Welcome to ESL Business News for April 23, 2007. ESL Business News gives you a podcast and script of international business news every week in slow, clear English. Find us on the web at eslbusinessnews.com, where you can follow along with the podcast script as you listen.
The British pound's value reached its highest point against the US dollar in 26 years. On Tuesday, the pound was worth two United States dollars for the first time since 1992, and the dollar later slipped to its lowest point against the pound since 1981. Economists say that the slide was a result of predictions that the Bank of England will raise interest rates soon and that the US Federal Reserve will lower theirs. A Bear Stearns analyst predicted that the pound will be worth $2.10 a year from now. The euro rose to a value of $1.3614, getting closer to its all-time high of $1.3667 set in December of 2004. The European Central Bank also plans to raise their interest rate.
At a South American energy summit held in Venezuela, Venezuelan President Hugo Chávez and Brazilian President Luiz Inacio Lula da Silva argued over policies for the production of ethanol, a fuel made from crops such as corn and sugar. Lula recently signed an agreement with US President George Bush to promote the production of ethanol as a commodity like petroleum-based oil. In addition to his dislike for any cooperation with Bush, Chávez claims that raising crops to create fuel for cars will raise the price of food to feed people and livestock. He later said that he opposes the use of corn for ethanol, but not the sugar that Brazil plans to use.
American student loan company Sallie Mae is selling itself for $25 billion to two banks and two private equity firms. The $60 per share price that they are paying is well above market value; recent events have pushed their share price down. There are investigations of whether lenders have bribed university officials to send business their way, and the federal government has threatened to cut Sallie Mae's current subsidies and loan guarantees. Analysts say that because of their low operating costs, the purchase of the company still represents a good investment. The loan company was first created by the government in 1972 as the Student Loan Marketing Association.
Millions of people in North America, Asia, and Europe lost access to their email for up to 12 hours when a software upgrade caused problems with central systems at Canadian company Research In Motion, maker of the BlackBerry email device. The software upgrade had not been tested enough. BlackBerry users, who are known for sometimes checking their email every few minutes, were very angry with the company. Wall Street banks said that deals may have been held up because of their inability to use their favorite form of communication. RIM, who has 8 million subscribers to their BlackBerry service, announced that they were making internal changes to ensure that such an outage does not happen again.
Things are not going well at the Yahoo search engine and portal. To compete better with Google, who get much of their income from their online advertising system, Yahoo has spent huge amounts of money building a new advertising system named Project Panama, but the new system was delayed and has not encouraged Yahoo users to click on ads as much as the management had hoped. Their first quarter net income was down 11% from the same quarter last year. In other bad news for Yahoo, the World Organization for Human Rights is suing them for assisting the Chinese government in identifying dissidents who were later arrested and tortured. Yahoo said that they turned over user data to comply with local laws.
Thanks for listening to this week's summary of international business news. What kinds of stories and businesses do you like to hear about in our weekly report? E-mail us at suggestions@eslbusinessnews.com and let us know your name and where you're writing from. Watch for a summary of next week's news on eslbusinessnews.com on Monday, April 30th.
Copyright 2007 ESL Business News.