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tv   Street Signs  CNBC  February 12, 2016 4:00am-5:01am EST

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hi, everybody. happy friday. welcome to "street signs." i'm louisa bojesen. >> the nikkei closes down its worst week since 2008. >> and here in europe, commerce bank's clean yuch is paying off. the stock is spiking in frankfurt after the lender announces its first dividend since 2007, this after revealing lower bad loan provisions. announce ago 20% cut to the
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top two layers of senior management, this by sending shares sharply higher in london. and renault drives after a 50% jump in profits. after a joint venture with nissan. >> hi, everybody. welcome to the show. you are watching "street signs." do you notice anything different? friday capping off the week that was in turbulence? >> love. love. valentine's day weekend. >> i should have known. >> the love necklace. love is in the air. love is in the air and a lot more. finally. >> here in europe, at least. >> exactly. exactly. we have a bit of relief in europe. we're seeing green across the screens. we're higher by almost 2%. 1.7%. we also have a little gdp coming
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through. >> that's right, louisa. fourth quarter gdp is up about 071%. on the year basis annually, we're looking at growth of 1%. forecasts were looking for an increase of 0.3% against the actual measure of 0.1%. gpd italian growth preliminary basis falling short shy of that 1.2% forecast we got from reuters. euro/dollar continues to trade lower just about 0.4% against the dollars dollar now. >> i'm not sure if we're reacting to any of this at the moment. >> i think it's still the safe haven trade in focus. we've got the relief rally. some of that reverses there. >> it's all bigger picture stuff. and if anything, we are driven by some of those unwindings and getting into the fixed income markets, too, as we've seen. those deals push the multi year lows. speaking of which, let's check
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out our main asset classes briefly. looks nice, but let's not forget that we were down 4% yesterday. day before yesterday. we've been having massive losses this week in general. and our european equity markets this morning, though, just a little bit of delicate buying back compared to all the selling we saw yesterday. again, half an hour into trade, yesterday we were down between 3% and 5% on all of these major indexes. the ftse 100, 1.5% higher having hit a 3.5% low in yesterday's trade. >> that's right, louisa. all week, we've been following the drag from european banks, tied to earnings. finally, we're getting a break out of commerzbank. this comes following the week's heavy lows, but now commerzbank stock res soaring and this comes after announcing its first dividend since 2007. with that income in the time quarter of 2016 surpassed expectations and the core equity
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tier one ratio rose to 12% up from 9.3% a year earlier. so investors cheering the increase in the capital ratio there. the lender saw a solid drop in loan loss provisions which has been a concern for many analysts. and keeping this in perspective, financial stocks have been bouncing back across europe and this comes after the steep losses we've seen earlier in the week. but the gains in financials today are coming along with strength in basic resources we've seen, as well. all significantly outperforming the other sectors. we've got to take a look back at exactly what banks have done over this torrid week here. credit suisse led pierce to the down side. off almost 14% for the week. but investors punished socgen for its guidance. i was speaking to the ceo of socgen, and they were optimistic on some of the results, but they couldn't confirm beyond the immediate target.
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we also had that surprise rate cut from the swedish central bank, of course, further into negative territory. adding to these worries about alternatings potential across the continent and a new normal here when we talk about the possibility for some of these banks. >> two days ago on the show, we had some guests on who were saying buy some of these european banks and value them now. i wonder what they're thinking today after yesterday. >> that's right. >> but bank ceos, they've jumped in to reassure investors with deutsche bank's chief stating that the lender is, quote, absolutely rock solid. he says default protection on the bank spiked to levels higher than during the financial crisis. the heads of ubs and socgen, they blame volatility for provoked irrational behavior. we have all these comments trying to stabilize the market. >> that's right. and there is a real disconnect between what we're seeing in equity markets and fundamentals and growth, as well.
