tv World Business Today CNN December 1, 2011 4:00am-5:00am EST
>> and betsy and beth, thank you both very much. i'm zain verjee at cnn in london. here are the top stories. iraq is preparing for a landmark event, the withdrawal of nearly all u.s. troops left in the country. vice president joe biden is joining officials on thursday which will honor troops from iraq and the co-lags who fought during nine years of war. elsewhere in iraq police say ten people were killed and 30 wounded when a car bomb was blown up at an outdoor village market, 75 kilometers north of bagdad. in a separate incident, seven people were killed when a gunman
struck a town. when he meets with the eu foreign ministers thursday, hague shutdown the embassy and expelled diplomats in response to an attack on demonstrators on tuesday. he says iran should be ashamed of failing to protect britain's interest. today is the 24th annual world aids day. people, organizations and retailers are working together. in 2010 34 million people have the virus, nearly 17% than a decade ago. i'm zain verjee and "world business today" starts now. it's 9:00 a.m. in the morning here in london. a very good morning to you. i'm nina dos santos. >> it's 5:00 p.m. in hong kong. good afternoon.
i'm andrew stephens. you're watching "world business today," the top stories this thursday, december 1st. steps to boost lending send asian markets soaring, banks and property stocks see the biggest gains. michael woodford resigns as the director of olympus hoping to set a comeback of the troubled company. and spodify opens up to app developers. how that could make it the home of music on the internet. first up, attention is firmly focused on events in europe and also how this particular region continues to try and plan to handle its debt crisis. we've had a couple of important pieces of news over the last day or so. on the one hand, on a positive note, we've had coordinated effort by the world central bank chiefs, particularly five of them to try to boost lending between banks. we've had this gentleman, oli
reign saying on the negative side there are just ten days now to send the euro or we could see an entire collapse for the european union. let's have a look at how this is affecting the euro in particular. as you can see, quite a bit of weakness trading at 1,3433. that v the pound falling against the dollar and the yen falling against the greenback, that one trading at 77.67. the british pound at 1.5660. as many people were fearing after yesterday's really significant spike for some of these markets, following news of that coordinated central bank action we are seeing losses already in the first hour of trading with the exception of the ftse 100 in london. the strength there isn't particularly pronouncesed either. that one currently up about a quarter of 1%, perhaps a little weaker than that.
are we in better shape after this particular set of coordinated action from the world central bank chief. we put that question to alan clark, of scotia capital. >> maybe ever so slightly. things have to get really, really bad to take the right action. it's going to get worse before it gets better i think. >> a pretty pessimistic view you saw there, andrew. asian markets, the big question is are they getting a bit of a lift from wednesday's moves? >> a lot of a lift, nina. look at the focus here. very much firmly on that central bank action yesterday. they're not looking beyond that at the moment. all they're seeing is a liquidity crunch being averted. they're also getting support from what china was doing with its own monetary policy as well. this is how the day ended. we didn't see quite the spectacular gains in most of the markets that we saw in the u.s.
overnight and indeed in europe. nevertheless, gains right across the board. remember, the markets have been down pretty relentlessly over the past two weeks. up 5.3%. if you do it over a month, a bit more perspective, if you like, coming off quite a low base. still quite a long way to go from hong kong to get back where it was a couple weeks ago. today it was the insurance and the banking stocks getting a lot of attention from investors because the banks are particularly exposed to what's going on in the euro crisis and also this liquidity crunch was also mainly hurting the banks. shanghai up 2.3%. that came despite pretty ordinary numbers from the manufacturing sector in shanghai. take a look at this. this is the pmi, purchasing manufacturers index. any number above 50 means manufacturing is expanding. the latest number coming in -- 49 it's actually contracting.
