tv Wall Street Journal Rpt. NBC June 18, 2012 12:30am-1:00am PDT
hi everybody, welcome to the "wall street journal report" i'm maria bartiromo. europe isn't the only global story. what do you tell retail investors about the e americaning markets? where will the next economic happen and where do you invest in it? from a bridle shower -- bri shower to bridal power. here is what is making news on a
knew week on wall street. on the hot seat this week, jamie dimon appearing before a senate committee answering questions about what went wrong after losing billions in bad trades in london. >> for the senior people, we can claw back for things like bad judgment, any unvested stock, cash bonuses, so it's pretty extensive. and dimon was asked if he would give his salary back, and said that was not his decision. the markets did a best imitation of the yo yo this week. mostly on hopes for a bailout for europe and more federal reserve easing in the united states. retail sales fell for the second straight month. demand for building materials was down as was the price of
gasoline. no huge developments from the apple developers conference, but the company did announce a new operating system to be introduced in the fall. a new 3-d mapping system for the iphones and mack computer. the stock fell on the news on monday. can europe's debt contagion be contained to greece or will it spread? what does it mean to america's economy is what we're trying to figure out. currently, our guest is a pfrs at the school of business at berkeley. let's talk about so many concerns this week of course the greek elections. that could determine the future of the injury row. we're starting to see signals that central banks may act if needed, more stimulus, what are you expecting from all of this? >> i think it's a moment of great uncertainty.
the contagion has already spread from greece to spread. it's spreading throughout the european banking system. the european banking system together is the largest in the world. so you have evidence of people pulling out deposits, private capital moving out of those financial institutions. concerns about the lack of deposit insurance. so this is really morphing into a full fledged financial market crisis in europe, and of course, that would leave the central banks, correctly, so say what can we do in the event of a crisis to make sure the system as adequate amounts of liquidity, and do what we can do bring back some certainty to this marketplace. >> what's the impact on the u.s.? after greece will. >> eddie: there are bigger concerns as you mentioned in italy, spain, larger economies there. those countries are facing higher bond yields. that is making it more expensive
for them to pay down their debt, and a sign of concern about the debt. are you expecting an impact on the u.s.? >> it has come through many channels. one channel is that the very dramatic slow down in europe into recession in many countries has led to a softening of commodity prices including oil and gas, and the u.s. is a net oil importer and there's an effect. another major effect is the running away of anything considered risky and running away from anything considered risky has been running into u.s. treasury debt. so we have interest rates on long term debt flirting at or at, depending on the hour you look, the lowest rates we have seen in 50 years. we have those two effects as basically positive, oddly enough, effects for the u.s. economy for growth. but we have europe, our second largest when you take it in it's
entirety in the trading market, and then of course you have all of the capital market uncertainties that are effecting u.s. financial institutions as well as their counter parties. >> what about the federal reserve. we have the softening economy here, putting europe aside. do you think the fed takes any new action? >> i think the fed, throughout this whole period, this extraordinary period, has been very, very clear that it's looking at two pieces of evidence. the unemployment rate and inflation, and inflationary expectations. and it's trying to decide what it should do. i think with evidence of the softening of the labor market growth, it's not that the labor market turned negative, but it's becoming softer in terms of slower growth, and with new evidence that expectations are well under control with the new downward pressure coming from oil, commodity prices, it gives room for the fed to move. i think what they're saying is
we need a little more evidence. we need a little more evidence on what's really happening in the labor market. but also, behind the scenes, i would have expected the fed to be in a lip position with the ecb and the bank of england and other central banks preparing a crisis mitigation plan should there be a major financial crisis in europe. >> what about the fiscal bliss here. what are you thinking in terms of the tax cuts and spending programs going away at year end? do you think we will have any agreement on this? >> i think it will be interesting for those in power during that period of time to look at the european experience. and to realize that we all have a debt crisis. if we go off a fiscal cliff it's because we jumped off the cliff. we don't need to put on to a modest recovery in the u.s. economy, in a negative global
environment. we don't need to take 3% to 5% points out of the gdp just because we have them slated to go into effect at the end of the year. you have to look at the circumstances. you have to look at the word economy, the u.s. economy, and at the ability of the u.s. government to finance itself. you have to look at the capital, and say we don't have to go off that cliff. the europeans have kicked the can down the road until they kick it to a wall, and it will come back and hit them in the face. the u.s. has room, plenty of room, to extend it's decision making and say our problem is a ten year problem, a 20 year problem.
if we do anything dramatic in austerity between november of 2012 and february of 2013 the risk of recession, and we have been warned by the cbo, is very high. >> that means extend everything, the tax cuts, the programs, because we're too fragile right now. >> however the politics of the package work, we need to pay attention to the fact that we do not want to take 3 to 5% of gdp out. >> it's a positive that oil prices have gone down. >> oil prices and interest rates. those two are positives. american consumers and households have been suffering from relatively low income growth, still high levels of unemployment. what they have seen as a result of the decline in gasoline prices up to this point is probably around $500 additional income this year. that's so far. and oil prices look to be headed
down further. >> good to have you on the program, thank you so much. laura psison joini laura tyson joining us. a global search for economic miracles coming up and how much it will cost you to visit. and the most expensive event for young couples. the times are changing. as we take a break, look at how the stock market ended this week. we'll be back in a minute. [ woman ] for the london olympic games, our town had a "brilliant" idea.
