tv Street Signs CNBC June 7, 2017 4:00am-5:01am EDT
interest's 24 hours to save the national health service. german utilities have trade 4% higher after the country's constitutional court declares a nuclear fuel tax illegal. good morning, everyone. it's wednesday. glad you're with us once again. let's take you straight to the european equity markets this morning. the ftse is up 0.21. the cac 40 is up by 1/3 of 1%. let's take you to the sectors. what you're seeing is banks are doing quite well. despite spain, banks up 1.3%. chemicals down by .3%. santander is taking over banco popular.
they're buying it for the symbolic price of 1 euro. santander says the popular brand will completely disappear in the deal. pimlico is also wrapped up in this deal. they're the largest holder of the bank's riskiest debt with 279 million euros. karen has been breaking the story all morning long. to me, karen, it seems like this is a banco popular specific story. it didn't send shock waves through the industry, right? >> it is a specific story but it talks about bank rescues here. it is a private twist, a private sector bailout. very interesting when you talk about the direction for rescues here in europe. the other big point here, you mentioned symbolic amount, 1 euro was the buyout price.
santander has to reach into its pocket to provide provisions for popular. there is a cost percent. you might ask, you know, what is in it for santander. the argument is from 2019 onward it starts to generate profit. it bolsters the share of the domestic market percent by about 25%. santander is a business that's been diversifying aggressively. you have the bulking up when the eurozone is meant to be improving. what does it mean for the rest of the banks, you saw very negative trade around santander for its now being dragged into the situation. very strong reversal. i think the message from the spanish economy is quite key saying it implies no contagion to other banks. it implies there might not be any other bailings from other
depositors. the question that i would have now is about the 7.9 billion euros that have been set aside from santander to meet the mpls. we know they have a history of winding up non-performing assets in spain after financial crisis. the strategy was trying to hold on to some of those asset, stabilize the market to have a a better environment to sell those assets back into and hope some of those mortgages that had gone south would improve. that might be a strategy from 2017 to 2018. >> karen, you raise some really good points. let's put those questions to peter. peter, always a pleasure speaking to you. how did banco popular get into this position, this predicament in the first place? are these still the eurozone crisis problems? >> it does seem like popular is
in this particular case the bad loans that it wrapped up. i have to say really learning this morning the extent of that problem. the fact that santander is setting aside that money on popular's balance sheet suggests there was quite a lot of bad debt there, probably more than people from the outside had thought was the case. >> that's why, 37 billion euros in non-performing assets is what was said. a fraction of that set aside. how do you rank santander to shed those assets after an improving housing and property market in spain with a better economy? >> santander is the biggest bank in spain. with this provision it will have
increased the coverage on those non-performing loans quite substantially obviously raising a load of equity to basically absorb popular. it will be in a position to kind of ride out the bad loan cycle. but i think, i mean, the interesting sort of broader banking situation here really because this is really the first substantial bank that's been sort of more or less resolved under the new european bank resolution rule. so even though santander is buying popular for 1 euro, equity holders and holders of subordinated, you know, kind of additional tier 1 capital bonds and tier 2 debt are basically getting nothing in this transaction. so there is also some burden sharing, some risk sharing with private investors as part of this whole rescue. >> another burden sharing vote
and deposit holders and other bank windups you've seen deposit holders on the hook. can we read anything into this if deposit holders do not have to contribute a cent? >> we're still trying to sort through the details but it does seem like santander was willing to take on most liabilities. the people got wiped out and that was to say, you know, that was not the -- kind of the central market assumption even though people realized that popular was in trouble, there was some expectation that those additional tier 1 bonds might be converted into equity. people were going to get nothing back. you have to read across that to perhaps some other weak banks in europe and say, okay, if europe is as it seems the european regulators are quite willing to put these -- use the resolution
powers that they have and to actually kind of make sure that people down the capital structure, you know, take the risk, then that presumably will be reflected in the pricing of the lowest -- sort of lower instruments, the equity and the lower bonds for other spanish banks but also in places like italy. >> looking at some of the pricing of the 81 bonds, just recently some of them were held by pimco obviously. we saw them trading at 68, 65 cents on the euro. didn't completely price in a default as such. just a more general question pertaining to the link between the banking sector and the state and the government itself, we've always seen that very close link during the eurozone debt crisis and officials were very keen to sever that link to make the banking sector and to make the sovereign a lot more immune to some of the banking crises. we saw that spanish yields didn't react very much in the last couple trading days when