that's the lowest number for 2 1/2 years. it confirms what we heard from hsbc a few days ago showing that there is a problem and there is a contraction. a lot of this obviously is to do with the fact that europe is weak, the u.s. is weak, but the chinese economy is showing weakness in consumer demand as well. investors responding to the loosening of monetary policy rather than the pmi number. that was a big move we saw yesterday. beijing cut the cash the banks have to keep on reserves by 50 basis points. that effectively means they have more money to lend to anyone who wants it, trying to kick start, stimulate a bit of lending, a bit of spending. this is the first cut we've seen since 2008. lit be effective tim december 5. one of the several sectors to
watch will be the property sector. property has been very sensitive to this monetary tightening in china. china is up 10%. overseas land up 13%. these companies, agile property, up 15%. these are all big property developers in china. the other big beneficiary today, the banking stocks, the central bank action partly to thank, big moves by the chinese banks, but they have been bearing a lot of the selloff. great day today. a lot of pessimism still out there. >> and even the markets here have turned south in europe just the next day after that concerted policy action from some of the world's biggest central banks. let's have a look at how things fared in the united states. it was a very positive speakly by the close of trade wednesday for wall street. like the rest of the world, u.s. stocks managed to serve on the back of that coordinated move by central banks to try to bolster
the global financial system. as you'd expect, banking stocks were some of the biggest gainers. they helped to push the dow jones industrial average back to positive territory. the blue chips gained about 490 points. the nasdaq and the s&p were also up in excess of 4% as well. we'll be watching to see whether u.s. marks can hold on to that momentum later today. they trade in about five hours time from now. this is where we stand when it comes to the futures markets. as you can see, we're bracing ourselves for a slightly lower open at the moment on thursday. andrew, that goes to show a lot of people were wondering whether this might be a one-day wonder, the reaction to the coordinated central bank moves. we know it will have to be followed up with consolidated political action from the eurozone. >> that's not a big selloff, after a 4% gain the day before.
watch that space. new developments in the olympus to tell you about. ceo michael woodford resigned from the board of directors, making that announcement while in new york on wednesday. he says it will put him in a better position to regain control of the company after a crucial shareholders meeting. he was fired in october for questioning olympus's coverup of more than $1 billion in takeover costs. earlier maggie lake asked if he thinks olympus can survive this, and if so how? >> its underlying businesses are so form. what form remains unclear. 14th of december when a decision will be made whether olympus is d listed. that will be whether we can -- the external auditors have to sign off on that, super sincive for the renal reasons you can
appreciate. >> are you going to come back adds ceo. >> i would like to. that decision is down to the shareholders. >> michael woodford there. nina? coming up next on "world business today," as the u.s. secretary of state hillary clinton continues her meetings in myanmar, we see what that means economically for this country's people as the government promises more freedom. that's just ahead on the show. there's a moment where everything comes together. where there's magic. and you now understand what nature's been hiding. ♪ at dow we understand the difference between innovation and invention. invention is important. it's the beginning. it's the spark. but innovation is where we actually create value for dow, for society, and for the world.
♪ at dow, we're constantly searching for how to use our fundamental knowledge of chemistry to solve these difficult problems. science is definitive. there is a right answer out there. [ male announcer ] the same 117 elements do the fundamental work of chemistry. ♪ the difference, the one element that is the catalyst for innovation, the one element that changes everything is the human element. ♪ [ electronic beeping ] [ male announcer ] still getting dandruff? neutrogena® t/gel shampoo defeats dandruff after just one use. t/gel shampoo. it works. neutrogena®.
which share second place. what's it like at the other end? >> the other end of the scale, some of the countries you would imagine to be there. north korea included for the first time. it tied with some mole yeah in last place. myanmar is perceived as being the world's third most corrupt nation at a ranking of 180. it's important to note that transparency international's report is not a measurement but an assessment based on expert views and opinion of people doing business there. welcome back. you're watching "world business today" live on cnn. myanmar may be regarded as one of the most corrupt and repressive regimes on earth, but promises of change have drawn the attention of the u.s. u.s. secretary of state hillary clinton flew to myanmar's new capital on wednesday. today she's been in meetings with the country's president and top officials. relations between the two countries are far from normal. the u.s. imposed broad economic
