tv Worldwide Exchange CNBC May 10, 2012 4:00am-6:00am EDT
headlines from around the globe, spare bears out bankia ahead of a sector overhaul due to be announced tomorrow. >> and sony posts a full year loss of $5.7 billion. >> cisco issued a grim outlook saying kugss are being cautious with their i.t. spending. >> and surprisingly weak trade figures call china's growth recovery into question.
>> welcome to today's program. let's remind you what we're covering today. christine. >> we're live of course in athens where it's last chance for the socialist after the radical left fails on form a government. in london, will the bank of england sanction another round of qe? we'll speak to a former adviser at 10:30 cet. and we'll be joined by a former u.s. senator who says the president and congress need to leave town until november. find out why at 11:00 cet. >> we just had some data out of italy this morning. we'll get greek unemployment later. italian march industry output up half a percent on the month,
better than the consensus for a 4.2% contraction. february unrevised, so industrial output stronger than expected. but first quarter output still down 2.1% from the previous three months. and we have a second quarter survey from the ecb, eurozone inflation 2.3%. 1.9% in the first quarter. growth numbers probably the most interesting. saying 2012 gdp growth in the second quarter will be contractionary again of minus 0.2%, talking about 1% in 2013 for that quarter. euro-dollar just back a little bit from the three month lows we hit yesterday. spanish government has stepped into rescue the country's fourth biggest lender bankia. the state will take a 45% stake
in the parent company in a bid to shore up the sector. roubini said spain could exit the eurozone in the next pew years. sdwr maybe three years down the line, you have a restructure of the debt, restores the competitiveness and eventually even spap couin could exit the eurozone. but it won't happen in 12 months. >> stefane has more. new prime minister said we wouldn't put a single more penny or euro cent into the banking sector. how much more comes after this? >> indeed it's a significant turn. that's the political implication. if you look at the market reaction and what it means for the financial community, it's definitely a positive signal that will this time the government could do whatever it
takes to try to really clean up the spanish banking sector. let's put thing miswill to context. bankia is not the first to be rescued, but this is by far the largest one. it has on 10% of the total 2k30ss 2k30s goss, biggest exposure to the real estate and construction sector in in spain with with a portfolio of more than 51 billion euros. that's to compare with only 32 billion for the largest spanish bank. in practical terms the bank of spain has announced it will convert a loan of 4.5 billion euros made to b of a in two regular shares and now the largest shareholder of that bank with a 45% stake. as i say, political ly from the market point of view definitely a step in the right direction. we'll have another step tomorrow because we're expecting a
significant announcement, a new reform of the banking sector basically he'll announce spanish banks to set aside 35 billion euros on top of the 54 billion that they are already setting aside. hopefully this time it will stop all the question mark, it will end all the question mark on the spanish banking sector. >> all right. we'll see whether it does. thanks. joining us for the first hour, denny, great to see you. still a big hole in the spanish banking sector. the question here is whether the game has been to see whether we can shield or cauterize italy and spain from what you now describe as a greek exit being a very real threat. >> the game the politicians have been playing all along is to try
to get everybody on focus on this as if it's a sovereign crisis country by country and what we've argued all along is that that's a real smoke screen. it's a bank crisis. it always was. and the interconnectedness of the region's banks is the bone re don we don't cut one or two countries out. spain had a significant boom before the crash and it also lays the light to the idea in a this is a sovereign crisis, but spain's problems are not really in the sovereign. the debt is privately held. construction, housing, classic asset boom. and it's the spanish banks that are on the front line. recapitalization is the right answer, it's just getting the politicians to admit it. >> do we need to recreate a european bank system, do we need
a system where europe stands behind a european banking system rather than ireland standing behind an ire rish and so on? >> yes, you could have a central bank and we could call it the european central bank, for example. it could look after the whole region. yes, that's what's required. the ltro put one foot on to the plate. it was a step in the right direction, but it wasn't qe. the risk remained and therefore any default would still have to be born by the private banks first. what we need is what the americans have had do and what is ultimately the answer to the cries cease, which is losses have to be written off and recapitalization required. we're in the property, it's just taking a long time for europe to get around to it. >> complicated by the national
structures that we have. xris teen. >> you said banks going bust. what's the possibility of that happening in spain? >> now it becomes a matter of semantics of whether the government will take 50%, is a bank going bust. did rbs go bust or is it still alive. what we've argued is that it won't let a wholesale banking crisis develop or number of banks go bust. america is following the model in a sweden laid out in the early '90s. europe is following the model of japan. in sweden, there were a number of bank busts. very big recession. followed by robust recovery
which has been sustained. japan is still waiting for the major bank to go bust and we've seen the results of that. you can limpt on for a long time, but you don't go very far very fast and we're worried that europe has tried to follow that model. the difference being of course japan is a very cohesive -- will. >> one country. >> elected the same government for 60 something years. europe is not in that position. >> former greek finance minister socialist party leader will be the laltest to try to form a government coalition. the rad ral left leader failed yesterday. carolyn is in athens. so we know how it this one goes, suppose, carolyn. >> as you said, the mandate goes to the leader of the socialist
party. his chances his chances are receding sdras particularly because the differences among the several political parties are simply too high. but he's said he's happy to support any coalition as long as it supports greece in the eurozone. but it means that a number of party, including demands for the scrappage of the bailout terms are pretty much excluded from that. so again what we're looking at is a new round of elections in june, it will likely be june 17th. and in my previous reports i've said that theout come of these elections could be in-conclusion suffer, but this morning we did get a poll from dow jones saying the rad ral rest part i would actually get some 25% of the votes if degrees were to go to the polls right now. that's a 7% percentage increase
from the elections on sunday. so they would likely get power if parliament, but i shouldn't point out it wouldn't be able to get 50 seat majority. that's because it's technically just a coalition of smaller parties. so very important thing to keep in mind here. >> you say more elections would strengthen the hand of anti-austerity partieses. the question is this about whether we could get an exit the a point whether the rest of the eurozone would be able to deal with it. what are the implications of a greek exit at the moment? >> i have to be honest, we haven't always thought a greek exit was inevitable or probable because the consequences are absolutely appalling. not just for greece, with ybut e rest of the eurozone. and it's not a greek sovereign
problem. it's a european banking crisis. >> european bank system in any shape at the moment, any policy misplace that will shield the rest from a greek exit? >> no. what we've learned is that the greek banks got wailed out, everybody else didn't. so foreign bond holders suffered. and the point is that it won't stop with greece. if you really believe this whole crisis was just greece, it's like if we company back to 2007, subprime crisis was in arkansas. if you just take arkansas out of the juunited states, everything will be fine. it's not that at all. how much they borrowed is the wrong question. who lent them the money. and that's italian, french, german banks. so we're worried about the konsz quent consequences of the greek exit and it didn't make sense for
everybody. but politicians offer you impossible choice, you can have the end of austerity and stay in the eurozone. how. >> impossible. absolutely. more to come. let's update you where we are with market reaction to the chinese trade data. >> particularly, as well. but in the meantime we have a mixed session here in asia as people saw the news from your neck of the woods. nikkei 225 down 0.4%. we had bargain hunting help to go offset some of the concerns coming from china. shanghai market limit willed gains pretty flat. hang seng concerns about a bigger slow down over in china. south korea, we had the central
bank decision to keep rates onle hold. not much reaction to that. central bank choosing toe quus instead on fighting inflation. that stronger jobs data in australia had a positive impact. lifting the market up 0.5% and the sensex in and out of negative territory, down pretty much flat, 0.1%. >> just got to the flat line. we're back to kind of where we started. dow jones stoxx 600 down 0.2%. ftse 100 started the day at fresh lows and now another 12 points down off around 4% in the last three days. the dax as you mentioned still up 8 points at the point. cac 40 down two-thirds. ftse mib up a third at the moment.
