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tv   Worldwide Exchange  CNBC  January 27, 2010 4:00am-4:02am EST

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hello and welcome to the program. here in davos, the governor of the peoples bank of china tells cnbc the policy will remain relatively accommodating. >> here in asia, shanghai stocks dropped to a three-month closing low as bank shares decline on liquidity worries. >> in the u.s., washington front and center. president obama delivers his state of the union and lawmakers are set to grill tim geithner on aig. >> and in europe, markets heading lower. dividends will be hit by regulatory charge changes. >> hello and welcome to cnbc's "worldwide exchange." yes, for the next three days, i will be here at the annual meeting of the world economic forum in davos, the swiss alpine
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town where many have come to discuss some of the world's biggest issues. already this morning, my partner has spoke to nouriel roubini and a few moments ago, the governor of the bank of china was on this very stage. this is what he had to say about the teetenning. >> china will continue and also make sure to sustain the current policy. there is still relatively accommodating fiscal and monetary policy. we want to make sure that growth is still there. i think it's important for china and also for the world. there's a reason they would be able to have 9% gdp growth rates. >> eventually, he was saying he thought western markets were getting it wrong when they were interpreting a move. that will be a great source of debate as we go through this
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show and indeed over the next three days. this meeting is being held over increasingly fractured policy from around the world. the challenge is that presents the businessman, policymakers is indeed great. we'll be discussing that, of course. the mood, very much one of redesign, rebuild and rethink. that is the motto of this year's an muth meeting. plenty to come from this part of the world and plenty to talk about from elsewhere in the world, as well. >> i'm christine tan in asia. it's great to have ross in davos joining us from there. let's get a quick view where asian markets have traded or have closed today. this is how the picture is looking. negative session across the board. that is weighing on sentiment and how that would curb the global economic recovery. investors staying sidelined ahead of the conclusion of the meeting today. the nikkei 225 is down 0.7%. the stronger yen is hurting
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exporters there. the hang seng is down 0.4%. shanghai composite down 1%. the xospy is down 0.7%. a lot of tejz between north korea and south korea and that is weighing on the index there. the bombay sensex is down more than 2% and the australia market is down more than 1%. becky, good to see you. >> it's just past 9:00 here in london, 10 on the on the continent and the european markets have been trading for over an hour. here is how they're looking. declines across the region. the cac is looking pretty weak, 1.6% lower. 1.3 down for the ftse 100. the smi is holding up, lower, but just by about 0.8%. brian. >> thank you, becky. i'm brian shactman here in the u.s. we had a bit of a sell into the close yesterday. the dow is only slightly down,
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but it had been in positive territory for several hours before the close. that negative sentiment bleeding into the u.s. markets here in the early trade. extremely busy day. we have the state of the union tonight. tim geithner testifying on aig in congress today. we have more earnings from the likes of boeing, caterpillar, united technologies. we have home sales data. just quite a bit of -- to deal with on top of all the global economic discussions we're having. but we're negative across the board, at least at this hour. becky, back to you. >> let's take a check on all those earnings. st microbeat expectations. the ceo of st microis with us on the phone for a first on cnbc. so sales beating expectations, carlo, but eps just missing
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slightly. tell us how the business went in the fourth quarter. >> well, i think from an operational point of view, we are back to profit. in fact, the operating income was positive, $90 million, and we grew sequentially almost 14%. and i think we are pleased about the freakish performance and the quarter effect, the operational figures for $220 million. so over all, it was a good quarter and we see very strong demand. the reduction is very much more. the is 10% shorter quarter. it's just the number of working days. the demand is strong. we expect at this point that
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overall we saw 10% to 12% and we are confident that we can outperform the market and grow faster or significantly faster than the market overall in 2010. >> carlos, double digit growth is obviously a positive outlook. where is the strength coming from? >> at this point, i would say that it's pretty much broad range. we can discuss about geography for a second. from a geographical point of view, we saw the first sign of recovery in china at the end of the second quarter, but now it's much more global and across the board and is very material, also, in europe and in united states.
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and japan. from the industrial point of view, it is the same. it may be more specific to us. we are merging three measured companies in wireless and, of course, we are some overlaps, but in terms of resources and products, but this is very broad, also from industrial point of view. it's from the automotive to industrial, from consumer products, entertainment products, it is very broad. starting from a base in q1 that was particularly weak. >> how is pricing holding up for you? >> pricing, i would say, is really two blocks, basically. and here there are
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opportunities. there is a second portion that is more on the long-term contracts that is driven by the contract. so overall is -- is improving. >> carro bozotti, we appreciate your time, ceo of stmic stmicroelectronics. now back to davos, where it's chilly. ross b, are you multi layered? >> more than. i am quad ruined, tripled, it's about 15 degrees at the moment. it normally warms up, though, as we go through the morning. things are certainly warming up here, as well. it's the first day of debate in davos. we just heard from the governor's bank of china. tonight we're going hear from
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the fed. of course, then from the state of the union speech, as well, from president obama. but what we are seeing and the imf talked about this yesterday is an increasingly fractured and different role of policy regulation coming out from leaders right across the globe. how is business going to survive in that environment? joining us now, julian clayton and mike mac, as well, ceo of sangenta. gentlemen, thank you very much, indeed, for joining us. in this environment where we're coming out of recession at different speeds of growth where we're uncertain about the policy that's coming down at the moment, how do you run your company? let's kick off with you first. >> well, we're a research and development company, so we necessarily have to take a long view pipeline as anywhere from 10 to 20 years for delivery. what we look for is to be sure that sensible government policy is trying to converge on the
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things that really matter. of course, we're coming out of a turbulent period here. a lot of governments are talking about solving problems in a sensible way and we hope that progress continues. >> health care, is that going to be a boom for you? the health care debate clashes? well, we're in the agriculture business and so the health care collapse isn't going to affect us directly. but if there were a concern of mine, it would be the fracturus nature of legislations and governments getting together. i hope that's not the trend. >> you just raised $5 billion. what are you going to do with that $5 billion? how might the state of union tonight affect where you put your money? >> i don't know whether the state of the union will affect where i put my money. yes, we have invested $5 billion and we've already invested 20% of that so we have $4 million to go. in 2009, there was a significant
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slowdown. what we have seen is a pick up in the pipeline of deals coming through. and we see that increasing as we go in 2010. the debt availability as improved significantly. january in particular. if you look at mezzanine availability, straight bank debt and high yield, a couple of weeks ago, three weeks ago, he think it was, over 11.7 billion were raised in the high yield market. so business is picking up, for sure. >> and a theme for us, the road to recovery. there is a size of limited recovery and then pick up most of the growth. where is that going to be for you? >> picking up the growth, yes. but the investing strategy going forward in this next cycle will be all about value creation. sort of taking businesses and improving the underlying
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operating performance of business growth. and financial engineering and so the investments will be focused in those particular areas where we see real opportunity to drive operations. >> where? look at geography, as well. >> i think it will be broad spread. i don't think there will be any private sector. we have focused on service rather than heavy manufacturing. i think from a geographic standpoint, the u.s. should lead the way. then we see europe falling on from that. >> roberto, it's brian shactman here in the united states. i'm curious as to your opinion on the ipo market, whether a lot of these names will come back with publicly traded companies in 2010. we haven't seen a lot of execution. >> well, there certainly is a lot of talk. what we'll have to wait and see is when this stock will turn
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into reality. frankly, i'm more cautious in terms of timing. perhaps a bit later rather than sooner. but obviously, they will. the question will be, will we start seeing it in the first half of this year or into early next year? i really don't have that answer. >> and roberto, michael, i'd like to get your views on how important you think china is to the global economic recovery. mike, can you start first. >> well, again, from the voice of agriculture, it is the second largest agricultural market in the world. i don't need to tell you that there are a lot of farmers tr, half a billion farmers, they value technology, they value productivity, and for us, it's going to be a particularly big growth market. i wouldn't want to venture a guess as to whether or not china itself is facing a bit of a bubble and we hear a lot of news flow coming out that they've got some challenges here in 2010. how important is it to sustaining the recovery to the
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extent that we're in recovery? i think it's pretty important. >> definitely, i think from a fee perspective and we see it from the eyes of our portfolio company rather than straight investments. our companies have continued to invest and expand their presence in china and we will continue to do so and continue to support them in investing. >> and mike, we're just get a brief comment on you. what is going to happen to agriculture prices in the near term? >> look, 2009 yields broadly were very good. we come into 2010 with good stocks and as a consequence of that, prices have taken a bit of a tumble in the past few weeks. having said that, credit viability in parts of europe is better than it was a year ago at
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this time. credit availability down in latin america than it was a year ago at this time. >> there's print more to come here in davos, including what was put on for the general in a big way is relief here among those attending the annual meeting for haiti. we'll find out how that is going down with members. for the moment, though, i'll hand it over. >> good stuff, ross. thank you very much. coming up on "worldwide exchange," a major, major day for president obama as he delivers his state of the union at 9:00 p.m. eastern time, expected, of course, to focus even more on the jobs situation here in the states. we'll have analysis throughout the entire show.