sanctions on myanmar in 1988 after the military huna launched a brute tall crackdown on student-led protests. it was tightened in 1990 when suu kyi was left out of party despite a landslide win. the u.s. imposed more sanctions including a ban of -- u.s. treasury officials targeted several companies based in myanmar in 2008. president obama renewed u.s. sanctions last year. nina? andrew, the u.s. isn't alone in having imposed sanctions on myanmar. european union, canada and others have as well. with exports of precious substances like, for instance, natural gas, clothing and gems. mayan man has managed to find
other countries happy to trade. thailand is their biggest trading partner taking in about 38% of its total exports. india, on the other hand, is second place there with about 21%. and then we see next in the line coming china and also japan. in 2010, myanmar exported about $8.5 billion worth of goods. that does not include products that are smuggled across its borders into thailand, china and also bangladesh. >> certainly myanmar is keen to expand trade relations with particularly the u.s. and europe as well. for a closer look now at the economic picture in myanmar and how it might change after the clinton visit, we're joined by paula hancocks who joins us from the biggest city and the former capital yan gan. describe form us the level of economic development there. we've seen southeast asia
generally surging ahead. myanmar obviously left behind. how far behind has it been left? >> reporter: andrew, the first thing that actually strikes you when you get to the airport is the fact that all the signs are in english, even though this could be one of the most isolated countries in the world, it is already opening up in that respect. yangon was the capital for many years. it was a busy, bustling city. it hasn't expanded anywhere as much as many southeast asian nations. it's definitely a very cash oriented economy. there are many fundamental flaws within the economy as well. one example. the exchange rate here, the official rate is around about seven chaps to one u.s. dollar. the unofficial rate, and there are many of them, could go anywhere up to 100 times that level. of course, it is incredible difficult for businesses to function when you're dealing
with these kind of restrictions. also, the banking system is very much controlled by the ruling military -- i should say civilian leadership as well. that is something that banking businessmen want to see changed. i spoke to the chairman of the first private bank that was opened in myanmar. he's hopeful of the reforms he's seeing but he thinks lit be a few years until we see significant change, and the economy getting anywhere near where it should be. andrew? >> and when you look at the infrastructure. you talk about the financial system there, paula. obviously in bad shape. but what about things like power supply, roads, communications? >> the power supplies we've seen in yangon at this point have not been too bad. as soon as you get out of the city, obviously things are very different. the rural areas, the poorer areas in the country as they are in many countries.
but driving along a brand new road just yesterday which joins up the old capital to the new capital costs millions of dollars. it's almost empty because no one can afford to travel on it. it costs just $8.00 to travel on it. the rural villages that live next door to this road obviously earn about $2.00 a day. there's an extreme difference in the earning power you see here. the roads within yangon are not too bad. it is a functioning city. it's been a capital for many years. when you consider this country was one of the richest countries in asia just 50 years ago, it is staggering that it is in the position it is today. andrew? >> as hillary clinton said she wants to see with her own eyes what sort of changes are under way in that country. how long realistically, even if the u.s. like what they see would it be before we'd see any sort of changes in the sanctions policy, do you think?
>> well, it's a very interesting question. i don't think you'd get the u.s. secretary of state answering the question at this point, andrew. i did ask that to the chairman of the first private bank. he said he hoped it wouldn't be more than three years. he was worried that he was being very optimistic. we know the international monetary fund is being brought into myanmar. they've been asked about how to fix the economy, how to kick start the economy, how to get the very basics of a banking system. it could take an awfully long time before we see any significant change. certainly the changes we've been seeing at the top, while they are quite significant and they do seem rather fast-moving considering the past half a century, at the street level we really haven't seen anything changeality this point i'm being told. andrew? >> okay, paula. thanks so much. joining us from the former capital of myanmar, yangon. a story crossing the wires,
quoting the u.s. secretary of state hillary clinton saying the u.s. is open to easing sanctions on myanmar as long as, quote, real reforms continue. so hillary clinton clinton saying that easing the sanctions on myanmar are an option as long as the military-backed government continues on its road to reform. nina? >> andrew, still to come on "world business today," central banks around the world including the fed hope their coordinated action will boost the global financial system. so do a lot of other people out there as well. we'll take a look at how exactly they can do that. nyquil:what? tissue box (whispering): he said nasal congestion... nyquil: i heard him. anncr vo: tylenol cold multi-symptom nighttime relieves nasal congestion... nyquil cold & flu doesn't.