the concerns around banco popular became very apparent. do you feel, are you confident that this link has now been broken? >> i don't think we can say that for certain, but it's certainly a step in the right direction. i mean, you know, what you have here is a situation where basically the european mechanism has allowed popular's balance sheet to be adjusted to a point where the bank santander is willing to take over its assets and liabilities. if you hadn't done that then you would have had to involve public money a bit like we saw in 2008. the fact that we can -- basically these banks can now sort of be resolved and sold on without the involvement of public monies is significant, but on the other hand, you still have to have a bigger bank that's willing to absorb the assets and the liabilities of a smaller one and that game, as we
know, as we've seen elsewhere cannot necessarily always go on forever. so i think it's a step in the right direction but i don't think we can definitively say that the link and the bank bail jourt psy bailout cycle has been broken. in italy the italian government is putting pressure on european commission and european regulators to give it greater leeway to maybe help out credits of smaller italian banks. so it's a step in the right direction but the link is definitely not broken. >> i want to raise the point of what this means for investors who have been chasing yield that have gone further down the credit curve, particularly into banks, because they thought the ecb, that mario draghi was ready to help out a number of these names. do you think it alters the risk profile and whiteyness of investors to hold the bond portfolio in some of the riskier banks across europe? >> yes, probably. it depends where in the capital
structure you are. i mean, you know, it's always -- ever since the crisis sort of the argument has been that, you know, kind of shareholders and junior bond holders should take the losses when they're losses and they shouldn't be bailed out but -- with public money. that's effectively what is happening here. if you're a senior credit suisse popular, you're going to take a risk but you're going to be okay. there ease different risks in the capital structure which is the way the market should work. but, i mean, it's always interesting in these things when they happen for the first time to see what the knock on consequences are for other banks who might be in a similar position. >> peter, thank you so much for your time. really appreciate it. karen, as always, thank you to you. the british people will vote tomorrow to choose a new government in what's seen as a head to head showdown between theresa may's conservatism and
jeremy corbin's party. it's seen her come under pressure for dodging debates and backtracking on her party's did he men is a party. she has focused on brexit saying no deal was better than a bad deal. more recently she's had to defend her record on police cuts in the wake of the terrorist attack on london bridge. on the other side we have jeremy corbyn. he has surprised pundants focusing on issues like health care and education. the left winger plans a major overhaul including hiking the corporation tax of 26%. he's eager to nationalize some british industries. he's facing questions with some critics saying he would be too soft on the fence. theresa may has seen her poll leads slashed to 22 points to single digits.
corbyn is only two points behind in some polls. let's get out to westminster. we have some news on the shadow home secretary diane abbott. >> reporter: that's right. we understand from a number of british media outlets that diane will be stepping back from her role as shadow home secretary. that is the senior official in the u.k. when it comes to security. she's been over the last few weeks pummelled by conservative parties, leaders like theresa may, for her awareness when it comes to brexit. we understand she's going to be stepping back from her front line role due to health. she canceled a radio interview later in the day on the grounds of ill health. she's apparently stepped back
from that position. she's being replaced by lynn brown who's the shadow minister of taking over for diane abbott over the rest of the campaign, one presumes. we've also got some other stories that we should be focusing on over the course of today around security. that is a major issue following the attacks of course saturday night over london bridge. theresa may has faced a lot of criticism about her policies, her decisions when she, herself, was home secretary for six years prior to becoming prime minister. she's struck back saying she's going to take a much stronger, morrow best line on counter terrorism. let's take a listen to what she said. >> i mean longer prison sentences. i mean making it easier for the authorities to deport foreign terror suspects back to their own country. and i mean doing more to restrict the freedom and movements of terrorist suspects
when we have enough evidence to know they are a threat but not enough evidence to prosecute them in full in court. and if -- if our human rights laws stop us from doing it, we'll change the laws so we can do it. >> reporter: now jeremy corbyn has said it's not about police powers and security agency powers, it's much more about resources, that means money. he's criticized theresa may for cutting more than 20,000 jobs as secretary. she's been accused of posturing by the head of the liberal democrats tim farryn. jeremy corbyn out on the campaign tram much more focused on what he calls damaging funding cuts from the conservatives. let's take a listen to what he says. >> this is fundamentally a choice. another five years of a conservative government -- >> no. >> i take that's a no to another