remember yesterday we say gilt yielding hitting record lows. we did have a print on trade with 1.89%. so hitting record lows. more from denny on that in a moment. italian yields where we were yesterday. spanish still above that psychologically important 6%. and ten year bund yield 1/.523%, still write down on record low yields, as well. as far as euro-dollar is concern canned, a little stronger, but remember, you hit the lows three 1/2 month low since late january. euro sterling.8035. dollar-yen slightly stronger up to 79.70, but remember, on this cross rate, we're also down near three month lows, as well. and the aussie dollar just
rebounding because of upbeat jobs data out of australia. still to come, italian lender unicredit has banked to you were it around its fortunes in the fourth quarter. had a big deleveraging drive last year. can the trend continue. ♪ why do you whisper, green grass? ♪ [ all ] shh! ♪ why tell the trees what ain't so? ♪ [ male announcer ] dow solutions use vibration reduction technology to help reduce track noise so trains move quieter through urban areas all over the world. together, the elements of science and the human element can solve anything. [ all ] shh! [ male announcer ] solutionism. the new optimism. a living breathing intelligence bringing people together to bring new ideas to life.
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unicredit expected for post a 4% increase in first quarter profits when it has results later today. managed to swing back to the black in the fourth quarter of last year after posting a record loss in in the previous three months. partly due to massive cleanup of its balance sheet. simon, italian banks have loaded up a lot on italian debt. they benefited as much as anybody else from the htro. are there any key differences between italy and spain in terms of financial sector? >> italian banks are much better capitalized on the whole and they didn't have a big credit boom in italy, so you haven't got the same problems of nonperforming loans that you've got in spain. what you have in italy, banks
don't make any money. and that's been -- so as a result, they aren't earning any money, not earning enough money to build their capital basis further. and so as a result, they don't trade at very good levels so there's sort of a structural problem there. just overcapacity and how you -- >> also been worried about their exposure to eastern europe and that part the world, as well. is that going to come back and bite them a little bit more? >> unicredit in particular has a lot of exposure there. the eastern european picture is a country by country picture. and a lot of it depends on to what extent they have a domestic deposit base. in a sense this is the hart of the problem for the whole of european financial system. capital is one issue, but the issue that gets overlooked is funding. and that's becoming the real stress as to what september banks have been forced to deleverage because they can't raise the funding in the markets. >> and is the ltro a crutch that
actually will have to be semipermanent. >> the ecb would like to think that it's a bridge, that it helps you get from one state to the other. but the problem is that the european banking system started will crisis with a loan to deposit ratio of about 130%. now, in the u.s., that loan to deposit raesh i don't is only 80%. in japan, it went from about 130 to 80% over the course of the last 20 years. and the worry is that to what extent the european banking system which is now fallen to 120, to what extent it will have to come down a lot further. the ltro provides a bridge, but if they have to carry on deleveraging to reduce their reliance on bond funding, the process will last a long time and the impact for the economy will carry on. >> comparing the eurozone to
japan. spanish government stepped in to rescue the country's largest bankia. ahead of a broad financial sector overhaul detailed tomorrow. talking about another recapitalization process. is this just and ongoing process, are they making the right moves but afraid of telling us how bad the picture really is? >> there's all sorts of things. it's been incremental for four years. tomorrow we'll find out about the new provisions. there's talk of 35 billion. i don't think that's anywhere near must have so i hope the reports are wrong and they've got 24 hours to rethink. there are 300 odd billion euros of real estate assetses in spain and at the moment only 38% of
hose are covered by provisions. and banks like ubs reckon that that needs to rise to about 60% to be creditle. for the markets to start to peel that they've really got a glip of it. now, given where the capital positions and spanish banks are at the moment, that could only come in the form of new capital. so that really is -- >> where is the new capital coming from? >> good news and bad news. the bad news is that we estimate that you need about 1.5 trillion euros in total in terms of recapitalization. the really bad news, if your friends with germans, they could afford it. that would be broadly similar to the 20% or so that we've spent in the uk, the americans have spent in the u.s.
