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tv   World Business Today  CNN  May 4, 2011 4:00am-5:00am EDT

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hi. i'm zain verjee at cnn this hour. they say bin laden was not around when he was killed by u.s. forces at his compound, but they say he did resist. pakistan says they plan to take revenge on america. the prime minister says gadhafi needs to fulfill his historical responsibility by leaving power immediately. turkey has closed its libyan embassy sighting security risks. in bahrain nurses are set to be tried in a military court, the charge, acting against the
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state. they say they were performing their medical duty to help anyone in need. the first trip included a trip to a washington area farm. charles is a long-time advocate to agriculture. he met with three of the country's top judges. those are the headlines. i'm zain verjee at cnn london. "world business today" starts now. hello and good morning. from cnn london i'm nina dos santos. and good morning from cnn hong kong. i'm andrew stevens. welcome to "world business today." our top stories on this wednesday, may 4th, gold and silver slide on reports that big name investors are hitting the sell button. we're going to be speaking
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live to a ceo during the course of the show. and makes the chinese consumers hungry for change after food safety scares. european stock markets have opened lower, quite a bit lower. let's have a look at this. they're currently being led low by higher crude prices. as you can see we've gottet the ftse 100 down by .70%. in paris the figures coming out helping to bait some of those losses. we're going to be taking a look at the crude prices in just a moment's time. let's have a look at the currency markets as you should be able to see on the chart i'm showing you now. we've currently got the u.s. dollar trading -- or the iuorio at 1.4855, gbp at 1.6499 tarnd
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jpy at 81.01. investors could be quite happy about it actually if you look at what's been happening around the rest of the region this day. the hang seng hong kong dropping thanks to commodity prices. the slide has gone on pretty much this week. speculation mounts. that's the damage that caused it. hang seng down 1.35. shanghai down 2.23%. it is quite sensitive to move on any commodity sort of prices. one item of asia-related market news we need to tell you about, and that is renren. the social networking company was expected to price after the market closed on tuesday. that's now expected to take
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place later this day. no explanations on why the postponements. we'll bring you details on that when we get them. nina. >> stocks struggled on tuesday after disappointing drops. investors were less than impressed by results after pfizer's stocks dropping by.34%. at the end of the session the s&p was completely flat. the nasdaq was down four-fifth of one percent as you can see. let's have a look at the futures market because we look ahead at trade later on today. futures seen as quite a bit gloomy. we only have the current ones up at a quarter of one percent. it seems at the moment the dow
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jones industrial average and s&p 500 are poised for a lower open. >> they're talking about a weaker wall street consolidation expected on wall street. so there are a fair few things missing there if you read some reports. we were talking about the weakness in commodity prices. after a record-break run, it's gold and silver prices that are particularly heading south. we're looking at why sentiment has been called off so quickly, pauline. >> it's been a rocky week as investor investors are are starting to drop off. silver hit an all-time high on april 28th, up nearly 57% as you can see on this chart. now, silver buyers have included
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investors concerned about the week dollar and global risks like all the political instability in the middle east. and then it all changes in asian trade on monday where you see a steep selloff here. what triggered the selloff? the increase was increased market calls which oversees silver trading. the exchange has been increasing the amount of money that investors need to put up in order to trade silver, and that has driven off some investors. and others are also worried that silver may have risen too far, too fast. gold prices are also rising with reports that big investors like george soros selling much of their holdings. >> pauline, okay. we've looked at the metals. oil also in the spotlight, isn't it? >> that's right. as we heard from nina a little bit earlier, oil also on the decline. let's take a look at the price
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of oil since the month of january. we're looking at a graph of nymex crude here. now, late in january, early february is when we saw a spike in that unrest in egypt and also in the middle easement but this week you'll see that oil has dipped, and that has happened for a couple of reasons. now, the news about osama bin laden being killed strengthened the u.s. dollar. that pushed oil down as it's priced in dollars. some investors worry that the price will follow the path of silver. right now, andrew, nymex crude is trading at $111.04 a barrel. so pretty interesting. gold, silver, and oil all down this week. >> volatile times indeed, thanks so much for that. andrew and pauline, you'll be able to buy more than 17 ounces in gold.