five years of a conservative government. thank you very much. what it will do is continue the under funding of our nhs, continue the crisis in our schools, continue the crisis in our housing and continue the unfair treatment of the majority of the population whilst at the same time handing more tax give aways to those at the top end. >> reporter: when theresa may called the snap election nearly eight weeks ago now she was focusing on brexit. she wanted a stronger mandate when it came to brexit negotiations. the mandate has shifted because of security and although she has lost a lot of her lead in the polls, the conservative's still above labor by a number of points depending on the poll you look at. as voters prepare for tomorrow morning, it looks like the conservatives will hold their majority. of course, that will very much depend on younger voters and how
they turn out to vote. >> less than 24 hours to go until voting kicks off. want to talk more about what's on voter's minds as we head into the crucial election. thank you so much for joining us this morning. we know that security in the last couple of days after this horrible london attack, london bridge attack has really come to the forefront when it comes to voter's minds. does the economy top the agenda at all? >> surprisingly, i don't think it does. it's been an unusual campaign in that request. personally i've been surprised the conservatives didn't make a little bit more of the very strong employment situation that we have, the situation in the country is actually -- the economic situation is actually pretty strong. apparently that's not what's on voter's minds and, therefore, it's not what's on the candidate's lines. >> as you pointed out, u.k. unemployment is the lowest since 1975 at 4.6%. yet on the other hand maybe the
conservatives were quite smart not to focus too much on that. at the same time we are seeing real wages are being squeezed as inflation is moving higher and wages are very much range bound. that is surely a concern going forward. >> i think it is, but on the other hand jobs usually are the key element in political campaigns. there the conservatives have to send a strong record. i think the squeeze on wages, we'll see. wages are usually a lagging indicator. first you get tightness in the labor market and then you get wage increases, and here it's going to be a race between the wage increases and inflation. >> but this is certainly something that the boe has been concerned about. they've taken a wait and see approach after the massive stimulus after the brexit vote. does it seem like their hands are tied until after the brexit negotiations are finalized? could we see the boe stay put for the next two years? >> i certainly hope not. it's possible.
i've been quite surprised that kristin forbes has been the only mpc member who has voted for a small increase in interest rates. i think if one steps back from the rhetoric and looks the a the situation where inflation has been 2.7%, we've had a massive stimulus from the fall in sterling, the labor market is tight as we've just been saying. last year growth was probably above our sustainable rate, 2.2%, it's hard to see why one should not remove some of this monetary stimulus and begin to raise interest rates. >> the argument from the boe is there's so much uncertainty whether we'll have a transition deal, what the actual transition deal looks like and what the brexit negotiations will take shape because at this point we've got a very hostile e.u. on the other side of the bargaining table. do you understand some of the reasoning behind the boe? >> well, i think they're making a case, but actually if you're
really worried about the uncertainty of brexit, i would think the thing to do is build up a little ammunition now. take advantage of the situation, which is a robust economy, begin raising interest rates, at least remove the extra stimulus that was put in after the referendum on the theory or on the hypothesis that the economy was going into a downward spiral which, of course, didn't happen. so what you really need to do is get interest rates to a level where you could, indeed, drop them if the situation on brexit turns out worse than expected. >> there have been some rumors that after this election tomorrow we'll see a cabinet shuffle. of course, the conservatives say power and phillip hammond said that he might be losing. do you think that would be a good idea? >> depends on who would take his place. >> yeah. >> i think -- i think he's done a reasonable job. he's a very cautious person, but he does seem to have an understanding of business
interests and so he's one of the vehicles through which business can actually get to the government in power. so i think it would be risky to drop him at this point. >> we will have to wait and see who would actually replace him. thank you. i appreciate your input. and still coming up on the show, we'll be live from the conference in hong kong. we'll be back in two. hey, the future, what's her problem? apparently, i kept her up all night. she said the future freaks her out. how come no one likes me, jim? intel does! just think of everything intel's doing right now with artificial intelligence. and pretty soon ai is going to help executives like her see trends to stay ahead of her competition.
