Interview: Paul Gordon on Homeland security resigns
>> president george w. bush’s cabinet changes again as the man responsible for homeland security resigns. paul gordon has more.
>> yes, u.s. homeland security secretary tom ridge resigns after two years in the job. ridge was the first person person to hold the post created by president george w. bush following the terror attacks of september 11, 2001. ridge integrated 20 federal agencies with 180,000 employees and set up the color-coded terror alert system and started fingerprinting foreign visitors to the u.s. he says he wants to spend more time with his family. ukraine’s parliament may try again today to pass a no confidence vote on prime minister viktor yanukovich. legislators were unable to force the vote yesterday. the lawmakers last week rejected the results of the presidential election which showed yanukovich winning. observers say there was evidence of voter fraud. opposition candidate viktor yushchenko says there is a crisis forming and it’s only a matter of time before it explodes. yushchenko’s supporters say talks with yanukovich over a compromise have broken down and say they’ll resume blocking government buildings. poland’s president leads european union delegation to the ukraine today.
>> i came with the same spirit that i came on friday. i think it’s very important that the dialogue take place. that the agreement that we reached on friday that are implemented and i hope very much that everybody will be able to overcome the difficulty.
>> ukraine handles 1/4 of the gas exported by russia to central and western europe. in iraq, a car bomb kills four civilians and injuries three others, including three u.s. soldiers. november is one of the deadliest months for the u.s. military since the launch. of the invasion.
>> the u.s. commerce department is slapping duties on some seafood from asia. the increased costs will be as much as 113% of shrimp imported from china and a similar amount on shrimp imported from vietnam. they claim the shrimp is being sold below market prices in the u.s. l.m.v.h., burberry and other luxury brands are getting a boost in china. goldman sachs estimates sales of upscale consumer brands in china are growing as much as 60% a year. louis viutton has 13 stores in 13 cities in china. lucketsurey goods makers must compete against cheap copy cats. a fake louis viutton or chanel bag can be purchased in beijing for $20. after the complaint, the beijing government changed its mind about buying microsoft software. the decision underscores the challenge microsoft faces in building a profitable basis in china. in addition to local favoritism, microsoft must cope with widespread piracy. a report by the business alliance says 92% of software in china is illegally copied. taiwan’s ratings outlook is downgraded by standard & poor’s, citing the record budget deficit and tense relations with china. taiwan is selling assets to help plug a budget deficit that’s forecast to reach a record $9.4 billion and pay interest in national debt. s&p says taiwan’s president chen shui-bian to bolster the military would keep the frilved reaching its goal by 2010.
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Listen Interview: Hank Morris on Asian Economy
in a moment, an investment vist in seoul will react to the latest figures in south korea. south korean consumer prices fall for the first time in six months. retailers including dow components wal-mart and home depot lead the market lower as rising oil prices lead the u.s. consumer to be more pessimistic. the head of the european central bank says financial conditions in europe are favorable. jean-claude trichet’s words sundays―sends the dollar to a new low against euro. china’s top bank regulator prepares to outline reforms for the new year to help local banks compete with foreign lenders as china opens financial markets to competition from hsbc and citibank. as i mentioned earlier, south korea november consumer prices fall for the first time in six months, it’s declined .6% from october. economists we surveyed expected the nation’s consumer price index to fall .2% since october. oil prices climbed last month after reaching a record $50 a barrel in october and the rising south korean won is making imports cheaper in the asian economy. i’m joined by hank morris on the phone from seoul, director of industrial research and consultancy. what you do make of the results?
>> i think it confirms what we’re seeing in other stats that have come out recently. for example, in terms of inflation adjusted consumption expenditure, third quarter last year, that rose nearly 3% but third quarter this year, 1.8%. so consumption is definitely not rising in this economy and that’s being reflected in the results of manufacturers. you’re seeing people like hyundai motor adjusting their sales target, domestic target, from 1.5 million sales this year to 1.1. that’s a huge come down.
>> given your assumptions of crude oil prices and the korean won, where do you see consumer prices next month into 2005?
>> i think they will moderate. the oecd is calling for prices to rise 3.5% in 2005 and that’s probably about right. they might even fall somewhat lower than that if the won continues the current pace of strengthening we’ve seen.
>> what do you think is the next direction on interest rates and when will they make that move?
>> the government is worried about the strength of the won so as we see dollar interest rates rising, i think they’ll be temped to continue cutting local rates and they might cut another quarter percent, particularly since we’re not seeing any significant increases in domestic consumption here. we might see the next quarter percent cut sooner rather than later.
>> the nation also releases november export data in about two hours with economists we surveyed expecting exports probably rose at the fastest pace in three months. what are you expecting?
>> it looks like the electronics exports are holding up pretty well so i think i would agree with most of the analysts that we’re probably going to see a pretty good result here.
>> what do you advise clients wanting to invest in the nation’s markets given slowing domestic demand as well as rising interest rates in the u.s. and rising oil prices?
>> i’d like to see them go into solid manufacturing companies showing good investment in product design and technical improvement, companies like hyundai motor which are enjoying exceptionally good export sales and could benefit hugely if we do get some consumption turnaround next year. i think it’s too early for banks
>> hank morris of industrial research and consulting in seoul. u.s. consumer confidence unexpectedly fell in november. we’ll find out how it may affect asian markets today. we have david tweed, our stock market editor in sydney joining us. how are the consumer confidence confidence figures in the u.s. likely to play out in australia today?
>> you need to look at the exporters to the u.s. they’ll be affected by a decline in u.s. consumer confidence. first of all, you think about china which counts the u.s. as its biggest investment market . look at the exporters in japan―honda, toyota motor, nissan. all of these stocks may be affected. but also look behind the reason for the drop in consumer confidence. the economists with the conference board in new york said it was low income families who are being hit by or hurt by the fact that the fuel prices have risen, new york oil futures have risen 64% in the past year and that’s beginning to -- that’s beginning to make these lower salaried people feel the crunch in the back pocket so as well as looking at what happened to the u.s. stores like wal-mart, look also to retailers across asia. we saw ito-yokada falling yesterday in japan. we saw 7-eleven also falling, the biggest convenience store in japan. in australia, his retail sales fell for the same reason yesterday because of high fuel prices and companies like coles myer and woolworths declining.
>> australian futures are indicating a higher open. what are investors looking at?
>> one of the things that’s been happening in australia is we’ve been having record amounts of dividends paid back to investors after booming record profits in australia and that money is helping to support the market . today marks the day that b.h.p. finishes depositing the 2.2 billion it’s paid back to investors in a share buyback and so investors here are speculating that money may be reinvested back into b.h.p. stock or the rest of the market .
>> thanks for that, david. coming up, u.s. homeland security secretary tom ridge resigns as a leader of the government department created to protect the nation from terrorists.