the actions of the central bank and spanish government is taking is probably correct if it is properly financed. >> you made the key point, you said 1.2 trillion, did you say? >> 1 1/2 trillion. maybe the capital will have to come from by the european partners. but i just want to really emphasize the point that the biggest funding gap in europe is in the spanish banking system. half a trillion euros of gap between the amount of deposits they have and the amount of loans they have outstanding. so sorting the capital issue out is one bit of the puzzle, but the funding issues, the funding issue that is killing the european banking system, so they have as to somehow find a way also of sorting out that funding bit of the puzzle, too. >> whether one leads to the other. if you reassure people that capital, do they get the funding. or has that been sort of what
people assumed. >> yes, the problem is of course that if theory if you make the banks very highly capitalized, the bond markets will start to fund them again. but in reality, if you've got -- if it there's doubts about the solvency of the sovereign, it's hard to fund the bank. so there needs to be some kind of solution around the funding issue as well as the capital. >> we'll leave it there. simon, thanks very much. christine. >> while you're worried about banks in europe, here in asia, we're worried about china. economists have reason to second guess shy that's growth recovery. tracy trank is here with us for the details. >> that's right. china's trade data surplus actually widened to nearly $18.5 billion driven by much slower than expected import growth. it barely rose in april compared to a year earlier, but economists were looking for a gain of closer to 11%. and exports, too, missed their
mark. economists now say weak domestic demand as well as falling global economy prices contributed to the disappointing imports number. of course recession europe and the patchy u.s. recovery also surprised exports. analyst wills now expect beijing to roll out more measures to boost economy after it grew at its slowest pace this three years in q1. government investments as well as fiscal regulation will help lift growth back to a normal level. most economists think china's economy will bottom out and start to rebound in the second half of the year. we'll get more details tomorrow when china releases key data, including cpi, ppi as well as industrial output. back to you. >> thank you very much. speaking of growth measures, some new directives out of china may help build confidence. the country's security regulators calling on listed companies to be more transparent when planning and awarding cash
dividend payments. meantime china is also slashing through prices starting today. something it has not done in over half a year. economists believe the move will help import costs for chinese industries. and of course we'll have more china analysis coming up in the next half an hour with brian jackson from rbc capital markets. >> and we'll also, still to come, uk industrial figures about to hit the april. the last bit of day a before the bank of england decides whether to halt its quantitative easing program or not. [singing] hoveround takes me where i wanna go... where will it send me... one call to hoveround and you'll be singing too! pick up the phone and call hoveround, the premier power chair. hoveround makes it easier than any other power chair. hoveround is more maneuverable to get you through the tightest doors and hallways. more reliable. hoveround employees build your chair, deliver your chair, and will service your chair for as long as
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spain taken a 45% stake in the country's fourth biggest lender ahead of the sector overhaul to be announced tomorrow. >> sony aims to return to profit despite a record four year loss of $5.7 billion. >> cisco's issued a grim outlook saying customers are being cautious on i.t. spending. >> surprisingly weak trade figures caught china's growth recovery into question. hint at waning domestic demand.
last bit of data before the bank of england wants to do. manufacturing output up 0.9%. still down on the year. industrial output as expected contracting 0.3% on the month, down 2.6% on the year. industrial output down 0.4% on the month. probably have very little input really on the bank's decision today. while expected to keep the 325 quantitative easing program on hold, but it might be in the balance. the decision is at 12 noon, despite the uk economy falling back into recession first quarter of the year and inflation still stubbornly high levels. and remind you ahead of that decision, gilt yields 1.2%, pretty much down on all-time lows for the ten year gilt at
that yield. ruth, welcome. there's a theory that actually we're in a negative supply shock and low interest rates might be making the situation worse. i agree in the sense that in stubbornly high inflation and no wage growth has been a bigger drag perhaps on the uk economy, about you if you have things like food, energy, credit, clothing all playing a part in inflation, you can't do anything about those. you say you strip those out. and then we still have a problem. >> it's not a theory. we've had zero growth for the past three to four years and the price level is over 15% higher. so it's a fact. no growth, high inflation.
>> how do you deal with it? >> textbook says tighten moneta monetary. the point we're making about quantitative easing is two fold. first it's done nothing to help growth. we've been consistent in that line of argument. monetizing government debt hasn't help willed lending, households or businesses. what we've become more concerned about is that and the bank of england's own numbers suggest quantitative easing has boosted inflation. ville out all the things that you talked about, core uk cpi, food, energy, et cetera, is at 2 1/2. target is 2 for the headline. core is at 2 1/2. so what's really confusing about the uk is that the domestic
economy weak as it is has not been sufficiently weak to offset the external price pressures. with no growth, with unemployment where it is, we still have domestically generated inflation well above the target. >> i would certainly accept the fact that there's been a negative supply shock for the reasons danny said. cpi inflation is running well ahead -- >> how do you deal with it? >> you basically have to live with it. i take the view it has come from external shocks and ties policy on the basis of that would be counterproductive. and if i may have a little defense of the bank and its quantitate i have easing policy, just a little one, is that, yes, they come condition seed that it's increased the inflation figures. there was a report done some time ago about that. but they also claim that they managed to bring down the long term gilt yields which i think is fairly obvious if i may say so. under those circumstances hch- >> how much is that due to qe
and due to the crisis in the eurozone? we had a 30 year auction. i think the bank was saying for instance qe 1 so to speak, the 200 billion speaking free throwly from memory, they said it was equivalent to about 100 basis points. please don't quote me on that but they did put quaint at a time difference estimate on the effects of the quantitative easing. so if qe has succeeded as the bank claims in keeping interest rates down, i'd have thought that was actually a plus rather than a minus. >> sterling has strengthened in the last month or so. so here's the thing. sterling would be quite beneficial in dealing with these p external. is it does that sterling is increasing or is it more damaging that damages the export
led recovery? where's the balance? >> i take the view that it's acting as entirely on policy and that on balance is a bad thing rather than a good thing. obviously i accept the advantages because you will find some of the came mod i price inflation be negated by the stronger currency. you've not just had the turning of policy from higher sterling which is now, what, 5% higher than it was in effective terms than the mid 201 1rks but also of course borrowing rates are ticking up for a variety of reasons. therefore ironically, even though the economy appears to be back in recession -- >> yes, higher rates. wage growth is stagnant. how do you deal with that? >> if i may, if quantity indicative easing was launched in order to keep government borrowing costs down, then fine. well done. how could you not when you now own over a third of the outstanding stock. it's monetizing deficit.
that's not what it was supposed to do. it was supposeded to help will the economy recover. there is a way in which quantitative easing may ease inflation. it's not external. the government is getting close to its 13th letter of unfortunate events. there are 13 cpi, 12 of the 13 are well above 2%. the only one that isn't includes dvd players and so on which is an external negative shock. there's an internal problem, domestic rob in the uk. the way quantitative easing may work -- >> how do you deal with it? >> quantitative easing could have been done in a way that it could boost growth without in our view generating more inflation, but what we're doing with quantitative easing is allowing the banks on to not clear. it's the opposite of what the americans have done. they've forced the housing market to force the u.s. banking
system to cheer. ours is doing the opposite. it's preventing that from happening. so interest rates may be at zero. the spread -- >> i've made the point that i think policy is tightening because for a variety of reason, mortgage rates are going up. but with quantitative easing, you have brought down the longer term interest rates and that surely has been beneficial to growth. q how do we get growth back into the system is much more important if i may say so. up until the march minutes, i thought that's what the mpc's views was as well. but they talked more about the stickiness of inflation. they seemed to stop worrying about it. i still on the whole am less worried about that than i am about the lack of growth in the economy. what do you do? for a start the government really has to have some proper supply side measures.