tthat's why at comcast,t to be connected 24/7. we're always working to make our services more reliable. with technology that can update itself. and advanced fiber network infrastructure. new, more reliable equipment for your home. and a new culture built around customer service. it all adds up to our most reliable network ever. one that keeps you connected to what matters most. welcome back to the show. man wah holdings shares are down after they put the furniture maker on its target list. the announcement was made at the
sohn conference. and speaking of the sohn conference in hong kong, it brings together some of the biggest names in the investment sphere in asia. one of them is ethan devine. pleasure speaking with you. your main strategy is long short and long only in asia pacific, japan and in the emerging markets. i want to kick things off with japan. we recently saw the nikkei two to five beyond the 20,000 level for the first time in roughly 20 years. is that market priced for perfection? >> oh, i wouldn't say so at all at this point. it's started from such a low level, particularly if you think about the returns the companies are making currently. i'd say that we're on a reasonable valuation to a cheap valuation based upon an earnings level that itself has plenty of room to grow. so i wouldn't say that market is priced for perfection at all. >> we have seen though that the yen has strengthened against the u.s. dollar.
this doesn't usually benefit the exporters so what sort of stocks do you want to be long in that market if you say it's got further room to run? is it actually the domestically focused companies or do you still want to still side with some of the exporters? >> well, so i've been investing in japan for a long time. you know, i'd say before i answer that i need to give the disclaimer that, japan, you're right, is a market that depends on being impacted by the yen. as an investor you can sometimes get a little too fancy and take a step back and say particularly a market like japan stocks do tend to move together. that being said, i think there are a number of what i call self-help situations where there are companies that if they do what they need to do to execute their own business plans have plenty of up side irrespective of what happens with the yen. one stock, for example, this one is a little bit hairy at the moment, but tow shiba is one if
they can get through the problems they're facing, whatever yen level we're talking about, that stock is going to perform pretty well. >> we recently saw the nikkei two to five rallied on strong earnings and cap ex. do you think this is what the japanese execs have been waiting for for such a long time, we see inflation picking up, gdp growth picking up, could be hitting 2% in 2017. do you get the sense that abenomics is finally getting the fruits of labor? >> boy, i tell you, cap exex ise thing to watch. you've honed in on the right point. we've seen a slow hollowing out of the domestic japanese economy for that very reason. you have a lot of companies that make plenty of money in their over seas operations and, in fact, there's a very big component of the japanese current account is dividends back from joint ventures or over
seas operations but the domestic capex spend hasn't been there. it's encouraging to see it showing green shoots. i certainly hope it's happening and i think that abenomics certainly has a major role to play in making sure that it continues. >> ethan, also want to talk about investing in asia pacific and emerging markets in asia overall. now the reflation trade has suffered somewhat. the dollar is down. that has given some reprieve to the very popular carrier trade that we've seen in asia. do you think that has further to run? do you think the reflation trade will come back in the works of that carry trade? >> we're talking the yen? >> no, we're talking emerging markets in asia in general. >> i see. okay. you know, i don't do macro as much in fact. the fund where i work formally was part of soros and a number
of my colleagues are quite familiar with carry trades and those sorts of things. not really my particular area of experfect piece so i wouldn't want to comment outside of my depth. >> all right. >> i really focus on companies. >> let's leave it then. ethan devine, partner at indus capital. thank you very much for your time. we are going to go for a quick break. do check out world markets live, our blog that runs throughout the day on world trading. we'll be back in two.