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this is it, $116 billion, as you can see. that is what the european union at the international monetary fund have agreed to lend to portugal as part of a three-year bailout plan. they'll have to reduce their deficit from 9.1% of gdp last year to 5.9% of gdp this year. the country was hoping earlier for half the figure. but it's said that -- well, he was forced to resign in march after failing to agree to a settlement in parliament. they've described the new deal as a less demanding one than the bailouts secured by the likes of ireland and greece in the last year and that's certainly lower in terms of value. ireland, just a little under $126 billion u.s. dollars in today's money and greece, nearly $136 billion. what you have to bear in mind is
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the portuguese loan has only been agleed principle. eu members in portugal still need to give the green light. they've already objected to one proposal. finland could potentially include bailout elements, of course, the question marks remain here about whether portugal will be able to push this through. as we have just said it's $116 billion, andrew. it's an awful lot of money it. >> is an awful lot of money, and i'm sure many people in the euro-zone are not sure they want to take that step. we will watch. well, osama bin laden is dead, but he's still costing the u.s. and other countries a lot of money. coming up, we'll tally up the cost the u.s. has incurred since the attacks of september 11th. let me tell you about a very important phone call i made.
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from cnn hong kong and london, you're watching "world business today." now, the biggest story of the week so far, of course, has been the killing of osama bin laden. we've heard a lot about the circumstances of his death, but let's take a look at his impact by numbers. just how much money has the u.s. spent in response to bin laden's attacks on september 11, 2001? it's actually difficult to put a figure on the dollar amount but it appears it's in the trillions. let's take a look at the invasion of the war in afghanistan. on tuesday, one u.s. senator put the cost of that at no less than $100 billion a year. then, of course, there's the consolidation of new recent government agencies into the department of homeland security. during the past decade, the department has spent more than $424 billion, and that includes more than $66 billion on travel
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security. there's been about $18 billion spent on aid to pakistan. that's the country where much of the time the u.s. has been hunting for bin laden, and in new york city, the attacks on the world trade center cost the city's economy between $83 billion and $95 billion just in the first year after the attacks. the total, one economist estimates 9/11 has cost the u.s. economy some $2.5 trillion. whatever the final figure is, there's no denying that bin laden has forced the u.s., britain, and many other countries around the world to spend big money on protecting themselves, and that in turn has meant foregoing spending that could have otherwise enriched them. >> all the areas where we are saying our nation has fallen behind, our education system, infrastructure, research and development, medical costs. those are areas where the dollars could have gone if they hadn't been spent on homeland
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security and the things that bin laden forced us to spend the money on or to make folks happy, we could have had a tax cut. those decisions didn't get to be made and that's what we're talking about. he has changed our priorities and that may be one of the biggest impacts. do you think he wanted it? >> of course, he did. it was to bring down capitalism as we know it. it was an attack on american people, on our way of life, on our structures, on our market economist, on all the things we have stood for. but the point to make on this opportunity is you have no choice. you have no choice in britain after 7/7. you have to spend the money. the war was not chosen. the war was brought to your doorstep. so not spending the money was false as the economists might put it. >> but understand that bin laden, by his investment, reasonably small in terms of dollars and cents has completely
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altered the sense of priorities that dictated our spending over the past ten year. that is his greatest -- i hate to put it in terms of this -- but on terms of equity he forced us to spend trillions of dollars on things we didn't want to necessarily spend it on. >> and it wasn't just the u.s. and britain. al qaeda under bin lad en's leadership was blamed for other attacks including yemen, spain, and other places around the world. andrew. >> and, nina, on thursday, president barack obama is expected to meet families at ground zero in new york. one dignitary that the white house has invited turned the invitation down. we have the details on that. luis carlos, a very high-profile invitation was too. >> reporter: absolutely. hi, andrew. it's 4:00 a.m. here in new york at ground zero and not many details have been released about
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president obama's visit here to ground zero. local media is actually saying that president obama will meet with some of the families of the families of 9/11. even local fmedia saying he migt visit a firehouse. president obama also invited as you said president george w. bush but he declined the invitation. he will not come here. he wants to be out of the public eye. but this is a very interesting site. we've been here since 9:00 p.m. last night, and among the people that we talked with, we found out demitra hymez joined the attack. this is part of the conversation. >> i love my country and to be part of this history and the