they really have to start getting money into structural spending. they have to look at all the capital requirements on banks and say is this the right time to be pushing up capital requirements. >> and on that note, yesterday a big disappointment. ruth, we have to go. thanks very much for joining us. christine. >> in japan, two big firms in the midst of restructuring. they are posting steep losses, but at least one is promising better days to company. sony is forecasting an operating profit for the coming year after its annual loss in 2011 hit a record $5.7 billion. meanwhile, scandal plagued olympus lost but declined to give guidance. let's go to the nikkei for the details. >> sony's record net loss for fiscal 2011 marks its fourth consecutive year in the red. its slumping tv operations have
lost money for eight straight years failing to launch products attractive must have to compete with low price tvs of its asian rivals. the strong yen and were other headwinds. stoen still sony put out a bullish outlook for the current fiscal year. it expects to get back into the black for the first time since fiscal 2007 by concentrating on digital cameras, smart phones and games. also it hopes to foster its medical businesses and is approaching scandal hit olympus for an alliance. olympus annual net loss was far larger than its former projections, all hoe its operations were stable, liquidation of the three companies led to huge losses. that's all from the nikkei business report. back to you. >> still with japan, the country's current account surplus unexpectedly grew in march as rising demand from the u.s. boosted exports of local earnings improved on stronger returns overseas. but economists say the trend is
unlikely to continue because of expensive energy imports. the data signaling trouble since relies heavily on international trade. world's biggest steel maker saw profit come in above consensus, so the group has warned europe still is the biggest challenge for the company. as financial stocks just down mildly in switzerland, had a 78% rise in first quarter process. natural disasters down on the same period a year earlier.
>> we very much see a lot we can do in terms of investments making things in fast growing economies and just really concentrating on the exciting bet. if we do that we can carry on key metrics. let's get more from patricia. >> the numbers were broadly in line, however, a couple of interesting twists. first of all, it seems that the eu business is stabilizing and also u.s. seems to be recovery a little bit because of that all also to do with speculation that perhaps t-mobile in the u.s. may have found a new merging partner.
pushing the telecom up about 3% as we speak. in terms of the figures quickly coming back, u.s. revenues above expectations on the overall figure though, net profit definitely did disappoint at an adjusted level of 580 million. important here also despite the u.s. business actually now because of the u.s. business they can keep their full year outlook for 2012. t-mobile a little bit more specific here, they have a net gain of customers. up 187,000. however dow jones reported that on a brand contract level, customers actually left about 510,000 left. a bit of pricing power in the market in the u.s. which is
potentially very good news in which they gave you an operating income. utility here in germany coming in with a mixed set of results. on the other hand, revenue slightly below expectations. >> something else going on in greece today. the olympic torch lighting ceremony takes place, and way at the moment. should have been lit already. due to be lit at 9:30 london time. and then the first torchbearer, a greek open water swimmer, will depart and travel around greece visiting the likes of greece before they have the handover ceremony before the local delegation back to the uk on may the 17th.
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imports expected to grow, but barely managed to squeak out a slight gain. may signal a slow down in domestic growth. all this of course contributing to a bigger trade surplus. joining us to talk a everything china, ryan jackson. good to have you with us about. should we worry about a bigger slowdown coming from china? >> i think it's a little bit too early to make that call just based on today's numbers. definitely weakened and they show that external demand and domestic activity have made a soft start to q2. but we've got other data coming out tomorrow, industrial production, retail sales. so we'll see what they show. also pmi numbers start to pick up a bit in the last few months. so what we think is happening is you're seeing growth stabilize rather than weaken further at the moment as policy becomes more supportive. but obviously the risks to that
is still what's going on in the external situation in europe. so we'll have to wait and see what that does to the numbers in the next few months. >> what sort of number would worry you? >> in terms of industrial production, if you've got something below say 10%, that would clearly indicate that conditions in the manufacturing sector have weakened quite sharply. pretty hard to get that number given what the pmi surveys have been saying, but that's something we have as to watch out for. we also have to pay attention to what's going on with inflation. we think it will stabilize and bottom out in the next few months after falling pretty consistently since the middle of next year. so i think that will shift the focus back on the need to keep inflation under control.
>> to what extent will cutting prices help the economy? >> it will help at the margin, but it's again a very clear sx aechl pl of just fine tuning the policy instead of any big shifts. we think it will be more the targeted indirect approach. >> which of the two sides. trade data worry you the most? do you think global demand needs china more or does china need global demand?
>> from a pure accounting perspective, it's not as important to the world economy as the world economy is to the chinese economy. but it's still very important. obviously inter-trade make it important that china continues to see strong imports. we want to see growth across the board in europe, asia and u.s. and they'll feed on each other and drive that sort of recovery that i think we all see going into the second half of 2012. >> will today's trade data have any correct implications on the u.n. appreciation story going on right now? >> as you know, the yuan appreciation has been stalled for the last three or four months. i think that will continue until around mid year. and i think today's numbers just reinforce that view that you're not going to see any big moves
anytime soon from beijing. what is going to drive the resumption of yuan appreciation is a better global outlook. so that's what we are pin abouting our hopes on in the second half of the year. but risk still skewed to the down side. >> brian, thanks for being with us today. watching here in asia, starting with india, what's happening over there, the central bank wants exporters to convert 50 percent into rupees. it's aimed at propping up india's bruised currency. quick check on the currency. moving to the down side, the dollar weakening of course
against the rupee. so that did help prop up the currency. south korea central bank kept interest rates unchanged today for the 11th consecutive month. bok governor says this there was no discussion among bank members about any possible rate cut. it's expected to gradually recover with inflation remaining high. >> spanish governor stepped into rescue bankia. a bid to shore up the bank ahead of a broad financial sector to be detailed friday. spain might still exit the eurozone in the next pew years.