hello and welcome to "street signs." i'm carolin ross. shares in santander falls as it funds the takeover of the failing banco popular. u.k. parties make their final pitch before the vote tomorrow. prime minister theresa may promises a tougher legal stance on fighting terror. >> if our human rights laws stop us from doing it, we'll change the laws so that we can do it. >> with the polls tightening, labor's jeremy corbyn says they can't be trusted with public services adding there's 24 hours to save the nhs. >> what it will do is continue the underfunding of our nhs, continue the crisis in our schools, continue the crisis in
our housing and continue the unfair treatment of the majority of the population. >> and german utilities get energized by illegal shares of re after they declare a nuclear fuel tax illegal. good morning, everyone. if you're just tuning in, let's show you what your futures are up to at this point in time and what we saw yesterday was wall street slipping from recent record highs. the dow down by roughly 1/4 of 1%. the s&p 500 down by 0.3%. we're looking at a tiny bit of a bounce back. the s&p 500 up by less than 1% and nasdaq cut out 7.5 points. tomorrow will be a crucial day for markets state side and we are waiting for the comey
testimony. we're waiting for the ecb meeting and of course the all important u.k. election. we're looking at a mixed performance. ftse 100 is up by .18%. want to bring you some of the biggest stories out of these markets. german utilities are getting a lift after the country's top court ruled a nuclear fuel tax imposed between 2011 and 2016 was, in fact, illegal. the decision means companies will be able to claim back about 6 billion euros in taxes they paid for using nuclear fuel rods and take a look at the rally e. on up by 3.43%. bayer cut its stake. they cut their holdings from 53.3% to 48%. they are going to cut their
stakes in coscestro. vivendi hit its high last year. they hit their 60% stake in havas. vivendi says it plans to make an offer for the rest of the stake in havas after the initial deal is done. in other news, a children's cancer charity run by president trump's son eric reportedly paid the family business more than $1.2 million for fundraising events at trump golf resorts. despite claiming it was using the golf courses for free. according to a report by forbes, donors were told their money was exclusively going to help sick children. more than $500,000 were redonated to other groups. the trump organization said in a statement, quote, at no time did the trump organization profit in any way from the foundation or
one of its activities. and former fbi director james comey reportedly told attorney general jeff sessions that he did not want to meet alone with president trump after he asked comey to end a probe into former national security adviser michael flynn. according to "new york times" report comey told sessions that private interactions between the president and the fbi director were inappropriate. comey testifies before congress tomorrow. a new report claims president trump tried to get the nation's top intelligence official to shut down the russia investigation. that official, director of national intelligence, dan coates testifies in front of congress today. nbc's tracie potts has more. >> reporter: this washington post report is fueling new questions for today's hearing. it claims president trump asked dan coates, the director of national intelligence, to lean on then fbi director james comey to back off the russia investigation. >> it's hard to avoid the conclusion that the president's decision to remove director comey was related to this
investigation. >> reporter: in a statement coates says he has never felt pressured by the president or anyone else in the administration to influence any intelligence matters orion going investigations. coates testifies today a lod lodge -- along with the fbi director, acting fbi director all facing questions about president trump. >> there could be other skeletons that come out that he's not aware of. that's one of the fears in the white house. >> reporter: this was andrew mccabe at his last hearing. >> i can't comment on any conversations the director may have had with the president. >> reporter: fired fbi director james comey testifies tomorrow. >> i wish him luck. >> reporter: he's expected to detail private conversations with mr. trump about russia. >> that will be fair game for questions, and i'm -- i suspect that director comey will give us direct answers. >> reporter: this week's hearings could reveal new information about whether conversations behind closed
doors crossed the line. the president heads to ohio today talking to obama care patients and focusing on building up the nation's infrastructure. tracie potts, nbc news, washington. and brittain's political parties are in their final day of campaigning ahead of what's likely to be a head-to-head showdown between theresa may's conservatives and jeremy corbyn's labor party. they're expected to reposition the vote. may promises a $23 billion brexit fund and corbyn says there's, quote, 24 hours to save the nhs. let's look at sterling. it has been hedging higher with a majority of the polls saying there will be an election victory. let's get out to charles goodheart, lse professor and former member of the bank of england's monetary policy committee.