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pride of being in my country, it's amazing. being here is so overwhelming and extremely surreal to me. >> reporter: andrew, i just want to point out that even though it's been a very peaceful night, very different from what we saw a couple of days ago when everybody knew about osama bin laden's death, there's a very high presence of police. we've seen a lot of police, personnel over here, police cars. so even though it's very peaceful, police is actually over here. andrew? >> luis carlos, talking about the redevelopment of that site, we're coming up to ten years since the attacks in september of this year. rebuilding is now under way. where are we in the rebuilding schedule? it does seem to have taken a long time to get just this far. >> reporter: that is a very interesting question. i don't know if you can hear, but construction operations,
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construction workers are working right now. it's 4:00 a.m. in the morning. we talked to some construction workers, and they have been working 24/7. this is a nonstop operation. even though that's going on, only two towers have been built. that's under construction, that's happening right now. but we don't know about the other two towers. that's very uncertain. the developmenter wants to construct those towers, but it will all depend on the economy and if he gets the finance to do it. andrew? >> luis carlos velez, thank you so much for us. joining us from ground zero in new york where the u.s. president will be visiting in a few hours from now. he was talking about the big police presence, security presence already there. it's not just internal in the u.s. either. the u.s. government says it's beefing up securities facilities as well as right around the world. this has already closed the
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embassy and consulates in pakistan and businesses are taking extra precautions as well. the marriott hotel chain knows the damage al qaeda can do better than most. in september 2008 a track bomb explode outside of a marriott hotel in pakistan killing more than 50 people. and in july of 2009 suicide bombers believed to be linked to an al qaeda cell in indonesia bombed a ritz-carlton and j.w. marriott hotel in indonesia capital. 17 people died in those attacks. marriott president says the company is taking a multi-tiered approach to ensuring its hotels are safe. >> we'll continue to be as vigilant as we possibly can be. so we work with our teams. they in turn try to have the best communications that they can with the local governments where we're doing business and with other sources of information, and we have both before these events and afterward made sure we've got the best, you know, rankings.
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we talk about code red hotels and code orange just like the airports, and we've ajusted a few of those. >> and next week we'll have a more in-depth interview with marriott's president. he'll talk about marriott's expansion plans in china and how the weak u.s. dollar is affecting its business. nina. >> well, andrew, up next from the break, from pet food to milk, china has suffered a wave of tablted food scares. now new patents of food buying are among the consumers. we'll have more as "world business today" continues.
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"world business today" on cnn. now, chinese consumers are fighting back after a string of tainted food scandals made many people scared to shop for basic problems.
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in 2007, you may remember, more than 300 dogs and cats died in the u.s. and canada after eating contaminated pet food. companies recalled thousands of kinds of pet food and treats that had been imported from china. much worse, though, was to come. in the following year, contaminated milk killed at least six chinese infants and sickened about 300,000 more. infant milk powder and other products that have been laced with a chemical melamine that made it look like it has a protein content. three were tried, convicted and sentenced to death. two others were sent to prison for life. that was a tough response by the chinese authorities but apparently not tough enough to deter others from tampering with food products. 26 tons of melamine-tainted milk was seized just last week. and last month, 16 chinese government officials were charged with breach of duty in a
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case involving china's biggest producer of pork products. bigs reportedly were given an illegal supplement to make their meat leern. the effects on humanses, did iness and heart palpitations. joining buying clubs, groups of like-mind people who source their food from organic farms. we review on what could be the seeds of a chinese food revolution. >> reporter: she is an accidental food safety advocate. a young mother, she enlisted some moms in beijing to set up this organic food buying club. now there are more than 100 members who together place large orders at nearby yore gappic farm farms. we're doing this out of concern
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for our children's health. we hope they can eat safe food. every week seems to bring a new food safety scandal. tainted milk, pork meant to taste like beef. public viewsover safety is considered as a grassroots consumer movement. this power from civil society might eventually push the government to make some change, she says. some of the foot is delivered from farms like this, organic community farms cropping up on the outskirts of beijing. we hope to help the many concerned urban residents find a way to address their worries themselves and produce their own healthy foods, say this farm's founder. hundreds of families from the city o celebrating the start of planting season as they get set to grow their own vegetables on their rented plots of land. the food is different, says this mother. we're growing it.
