Transcripts For CNBC Worldwide Exchange 20091123

i'm christine tan, a chinese government researcher forecast double digit growth this quarter while the pboc signals an exit to proper stimulus measures. >> i'm matt nesto in the states. raising the gdp forecast for 2010, but going to be sticky and thorny in the budding recovery. >> and in europe, equity markets start the week in the green. boosted by strength in the resource sector as gold hits another record high. >> welcome to "worldwide exchange." we have flash services pmi, better than expected 53.2%, the expectation was 52.8%. the november flash services came on new business index, slightly lower than expected. but let's go through because this service sector grew at its fastest pace in two years in november suggesting the economic recovery could well continue into the fourth quarter. the manufacturing pmi new orders index was 53.6%, a tad lower than the 53.7% we saw back in november, but november flash composite pmi, 53.7%, that's better than expected. let's take a look at some of the indices now. the ftse global 300 index was trading higher last time i had a look. let's see how it is now. up 1% at a moment, 43 points to the good, the individual are trading, we have the ftse up 1.7%, resources moving higher. a similar margin on the rest of the major indices. let's take a look at the foreign exchange market. euro 1.49, and the dollar/yen. >> good to see you too, steve. here in asia, mix eed session. the end of the week. japan is closed for a holiday. trade is a little bit light today. the kospi down, the market getting a bigger boost from talk that monetary policy, monetary stimulus policy in china will continue. the shanghai up 0.9%. the financial stocks led the way higher. in australia, the surge in gold price and commodity prices really lifting. sending this market up 0.7% and the bombay trading up 1.7%. crude is trading up, 78.32 a barrel. and brent taking higher almost 94 cents, $78.14 a barrel. matt? how are you today? >> well, i'm very well, thank you. helping out. and as we say, christine, check out the futures, same thing 95 points higher on the dow futures here today, 93 -- i misspoke, don't hold it against me. if you take a look at the nasdaq and s&p, they're higher today, that would be snapping a three-day losing streak that we took into the weekend. if we take a look at the fixed income markets now, take a look at the peek at the ten-year bund, burn that into your brain, 3.38 versus 3.39. so the spread is back to more than ten basis points. and perhaps, arguably, we saved the best for last. look at this price of gold, $1,165. >> we have greg smith, managing director at fat profits and joining us live from london. good to have youwith us. you heard what matt said habit gold. a lot of people are saying it's a bubble. what do you think? >> it's been made a lot that warren buffett won't touch it. i think a lot of it's of course about the dollar, which continues to be weak. i think really with gold it's just on the back wall of money, fiscal monetary stimulus that's been pumped into the system that we believe and pluresumably gol. maybe not next year, but the years ahead. >> would you buy gold at these level, greg? >> if you've got a minimum of two-year time frame. i think this is certainly a prospect for correction or pullback on the gold market over the past eight or nine years, there have been significant corrections $50 to $100. so if you've got a near term view, you'll be taking a bit of a risk. for the next two years. plus i think it's still good value. >> greg, i was going to ask you about tax. but we had a viewer in europe saying that we're being too derogatory about gold as a whole. i just recall comments from warren buffett that says you take it out of one hole in the ground, transport it around the world put it in another hole in the ground. why has gold got a special place in our psyche at the moment? it seems to me that everyone treats gold in a different way than any other commodity. >> there's not stores, it's just a lump of something. it has no industrial use unlike sterling. so that's i think why people struggle to get their heads around the idea. i think it really is a fundamental store value and hesitancy for thousands of years, long before paper came along. i think that is what you're seeing. you're seeing a lack of confidence or increasing lack of confidence in paper. we've already seen the -- of course buying into gold, the chinese have been talking about buying more gold, as well. still compelled to compare the overall liberal reserves. we've seen some significant buying. >> let's move on to our other guest who joins us, as well, for this conversation start of the show. the chief economist and strategist for asia at kantor fitzgerald securities. thank you very much for joining us. we're talking about gold there. i would guess there are two reasons people are buying gold at the moment. one they think it's going up, two, concerned about inflation, and three, they just don't trust a lot of the other paper being raised by governments around the world. what's your take? >> well, i think it's the -- of those points, the last one you mentioned. clearly there is a lot of problems when you're issuing enormous amounts of debt. and money is money and you can't do a whole lot with it if the governments that issue it don't really stand behind it. so that's the issue. and i can understand why people would be buying gold under those circumstances. i don't find it perhaps the best possible hedge, but it's certainly one of the hedges that is being used. >> it doesn't make a lick of sense to me that people are pouring money into gold out of basically fear of whatever, take your pick and also buying stocks at the same time. because they think this economic recovery is sustainable. they're absolutely counterintuitive. >> that's -- if you want to add to that -- it's also counterintuitive that people at the same time buying stocks are buying bonds. you shouldn't have a situation in which stocks and bonds are going up in price at the same time. what we're seeing here, i think, is essentially a situation where the expectations for inflation globally are extremely low, non-existent for excisome time. there's expectations that the federal reserve will keep interest rates low. that should support economic recovery, at the same time it should be very supportive of the bond market when it comes to -- when it comes to gold. i don't think it's an inflation hedge at this point. i think the reason it's been bought is what we discussed earlier that you have a situation in which, you know, investors simply do not trust government's, you know, ability and willingness to pay them back on the huge amount of debt that's being issued. >> greg, how do you add it all up? you've got a government spending money, that's out generations that will never pay back probably. and yet you have people pushing gold and stocks faster than we can keep up. >> well, i think that was a good point made that why should all of these markets be going up at the same time? i would argue there's an inflation element to it. and i think obviously there's not a lot of inflation around, but as far as central banks are concerned, it's far prempbable to deflation. that will explain the move in gold. and do perform in inflationary times, as well. bad news for the bond market. and i would say if anything, probably looking tough. but in the medium term as well as equities. >> you mentioned equities. just looking at your note, why do you fancy the tech stocks? they've had a big rally compared to the broad market. >> i think in a broader term, most stocks have run pretty hard. the ftse up 50% since march, hard to find a lot of value if you're looking six months. we're takinging a wider view. it's been through two massive shocks. the first we had in 2000, and a second shock, as well, taking out high priced names like nortel. i think they can be arguably well placed to benefit from the uptick in demand. and i think that's why we like it. >> in hong kong, how do you feel about the greater china markets. we have a report in china saying the country's expected to grow 10% in the current quarter and of course the pboc, the central bank of china is signalling an exit to stimulus measures there. >> well, yeah. i think when we saw the third quarter results and then the results for the month of september and october, it's quite clear that china is going to grow 10% or above in the fourth quarter. not only that, but we believe that this is sustainable. on the one hand the stimulus spending will now go into its second year. it was initially decreed in november of 2008. so it's got a year to go. and at the same time, we will see, i think, exports kicking in at some point. we will probably in december or january for the first time get positive year-on-year export figures for china. when that's overlaid on the domestic demand story, which is a positive story. without any question, china's going to move forward. now, there are some concerns. there are, you know, the banking regulator in particular is saying that banks need to raise their capital adequacy. i think that's cautious under those circumstances when you have a fast-growing economy with a lot of bank lending going on, you have a high rate of monetary transmission, it is important for the banks to be adequately capitalized. as we know from bad experience when it's not been the case. >> thank you very much, indeed, for your thoughts. chief economist and strategist, and greg smith, as well, thank you very much indeed managing director of fat prophets. kraft could raise the $16.8 billion hostile bid for cadbury if rival bidders have emerged. that's what sources have said. hershey, nestle, and italian chocolate group are all making bids for cadbury. they're also call kraft's original bid derivery. they will only