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i think a lot of others have been point to go that argument. we've been talking to reaction from several analysts who quelly dismissed the comments where they site vastly improved quality and benign conditions. concerns can persist as they faes mounting challenges from regulators, central banks and, of course, the real message here is eight years on from the crisis, people worry that the banks have not been quick enough to restructure, reduce their costs. but is not 2008. >> totally agree. i haven't heard anybody say it is similar to '08. we'll talk more about that. i want to show you what's was going on in oil. i think the big story yesterday with gold, gold, yen and debt, but not to ignore oil because we've seen some flip-flopping twl, as well. we're a bit higher on brent and nymex. we've had comments from opec ministers about coordinated --
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because this rumor took the wind out of yesterday's selling. it was the uae's energy minister, to be exact. and he reportedly said opec had agreed to a production cut. we spoke with mr. laruze last month where he struck an upbeat tone on the chance of coordination in order to stabilize prices. >> it's not logical, it's not fair. it's not whatever you want to put the it for us to step in and correct the market, 100% of the market of the supply by itself. they cannot correct and i can say this ten times. they cannot correct the whole market. but they are still ready to contribute in the correction of whenever in the future are needed. and i think we all discussing between ourselves, our role among the bigger players. >> well, this relief rally we're
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seeing in europe comes after the japanese nikkei logged its biggest weekly loss since october 2008, closing down 11%. now, this comes as the dollar falls to a new 15-month low against the yen. but bank of japan governor corrode ya insists the market turbulence should not be blamed on its interest rate policy. let's get straight out to sri jegarajah who is standing by in singapore with more market reaction. the bank of japan saying do not blame us. fair enough, they may not be the only reason for the volatility, but the bank of japan appears to have a real problem on their hands when we look at the market reaction here. >> true. yes and no. i think there are some real issues relate to go negative interest rates and the ink is barely dried now. some in the markets are calling for more action from the bank of japan. so yes, the banks have been punished because of the impact on their margin of profitable because of the environment.
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on the other hand, a lot of this is externally driven, as well. we have this global flight into safety. the yen is benefiting. we've seen the yen at 15-month highs against the u.s. dollar. so dollar/yen getting absolutely smoked and today was no exception.. so whenever you have a stronger japanese currency and all this pressure on the exporters and names like the automakers like honda and toyota, they get punished today. they drag down the broader index, as well. this was a very, very grim week for the nikkei. down more than 11% for the worst week the financial crisis since 2008. so we're looking at the settlement at 16-month lows. i think japan is going to remain in the headlines next week. monday, the next key risk event is going to be q4 gdp, expectations supporting towards a contraction in growth. .so that could generate another wave of selling on japanese equities which are not feeling the love this week or today at all, louisa and nancy, despite
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that very nice pendant you're wearing. make love, no war. that's how we did it in the '70s, man. >> i don't know. i wasn't born there, sri. >> i am that old. >> you're absolutely right. nancy and i are a lot, a lot younger than you, sri, always. but yes, it is a love necklace, so we're spreading a bit of love between the market moves this morning. >> we all need it. >> thank you very much, sri. we'll carry it with us throughout the weekend. happy valentine's day weekend, sri, sri jegarajah out of asia. look, the fx markets out of yesterday, there is no leaving the yen alone, right? the yen's rally just continued for some reason with 15-month highs or so. 112.61 currently. but yesterday, i mean, the levels hit there. they entered that 110..9. gold also surging to a one-year high as investors flock to these safe haven assets.
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the bond king jeffrey gerlach says gold is likely to continue the rally. as investors lose confidence in central banks out there. you know we went live on facebook yesterday, right? >> i missed that. >> your turn is next. a bit of a pilot scheme. while i was on there live, i was trying to figure out all the technology and whatever. gold is going nuts. the yield is going nuts to the downside. it is crazy. head online and take a look again at the facebook page. listen, i have to preface this because the introduction i'm about to do is done in good fun. there are no ul terror motives. but joining us now is valentine marry me now marinov. that was why i prosecute faefac.
