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tv   Worldwide Exchange  CNBC  December 18, 2013 4:00am-6:01am EST

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expectations for a rate hike to bring down soaring inflation. the world's biggest bitcoin exchange in china says it can't accept u.n. deposits any more since the pboc could stop its third party payment deals in a crackdown on the virtual currency. and a little holiday cheer for retailers. weak christmas sales prompt analyst downgrades to the likes of marks & spencer. >> announcer: you're watching "worldwide exchange," bringing you business news from around the globe. >> all right. we have the -- starting off show with the latest ifo business climate. it has risen in december. december ifo, 109.5 as expected at 109.5.
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current conditions, 111.6. expectations have come in at 107.4. so we've kind of met the expectations as far as the headline business expectation is concerned. euro/dollar, not a huge reaction on that. and we're still pretty much with this 137 handle, as well. 64, remember, the high for the year is 138.30 is where we stand. still another bit of data that's suggests all is okay as far as germany is concerned. leeann banbrex joins us now. jan, nice to see you. we have a dichotomy in europe particularly between the german and the french economy. euro/dollar doesn't seem to care an awful lot. >> at the moment, not. they're waiting for that big truck, the big elephant in the room, really. if you look at the german ifo index coming out. the uaw index is better.
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but this is really what the real economy is doing and the back stop that the german economy is in reasonably good back step. bear in mind retail pmi in germany has been good for half a year now. if you look at capacity utilization in the construction sector, that's looking pretty good. now it looks like the export story could come together again, as well. it could mean germany moves into a bit of a higher year even as germany holds it down a bit. >> there are some signs that the new coalition government might hurt the economy. they're going to reverse some of the harsh concerns. >> i think short-term there could be a positive in terms of more spending power at the bottom of the rung here. longer term, though, there are some concerns. we've looked at competitiveness in germany. there's quite an edge here. it isn't as simple as raising the minimum wage, taking most of that away. we think most of that will suffice even as they're chipping
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away at it. >> just looking at euro/dollar, how much of the relative -- the ecb cut rates a couple of meetings ago and it had a very temporary effect. how much of that is due to a lot of financial bringing money back into the eurozone because they're going to boost their capital base because of things like asset quality reviews? >> definitely a factor here. if you're taking into account the fomc decision today. we're heading towards year-end, so there is more volatility, a lot more issues on the liquidity side. do they want to taper in that kind of environment or list it over to next year. >> you mentioned the fed. ben bernanke is holding his last meeting as chairman of the fomc raising speculation as to whether they will reign in their bond buying program. >> most banks predict the federal reserve will taper in march, but there are some outliers.
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goldman sachs, for example, holds the consensus view saying the central bank will focus more on weakening inflation than the most recent jobs picture. the most hawkish prediction includes the federal bank. jpmorgan says the central bank will start laying the groundwork this week, but only in january. and cnbc's survey saw bring forward their taper timeline from april to february. chairman ben bernanke will give his final press conference as head of the central bank after the decision he hands over the helm to janet yellen on january the 31st. in the run up to today's meeting, fed president officials from across the country have given conflicting you videos on the taper timeline, raising doubts about the validity of forward guidance. >> the jobs report continues to show more jobs being created and
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a tick down in the unemployment rate will meet probably taper both up. >> our job, of course, is to do what is best for the real economy and have markets adjust around us. we've changed and impacted the markets because of our interventi interventions. and i understand full well their sensitivity, but they should also bear in mind this program cannot go on forever. >> people should delink these two choices. the decision on tapering is how fast are we adding accommodation? how much are we increasing our balance sheet? the decision on short-term interest rates is a tightening. people shouldn't conflate the two. >> and, of course, full coverage counting up to that decision. we have a special program start, 20:00 cet, that's 14:00 even gmt. ben bernanke's final press conference as chairman begins
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half an hour later. should they make an announcement today? >> well, the data was good enough in december to go and they didn't. that time i think they got a call from the white house given all the budget problems. the budget problem is solved, employment is looking better, but it's just that inflation is low. the fed does have to worry about inflation. the odds of going today or in january have increased substantially. >> is there any concern about them going today with lighter volumes? would that cause more of an issue for them? would that be a reason not to do it? >> i'm not sure if it would be the only factor. low readings there. in terms of the debt ceiling, there has been no deal yet. february 7 is still on the cards. that altogether could see them hesitate at least and wait out until next year. >> it just seems -- you know, it
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just seems another sort of three months of this seems like purgatory to me. >> well, it's the purgatory the fed put us in when they didn't move in october. it was hard to rationalize. at that time, the economy was strong enough, it is strong enough, it looks morrow bust coming out of a government shutdown in terms of data. but the fed has a lot of things to weigh in here at the same time. >> if they made a small reduction, you know, and then also lowered the threshold target and they only stopped buying government debt not mortgage-backed securities, how would we react to that? >> i think on the whole, if i just pick up one thing there, moving that threshold, i don't think that's a very good idea. if they start moving that threshold one too much times, it sends a signal to the government and that is not the signal they
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want to send. but if they do keep supporting the treasury market and all that, i think overall the impact could be muted here. it is on a longer term horizon, three to six months, it's very well priced in. >> yeah. so look, how is the dollar going to trade to? >> we think they won't go today. in which case, the market is again going to have a look at the ecb and the fed. it's ironic, but the ecb doesn't have too much options. whereas if the fed hesitates right now, that could result in euro strength short-term here. >> okay. all right, jan, thanks for that. ross westgate just had to step off set for a moment. you've now got a real anchorman at the helm. and there's news that a certain movie being released worldwide. but apparently the producers got a little drunk last night and dreamed up some stuff about a
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federal reserve. sounds like a nice bottle of scotch to me. anyway, tapering, i never understood that. nice, white trouser pants clearly the only choice we have here on -- what is this channel? vnc? vb -- anyway, whatever. what would ron burgundy ask ben bernanke? that's what we're asking here today. if you want to join us here on the conversation, e-mail us, worldwide@cnbc.com, tweet us @cnbcwex or direct to me @rosswestgate. jan, finally got a name. jan. is there any other currencies besides the dollar? >> well, very far away from here, ron. we have the australian and new zealand economies. we think we see some interesting opportunity into next year. looking at the australian dollar versus the new zealand dollar,
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we think it has gained a lot of ground. i wouldn't be surprised if it's moving closer towards the buck there. that's one for you, ron. and that's something to watch next year. the key element here is that the new zealand central bank is going to move quicker than the rba. >> okay. i've got no idea what you just said. do you get paid for this? >> yes, some people think even way too much, ron. >> okay. i've had enough. okay. that's -- okay. i've had enough. that's okay. okay. whatever your name is, yeah, thank you. thank you. >> welcome, ron. >> all right. more of that nonsense coming up a little bit later. jan is actually sticking around. we're going to talk about bitcoin. bitcoin backlash maybe on its way in china. the world's largest bit contain exchange says it has heard the central bank isn't letting third party platforms use the
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exchange. straight bitcoin transactions won't be affected. a very important impersonation of ron burgundy, by the way. it will make it on youtube, unfortunately. bitcoin, do i think the authorities are right to take a closer look at this? >> indeed, they are. the big problem with this is it's becoming a fairly substantial market. bitcoin is filling out a number of tests, i think. one of it is simply stability. if you look at the enormous volatility in here, that is a key issue for this authorities. authorities don't like it because they have less control over it. but they're looking at it and thinking what if bitcoin takes a bigger and bigger flight, it's very volatile. that's what they're looking at, this latest move from china to target the currency exchanges is a real blow for bitcoin. >> individual trading houses, etcetera, retailers denying the
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use of bitcoin, that's not necessarily a real big blow. but exchanges are quite vital in determining the value and exchanging these bitcoins. so targeting those does hurt. >> jan, good to see you today. thanks for joining us in in the fun, as well. so we're asking has china clamped down burst bitcoin's bubble? what does the price in the digital currency mean to investors? head to cnbc.com. follow us on twitter @cnbcworld. in a surprise moved, the central bank of india held benchmark rates steady. the rbi says prices are set to slide which should lower food inflation.