thank you for joining us this morning. what do you think will happen tomorrow? >> i have no better idea than the polls, and they're very widely apart. it will be very interesting. >> why, exactly, do you think we've seen that tightening in the polls? some put it down to the lack of authenticity in theresa may's campaign or the bundled manif t manifes manifesto. others say it is because corbyn has done so incredibly well. what do you think it was? >> i would say in a sense neither of those. there's always been the tendency for the party that is training to recover a bit in the final days before the poll, it's sort of a natural phenomenon. and, of course, it's a story that all of the news vendors like to concentrate on so it gets a bit of momentum behind it. really i think there's only been one major error in the may campaign which was the dementia tax when she realized what a
stupid idea it was. i think she was very right to reverse courses and say we're not going to do such a silly thing. >> when we saw the polls tightening, and there was one poll that said she might even be losing her majority in the house of commons, we saw the pound suffer quite a bit going down below 1.28 level at some point. now it's obviously recovered quite a bit. would that really be so bad for the pound if we do see a hung parliament? some people told me over the last couple of days, in fact, with a hung parliament we'll see a softer brexit and that would mean the pound sterling would actually rise. where do you stand on this? >> i think that the initial response would be very negative. not so much because of the brexit outcome, which nobody really knows what that's going to entail, but because of the policies at a hung parliament led by a mixture of corbyn and nicholas sturgeon might produce. you got a look at the budget
proposals and their proposals for renationalization, et cetera. you realize that foreign investors would not be very happy with that outcome. >> is there a real pro business party now a days in the choice the u.k. voters make snom because obviously you wouldn't necessarily associate labor with being a pro business party, certainly not, especially if they're raising the corporate tax to 26%. on the other hand, the conservatives haven't really ruled out tax increases either. so we're not really sure what to expect from them. >> well, we've got to have tax increases whoever comes into power. the problem is there are too many people like me and we're going to need health, medicines, and that's very expensive, and we're going to need pensions. the ratio of old people like me to workers is it going to rise and inevitably whoever comes into power, taxes are going to have to rise over the next decade or two, and quite a lot.
and it's a mistake to believe otherwise. it's a mistake to believe that this can be done only by taxing the wealthy and corporates, both of whom who complete if necessary. >> when it comes to pure economics i've seen plenty of arguments saying that neither of the parties would be able to tackle one of the biggest problems that we've got in the u.k. economy, and that's the lack of productivity. why do you think it's so difficult to get a grasp on that? >> it's partly because labor is being so cheap and so easy to get hold of. when labor is cheap, you don't struggle and invest to get an extra output from your workers. i think in some ways the idea that real wages can only go up when productivity rises is actually in part factor front. if real wages rise, then they will investment and they will
try and get more out of their workers. so a higher wages might need to help productivity. relationship goes both ways. >> we're not seeing higher real wages. it seems we're looking at a very much protracted wage squeeze for the u.k. consumer going forward. how difficult will it be for the next government to tell the story of a strong economy, even if wages are higher. if wages are under pressure, the consumer will feel the pinch. >> indeed. i don't think we have a particularly strong economy now. we had a fairly sluggish economy in the first quarter and it looks like continuing into the second quarter. the brexit negotiations go as they may fairly early on, then we get uncertainty of business investment so the likelihood is
that the outcome for the economy varies between poor and really rather bad. >> i don't know if you saw but roughly half an hour ago i had dean dra julius on the show. do you agree with her? >> i think there had been occasions where it could have been times to hike rates. it was a mistake to go towards negative territory in august. but now is not the right time to think about raising rates. there's too many uncertainties. it's not only the general election, it's brexit and a whole series of things, and the economy at the moment having been quite strong last year is now entering into a period of weakness. >> well, when is the right time? would it only be in two years when we have the clarity on what the transitional deal looks like? can the boe sit on the sidelines for the next two years.
>> we sat on the sidelines for the last eight in the sense that interest rates are being held at zero. many members of the mpc have never entered in there. they voted to change rates. if you sat on the sidelines for eight years or so, another two isn't going to make that much difference. >> well, i don't know because this time around we do see inflation rising and its key mandate is keeping stability. if you have inflation at 2.2% -- >> that's entirely because of the exchange rate. the bank of england says this is temporary and we're going to look through it because the effect of the reduction in the exchange rate will wear off within a year or so and the underlying domestic, domest domestically caused inflation, essentially unit labor costs, is still very low. >> charles, we're going to have to leave it here. interesting discussion. thank you for your thoughts.
welcome back to the show. want to bring you the latest on the situation in iran where seven people have died in an attack at the iranian parliament. four people have been taken hostage. the attackers have struck iran's parliament and shrine of ayatollah khamenei according to state tv. now we're hearing from state tv that iran's intelligence ministry has said the twin attacks in iran were carried out by terrorist groups. one attacker blew himself up in the iranian parliament. once we do get more on this story we'll bring that to you.