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>> at some point, i figured it out. >> let's get serious about the yen. are we going to continue higher? >> on the dollar/yen or indeed the japanese yen, i guess the key question is how likely is it for the officials to intervene in the markets either verbally or directly by selling their currency. for the time being, it feels like the japanese hands are tied by that 2013 g-20 communique, which advised all its members against any policy that could be interpreted as competitive devaluation. the japanese yen is undervalued by any measure. the japanese economy is running trade surplus trying to stop the yen from appreciating. could amount to competitive devaluation. from that point of view and given that we are heading into a
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g-20 finance minister's meeting on february 26-27. i think any intervention won't go down very well. from that, i think the timing, you're going to see the potential to choke down the currency. in fact, we've seen that already. if anything, the japanese -- >> but it works. >> well, it is the case. talk is cheap. if you wish. the point is that for the japanese officials, we'll be using another part of that g-20 communique whereby official intervention maybe warranted to avoid disruptive moves in the market. that's what they will try to use potentially. but for the time being, it feels like intervention is still on the card. what we're going to see potentially would be pmi official accounts propping up for dollar/yen, effect hely buying dollar up. we're seeing that in -- not months, but certainly up to 2013. >> and i want to get your
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thoughts on the dollar moves he we've seen. the dollar falling quite sharply.we got comments coming from janet yellen, not going so far as to endorse them, but that is on investors' minds. do you think we will get more easing before we get a future hike? >> our view is that the fed is more likely to hike than cuts. if anything, listening to the testimony yesterday, i think the fed chair was keeping her option hes wide open. she's fully aware if she were to completely rule out negative rates, she was in for a potential bounce in the dollar. however short lived. don't worry about the current depreciation is still very much there. i guess the bigger question for the markets now and that's kind of an escalated surprise decision by the boj to join the club of the banks negative rate is how positive that measure is
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and how disruptive it could be. and there was a lot of backlash against those decisions. so i guess the indication by yellen that they may be considering a negative rate given the bad reputation, that particular measure was not seen as support for market sentiment. we're up against the break. thank you so much. do you have any plans with your lovely wife? >> i do, yeah. >> good. don't say anything. keep it a surprise for her. thank you very much, valentine marinov, aka for today, valentine marry me now. now, a relief rally is in for rolls-royce shares surging to the top of the stoxx 600.
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now, this happening despite underlying full year pretax profits falling year on year to 1.4 billion pounds. now, still in the auto sector, renault has reported a 49% jump in net profit in 2015 as improving sales boosted the carmaker's bottom line. renault has increased its dividend significantly despite taking a hit from its russian joint venture from nissan. still to come up here on "street signs." first on krn, we'll be speaking to the former prime minister of italy and what about timing this is. we'll be talking about hallenges still facing the. and putting your money where your mouth is. how jamie dimon is defy b b fears. after this break. fç now here is a sneak preview. >> if germany should find themselves in any financial
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difficulty in the coming months, stand behind them? >> we always stand behind all of our colleagues, but this is a highly unlikely scenario. it's hard to find time to keep up on my shows.
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welcome back to "street signs." we're enjoying a bit of a relief rally in europe for the last trading day of the week. this will be good news considering the broader market was off 7% prior to today. banking is, of course, a talk of many of the fnl finance ministers in brussels. julia, pleasure to see you. no doubt the leaders in brussels he will be taking note of this relief rally. what is the feeling on the ground there? >> it's a great question, nancy. we can totally forget the agenda
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from yesterday from the eurozone finance ministers. all we want to know is what they think of the current volatility and the pressure we're seeing on the europe kwan bank stocks, even if we are seeing a respite today. i spoke to the president of the euro group and asked him what does he make of the volatility and how concerned is it? listen in. >> there is concern. yet we also realize we're in a much better situation than we were some years ago. both governments, governments budgets, the economy, real economy picking up throughout the eurozone. and our banks are in a much better situation than they were some years ago. lots of capital has been brought in, balance sheets have been b restructured and this is continuing with the new rules of the banking union in place. >> fears in the banking sector are overblown? >> i think a lot of the concerns are coming, actually, from outside the banking sector and are coming from outside the eurozone. it's about the global economy and emerging markets.
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strengthening the banks which st still ongoing. >> you said just now, look, if we are seeing a repricing in equities as a result of the new bail-in rules, then so be it. that's the price we have to pay. we're seeing that surely, too. >> there can be an melt of that, but it's really too early to say. i think that investors realize that with the bail-in rules, the risks are being priced and that may have an effect. but also here i feel if there are legacy issues in our banks, we should deal with them. a lot of them have been dealt with and we should continue on that so that the banks are fully open for business and fully supportive of the economic recovery. >> you're suggesting all vice president been dealt with and this is still a lack of information about what's still to go. >> i don't think it's the lack of information.