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stocks and government bonds rallied on the news. let's get more from mumbai. hi, exa. >> hi. like you mentioned, it has been quite a different surprise type of policy that fell from the rbi. most of the economists are going with the 25 basis points and the rate hike in terms of this policy because of the cpi as well as the wpi inflation readings that came out sometime back and which were completely surprising and on the upside. inflation is the key priority and that they will be -- on it and that they might only even move off markets if in case they think the inflation is not per the expectations. they did mention that it is going to be data driven going forward. so the next time, which is the 13th as well as the 14th of january, they will assess what the data looks like from cpi and
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wpi inflation and take a call on whether or not a rate hike is required or not. so for today, it was a bit of a relief rally that we saw. back to you. >> thanks for that. we'll have more on the rbi's decision to keep rates on hold after the break from julian calo from barclay's. at the same time, the indian government has command demanded concrete traffic barriers be removed. the consulate was arrested for allegedly underpaying her cleaner and kept in a cell with other detainees. her treatment has been called despicable and barbaric. all right. here we are. day of the fed. it has arrived.
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we're an hour and 15 minutes just about into the european trading day. you can see around about 8 to 1 advancers currently outpacing decliners on the stoxx europe 600. losses in the united states, as well. today we're up 25 points. so the up-and-down session continues here in europe. xetra dax, up around 0.6%. the cac 40 up 0.5%. the ftse mib up around 0.6%, as well. a couple of individual stocks, technip, not fikly a great week for all service providers out of france. it's been awarded a $400 million contract out of company. better news for investors windmaker. up 5.3% today. it received a 350 megawatt orders from the united states. it expects to deliver the turbine between 2014 and 2015.
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now, retailers were weak yesterday. we saw super market groups down at the end of the session yesterday. and marks & spencer turned to feel under pressure amid fears of welcome christmas sales. retailer taking a hit. debenhams slowed this season when it asked suppliers for a discount. this morning, hsbc cut its price on both marks & expenser and debenhams. bond rate, we're keeping our eye on bond rates because we have data coming out of the uk. 2.84% is the yield. yesterday we were up so we have come down on the session. and the currency markets, kind of as we were when we started the week. euro/dollar, 1 is.3767. dollar/yen, tracking below 103, we're still there at the moment.
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sterling, 1.63. but how have we fared in asia today? not a bad performance out of japan. with all the details, here is sixuan in singapore. >> thanks, ross. you're right. similar to yesterday's trading, most asian market gained grounds today. but gains and losses were modest ahead of the fed decision and the japanese market outperformed, ending at a one-week closing high thanks to futures buying. and exporters were boosted by a rise in the dollar/yen bear and there's speculation that prime minister shinzo abe may make a growth strategy announcement tomorrow. elsewhere, shares extended a seven-day losing streak with lingering liquidity concerns towards the year. elsewhere, south korea's kospi gained 0.5% today. but aud trail ya eased a bit ahead of the fed meeting. india's sensex still in auction by 1.1%.
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the rbi stood pat on those rates despite surging inflation. japanese automakers drilled higher today as car exports enjoyed the fastest -- in about a year and a half. on the whole, japan's exports rose for a nice month jumping over 18% all year. as for automakers, honda jumped over 3% today. nissan and suzuki motor both gained over 2%. that's a look out of asian markets. back to you, ross. >> thanks very much indeed for that, sixuan. coming on today's show, we'll review the action at 10:40 cet. is a college degree an essential asset on the path to success? yes or no? we'll discuss the merits or pit falls of higher education.
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and we'll discuss the long anticipated agreement at 10:20 cet. and it's almost impossible to forget, ben bernanke has his pen ultimate meeting as the federal reserve chair today. amid speculation we might just start seeing a taper. plenty coming up in the second half of the show. [ male announcer ] the new new york is open. open to innovation. open to ambition. open to bold ideas. that's why new york has a new plan -- dozens of tax free zones all across the state. move here, expand here, or start a new business here
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india's central bank wants to see what the fed does. joining us for the next half hour, julian callo, chief international economist at barclay's. julian, nice to see you. they have a farther fwiel economy and an inflation problem. do you think they will wait to see what pressure comes? >> yes. we saw that clearly during q2
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q3. whether or not the fed is going to announce tapering tonight or give some understand occasion of it coming fairly soon, it's going to be critical for the rupee and the strategy for the bank of india. i think at the same time the economy has, to me, shown some signs of picking up led by exports. and that's very encouraging. and i think it may be a little bit overlooked. but india has been printing some surprisingly good export data recently. in fact, in the third quarter, it's current account deficit was less than 1% of gdp. it was calculated about 0.6% gdp only on a seasonally adjusted basis. now, there might have been some special factors in the export data from india in the third quarter. but still, if you look at the latest data for october, for example, you can see the numbers are still quite strong. so i think there is some real evidence here that the combination of a much weaker currency along with actually a good exporting sector that has a long way to develop and grow, both in services but also i
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would highlight in manufactured goods is helping the balance of payments here. i think the economy is improving. you're right, you mentioned core inflation and inflation overall. that is actually base. i look to the core inflation of the cpi running at about 8.2% year on year i calculate with the latest data. so that is certainly on the strong side. and there must be, therefore, some chance that we will get some tightening at a later stage. but it's clear, as you said, that really the rbi wants to wait and see a little bit what's going on with the fed, like we all do. i think tonight. >> we certainly do, julian. stick around. we've got some uk data coming out. home prices in china continue to rise at a record annual pace, even. november prices in major cities jumped from maybe 10% a year earlier on average. on the month, prices rose at a slower pace than september and october. analysts expect new property
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taxes and more supply next year will calm down things a little bit. cash crunch worries have returned in china, bank lending rates are primed. the pboc has skipped out on injecting cash into the money markets for four straight sessions trying to wean them off cheap and excess credit. and china mobile has performed in hong kong today even as it rolled out its new 4g network service. analysts have been expecting a deal with apple to carry the iphone with china mobile's ceo made no mention of apple today at its developers conference. instead, they said they would be raising hands in subsidies and talks with mobile. the world's carrier hinted last week it was taking preorders for some apple hand sets. joining us is bertram lye.