a quick check on the world's 4x markets. the gold is gaining ground against both the euro and the pound as well on the back of that relief rally we saw from wall street on wednesday. let me bring you up to date with statements being made by the new head of the ecb. we're talking about mario draghi here. he's been saying that, quote, his central bank will ensure that inflation doesn't understood its target nor exceed it. that's being viewed by many analysts out there on the market as a pointed message that we could perhaps see a second cut in the interest rates for the eurozone, one of the reasons we're seeing the euro trading down at 1.3450 as well. you're watching "world business
today" on cnn. financial authorities have come up with, to stop the lending from freezing solid, the fed and five other central banks around the world agreed wednesday to take coordinated action to support the global financial system. china also took steps to boost its own lending by lowering the amount of capital the banks have to hold in reserve. essentially the moves are being made to stave off another global credit crunch. christine romans explains the nuts and bolts of how it all works. >> what are the world central banks doing? it's complicated. really complicated. >> they're doing what politicians can't or won't do. they're making sure that there's money flowing between europe's banks. they're lowering prices on dollar liquidity swaps. what's a swap? a swhomewhat is when the fed provides dollars to a foreign
bank and gets currency in return. that's the lifeblood of short-term operations for banks. why now? because those swaps between the banks were getting more expensive. a credit freeze was looking more and more likely. since may, the cost for european banks to borrow dollars from other european banks has been skyrocketing. it's been more expensive to get access to dollar funding. now it's at levels not seen since lehman brothers collapsed since 2008. causing a lot of concern in global markets. we all remembered what happened after lehman brothers collapsed. a credit freeze that closed factories, killed business and wiped out millions of jobs around the world. so the fastball here in the u.s., the central banks of england, japan, switzerland and canada, they want to keep the money flowing so households can borrow, companies can pay their bills and you can get paid at work. another player in a separate move was china.
china loosened bank rules there to keep money flowing as well at about the same time the ecb and fed and all these other central banks around the world announced their move. some are wondering if all of this is a worldwide coordinated effort to keep europe afloat here. all this is good news, a very positive action in a still pretty negative and dangerous situation in the credit markets. the underlying problems are still there, make no mistake. those problems are an escalating sovereign debt crisis in europe. that threatens to tear apart the eurozone. europe basically is still on the brink, and there's very little time to fix it before borrowing costs rise more, the credit markets potentially lock up. then you'd have stock markets buckling and companies couldn't get funding the do anything. >> that was christine romans there explaining it all for us. central banks provide short-term relief, we're still no closer to a long-term fix in europe. up next on "world business today," eu economic affairs
from cnn hong kong. hello, i'm andrew stevens. >> and i'm nina dos santos at cnn london. welcome back. you're watching "world business today." let's take a look at how the european stock markets are fairing. about an hour and a half into the trading session. most of them rose after coordinated action by the
world's banks including the federal reserve. a day later, perhaps a little profit taking. also olli rehn saying there's just ten days to save the single currency, the euro, otherwise we could see a total collapse of the eu. andrew? >> certainly a brave man putting a time like that, ten days to save europe. so let's take a quick look at the asian markets now. certainly, as nina was saying, a big pop here across the region. as you see there the standout is hong kong. this obviously a very liquid market, but certainly getting a double boost today. not only was the general confidence boost from the liquidity moved by the central banks around the world. there was also the chinese move to allow the banks to lend a little bit more money which certainly helped sentiment in hong kong as well. you can see shanghai also getting a boost. looking broadly, there was the biggest rise we've seen in hong kong for two years now, although it has come off from a
relentless selling spiral. but really if you watch the space now, we've certainly seen the catchup there. whether it will continue remains to be seen. as i said, investors also responding to beijing's loosening of monetary policy. take a look at the really big gainers, chinese property stocks. they've been absolutely hammered as china has taken several measures over the past two years now to try to take the heat out of the economy, particularly the property bubble in china. now, we're seeing a reverse china -- actually loosening on this, on the weakening in the economy and seeing the big rebound in the property sector as well. there have been five raises of this reserve ratio requirement which was eased yesterday. so this is the first cut we've seen for three years. a significant move, nina, being interpreted as this is like a sea change. this is the big swing going from tightening, worried about inflation to loosening because
china is now worried about growth. >> andrew, we also saw a positive picture for u.s. stock markets as well which, of course, are now closed. that was the closing bell on wall street on wednesday. we've got another 5 1/2 hours before these markets start trading today. in yesterday's session, just like the rest of the world, we saw u.s. markets surging on the back of that coordinated move by central banks to bolster the world's global financial system. banking stocks were some of the biggest gainers here helping to push all the major indices up by more than 4%. >> a quick look now at the futures see where we're expected to go today after the big jump yesterday. some profit-taking looks like it's going to happen. the s&p showing a 2/3 of 1% drop at this hour.