>> eventually even spain could exit the eurozone, but not something that will hazardous if 12 minutes. it's a slow motion process. >> and a new report says the financial sector bonuses will faf by half in the current fiscal year. largest total payout pool in 14 years. another suggestion of how weak wages will be over here. let's get a final thought. you talked about negative supply shop. current quantity taative easing the wrong policy. just recap what would be the answer here. get credit flow and also be a right form of qe. >> we've argued they should have targeted qe at the source of the problem. and the source of the problem in the uk was there was a domestic
credit boon. in our view the combination of weak consumer spending and high inflation can both be traced to the same source. it may be true that wages are not growing, but financial crisis, you know in, termsvice driving inflation. spreads are high. qe could have been used in order to unlock that. and would have had both beneficial effect on demand and on fly in our view by localing the banks to write-off the losses that must be written off and the hones that they made against the housing market which has fallen quite sharply and shows no prospect of recovering any time soon. >> bank funds would have daughter, what would you have set up a bad bank? >> a very bad bank.
>> to allow the banks the space to write-off the losses. and it's only once they've done that that they can start lending again to the real economy. at the moment they're being told to do two contradictory things, to shrink their balance sheet and increase lending. what the americans call hurry up and wait. >> never going to work. >> and that's the reason why we're seeing lending continuing to whoever around the zero line, unsecured credit not happening. consumers are not gaining real wages. they're negative. they're not being allowed to borrow. how did consumption rise. it's not about exports. it's all investment. >> good to see you. thanks for coming in. jackie has about 30 seconds to tell us what's coming up.
>> let's take a quek loick look the u.s. futures. it does look like it will be a down open. and also facebook's latest filing highlighting now a possible weakness in the company's growth plan. find out what could spook potential investors later in the show. ♪ i can do anything ♪ i can do anything today ♪ i can go anywhere ♪ i can go anywhere today ♪ la la la la la la la [ male announcer ] dow solutions help millions of people by helping to make gluten free bread that doesn't taste gluten free.
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why the united states, sisco could weigh on the tech sector. the company issuing a grim outlook saying customers are being cautious on i.t. spending. >> spain taking a stake in the fourth biggest lender. >> surprisingly weak trade pigs call china's growth recovery into question. fouling imports in april hint at waning domestic ghant. >> welcome to "worldwide exchange." let's take a look at u.s.
futures. see how we're lookinged a trade. we were looking at a higher hope and we have reverse direction at this point. the dow looking lower by 17, nasdaq by 5 and the s&p 500 slightly over the plot line. this after stocks ended lower again on eurozone fears yesterday, but we did pair steep early morning losses. we also saw volume picking up a little yesterday. dow lost 97 after being down as much as 183 during the morning session. falling for the sixth straight day that we've seen it for the first time since august. also the yield nearing 1.8%, a three month low for that yield right now. >> we tried to rally off the four month lows and hit a road block.
>> spanish banks got hit yesterday, smi down about a third of a%. this is their march industrial output contracted 8.5% on the year. it was 8.3% in february. so the numbers continue to get worse in greece. and this is all as the socialist party leader will try today to form a government. carolyn has been in athens for us all week and jones us once again today. we know the third man gets a chance to form a coalition government. is he likely to be anymore successful than anybody else?
>> no one hear is really getting their hopes up. the chances of being able to form a government are very slim, basically because the political parties here can't overcome their differences. the main sticking point was for other parties unwilling to scrap the second bailout plan. they're severally not willing to do that. they know that's at stake and it that's the membership of the eurozone. the man then would then go to the greek president and he will be given the chance to form a coalition government, but he has to broker that deal and that seems very unlikely, as well. following the disappointing unemployment numbers, i want to give you an idea of how the
cover is suffering, with you also from the increased political uncertainty. bookings dropped 50%. yes, you are heard me right, 50% in the days following the inconclusive elections. also want to point out another report says more than 1,000 businesses close each week. no one is buying. and this situation is only going to get worse before it gets better. >> pretty awful statistics. thank you. joining us now is judd gregg oig, former republican senator and governor of new hampshire, also international adviser ap-goldman sachs. senator, great to have you with us. you just heard carolyn's report about the latest in greece. this having a great impact on the markets day to day here. you pointed out we can learn something that we've seen from the elections if europe. what is that? >> that you can't solve our problem by adding more
government. the simple fact is what france has done, what greece has done is try to address a problem where they have massive debt that they can't pay off by electing governments which will add more tax. probably digs your hole deeper. so you should stop digging. stop adding to the government, start addressing the issue of how you have a responsible government, one that can live within its revenues. and that's a challenge for us obviously a challenge for the europeans. >> so how do we start on do that given that it is an election here in the united states, whether bram does stay in office and continues in office or we get a new president that brings in a new group to try to bring reform about and shape the politics as we go forward. how do we get on the same page and start to do some of the things? >> that's the question, how do you get people to step up and be responsible when it's easier to get elected if you're not
responsible. ironically here in the united states, weaved hadley had a couple runs at this. and although they haven't liked the results, they've at least shown us there's a pathway. simpson-bowles which the president didn't support its results laid out a plan, a blueprints for how you get our fiscal house in order. how you reduce the deficit and debt by $4 trillion over ten years. that was followed by the special commits committee which could have instituted simpson-bowles had they instituted an agreement. there will be an opportunity to go back and take another look at the simpson bowles proeposals ad taking action. >> just looking at the recent bout of elections in greece and other places in europe, will this seems to be a major challenge for democracy. and i'll put it like this this.
because in a democratic environment, politicians get elected by sort of promising the lector nat things will get better and that's the sort of cycle. we're in a situation where the only things they can promise, that things will get worse. i'm wondering whether we'll see a fundamental challenge to democracy as a result. whether the institutions can deliver what needs to be done. >> i think europe has serious issues of social unrest confronting it. you've seen it in greece and spain. this is clearly a tremendous concern by the people in those countries about their drop in standard of live which go will occur as a result of facing up to the debt which they have on the books in which they can't pay back. we have to worry about that here in the united states. not the civil unrest, but the fact that we have a did debt that we can't pay back and that
it may affect their standard of living. many of them and the united states and japan have been living well beyond our means for too low and they are paying the piper. the fact is we'll have to figure out a way out of this problem that will involve some very difficult decisions and it will involve reducing the size of governments. so the benefit structure this have to be reduced. that's simply the way that it will occur. your currency is attacked by the markets you because the markets lose confidence in the currency and then you end up with a cataclysmic event like we almost faced here when our banking system was actually collapsed.