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we put in effort and it tastes really good. the vegetables are grown without pesticides and fertilizers that are commonly used on farms throughout china. they also conduct regular quality checks on soil and water. with so much mistrust, consumers are looking for ways to back-check products, turning to the internet to look at goods including food. signs of a ratings culture the nation sorely lacks. student kerry young says it's still hard to know what's safe. he buys his food here despite the relatively higher price. >> i don't think of the expense. i think the regular food is too cheap. >> reporter: and consumers like him would rather pay for the peace of mind. following three ceos and kroy the globe as they continue to take on new ventures for their businesses. coming up after the break, we're going to be look at how the
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from cnn hong kong, i'm andrew stevens. >> and i'm nina dos santos at cnn london. welcome back to "world business today." let ee take a look at how things are fairing on the european stock markets. we're about 90 minutes into the trading day and it seems there are quite a bit of markets in the red. the ftse 100 was down two-thirds
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of 1%. the dax was down a quarter. let me tell you about some of the corporate earnings that are moving some of these markets. better than expecting earnings coming from bmw and others. that's helping to gain on the dax. also paraiba coming out. again, exceeding on the expectations. that's one of the reasons why you see the cac still trading in positive territory. they're only up by about 0.07%, andrew. >> nothing to do with earnings in this direction of the world. it has all to do with the commodity prices and falling commodity prices. you see gold and silver. oil has also come down. that has led to a selloff of
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some of the more heavy markets in the region, particularly shanghai. 2.23%. shanghai being brought down. sensex brought down by 0.32%. they continue to fall down 2% after that surprisingly strong interest rate off the other third of one per sechblt japan remains cold for the holidays. not a pretty picture for this week's training day. >> in the meantime things seem to be rebounding here in europe. you look at how some of the things ended in america. in the united states, dostocks were under pressure. at end of the the session, the dow jones industrial average as you can see there was completely flat. the s&p 500 lost about a third of one percent and the nasdaq was down four-fifth of one
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percent perhaps a little bit of relief for u.s. treasury. timothy geithner has extended the deadline. the new deadline will be august 2nd. that should give the white house and congress more time to put together a package but geithner is still warning that new delays and increasing the debt ceiling could have america's fledging recovery. he says he's taking what he describes as extraordinary measures to head off a potential government default. indeed there would be a risk of america defaulting on its debts if washington produces a stalemate. that would be because the u.s. would be unable to borrow beyond its limit of $14.3 trillion. they're set to hit nearly $1.5 trillion this year. secretary geithner warns of a
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catastrophic amount if the budget is not raised. we went to visit three business owners in new york and asked them those specific questions. >> look at that. look at that moisture on there. look at that marbleization. oh, god. >> reporter: no cutting corners here at midtown manhattan famed carnegie deli. >> we make our sandwiches one way and that's the big way. >> reporter: where sammy le vin shows off carnegie's latest creations. downtown at the city quilter, ace fabric cutter kathy izzo. politicians need to cut and cut hard. can these three businesspeople with years of cutting experience show politicians the way? for sandy levin, frustration is
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shown. he says take a knife to the political areas of the government. >> take a good look at the entitlements. it's a broad area, wide area, a lot of things follow under that umbrella whether it be medicare, medicaid, and a little bit of sandy levin to kick a little butt. >> this someone using the subway fabric. >> reporter: co-owner kathy izzo says entitlement should be the last thing cud. social security, no way, medicaid, no way. these are the people who need the help. these are the people who have given their lives for their country. now's the time to give back. cuts are important, but as many quill ter knows you have to make the right cuts out of the right fabric at the right time. >> reporter: and paul malays on, he's willing to snip away at the safety net. >> i'd like to see things cut
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from the economy that maim people haven't paid into the system. make we could cut them first. >> reporter: his customer orrin grossman takes a diplomatic line. >> seems to me you have to have some balance of tax hikes on the wealthy. maybe everybody has to go back to the pre-bush cuts and certainly the wealthy. i'm having a trim today, right? if everybody took a little hit, nobody would have to suffer enormously. >> in other words, we don't have a bad haircut day, you know what i mean? danny rose, woody allen. >> reporter: back at the carnegie, sammy levin who names sandwiches after celebrities, he has a challenge. >> we'll do like president reagan. cut the deficit, put them on the
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right trachlkt pa extrany, the basic stuff, no bologna and no tongue. >> some serious sandwiches there. coming up next on "the boss," find out whether steve hindy can really organize. he's up in a brewery on our "fly in the wall" series just ahead. nationwide insurance. talk to me. should i bundle all my policies with nationwide insurance ? watch this. on one hand, you have your home insurance with one company.