europe's future has rarely looked so bleak. wednesday's coordinated bank action did pump oxygen into the world's global economy, but brought short-term relief for the markets. already we're seeing some declines. it demonstrates the scale and severity of this region's sovereign debt crisis. the eu's public affairs commissioner says there are just ten days left to save the single currency before the european union starts to fall apart. >> we are now entering the critical period of ten days to complete and conclude the crisis response to all the european union. we have to continue to work on -- especially on two fronts, both in order to ensure that we have the sufficiently credible financial firewalls to contain market turbulence and at the same time we need to further
enforce our economic governance. >> pretty somber assessment there from olli rehn. martin wolf from the "financial times" has little faith in european leaders coming up with a long-term fix. >> i think they will probably enough it in the sense they will make some soothing words and still be, as they say, behind the curve. it won't be enough. what happens -- i think, unlike some commentators, that they can continue. obviously countries like italy can roll over debt if they can still borrow and they just have been able to borrow at the high interest rates. the ecb can continue to fund the banking sector. it's on an enormous scale. they can keep this rolling forward for some time, but they don't seem to be able to offer an exit. >> so, if the eurozone actually does implode, what are the consequences of that happening? kirstie hughes is from oxford university and specializes in
international studies. she says if the eurozone collapses the future of the entire european union can be at risk. good morning kirstie. let's talk about the failures. you have a list of ten, which is interestingly enough the amount of days left according to olli rehn. which is the biggest failure. >> i think given the depth of the crisis, the biggest failure is to act quickly enough and on a big enough scale. that's true for the last almost two years, the scale and speed you could have acted at to deal with greece is smaller than the scale you need at this summit which is now only in a week's time not even ten days. you need huge scale if you're to decisively solve the crisis. >> the numbers are like 300 billion euros worth of debt for greece. now talking about a
trillion-euro problem that threatens to engulf other countries as well. olli rehn has said we have ten days left to save the euro. and if it collapses, the entire eurozone collapse. do you agree with what he says? >> i think this is a crunch moment. the summit that will happen at the end of next week in brussels is supposedly going to try to do two things. it's going to say the eurozone will move to greater fiscal integration, and if they can agree, the ecb will come in on a much, much bigger scale. there are a lot of ifs and buts today. the markets are already taking flight and that may turn into a full-scale route. >> interesting to note that supposedly you said. it rolled on for five days last year and still we didn't have what the markets wanted to hear. let's talk about this con zerted central bank action. a lot of people have been saying
this is the moment when really the adults have been entering the room, so to speak. and that to a certain extent puts the eu political leaders in the position of being children and still can't answer the kind of questions that people want them to answer. if we don't see a political followup in the next few day, what could happen? >> i think it's very serious. as you say, the central bank's action is showing how grave it is, and it's telling you that european politicians haven't got on top of it and germany is absolutely central here and has been criticized again and again for doing too little too late. >> do you think germany has done too little too late? >> i think germany has done too little too late. it's by far the most dominant decision maker. even france is having to give in to germany. if you see a panic that threatens italy with default which is where it could go next, not just italy, then you're threatened with a serious breakup of the eurozone, not just maybe greece leaving, but
italy leaving. then can the european union hold together if its core integration project, the political as well as economic project starts to crumble. >> in ten seconds or so, do you have a date for that? how long could the eu survive without the single currency if it were to crumble? >> it would need a huge political will to keep the eu on the road. we haven't seen that skill and maturity in the last few years. >> thank you so much, kirstie hughes, from oxnard university. >> dark days ahead. still ahead here on "world business today," capitalizing on the growing middle class. the number of middle income earners in asia is expected to soar in the next two decades. we'll take a look at what it means for economies next. one no. and since my doctor prescribed lipitor, i won't go without it for my high cholesterol and my risk of heart attack. why kid myself? diet and exercise weren't lowering my cholesterol enough. now i'm eating healthier, exercising more, taking lipitor.
