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tv   BBC Business Live  BBC News  September 28, 2018 8:30am-9:01am BST

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hello. this is business live from bbc news with sally bundock and victoria fritz. electric shock. tesla's boss elon musk is charged with fraud by us financial regulators — sending shares in the car maker tumbling. live from london, that's our top story on friday 28th september. are the wheels coming off at tesla? the sec says elon musk‘s claims he'd secured funding to take the electric carmaker private were "false and misleading". plus — a trillion dollars of trade hanging in the balance — time is running out for a new deal on nafta — as talks between the us and canada hit the buffers. and we have been trading for 30
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minutes, european markets are all heading lower, especially italian markets as they grapple with a newly formed budget, uninteresting budget from the newly formed government. and it was the week that comcast bought sky, the us fed raised interest rates — and brexit was never farfrom the news we'll get the inside track on all this with our economics editor, kamal ahmed. today we want to know — are you penalised for being a loyal customer? new research in the uk claims long term customers are overpaying for key services like car insurance and phone contracts. what's your experience? let us know — just use the hashtag bbcbizlive. they warm welcome, do get in touch with your thoughts on loyalty. a packed programme, so let's get cracking. we start in the us — where billionaire tech entrepreneur elon musk has been charged with fraud by financial regulators. they allege the boss of tesla deliberately misled
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investors earlier this year — when he tweeted that he planned to take the electric car company private by buying back its shares. mr musk has called the action ‘unjustified' — saying he has always acted in ‘the best interests of truth, transparency and investors‘. the charges could see him barred from running a public company. billions of dollars were wiped from the company ‘s share result. it all began as it often does these days with a tweet. this one had two words, funding secured. the problem, according to us regulators, elon musk did not have the money. in fact he had not even gotten around to asking any investors to put up the cash. saying that you have funding when you don't, according to the sec thatis
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when you don't, according to the sec that is the definition of fraud. and they say that no one gets away with they say that no one gets away with the outcome even space explorers. mother celebrity status nor reputation as a technological innovator provide exemption from the laws of the federal security. mr musk has called the lawsuit unjustified and said it left him deeply saddened and disappointed, yet his credibility with investors is increasingly wearing thin. especially after he smoked marijuana ona especially after he smoked marijuana on a radio show and provoked a libel suit after he sent e—mails to a journalist accusing a british cave diver of being a child rapist. not to mention the fact that tesla itself has been struggling to hit itself has been struggling to hit its production targets. when you add ina its production targets. when you add in a fraud lawsuit from america's financial regulator, it is enough to make even mr musk‘s biggest fans wonder if the tesla co—founder‘s wild ride is about to come to a screeching halt. bbc news, new york.
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with me is our technology correspondent is rory cellan—jones. you got a phone call this morning saying, please come on the show and tell us more. always happy! what is the border said? the board has come out in full support of mr musk, the statement says that tesla and the board of directors are fully confident in elon musk, his leadership and steering of the company. yet i think the board itself will come under increasing scrutiny. this is a compelling narrative from the sec and lays out exactly what happened between elon musk, his fellow board members, and it does not look pretty. there is no real sign that they were much of a restraining influence. we've seen him come up with a very sketchy plan, without the funding that he said was secured, and where are the directors, saying to him, wait a minute, is this wise? is there any
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defence in saying, it was only a tweet? not. two things. we know that twitter has consequences. everyone should know that by now. it is used by the most powerful man in the world to send out messages and he thinks he means them. elon musk must thinks he means them. elon musk must think that his 20 million followers believe what he says. secondly the company actually said some years ago that it would use twitter as a way of disseminating information to investors, and efficient way. he knew what he was doing. it is not a casual tweet. what you say in public has consequences. we have been fascinated by elon musk who seemed to have a magical spell for a long time but now everything seems to be unravelling, the maverick billionaire doesn't play by the rules, what will the outcome be?m a real dangerfor the rules, what will the outcome be?m a real danger for the company that he will end up disbarred from holding office. that is what the sec
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is calling for. that he shouldn't be allowed to be an officer of a public company. and that will leave the company. and that will leave the company ina company. and that will leave the company in a bad way. tesla is absolutely elon musk. he is a genius although a flawed genius, he's driven his incredible space business forward when people said it wouldn't work, he has guided tesla to a dominant position in electric cars, it is hard to imagine it without him although the board would be wise to find some adult supervision, find somebody who can take the reins and say, be careful. a twitter nanny! i think rory should do it! he would keep elon in line, definitely! let's move on. time is running out to save the north american free trade agreement. president trump famously called it the ‘worst deal in history‘ — blaming it for the loss of millions
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of us jobs and vowing to shake it up. he has already got mexico to agree to new terms. but there‘s been little progress with the third partner, canada — amid reports he refused to meet prime ministerjustin trudeau for talks this week. let‘s look at some of the big sticking points. canada imposes import taxes or tariffs of between 200% and 300% on foreign milk products and president trump says this isjust too high. he has threatened to hit what he calls the ‘motherlode‘ of canadian exports to the us — the car industry — a trade worth $200bn a year. the us wants a new deal signed off before the new mexican president takes office on december 1st. us law states any trade text has to be published 60 days before a vote ? so a deal must be done by this monday — october 1st. joining us is cristobal arias, latin america economist at ts lombard. thank you forjoining us. thank you.