consider 800 cents per share. the first stage of the $35 billion capital-raising plan. the bank said uptake for the bond swap was strong as investors exchange more than $14 billion of debt into new so-called cocoa notes. raising the cash as part of the plan to exit the british government's asset protection scheme. the bank is set to unveil terms later this week. the confederation of british industry is holding its annual conference today. british prime minister gordon brown will address the conference along with the consecutive opposition leader david cameron. a less risky approach to business is needed even if this results in lower profit. the announcement calls into question the traditional model of capitalism. speaking to cnbc, the direct general of the cbi explained the problem of capitalism. >> we have an interest in containing debt. the burden as to the share of the economy. it has risen very rapidly. it's on a year on year basis bigger than we're comfortable with. >> that was richard lambert, the director general of the cbi. and stay tuned to "worldwide exchange," we'll have live coverage ahead on the program. christine? well, china's economy is likely to grow by 10% this quarter and will grow even faster in the first quarter of 2010 according to published comments by a government researcher. but he says there's unlikely to be any significant changes in monetary policy next year. as for the yen, he said the appreciation could hurt china's export sector while a small and gradual rise would likely feed speculation and hot money inflows. meanwhile the central bank newspaper is suggesting china should exit the stimulus measures or risk having the property markets spin out of control. and shares of india's reliance industry has hit highs. plans by reliance to buy lye baz l industries was well timed. they're trading up at the moment. we have reiters saying the deal is worth $10 billion to $12 billion and would create one of the largest petro chemical funds. it would give them greater power insourcing and a stronger presence in the u.s. and europe. well, an influential group of economists raising their gdp forecasts for next year. but they also say unemployment will stay high. the latest survey from the national association of business economists is predicting growth of 2.9% next year. that's up from the previous forecast just two months ago of 2.6%. they see the jobless rate holding at an average of 10% through the second quarter before slipping back to 9.6% by the end of next year. they also believe that inflation will remain low because of a substantial slack in the labor market and further productivity gains, which will reduce employment costs. james bulllard says the central bank should keep buying the mortgage asset bonds to keep that policy alive. policy makers will be able to have more flexibility if they do so. the fed has committed to buying $1.25 trillion of mortgage-backed securities by the end of march. bullard says extending the program would allow the fed to react should the economy take another turn for the worse. bullard will be an fomc voting member next year, steve. coming up on "worldwide exchange," is the recovery on track? the economists up their growth forecasts. we'll ask our own economist guest what he makes of the predictions. but how will the economists deal with the pile of debt piling up? in india at one-month highs on m&a news. more on this story after the break. 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[ female announcer ] swiffer wet cloths clean better than a mop with new cleansers that attract dirt deep into the cloth and lock it away. new swiffer wet cloths clean better, or your money back. ♪ love stinks! welcome back to the show. let's get to our global round-up of equity markets now. we are joined by saijal and rebecca. let's kick off with the latter, but not the least. >> not, steve, quite frankly. and let's look at what's going on on the ftse 100. markets generally are looking quite strong generally, and we're adding 85 points or so to the ftse 100 higher by 1.6% if you want to look at it in those terms after declines last year of 45 points. more than making up for last week. you're not surprised to see the mining stocks are looking really strong in the uk today. record gold prices again today and that is certainly helping the likes of duration. amongst the biggest gainers on the markets here in the uk. and we're adding between 4% and 5% for several of the basic resources stocks. that is certainly helping. cadbury is one of the stories we're keeping our eyes on. reporting this morning that kraft may raise the bid if other suitors come forward. if they don't have rival offers, then they'll stick with what they've got. but we could e see some new offers emerging on that front and potentially a bidding war coming through. two weeks ago, in fact, kraft took their hostile bid directly to shareholders a $16.8 billion bid. another developing story, british airways, the disputes between the management and staff, particularly cabin crew british airways continues to heat up, and the ceo willie walsh saying -- the front page story saying there'll be no compromising or cost-cutting. so we should watch out for how this develop, because it could be look at strikes over a busy travel period these holidays for british airways. let's go out and find out what the picture is in germany. >> thank you very much, indeed, beckdy. up about 1.6%, looks good, sounds good, however volumes fairly muted. about 17.6 million shares only have traded around this time. this is very low. never mind, everybody's trying to make the best out of deutsche bank. for example, trading up quite nicely. just about in the red. but the most interesting story still going to develop today in brussels, ministers across the board. gm head nick riley, with regards to the restructuring program for general motors here in europe. how much are these individual going to put on the table in terms of money in order to get the restructuring process over and done with? a couple of interesting stocks sma mentioned by goldman sachs this morning, another upgrade for that stock, plus that corruption company. both of these stocks are very exciting because sma has had a fantastic rally, continues to rise and the price target for goldman sachs was raised to 130 euros, at the moment at 190. about 3.6 7%. apart from that, great numbers for manufacturing as well as service. however, the business expectations part of that index is starting to lose a little bit of momentum. now over to france. >> thank you, patricia. the french market is up 1.7% and by stronger economic data, the composite pmi reached 59.8 points in november, that's the highest level in more than three years for the french economy. in terms of cooperate news, we've got some speculation in the banking sector after the news agency reported that the french government may try to merge. there is no confirmation and it's not the first time that we have some speculation around speculation, but the whole sector is performing well today. in terms of cooperating news, ads trading higher as the company starts today its insider trading trial in paris. 17 managers, all former managers of the company and two shareholders. they will appear today before the french court to check whether or not some top managers were aware of the delays when they decided to sell some shares between november of 2005 and march 2006. the trial will last until the end of the week, the ads is trading higher at 1.8%. let's have a look at the asian market with saijal in singapore. good morning. >> good morning to you, ste stephanie. a lot of strength coming from the greater china region. you had shanghai composite closing at a 3 1/2 month high. still some indications that the government there will keep or the central bank will keep loose monetary policies. that really helped the banking stocks there and, of course, as becky had mentioned, gold miners performing very well over in china, as well. there was some weakness, though, in the property stocks. there was an opinion piece put out by the central bank there saying that china should immediately halt some of their real estate stimulus measures or risk a bubble that could wreak havoc. so some of those stocks selling off on the back of that. as for kospi, a little bit of a weakness for the kospi, down 0.1%. we tossed selloff in some of the autos, some of the tech plays, as well. the financials putting in decent gains. again, some m&a talks, this time coming from hanna financials chairman over the weekend saying he would be interested in m&a talks with keb. so we saw some gains there. lg electronics was one that was a little bit weak. concerns that apple launching the iphone coming into korea on saturday could weigh on its hand set sales. so we saw some weakness in that stock. now send things back to matt in the u.s. good morning, matt. >> hi. good old thanksgiving week. and we've got a calendar stuffed like a turkey. busy, busy, busy, including theartd gdp. remember that 3 1/2 figure? consumer confidence, durable goods, and the minutes from the latest fed meeting. existing home sales, they'll be out this morning at 10:00 a.m. washington time. look for them to be up 2.3% on an analyzed rate of 5.7 million homes. oil services provider bj services reports results before the opening bell along with campbell soup and tyson food. after the close, the last of the dow 30, hewlett-packard and network equipment maker bro cade will give us their results. also cit has the initial hearings in bankruptcy court in new york city today, the commercial lender filed for a prepackage ed chapter 11 earlie this month. a majority of bondholders support the plan as it aims to emerge from bankruptcy by the end of the year. and that is your global stock watch. well, coming up on "worldwide exchange," we'll focus on the southeast region after