numbers don't lie. my cholesterol's stayed down. lipitor is fda approved to reduce the risk of heart attack and stroke in patients who have heart disease or risk factors for heart disease. it's backed by over 19 years of research. [ female announcer ] lipitor is not for everyone, including people with liver problems and women who are nursing, pregnant or may become pregnant. you need simple blood tests to check for liver problems. tell your doctor if you are taking other medications, or if you have any muscle pain or weakness. this may be a sign of a rare but serious side effect. [ man ] still love that wind in my face! talk to your doctor. don't kid yourself about the risk of heart attack and stroke. if lipitor's been working for you, stay with it. lipitor may be available for as little as $4 a month with the lipitor co-pay card. terms and conditions apply. learn more at lipitorforyou.com. there's no time like the present to consider all your health insurance options. does medicare alone meet your needs? would additional coverage be better for you? well, now is a good time to take a look
at an aarp medicare supplement insurance plan, insured by unitedhealthcare insurance company. get started by calling for your free information kit and guide to medicare. as you probably know, medicare only covers about 80% of your part b medical expenses. the rest is up to you. a medicare supplement insurance plan helps cover some of it. that could save you up to thousands of dollars a year in out-of-pocket costs. and you can visit any doctor who accepts medicare patients. with medicare supplement insurance, you'll find a range of plans to choose from to fit your needs and budget. there are no networks. no referrals to see a specialist. and you could get a pretty good idea what your out-of-pocket costs will be every month. plus, these plans travel with you anywhere in the u.s. don't let this time go by without considering if an aarp medicare supplement insurance plan is right for you. it's as easy as a phone call. rates are competitive.
and these are the only medicare supplement insurance plans exclusively endorsed by aarp. remember, medicare doesn't cover everything. medicare supplement insurance plans help pay for some of the rest. you could save up to thousands of dollars a year in out-of-pocket costs. and you can choose any doctor or hospital that accepts medicare patients. an aarp medicare supplement insurance plan could be an option to get the coverage you need at a competitive rate. so don't wait another minute. be sure to call today. call now for your free medicare guide and information kit about aarp medicare supplement insurance plans, insured by unitedhealthcare insurance company. has been rubbed off the price of gold as investors make a beeline back for the world's equity
markets especially in the united states on wednesday. we saw people returning to the equity markets in asia today. gold is in pretty secure demand, a safe haven. its price is still up almost a quarter on what it was at the beginning of the year, up 25% there. you can see it's trading at $1,741 but down about $6.69 on the day. >> welcome back. you're watching "world business today." the world's middle class will add 3 billion people to its ranks through 2030 led by explosive growth in asia according to a recent report by ernst and young. it also advises companies on how they can capitalize on this future spenders. ramy inocencio joins us with details. how do you know when you're middle class? >> that's a very good question. by ernst and youngs, if you spend between $10 and $100 a day, you're in that income bracket.
here in asia more than 500 million people fall into this group, that's more than the population of the entire european union. asia's middle class numbers are set to soar at the turn of the century asia accounted for just about 10% of the population, middle class consumption. by 2030, right here, the organization for economic cooperation and development says that could rise to as much as 40%, and by 2050, asia's middle class could actually make up even more than that. it could make up as much as 60% of the world's middle class consumption. by then asia's middle class will likely have a much greater affect on what's sold around the world. for instance, in 2004 general motors, for example, sold one car in china for every ten it sold in the united states. but five years later, in 2009, that ratio had actually reached one to one. in the future, if you think about this, if this number skews
more towards chinese preference, those tastes could determine the design of gm cars that actually americans buy instead. looking at real money terms, in 2009 the middle class here in asia spent this much, just under $5 trillion. but by 2030, just 18 years away, that could rise to nearly $33 trillion. so there's a lot of money and definitely a lot of power flowing out of asian wallets. >> mouthwatering numbers if you're a company, ramy. how are countries adapting to those numbers? >> ernst & young says companies have been slow at adapting. for one, there's this 80/10 statistic out there. they say emerging markets including china and india account for 80% of the world's population, but the average s&p 500 company, nike or apple, for example, they only get about 10% of their revenue from this emerging market group. right now they're still focused on the high-end buyers in developed countries.
that's of course despite the current state of those economies, like the u.s., france and germany. those high-end buyers hardly exist in some of asia's biggest economies. for china, for example, only this much, only .3% of households pull in more than $50,000 a year. for india, that's even lower, just .2% of households earn that. the takehome for companies is this, don't just target the high-end consumers. there's a lot to be made from the middle. and 3 billion people more by 2030. >> tell that to the people at pra da, they seem to be doing all right in china. fascinating stuff, ramy. thanks for that. andrew, coming up next on "world business today," spotify makes a sound move. the music service has announced big plans for its business. we'll tell you what it's doing now and how that could affect you next.