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welcome back to "worldwide exchange." let's get to our guest host for the entire two hours from hong kong, senior investment strategist from bnp paribas. andrew, great to have you with us. lots of issues coming out from china.
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we have the governor of the bank of china talking about tightening and stable renminbi. what are your thoughts about china? >> my thoughts about china are the following. the peoples bank of china say they're going to have relatively loose monetary policy, whatever that means. they have got very concerned from june,ul on wards when credit jumped by 35%. the write was on the wall that they were going to do something about it, and when they did, guess what? the markets tumbles. they will continue to tighten, possibly for the next 18 months. being china, it's going to be done evenly, slowly. the renminbi i don't think is going to depreciate. it's going the hit about 3%. about 1.5% out. they will not want to have market interest rates less than the rate of inflation. you know, all this is absolutely predictable. it is just as purely technical.
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and guess what? the markets have gotten shocked again. this idea that things are passed to the market i think is one of the biggest falsehoods ever. >> and ewe region in that discussion that the governor had with jeff, he said he was surprised particularly with the reaction of the western market to announcements about changes in policy. and he thought basically that investors were overreacting. are they or not? they overreacted to the extent they thought the chinese wag goes to do absolutely nothing. but the notion that the peoples bank of china would not increase what they were doing, they were doing open market operations. they were pushing up interest rates very slowly.
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that's chinese. they're not going to rush anything. that is not their style. although it's not their style, that's not the way it's going to work through. they have all the time in the world. they're not constrained. they have an economy which just grew 8.7%. 2.3 trillion foreign investment. they want to avoid inflation. the issue is a little bit of a nonstarter because their housing and residential sector has been under pressure for quite a while now. they simply want the economy to grow between 8% and 9% and they don't want to see prices accelerate and perhaps they're quite happy to see the index correct by 2% or 3% or 4% as it has done. so that seniority of keeps it even. i'm not bracing myself, but i'm telling my clients and my investors that for the next 12 months plus, the policy will quickly tighten, very slowly. >> all right.
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andrew, you're sticking with us for the next few hours. we won't forget you out in hong kong. for now, though, we come back to one of the other issues that has been firmly put on the agenda in davos. how does that play in this world politically with movements on human rights. joining us is kenneth ross, the executive director of the human rights watch. thanks very much indeed for joining us. >> thank you. >> at the moment, we're talking about reconstruction in haiti in terms of the actual physical reconstruction, humanitarian aid, but does that move into political reconstruction? >> obviously, yes. the first issue is humanitarian relief, saving people's lives, providing food and shelter. the next step will be part of the physical reconstruction. i've been following haiti for over 20 years. frankly, there's been a predatory state in place in haiti for much of its recent history. a lot of the reason why haiti is so underdeveloped, essentially,
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the state got in the way. there was violence, it was not a good place to be economically. that needs to change. you need to establish the the rule of law, reign in the police. the brazilian-led peace keeping force has done a good job of providing stability, but now there are brand new challenges ahead. as the world looks to physically reconstruct haiti, there's a need to politically reconstruct it, as well. >> if the world in the mood is to do so, what could be the lesson for other countries and other areas where there are human rights issues? >> here in davos, there is much talk about where is the leadership going to come from to help emerge from the global economic crisis. what's often being lost in that discussion is where is the political leadership going to come from too deal with political issues rights, as well? the rise in china represents an alternative model, one built on not respecting human rights as
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it grows economically. and maybe a new treaty with a european president will allow europe to its way. it hasn't so far. in the last year, president obama has given a series of really good speeches, but he hasn't followed through and changed policy. >> is it next to have economic growth, job security first and on the back of that, then it's human rights afterwards? >> that is a huge mistake people make. there are a number of dictators who say i'm going to build my economy first. but when you're not sure that the government is serving the people, that's where you get corruption, all kinds of mismanagement and it's a desire for economic growth. for every case of a taiwan or singapore that's perceived, you can see others falling apart. thanks very much indeed for
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joining us. the markets have been under way for quite some time. particularly in europe. we're about an hour and 24 minutes into the trading day. let's bring you up to speed with what's happening there. >> yeah. let's take a check. declines for the region for the ftse 100 and all the major sessions. the ftse is still down by almost 1%. the biggest decliner is actual low oil. shares of tullow oil dropping after the announcement that they are set to raise 1 billion pounds in a share of higher expenses. certainly one of the big decliners on the uk market. not very many gainers in this part of europe. now out to patricia sar vas to see what the picture looks like in frankfurt. >> this is not a good session,
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down 0.7% as we speak. as we get closer to the u.s. opening, we'll we'll see more of a positive drive. the only stock really standing out right now in positive territory is s.a.p., up 0.6%. good numbers. and especially the guidance was given something that seems to be convincing the markets this morning. we spoke to the ceo earlier on "squawk box" and this is what he had to say with regards to forecasts. >> looking forward, we believe i.t. and particularly our software is necessary. we will grow this year between 4% to 8%. >> as i said, deutsche bank is
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the only gainer right now. now over to paris and stephane. >> the company posted wider than expected loss for the fourth quart quarter. that being said, the revenue is stronger than expected. up 14%. stmicrobelieves that the global market will increase by 10% or 12% this year on hopes that the company will outperform the global market. the stock is up 0.8%. tough draw of trading for russo, a company listed in paris and not in london for europe. the stock is down now 1.8%. in hong kong, we had a sharp dive where the company is listed. now back to the united states. >> thank you, stephane. coming up on "worldwide exchange," you might want to mind your language. it is day two of the fed meeting and people want to know what the
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fed has to say because we're pretty sure that rates will not change. ross, i'm sure that might be agenda item number 19 over there in davos with everything going on. >> well, now, look, everybody is very much focused on what policy initiatives we're going to get out from both central banks as well, of course, politicians. we'll take the view from another leader. here is timothy split. a little later, george soros will be on closing bell and we want your questions, as well. e-mail us, 
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this is cnbc's "worldwide exchange." the headlines from around the globe, here in davos, the governor of the peoples bank of china tells cnbc the policy there is pretty accommodating. >> and speaking of china, shanghai stocks dropped to three-month closing lows as bank stocks declined on worries. >> and here in the i'd, washington front and center. president obama delivering a state of the union address later today and lawmakers will grill tim geithner on aig. >> and in europe, bank shares heading lower. dividends will be hit by regulatory changes.