getting expanded figures out of thailand for the third quarter. stay tuned. we'll be right back. i'm christine tan. a chinese government researcher forecasting double digit growth this quarter while the pboc signals and exits the property stimulus measures. u.s. is raising the gdp forecast for next year, but unemployment is going to remain a thorn in the side of a budding recovery. and i'm steve sedgwick. in europe, equity markets in the green, boosted by strength in the resource sector as gold hits another record high. okay. let's take a look at these markets. they do seem to be going strongly to the up side this morning. we have 1% gain on the ftse, global 300 index. resources boosting the london market to 53.37 for blue chips, 1.65% higher. very coordinated moves to the up side. all up around 1.6% regardless of their constituent make-up for these blue chip indices. in term of the foreign exchange market, the euro dollar pair still in recent range at 1.4976. the dollar/yen, as well. we've got flashes hitting the wires over at the imf. he says it's better to exit stimulus later than earlier. still too early for general stimulus exit so says dominic strauss cohen. monetary policy can stay loose for sometime, need to reform to combat regulator uncertainty. adding that the chinese u.n. and some other asian appreciation is desirable. uk recovery may be somewhat subdued and adding the consolidation plans must be top priority. christine, let's go over to you. >> well, here in asia, volume was light, japan out for a public holiday. but in terms of sectors, we had the metal stocks with gold a high. the kospi down 0.1%, hang seng up 1.6%. optimism that china will continue with the loose monetary policy, the shanghai market rising as a result, the financials, of course, leading the way higher. the metal stocks getting a boost, mining stocks getting a boost. and the sensex is trading up 1%. overall a mixed picture here in asia. matt, throwing it over to you. >> well, it's pretty bullish picture here. traders love a good overseas rally and those commodities and weak dollar have our futures pushing higher here today, up more than 90 points on the dow. oh, just about 90 points. that's a little weaker than it was 30 minutes ago. the nasdaq strong, the s&p snapping a three-day losing stre streak. a market which we'll be digesting over $100 billion in new issuance in this shortened week is rising ever so slightly as people sell their treasuries ahead of that. joining me now to discuss the global economy is peter cardillo, chief market economist at avalon partners. appreciate you coming on, peter, today. we just mentioned the auction situation, another $118 billion coming into the market. it's not a record, but darn near. at what point do investors say, you know, these emergency level rates really need to come up? >> well, i think, you know, there's certainly a little cautious about that right now. the market is worried about that. but you know, we hear continuously just a few moments ago i heard steve mention that the -- someone from the imf basically said it's too early to begin to exit some of these emergency funds. and i think that's basically what we're hearing from a lot of the central bankers. so i kind of think that, you know, this is what this whole stock market rally, global market rally is all about, by the way, cheap money which continues to chase securities. and that's fine because there is basis for that in the sense that the global economy is at a recession and, of course, here in the states, we're at a recession, and i think that's okay. but there will come a point in time when we're going to have to worry about inflation. now, inflation is subdued for now, there's no question about that. we don't have an inflation problem here in the states nor do we have it on a global scale. but i think going forward within the next 12 to 16 months, we could be in for a dose of serious inflation. somewhere along the line, they're going to have to begin to seriously exit some of these emergency programs. and by the way, some of the countries already have. for instance, here in the states to a certain degree they already begun taking some of it out of the system. but in a very gradual and small way. >> the "new york times" today writes that the treasury officials will now face a trifecta of headaches, mountain of new debt, balloon of short-term borrowing that comes due in the months ahead and interest rates sure to climb back to normal as the federal reserve decides the emergency has passed. >> well, there's no -- there's no doubt about that that that's going to happen. and, of course, you know, if you look tat the price of gold at a record high, that's telling us one thing only. it's not so much about the -- about the weakness of the u.s. currency as much as it is about the huge budget deficits that are going to continue to balloon. and obviously you know with health care now gaining traction, somewhere along the line there will be that reform and that means here in the states that we're going to see massive amounts of deficits. and that's what the price of gold is telling us at this time. and so there will be a point in time where the fed is going to have to be aggressive. i thought that we probably could see a 25 basis point hike sometime in the first quarter of 2010. obviously some of the comments that we continue to get a lot of the rhetoric that we've been getting out of the smoc members, many of them indicate that's probably not going to be the case, but i think along the lines the fed will surprise us and begin raising interest rates sooner than later. >> peter, i'm very simplistic, let's keep it simplistic, is this money that should be going to small and medium-sized companies to reflate their businesses and economy. is it chasing gold and equities rather than being used where it should be used? what i'm asking is as the regulators and policy makers getting it wrong? is the money going to the wrong place? >> well, i think what we're seeing is the money going to the places where people think that -- where people are going to try to look for safety. obviously it's going into natural resources and it's going into gold. certainly not coming into the u.s. currency. it's going into foreign currencies. we're seeing that with the australian dollar. we're seeing where some of the countries that have already begun to raise interest rates where that money influx is going into in terms of it going into businesses. well, the only way you're going to get that flowing into small businesses is by tax cuts by the -- as they've done in europe, by the way. but here in the states, that doesn't seem to be the case. so there is talk of perhaps another stimulus in the form of tax cuts trying to help the small businesses. but at the time, you know, that's where we're really lacking. and so what we're seeing is this influx of money chasing some of the safer assets. >> and peter, this is christine. as you sit in the states and you hear a report by a government researcher in china saying the country's gdp growth could hit 10% in the fourth quarter, also concerns about rampant speculation in a property market, are you worried about a bubble forming in china? >> well, that's been, you know, that's been for the past six months, that's been the trend, and of course, if we go beyond 10% of gdp growth, i'm not sure we're going to see the -- that growth rate actually go above 10%. perhaps more like 9.2% or 9.3%. but if we do go above 10%, i think that will be the first signs of real trouble in terms of real estate bubble in china. and of course, you know, the rhetoric that we heard just what two weeks ago about the chinese getting ready to perhaps let the yuan float against the dollar, i don't think that's going to happen. they want these property values to continue to rise. they want investments to continue to come into china. and above all, they want growth up around, you know, 9 1/2 maybe 9.75%. i don't think they want it much beyond that because obviously they're going to have a problem. now whether or not that comes to fruition, i'm not sure, but i can tell you we are ahead of some sort of a bubble in the chinese economy. >> peter, we'll leave it there. thank you very much indeed for your thoughts. chief market economist at avalon partners. talking at the cbi saying it's better to exit stimulus later than earlier. still too early for general stimulus exit. we'll keep on top of more comments from him and indeed from the cbi as indeed they develop the coverage throughout the day. well, let's turn our attention now in focus to southeast asia where countries are showing stronger signs of recovery after being hit by the global slowdown last year. we had data today that showed thailand's economy grew 1.3% in the third quarter. the second straight quarterly growth after slipping into the first recession in 11 years. we also have strong gdp figures from malaysia and singapore in recent days. let's ask the economist for southeast asia at global research. alvin, with regards to thailand, do you think the country is clearly out of the woods? >> in terms of the region itself, thailand just like the rest of the region is slowly moving out of this recession. due to the very aggressive stimulus package and monetary policy. but i think going forward in thailand, i think there is another risk that is political risk that probably will be seeing the grow much slower compared to maybe say the rest of the region, like indonesia and singapore. >> how big of a drag is this political uncertainty on the overall economic growth in the country? >> right now it's still unclear. but in terms of foreign investment, definitely the sentiments have been very much weakened. we will probably be picturing -- looking at fairly weak growth for recovery for thailand in 2010. we're looking at something like 2.8% quite low compared to