you can't live with these max sif commitments to funding government which is cannot be paid for by the productivity of the society which is taking advantage of those. at least here in the united states there is an awareness of the problem and i believe a willingness to step up and do something about it. you're not talking about draconian events here in the united states. you probably are in greece. ireland is a good laboratory for whaps when you do make the tough decisions. but here in the united states, we actually have the capacity to address this because we have lead time. we have the capacity to make these adjustments and they will not be draconian, in fact they
probably won't affect most of the people that are on the programs today. those folks will have time to get ready for a different type of program. >> and we're showing pictures here at the moment. greece was the birth place of democracy. these are pictures from olympia where they are lighting the olympic flame. this is the flame that will eventually come to london on may the 17th. that's when the local delegation take the flame back to the uk. but it's lit today and then for the next five days, the torch will travel around greece. of course it will culminate at the olympic stadium in east london.
that is an actress that apparently has been doing this, i think this is her third occasion that she's been performing this role up in olympia. >> it looks like she know what is she's doing. let's switch gears over to the united states. cisco's third quarter profits rises 20s%, revenues more than 6% beating forecast, but there are trouble spots, as well. european orders were flat and orders from big customers fell. cisco expects revenues below both analysts estimates and the company's previous projections. john chambers cites on going challenges and customers being cautious with tech spending. deals are smaller and taking locker to close. >> the main thing all of us need is certainty. businesses don't spend when it's an uncertain environment. if we understand the issue, then we'll make decisions about where we invest in resources, how much we give in dividends versus how
much we do in acquisitions, et cetera. so that's part of the uncertainty that i think bothers the customers the most. in frankfurt, it's down nearly 90%, as well. we'll break down the results with an analyst at 5:40 a.m. eastern time. >> and there you go, olympic torch has been lit using the sun's rays. when we come back, we'll see whether the sun is still shining on european bond yields or not. ♪
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time for your global markets report. here in the united states, u.s. futures looking at a lower open at this point. the dow could be lower by 19, the nasdaq hoer by 5 and the s&p 500 just slightly over the flat line. this after we had a tough day for stocks yesterday, but we did pair some of the steep early morning losses that we saw in the markets. we were down 97 points for the day, but down as much as 183 intra day. we did rebound towards the end as we got news out of greece regarding the bailout funds that will will be distributed there. also want to point out the u.s.
ten year recovering around 1.8%. >> just hit the session low. decliners outpacing advancers by around about 3:2. remember we started with stocks in four month lows. xetra dax flat at the moment. cac 40 town about a%. ftse mib fairly flat as you can see. bank of england coming out to decide when it sends its quantitative easing program. consensus is that it won't. ten year gilt yields down fresh record lows. yesterday we had a print that went through at 1.89%. that's the low on the reuters data. ten year italian yields are higher getting back towards 5.8%. spanish debt yields still above the 6% mark we broached
yesterday. euro sterling, we got down to a 3 1/2 year low. dollar-yen we moved away from the low we hit yesterday. not by much. aussie dollar also not far away from five month lows about. we did have some upbeat australian employment data today. rba surprisingly cut rates by 50 basis points last week. christine. >> here in asia, a mix willed session for today, but all eyes of course what's happening news coming there spain and greece kept investors at the saed lines. not to mention it that trade data coming from china questioning of course the slowdown coming from that particular country. nikkei 225 in and out of negative territory, concerns
about a slowdown in china offset by bargain hunting. that trade data kind of limited gains in the shanghai market pretty much flat. the hang seng down for the sixth straight session, concerns of a bigger slowdown in china, down 0.5% about, the kospi interest rates unchanged. not much reaction, so the kospi closing down 0.3%. the question is whether it's the end of easing. so overall it's a mixed session here in asia. and that's it for the global market and i'll be back tomorrow with news moving markets here in asia. the house of representatives set to pass a bril today to cut the u.s. deficit by $300 billion over ten years. the measure will likely be approved by the strength of republican votes over opposition
by democrats it includes major cuts to social programs like medicaid, but no new taxes. it's part of an effort to head off defense spending cuts that will automatically be triggered in january as part of last year's 11th hour deal to raise the u.s. debt ceiling. still with us, senator gregg. i wanted to come to you on this issue, as well. steps in the right direction, but as you said, in the beginning of 2013, we have a couple of key issues to look at. >> it's all discretionary. and the other is the fact that taxes go up by 1.5 to $2 trillion.
the economy can't handle that type of withdrawal of stimulus basically. so i think what you're going to see congress do when they come back next department, we shoopd be sitting here for five months and pot doing anything as a government, but that's the way it's going to happen. and they'll have to do two things. they'll have to figure out some way it to mute the sequester which is what's being taunked about a today. it outlines how the house would do it and now the senate will come back with how they'll do it and in december they'll reach an agreement i suspect which will allow them to set aside or repeal. so some sort of discretionary cut. the bigger issue is the tax issue. i suspect what will happen is that there will be a six month or eight month extension of all the present tax structure and a way to come back with major tax reform, which is what we need.
simpson-bowles eliminated lots of exemptions, took the tax rates to 9%, 15%, and 21%, and went to a territorial system. that's exactly what we should have for our taxes. >> do you think the tax cuts will be sended no matter who is in the white house? >> i don't believe congress has goose rewrite the tax laws in department. it's just no consensus ship. but i think they can do it within the first six months, obviously it will be a different lax law. it's obvious corporate tax rates will come down. everybody agrees our rates are not competitive in this commercial world where we have the highest corporate tax rates at 35%. and our system of nonterritorial
taxation is really counter productive because it leave as lot of resources overseas that should be brought back to the united states and used here. and then the individual rates will fend on who the president is. and i do believe something along the lines of what was in the appropriate in '86 is what we'll end up with. >> all right. we'll have to leave it there for the moment. i am going to ask you who you think is going to win the election later to come in the show. with you meantime, still to come, soring fuel prices causing turbulence. we'll get out to dubai next.
we will come back to senator judd gregg and i want to pick up the conversation where we left off in the last segment. so we were talking about the elections coming up in november and i do want to get your take because you gave me a very candid take during the break on who you think will win and why. >> well, i think mitt romney will win and i'm not saying this as a partisan. although i'm a republican. but i think the president has a few issues which will be difficult for him to get over. number one, he's running a campaign of blame rather than hope. last time it was hope and change, and this time it's divide and blame.