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>> you're watching cnbc's "worldwide exchange" with christine tan, becky meehan, brian shactman and me, ross westgate. we're joined now by timothy flint. the imf came out yesterday and said policy has increasingly been driven at a multi fractured policy. how are you working out in this regulation changing environment how companies should be responding? >> first, we have the policy level. if anything this crisis has demonstrated, it's a global connected world. the first thing we have to do is get clarify of the structural stage. harmonize in some way everything that's been talked about across the board today. >> we're increasingly young coordinated, aren't we. >> i think that's the challenge and the opportunity. clearly the g-20, what's
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happened in the uk, what's happened in the u.s., take the best ideas. bring together policymakers and come together and create a global framework, clarity of roles, responsibilities so companies can install that and together we can improve the global capital markets. >> mr. flynn, it's brian shactman here in the states. in terms of the conversations on the ground here, we have president obama with so many things expected to say tonight in the state of union. we have the fed meeting and then we have all these concerns on china. how do you sort of prioritize the conversations you're having off camera in terms of what is the biggest concern right now? >> well, as you mentioned, there's a multitude of concerns out there. i think the biggest thing is restoring trust and confidence across the markets across the globe. politicians, business leaders need to come together and say it is critically important that we gain the trust of the people.
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many people have been damaged over the past 18 months from what's happened. that needs to be resolved here. >> let me play devil's advocate. here in asia, no bank was national i'llized or recapitulated across the states. why should the nations be concerned about regulatory environments and issues that go directly to the roots of all of it which was a major property crisis in the united states? >> you're exactly right when you look at asia. but what is important is they were impacted by the liquidity crisis. what is really important, i do believe, is a global framework. the financial sector is connected. it does affect everybody around the world and we owe out responsibility around the world to bring forward a fair debate and bring forward the best ideas
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globally to ensure it never happens again. >> and this is christine here. what is your view on that? >> well, i won't get into policy decisions from china, but i believe everybody is focused on long-term sustainable growth. and how we maneuver to make that happen is critically important. things don't get overheated again and things get set up with the right incentives. that is what i think everybody is trying to do to bring forward that investment. >> thank you very much. we'll hand it back from davos. becky is keeping my seat very warm for me in the london studio. i wish someone was keeping my seat warm here. >> i don't think i'll be doing that, ross. >> i wasn't suggesting that you should do that. i was just merely saying it would be nice to have a warm seat. >> i think i just revealed a little bit too much about my
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character there and now i'm blushing. the ftse cnbc global 300 index is looking like this, down by just about 24 points or so. it has been a negative session. we've been watching it globally. let's see how it's shaping up in asia. christine. >> hey, we're having a negative session here in asia, as well, becky. we are seeing lots of concerns about china, monetary tightening, what it means for the prospects of global economic growth. investors staying kind of sidelines ahead of the conclusion of the fed meeting, nikkei 225 down 0.7%. a strong yen is hurting exporters. the hang seng is up 0.4%. south korea had a bit of a rough time today because of all these concerns of artillery fire between the north and the south. that is hurting sentiment there. in india, this particular market continues to follow. bombay, there you go, down more than %. and the australian market is down 1.5%.
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>> let's take a quick look at your u.s. stock picture here. we're at 4:37 here in new york. we're in negative territory all across the board. it's a dynamic where we sold into the close yesterday and there's a lot of anticipation/anxiety heading into tonight's state of the union address and what pb will say about the jobs program, about the bank overall andlty of other issues. and, of course, the dynamic, we'll find out what he has to say. there's not a lot leaking in terms of proposals as of yet. let's head out to davos. maria bartiromo is on the ground. maria. >> hi there, brian. thank you very much. i'm coming to you right now from the sonata room in davos, switzerland. we are about to kick off one of the morning sessions. it is called back to the future, the next global crisis. we have six gentlemen on stage and we have a number of front row participants.
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we have three people who are going to make propositions in terms of proposing what could be the major risks that could trip up the global economy and cause the next global recession. and then we have three challengers, as well as front row participants throwing challenges in there to try and figure out if, in fact, there are even other upsets that we are worried about. the goal here is not to focus too much on how we arrived here and where we were in the economic recovery that we miss possible warning signs of what's ahead. some of the proponents will be making the case for the possibility of the sovereign debt crisis, the possibility of overregulation. the possibility of protectionism. there are a number of challenges to those cases and we will be back to you to update you on the audience's reaction in terms of which is truly the biggest risk for the global economy. i'll be back to you soon, bien. i'll send it back to you. >> all right. sounds quite dynamic, maria.
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that you can very much. we go from davos to new york back to davos. let's take it back to mr. westgate. >> there you go. maria is only standing probably about 200 meters away from where i am. >> she's warmer, too. >> she's looking a lot warmer. still, look, i'm being warmed by the quality of the conversations and debates we're having here. joining us now is presha rua from steel energy power. you heard maria talking about the next global crisis. india hasn't had sort of a crisis, really. very strong growth at the moment and we're talking about this road to recovery. it's not a road to recovery. it's india, about a road of sustainability. >> absolutely. latvia had a growth of 6%, 7%, which in the global context i think walls very, very strong. and going forward, we're seeing 8%, 9% kind of growth coming back for many, many years. and in the next 10, 15 years is the period where india has to
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create capacity for domestic -- >> i was going to say, what is going to be the biggest challenge for india and companies operating in india? where are the risks in this growth? >> the domestic demand story, we think, is there to stay for a long time. and i think it's going to be -- in the commodities space, obviously, india relies a lot on imports, crude oil, for example. and those supply probably would be the biggest challenge going forward, but not so much on the domestic supply side. >> andrew has a question from hong kong. >> mr. rua, thanks. i'm delighted to hear emphasized that india did not have a crisis. whenever i'm asked how is the recovery of india doing, first you have to be ill and india was never ill. be that 80s may, are you concerned at all that the bank of india is likely to hit with increasing interest rates?