other countries like singapore at 5%. >> what is the central bank's position? will the political uncertainty really impact the way the central impact might move on interest rates? or are they focussed on the real economy? >> clearly just like many of the other central banks, i believe that it will not be moving any time soon. they need to get the growth momentum to be more entrenched. and therefore, i think thailand just like in other countries, malaysia, philippines, and singapore, will be much later in the monetary policy in this current cycle compared to some of the other countries like say indonesia and korea whereby domestic is very strong and we might see more inflationary pressures there, and therefore, we will be expecting them. >> speaking of domestic demand, we have the import picture still looking pretty weak. how fragile is this picture in thailand? if that stimulus measures are removed? >> things might slip up going down the next few quarters. but again, we do not expect the fiscal stimulus to be removed any time soon. in fact, there might be additional stimulus coming on. i think we probably have seen the worst in the current recession. q-4 2008 and q-1 2009. we may not go back to the pre-crisis level any time soon, but we're not going into a double dip for now. >> and what about the rest of southeast asia? looking brighter i suppose? >> i think when you look across the rest of southeast asia, i think there's a distinction between the two countries. those are independent and the countries that have strong domestic demand, i think those countries have strong domestic demand like indonesia and vietnam, they're doing much better. still recording positive year-on-year growth. and for countries like malaysia, singapore, and thailand where they depend on exports. so they might be very much still at risk if let's say global demand takes a turn for the worse. therefore, they will possibly be experiencing slower growth if that case happens. while those with stronger domestic demand should be able to weather much better. >> so the dog's clearly still wagging the tail. >> there is a level of uncertainty going forward in the next two quarters. >> thank you very much. good talking to you. and global research, standard charter bank. let's head over to india and see what the india market is doing. the india business report. hello ayesha. >> thanks for that, christine. turning out to be a great morning. almost a 100-point bump-up. nudging that 5,100 mark, and similar for the sensex, 17,200 where the index is currently positioned and great rallies is what we're seeing across the sectors. it is adding to the bump-up. here's the news that currency driving the counter. reliance industries has conformed a non-binding offer. that is really the news that is currently driving and that has the maximum on the index driving almost 3% gain for the itc, that is the market capital reached new limits and that count is also looking very, very strong. today's trading session is really the entire telecom basket. one nuclear and that has intensified the telecom war in the domestic gamut, they have slashed their roaming rates, and is actually raising concerns about the margins and the minutes per usage of other telecom players which is why you're seeing the telecom under pressure, but also the market. it's back to you, christ teen. >> thank you, live from mumbai. well, from telecom, the financial sector with the industrial bank saying its board has approved a plan to raise $2.6 billion via a rights issue to supplement the working capital. the medium-sized chinese bank said it would issue 2.5 million shares for each of the 10 shares held by shareholders. the plan still needs approval from shareholders as well as chinese securities and bank regulators. and shares in industrial bank added 0.8% in shanghai today, that's about, there we go, about 40 yen. plans to buy shares of china worth possibly $100 million. according to preliminary prospectors obtained is one of four corner stone investors, the wind power generator has lined up. the other three are china life insurance, value partners and bank of east asia. which are reportedly injecting $230 million in total. the prospectus indicated raising up to $2.2 billion from the hong kong initial public offering. steve? >> well, christine, france's biggest insider trading trial starts today. 17 current and former executives of european aerorow giant are facing charges. whether they knew habit the problem plaguing when they sold shares in november 2005 and march 2006. shares in the company currently up 1.9%. well, the issue of state aid for gm's struggling opal unit has split the coalition. the proposal is also causing a rift amongst eu leaders as other european countries have pledged more than 1 billion euros in order to protect factories and jobs. the officials, eu economic ministers, and gm are meeting in brussels to discuss the restructuring plan. eu officials have warned that the financial aid may go against competition rules. matt? well, the so-called health care reform bill cleared the big hurdle in the senate this weekend. lawmakers voting to open the debate just by a narrow margin. that is expected to start next week and last for three weeks. no republicans back the procedural vote. and a number of democrats, conservative democrats support the floor debate but are uncommitted as to the bill itself. senator dick durbin, the number two democrat in the senate says the government-run insurance plan or public option is negotiable. >> we're going to stick around and get it done. >> i don't think anybody feels this bill as senator reid put it down, though he made a lot of progress in blending bills together. i don't think anybody thinks this bill will pass. >> of course, the house has already passed its version of the health care bill, differences between those two would have to be ironed out in january before president obama would be able to sign a final measure. also of note, all of these years after they made them famous, vampires and werewolves are still popular at the box office. "twilight: new moon" which features several shirtless creatures that go bump in the night pulled in $258 million worldwide, the film made $140 million in north america alone. the best debut of the year and third best all time behind "the dark knight" and "spider-man 3." did shatter the record for the best opening day taking in $72 million in the u.s. and canada, best opening day on friday. how about that? well, on a different note. in these times of economic strains, we have ten tips to bring down your personal debt. check out our website. cnbc.com for more. it's free. there's a tip right there. get free financial advice. save money. that's number 11. coming up, gold at another record price north of $1,165 an ounce. we're going to analyze the consequences on the currency market. >> i've got a tip, don't spend money on gold. just over 149 at the moment, 149.73, we'll get the latest on the currency markets after this very short break. welcome back to the show. let's focus in on the currency markets. the dollar is currently trading 1.4969 on the euro/dollar. comments from dominic strauss saying it's too early for a general stimulus exit. the economy's improving, but highly vulnerable. given the market action we've seen on the dollar, is the dollar and the u.s. economy more vulnerable than the rest of the global economy? because no matter what the data brings, we still see this selloff. >> yes, it's quite interesting, the currency market developments i think are becoming a little bit divorced from the actual economic data and i think are being driven more by a market perception with regards to the expense of stimulus packages, how long they will last, and the impact of having on asset markets. i think the market is taking a little bit of comfort, though, from the most recent comments coming from the fed, the fed defining the extended period of time as being least free fmoc meeting. that does suggest the market will get plenty of warning before monetary conditions start in the u.s. at least. so that is allowing, i think, the dollar trend to be extended further, the weak dollar trend to be extended further. and i think we'll likely see the euro/dollar pushing higher again. particularly after last week when we saw the warning preparing to remove some of the liquidity provision measures early next year and warning the banks they should prepare for that event now. that does suggest we're going to see some strong repatriation flows back into europe, supporting the euro ahead of the year-end as banks will look to sure up their balance sheets to make sure they have very healthy liquidity heading into year end before the ecb starts to wind down some of those measures. i think the 150 area is going to be broken this week and we'll likely see the euro/dollar heading up to the 1.52 area. >> okay, ian, this is christine, you expect the gold and commodity prices continue to help out the aussie dollar? >> i think they are going to continue to help the australian dollar to a certain extent, but i'm far more cautious with regards to the commodity currencies after the events of last week. the corrective move we saw last week was quite sharp and i think warns the market that maybe positioning in the commodity currencies is now at an extreme and could quite easily trigger another sharp correction if we start to see negative news coming through. any signs of the commodity markets rally is running out of steam. i think it will have a sharp impact on to the commodities currencies. far more cautious with regard to the australian dollar. i think it is likely to retest the highs, but making new highs may prove a struggle, increasingly vulnerable to any bad news. >> ian, you know, all of this, you know, inverse relationship between the weak dollar and the rising commodities is going to stoke