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bertram, good to see you. is there any doubt that a deal won't be signed with apple? we just have to go through the negotiations? >> yeah, no. i think it's quite clear that apple has been preparing for iphone for quite some time. the iphone 5s has been approved to run on china mobile's network. i think it's only a matter of time. there's been many indications from the press advertising and in terms of taking orders for the apple iphone. so i think it's only a matter of time before china mobile carries the phone. >> when it does, is it going to be as big a deal as everybody sort of thinks it is or, you know, once it's got out and once you have sort of the hit, does it just then become a battle between marketing spin and brand? >> no, exactly. i think the apple iphone has been for sale in china for quite some time. the estimate for the numbers of
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iphones that run on china mobile's network currently range from 20 to 40 million. now, launching the iphone on china mobile together with 4g is really going to, i guess, limit, i fwes, the addressable market for sales through china mobile. now, we think 4g will move markets for expectations in 2014. we're going for about 47 million and we think that china mobile would get about 27 million subscribers on a 4g. but within that, the vast majority of those subscribers will be receiving low to mid end
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4g hand sets from china mobile. the iphone 5s has been widely discussed, is quite expensive for the average chinese subscriber. and we would think that you're looking in the order of something about 10 million additional iphones to be sold together with 4g next year. >> they've got to spend money, though, in rolling out 4g and they have to decide how much to subsidize the iphone with that, as well. so how much of a hit are they going to take before they get a return? >> look, i mean, i think it's quite well understood in the market that in the initial rollout phases for 4g in china, profits are going to take a hit. if this is done together with the iphone rollout, we could be looking at, you know, an order of, say, 10% further downside for earnings. now, china mobile currently makes about 130 billion in net
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profit a year. they spend about 27 billion this year on subsidies. so this year, they subsidized about 150 million smartphones. just today, the chairman has said that they will subsidy died 220 million phones next year. so that is an increase of about 50%. so you're looking in the order of, say, about 5% to 10% in additional subsidies for next year. i think the key here, as well, is that we're not really looking at, say, increased revenue at least in the initial phases. so this is really going to hit profits. and we are expecting a full currently of about low single digits in profitability for next year. add on top of that the iphone and additional subsidies, we could be looking at, say, in the order of about a 10% down said for next year. >> okay. thanks for that, bertram. nice to speak to you today.
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>> thank you. now, we're going to -- in about 20 minutes, get the latest minutes out from the bank of england. two weeks ago, they didn't do anything, they didn't change their quantitative easing program or talk about rates. there was no statement. so we'll see just how dovish or hawkish mind-set, though, they might be with these minutes. and we've got the labor market figures, as well. could we feel another fall in the unemployment rate and may, therefore, bring forward expectations when we might move auto on rates. the boe minutes voting 9-0 for rate action, 9-0 to leave asset purchases unchange. all agreed the forward guidance remained in place. a further rise in sterling they say would pose risk to recovery. the uk experiencing burgeoning recovery. the economy growing 0.9% quarter on quarter in the fourth quarter. inflation could fall to target by early 2014. the recovery has been driven by consumers and stock building.
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sustained recovery will need investment growth. further consumption growth will require pick up in incomes. sometimes the consumption is softening and surveys suggest investment tensions are picking up. rebalancing while external demand remains fairly subdued. those are the minutes. and i'll see if i can pull out where we are with the employment figures, as well. here we go. jobless claimsants, this is the number two unemployment, down 36,000, 3.8% of the workforce. we were forecasting it the full 36,500. the claimant rate was forecast at 3.8%, as well. the total unemployment, three months of october fell by 99,000. the unemployment rate, as a result, has the lowest since april 2009 has come in at 7.4%. 7.4%. it was forecast at 7.6%.
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so that is something of a -- a surprise to do downside. and, again, we might see gilt off a little bit. sterling, you would think, would rally slightly. indeed, it has. we're below 1.63 before this data came out. julian is still with us, helia is joining me on set. julian, are you going to change your forecast for when the bank changes its mind? >> i couldn't possibly say that without going first to our production process, ross. but what we can observe is that this is suddenly a very clear fall in the unemployment rate, down to 7.4%. as you noted, at the same time, i guess the average earnings numbers were still very subdued there, probably around 1% or so. and that's very important because inflation pressures in the uk have been moderating and the relative firm of sterling is a factor helping that as is the
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subdued claim of commodity prices right now. if we look at yesterday's inflation data from the uk, they were quite subdued, particularly if you strip out the food and energy and other special factors like educational fees, it's running just over 1.5%, that kind of core rate for the uk i would calculate. so we actually see the uk and something of a sweet spot, which as you know is quite a rare experience for the uk economy where we actually have low rates for inflation and we do have this economy as exhibited by that latest employment and unemployment data that you mentioned. now, from the bank of england perspective, what is really vital is to understand that the 7% unemployment rate is a threshold, not a trigger. that means it is a necessary but not sufficient condition for the bank of england to start to consider rate increases. but at the same time, the bank of england i think made it fairly cleveland at its november inflation report press conference that it will, of course, be focusing on inflation
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to determine whether or not it's going to be raising interest rates. solo it looks like we are making this good progress in terms of reducing the unemployment rate on an ongoing basis still in the uk, the most important thing is, really, the inflation risk profile. and that's where sterling comes into play. you mentioned from the minutes that the fact that sterling rise from here could actually dampen the economy. and it would seem to me, do be honest with you, that the uk is heading for some kind of monetary tightening. but the question is really one of whether that comes more through the exchange rate channel or through the interest rate channel. and even then, i think it's still going to away long way off because at the end of the day, we are dealing with subdued inflation readings. and let's face it, the uk had a bit of a scare. it took a very long time to get out of recession here. so i think the bank of england is going to very much err on the cautious side. >> i presume the politicians
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would appreciate a strong sterling at this junction, having miserably failed to rebalance the economy towards exports. the cost of living crisis is now the political debate. >> it is, it is. and although inflation figures were down yesterday, we have it in the december figures we're going to get those utility price hikes. so we're going to see that probably bounce up, but today, much better than expected unemployment figures. >> all right. stick around. we'll continue the discussion in just a few moments, take a break and recap those data for you, as well. we'll be back in just a few moments.
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the headlines from around the globe, watching and waiting. few investors think the fed will announce a move today to announce its bond buying tapering program. but it's not completely ruled out. the bank of england says there are signs of consumption in the uk softening, but unemployment figures surprised on the upside. and the economy is in a festive mood. that's the assessment of the ifo institute. the latest survey in germany
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shows expect actions coming in higher than expected. meanwhile, the big news out of the uk a short while ago, the unemployment rate has ticked down more than we might have thought. there was a big fall in unemployment by 99,000. some people thought that was by around 40,000 which caused that unemployment rate to drop. and countdown, 36,000 and the boe said we'll see, you know, what happens with growth, but they are surprised by the lack of productivity growth. still with us, julian calo and helia. on this last point, helia, would you have been focused a lot on activity and the conundrum. what do you make of the numbers there? >> i think that's the big question b now for the bank of england. are we going to return to levels
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of productivity that we saw before the crisis? yesterday the house of lords saying there is no reason why the uk economy shouldn't reach the levels of productivity and growth that we saw precrisis. but so far, there's no evidence of that and as we're seeing today, that productivity is still a drag. and that's why the bank of england is saying, even if we get to that 7% threshold, it's a staging post because there's still slack in the economy. we still have to give it some -- in order to support it because we are not at levels we saw before the crisis. so yes, today's unemployment figure will focus everyone's minds on a rate hike. that will probably come earlier. but i think at the forefront of the mpc's mind, at the forefront of the bank of england's mind is the fact that if we're not at precrisis levels in terms of output, in terms of growth, in terms of productivity, then the economy still needs some support. >> how much more support,
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julian? i think yesterday we were said to be still 2.5% smaller economy than we were before the crisis. >> yes. well, that's right. to be honest on this productivity story, i'd just like to make the following observation. i mean, there is a lot of focus on the gdp data here. and assuming that the gdp data is being very reliably recorded. on the employment side, we have many different indications. we have the intention survey, so many of these, the bcc, the cbi, the market, the bank of england agents. and those are universally at very high levels right now. you also have two different measures of employment, both of which are pointing to, i would argue, a quite significant employment growth in the uk economy. and then you have so ask yourself, really, with all this hiring and this intention to hire, and this jobs growth that we're seeing in the uk, it's a private sector, really, so stupid? i mean, it's just hiring people, even though it's actually
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resulting in worse productivity here. maybe it's actually the gdp numbers that we need to focus on a bit more and question, really, whether those are giving us a very accurate read. so i think there is another side to this issue and perhaps actually the gdp numbers, in reality, when they finally get revised in ten years time, will find that it was quite a good recovery coming, soon. burgeoning was the word you used earlier, ross. that probably well sums it up here. >> on the surprising productivity, julian, were you talking about? >> yeah, yeah. >> yeah. that's bank of england. that was their phrase, burgeoning. >> burgeoning you said, yes. >> burgeoning, that was me. that was me. >> i thought it didn't sound like like the bank of england. >> that was one of my things, yeah. helia. >> we've seen the minutes from the bank of england.