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i think this is inevitable. how much do you think this has been priced in? and as a businessman, are you aware and comfortable with that? >> i think interest rates in india did not drop significantly. and the general feeling is that it's going to rachet up between 50 and 200 basis points. so india has not benefitted from very, very low interest rates and therefore, we don't think it should get that badly affected by rbi tightening up a little bit on the monetary side. >> mr. rua, are you worried that any monetary tightening coming from china could hurt demand for your product? >> not really, christine. probably the only risk is the price of crude oil. it's up to in the 80s. and once it gets past 00, 110,
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then it affect tess ability of the local customer to consume. other than that, we don't see a significant risk. >> how will the rupee play into this? we talk to outsource companying and the accelerating rupee is a problem for them. i wonder for you, though, whether that might be a good story. you have to think, we're happy with that. >> exactly. a strengthening rupee is not that much of a concern. and the rupee is now very much in the middle. the lows were the 40 rupees to the dollar and the highs were 50. >> do you have a company view on what you think will happen to the rupee? >> we don't want to take a long-term view on currency because that's not our business. but in the next one year, we are seeing a strengthening on the rupee, probably in the 43 range to the dollar.
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>> good to talk to you. thanks for joining us. still to come, we'll be joined by steven king from hsbc. if he is in ben bernanke's shoes today, what message wooept to give out to the global capital markets? we'll get his views when we come back. %%%%%%%%%%%%%%
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you're watching cnbc's "worldwide exchange." for the next few days we're reporting live from davos. the sun is out. things are warming up quite nicely in terms of the debate and literally the temperatures. the policy is going to stay relatively accommodating according to the governor of the bank of china and that he thought actually the property market, christine, he thought relatively small issue and that investors in the west particularly should be a little bit more relaxed about it. >> it was a very interesting discussion. we were completely glued to that particular interview. but on a more personal note, ross, i want to know with all the snow around you and the fact that it's kind of cold, how many layers of clothing are you
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actually wearing right now? >> do you want me to count? >> brian and i want to know. >> i think six, if i'm right. yes. but it's a bit difficult because it's dark when you first get up. you're fumbling around for various items of clothing. >> just don't miss any of these key items. just stay warm for our sake. >> the essential items are all there. i can tell you that. i can confirm that exclusively for you. >> gotcha. gotcha. speaking of davos, you can keep jut updated on the latest happenings from davos. we know that ross is there. go to our website. and with over 2,000 guests in attendance at davos, what would you ask some of the world's top politicians and business leaders if you could? e-mail us and we will give you an opportunity to
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put your questions to them. let's cross to ayesha faridi live from mumbai. what's going on, ayesha? >> thanks for that, christine. we had a market holiday yesterday. when most of asia was cracking up, the colagz is coming in. that is why you see a fair amount of winding pressure. and the big rbi event saw all eyes on that. lots of triggers in the market. down about 3.5% for the nifty. it's cracked well below the 2,900 mark. the sensex down 3%. you've got a yawning market well in favor of the declines, almost 18 stocks standing to the red for every one stock in the green. you've got almost 49, 15 of the nifty stocks which are currently deep down in the red. it's the entire technology basket which is really at the bottom of the heap, so it's technology. 8.5%, you are seeing one stand alone on tech, ta ta steel, very
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disappointing. so 8.35% is the kind of cut for that counter, as well. the entire auto basket has really disappointed. now the concern seems to be what is the cost actually going up? we have seen autos have been the outperformer for all of last year, last quarter has been very, very good for them. so most of them are delivering below expect ages numbers. so autos have seen a significant amount of pressure. banks are going extremely weak into the big event. that's the rbi credit policy. >> ayesha faridi, live from mumbai. let's cross over to adam who is just next to me to talk about how the markets are doing. another sell-off. >> that's right, christine. another fragile session for asian markets. some of them were in the green this morning and then we saw an acceleration, the losses in the japanese equity market as the trading day unfolded, largely on
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the back of the movements in the forex markets. once again, we saw the yen strengthen about 80 basis points for the u.s. dollar and it strengthened against the euro for nine-month highs. in fact, we saw deep losses for some of the big names, including toyota and also ahead of the earnings from canon and nec electronics. we saw deep losses across the board for the entire sector. of course, they manage to struggle positive news, showing that japan's exports rose in 13 months since before the financial crisis, pardon me. exports up about 12% here. asian markets make up half of japan's exports. although the deputy governor of the pboc says they will leave
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policy accommodative and loose. steelmakers and shipping stocks drop dropped heavily today. similar stories in korea. both north korea and south korea have fired missiles. lg electronics, coming up with numbers from the fourth quarter, but the investors were a little disappointed in terms of the margins, even though they did beat expectations. back to you, christine. >> adam, thank you very much. a lot of china's story is going on in that particular market. let's check in with andrew ferris, senior investment strategist from bnp paribas. there are still a lot of jitters in the market regarding tightening concerns. do you think there's anything that the fed could change later on today that will change sentiment? >> well, there are two things we could look forward to now. i don't think this will happen,
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but if bernanke were going to talk about interest rate policy, that would mean interest rates would go up. much more to happen are the gdp numbers coming out on friday. if gdp growth is healthy and robust at the back of fed spending, at the back of loose monetary policy, which is very bad news, it means for this to continue the fiscal deficit needs to widen and that is bad news for the bond yields. so in a sense, it's going to be a very, very tricky period. if dp dp growth is weak, the market is strong. i think the markets will be reading there that the fiscal deficit won't go away. it's going to be very, very tricky. it's going to be quite jittery. >> andrew, it's brian shactman in the united states. s for the fed, especially,
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they're going to be either too late or too early. but everyone assumes this gdp number on friday is going to be strong. what about in two quarters when stim use husband is waning and we get a weak gdp number. what happens then? >> thank you very much. actually, my calculation is at the beginning of the year we had a fiscal deficit that add about 8% of gdp. and then that now, as we talk, has gone down to 6. and then there is nothing else on the line. so this is my key concern. in other words, if it looks as though we are on a decline curve, the gdp growth continues to be strong precisely because of the growth. the news for the united states are going to be pretty green. either that or the government will have to step in and they will have to say something along the lines that we're going to spend money, which is precisely what's going to be bad news for the yields. i'm sorry if i sound a little bit gloomy here, but it is very,
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very important to get the economy right. it is a self-sustained return to growth and not something that depends on cash for clunkers or cats for mortgage, first time mortgage borrowers and so on. >> andrew, with so much uncertainty you talked about from the u.s. economy, do you think ben bernanke should stay on as fed chairman? >> well, that is something for the american people to decide. or should i say the congress to decide. michael has a very, very difficult job to do. so it is easy for people to criticize. but changing the leader at mid course may be a very simple indicator that that was not the correct poll and good god, that would not be a good idea at all. >> andrew, continue to stay with us for another hour or so.