inflation. there's no question about it, which ultimately will have to see the federal reserve raise rates to hold that in line. are you just trying to get business done and get the dollar trade done before the inevitable happens? >> well, i think as far as the inflation expectations are concerned, i believe there are to a certain extent overdone. i think the markets fear with regards to inflation is probably overdone. i think inflation is still quite some way down the road before that starts to bleed through. i think some of the pricing of inflation expectations has gone too far and is probably likely need to be adjusted slightly lower. i think the point that bernanke has been making with regards or the output gaps and the slack in the economy is a very good one and suggesting that at least domestically generating inflation is going to take some time. big question is, would a central bank react to external inflation shock coming from commodity prices, particularly when the recovery is still at a fragile state. i believe the answer to that is they're unlikely to react to that kind of inflation shock. i think as far as the monetary policy setting is concerned, it will be still very focussed on domestically generating inflation. i think that is still some way before we see a pick up. so rate expectations also likely to have to adjust lower amongst the major economies globally. >> and we'll leave it there, thank you very much, indeed. ian stannard. coming up in the next hour of "worldwide exchange," the confederation is meeting in london. ross westgate is covering it where gordon brown is set to unveil his plans to boost growth. i'm matt nesto in the u.s., and this economic group raises their 2010 gdp forecast but says unemployment is going to be a thorn in the side of the recovery for sometime. >> and i'm christine tan. a chinese government researcher forecast a double digit growth while the pmoc signals an exit to stimulus measures. equity markets start the week firmly in the green boosted by strength in the resource sector as gold hits another record high. if you're just joining us in the united states, welcome to the start of your global monday trading day. it is worldwide exchange, broadcasting live as always from here in the u.s. asia and europe. let's check out the u.s. futures on a monday morning. 84 points higher, you're looking for a sharply higher open here today snapping that three-day losing streak as we see dollar weakness creep in and commodities climb. and that has everything moving higher. quick check on the german bund rate. the ten-year bund is trending higher, priced down 3.28% is the yield and the ten-year treasury is also selling off to a degree, 3.38% is the yield on it. steve, how we looking over there? >> we're doing pretty well at the moment there, matt. the ftse cnbc global index up about 1% for the whole of this show. the individual were up around 1.6% the last time we looked, and they are still exactly the same place. they seem to have plateaued out after a very good run this morning. the dollar rates look pretty steady, actually, 1.4977 is where euro is trading, sterling, 1.6622 on the pair. here in asia, investors looking for fresh incentives to trade a lot of key u.s. data coming out of asia this week, keeping investors sidelined. of course, trade is a little bit thin with georgia man closed for a public holiday. the kospi's done -- this particular market getting a bit of a boost on talk that china will continue the loose monetary policy. the shanghai market also up 0.9%. the aussie market, strong gold and commodity prices lifting the mining stocks in this particular sector, up 0.7% and the sensex trading up. a strong showing today, nymex crude is putting on gains almost a buck now, $98, up 1.2%, 1.3%, $78.45 that barrel. and brent, as well, continues to climb in line with nymex trading at $78.28 a barrel, up $1.08. >> christine, our next guest, he's long on that. louis, the managing partner at lig capital. i want to talk about risks too this rally, as well. you were saying to me off camera, there were two distinct groupings. those who are invested and perhaps want to take risk off the table and those who haven't taken part in this. >> well, as i would explain it simply, there are some people who have a very good year. 40% or 50% as they trail the indices, why would they begin to take risks since it probably will not affect their pay package. if they go home making 40% this year, they'll pay the same. if they do risk and lose some, it's likely to effect their bonus. a lot of people that de-risked in february and march and missed that initial rally and began to invest but have a cash balance between 20% and 30%. those investors will be willfully behind the market. >> do those two groups of investors create equal librium? >> what i think happens is i think you start to begin to see liquidity exit the market towards year end. if you begin to have risk positions, things that are more difficult to trade than on -- on the board stocks, you will begin to see less liquidity. so if you need to sell a big block or do an off market transaction, you'll have less liquidity. i think they're an eke librium now. >> it seems that the market fell last week there had been a major change in mood that doesn't seem so applicable this morning. but if you look over that period of time, the retailers, the apparel stocks really took a pounding among the worst performers in the giveback. do you think there is a meaningful mood change in terms of investors as we get into this final month of the year? >> i think you're always going to see the year-end effect, which is a difficult one. the major contributing factor, i think, to what's going on is unemployment. and we're clearly still increasing in unemployment. we're heading towards 10.5% to 11% in the u.s. year end. i think a lot of numbers were revised in they hit their numbers. people want to be exceeding their numbers. and is it a double year v? that's the question. >> matt asked this question earlier, it's so good i'm going to steal it. first of all, can gold and stocks continue to go up at the same time? >> well, gold typically has been a hedge, and i'm not going to give you the lesson about gold again. gold right now is a currency hedge. central banks do not know if the dollar will be the reserve currency. the safest way of investing in something is homes and gold. the real estate market remains to be seen whether it's out of the woods. the purchasing of gold especially by central banks is one of saying i do not want to be long dollar. as far as whether risk assets go up, yes, i think they will go up. emerging market equity, credit do not belong government bonds and belong not necessarily blue chip but smaller cap things that can do well because those sectors show they can do well in any type of economic recovery. >> louis, we're going to leave it there. not necessarily in blue chips but the smaller companies within the next hour. very interesting, as well. thank you very much, indeed. okay. we are going to take a short break. but coming up, the end of anglo saxton capitalism. that's what the confederation of british industry is discussing. stay tuned for more coverage of the cbi conference after this break. the man speaking there is from the imf. for over 150 years, wells fargo has been putting our clients first. according to a leading independent research firm, in 2009 clients rated wells fargo advisors the #1 u.s investment firm for doing what's best for them. with advisors nearby and nationwide, we're with you when you need advice and planning expertise to meet today's challenges. wells fargo advisors. together we'll go far. the confederation of british industry is holding its annual conference today. british prime minister gordon brown will address the conference along with the opposition leaders, david cameron. the cbi is warning businesses that a less risky approach to business is needed. even if this results in lower profits. the announcement calls into question the traditional anglo saxton model of capitalism. ross westgate is at the conference. we've been here before, haven't we? are they serious? >> well, look -- i think they're trying to look out what is the past going to be for regulation, for business, for investment over the next ten years? we're going to be hearing from the political leaders of the uk, including gordon brown a little later. before that, we've heard from the managing director of the imf telling the conference about how he sees the global picture shaping up. because the lag between unemployment and growth, says it's too early to say we're out of the crisis because people will continue to be losing their jobs. and not until we have seen the peak in unemployment can we say that we're definitely out of the crisis. what is going to be critical for the future is going to be the sustainability of the recovery. and that's dependent on the policy decisions in the months to come. and, of course, that means because of this path of recovery and pace of recovery between the debtor countries and what's going on in the west and emerging markets, we're going to see different things at different times. particularly the problems in the west are going to fiscal policy. >> on the fiscal side, the message is a bit mixed. on one time it's too early, on the other time, it's the right time, when will be the right time? that will be tough. and we will have the most advanced economy another thing to go back on a more sustainable path on the fiscal side. i see less problems on the monetary policy in many advanced economies. but in some emerging economy, which face different challenges, the monetary policy may need to move sooner because they're already under pressure and possible inflation pressure. >> and he spent a lot of time talking about the rebalancing of growth that's needed, the deficit countries like