and mitt is running on an issue of american optimism. but the president is very defined now. before when he ran, anybody could think he was coming in to come whatever they wanted to think. this time he's very defined and he's clearly defined as a left of center individual in our political system. and we're still a center right people, i believe. and secondly the electoral college works against him. last time he carried north carolina, virginia and indiana. he probably won't carry any of those states i don't believe. so he has to carry the swing states, almost run the table, which are florida, ohio, missouri, colorado, new hampshire, and nevada. and he has real problems in some of those swing states. so that's a challenge. and the american people are really frustrated with all incumbents and they want change. they just don't see washington addressing the big issues. the biggest one being there's a basic rule of american governments being violated which
is that americans always believe we'll pass on to our children a more prosperous nation. that's american culture. we're an optimistic culture and yet most americans don't feel like we're passing on a more prosperous nation and they're really worried about that. >> okay. we will have to do it there for the moment, but let's also take a look at how the u.s. markets are likely to open at this point by looking at the u.s. futures. we are looking at a lower open, the dow could be lower. meantime coming up on the show, it's an interesting pattern of mid-morning rallies. is that trend going to continue? we'll discuss strategy coming up next. [ male announcer ] this is corporate caterers, miami, florida. in here, great food demands a great presentation. so at&t showed corporate caterers how to better collaborate by using a mobile solution,
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cisco could weigh on the tech sector today. the company issues a grim outlook saying customers are being cautious on i.t. spending. >> spain bails out bankia taking a 45% stake in the country's fourth biggest lender ahead of a sector overhaul tomorrow. >> and weak trade figures call china's growth recovery into question. hints at waning domestic demand.
let's see how we're setting up for trade. when i first came in, it looked reek the dow would open higher by 30, now looking lower by 35. the nasdaq looking lower by 9 and s&p about 1-. we'll talk about some of the trading patterns that we've seen, but for now let's see how we're doing in europe. >> session lows. ftse 100 down half a%. now wondering besides the bailout of bcht ankbankia will will limit to house builders
tomorrow. so more requirements coming. and the question where that money comes from. >> here there have been some interesting patterns. initial selloff on the back of european related fears that usually comes in the early morning followed by a mid-morning rally. joining us to talk strategy is the president and ceo of asset management and judd gregg is still with us. kevin, let's talk about will sort of pattern that we're seeing. is the retail investor back in this market? because a lot of people have been feeling the retail investors are stepping out on the sidelines. >> i think the trading pattern is very consistent with the
divergence between main street america and wall street. what we saw during the first quarter is that although the s&p 500 was up nearly 12.5% in twon quarter, what did the average retail investor do. they took their money out of equity mutual funds and went if to bond mutual funds so i think institutional investors are coming back into the market later in the day because they realize that the economic recovery while it's still muted is progressing and they're relying upon more about corporate earning day that than they are about overseas. >> and what do the volumes tell us about who is invested in the market? yesterday volumes picking up, so does that speak to the same picture? >> exactly the same picture. i still think retail investors to on us wall street 2008 is four years ago.
retail investors, it seemed like just yesterday. >> the dour below 13 thousand, we have the nasdaq just around 3,000 and the s&p 500 now at 1354. so we sort of feel like we've been treading water a little bit how much longer does the sideways trading continue? >> i actually pointed out on my blog i think we'll be range bound position. i think we'll sea peaks and valleys europe is overhanging the markets and any information that comes out whether from france or germany, but we'll be in this trading range for some period of time. >> john chambers said the reason he saw cisco's earnings and sales drop was the uncertainty in the market, that people
didn't know what to do. how do we get certainty? is it an election event that creates certainty or does something else have to happen to define where we're going? >> i think that the presidential election is another area of uncertainty. you have europe, you have jobs, you have consumer spending. and we have concerns about future corporate earnings. and a lot of people contend inflation isn't here. i would suggest looking at the commodities market and saying inflation is here and if we don't start wages starting to rise and put america back to work that could retard our recovery. so it's a series of factors. >> we'll have to leave there for the moment. over to ross in london. >> a big jump in fuel costs have
led to more than 70% in full year profit for the airline emirates. yousef has more details for us. >> you mentioned the revenue numbers that are up to 17 billion u.s. dollars. the financial year ending march 3 1s, but net profit down to $409 million. you mentioned the main cull pretty, the fuel rises. passengers increased by 8% to 34 million. of course relatively consistent, but given the difficult operating environment, how do you sell up a year like that. we spoke to tim clark and here's what he had to say. >> in many respects it's been very good story. our problem has been the cost of
fuel, which for over 11 months in the financial year, we did not pat on to our kimmers, our customers and more recently we've had to do that. so as we now see fuel taking $1.6 billion straight off the bottom line of company's accounts, you see the fall in profits. had it not been for that, company results would have been significantly better this time last year. >> fuel costs really constitute a good chunk of any airline's operating costs. those were up 44% in this case. he mentioned the $6.6 billion and they tried to pass some of it. of course there are other distractions like the carbon tax which is also eating in to the bottom line, but just perhaps another quick note on fuel. here's what he had to say on that, as well.
>> because we believe fuel prices had come off, but they haven't. i personally believe they'll come off during the next pew months. i think there's evidence of that already particularly as you're starting to see once again the problems in eurozone and other areas. and i'm sure that will work through to the the cost of fuel. it will come off. it stays down for a period of time, we will remove the pul surchar surcharsu fuel surcharges. >> and he also said the company is growing in a balanced way meaning they have a diverse portfol portfolio. 232 aircraft are still on order
worth $84 billion. in the past, emirates has always put up a very competitive with some of the air shows in the past and tim told me that they're still open to buying even more aircraft and the only draw back is they don't have miles per hour to park help. >> all right, yousef, thanks. and still to come on the show, we're talking cisco, of course. sounding a warning bell saying customers are holding back on tech spending taking more time to close deals. is this dire outlook specific to cisco or a reflection of the broader tech sector? we'll break down the company's results coming up next.