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he's our guest host. let me throw it back to ross. >> also joining us for the rest of the program, stephen king. he's with me now. andrew, we were talking about what happens with the u.s. government bond market. are you a seller of the u.s. bonds? >> short-term, not so much. but long-term, absolutely. one of the things we're seeing in the western world is a collapse of money supply growth, even with all the printing money policies from the central bank. so yeah, short-term worries about the rates, long-term, my guess is we're going to see lower rates for the end of the year. >> when we come back, we're going to put you in ben bernanke's chair. if you were him, what message would you community to the markets later today? think about that. so plenty more to come from "worldwide exchange." plus, we've had a lot already on
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the program about regulation. this is what nouriel roubini had to see to say and lord levine. >> not just enough to take trading activity and privates equity and hedge fund activities way. i think there is a glass steegal operation away from commercial banks was a failure and we're going to restore those for commercial banks and investment banks. >> if you want to look at regulation, of course we have to have regulation. at lloyd's, we know more about that i think than anybody else. we went through a near death experience and we got it right punish but you can also just drive the problem away somewhere else. >> a year ago, it was a massive bailout. we could support the capitalization, guarantee insurance, you name it. right now, we're back to leverage. it seems like we're back to business as usual and that is why there's plenty of backlash
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against the financial industry. i think there is that policy allowing that.
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the headlines from around the globe. here in davos, the governor of the peoples bank of china tells cnbc the policy of the bank of china is still relatively accommodating. >> here in asia, stocks dropped to a three-month low as banks
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decline. >> here in the u.s., president obama is delivering the state of the union address tonight and lawmakers will grill tim geithner on aig. >> and in europe, bank shares as morgan stably says bank shares will be hit by regulatory changes. >> we've picked off our annual coverage of davos. andrew ferris is helping us, as well, adding to this global debate. plenty of guests have already appeared on cnbc this morning. big discussion around china when earlier we spoke to the governor of the peoples bank of china. he said, look, policy is relatively accommodating there. we'll do everything we can to sustain gloebl growth. and he wasn't that worried, necessarily, about the real estate b bubble, as well. earlier on, we spoke to nouriel
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roubini and this is what he had to say about the china story. >> china cannot be the only locomotive or engine of growth. but the trouble is that the need for deleveraging and saving more in the advanced economies, the recovery has to be anemic and, therefore, even the emerging markets cannot go back to the same growth ahead in the golden years. >> that's nouriel roubini's view on china. we've joined by stephen king, global economist at hsbc. the other thing, we get into china and we've got a federal reserve meeting today. that's going to provide some focus ahead of the state of union speech. if you, today, stephen, in the federal reserve meeting, what message would you want to communicate at the end of it? i would probably be praying more than anything else. we've got a very low level of rates, all these unconventional policies coming through.
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but at the same time, it's important to remember that the u.s. is still very much on life support drugs. we don't really know what's going on happen when those drugs are being removed. my guess is this will be ideal for all central banks to put pressure on governments to tighten fiscal policy, leave rates unchanged for a long period of time. if you like to kick start the economy, try to make sure that there's instruction coming through to say this is going to be easy policy from the bank and in particular, there's no worries about the state in inflation. >> this is something that we were told today, as well. he said, look, we're moving towards the exit. some measures need to be phased out. the economy cannot yet stand on its own two feet. does that apply to the u.s. economy? >> absolutely. u.s. economies have fallen off a cliff and we've reached the bottom of the cliff. it's hard struggle to get up to that off the yooel years ahead. unemployment has come down, but nevertheless, unemployment is
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enormously high by u.s. standards. the federal reserve should be worried about that. so the idea of tightening policy now against a background where there's so much spare capacity seems to me to be an odd idea. so the idea is to keep rates changed as long as possible, maybe fiddle around with some of the unconventional starts. but from the point of view of interest rates themselves, keep them low. >> stephen, it's brian here in the states. we just talked about it a few minutes ago. the consensus is the fed will be too early or too late. it's a lose-lose situation in many ways. but keeping the rates low for as long as you proposed, the problem of a bubble comes up. my question to you is is it impossible to prevent bubbles? and so we're going to create one no matter what as we try to steer our way through this one. >> well, it's very tricky. one of the key issues, i think,
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is there's been discussion within central banking policies about extra policy tool, really, to try and dream with the issue of the bubble. but the bottom line is, when you look at what's happened to money supply in the states and in particular the uk and the euro zone, we're looking at a story which is erie familiar to many of us in japan over the last several years. and it's not a particularly encouraging story. big questions about the sustainability of the recovery. if you raise interest rates too soon, you get heavily criticized. one thing to bear in mind at the moment is if the economies are on life support, there's no policy left. if you raise rates and you have to cut from the gain, you look as though you've lost a lot of credibility.
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>> still, you raise actually the issue of the case. and so what happens next with mervyn king, the interest rates of the bank of england and, of course, the pound. >> well, the uk is an interesting story. unlike the state, unlike the euro zone, inflation in the uk is actually relatively elevated. and wuven reason for it, of course, is that we've see property from 2008 with higher import prices coming through over the last year or so. so the bank of england has add extra confusion to the story. we have a modest recovery coming through. 0.1% in the latest quarter was very weak. but the way to resolve it, i think, for the uk is we're going to hear much more about this during the course of the year is to go for a big tightening of
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fiscal policy. that takes the domestic economy, squeezes inflation and at the same time should be consistent with a relatively soft exchange rate. but so far, we say in the uk, signs of recovery. but that is not as strong as i think the bank of england would like to have seen at this stage. >> stephen, we appreciate you sticking outside in the cold with us. you're going to stick with us for a little longer. and andrew in the warmth of the hong kong studio, stick with us, as well. we'll get back with you on more insight on the growth of the economy. let's check on the u.s. futures for now. they have been in negative territory through the overnight here in the states. they have improved a little bit. an hour ago, that minus 11 was a minus 18. we have a focus on washington, d.c. with tim geithner talking. we have the state of the union address tonight. a lot of earnings to deal with, as well.
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i know they've taken a bit of a back seat, but big names, boeing, caterpillar, united technology to name three big dow components reporting today. that is where we stand. let's go to christine to see how things fared in asia. >> and brian, those things that you talked about and, of course, what's happening with china, that is creating a lot of risk aversion in the currency markets. this is how the picture is looking as far as the dollar is concerned. weaker against the yen. 89.32. euro/dollar, 1.4069. sterling/dollar, 1.6202. euro/sterling, 0.8684. becky. >> in an attempt to avoid one of the europe's biggest debt crises, greece turns to china to buy some of its government bonds. goldman sachs already approached china's state administration in order to broker a deal. greece has stated it will sell more bonds in february after being oversubscribed to its
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first debt issue of the year. president obama is expected to use his state of the union address tonight, at 9:00 p.m. new york time, to focus on jobs. reports say the president will make small business hiring a centerpiece of his message, pressing congress to act on tax cuts that have been stalled for months. other major topics included the president's proposed budget freeze and a salary freeze for top government officials. ahead of the speech, a new nbc wall street journal poll shows 51% of americans believes president obama has spent too much time on health care and not enough on the economy. treasury secretary tim geithner faces off with lawmakers today over his role in aig's bailout. the how the house oversight committee holds a hearing at 10:00 a.m. new york time. hank paulson will testify. in prepared remarks, geithner involves any involvement any aig's disclosures to banks.