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this deadline we are talking about is really on the basis of the new leadership coming in in mexico. will new leadership mean that the terms of the deal agreed by mexico will unravel? i don't think so. think one of reasons behind the agreement was that the current mexican administration worked together with the american one to set a new deal so the american one to set a new deal so actually the new administration is backing the trade deal. there‘s no reason to believe they could unravel. 0n the contrary, i think they will support it. and continue trading. so let's talk about canada. canada is the party not coming on board at the moment, trying to negotiate with president trump. many argue that he won‘t get his own way with canada. we have mentioned block and cars, what other issues?”
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with canada. we have mentioned block and cars, what other issues? i think canada wants to support farmers. they have been doing it for a long time. that is what keeping the negotiations from coming to a conclusion. but i think eventually they welcome to terms. maybe canada was often there position and they we re was often there position and they were rich and agreement. this is not happening in a vacuum, we have to eats left right and centre, trade deals left right and centre mike we have tweets, what should we be reading into this? i think most negotiations are like that. one party says something, many times it is just theatre. but what is behind it is that this is an important deal for canada, the us and mexico. i think to understand it, justin to do understand they need to resolve
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their differences, to come to terms. i think there isn‘t one straight line on how to get the deal. in the end, the reason for the 60 days is because they wanted the mexican and current president not to continue like that. in reality i think it is just a matter of time until we get a deal. cristobal arias, just a matter of time until we get a deal. cristobalarias, thank just a matter of time until we get a deal. cristobal arias, thank you for coming in and talking to us, have a lovely weekend. thank you. let‘s take a look at some of the other stories making the news more than 40,000 air travellers across europe are facing disruption this friday after strike action forced ryanair to cancel some 250 flights. the low cost carrier has faced a string of strikes over pay and conditions since it recognized trade unions for the first time in december. australia‘s macquarie group s says its current and future chief executives are expected to be interviewed by german police over the bank‘s involvement
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in a share trading case. macquarie were lenders to a group of investment funds in 2011 that were seeking to obtain benefits for their investors from dividend withholding tax credits. 0nline retailing giant amazon is opening a store in new york that will only sell products that receive four stars or more on its website. the store will sell toys, household goods and other items. physical shops are becoming a key expansion area for amazon as it seeks to take on more traditional retailers. let‘s look at the markets in europe, asi let‘s look at the markets in europe, as i mentioned earlier they have now been trading forjust over a0 minutes. the italian market is very much in focus. that market is falling. italian banks are leading the losers. this follows the budget announced yesterday in italy quite late after the close of day in
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europe, italian bond yields have jumped today after the government defied brussels with this budget plan. it was quite a lot more than we we re plan. it was quite a lot more than we were expecting so we can talk this through with jeremy thomson—cook. he is the chief economist at world first. italy is a very big bond market, isn‘t it? italy is a very big bond market, isn't it? the third largest in the world, these factors include loans that have not been repaid, in a very high number so we were looking for a budget from the new government which kept spending in line and u nfortu nately kept spending in line and unfortunately the market is not happy that spending will increase to such a level, 2.a% of gdp as a deficit, spending more money than they are taking income in tax. deficit, spending more money than they are taking income in taxm deficit, spending more money than they are taking income in tax. is it a good idea to swell national debt ata time
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a good idea to swell national debt at a time when the eu is looking fractures and the fundamentals are looking weak? this is a populist budget. no two ways about it. it‘s also only about six weeks since that bridge collapse in genoa. we have known for a long time that italy has not been investing in its own infrastructure, whether these plans are put forward to create infrastructure spending in italy or whether it is just a sop to populist voters in terms of universal income or retirement plans. this week has been so busy from markets, the fed, trade deals between south korea and the us,japan and trade deals between south korea and the us, japan and the us, all the brexit tauqir it in the uk, what has this week be likely for you?m brexit tauqir it in the uk, what has this week be likely for you? it was an interesting meeting in that it was steady as she goes, we won‘t rock the boat, everything is very
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data dependent, we must see how things develop in the next nine months, we are looking for them to stop hiking interest rates, maybe in the third quarter of next year. politics governs everything in these markets, be it brexit, trump or trade, we are trading on the headlines and moving forwards. the next time brexit fronts the show the pound will be in the cross hairs. thank you. you will take us through the papers later and we have come i'll the papers later and we have come i‘ll coming on to talk about the fed in about ten minutes‘ time. kamal will be talking about comcast and the deal with sky and also interest rates, that‘s here on business live. tens of thousands of ryanair passengers are facing travel