the u.s. are going to see a rebuilding of savings. of course, that causes a question mark about where the future growth is going to come from. and while the likes of china are stimulating the domestic side, they're not going to be able to pick up the slack that quickly. he says that's why the consensus view is that growth over the next few years globally is going to be fairly sluggish. and he also talked about policy, particularly in china, saying, of course, it is natural that at some point they will, it is in their interest to let their currency appreciate. but, this is the key thing, he said, don't expect anything too soon. so he says it's going to happen, but we mustn't expect them to do it too quickly on revaluing the mmb. >> let's bring louis in with us, as well. the regulators seem to lack a bit of appetite for wholesale changes because they're very concerned, of course, if you do something in one country, business is going to another. do you see the appetite for global cohesion and hence some real movement on some of these? >> well, the question i get typically asked, steve, is how do you as a hedge fund manager feel about paying 65% tax? given what i'm getting for my tax dollar in the uk or my tax pound in the uk, i don't feel very good about it. if i'm continuing to see increasing debt and continuing to see social programs that are underfunded, and i'm continuing to see the expatriot community being taxed disproportionately, i think it's actually very dangerous for the uk government to say, right, we're going to tax the people and make the most amount of money because they can leave. it's the actual person that works that has a job 9:00 to 5:00 that's in a lot of the sort of non-financial sector jobs that has no job ability and is going to stay here. >> louis, it's very interesting because all of the big fiscal leaders are going to be speaking. i wonder given the interesting poll this weekend we've had that puts the conservatives a lot nearer to the followers and chasers from the liberal democrats whether the language be adapted somewhat because of it. >> well, yeah, it is going to be interesting. what the political leaders are going to have to do here is set out, the roots to recovery. they're going to have to sell out their plans to deal with the fiscal deficits, sellout on how to create the jobs of the future which is of course the quickest way to reduce the deficit. at 11:00, the prime minister, gordon brown is going to speak, then there'll be a q & a session. finally david cameron the leader of the conservative party will then have his chance to speak and take a question/answer session. it'll be interesting to see after 44 years of the annual conference, this year probably the hottest tick ever. we're going to have a mix of politicians, regulators, and the business community. i think by the end of the day, hopefully, we never can be sure, we'll have a clearer idea of what policies are going to emerge going through the general election in june next year. >> we knew it was the hottest ticket because you're there. we'll see you, of course, hosting the show, strictly money for all of you uk viewers. and we'll have coverage of those leaders' speeches. thanks, ross. a group of our own hot ticket economists here in the states have raised their gdp forecasts for 2010, but they also say that unemployment is going to remain high. the latest survey from the national association for business economists is predicting growth of 2.9% next year, that's up from the previous forecast of 2.6%. the group sees the unemployment rate holding at about 10% through the second quarter before slipping back to 9.6% by the end of the year. now, they also believe that inflation will remain low because of substantial slack in the aforementioned labor market and further productivity gains which will reduce employment costs. also of note, st. louis fed president james bullard says the central bank should keep its mortgage asset purchases alive to give policy makers more flexibility. the fed has committed to buying over $1 trillion in mortgage-back securities by the end of march. now, bullard says with rates near zero, extending the program would allow the fed to react if and when the economy takes a turn for the worse. bullard will be an fomc voter next year. well, china's economy is likely to grow by 10% this quarter and will grow even faster in the first quarter of 2010. that's according to published comments by a government researcher. but he says there's unlikely to be any significant changes in monetary policy next year. as for the u.n., says a fast appreciation could hurt china's export sector while the small and gradual rise would likely feed speculation and hot money inflows. meanwhile, a central bank newspaper is suggesting that china should exit the stimulus measures for the property sector or risk having the property market spin out of control. and not too far away, shares of india's reliance industries hit one-month highs today. after investors said plans by reliance to buy lye don bas l industries. we have a source saying the deal is worth between $10 billion and $12 billion and would create one of the largest pet tro chemical firms. it would give reliance technology patents a strong presence in the u.s. and europe. and still to come, we'll get you up to date with the latest on the markets after the break. and which artist holds the record for the highest number of pre-ordered albums of all time? well, a record-breaking album is released today. we'll fill you in later on in the show. and it's that time of the show when we love to hear from you. whether it's a comment or a question, e-mail us. you know the address, it's worldwide@cnbc.com. you all want to run your businesses more efficiently, so we've brought in a team of experts to help. one suggestion is to make your shipping more efficient with priority mail flat rate boxes from the postal service. shipping's a hassle! weighing every box... actually, with flat rate boxes you don't need to weigh anything under 70 pounds. if it fits, it ships for a low flat rate. call or go online for a free flat rate box shipping kit that includes free boxes and our helpful shipping guide. do it today, and we'll ship it all right to your door for free. ok, but i ship all over the country. you can ship anywhere in the country for a low flat rate. ship international, too. and remember flat rate boxes come in four sizes and shipping starts at just $4.95. call or go online for a free shipping kit with a full supply of free boxes, plus the shipping guide. act now, and you'll get them all delivered right to your business free of charge. priority mail flat rate boxes only from the postal service. a simpler way to ship. call or go online now to get started. welcome back to our global equity markets round-up now. let's start off with becky who joined us. >> let's take a check on where the ftse 100 is going. it's been a really strong morning so far. we seem to be sticking around these levels, as well. pretty flat line as far as that market is concerned. we're adding about 88 points or so, 1.7%. that seems the case across europe, as well. certainly here in the uk, we're looking at very, very decliners on the uk market. amongst, mining stocks, basic resources and mining stocks gaining lots and lots of ground, 4.8%, in fact, higher for the biggest gainer. natural resources looking very strong. followed by lonmin, randgold resources. cadbu cadbury, today reports that kraft may raise the bid for cadbury if some rival bidders come out of the woodwork. two weeks ago they approached shareholders of cadbury directly with their hostile bid worth $16.8 billion. and there have been reports over the past couple of days about possible bids coming from hershey, ferrero. we will see a little more movement on that front. but we should keep an eye on the shares of cadbury that have about 1.75% today. very strong in paris. we are driven today by some strong economic data, the pmi for november reached the highest level in more than three years, actually better than expected. also we've got speculation in the news sector, the french government is trying to merge. it has not been -- it's not the first time we have speckation about the stock. also in good shape according to the financial times, the company plans to sell its retail portfolio to focus on luxury and the brand. ppr last week started the ipo of its african unit csio which fuelled the speculation about further disposals in the retail sector. opening higher in the insider trading trial that lasts all the week. 17 managers and former managers will appear before the french stock the stock is 1.7% higher. let's have a look at the asian markets with saijal in singapore. it was mostly a positive picture here in asia with gold miners really leading the rally. not just in australia, but also in china, as well. the exception today, really the kospi, which was just a little bit weak. down about 0.1%. we saw some weakness in the auto plays, as well as some of the tech stocks there. the banking stocks performing well on m&a hopes. and this is after the chairman expressed interest in kbe. as for the greater china region, hang seng index up 1.4%. also m&a news there, as well, as china's announcing it will buy a 53% stake in the securities, worth about $135 million, saying they will do a general offer for the rest of the shares and it is fuelling speculation we could see some more deals being done. another stock, i want to mention china industrial bank. today a mid-sized lender saying it'll raise to boost the capital adequacy ratio with the tight capital requirements that we're seeing in china. there is also speculation that a lot of these chinese banks will go to the market to raise some more money. now back to matt in the u.s. >> thanks, saijal, appreciate it. a lot of data on a short week here. we're all going to have