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paulson says he, geithner and fed chairman ben bernanke acted properly in rescuing aig. talking about mr. besh unanimousky, he moves one step closer to a second term as fed chairman. senate democrats have set a key vote for thursday on his nomination. confirmation requires a 60-vote majority and it appears he'll clear that hurdle for the filibuster. both republicans and democrats who were previously undecided now say they will support bernanke. >> rusah's debut, the first non-asian listing in hong kong, was delayed aft least twice on concerns about the firm's massive debt load. despite that, its chief executive believes that rusal stock represents good value. >> we have looking at the asset
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in our class, ability to grow and to benefit from growth in china in theasrusal's debut opened lower. the issue price is 19till to co "worldwide exchange," we'll be joined by eric akby. how are they faring in this global recovery? and how much is the understand in dubai knocked confidence in the region snl we'll get his views on all of that.
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and that hampered the recovery. volvo stocks have taken strain this week on the back of china's heightening bet. is the market already in a correction? some investors believe so saying that in the next couple of months, the market isn't going anywhere. and despite the euro's strength, the monetary union is beginning to look a bit wobbly saying that weak spots in pore tual,
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ireland, gooes and spain are weighing on the region. >> we're joined by reporters across the globe to help us understand what's happening. let's start here in london, though. the ftse 100 at this stage is moving lower. we're down by just about 0.8%. coming off the lows of the session, but losing 42 points. actual low oil is the biggest decliner, down by some 4.6% today. it's a london based exploration company and has launched a share sale of 1.9 pounds today. this ftse 100 member dropped the plan to sell half of its ugandan
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assets. they could float the uganda and denaian operations today. patricia, what does the picture look like in germany? >> a little bit better, i'm happy to say, becky. in the last hour, we managed to climb back a little bit. we're still down 0.6%, but that's better than about an hour ago. henkle and s.a.p. are overprmping the market. and there was an outlook at all, so i think that the market did like it and analysts do comment quite positively to me with regard to the numbers and the outfit. jpmorgan upgrading their stock to nudal, and we have credit suisse upgrading the price
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target on that this morning. m.a.n. is down, deutsche bank, the carmakers a little bit under pressure, perhaps the really is from toyota and japan not helping things. watch out for siemens after getten app an upgrade. it is trading down because it is trading ex dividend. that's frankfurt. over to paris and stephane. >> and it's not really improving in paris. the cac is off 1.1%. it's losing more than 4% over the last trading days. stmicrois reacting negatively to the earnings after yesterday's close. the company posted a net loss of $17 million for the fourth quarter. that was much wider than expected. and the growth margin is about the company's guidance. and the company is expecting sales to decline again in the fourth quarter of this year and
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the stock is trading a bit lower. also in focus today, rusal is trading in paris. the stock, which is also listed in hong kong, lost a bit of ground this morning. in paris, the decline is rather limited. rusal at 17 euro 70. the stock was introduced at 18 euros this morning. that's the story here. over to adam now in singapore. >> thank you very much, stephane. let's kick off in hong kong with the rusal, which listed today. we saw a very weak reaction from the markets. it had about a 15.5% drop from its ipo price there. overall, we saw weakness permeate across the greater china markets.
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it was certainly a very weak picture there. across the board as we saw, a lot of risk coming off the table. and because of the fear that china might be slowing dow or tighten even further, that gribd a lot of asia and japan. and we have the kospi closing at seven-week lows. overall, a very weak picture in asia. on that note, back to the u.s. with brian. good morning. >> thank you very much, adam. thank you very much for that report. coming up, hank paulson is expecteded to say he and geithner made the right moves regarding aig. but first, we want to know what you think. did the u.s. government do the right thing in bailing out aig? is the government too cozy with wall street? whapt your thoughts, whatever they may be, but keep it decent. ♪
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welcome back to "worldwide exchange" on this wednesday. each and every year, cnbc hosts an opening debate at the world economic forum in davos. this year, we themed it back to
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the future. how we look ahead as we move towards the road to recovery and whether we rush to return to business as usual. let's get out to maria bartiromo who is hoftding that out there. >> we have heard two propositions as possible threats which would be the next global upset. the first one was the possibility of sovereign debt and that would turn into a crisis, governments around the world dead leighton. and the second one was in the mist of all the issues that the globe has faced, that we would see too much regulation. we have a pretty heated debate on that one. ladies and gentlemen, would you say that's accurate? yeah. pretty heated debate on that one. we have a standing room only here. the third proposition is coming and it has to do with protectionism. but i would say jacob frankel, who is on stage, it's pretty bros broad baseded on
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protectionism, isn't that right? we'll be back with that possibly going forward. brian, i'll send it back to you. >> thank you very much, maria bart row moos in davos, switzerland. let's take a look at u.s. stock futures. they are still to the downside, although the s&p 500 clawing back to even. we're down about 18 in the dow, better than 7 points in the nasdaq. but that s&p 500 for perspective, that plus 1.2 was minus 272 about 90 minutes ago. so that is where we stand at this hour. the u.s. housing market is in focus for a third consecutive day. december home sales forecast to rise near 3% to an annualized rate of 365,000 homes. we have a few dow components reporting results from the opening bell. we also get earnings from the likes of conco phillips, blackrock, defense contractor general dynamics, ual and
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wellpoint health. there's steve jobs taking the stage in san francisco at 1:00 p.m. eastern time, 0 o'clock a.m. pacific to unveil apple's long awaited tablet device. but mcgraw-hill's ceo terry mcgraw may have taken a bite out of apple sales when he gave a little bit of information away on the device yesterday on cnbc's street signs. >> we have worked with apple for quite a while. so the tablet will be based on the iphone operating system and so it will be transferable. >> adding to the excitement, apple down nearly 2% in frankfurt. >> here in davos, the road to recovery is what we're talking about. you heard maria talking about sovereign debt as one of the
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risks being poed posed in her debate. still joining us, the largest private equity group in the middle east. debt is something, of course, that's been very much in focus with dubai's problem. is there a legacy? is there going to be a long lasting legacy from dubai for the region? when we come to things like dubai and in the region, i think that it is overstated. dubai is not a automobile manufacturer. it's a real city with real people. and i believe that the dividends are going to last us for 50 years. so yes, we have a pickup at present and we have some rescheduling that needs to be done in dubai, but i don't look at it as a long-term -- >> is it knocking confidence for investment in the entire region? >> i think confidence is being knocked globally, and within the
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region we have reflecting that we are part of the globalized economy. within the region, we're seeing signs of recovery. as long as we believe in the oil story and the fact that the oil prices are going to hold up, i think dubai will be the gateway to the region. >> what is going to happen with oil? >> well, i think that the key thing there is what is happening with china. >> in the last couple of weeks, they often do, but in the truth of the matter is, when growth is dominated by china and not the u.s., a lot a lot more demand for commodities. not just in the middle east, but also in latin america and new zealand. it's very different from what we've seen in the past. >> andrew is in hong kong and he has a question. >> i would like to seek your
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views on the notion with sovereign defaults, particularly with the concerns about greene greece or the united states is completely exaggerated. that is if argentina doesn't have u.s. dollars, brazil doesn't have u.s. dollars, the united states can and has printed as much as they need. the ecb can and has printed as much as they need. i'm not quite sure what is the concern. japan defaulting? the majority is domestic in any case, so what is the fuss about? unless it is about very high interest rates. >> japan is a interesting story because it has pulled off a remarkable trick, having a huge deficit and at the same time having absolutely no growth. japan has had to borrow more and more simply to keep the economy's head above water. they're worried about the future. the more savings they make, the more government bonds they buy.