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disruption today because of strike action in several european countries. the airline has cancelled hundreds of flights as some of its pilots and cabin crew stage walkouts. but ryanair says the vast majority of its flights will take off as scheduled. sally gethin, editor of airlines and aviation website gethin‘s inflight news, joins us from the newsroom. sadly, yet another day of disruption for ryanair passengers? absolutely, it‘s horrendous, this has been going on all summer. passengers are sick of it and taking the side of the unions now. some of them are getting better treatment from ryanair, they believe. for instance they can‘t a lwa ys believe. for instance they can‘t always book on two alternative airlines this time round and this is messing up their plans, they can‘t rebook on other airlines, if they do come they get their money back. it‘s very bad news for passengers and bad
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news for ryanair management who should have resolved these issues with the unions. sally, just quickly, is this the sort of behaviour that means people will swa p behaviour that means people will swap and go to a different airline? 0n super pay up front you are stuck with the airline of your choice u nless with the airline of your choice unless it has a generous refund cancellation policy and most low—budget airlines do not. so they are stuck with the same airline and then it‘s a last—minute scramble to get on another airline without knowing if you can get a refund. sally gethin, thank you. let‘s look at ryanair‘s arch rival easyjet. its chief executive is quite new in the topjob and chief executive is quite new in the top job and says it expects a strong performance this year, i wonder if
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people have chosen to fly with easyj et a re people have chosen to fly with easyjet are supposed to ryanair? that may be one of the benefits that easyj et has that may be one of the benefits that easyjet has seen. and the chief executive of copthorne hotels and millennium, jennifer fox, says she‘s going with immediate effect. for more details, look at our business live page. you‘re watching business live — our top story — tesla‘s boss elon musk is charged with fraud by us financial regulators — sending shares in the car maker tumbling. a quick look at how the markets are faring. a bit ofa a bit of a wobbly start particularly for italian stocks today, after we heard from the budget after hours,
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the spending was taken to more than what was expected. it has been very busyin what was expected. it has been very busy in terms of economic news and business, comcast outbid fast on the weekend to kick—off the weekend. let‘s introduce kamal, thank you for coming back on the programme. will this prove a costly victory for comcast because their shares are already falling. they are, investors clearly pa id already falling. they are, investors clearly paid what has been called a very rich prize, to get full control of sky, much more than fox and rupert murdoch or willing to bet. what is interesting is that we have not noticed, given what has gone on, is that rupert murdoch has left sky.
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fox and disney are selling their sta ke fox and disney are selling their stake in sky. the end of an era. rupert murdoch, 30 years ago, did the first pay—tv business in britain and revisionist tv, not only in britain but throughout europe eventually and possibly the world in terms of paying for sports rights and movie rights, the whole pay—tv, any business model. something you miss in the teeth of the battle, rupert murdoch was pulled back to america so what rights is going to buy in america, how will he rebuild at the age of 86 a new film business, a rival to netflix and amazon? tectonic plates are moving, and amazing three—way battle, and now rupert murdoch selling out at
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sky his own baby. it's interesting because we are all talking about what comcast would mean but some a nalysts what comcast would mean but some analysts have said, rupert murdoch is taking back siege commies in his mid—80s... and is taking back siege commies in his mid—80s. .. and i is taking back siege commies in his mid—80s... and i thought, i don‘t think so at all. star india has gone, james fox has moved out of the business is now fox is the business ofjames business is now fox is the business of james murdoch and business is now fox is the business ofjames murdoch and the other son, lachlan. i imagine they are putting in some money, comcast paid to get this deal over the line, it‘s crystallised a lot of profit for the murdochs and i imagine that mr murdochs and i imagine that mr murdoch and his son will not be too slow and putting that money to use. all part of the wider plan. the us central bank raised rates on wednesday for the third time this year and meanwhile the ballot sheets seems to be shrinking, just as uncle
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sam is shrinking gets, what other problems facing the economy?” sam is shrinking gets, what other problems facing the economy? i think thatis problems facing the economy? i think that is the headwind, in a way, the new chairman after janet that is the headwind, in a way, the new chairman afterjanet yellen and is clearly worried about overheating. president trump has put in place a huge fiscal boost with the tax cuts he has announced, stock markets are strong, and employment at record low levels, inflation creeping up, growth of a% a year, the concern from the fed is that there will be three more rate rises next year, is the an overheating problem? you‘ve also got this remarkable political battle with the president has criticised the chairman of the fed raising interest rates, saying it doesn‘t help with "cheap money" is the president calls it, and jay powell has gone around meeting congress members, saying, this is why we do what we do and we
