A major oil spill in the Gulf of Mexico is expected to cause substantial environmental damage along the Florida coastline. Here CNN's Jim Boulden explains the circumstances behind the leak and the consequences for oil giant BP as efforts to limit the disaster get underway.
What caused the oil spill?
What are BP's offshore operations?
Will BP have to foot the bill for the clean up?
Will anyone face legal action over the spill?
What effect has it had on BP's share price?
Why does something like this impact on share price?
Will it have an impact on BP's profits?
It is a complicated puzzle that has taken months to put together - and a few critical pieces are still missing
Greece has been negotiating the terms of a European Union bailout since the end of last year and in that time interest rates and the cost of borrowing have soared.
At a press briefing in Davos at the end of January, I remember asking Greek Prime Minister George Papandreou if Germany and France would lend their political support to his country. His answer - like the countries at the time - was non-committal. France did come on board; Germany is just warming up to the idea.
We know at this juncture that the road ahead for Greece is a painful one. We are looking at one out of five government jobs being eliminated. The coveted 14-month salary for government workers will be cut and taxes will continue to increase to close a 13.6 percent budget deficit from 2009. The target for 2010 is cut of almost five percent, which is incredibly difficult to deliver when your economy is still contracting.
Left out of today’s debate is why we are in this position in the first place.
The reality is that the architects of the Euro made a political decision to be inclusive with the new currency union probably a full decade ahead of actual convergence with Greece, Spain and Portugal - dare I say even Italy, a G-8 member.
As a result of being pegged to a single currency and therefore German monetary policy, the Greeks have enjoyed the full benefits of a strong and stable currency without - until today - any of the pitfalls. Most notably, real estate prices and wages have continued to rise over the past decade, without the necessary openness and flexibility to attract foreign direct investment.
Greece trades a great deal with its southeastern European neighbors - especially in food stuffs. But the country cannot live on olive oil and the food sector alone.
During an interview with CNN, Papandreou talked about developing a green economy and tapping the growing market for solar energy. Practically speaking, it makes sense, but the building blocks for reforms need to be put in place first.
I spoke to one leading Greek businessman who produces high-tech software and sensors from his manufacturing base outside Athens. He recognises the burden of the budget deficit and the mess left over by the previous government. We have seen the protesters on the streets. But he notes - and the polls reflect this - that those shouting the loudest are in the minority. The Prime Minister still has a majority of the population, which supports change.
But herein lies the caveat: The International Monetary Fund is pushing for steep budget cuts and reforms. Papandreou with the support of his European counterparts can use this opportunity to start and complete what should have been done more than a decade ago. As one Greek chief executive said: “Better a showdown with the extremists today than a slow death of our economy in the future.”
Business leaders talk of opening up the property sector. The government and the Church of Greece reportedly own and sit on €250 billion of real estate.
Selling some of those assets would help bring down the deficit and ease the unrealistic level of prices brought on by the single currency. Secondly, many sectors remain closed or overly controlled in Greece. The transportation business lacks competition and prices remain artificially high - thanks again to the strong euro.
No one wants to see Greece exit the single currency. An exit would be a failure for Greece and the European Union as a whole. As one executive noted this past week, “it is absolutely not an option.” If that option is off the table, the Prime Minister has few cards to play at this juncture. Job cuts, higher taxes and yes long-term reforms need to take place for the country to rebuild confidence after the crisis.
A few years ago I wrote an article for Vogue magazine about wearing my grandmother’s clothes. These days the fashion magazines call old or second hand clothes ‘vintage.’ Mine are just called ‘granny’s clothes.’
I thought about that story and the history behind many of my clothes recently when I pulled on one of my granny’s jackets, just before going on air to present Marketplace Africa.
I had been planning to wear a neatly cropped, steel gray jacket with an orange necklace but the weather made me change my mind. It was an unusually gray, wet and cloudy day in Johannesburg so the combination of a gray background and a gray jacket made for a dull picture.
So I did what I have done countless times in my 15-year TV career – I went to my office and took my 86-year-old grandmother’s red jacket off a hanger. She gave it to me when I first started as a news journalist in 1995. I worked for the South African Broadcasting Corporation and was so poor that I couldn’t afford to buy a whole new set of ‘smart’ business attire. So granny let me go ‘shopping’ in her wardrobe.
