never reached. >> the project cost $2.5
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billion. in the end government expenditure nearly doubled. only 3 hub,000 visitors came and south africa at 25%. the unemployment rate is back where it was before the world cup. >> translator: here it only benefitted those who could provide accommodation for the visitors. the rest of us didn't gain anything, this man tells me. >> translator: all four of my brothers are are unemployed, this woman say, there are no jobs and the world cup didn't make a dichs. organizers blame the countries. >> when we won the event in 2004, not a single one of these economists predicted that in 2008 there will be a serious economic crisis and a global one. >> reporter: it was a crisis out of which fifa emerged unscathed. the government body raked in more than $400 billion making it
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their most lucrative ever. some economists say it was an expensive marketing campaign, others believe the hosting of the event has altered the country's image in the eyes of investors and travelers. >> most tourists when they talk of africa, they say, is it safe? that's the first question. also the state leading up to the delivery. that was the first question all o over the world. and after the world cup, that question disappeared. >> reporter: and as for the country's poor, he says not a single cent was diverted from the programs ear marked to improve their lives. the upgraded roads and amounts, the country will forever benefit from. infrastructure is important but job growth is it.
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that's a major disappointment. 600,000 jobs were created during the world cup through the building of the new stadiums but the people that were working during the world cup, most of them are back in the unemployment line because they were not permanent jobs. they were just for the period of the world cup, charles. >> it sounds like the sectors who benefit ready those that benefitted from stronger infrastructure. is that about right? >> exactly. the construction industry saw a boon. this whole country was a construction site in the lead-up to the world cup. it still is because some of the work has not been finished. some of the roadings are not been finished. hospitality, not that much. you will remember, charles, fifa was at some point doubting whether south africa had enough accommodations thinking half a
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million people would come. of course, only 300,000 visitors came so it was a bit of a disappointment for new hotels that were built specifically for the world cup, charles. >> okay. joining us from the bright and sunny johannhannesburjohannesbu. one more look. there's a little bit of evidence of a hangover from the wall street losses back on friday in this part of the world, so after some courage to start off with, we are seeing the early gains turning into losses except in the case of the london ftse. off by about a seventh of a percent and margin rally done for the paris contact currant one of those was the nikkei, which continues to be bogged
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down by the strong yen. big carmakers among the exporters. early losses in the property sector brought about by tightening mortgage rates but actually managed to come through and finish up by about 0.et 4%. if you want to comment on any of the stories in the show get in touch with our whole team on our facebook page. that's about it for me. i'll see you again for a later edition of the show in about fwour hours later. meanwhile "world one" is next. 4 will
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tonight, millions of people will go to sleep lying on something like this .... just as they have for a hundred years. coils...springs...matting. ..some kind of soft stuff.... and what's the result? insomnia rampant. it's couples everywhere sleeping in separate beds and separate bedrooms. and back pain in epic proportions which is why we're here to tell you about a revolution in sleep that can change your life: the sleep number bed. a bed so ingenious, at your command it transforms on each side into the precise zone of comfort each of your bodies need - your sleep number setting. call now to find out more. we'll send you a free dvd, brochures and prices for the revolutionary-and affordable-sleep number bed. if you call now, you'll get a $50 savings card good toward any bed-for a limited time. this bed is people waking up finally without back pain. i found my sleep number two years ago. now i wake up pain-free. it feels like my lower back ... like there's no pressure on it at all. i found my sleep number ... and i don't have the
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pain in the morning anymore. it's couples enjoying a great night's sleep in the same bed at the same time. now that we have the bed we have one less thing to argue about-'cause i've got my soft bed, she's got her firm bed. most of all, this bed is the deep, nurturing sleep that you've always dreamed of. and in clinical studies, 87% fell asleep faster on the sleep number bed and slept more soundly, and 93% experienced relief from back pain. call now and find out how the revolutionary sleep number bed can help you sleep in total comfort from now on, though it costs no more than ordinary beds-yet lasts twice as long. call now. call the number on your screen. we'll send you a free dvd, brochures and prices for the amazing yet affordable sleep number bed. you can even try it in your own home for 30 nights, risk free. if you call now, you'll get a $50 savings card good toward any sleep number bed - for a limited time. call the number on your screen. everybody has a sleep number.
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