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who will take their place? my next test is an investor traveling the world. ruchir sharma is joining us. we hear so much about russia, india, and china, tell us their importance in the coming years. >> a lot has been discussed about what this slow down means for the western world. what really this is doing to all these countries out there in terms of china, russia, bra gill, india. despite expectations they would be able to lift it and run as far as economic growth is concerned, we're seeing a slow down now come through in some of these countries. so the data out of china shows after 14 years of growing at 8%
or more, there is a risk the chinese government will be dipping blow that. anything less than eight seems like a hard landing as far as china is concerned. and the same story for russia, india, and brazil. russia will struggle to get to 4% this year. and india is coming off eight or nine to six or seven. but some new will emerge as the leadership of tomorrow. >> i want to ask you where the leadership will be, but when you see china slowing down from 11% to 7%, that's a big number. >> yes. everyone still expects it to grow at the same past as it has for the last decade or so. but now it's per capita income
is more than $6,000. at those levels, some of the most successful economies in economic history, japan, korea, and taiwan slowed down. so i think china in the next few years will be 6% or 7%. that is a slightly positive message for the u.s. as well. as china slows down, a lot of commodity prices, like oil, are like likely to fall. and the u.s. will return to be the largest contributor of global growth. it is more than twice the size of the chinese economy. >> that makes a lot of sense. so countries with this trillion dollar economy, you said turkey and indonesia are heading to that milestone. >> there are only a few with the size of a trillion dollars.
the next i think to join will be turkey and indonesia. there is a lot of cynicism in the west the way the economies can work. i this turkey and indonesia are sending a powerful signal to the arab world and here in the west that if you get the economics right you can be successful. and that's what's going on news this two countries. >> someone came back from china recently, and they came back from the beijing auto show, and the show everybody is buzzing about is the new suv. you talk about a $24 cocktail in brazil. what are the prices of these luxuries tell you about the local areas. >> which places are doing business and which are not. which are cheap and which are
expensive. today i find among the cheapest currencies is the u.s. dollar. some of the others are very expensive. if you get to stay at the four seasons hotel or the equivalent, in many of these countries, and the prices of the room rates tell you about which places are cheap and which is expensive. >> if you look around the word, a room with a king size bed is different in some places than it would be in se new york. >> it is still somewhat better. so russia and brazil are really expensive, and when you go to new york hotels, many of them are portuguese speaking because they come here for gbargains to
take back home. >> there will be winners and losers. and we need to pick which ones those will be, and not just form a fantasy that you stick an emerging market flag up on any country and it will fly. it's about figuring out which ever break out nations, which will beat the expectations, this is 40% of the global economy now. good to have you on the program, thank you so much. ruchir sharma joining us. thank you. coming up, whose wedding is it mom? hmm?
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today's bride and groom want everything personalized, tailor made. >> the bride would rather lose her sense of smell than give away a computer or smart phone. >> we have come up with your wedding, your style, a tool there to create bouquets, reception pieces, and the designer really brings it to life. >> the market, wedding, honey moons, it is 20 or 30 -- we have had millions come get married. saying ie do is a $45
billion business. so what makes brides and grooms say i'll buy? what's new these days? the average cost of a wedding $27,000. tell me about brides and grooms and consumers, how are they shopping for the big day? >> it's all about personalization. they're getting married a little later. the average age for a bride is 27 or 28, and for a groom it's 29. there's lots of 25 and 26-year-old brides in new york city. they know themselves better, they're moving in together sooner. we know 81% of people live together before they get married. and many in that 59% decide to move in together before the promise of an engagement. so it's part of that conversation, and i think they're focussing on making their day and putting a personal stamp on it.
>> how does that fit into the trends with colors, venues, and themes. >> that is a early decision when it comes to planning the wedding. you see the church, and a synagogue, and places that are meaningful. it's a big trend to have a wedding at a place where you can have the ceremony and reception. it's a cost cutting measure and it makes sense. we see people getting married on mountain tops where they had their first vacation. a beach, a family property, a historical property, and art gallery. it's what's meaningful to them. >> we just saw that sandals recreated a wedding experience for technology savvy brides. so social media and mobile purchasing, how has that changed things? >> the past year, you think about what happened with
pinterest. you can go through any page, make a virtual inspiration board, and share that with your planner, your mom, your bridesmaids and it's taking it to a new level. and this bride has never known the world without the internet. she's tweeting, using facebook, and the bride still does want to keep it private. pinterest is a place where she can share and her husband might not be on it, not everyone is on it, but they're using everything. >> speaking of facebook founder, mark zuckerberg got married, and but saw famous brides be trendsetters in the past. any trends because of mark's wife? >> i think everybody was really interested in her. think thought -- i think brides
in general are looking for inspiration from everyone where and every one. they want to know who designs the dress, i think a lot of people got introduced to someone they may not have known. >> great to have you on the program. thank you so much. up next, we'll talk a look at the news this upcoming week with an impact on your money. take me out to the ball game, when the boys of summer invited a girl like me into the next. [ male announcer ] olympic tennis players bob and mike bryan
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check out our website wjsr.com. and on twitter. the stories coming up, on monday leaders of the twenty largest economies meet in ex-koe for a summit, the g 20. and jamie dimon will return to capitol hill. on wednesday the federal reserve will wrap up a two day meeting. and we'll see if there is more stimulus coming. thursday the housing market when realtors report the number of existing homes sold in the month of may. and finally when i take the mound i mean business. i got called to the major laejs for the bombers, boomers broadway classic this week.
i was honored to don yankees pinstripes, and pitch five innings. even shot boomers scored eight runs during my long appearance, remember this, in sports, life, and even your money, it's all about how you play the game. what a thrill to me, thank you for the yankees for that. thank you for joining us, next week join me for the chef behind a new harlem renaissance. have a great week everybody, happy father's day, i'll see you next weekend. [ male announcer ] u.s. olympian gwen jorgensen is going for aluminum.
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