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i wouldn't say it's a virtual yulus circle, but it's a circle whereby the government can borrowlty of money. the chance of the u.s. defaulting is zero. but what it will do instead is print lots of money if it has to. the big opportunity the u.s. has is to print dollars to devalue it against other currencies. >> and that printing of dollars, how much of that is a challenge if they continue to devalue for the middle east? they don't want the dollar to be devalued. >> at the end of the day, the dollar deval ewation is very much a u.s. policy. i heard it statistically, that a 10% fall in the u.s. dollars is going to lead to a million new jobs. so a lot of this is driven by trillion employment issues. when the dollar is in free fall wibt affects us and vice versa,
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as well. >> quickly, is this an inflex point? what do you mean, briefly? >> well, i believe that, you know, transactions, especially in my industry are done by willing buyers and willing sellers. in 2009, we didn't have that many sellers in the market simply because we believe this market is here the stay and it is here to stay for a time to come. and i believe it is now at a point where good trngs are going to happen. good assets are going to change from good hand to good hantdz. >> thank you very much, indeed. we've had some great conversations this morning on cnbc, particularly about monetary policy. a little earlier on, geoff was talking to nouriel roubini. he was talking about the dangers of exiting too soon as far as monetary policy is concerned. >> the trouble is that we're steering quantitative easing, now it's the beginning of as
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asset bubble coming global. >> china will continue and make sure to sustain the current policy, relatively accommodating fiscal and monetary policy. we want to make sure that growth is a very there. it's important for china and for the world. keep the focus in 2010 on implementing the measures it has used. we're not in you year one after the crisis. we're in year three of the financial crisis. as we're moving towards the exit, some measures need to be phased out, but not this year.
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this is cnbc's "worldwide exchange." the headlines from around the globe. here in davos, the governor of the bank of china says the policies are still relatively acome dating. and shanghai stocks dropped to a low as bank stocks declined on liquidity worries. president obama delivers his state of the union address and lawmakers grill tim geithner on aig. >> and in europe, markets heading lower. bank shares dropped as morgan stanley says bank shares will be hit by regulatory changes. >> you're watching cnbc's
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"worldwide exchange" with christine tan, brian shactman, rebecca meehan and myself, ross westgate, here in davos. markets are heading lower. we're get a look at the u.s. futures shortly meanwhile, here on the ground, the cnbc debate has kicked off back to the future. the next global crisis. maria bartiromo is hosting that. carolin schober, they're trying to find out where the risks are and we vvent even had a recovery. what are they saying? >> economist kenneth roguff of harvard, he says the sovereign debt crisis will be the next global crisis. on the other hand, we have barney frank, democrat, he said he certainly didn't agree with rogoff, he said it will be a debt crisis, but not a sovereign one. it's the u.s. -- and, of course, his focus is on the u.s. they have been overspending, especially in terms of military expenditures. that will lead to the next
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crisis in terms that the u.s., they cannot ensure the high quality of life of its citizens because they're going to have to cut health care and education. also, we've got the chairman of lloyd's in the uk. he said that overregulation, that will be the next global crisis here. and then he says the industry has to deal with it themselves. he says, we have to do it like the children do it, stop, look, listen and learn. >> thank you very much, carolin, for that. that will be at 2200 eastern time on friday. meanwhile, let's get a look at those u.s. futures. brian, how are we fairing? >> we're doing okay, ross. we had a bit of a sell-off into the dow yesterday. down fractionally, but it was notable that we finished in the red. today against fair value, the dow was down about 7 points. the nasdaq fell negative against fair value as is the s&p 500. but if you're just joining us,
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the numbers are starting to trend better. we'll see if that continues through the open. we have three dow components reporting today. boeing, caterpillar and united technology. bec becky, over to you. >> let's take a check on how the european bourses are fairing. at sth stage, the ftse is down by 0.75%. the dax, about 0.5% lower in this instance and across in france, the cac is 0.9% down, smi holding up reasonably well, just losing about 0.2%. christine. >> hey, becky, lots of risk aversion. we had the fed meeting coming up and, of course, concerns about monetary tightening in china. that seems to be weighing on risk aversion. dollar/yen, 89.45. euro/dollar, 1.4067. sterling/dollar, 1.6211 opinion euro/sterling, 0.8675. ross, back to you. >> christine, thank you very much for that. one of the great parts of coming
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to davos is you get to talk to the ceos of various companies. richard, thank you very much indeed for joining us. it's slightly warmer now, to be fair, than it was earlier this morning. you're very into what happens with global monetary policy. two things going on today. we've had the governor of the peoples bank of china said look, the government will remain relatively accommodating. we will hear from the fed who is likely to say it's relatively for a good time to come. >> gold price, obviously, reflation, when we try to look for a longer term economic solution, it's hard to get off stimulus packages. and i think the strategy is prevalent. we see countries buying gold.
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i think with that people are trying to protect their portfolio. >> how much of this is still a dollar story? do you take the view that china devalues the dollar? >> i do. and i do think that it is a dollar story, largely. but i think part of it is the real value of gold over time. gold is a currency which doesn't have any debt against it. nobody can make more of it. you can't print more of it. it has intrinsic value. and i think there's a sense that intrinsic value is -- >> you can't make any more of it. >> you can't make any more of it. >> christine has a question for pup. >> hey, richard, this is christine. personally, i do like gold. what kind of physical demand is there from asia and china? >> great question. we've seen the physical demand for china down. but i think we'll see that bernlgonning middle class, india
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is a large consumer of gold, but china out rated india in terms of consumption. so i think it bodes well for the long-term so it has that commodity and currency major to it. and wealth accrual is important to everybody in the world. >> rimp ard, mine is a timing question. insecurity or uncertainty is likely to rise in the course of this year for a number of reasons. can you think of a particularly sweet spot for this kind of insecurity? that will be good for your business in terms of timing. personally, i think it's something between may and june when the questions about the capacity of the united states economy to self-sustain will begin to rise. now, i'm not suggesting that there's any magical number or magical date. do you have any date where you think this sweet spot for gold is likely to get even sweeter?
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>> well, it's a great question. i don't have a specific date, but i would say you've got it right. keep your eye on the u.s. economy. see what president obama says in the state of the u.s. message. can we get beyond health care and into a longer term solution? creating jobs for the u.s. economy. i think it will take five to six months to see if we've been able to do that. if not, you know, i think one thing that is always a downside for gold is recession. so let's hope that the world doesn't see reseg. we continue to see, even if it takes government stimulus, spending on infrastructure because i think over time that will help create jobs, help the world grow. >> thank you very much. >> thank you. >> andrew, we'll let you go, as well. andrew ferris has been with us throughout the last two hours in hong kong. it's been a truly global debate. thank you, andrew. >> it is a pretty incredible show today. coming up after the break, president obama making his state of the union address tonight with jobs at the forefront of this speech. what will he say snl what will
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it probody and is it realistic to implement it?