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they're about to announce the result of that bank consultation, remember, that we're talking about. you can chuck them in a cup of coffee. is this -- >> 20 bucks. >> but remember all that controversy, is jane austin going to be on the ten, or will people lose confidence? we're expecting that out in the next couple of minutes. >> you can sort of write on them, sort of. >> let's have a look. what did you write? oh, cute, thanks. >> i was just trying to see whether the pen went on it.
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i'm not sure where that leaves us. anyway, thank you very much, indeed, for that. julian, i was just trying to check whether -- i did make up the word burgeoning or whether they did say it in the minutes. i can't see it. >> it's a good word. i like it. it sums it up nicely, i think. >> i couldn't think of a more exciting job. right. we have some other news coming out regarding the dissle bloom. they say they are ready to put the final building blocks of a banking union in place. i wonder whether they'll satisfy mr. draghi who indicated we don't want a complex solution, because complex solution is what we appear to be building. and the swedish prime minister says we look to be somewhat off a complex banking union.
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julian, we have a single resolution fund seems to be what we're building which is what mr. draghi alluded to that he didn't want. what are we going to get, do you think, that works? >> we have the council meeting at the end of this week and we would expect this agreement on this. once again, it's the same old argument that we are familiar with. it's the degree to which the companies are willing to burden share to the debt and responsibilities. the expression that rome wasn't built in a day very much comes to mind. things are complicated. different countries have very different interests, very different liabilities and assets here. at the same time, if you look at the latest eba reports, which according to our analysts, they
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released a spreadsheet of about 133,000 rows of data in it. but apparently if you look at the headline numbers, there certainly was some very significant improvement in the capital, the core capital building by eurozone banks that is materializinged in the last few years. and the very significant reduction in balance sheets. so banks have been moving in the right direction. solo perfectly, yes, we would want the countries to be sharing burdens, it would make the whole single resolution mechanism much more effective and it would give everybody a much better feeling of confidence towards europe as we go into 2014. at the same time, i think that politics really are well aligned with that. and the politics, of course, are going to be very interesting next year in 2014 because you have these european elections, the parliamentary elections coming through in may. what's important is that you get an agreement on the srm by the eu council by the heads of
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government which can be approved by the european parliament before it brakes up and advances those may 2014 elections. so i think we're heading in the right direction and this is probably the best that really we can hope for. because germany is always very conscious of not really providing such an umbrella here that it's overburdening itself with future european commitments. >> we'll have to see what happens. actually, i can now draw a line under burgeoning. i just found it. it was in the minutes. i knew it was too good to be true that i came up with it. julian, thanks very much for joining us from barclay's. switching our attention to japan, the trade deficit widens for the 17th straight month. kitadai has more for us from tokyo. kitadai-san. >> hi, ross. exports were up 80% year on year
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driven by car shipments to the u.s. and china, imports increased at a faster pace. resulting in a widening trade gap. imported fossil fuel has been constantly rising making up for energy loss since the nuclear shutdown following the 2011 fukushima disaster. a rush to buy ahead of sales tax hike next april boosted imports. analysts predict japan's trade deficit will continue unless nuclear reactors are restarted and global recovery accelerates. demand in china is not expected to pick up anytime soon as the economy is heading for a stable slowdown. that means japan will have to rely more on domestic for growth. the question is how. prime minister shinzo abe may have some answers. the nikkei 225 rose 2%, partly on speculation that abe may announce a new growth strategy in a year-end speech he's scheduled to give on thursday.
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expectations the bank of japan will keep monetary policy steady at a meeting on friday encouraged investers to buy. back to you, ross. >> thanks for that. still to come, iran's oil exports are lifted following a long awaited deal with the country's nuclear program. we'll digest market reaction next. [ male announcer ] this store knows how to handle a saturday crowd.
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iranian oil ex sports received a major boost this month following a long awaited fwraemt to scale back the nation's nuclear program. the preliminary deal relaxes a number of trading sanctions, but doesn't allow the company to create oil sales above 1 million barrels a day. >> i hope after sanctions we will produce fourth. after lifting sanctions immediately, we can -- yes, we can do. >> 2014? >> after lifting the sanctions. >> sir, that's the middle of 2014. you're hoping to produce -- >> yes, we can technically.
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>> for more, we're joined by the ceo at question trutilium. is that stretching it a bit to say we can produce 4 million barrels a day by tend of 2014? >> what that would suggest is 1100 million barrels a day. which they've been gearing up for in iran. what's interesting, looking over the last couple of years, is how stable oil prices have been, given the economic turmoil in the west and the political turmoil in the region. so in 2011, the average price was $111. in 2012, we lost 1 million barrels of exports because of sanctions and the u.s. increased by a million. and this year, libya will remain a drop-off, again, about a million barrels per day and,
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again, the u.s. increase was about that. >> opec output is lowest for two or three years. and for the rest of global output is -- nonopec is up near an all-time high, isn't it? >> opec meeting earlier this month, there was a lot of posturing and iran claiming it's increase by a million each, but actually they kept the cap at 30 million which is about a third of the global supply. and nonopec oil, u.s. and canada, but also brazil and kazakhstan are projected to increase in the next two years by about 4 million, which is more than the last 12 years. the u.s. alone in the last few years has increased by more than iran's total production. >> how is the u.s. in particular changing the nature of the global market? particularly, as well, when oil is priced in dollars.
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and i actually wonder whether we might see change in the inverse relationship between dollar and oil and you might get a point where you could get the dollar and oil going up together. >> i mean, the revolution, particularly for the nonconventional shale oil and gas in the u.s. has been a game changer for world energy markets. i mean, i remember 15 years ago, i was working shell here in london and oil had recently been $9 a barrel. it would you was an old industry. my friends were all an internet -- and people thought this was a dying industry. now it's a high tech industry. the whole peak oil theory seems to have gone out the window and people are adding new reserves and production and we've had stable oil prices again, end of this year, around $110 a barrel. >> do you think it's more likely or less likely? >> of course, it's hard to forecast. but there's a lot of focus, i think too much focus on the supply where there's bigger
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drivers of the demand. and it's not the demand in the oed. it's demand in india pup mentioned some globals on the economy there. that's very important. china and the middle east itself is now actually one of the fastest growing markets by the end of the next decade, middle east demand will be 10 million barrels a day, which is equivalent to china with a much smaller population and economy. and likewise, on the u.s. side, yes, there's been an increase in supply, but reduction of demand both because of efficiency standards and also gas because it's so cheap at the moment, $20 a barrel equivalent is replacing oil and all but passenger vehicle uses forestry, even for heavy transport. so the reduction in u.s. demand is also an important driver. >> yeah, we'll see what happens. good to talk to you. hopefully see you in the new year. >> see you again. >> thank you. now, what's on the agenda in
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asia pacific tomorrow? we'll tell you. we have third quarter gdp numbers out of new zealand. in gentleman pap, shinzo abe may outline his intention wes, the boj meeting begins. >> australia, cover more debut. still to come, is bernanke going to spring a taper surprise or yellen adopt a more dovish tone? how should investors position themselves? we'll talk all things fed. the second hour of "worldwide exchange" approaching and more of that real anchorman, ross burgundy. stay classy, world.