just on dusk here in hong kong. isn't that a pretty picture? live from hong kong, you're watching "world business today." the international music platform spotify is making news to expand. on wednesday it announced a spotify app. the move is similar to something facebook did several years ago. it makes sense considering
spotted phi launched a new partnership with that particular social networking site back in september. spotify ceo daniel eck says it's for consumers to consume music the way they want to. they have ten million active users around the world and nearly 2.5 million are paying. felicia taylor caught up at spotify's launch event in new york city and asked why he's investing in the music site. >> spotify is realizing the dream that we set out to do in 1995 with nap center which was always about trying to bring music to the world. that's a big part of what's happening with this big announcement today. spotify is opening up, becoming a platform so that music can
truly become ubiquitous. >> this is, in effect what napster was intended to be? >> we were never really given a chance to prove it because we were this forcing event that shifted the thinking in newsic industry. it's taken a decade to shift that thinking and ultimately to come up with a revenue model that works. spotify is if best chance we have for restoring the industry to growth and getting artists paid. >> and this actually is pleasing obviously to the record companies. it keeps everybody in business. >> not only keeps everybody in business, but hopefully grow their business substantially. >> what does this do in terms of facebook? >> in terms of facebook there's a parallel that can be drawn to the transformational moment when facebook launched their platform. this is, in essence, an important proof point for us that spotify has become one of the great platform players on the internet and there are not many of them. >> what's next for sean parker?
>> what is next for me? i've got a knew company launching called air time which we can talk about in the future. for now i'm very focused on spotify and trying to help make this company a success. >> we wish him all the best in that particular endeavor, sean parker seeing to cnn's felicia taylor. we're a couple hours into today's session, and after yesterday's significant moves on the back of that concerted action from the world central banks, it seems as though some of our european stock markets which i believe we can just show you now -- there you have it -- seeing a bit of a mixed picture. coming back to re-entering the markets there. they were almost all of them down earlier today. still weakness for the two eurozone markets like the dak and also the cac courant in paris. let's go over to weather. it seems as we have hurricane-force winds leave iin air trouble in california.
jennifer delgado joins us from the international cnn weather center. good morning. tell us about it. >> good morning. we're dealing with a santa ana wind event setting up along the west coast of california. we're dealing with winds in some locations up to hurricane-force. talking roughly about 140 kilometers per hour, 97 miles per hour. as i show you, the area right here in yellow, this is the area we're dealing with a high wind advisory. that includes california, nevada as well as parts of utah. the area we're concerned about is southern california. let's go you to video and show you what's been happening there. we do know about 20 flights had to be delayed on arrival or taking off. this is out of los angeles international airport. the video you're looking at right now showing you the wind blowing the camera around. now, let me show you some of the damage left behind. as you said, hurricane-force winds indeed. you're looking at some trees that are down, power lines were snapped. this is what happens when we get these santa ana winds that pick
up. they come in from the mojave desert and comings down the canyons. i want to show you some of the winds right now, roughly around 22. you can see 28. not so bad right now. as we go into the afternoon as well as later into thursday, they're going to be gusting again, and the possibility of hurricane-force winds means more damage possible and, of course, this is going to lead to an elevated fire threat. as i said to you earlier, when the wind comes down the mountains, it deskrends, warms, lowers the relative humidity. that's why we talk about the fire danger there. certainly we'll see more delays traveling into or out of parts of california, especially into the los angeles region. as i show you on the radar, the other story we're following on the other side of the system, we're dealing with some snow that's going to be coming down through the central plains, through the mountains, it's going to being quite heavy, talking roughly about 25 centimeters in some locations. through parents of the uk, still windy conditions through scotland.
winds 46, 43 in belfast. but as we go through the day, the winds will subside. right now looking at rain as well as wintery precipitation as we go through the remainder of thursday. by friday, the weather will be looking a lot better for the uk as we head into the upcoming weekend. nina? >> i'll hold you to that particular statement, jen. i'm planning on staying in the country this weekend. always good to see you. thanks for the update. andrew? nina, he's a man who definitely knows how to make an entrance, although it's usually down a chimney. after this botched ad sale attempt, santa will probably want to stick to, well, what he knows. it was all going to well at this shopping center in florida. you can see him making his way down to the cheering crowd below. santa was left hanging when his beard got snagged in the rope. for all we know, he could actually still be dangling