thursday off in america for thanksgiving. a great holiday, i would recommend everyone adopt. but the first thing that we will have is the revision, if any, to the third quarter gdp number. consumer confidence also out, durable goods, personal income in spending as well as the minutes from this month's fed meeting. existing home sales will kick it off today, though, at 10:00 a.m. washington time, look for a 2.3% increase to an annual rate of 5.7 million homes. oil services provider, bj services reports results before the opening bell. campbell's soup and tyson food will also give us their numbers. after the close, the final of the dow industrial stocks will give us their numbers. hewlett-packard will also hear from brocade communicas. cit has the initial hearing in bankruptcy court today in new york city, the commercial lender filed for a pre-packaged chapter 11 earlier this month, a majority of bondholders support the restructuring as it aims to emerge from bankruptcy by the end of the year. and that is your global stock watch. coming up, if you're concerned with trading rather than thanksgiving holidays and tucking in the turkey, stay tuned, we're going to find out how to position your portfolio as the year draws to an end. it's 30 minutes past the hour. here are the top business stories we're tracking all over this world that we share together. in the u.s., economists are raising their gdp forecasts. it's true. for next year, but they say unemployment's going to be a pain in the neck for the foreseeable future. >> i'm steve sedgwick in europe. equity markets firmly in the green, boosted by strength in the resource sector as gold hit another record high. and here in asia, china's banking regulators reportedly urging lenders to raise their capital adequately ratio. all right, folks. off we go. the peak in the futures. looks bright, 90 points higher, futures with a positive fair value of almost 1% if we were to hope right now. the treasury yield on the ten-year is going to be inching higher ever so slightly at 3.39. so a little bit of give back on a very busy 100 plus billion week of new issuance of treasury debt, steve. >> these european bosses proceeding those u.s. futures 1.7% higher for the ftse. maybe we've taken a peek out of and that's why we're higher -- i don't know. in terms of the dollar rates, what a place it appears to be. euro/dollar trading, 1.4970. how did the asian markets look? >> a little mixed today. waiting for fresh clues on how to trade. we have japan closed and volume a little tight. the kospi ending marginally lower, 0.1% down, the hang seng surging 1.4%, a lot of talks about monetary stimulus policies, and that is fuelling financial stocks which are gaining, pushing this market higher. the shanghai composite is up 0.9%, as well. and australian markets, up, and the sensex is up 0.9%. and nymex, crude on strong gains at this point in time, 96 cents higher, $78.43 a barrel and brent is tacking on gains up more than 1% at $78.36 a barrel, up $1.16. matt? well, for some more strategy and insight on where we might trade today william, partner at edge capital partners from hong kong joins us as well as louis gargoure still along for the ride. william, let's see what you have to say. we saw three weak days last week. everything was the inverse of what we're seeing here this morning. was that a marketable -- or a marked event? or was that just one of these short-term dips which proves to be a buying opportunity? >> i think it's one of those short-term dips that turns out to be a buying opportunity. if you take a look at the past mondays for the past several weeks, it pays to be long and strong on monday. that being said, i think i agree with one of the comments made earlier that going into the fourth quarter, what we're likely going to see -- the tail end of the year, what we're likely going to see is volumes declining, but most people still playing the risk trade. not to play a broken record, we are still very much focussed on quality. but i think most investors who start off in cash move to credit, have become dissatisfied with the way our credit spreads have gone and rotating towards equities. we think going into the end of the year, equity markets will continue to be up despite the fact that some try to book their compensation packages. >> well, let me ask you about that. if you're long and strong and playing quality. what exactly is quality right now in this marketplace? i mean, because if that's the case, you must be lagging because everything risk has been working and quality has been lagging. >> quality has been lagging. we've benefitted this year because quality for us at the beginning of the year also including technology. so while we have some positions in consumer staples and also technology has balanced us out. so we've participated in the rally quite significantly. in addition, our international exposure, 25% of our books have been japan and the other 5% in brazil. those markets up very strong for our clients. that being said, we still are finding unrecognized safety in areas like health care. where if you take a look on trailing earning, 12 times earning, closer to ten, very low degrees of debt, good margins, and an ability to grow from demographic tail winds within the u.s. specifically. and we think that finally when there's some clarity in the package coming through congress that we'll finally get to unlock that value. >> let me bring you in here, as well. you were saying earlier in the show that you thought the small and medium-sized companies might be worth a look at. that means russell 2000, why would you go for these companies? a lot higher risk and volatility. >> since we've actually had a significant value in risk assets, it's been predicated upon expected growth. in a sovereign investment, we try to analyze what we expect in terms of growth. the single biggest has been access to financing. banks have not been lending. what i think is going to be happening in the new year, we're going to get a bigger clearer picture as to what wages and employment are going to be doing, banks will begin to lend once again to smaller and medium-sized companies and the smes have a higher growth rate than their bigger brethren. the bigger companies have done very well because they've had access to capital and bank markets. the smaller companies haven't, i think that's about to change in the new year with more clarity. >> yeah, bill, just looking at the boards, that's the 12-month picture. but actually over a shorter period, this year-to-date, russell 2000's underperformed the s&p by around about 4%, as well. the default rate would be up presumably at smaller and medium-sized companies compared with the bigger caps, as well. do you buy louis's argument? >> well, what i don't like about louis's argument is frankly the small and mid-cap companies are primarily focussed within the u.s. and the domestic economy. and when you take a look at the larger cap, most of their revenues are generated outside the u.s. so the dollar effect and the fact there's been weakening over the course of this year will translate into a natural earnings growth for those larger cap companies. from a lending standpoint, i don't think that banks are going to be lending as strongly going into 2010, and that's for a couple of reasons. first, i think most bank's balance sheets still have credit issues. commercial real estate issues especially on the community bank side and smaller bank side and regional bank side. i don't think they're going to be too apt to increase their lending any time soon as they go through the process of recognizing what aspects of their loan books will not be performing. finally on that point, as well, we think that the access to capital markets will continue to be a benefit as a deleveraging process continues over the period of a couple of years. >> bill, since you're located in asia, what's your view on emerging markets equities? that's one of the picks we have prioritized in terms of growth rates. >> absolutely. and that's one of the reasons why i'm here. like i mentioned earlier, it has been a big part of our client portfolio. and to their benefit, and frankly this economy is growing quite strongly, but due to the fact of the currency regime has been importing easy monetary policies. in combination with the stimulus package out of china was spent far faster than the u.s. and put to work much quicker, you've had an economic bounceback quite a bit on combination with easy monetary policy. and so there's a couple of things that could occur. typically what would happen is a currency would appreciate and prevent inflation from occurring despite slowing down capital flows. but on the other side, what has happened because the currency regime, you've seen an asset price inflation, specifically in property prices. so we're here to check that out and see whether or not the risk to the economy is very real. when you take a look at the strong growth that's occurred, for instance, in china, it's primarily in durable aspect. so when building you're talking about bridges, roadways, which is fantastic for building infrastructure in the economy, but really a one-time source of growth. we'd rather see consumption grow quite much more so in order to balance the economy internally and not make it so dependent on exports. which i do think consumption is growing quite considerably and i think the balance will play out over the next couple of years. we continue to stay bullish on asia and japan specifically. the primary factor is, of course, valuation and valuation is extended a little bit. while we're still long-term bullish, we're going to be sensitive to the prices we pay. i think the money we put to work today will be more in a long/short format to play a relative value aspect. when you see asian companies, since the shakeout in july, there's been more divergence