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cisco's third quarter profits rose 20% and revenues more than 6% beating drafts, but there were trouble spots, as well. european orders were flat. cisco expects fourth quarter revenues of 2% to 5% below both analyst estimates as well as the company's previous projections. john chambers cites ongoing challenges and customers being cause sthus with tech spending. deals are taking loner to close. >> the major thing all of us see in business is certainty. and businesses don't spend or
react well when it's an uncertain environment, either from the economy or from government policy. if we understand what the issues are, then we'll make the decisions about where we grow our business, where we invest in resource, how much we give in difference te differenviden dividends. >> let's start with the cisco numbers. there were will some things you liked and things you didn't. >> cisco had a solid third quarter. revenues were in line with expectations. they cut expenses. it's the outlook that's disappointing and customers are actually planning on spending significantly more in the second half than they did in the first half. what is concerning is the macro environment. so that's really where the outlook has changed.
in terms of what we liked is that service providers orders were up by a percent year over year. that's an area most people expect to be flat. >> and you've been covering the company since 1996. when you're looking at how he's guided for future quarter, do you think he's hedging a little just to be on the safe side? >> i think he is being extra conservative. one is this is their fiscal year end and they would like to build backlog as they go into the new fiscal year, but secondly, cisco is in every network pretty much in the world. they have 70% market share in the i. ti. they see every customer out there and their intentions. many are worrying about what's
going to happen over the next 16 to 18 months in terms of europe and potentially government policy here in the u.s. and he wants to put that into the numbers now as opposed to have it be a surprise. >> chinese orders down #%, as well. how will that feed through into now your own forecasts. >> i'm looking at what i think customer intentions are. there's two major demand trends forcing customers to really invest. one is the mobile devices and the other is the data centers moving to the cloud have one gig ga bit pipes and they need to go
up to ten. so it is a matter of timing as opposed to if they'll see that business. so cisco given its current valuation is very attractively positioned for that. i can't tell you if it's because of the mac droe stuff if it will start next quarter or in two quarters, but cisco will see the demand trends hit. >> all right, we'll have to leave it there. but thank you so much for joining us on the program today. meantime, facebook saying its ad business isn't able to keep up with the growth in the mobile market. in an amended ipo filing, facebook says more than half of its users access the site on smart phones and tablets. but that's not leading to higher revenues because facebooks can plays limited ads on its mobile site. facebook says this could negatively affect results as more people shift from pcs to these mobile devices. facebook is expected to price its i perfopo next thursday. and dan lobe says he'll wage his proxy battle with yahoo! for as long as takes.
he's fighting on nominate his own slate of directors and last week publicly disclosed discrepancies in scott thomp on's academic background. speaking to cnbc, he says i can't should you bloated and suffering from a leadership crisis, but he also says there are good people on the board that he could work with and yahoo! still has the capability to turn itself around. yahoo! shares down about 0.6% also news corp's third quarter profits rose 47%, that beat forecasts. broadcast tv revenues did fall as ratings for beg shows like american idol have dropped. news corp is doubling its stock buy back to $10 billion and as for the uk hacking scandal, chase rarely rejected the notion in last week's report that murdoch was unfit to run the company. taking a look at shares of news corp as well, they are higher by
growth. exports, too, missed their mark. economists now say that weak domestic demand as well as falling global economic prices contributed to the disappointing mum. recession in europe and patchy u.s. recovery also suppressed exports. analysts expect beijing to roll out more measure it is to boost economy after it grew at the slowest pace in more than three years in q1. over to jackie in new jersey now. >> thank you so much. and meantime u.s. investors getting a trio of economic reports today. all at 8:30 a.m. we'll get weekly job last claims, forecast to rise by 5,000 to a total of 370,000. april import prices are seen falling by 0.2rs.
ben bernanke will be speaking about banks and bank lending at a conference in chicago at 9:30 a.m. there will be no q&a on that afterwards. and the usda releadising it gra forecasts at 8:30. and intel holding its annual investor today at 11:00 a.m. eastern. after the meeting, stacy smith will be on street signs. tune in for that. still with us aechb and senator gr greg. i expect weekly jobless claims will be in focus. >> if we look at my biggest concerns, it's not necessarily the unemployment roitd, bate, b the jobless rate. i'm worried about their confidence and ability to go out and spend. we know that 70% of our economic growth as measured by gdp comes
from consumer spending. so if investors and individuals are concerned that they'll be tapped on the shoulder and get a spinning slip on friday, that will limit their ability to spend. >> and we also wanted to discuss inflation more. >> i'm wondering if you think this is a serious issue for us to be concerned about, how do you think -- do you think the fed is looking at this, and if they are, what sort of interaction and how ask it affect further qe. >> i think inflation is a serious and long term issue and i look at that as a supply demand type of question. so on this plaent earth, we have limit willed national resources. as the population growth continues to grow, they place increased demand on those natural resources. so if you have limited supply, growing demand that's a beginest havement equation. so we look to the maces like
soybeans. up 24% year to date. we look at platinum. we look at copper and silver. we look at gold. prices are rising. so is core inflation down? sure. but what american can strip out food and energy from their daily lives. you can't. so the flan is here. they've told us they're not going to be raising rates, so i think investors will be likely to brace for the impact of inflation how. >> and what about europe? europe dominating the headlines. do you think that to calm down and slow down a little bit today? >> i think it could calm down and slow down for a period of time, but if you look to greece, the fact that their citizenry is rejecting some of the austerity measures, the new president in france, will germany be willing
to fund this any further. so i think europe will be out there. >> could we see a bit of momentum based on that today? >> you you could, but i could see it trading away quickly, as well, once they get upset about the austerity measures. >> and you talked about china. we've touched on europe. but give me your view on the emerging market. >> i'm still bullish. last years it was a risk aversion trade. will year columbia, argentina, places in the middle east, certain far east country, they're actually growing their economies. we all criticize china for their economic growth going down. in the u.s., we would certainly take a 7% to 8% xwchgdp growth right now. i wouldn't put russia in that category. the old bric trade is gone.
i think if you're looking for real growth in 2012, you have to look outside u.s. borders and developed countries into emerging markets. >> and we did talk about interest rates and you said not likely that we'll see a rise in election year, but do you think it's possible we could see qe-3? >> it's possible, but i hope it doesn't happen. >> we'll have to leave it there. gentlemen, thank you so much for joining us on the program. >> coming up next, of course, "squawk box." the countdown to the opening of markets. whatever happens, have a profitable day.
ay. today is gonna be an important day for us. you ready? we wanna be our brother's keeper. what's number two we wanna do? bring it up to 90 decatherms. how bout ya, joe? let's go ahead and bring it online. attention on site, attention on site. now starting unit nine. some of the world's cleanest gas turbines are now powering some of america's biggest cities. siemens. answers.
the doe dropping for a sixth straight day. meantime volume is picking up. first back to back days of 4 billion plus shares in nearly two months. tech trouble, cisco's outlook underwhelming the street raising fears about the global economy and jobs are in focus, unemployment claims top today's economic agenda. it's thursday, may 10th. "squawk box" begins right now. good morning, everybody. i'm becky quick along with joe kernen and andrew ross sorkin. let's bring you up to speed on today's top