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i think we all realize that, for example, nonperforming banks are an issue in some countries, but over the broad range of bank, a lot of new capital yapal has been brought in and the capital is of a higher standard and higher quality than some years ago. so we are in a much better position. >> the message there, i think, take a snapshot today, compare it to a snapshot back in 2007. actually, we've had the asset quality reviews, banks have more capital. they're in a stronger situation today. i think i would argue the operating environment is very difficult. of course, we've had low bond yields for a great deal of time. it's impacted profitability. never mind the nonperforming loans and the broader economy for the eurozone banks. but i also spoke to the commissioner for economic and monetary affairs and i said, look, bearing in mind both of those things, i mentioned regulation there, as well,
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actually are investors seeing something here that perhaps policymakers aren't. listen in. >> they need to be transparent on that. again, when a delicate situation happens, we have the means to address that. >> like how? >> overall, the quality -- the asset quality review, the stress tests, show, obviously, that the stability of the banking sector is much higher than it used to be. so, of course, we must be cautious about any kind of risks. but we must also keep our cool and face the reality as it is. no, we are not in the situation. no, we are not back there. so we won't be back there because we have all -- to address any kind of situation now in the eurozone. >> do you think the role of the bail-in that came into play in january of this year is playing into investors' concerns here
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because bondholders are going, hang on a second, actually in a bad situation we could be bailed in. it just seems like there's a lot of uncertainty and this is another factor. no. i don't want to enter too much about the comments of the psychology of the markets. i understand that markets are concerned that what we have to work towards. but we are concerned with this volatility. our message is clear. the fundamentals as well as the real economy or the financial economy of the banking sector are solid enough. >> so as you can see, certainly playing down.some of the broader concerns that we see from investors about the european banking sector and pierre saying we need to have a cold blooded, more rational look at the way bond prices and bond shares, as well. equities are trading at this moment. let's hope they're not famous last words. guys, back to you. >> thanks for that, julia. we'll be back in a few minutes for a closer look at the italian
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banking sector, as well. jpmorgan has cut its prices on luxtov from $84 to $80. that's after the company provided full year ets guide yaps of $2.60. that is below a reuters estimate of $$2.79. joining us now is dimitry, the ceo of luxoft. a pleasure having you today. the results have come in line with your own target, however, disappointing guidance. what's moving the expectations to the down side here? >> a few things are moving expectations. i think the lift and the growth trajectory. the company up to the second quarter last year. and the -- that our third quarter won't be as great as the fourth. so the difference is there are
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some relationship with our current clients that we have to commit. all in all, if you look at our nine month performance, 6% growth year over year, 35% currency. not bad. so i think it's just a little bit of street reaction and height expectation. >> let's talk more broadly and look at the turbulence we've seen in markets. that translates to more of a corporate down turn, a reduction in spending, perhaps. is that something you're watching? >> all key industries, financial services and the industry is going through massive transformation ever. and technology is not a support function. it's a big core function. so it's all about getting to the high efficiency and still moving to a new technology. i think that's very well the place. so all banks, the ime change the bank mode and that's exactly our position. so we say that rather opportunity for the downside.
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again, going forward, very bullish. and, you know, there are ups and downs. i still don't see the down. >> it's not a down because, again, pulling in kind of the bigger picture story at the moment and with a flattening yield curve can, that's indicating a recession is around the corner. that's how we're supposed to be reading the markets historically, right? if that is the case, would you anticipate then, given that you outsource in the financial sector, would you anticipate a significant slowdown from within your own company? >> no. definitely not. definitely not. where are the opportunities? where are the pockets of strength in particular from within financials? >> as i said, there is a lot of information going on. so banks are reviewed and ford to do that, they should have to rationalize. and upscale. first, you need to spend money to save money. kind of, you know, an interesting exercise. so number one is
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rationalezation. two, older half, which they have to support. and then moving forward, a lot of technology. block chains and all of the digital notions. again -- >> and you mentioned currency fluctuations, as well. you've moved the majority of your business out of russia. was this in direct response -- >> we hold on to the currency. all russian business is very small, 3%. >> okay. thank you very much for being with us here this morning. dimitry, the ceo of luxoft. thank you very much. still to come on this show, first on cnbc, we'll be speaking to the former prime minister of italy. we'll talk about the challenges facing the italian bank and get an outlook of his idea on the economy there. stay tuned.
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hell lowe and happy friday. >> commerzbank cleans up after the lender announces its first dividend since 2007, this after revealing lower bad provisions. rolls-royce having its final dividend for 2016 and announcing a 20% cut for the top two layers of senior management there by sending shares sharply higher in london. >> renault droifs high we shall as well, after a 50% drop in profits.
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good morning. welcome back to "street signs" and a very happy friday to you today. timely seeing green across the board here. as you can see, all of the major markets in positive territory. deep discounts in perspective, because up until today, the overall stoxx 600 was off about 7% on the week. banks and earnings. we'll get to that in just a moment. the ftse 100 up 1.7%. the german main market up about 1.4%. france, up a similar amount and the ftse mib here outperforming higher by 2.6%. now, let's take a look at the sectors on an individual basis because we're finally seeing a rebound in the banks, fms leading the way higher along with basic resources and oil and gas prices, as well. remember we're seeing a bit of a rebound in wti and brent, as well, after some reports that opec members and nonopec members could be coming together on production. however, some not buying that report.