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this is "worldwide exchange." i'm ross westgate. the headlines from around the globe, watching and waiting. few investors think the fed are going to move today on taper and bond buying program, but you can't completely rule it out. the bank of england warns a surprising lack of productivity growth, but unemployment figures surprise to the upside again. the economy is in a festive mood. that is the assessment of the ifo institute. this is in the latest survey of business sentiment out of germany.
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expectations are improving. and india's central bank defies its expectations for a rate hike. it's to bring down soaring inflation, it has stayed pat. >> announcer: you're watching "worldwide exchange." bringing you business news from around the globe. and a very warm welcome if you've just joined us stateside. welcome to the start of your global trading day. the fed wraps its up two-day meeting today with a decision expected at 2:00 p.m. eastern along with economic projections by ufmc members. it's followed by ben bernanke's final news conference awell as fed chairman at 2:30. most believe the fed will wait until early next year to taper its bond buying program given the low inflation, previous numbers by the economies as it
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recovered from the session. i would call this a 50/50 call on whether the fed goes or not. economists ready for it? are markets ready for it? yes and no is the answer. we don't really know. and that's what makes it such an exciting decision a little bit later if you're into that sort of thing. the dow at the moment is some 50 points above fair value. nasdaq is around about 5 points above s&p at the moment. after being down five points. european equity markets are firmer today. the ftse was down 36 yesterday, currently up 19, a third of a point higher. the xetra dax and the cac 40 up 0.75%. the cac 40 up 0.5%. ftse mib up 0.75%. the unemployment rate in the uk dipping down to 7.4%. or was it 7.6%? so closer to the bank of england's 7% threshold in a couple of easy bounces. we had the biggest fall in
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unemployment, total unemployment, 99,000 that we've had since 2000. so the biggest fall in unemployment for 13 years. ten-year treasury yields at the moment, 2.84% is the yield on the ten-year. so lower than where we were this time yesterday. take a look at the currency markets. as you were, really, same sort of cross rates that we've seen all week. eu euro/dollar, around 1.375 at the moment. sterling did get a boost from that unemployment data, up to 1.6350. we were just below 1.63 prethe numbers. that's where we stand right now in europe. let's recap how asia is performing today ahead of the cap. sixuan has the details for us outs of sixuan. >> thank you, ross. gains and losses were modest in asia ahead of the fed decision. but japan's nikkei 225 outperformed ending at a one-week closing high thanks to futures buying. exporters were boosted by a rise in the dollar/yen pair. japanese automakers drove higher
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thanks to strong export numbers in light of the weaker yen and the recovery in global demand. but china shares extended a seven-day losing streak with lingering liquidity concerns towards the year-end. the shanghai composite ended lower by a modest 1.3%. austral australia's asx 200 eased a bit ahead of the fed decision and india's sensex just ending higher by 1.3% after the rbi's surprise despite surging inflation. in terms of sectors, we've been watching chinese property shares. we know that home prices in some chinese cities fell a record 9.9% growth from a year ago. but on a month by month basis, the price continued to moderate, suggesting the curve may be gradually taking effect. we got a mixed showing for property developers in today's trade. back to you, ross. >> thanks for that, sixuan.
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have a good evening in sick pore. and joining us now is -- well, we'll get to mr. karr in just a few moments. but first, ben bernanke is holding hits penultimate meeting with the federal reserve today amid increasing speculation over whether it will tighten its bond buying plan. >> most banks predict the federal reserve will taper in march, but there are some outliers. goldman sax, for example, holds the consensus view, saying the central bank will focus more on inflation than the improving jobs picture. jpmorgan says it will lay the groundwork, but only act in january. chairman ben bernanke will give his final press conference as
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head of the central bank after the decision. he hands over the helm to janet yellen on january 31st. fed officials across the country have given conflicting views on the tapering timeline raising more doubts about the validity of forward guidance. >> a tick down in the unemployment rate is going to mean probably tapering is left out. >> our job is to do what's best for the real economy and have markets adjust around us. we've changed and impacted the markets because of our interventions. and i understand full well their sensitivity, but they should bear in mind this program cannot go on forever. people should delink these two choices. the decision on tapering is how fast are we adding accommodation? how much are we increasing our
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balance sheet? the decision in the short on term interest rates is a tightening. people shouldn't conflate the two. >> and stay tuned to cnbc for full coverage of the decision@. ross carnell is with us, chief economist at ing. r ross, what would you like them to do? >> i'd like them to get on with it, frankly. we've been talking about this not just since may, but people like richard fisher have been calling for this all year and with a reasonable degree of point. the economy is markedly worse, isn't markedly better than a year or so ago. and the inflation argument is an incredibly weak one for not ending the taper now. >> what's the strongest argument
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for not tapering? >> the strongest argument. well, there is not really a particularly strong argument for not changing. the inflation argument is used sometimes. if you look hard enough at the inflation data, you can find evidence of things begin to go pick up on an inflation front. you shouldn't really be leaving it alone. it's more things like why don't we leave it for janet to do, it is going to be her policy. >> a press conference in january or not? >> it would be more helpful if there was a press conference. >> they could schedule a teleconferen teleconference, but they would communicate a lot when they decide to do it. >> the impact of forward guidance, isn't it failing? whatever they do tonight, and he was saying earlier it's a 50/50 call. well, with all this emphasis on forward guidance, shouldn't we know? we have a lot of conflicting stuff, all of it linking the economic variables that's been put in place.
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>> which is an argument for making an announcement tonight and saying we're starting the program, it's very small, this is where we're going. and we'll start and do like 5 million. >> why not kick it off with -- and what we find out when this happens is when the skies have not fallen and then we can get on with it. taper isn't tightening and blah, blah, blah, and the assets markets must have already -- what have you been doing if you don't realize the taper is coming if not tonight, soon? so the financial markets ought to be pretty much on board with this. >> one would hope so. from a personally pure point of view, i would like to start next year with a slightly different discussion. >> would he have been talking about this for a bit too long, i think. >> i have. >> i'm going to do something
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now. go to camera two. i have to change character here. i put it the wrong way around. there we go. all right. okay, viewers, get the right pose. viewers, ross westgate just stepped off set for a moment. you've got a real anchorman now at the helm. the main business story, there's a certain movie being released worldwide, but apparently the producers got a little drunk last night and dreamed smup stuff about a federal reserve, whatever that is, a federal reserve, sounds like a nice bottle of scotch to me. also tapering. i never understood that. a nice white trouser pant is clearly the only choice. so here on cb -- cn -- what is it -- what is the channel again? cnb -- well, that's a stupid name for a start. anyway, we want to know what would ron burgundy ask this ben
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bernanke fellow, whoever he is? join the conversation here on skang at worldwide. get in touch with us with writing a letter to this address, worldwide@cnbc.com or you can do something called twit, twit us @cnbcwex or direct to the other fellow, whatever his name is. rob, can i talk to you about sports? >> you can try. >> football. this is a business channel? you only do business? that's a dumb idea. that's the dumbest idea i've ever heard. that's like -- that's like having a channel just for music, right, or a channel just for sports. that's never going to take off. >> never in a million years. >> right? really dumb.