The red jacket remains one of my favorites and it always makes me feel happy and confident when I wear it – how could I not? The wool jacket was bought more than thirty years ago; so it’s a little bit worn, the wool is slightly itchy if I wear it for too long, and the sleeves are a bit short but it is perfect for television. The fire-red color ‘pops’ on screen – which means it really catches your attention.
That is why most of us reporters and presenters have at least one red jacket in our arsenal of on-air clothing. Mine, though, is granny’s. It’s not the only jacket that has a story to it. In my office in the CNN Johannesburg bureau I have quite a large collection of jackets; backup clothes for any on-air eventuality. Many are now a bit too small or tight – after having two babies in three years, I suppose that is understandable. But that doesn’t mean I am going to give them away.
There is the dusty pink jacket I bought in Sicily, Italy while I was presenting CNN’s sailing show a few years ago. It was a total impulse buy because I don’t normally like wearing pink because it’s so, well, PINK. But this jacket is more blush or rose colored rather than bright pink so I tolerate it.
Then there is ‘Hala’s jacket’ which IDesk anchor, Hala Gorani, gave to me years ago when she left London to move to Atlanta. We used to sit next to each other, in the same little cubicle in the CNN London bureau where it seemed like the rail of anchor’s jackets was bigger than the office space. When she cleared out her stash of on-air clothes – I bagged the light blue, boyfriend-cut jacket. I wore it constantly throughout my pregnancy last year.
Of course, I have a rather ridiculous amount of new and stupidly expensive clothes too – but it’s the freebies that I am most fond of.
Tokyo, Japan – As a producer for CNN International, I’ve been lucky enough to travel the world to cover important, yet adrenaline-filled events. I’ve been around exploding IEDs, mobs demanding political equity and witnessed the global meltdown of the world’s second largest economy.
Yet putting my baby into day care in Tokyo was the toughest competition I ever went through in my life. Child care facilities for small infants are called hoikuens (Nurturing Garden) in Japan. They are the MUST item for any working mother in Japan where hiring nannies is a near-impossibility.
The cost is prohibitive in this culture, where domestic assistance is considered a jaw-dropping luxury. Public or government-subsidized hoikuens are relatively affordable at about US$600-800 a month (more affordable depending on your income level) with reliable caretakers. Not being able to get a spot in a hoikuen means financial suicide, or giving up your job to stay home with your baby.
After the first few months of my maternity leave with my newborn Anjin, I picked up the phone and started making calls to find a day care center. I was scheduled to return to work and absolutely needed help. A few phone calls were enough to realize that I was facing a monumental crisis. I could not find a single day care with an opening for my son!
One popular private day care in my neighborhood told me they were booked up to TWO years ahead. Yes, some clever working women book day care as soon as conception. But I was a slow turtle. It was well before Christmas when I realized this crisis. Japan’s government estimates 46,000 children are on waiting lists to get into day care. I did not have time to be 46,001. I had to find a day care, any day care, before April when I was scheduled to return to work.
I had a new assignment, perhaps the most pressing of my career. The competition is tough for public day care and you must convince the ward office that you are desperate, or you go to the back of the line. In the Setagaya area of Tokyo where I live, the ward office handles the placement of babies to day care and they have a point system to chart your desperation.
My husband Richard and I both work full time, which gave us 50 points each, equaling 100 points. I will be just out of maternity leave – another 5 points. If you are a single mother, you get another 20 points, if you receive social security, another 10 points. My single mother friend advised me to go to the ward office and show up with a desperate face and a sob letter. I did that, toting my adorable new born in my Baby Bjorn baby carrier. I did everything I could think of. We prayed and crossed our fingers to win this day care lottery.
We waited, and waited, and waited. My return date to work loomed, as I feared the prospect of sticking my child under my desk and towing him around while coordinating live shots for my reporter. After a month, we got the news. Our point score, because we had no child care options, put us barely over the minimum required and we got a day care slot.
The day care center wasn’t close to our home. The one next to our home, a really great day care center with a big garden, was really popular - we were 23rd out of 56 applicants. But a day care center about 15 minutes away got us in - we snagged the very last spot.
To say my husband and I were relieved would be a gross understatement. Some mothers describe entry into a day care in Japan as being more difficult than getting into Japan’s top university. We were, however, angry for the hassle and stress that we went through, along with all the working parents in Japan. It’s an unnecessary competition, which the government has for years been promising to eliminate for the sake of making it easier to raise children.