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nevertheless, we are get withing a bit of a rebounce in the oil price. let's see how these moves are set to rebound to wall street. it's been a turbulent week stateside, as well.. we're seeing green arrows across the board with dow jones higher by 120 points. s&p off about 15 points and the nasdaq, as well. all three of these markets, still in correction territory. now, a number of ceos, they've told cnbc in the past couple of weeks that the banking sector sell-off is overdone and now is the time to actually buy banks. jpmorgan's ceo jamie dimon is putting his money where his mouth is. he's buying shares in the firm that he owns netting a value of around $26 million and it brings his total holding to close to 7 million shares which, in turn, is valued at just under $400 million. so he is buying into the bank. the italian government, separate
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to this, has brought in a number of measures allowing bad loans to move into securities for sale. this happening as the prime minister matteo renzi vowed to, quote, do everything needed to resolve the problem of nonperforming loans. italian banks have lost some 40% of their value over this past year. joining us is enrico letta, the dean of the paris school of international affairs and the former prime minister of italy, as well. welcome, enrico. good to have you with us. >> thank you. >> and julia is joining us from brussels. good to have you with us again, as well. let's talk about what we're seeing in the markets at the moment and what the signal seemed to be. we have this massive sell-off taking place from within banks. some are saying it's being led by italian banks.
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what do you see? >> i think what the government did yesterday, it was in the right direction. but we need decisions that ever important today. we need to complete the banking union, in my view, the main point. we heard important steps for the banking union, but we need now to complete it. we need european guarantees with deposits working. the european union gives to the market the idea in this banking union system. we had to complete it with capital markets union that commissioner hill is proposing. so there is a lot to do at the european level. >> i he look at what we've already been through and i look at all the stability tests that the banks have been supposed to and i look at the rules and regulations that have been put in place. we were supposedly on our way out of the financial crisis. we might still be.
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i don't know. maybe it's just volatility that we're seeing. what would a banking union do different than what we've seen so far? >> we can give to the markets, to the investors, to the consumers, they can stay more -- they can keep more, they can, in my view, be more protected in their investment. and we can have a more convergent european banking system because today the differences between many countries are very high. this is why for what is linked to the italian situation, i push very much for big consolidation process at the lower level. because at the lower level, we have too many small banks and we need this consolidation process. at the bank, the main one of the key point. so there's a lot to do there. but as you know, italy is very
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much depending on the european situation. i think italy is different from france and germany. we need europe. we need very well performing europe. >> but until we get greater union at a european level, the government still has considerable xhalgs from the domestic side and mr. renzi has to do what he can at the domestic level. are you concerned that the longer these fears go on that this could turn into a political crisis for the government? >> i think at the national level, what is really important is to continue in the standing review for the national budget. and let us take and to use the money that we save because of the review, reducing taxes. this is the key issue for italy because it's a country with a very low growth and with a very high depth. so we need to continue because of the spending review. it was interrupted. i push the government to
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continue in this process because it's the only way to save money and to have money to reduce taxes and to to push growth. >> there's a difference between what we're seeing in italy and the likes of spain and ireland is that the nonperforming loans in italy continue to increase as oppose dollars to coming down in the likes of spain or ire olympic. so it's been the economic recovery, i agree, as you're quite rightly saying. but the other thing in italy is to try and foreclose on a loan, it can take six, seven years. so dealing with those bad debts is a far more difficult problem in italy. isn't this a crucial factor in something that they, quite frankly, have to talkel independently of what's going on in europe? >> yes. this is why, i think, what the government did was this sort of bad back. it's one of the important decisions. but i repeat, what is necessity? it is to boost the cop sole addition of the italian small banking system. because in my view, there's the
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need to be more modern, more european. these banks are important and they are very good because they are very much linked to the region's local authorities. italy is the country of the mes. the mes are let me thinked to the regions, to the cities. up to the north, for example. so we need to push there and to give the right dimension to these banking system, to this lower banking system. >> yeah, because it's fragmented and there's low profitability, as well. isn't there a risk here with trying to get these loans off the balance sheet and how they're valued on the balance sheet is higher than they're going to be sold out to private investors. do you fear that there's a risk that far greater capital is still needed for the italian banking sector? i think that's what inhe vesters are saying at this moment. >> i know -- i think and i'm sure that we can trust in the