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should be independent. so as ever with america, a new prison because of the way the president operates. you have to look at these things but the fed is concerned with things like overheating in the economy and this huge fiscal boost, meaning inflation could become runaway, high wages will feed into the system and i think that is the danger as well. thank you. we have run out of time, have a lovely weekend, kamal. this is set to stay in touch, we will look at your questions about loyalty. stay up—to—date with all the business news as it happens with our insightand the business news as it happens with our insight and analysis on our pages, insights from our team around the globe. we want to hear from you as well, get involved on the web page. or on twitter, and you can
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also find us on facebook. business live, on tv, and online, what you need to know, when you need to know it. jeremy is back, let‘s talk about loyalty. when are people penalised for loyalty? there‘s going to be a watchdog probe. apparently we are all being ripped off for about £900 all being ripped off for about £900 a year each! 0ver all being ripped off for about £900 a year each! over five things, mobile phones, broadband, home insurance, mortgages and savings. things that most people will have. people may not have a mortgage and savings but will probably have a mobile and broadband. we are too loyal to our providers and are not encouraged to switch at the end of our contract period. not being
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encouraged by the people we have a contract with, everyone else is telling us to switch. it is about time, though. it takes forever to try to switch. it reminds me of the joke about a man walking past his house and seeing a dog howling on the porch and the owner is sitting next to the dork, the man says, why is that dog moaning, he says, he has sat on a nail. the man asks, why doesn‘t he move? he says, it doesn‘t hurt that much. we are all lazy people and this is costing us money. and guilty, i get a letter saying, your contract is up farina will, if your contract is up farina will, if you don‘t do anything, it will renew itself, you don‘t need to do anything. every time i think i must ring them and ask them what they will offer me and i never do. and interesting things is the beginning of this is open banking which allows
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people move their current account and savings account very easily from one high st bank to another. let's look at some of those tweets. paul says it will help if you don‘t do things online, victoria says, you have to stamp your feet and threaten to leave to make people drop their charges. pity asks, i never get why people are charged the stadium, it is awkward and it‘s all about money, which is true at the end of the day. we should be more savvy. it's not a bad thing, if you can find a better deal, get a better deal. good advice, have a lovely weekend, jeremy. and thank you for your company. that‘s it from business live today. there will be more business news throughout the day on the bbc live webpage and on world business report. we will see you very soon. bye bye. hello, a much chillier day—to—day
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across much of the uk. yesterday temperatures reached the 20s across many parts of england and wales. today significantly lower than that. still plenty of dry and sunny weather. the reason for the colder weather. the reason for the colder weather is because we‘ve got air coming in from the north—west, and as you can see, it‘s taking over the uk, that‘s a much fresher air mass in. we start with blood across southern parts, sunny spells developing in southern parts and elsewhere much sunshine and the afternoon. with bad wind coming in from the north—west, it will feel much chillier with temperatures of i3 much chillier with temperatures of 13 or ia degrees, northern parts, 17 degrees in the south, perhaps the highest degrees today in the channel islands and i9 highest degrees today in the channel islands and 19 degrees. this evening and tonight some cloud and showers in the far north, the wind picking up in the far north, the wind picking upa touch, in the far north, the wind picking up a touch, for most of us with
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clear skies you can see from the temperature map it will be quite chilly as we go into saturday. some spots in the countryside could be close to freezing. typical values are between two and six celsius across the uk. it will start to dry and sunny, rather called for england and sunny, rather called for england and wales. more cloud for scotland and wales. more cloud for scotland and northern ireland, showers moving in to the north—west of scotland, temperatures about ii—i3d in the north, i8 celsius in the south. it is sunday the weather front across the north and the west will gradually move south, but now it‘s got a weak feature, not much rain gradually move south, but now it‘s got a weakfeature, not much rain in the weather front as it moves south but there will be more cloud round on sunday compared to saturday and with that maybe showers passing towards the south, frequent showers moving into north and scotland throughout the day, and it will feel
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chilly, temperatures down again, nine to ii chilly, temperatures down again, nine to 11 degrees, maybe ia—i6d across england and wales. going into next week higher pressure dominates. we‘ve got this north westerly airstream across the uk so that makes things on the chilly side especially through monday, temperatures ii—iad, it will warm again by the middle of the week and should stay largely dry, varying amounts of cloud but some sunshine from time to time. have a good day. bye bye. hello, welcome to the programme. we will bring you the dramatic testimony of and brett kavanaugh‘s emotional denial. i try to yell for help and when i did, brett put his hand over my mouth to stop me from yelling. this is what terrified me the most and has had the most lasting impact on my life. it was ha rd lasting impact on my life. it was hard for me to breathe and i thought that brett was accidentally going to
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kill me. your co-ordinated and well—funded effort to destroy my good name and destroy my family will not drive me out. the vile threats of violence against my family will not drive me out.
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