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so where are you going for christmas? >> subs. >> good. that's a foreign place, right? >> that's in europe. >> this fellow, bernanke, right? he's leaving, i understand. >> that is correct. >> do you like him? >> he's a perfectly good chap, yes. >> was he all right? with his job? >> he's done okay with the hand he was dealt. >> the does he like cards? >> i don't know. >> i'd like him more if he likes cards. >> i don't know whether he likes cards or not. >> all right. this is enough of this nonsense. this is a dumb channel, all business and economics and whatever it is you guys do. i have no idea what it is you guys do. but that's never going to work. thank you, mr. -- mr. -- whatever your name is. all right. enough of that nonsense. yes, ron burgundy is launching today, apparently.
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the producers thought they would stitch me up. although i think i'd rather stitch myself up. now, it will never take off, a channel devoted to business will never work. india's central bank wants to wait and see what the does. the rbi says prices are set to slide. we should low food inflation. the policymakers warn they'll keep a close eye on prices and could act between meetings if necessary. stocks and government bonds rallied on the news. joining us from mumbai, topeka. thanks very much indeed for joining us. sorry, gopika. i hope you can hear me. run us through what was behind this decision of the rbi to hold steady.
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>> well, that's right, the reserve bank surprised the market by keeping policy rates unchanged. this despite the fact that they reached concerns on the exchange rates, both domestic and retail are running too high. the royal bank says they need to look at more data before they take a final call on hiking rates. they believe there's a lot of uncertainty around the short-term inflation levels and, therefore, it's best not to hike rates looking at the -- in inflation. the reason why it wasn't giving them this kind of confidence is that the initial data showing the prices, which is the driver of inflation is showing decline. and also, they're expecting the earlier around -- to have an impact on inflation. all this sort of adding to the reserve bank's conclusion that they will -- around round of data.
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but analysts are clearly not ruling out a higher dose of rate hike in the coming -- in the next policy which is due in january. but markets rallied on equity, bond, rupee markets rallied after the reserve bank's no action policy was announced. . >> gopika, thanks very much indeed for that. the indian government has also demanded that concrete traffic barriers around the u.s. embassy in new delhi be removed. this is in retaliation to the arrest and treatment of an indian diplomate in new york. for allegedly underpaying her cleaner and kept in a cell with other detainees. india's national security advisers called her treatment despicable and barbaric. can eu leaders unwrap the gift of banking union before christmas? stay tuned as we discuss the slow but steady progress. see you in a few moments.
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could the fed surprise as it wraps up its two-day meeting? the reserve bank of india surprises as it keeps rates on hold despite rampant inflation. and minutes from the bank of england reveal concern over productivity growth. unemployment data offering a much brighter outlook.
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eurozone finance ministers have reportedly reached an agreement on how to wind down failing banks, one of the last phases in agreeing an overall banking union. the government would be allowed to access the ism if there wasn't enough money in the single resolution fund or it couldn't raise enough money. the president of the euro group and the dutch minister said we were putting the final building blocks in place. the speedish prime minister said this looks to be somewhat of a complex banking union. either has doubts about the backside and it won't give enough confidence boost. we heard earlier this week mario draghi coming out and saying he didn't want a complex single resolution fund and effectively what he fears is we have a single resolution mechanism that is single resolution in name only bearing in mind what is planned at the moment. is it -- we have a series of
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national funds, which when you add them all up together becomes a single resolution fund. it's complex, it's a pickle. still, it's the eurozone. >> and, therefore, it is complex and a pickle and would we expect anything else? we've got a conclusion or at least a resolution to do something. as you said, the amounts involved, 55 billion, wasn't it? the backstop, which sounds tiny when you compare the amounts of money that, for example, the uk used when it bailed out its own banking system wouldn't hold a candle to what was necessary. >> and the swedish prime minister is right to say it won't give anything a confidence boost. >> he's generally a smart cookie. if he says it, i'm inclined to believe it. >> the world's biggest bitcoin
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exchange says it now can't accept u.n. deposits. that's because it's heard the central bank isn't letting third party platforms use the exchange. btc china says straight bitcoin transactions won't be affected. has china's clamp down burst bitcoin's bubble? what does the clampdown mean to investors? head to cnbc.com. follow us on twitter @cnbcworld. still cocome through yao the show, more of that real anchorman, ross burgundy. if you're lucky. stay classy, world. hi honey, did you get the toaster cozy? yep. got all the cozies. [ grandma ] with new fedex one rate, i could fill a box and ship it for one flat rate. so i knit until it was full. you'd be crazy not to. is that nana? [ male announcer ] fedex one rate. simple, flat rate shipping with the reliability of fedex. [ male announcer ] how could switchgrass in argentina, change engineering in dubai,
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experience the gift of true artistry and some of the best offers of the year at the lexus december to remember sales event. this is the pursuit of perfection. eks planning to open at the moment, slightly higher. the s&p 500 called up around 6 points above fair value. it was down 5 points yesterday. the doe currently up 58 points. it was down 9 on the session on tuesday. and the nasdaq currently called up 10 points. amc entertainment is bringing movies back to wall street. the movie theater chain, now joined own by china's wander group, priced its ipo at $18 ul.
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movie fans flock to amc theaters and the latest movies, but will they want to buy a piece of the company? that's what we'll find out when the ticker amc start trading wednesday morning. amc does have some advantages. it's getting its movie goers to pay more with the highest average ticket price and highest concession sales of the major chains and it has more imax theaters than its two major competitors. it's the most leverage of those three companies. it has the lowest return on invested capital. but now amc is investing to make its theaters more appealing with reclining seats, leg rests, dine in food services and bar and lounges. amc is hoping its customers will invest in its future.
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it's inviting the 2.5 million members of its programs to buy as little as $100 worth of shares or as much as $2,500 worth of shares seed free through a start-up that gives individuals access to ipos. this could be a savvy program for amc. back over to you. >> all right, julia boorstin with that report. still to come on the show, will bernanke spring a taper surprise? and how should investors position themselves? more things fed. also, you can trust cnbc to have every angle of the story covered, included some of the lighter more left fieldwise. it's as simple as this.