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paults paulson says he, geithner and others acted properly in rescuing aig. >> warren buffett can claim membership in another club, the s&p 500. berkshire hathway will replace burlington northern in the index when it completes its takeover of the railroad.
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berkshire is the largest publicly traded company not in the s&p. the company has long been excluded because its shares weren't liquid enough, that is until now, thanks to the 50 to 1 split of the b shares. >> thanks very much indeed for that, brian. chief economics commentator and plenty to focus on with the fed meeting and the state oovt union address, what is it you're going to want to hear today from either mr. obama or the fed? >> well, i don't expect the fed to announce anything important, quite particularly with the looming nomination issue. so i don't think the fed is a player at the moment. i asked somebody who was supposed to know this morning, and the exclusion is yes, probably been i can't really imagine not. it would create a colossal meltdown in confidence because it would indicate an extreme politicalization of the fed issue and nobody knows who would
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replace him. i hope and believe he will get it. after the state of the union, i think obama has to indicate where he's going from here. i'm a bit worried about what is considered feb rhode island le -- not that i'm not into bashing banks, but one has to bash banks intelligently. the proposals announced last week were not, in my view, properly worked out. >> is the e-mail address. we've eageredly awaiting this apple tablet. and a viewer writes in and says steve jobs sa model ceo of for any business. do you agree with him i wish they could. i regard ste jobs quite simply as the greatest business visionary genius of my lifetime. and if everybody could be like him -- i buy all these products.
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i think they're wonderful. it would be great. but it's like saying every composer should be beethovebeet. unfortunately wab that level of talent is rare. >> most people believe goldman sachs has underhanded financial transitions, but they actually want to know, you know, are the banks getting too bad a wrap? >> i don't believe that this is the case. i think goldman sachs makes its extraordinary sums perfectly legally. but unfortunately, and it is a fundamental problem, these markets are really properly competitive because it's acting incredibly difficult for anyone to compete with a well entrench dollars inside of goldman. there is a question about why is it make extraordinary returns? but i think they're made completely legally. >> it seems to me policy is
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getting increasingly uncoordinated. are you worried about that? >> yes. one of the consequences of a very bad reseg, tremendous political pressure, misery among the electorate is that national politicians respond to short-term populist, completely inevitable, and they completely ignore the global dimension. that's particularly true for big companies which they don't notice the investors, anyway. in the u.s., people are basically looking at the domestic political scene. that is part of what happens in the 30s. we did very well with the g. 20. but i am worried that this whole global corporation, it's essential. it could happen. >> and i love your hat, by the way. where can i get one of those? >> you have to get it in moscow. >> do i? >> yes. >> you're already a front-runner, early contender for hat of the year.
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>> oh, good. i'll take that. >> somebody might tip you. thank you very much, martin wool, chief economic correspondent at the financial times. "squawk box" is coming up in just over -- just under 12 minutes. becky is with me here in davos, but where is becky? >> hey, ross, good morning! good morning, everybody. we are standing on the outskirts of the cnbc party tent, should we say, or our entire setup for this. the cnbc actually davos set up. if you look down here, you'll see the congress center right behind us. this is where everything is taking place, all the meetings are taking place. if we walk up a little bit, we're on the rooftop looking over the congress center. as we take a look up, you'll get a sense of how spectacular it is in the alps here. this is a 360 shot, guys. if you take a look around the other direction, you'll see the alps coming in from up here, as
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well. a little bit of construction going on. in the meantime, this is the cnbc world. let me show you guys just doubts this hallway -- we call it a hallway. it's outside. this is our preparation tent. come down a little bit. i believe this is the tent for cnbc poland. keep coming, though. this tent right here is where we're going to be doing squawk's broadcast from for three hours coming up. and ross, who is usually so far away from us, today we get to yell back and forth across the tent. guess what? that's our tent. take a look. ross is right here. ross, good morning. >> good morning, becky. >> hello. it's great to see you. this is cnbc europe's tent and this is ross standing right by. we only get to do this once a year. >> and i texted you earlier from down below. >> i noticed that. >> coming up on "squawk box" today, you guys have an
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incredible lineup here. we've got more guests coming into us from outside. everybody from andrew liveris, david rubenstein from the carlyle group. we're going to talk a lot about private equity and what some of these regulations coming out of washington might be. did i mention barry stenlick? >> yeah. >> that's a walk up those steps, isn't it? >> it's a walk. >> the air is thin. >> we've got earnings coming up today. joe is back in the states and we have a huge show coming up. >> it's another fun packed show. that was an exemplary walk. that's why you get paid the good money. that's what's coming up on "squawk box." how can you miss it? >> yeah. that was pretty solid stuff. plus wibt looks like cnbc pretty much dominates davos right now. we'll get a look ahead to the trading day on wall street and talk about strategy with our next guest. stay with us. #ñ#ñ#ñ#ñññññññ
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let's take a look at the u.s. trading day. ken, before we start with markets, president obama's speech will move markets, for sure, because there's so much in it. what do you want to hear from the president tonight? >> i think the president really needs on address small business owners tonight. there's a lot of angst about the unknown. the unknown about the economy getting better is a big hope, but jobs are the number one issue and small businesses creating jobs and small business owners feel a lot of angst and uncertainty, they're fought likely to spend a lot of money hiring and expanding our businesses. >> let's get to the markets and talk about three dow components today. boeing, caterpillar, united technologies. it seems earnings have taken a bit of a back seat. what do you expect from these three very big names and will it have an impact? >> earnings clearly always have an impact. i think we're seeing, you know, global economies picking up.
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so i think the trend is going to be positive. i'm more interested in the comments about going forward what visibility is than the earnings from the prior period. i think the global economy is rebooting. we're in world economy 2.0 now and everyone is getting used to new rules and big companies and small companies all have to look at the environment to how they're going to compete. so i'll be much more interested in their comments about their go-forward attitudes about what they see. >> very quickly, we've talked a lot about week about possible sentiment changes, it's a buy the dips, sell the rally mentality, have you noticed that? have you changed your strategy last week? >> well, i do a lot with individual investors. and i think the angsp there has been constant. so i think people are afraid to be out of this market on one hand because we've climbed this wall of worry and people are very concerned we're going to get that double dip. i don't really see that.
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i don't see this coming year as a big up year or a big down year, as a matter of fact. i think we're in a rebooting year as world economies start coming together. >> all right. ken cayman, thank you very much. let's take a super quick look at futures. we are trening a little better, but still negative across the board. there we go right there. that is it for today's show. i'm brian shactman here in the u.s. >> and i'm becky meehan in europe. >> and here in asia, i'm christine tan. >> and from here in davos, i'm ross westgate. we'll do it all again tomorrow. but in business, only two matter: red and black. red, well, no one wants that. black on the other hand, has strength. black is always in style. it's what business looks best in. black is where growth and success happen,
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