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you're watching "world business today." if you're an entrepreneur, you probably figure it's important to keep an eye on all aspects of your business but you have to fear spreading yourself too thin. for michael wu, being a boss is a huge part, staying on top of his ventures is basically a job itself. meanwhile there's a v.i.p. visitor for steve hindy. it's time for the latest installment of "the boss."
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>> previously on "the boss," we introduced you to steve hindy, ceo of the brooklyn brewery and what the future holds. >> there'll be about 2 25 200-barrel tanks in this space. >> and michael wu launch add tough new market as he launched his sushi brand in china. >> this really is a trial and error for us. ♪ >> michael wu is back in hong kong and stopping to check in on one of his ventures. this isn't a restaurant, though. it's the queen elizabeth hospital. hong kong maxim's group produces nearly 5 million hospital meals every year in partnership with the hong kong government. as chairman, michael started
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this division five years ago. >> a lot of people said to me, michael, don't do hospital catering because all you get is complaints and it won't be good publicity for us. i thought, this is the most demanding type of catering we could ever get into. if we can do a good job we could do any catering very he knows the safety and nutrition of food is ultimately his responsibility. >> running a hospital is different than many other restaurant businesses. we set up an entirely new team to do this. >> reporter: all the food is prepared in a single processing facility. then blast frozen, distributed to hospitals, and reheated an
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hour before lunchtime. michael says the division is making good returns from maxim's and saving money for the hospitals. plus it's helped attract new customers. >> our other businesses don't have as stringent of requirement of food safety as the hospitals do. but since we've taken on the hospital, we've been awarded with many other contracts such as schools and canteens and other institutions. >> reporter: as well as buying his food, the hospital is also hoping to benefit from michael's business expertise. tonight they've asked him to give a speech to their employees. >> thank you. thank you for the very kind words. >> reporter: as the boss, michael knows sometimes it's worth showing a little mod is city. >> our job is nowhere near as demanding as if you were at the front line of a hospital and you're saving lives, so i'd like
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to learn from them as well. >> reporter: in new york, steve hindy, the chief executive of the brooklyn brewery is managing more than just his staff. it's the opening of his new facility. the results of months of planning and $8 million in investments. the event has attracted some v.i.p. guests including new york mayor michael bloomberg. >> the story of brooklyn brewery is not just about the birth of a successful brewery. it's about the rebirth of o an entire neighborhood. >> reporter: steve hopes to double sales in the next three years. it's something he hopes the whole community can be proud of. >> the city worked with us for about five years trying to find space for our expansion. eventually we ended up expanding right in our backyard here,
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thanks to the industrial business zone designation of this neighborhood that is very important to the success of small business in the city and particularly small manufacturing. >> reporter: overall, the event is a resounding success. the beer purists are given something to mull on, an off-the-cuff remark by the mayor. >> i actually put ice in my beer. most people don't. i know most people don't. i don't think it comes from boston. >> reporter: thanks to steve's success, a number of new breweries are opening in new york city. steve welcomes the competition. >> beer consumption in the united states has gone down significantly, about 5% over the last couple of years. craft brewing our segment in iech of those years, my company grew 20% in each of those years, defying all expectations of what
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would happen in a recession. >> reporter: next week on "the boss --" >> amazingly smooth for that much hop. >> reporter: steve test as new recipe at the brooklyn brewery and discloses the secret ingredients of management success. and we're told how she selects the best brands for her business.