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this is "worldwide exchange." i'm ross westgate. these are the headlines. watching and waiting. few investors think the fed might make a move today. but they're not completely
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ruling it out. the banks of england warns on a surprising lack of growth, but unemployment figures surprise to the upside. the biggest fall in total unemployment since 2000. meanwhile, the german economy is in a festive mood. it shows expectation improving. and india's central bank defies expectations for a rate hike. to try and bring down soaring inflation. >> announcer: you're watching "worldwide exchange," bringing you business news from around the globe. >> if you've just joined us, thanks for tuning in to "worldwide exchange." the fed is front and center today. ahead of that, u.s. equities are showing us that we might open to the upside today. the dow was down 9 points
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yesterday. we're currently some 60 points above fair value at the moment. the high is for the futures so far this morning in london trade. the nasdaq is currently some 10 points above fair value and the s&p is around 5.5 points above fair value after falling five points yesterday, as well. european equities are firmer. the ftse 100 is up 0.5%. big fall in unemployment today. and the unemployment rate down 7.4%. remember, the bank of england set a 7% threshold for changing and doing something with interest rates. we're getting there quicker than they originally envisioned. the xetra dax is up 0.9%, the cac 40 is up 0.7% and the ftse mib is up around 1%. what have guests telling our cnbc viewers they should be doing? sheer a recap of some of the thoughts we've already had. >> we've gone to this through spain and -- recently. there's big pick up there. there's lots of sta.iccal value
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in that. and more risk off views is in germany. >> i think it's asia because of what we just said about china, the profit cycle is turning around, because it's underowned and the investors -- europe in the middle of the year are looking for a new place. >> the trades out there, really, the rbi was very clear. they wanted to see the aussie go up, join the mining boom. they want to see the aussie back down again. >> the fed is wrapping up its two-day meeting again. the decision is expected at 2:00 p.m. eastern. it's followed by ben bernanke's
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last news conference as fed chairman at 2:30 p.m. recent growth in u.s. jobs and retail sales convince the economist the timing is right to start tapering its bond buying program, but most believe the fed will wait until next year as it recovers from the recession. rob is still with us. joining us now, patrick spencer, m.d. and director of international institutional equity sales. i just have this as a 50/50 call earlier, patrick. do you think it is? >> i don't think so. i think it's unlikely you'll see tapering today. i think it's important the market has been getting a little worried recently. but what is quite interesting is that ten-year treasuries have backed up from 250 to 280. so it's almost anticipating a tightening and that's why i think bernanke is being quite clever. but i think -- >> clever? >> i think it's been clever that he's been positioning for tapering. tapering has to happen.
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the fed last week alluded to the fact that household net worth was at, you know, i think 17 trillion. i know 2.2 trillion, sorry, up 2.2%. so it's definitely working and there's reasons. retail sales are up 7% last month. so there's reasons to do the tapering. but i think you've got a very volatile set of unemployment statistics. traditionally, historically, in january and december. and i think it's unlikely. and i think bernanke wants to give -- wants to give yellen a clean piece of paper. to work with, you know? she's not in until february. the first fomc isn't until march. so for my money, we think no tapering today, even though the market would like to see it maybe given what's happened in the bond market. >> yeah. how will equities trade, then? into the new year with this debate still rumbling away? >> yes, well, i think
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traditionally, historically, december is always a strong month for equities. i think that will remain. corporate profits, this quarter, are going to be 4% after being flat for the last five quarters. well, they were up 5% last -- 4% last quarter. as i say, i think the market is anticipating it, so i don't think you'll see much of a reaction either way. >> really? >> yeah. >> you did say you don't get much reaction. it's an argument for tapering, isn't it? >> i think if you get tapering, maybe you get volatility. but given the earnings stream and the outlook for corporate profits last year, i know clients. i met a client last year who said to me they've got 10% cash and they're looking to make it work. and they're looking for a sell in the market. they're looking for a pullback in the market to put that money to work. >> so they would like a tapering. >> yeah. the point is the outlook for profits plus that corporate
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buying plus obviously, i think, plus you're seeing that continuation of people rolling out of bonds into equities is going to underpin the market. >> the biggest impact we've seen on any of this qe/taper, any of the stuff the fed has done over the last number of years has been in the announcement or the kind of run up prelude to actually doing stuff and pulling triggers. and we've had eight months of this at least. so it's hard to see there being a big knee jerk reaction from the financial markets, but i think the market will love that at least for a day or so. >> just on this point, is there any reason for not tapering because it might hurt the holidays? is that a reason not to do it or not? >> i can't imagine that the man in the street won't go out and buy christmas presents because the fed started tapering. >> and it's not tightening, is
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it? there's still humility every month. they're adding a bit more stimulus to the economy when the economy clearly doesn't need it. so i don't think it's a good -- it's a reason, but it's not a good reason for not doing it. as far as yellen goes, why leave her to take all the stink that goes wrong? i would start the policy meeting and maybe blame -- even though she is the brain of everything the fed has been doing for years. >> thank you for joining us today. thank you so much for joining us. patrick sticks around until the end of the show. don't forget, we've got full coverage as you might expect of the federal reserve decision at 1400 eastern and bernanke's final press korchb as chairman begins half an hour later. there are some other conference we're following today. the senate vote today on a final passage of the budget deal. some democrats and republicans say they'll push for a separate
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bill to restore cost of living increases for military retirement benefits. the justice department is reportedly preparing charges for citi and merrill lynch mortgage fraud. investors lost billions after buying securities allegedly but the bank marketed it as safe even though they had reason to believe otherwise. probes against rbs and krit swiss are under way and progressing. citi, bank of america, rbs and credit suisse stocks are down mostly higher 0.5%. jpmorgan is being sued by mississippi's attorney general over alleged misconduct when the bank went after credit card users for delinquent payments. the state's claim saying they relied on robo signing and consumers who didn't owe money, had already paid or were excused in bankruptcy.
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jpmorgan is suing the fdic, seeinging more in compensation for not pursuing the banks as agreed rising from the bank's acquisition of washington mutual. jpmorgan in frankfurt down about 1 is%. and some sad news, the chairman of sab miller passed away this morning after a long battle with cancer. he was credited with transforming south african breweries into a global business known for its dominance in emerging markets. the primary listing was moved from south africa to the london stock exchange in 1999. since then, the market cap grew to more than $76 million today. he also won cnbc's european business leader of the year award in 2010. our thoughts are with his family. how title is it to have a degree? we'll look at investing in
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further education, whether it still pays off, coming up. [ male announcer ] the new new york is open.
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open to innovation. open to ambition. open to bold ideas. that's why new york has a new plan -- dozens of tax free zones all across the state. move here, expand here, or start a new business here and pay no taxes for ten years... we're new york. if there's something that creates more jobs, and grows more businesses... we're open to it. start a tax-free business at startup-ny.com. now millions of people take a vitamin supplement as part of their daily regimen, but a new report suggests vitamins may have no benefit at all and could pose health risks. that can be a hard pill to swallow for vitaminmakers,
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retailers and investors. joaning us with more details, seema mody at cnbc hq in the states. morning, seema. what's going on here? >> good morning, ross. many people take vitamin supplements to improve their overall health, but a new study indicates that that theory may be wrong. >> i generally don't recommend vitamins. i recommend healthy dietary patterns and regular exercise. because it's unnecessary. >> now, dr. miller and other researchers cowrote a bold editorial in the annals of internal medicine writing a diet with supplements has no clear benefits and might be harmful. other researchers found vitamins may not ward off chronic diseases and high dose multi vitamins and minerals did not seem to reduce heart attacks, strokes or death in patients who
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had previously experienced a heart attack. vitamin sharp and herbalife all have exposure to the vitamin supplement industry which has been growing at a fast rate. euro star expects it to reach $28 billion in sales by 2017. analysts that i spoke to, ross, don't see nand fdemand for vita decreasing any time soon. ross. >> okay, seema. i just want to say one thing to you. you have beautiful eyes and your hair smells like cinnamon. >> oh, my goodness. why thank you so much, ron burgundy, aka ross. >> this is -- >> you have a great impersonation. i feel like you emulate that roll very well. >> if only. ow, ow, that hurt. are you going to see the movie? it's out tonight, seema. >> i hear. i am definitely going to be in line. probably not tonight, but soon.