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italian system, in the italian financial system. the italian real me economy is a one. very good. and this is why i'm sure that if the european situation is improving and if the government is continuing to spending review and kuing taxes, push recovery, we can trust in italy. >> you said back in january that david cameron shouldn't hold a referendum in the summer when we could likely see a flare-up of the refugee crisis and that you think he should wait until 2017. but doesn't that mean a whole further year plus of uncertainty for the uk economy? surely it would be better to hold a referendum as soon as
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possible and get this issue dealt with. >> you know, i prefer uncertainty to brexit. so i fear a sooner referendum will be very much linked to the cowace in the refugee crisis. this is my fear. >> we'll come back and chat a lot more on that, but i did want to ask enrico any questions, give them through. we'll float the address for you. nancy is on twitter. i'm on twitter, as well. we're all there. and you can find us on facebook, as well. we have various pages going for cnbc international. >> going live on facebook. >> exactly. meanwhile, the markets that we've been following all week not going unnoticed by
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politicians in the u.s. presidential race. and wall street and health care standing out as the key issues as a wide ranging democratic debate in milwaukee last night. bernie sanders and hillary clinton took shots at each other on clent yop's relationship with henry kissinger to sanders' relationship with putin. >> please do not tell me that in this country if -- and that's if we have the courage to take on the drug companies, and have the courage to take on the insurance companies and the medical equipment suppliers, if we do that, yes, we can guarantee health care to all people in a much more cost-effective way. >> now, hillary clinton fought back, reiterating her argument that sanders' health care plans, they simply don't add up. >> if you're having medicare for all, single payor, you need to level with people about what they will have at the end of the
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process you are proposing. and becaused on every analysis that i can find by people who are sympathetic to the goal, the numbers don't add up and many people will actually be worse off than they are right now. >> well, joining us now for more reaction is tracie potts of nbc news. great to see you. health care policy is obviously featuring front and center in the debate 37 how crucial is this in the contest in carolina? >> well, it could be very important. because a couple of things. first of all, health care and free college for all public universities are two hallmarks of the campaign platform of bernie sanders. and they are the two things that we immediately saw hillary clinton go after here. her point being that it sounds great, but we cannot pay for it. bernie sanders insists that we can. she says that we can't and that was a lot of the back and forth in the beginning of this debate. the other thing that we saw, the
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crashover here, and it was very interesting, was the legacy of president obama as a president. we saw hillary clinton's vigorously defending him, even to the point of saying bernie sanders, you sound like the republican when you criticize the president. and he pushes back on that quite a bit saying that he has the right as the u.s. senator to disagree with the president even if he thinks he's done a big job overall. why that can be significant in south carolina, you have a large african-american population in the democratic party. many of them supporters of president obama. hillary clinton is essentially running on his coat tails, constantly defending and supporting his policy. bernie sanders the nay sayer, saying most of what he's dong is great, but there are some things that he needs to do differently. we'll see how that plays out. still with us is enrico
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letta. former prime minister of italy. when you sit here and see what's going on in the u.s. presidential election, have you been surprised at some of the success of the nonestablishment candidates, if you will, or does that res neat with what we're seeing here with some of the french parties gaining? >> in europe, we have this supposed phenomena to the cry sits. the grades of unemployment in country cans like spain and italy. i think the american situation is something that is new. what is new is the fact that even without the migration program, even without a big unemployment problem, people are angry against the establishment. it is this -- people, establishment, and i think it is because of the new way to communicate, the role of the
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internet in politics and i open that the american debate will -- i would say develop some new ideas. i fear. why? >> because of hissed whys, because of his lack of any experience, because the fact that this big, big distance between words and reality. i think the president of the u.s. has to be very, very careful in speaking. i think france is not very careful in speaking. he says anything about anybody. and i fear as a president of the u.s., with responsibilities of having the word with this kind of very strange attitude, but
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transfers a short while ago. frankly speaking, i have some concern. >> and donald trump has been extremely critical about the europe upon policy efforts on the microcrisis. what is your respond on that? >> the u.s. didn't have such a crisis like the we are we are facing in europe. this is the most difficult one after the foreword, too. this crisis has challenges. the people coming from after the fall of the berlin wall, weren't people from different ethnic divisions. we had at that time in the '90s, people coming from eastern europe and, it was, frankly speaking, easier than it is now. now, the difficulty is at a very
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high level and, frankly speaking, at the european level, national level, no ideas how to -- you know, there's two po layerties, pop francis and european lady. >> thank you very much. for now, you're staying with us. what do you think of what you just heard from enrico? get your e-mails through street signs europe at cnbc.com. find us on twitter. up after the break, the -- pointing out who publishons suggest would she the break erb. more after this. there's no such thing as a little flu.