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welcome back. you're watching "world business today" today. now, if you're a frequent flyer, you'll be well aware that airline fees are aptly enough soaring. as oil prices rise, so in turn do the fuel surcharges associated with air travel. take a look at this chart which is on cnn money's website. fascinating stuff too. it relates from the flights from the u.s. to western europe. take a look in particular at the right-hand side. this is the most recent movements. you can see how airline charges
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have escalated in the early months of this year. they now exceed $400 for each return flight. now, remember, that's before you add the other taxes, the airport taxes into the equation. here in hong kong the air transport sits at the $132 for long-hall price, $28 for short haul. if you're wondering how the airline industry is justifying these fees, the answer is the way the passenger will keep on flying. the air transport association says traffic rose 1% in march despite the fact that the average cost rose 12%. quite a big jump. now for you business travelers out there, let's take a look at the global weather picture. let's go to jen delgado at the international weather center. i check how much i'm paying for fuel surcharges. we only need to go one way, which is up. it's been going up recently, but even when it comes down, i don't see those surcharges coming down
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alongside them. >> no, it never seems to happen that way. if the prices keep going up, join think i'm going to have much of a travel forecast coming up because people are going to be saying it's too expensive. >> staycation. >> right. staycation. maybe they'll hop on the bikes or hang around the family a little bit more. andrew, let's look at what's happening in parts of china and hong kong. we've had a lot of clouds around. i want to show you a view from hong kong, a live shot. it is actually looking a little bit hazy out there. a hot and humid day indeed for hong kong and much of the coastline of china because it has this boundary system and it's been hanging out there and it's going to continue to do so. heavier rainfall as we take you over to our graphic, affecting parts of asia. as i show you on our satellite, we're talking about the philippines and vietnam lost all those areas. clouds around, dealing with heavier rainfall. and watching a system east of the philippines that has a slight chance of o becoming a tropical cyclone within the next 48 hours. again, we're talking very slight
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chance, but you can kind of see as we go 48 hours out, it's not going to be moving anywhere, bringing heavy rainfalls on the eastern coast lines of the philippines as well as the south. we're going to be watching for any potential development. chongoing right now, 26 degrees. manila, they're already in the mid-30s. the izt moving away. bringing in more moisture as well as humidity. as we look across to asia, calcutta, storms around. the same for singapore. right around 45 to 60-minute delays. in europe, looking nice. look at that ridge of high pressure in place. we'll see clouds and scattered showers around for parts of ireland and northern ireland. other than that, temperatures are going to be spectacular. we're expecting highs to be around 178 degrees across parts of the uk. 14, madrid, keyiekiev.
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this is video from shawn boyd. you're looking at double -- yes, we're looking -- we'll send it back over to andrew in a minute. you're looking at funnel clouds -- i should say water spouts. luckily nobody was injured, but there were power outages after wicked storms produced those what you're looking at. back over to you. rare treat. it's a double. >> yeah. double. double trouble. >> double trouble. >> certainly looks like it. thanks, jen. >> all right. well, andrew and jen, europe's largest bank released its first quarter earnings on wednesday morning, and they're a big boost from last year. paris has been -- paribas says its first quarter profit has rose by 157 compared to last year. and that translated to around
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$3.9 billion in total. they say earnings at its retail operations in particular were up by about 25%. joining us now on the line from paris is the ceo of bnp paribas. good to have you on the show, mr. paul. let's look first at the retail banking operations. congratulations. it seems as though your earnings are rising when some of your competitors' earnings are falling. is it all due to retail? >> we had a strong growth in europe, france, italy, and nur emburg. for the rest of the group, all of the asset gathering and wealth management, businesses had a strong increase in revenues by 12%. and cib revenues and capital markets were also significant. and we had very strong activity in fixed income. we're now the number one player
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for all bonds and euro and we're the number four for all international bonds ranking. so a strong show not only in retail but in asset gathering and in banking revenues. >> mr. paut, how strong is that? that could be challenging some of your competitors seeing their earnings fall. >> yes. i sthoink far what we see is bnp paribas is on a strong dynamic organic growth trend, and i think that we feel the overall worldwide economy altogether improving. so i think that this trend is sustainable and will certainly continue to try to bring more of that in the next quarter.
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>> baudouin prot joining us. thank you. saying profits rose about 15% very sus last year. that's it for this edition of "world business today." we'll see you later on for our second edition of "world business today" in a few hoursahour s' time. in the meantime good-bye from me, nina dos santos from hong kong and london. >> and good-bye from me. make sure you join us at 9:00 p.m. hong kong time. "world one" is next. 
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