in the meantime, staying in the region, the uae has reportedly banned expressions of sympathy against qatar. they face a punishment of up to 15 years jail. the kingdom is part of a group of gulf states that have severed ties with qatar. let's get out to hadley gallmbe. hadley, personally i thought this is something that was going to blow over quite quickly. now it seems to be escalating further. >> well, caroline between saudi arabia, the uae and egypt they show no signs of backing off. you mentioned the comments from the uae foreign minister about banning any kind of show of sympathy or support or even communion with qatar on social media. we've seen al-jazeera's website knocked offline basically here in the uae. they had their offices closed in
saudi arabia. so a lot of questions about what exactly is going to happen next. and we've seen, of course, the leader of kuwait offering to mediate over the weekend. let's take a listen to some of the comments we've heard over the last 24 hours. >> we want to see qatar implement the promises it made a few years back with regard to supporting extremist groups with regards to its hostile media and we have taken this step with great pain in order to make sure that qatar understands that these policies are not acceptable and not sustainable and that they must change. >> translator: trying to isolate qatar which currently carries out an efficient fight against terrorism will not continue to resolve any problems. >> i think there is note that his message of toughness on terror finance and extremism is being heeded by countries in the region. the u.s. still wants to see this issue de-escalated and resolved
immediately. >> you heard there was some supportive remarks from the president of tushlgy. iran has also tweeted about this as well. it's interesting to note that these are two players, particularly turkey with regards to the muslim brotherhood in support of that organization, that in the past qatar has found a lot of common ground with in terms of their foreign policy. that doesn't really help them at least in these arguments they're having with saudi arabia, with egypt, with bahrain and the uae as well. it seems as if qatar, carolyn, is the one that's going to lose the most as this continues. at the end of the day, yes, they have a lot of money in their sovereign wealth fund. all of that coming off of massive stores of lng and gas. they have a large population and the banks are going to start hurting if that 45% of deposits that comes from those expats starts to leave the country because they can't do business. carolyn? >> hadley, want to ask you about a potential role of russia here.
obviously we all read the reports that russia maybe placed some fake news that really brought this conflict to an escalation. i know we're quick to blame russia these days, but why exactly would russia be interested in destabilizing the region? >> it's a very good question. at the end of the day you have the gulf countries that in the last couple of weeks in particular seem to be growing closer once again to the united states, particularly with the visit of u.s. president donald trump. in terms of the situation in the middle east in particular with regards to russia, russia has really been trying to work on their foreign policy as well when it comes to relationship building with saudi and the uae. they're still on the other side when it comes to syria. when we're talking about efforts to destabilize, it really depends on what side of the table you're on. >> hadley, thank you so much for that roundup. meantime, gm ceo mary barra has the backing of the shareholders.
it rejected a stock split from green light capital. phil lebeau has more. >> shares of general motors moving slightly lower after the company's annual meeting, a meeting where gm shareholders overwhelmingly rejected two proposals from green light capital. most notable of those proposals was to split general motors stock into two dual stocks. one would in theory track the growth prospects for general motors. over 90% said, we don't want them. at the same time, investors also rejected all three candidates nominated by green light capi l capital. all of the current board members were re-elected. for mary parra it shows her p--
shows her plan is working. and before we wrap up the show, let's once again show you what u.s. futures are looking like at this point on the trading day. the s&p 500 seen down by less than 1/2 of a point. this is after wall street slipped again yesterday ahead of the very busy thursday that we're about to embark on. we have the comey testimony tomorrow, the ecb meeting and the election and the dow is down 1/4 of a percent and the s&p down by 1/3 of 1%. that's it for today's show. i'm carolyn roth. thank you for being with us. "worldwide exchange" is up next. have a great day. bye-bye. [vo] when it comes to investing, looking from a fresh perspective can make all the difference. it can provide what we call an unlock: a realization that often reveals a better path forward.
good morning. sentiment shift? stocks suffer their second straight day of losses as jitters settle in. we'll set you up for today's session straight ahead. the last push. less than 24 hours to go before british voters cast their ballots. if you believe the polls, the outcome is anything but certain. a live report from london coming up. plus, uber takes action. the ride sharing app fires 20 employees following complaints of sexual harassment. it's wednesday, june 7th, 2017, and "worldwide exchange" begins right now. ♪ ♪