The government says we need more children, i.e. a future working force. By 2050, 40 percent of Japan will be over the age of 65. But if the nation needs to have more children, it should not discourage parents to have more children.
Working women are forced to give up careers after getting pregnant, anticipating trouble if they continue working. In April 2009 when we finally took our nine-month-old Anjin to his first day of day care, tens of thousands of other children, along with their mothers, were left out. At the beginning of 2010, 46,000 children were in the waiting queue. Behind them, I can see many faces of women desperately willing to work, earning salaries, and hey, paying the national tax as a result.
My mother was the very first working woman in her company back in the 1960s. My parents went through a back-breaking effort to find anyone who could take care of me while she was at the office. The 1960’s was a time when all working mothers in Japan put together a movement to push the government to increase day care centers for working mothers.
The slogan was: “Create as many child care centers as post boxes,” so that anyone who wants to work can put their children in a safe place. Four decades later, her daughter is struggling with exactly the same issue as she did. This simply shows how little things have improved for working mothers in this country.
I am sitting here watching the much anticipated Goldman Sachs hearing and four of the executives who were in charge of running the mortgage unit during 2006-2008 have just given their opening statements.
They were smooth, confident and proved why Goldman employees are known as the best on Wall Street. They explained complex mortgage products, their role in them and said that any short positions taken at that time was at the request of the firm’s risk management team. It was all very impressive.
That is until the Q&A started. At that point the polished bankers quickly deteriorated into witnesses bumbling through the massive tome of evidence and emails.
As expected the U.S. senators asked pointed, aggressive questions about why Goldman peddled these crummy deals, if they disclosed information properly to clients, about the conflicts of interest.
The Goldman guys were vague, confused and kept asking, “What page was that?” “What email are you referring to?” At one point Senator Collins said she was beginning to suspect the confusion was a strategy the bankers were using to eat up time!
It is shocking to think these superstars of banking seemed so ambushed by what was clearly going to be a hostile audience. Maybe they did decide on a "Forrest Gump"-type strategy ahead of time. Or maybe they naively thought they were actually going to be talking about structured finance and their area of expertise and that the ethical questions about Goldman’s role in the crisis were going to be reserved for CEO Lloyd Blankfein. Not so.
Goldman executives seem to think that if they can just explain these markets well enough they will be vindicated. Everyone will understand that they did exactly what they were supposed to: recognized risk and acted on that when no one else did. Their job is to make money and they did that well.
What Goldman executives have failed to understand to date is the moral question that people want answered: Did Goldman Sachs sell matches to passengers getting on a wooden boat? Did the firm have a moral obligation to sound the alarm bell when they saw the housing fire eventually break out? Instead of rallying regulators or industry leaders they focused on self-preservation, found a life boat and then drifted along and watched as competitors, clients and eventually the economy sank. Not only did they watch, they may have even profited from it.
Lloyd Blankfein needs to deal with those larger issues of responsibility and ethics if he hopes to try and quell the anger and repair Goldman’s reputation.
Some in financial circles feel they are unfairly being made a scapegoat. Others insist they are a villain in this tale. What do you think?
Top representatives from Goldman Sachs maintained that the company did not engage in any questionable business deals leading up to the financial crisis.
Was Goldman Sachs at fault?
A group of seven current and former executives at the New York City-based company are set to appear before the Permanent Subcommittee on Investigations later Tuesday to testify about the role of investment banks in the crisis.
Other top Goldman executives also blasted charges made by lawmakers in recent days that the company bet aggressively against the U.S. mortgage market as well as its clients, making as much as $3.7 billion in the process.
The charges stem from a slew of company e-mails and documents that have been released in recent days by Senate committee.
Goldman has refuted such claims, maintaining that it merely bet against housing in an effort to hedge its exposure to the housing market, which was quickly unraveling at the time. All told, the New York City-based investment bank said it lost $1.2 billion on residential mortgage-backed securities in 2007 and 2008.
We want to know what you think.
Should Goldman Sachs be held accountable for the way executives conducted business? Are they justified in the reasoning that it is all part of running a business and it's about the bottom line?
About Business 360
CNN International's business anchors and correspondents get to grips with the issues affecting world business, and they want your questions and feedback.