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>> okay. we've all got to buy purple jackets, apparently. seema, thanks very much indeed for that. it has been a subject of asking viewers today what questions should ron burgundy ask ben bernanke? what sort of questions would ron burgundy ask ben bernanke in his final news conference. keep e-mailing into us worldwide@cnbc.com. meanwhile, a recap of the headlines, most bet against tapering today, but could the fed surprise? the reserve bank of india keeps rates on hold despite rampant inflation. and minutes from the bank of england reveal concern over productivity growth. offering a much brighter outlook. now, ron burgundy didn't go to college, but they have set up
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the ron burgundy college of communications. but getting a degree now sets you back tens of thousands. but as the number of self-made entrepreneurs continues to rise, is the investment still worth it? recent data from the georgetown university center on education suggests college does give workers the edge. it found that those with a degree will earn 84% more over their lifetime than those who stop studies at high school. joining us is catherine cohen, founder and ceo of ivy wide. catherine, nice to see you. >> good morning. >> it's an interesting study. do you need to narrow it down to those that could have gone to college but chose not to as opposed to those who never really had the ability to get there? >> well, according to studies, those age 20 to 24 who don't have a college degree, their unemployment rate is 18%. but those age 20 to 24 with a college degree are higher. their unemployment rate is only
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6%. and the good news is this past year the average starting salary for a college graduate has gone up by 2.4%. so they're earning about 45,3 . $45,300. and that's a all fields in business, education, engineering, mathes and sciences. so there is that return on investment. >> how much have you got to invest, though, on average right now? and how long before you get the investment back? >> that's a great question. it depends on what kind of college you go to. if you go to a public in-state school, you'll spend about $8,800 a year. if you go to a public out of state school you'll spend about $22,000 a year. if you go to a private nonprofit four-year college, you'll spend about $30,000 a year on average. but the thing is, it's not only, as you said from that georgetown study that with that college
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degree you'll earn over $1 million more over the course of your lifetime, but there's a lot of intangibles. coming to the u.s. and studying here, the u.s. offers multiple educational opportunities. with a little education, you'll learn interdisciplinary skills for a job that may not even exist right now. you're going to make your personal and professional network at that college. and that could follow you through the rest of your career and open those doors later on. plus, colleges are trying to do everything they can to help students with that transition from college to career. >> there are always exceptions, though, catherine. i mean, i didn't go to undergrad school and there are plenty of tech global titans who never graduated, right? and it didn't do them any harm. silicone valley is full of them. >> yes, but i think those are the exceptions. and i also think that when you look at the statistics, you're going to see that you're going to be more employable with a
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college degree than without one. and also, we work with a lot of students not only through the u.s., but in 40 plus countries. and every family is asking, okay, if they're going to invest in this college education, what is that college going to do for me? and what we're seeing is that colleges are doing more and more for students. so, for example, the university of florida is always ranked at the top. their career resource center. they're helping a student plan out their career, their whole career path from beginning to end, not only helping them choose that career, but helping them write resumes and cover letters and connecting them with alumni. students can be looking at co-op or cooperative colleges, like northeastern university where you may go to school for five years, but you come out with 18 months of real work experience. and we're seeing that those students are being hired at a higher rate than those without that real work experience. so i think there are a lot of options out there for students
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and it really depends on the student. >> catherine, thanks very much indeed for joining us. we appreciate it. now, i don't know whether -- catherine, you didn't win, did you, last night? you didn't win this mega millions? that wasn't you? >> no, i didn't. >> are you sure? okay. did you check your ticket? okay. >> i did buy some tickets. >> all right. okay. well, look, degree or not, the point is someone today is waking up with a little extra spending cash in their pocket. there are at least two winners of tuesday's $636 million mega millions jackpot. lottery officials say winning tickets were sold in california and georgia. so check your tickets. the numbers were 8, 14, 17, 20, 39 and the mega ball number was 7. if you look the one time lump sum payment, you'll get around $2411 million or roughly 256 million after taxes in california and $230 million in
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georgia. always take the lump sum, never take the annuity. that seems to be the general advice. stim to come, meanwhile, janet yellen takes the helm at the federal reserve. will she be the one to introduce trainering? we'll talk about it. ya know, with new fedex one rate you can fill that box and pay one flat rate. i didn't know the coal thing was real. it's very real... david rivera. rivera, david. [ male announcer ] fedex one rate.
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[ male announcer ] this december, experience the gift of exacting precision and some of the best offers of the year at the lexus december to remember sales event. this is the pursuit of perfection. now, as everyone's favorite anchorman returns to movie theaters, we wanted to know what would ron burgundy ask ben bernanke? captain jay shuman said the first thing burgundy would ask ben is who does his moustache and how does he keep it on straight? well, it's pretty -- you just stick it on like that. and then you look in the monitor.
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that is not straight, is it? sylvia thinks i'm an awesome burgundy. sylvia, you're a classy lady. keep those answers coming. a bit of burgundy nonsense. u.s. futures are whatever they are. in burgundy land, he would have no idea what these are. they are higher above fair value on the dow by some 64 points and the s&p at the moment is some 6.5 points above fair value. final thought now from patrick spencer. patrick, you thought they wouldn't taper today. it's time for equities and we had such a big run up, 25% or more on the s&p. and earnings have got to justify moves higher next year, haven't they? >> well, i've been around a long time in this business. maybe i should be wearing that moustache. but usually markets are pretty good at anticipating what is
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coming. we had 4% growth on earnings last quarter. we're looking for 11% growth in earnings next year. but prior to that, you know, the prior five quarters, prior to the last quarter, you had flat growth in earnings. the motorcycles is up 26%. in. >> in your lifetime, you have never seen what? >> so much discounting of what is going to come in the future. usually markets are very sanguine. markets and stocks usually trade flat to down. and i've never seen, in all my career, pooh people and the market have been so sanguine about the outlook for next year. so they're discounting quite a big recovery for next year and i think the surprise will be to the upside next year in markets, certainly not to the down side. so i think the big trade that has been missed tt bank. the banks haven't been lending.
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if rates go up, they'll be heading for the doors to borrow money. >> patrick, thanks for that. merry christmas to you. that's it for "worldwide exchange." "squawk box" up next. impact life expectancy in the u.s., real estate in hong kong, and the optics industry in germany? at t. rowe price, we understand the connections of a complex, global economy. it's just one reason over 70% of our mutual funds beat their 10-year lipper average. t. rowe price. invest with confidence. request a prospectus or summary prospectus with investment information, risks, fees and expenses to read and consider carefully re investing.
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good morning. fed decision and a bernanke news conference. will the taper start? plus, key data on housing and the consumer. one week and counting now in many until christmas. but if you don't want to brave the crowds and stores, just turn to your computer. i watched someone buy something on amazon yesterday. many retail -- and it was so easy, andrew. many retailers are calling today free online shipping day. and if you still haven't sent
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out your holiday skardz and are looking for inspiration, jamie dimon's family might have an idea for you. it's gone viral. a nice shot inside a really nice place, we'll show you the greeting as "squawk box" begins right now. >> good morning, everybody. i'm becky quick with joe kernen and andrew ross sorkin. let's get right to today's agenda. on the economic front, the story we've been talking about for weeks -- actually, make that months at this point. the fed is going to be making a policy@announcement at 2:00 eastern time. now, some economists expect the fed to announce plans to curtail bond purchases. but most think that the central bank will wait until early 2014. we have complete coverage of the announcement on cnbc this afternoon. also on the economic calendar today, we have housing starts and building permits. at 8:30 eastern time, we'll get housing ts

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