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hi, everybody. welcome back. you're still watching "street signs." banco popolare and banca pop milano are just higher. they hope to close a larger deal next weekend. the ceo is stating there are still a few details that have to be ironed out on the deal with banca pop milano. that is on the news wires coming off this massive volatility we've been seeing in the banks. more a cop sole date addition, do you think, from the italian banks? >> yes. at the lower level, we need fast and effective consolidation. >> okay. we shall anticipate that. now, separate to that, if you're just joining us, enrico
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letta, the former prime minister of italy, david cameron is expected to warn that vladimir putin would be the winner if a brexit were to hat. that's according to sources cited by the international newspaper. hillary ben says that the russian president would benefit if britain were to leave the european union. mr. letta, you've been quite outspoken on this topic of whether we should see a referendum now. and also, what it would do to europe if a brexit were to happen. talk us through why it is you think we shouldn't see a referendum happening this summer and what the downside would be if a brexit were to happen. >> first of all, i trust in cameron's stills. he's a very good netiator. i happen him and i hope that his negotiation will keep the uk on board of european union. for the european union, first of
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all, but if the i can, it's important for the uk, for london. london performs are linked to the fact that london is big door to the biggest market in the world, that is the single european market. so i think it is a win-win solution. but how to get this solution? my idea is that we have to be a little bit more ambitious. what i mean, we have to move to a two-circle europe, two-circle europe means that cameron and the uk and the uk voters, they're right, in my view, by saying that their idea of europe is different from the idea that we have in the rest of the continental europe. so no ever close the union as final destination, but just to share some policies with the rest of the continent. we can do it and we can be
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allowed, i would say, as continental europe to join in a federal euro area with european union clothes with the economic union. that could work if this idea of a two-circle europe with a large 28 klg country circle works with the idea not to have ever close a union at this level, but to have closer union level at the 19 level. it is a solution. >> and just before the break, you were offering your thoughts on how serious the migrant crisis is that europe currently faess. there's been so much discussion that the timing of the referendum is ill timed. but then again, we have this issue that if we get to brexit, they could find themselves in a much worse situation when it comes to combatting the microcrisis. isn't that so?
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>> how it's possible today to face migrant crisis like the one we are having today just with national solutions? it is impossible. because these migrant crisis, it most important one since 70 years in europe and it will continue. this is the key point. maybe one day i hope we'll top the syrian refugee crisis. but there are migrations in the mediterranean. if we continue with the iranian policy and if we continue not to have what i think is necessary. so big euro marshall plan to africa, we need africa to develop. we can't leave africa like that. if not for ten years, storms and migrations and, i he repeat, your question is very good. it is impossible even for the uk. even for an island to face migrations alone.
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>> where do you think the euro is heading, then? >> i think the upper roar -- >> the bigger project. >> i think the only possibility at this level is to have migrations and nuance and large and wide spectrum of initiative. first of all, have big plan for africa. if not, it will be impossible. second, we have to change the rules for the migrants, for welcome the migrants. third, and the other key point, we need a large police control boarders united at the european level. we need german policemen in the greek boarders and greene greek policemen at the -- airport. it is the only way to work. if not, we're going to have a very weak external boarders system and to account inside
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europe. >> thank you very much for being with us this morning, dean letta. louisa, we've been keeping an eye on oil prices. in the u.s. session, talking about lows not seen since 2003. here we are on the rebound. brent and wti, each up about 4% and 5% respectively. we did get hope that opec members and nonopec members could be coming together. but others casting down across the area. that's it for street signs. i'm nancy. >> and it is the weekend of love, all right? we will see you on monday. bye.
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good morning. in japan, the nikkei plunging another 5%. >> oil shock. >> and jamie dimon is putting his money where his mouth is. the bank boss buying more than $25 million in jpmorgan shares. ite friday, february 12th, 2016. and "worldwide exchange" begins right now. good mortgage and welcome to

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