between the winners and losers and i think that will perpetrate through 2010 and becoming much more of a stock picker's market rather than liquidity driven. >> are you betting on the fact that china is going to revalue? it's going to let the currency appreciate why you're bullish on a greater china market? >> no, i think it's one of the ways that we can protect to some degree against the massive devaluation of the dollar. if that happened, i think china would make a move versus currency, but it's not an expectation. you know, from any politician standpoint, stability of their investor -- of their political base is important, right. so the weaker the dollar on the end of the day, the worse off this economy will be in order to grow from its exports, which are still a main part of the economy. i think everybody globally has that vested interest in making sure that the dollar, at least if it has a decline, which long-term it should have a decline, at least has an orderly decline rather than some kind of precipitous fall. i would expect china to revisit the policies at some point in time, but it's not going to be near term. >> okay. william, we'll leave it there. william skeehan, you're both going to stay with us for closing thoughts, as well. the most pre-ordered album of all time on amazon.com hits the shelves today. and who does this belong to? not michael jackson or u2, it's this woman. you get emotional when you hear her sing, susan boyle. stay tuned to see what else people will be talking about today. welcome to cnbc's "worldwide exchange." here's some of the stories we're tracking around the globe at this hour. in the states, coca-cola planning to double the amount of plants it has in china over the next ten years. the financial times says the company also wants to distribute more than six times as many coke-branded coolers to retailers, bars, and restaurants in the country. coke outlined the goals to double system wide revenue to roughly $200 billion by the year 2020 with 60% of the new growth expected from china, india, and emerging markets. if you check out coca-cola in the frankfurt at 38.58. all of those famous vampires and werewolves and monster movies, they're still popular today. the latest incarnation, "twilight: new moon" which features several shirtless creatures that go bump in the the night made $258 million at the box office worldwide in the first weekend. in fact, it made $140 million in north america alone, that's the best debut this year. and the third best of all time. behind the dark knight and spider-man 3. "new moon" did shatter the best opening day taking in $72.7 million in the u.s. and canada on friday alone. christine. in the first quarter of 2010, that's according to published comments by a government researcher. but he says there's unlikely to be any significant changes in monetary policy next year. as for the chinese yen, it could hurt the export sector. meanwhile a central bank newspaper is suggesting china should exit the stimulus measures for the property sector or risk having the property markets spin out of control. shares of india's reliance industry has hit one-month highs today after investors said plans by reliance to buy the lion del baz l industries was well-timed. we have sources saying the deal is worth between $10 billion and $12 billion and would create one of the world's largest petro chemical firms. they would get greater bargaining power and a strong presence in the u.s. and europe. kraft could raise $16.8 billion hostile bid for cadbury. well, that's what sources have said. nestle and ferrero are all considering bids for cadbury. the original bid was called derivalry. cadbury will only consider above 800 cents per share. a final thought now from louis gagoure, who has been with us for the last hour. louis, how are you getting on this year? and where will you put your money next? >> up over 70% as i said earlier, where are we going to put our money next? we think you won't have another w, another systemic shock. we want to have a diversified portfolio approach. so equity in bricks, brazil, russia, india, and china. we've just seen the growth rates, we've just seen the coca-cola's ramping up. you want to buy equity where there's economic growth. in terms of corporate debt, what's actually significantly changes here is in moody's and s&p ratings, their expectations of defaults have come way down. between 5% and 7%, not 11% and 13%. which means you hold a portfolio of bonds and the yield in that portfolio adequately compensates you for the fact that one or two of the names in your portfolio may go bankrupt. we've just seen it bought out. it's been bought three or four months after filing for bankruptcy. there's life after bankruptcy as gm shows you. growth economy equities, corporate debt, and in some cases i would twa look at the global commodity story. not necessarily gold, but gold's got a life of its own. but oil, copper, and the softs, agriculturals. we think the demand in agricultural and investment metals, let's say, china growth and other stories, will drive 2010. >> louis, thank you very much indeed. congratulations. >> thank you very much. >> louis gagour. u.s. "squawk box" follows worldwide exchange, becky quick joins us to tell us what to expect. good to see you. >> steve, good to see you. what did you qualify the year as a what kind of year? >> cracky year. >> i don't know, i thought -- you thought you said what? >> cracking year. >> oh, okay. i heard differently. thank you that clarifies things for me. let's tell you what's coming up on "squawk" in a few minutes. the fed under fire in the halls of congress. ron paul's proposal passes in committee. and now the gloves are coming off. we're going to be talking to the texas congressman coming up at 8:40 a.m. eastern time about making this measure a reality. there are a lot of people fighting on the other side. we'll talk about this a little later this morning. also in defense of the central bank, hearing from former federal reserve governor randy krosener who will make a point about why the fed needs to keep the independence. preparing for black friday, jane wells will tell us about the big deals and shopping strategies surrounding this holiday season. also how weather around the country may actually play into the shopping trends into crowd control, as well, trying to keep everyone safe while shopping. all that plus something we can call d.o.g.s. we've got plenty of data that's going to be coming out this week and a heads up on what to expect. we'll also get predictions on the next market bubble. "squawk box" is coming up at the top of the hour and steve, we're looking for a crackling year here too. >> that was a k not a p. >> i heard something a little differently. >> thanks, becky. >> thank you. >> why don't we all just agree on smashing or jolly good. we're going to get a reading on the u.s. housing market later on this morning with a release of existing home sales data. details on that. plus, everything you need to know to stay ahead of the game for the u.s. day ahead.  all right. let's take one last look ahead at this holiday shortened thanksgiving week in the states. joining us again with some closing thoughts here today. so you're pretty bullish, you like the quality and fairly conservative, but long-term bullish, what would have to change for you to become bearish? >> i think one of the things that would have to change is a massive spike in u.s. treasury rates. that's one of the issues that we have on our radar screen as a potential black swan and ways we're trying to position around that. because a spike-up would be detrimental to credit and equities if unanticipated. we watch to see how well subscribed they are and we've been very well subscribed both by foreign buyers as well as domestic buyers. but keeping an eye on it. >> so we pass this clunker monstrosity of a health care bill and we continue to issue $100 billion of treasury debt a week and we go into a double dip recession next year. what do you think is going to happen to these treasury yields and your bullish sentiment? >> well, you know, in terms of treasury yields, you don't really, you know, the double dip is not necessarily even necessary for it. what it really requires is the fact that you just brought up. most of the treasuries we've been issuing to fund all of our stimulus packages are very short-term in nature. we're essentially funding long-term liabilities with short-term debt. and so what is most at risk is frankly buyers not showing up to buy the bonds. now, if that were to happen, that would actually cause a massive dollar decline and a pretty strong correction in both the equity and the bond markets. so i term it as probably a 5% risk, i don't see it as a high probability, but something we're paying very close attention to. otherwise things that we'd have to be also paying very close attention to in order to turn bullish to bearish would be fund flows. we've been watching very closely and dollar flows have been moving out of the money market funds first into credit and then recently having changing over to the equity side, which is one of the reasons which why we were bullish, we saw on a nominal basis much less a risk adjusted basis. and that's one of the reasons why we think the next couple of months, at least, you might see strong equity markets, more so than people expect. frankly the market has a history of causing people as much pain as possible. we've been hearing derisking for a longer period of time and we think the trade could be up. that being said, you know, our firm, we're not traders, we are long-term investors. and from our perspective, what we see is a very difficult environment for the develop markets. and we want to be long companies that we think are going to be able to weather that storm well. >> we have to leave that. thank you very much for your thoughts. matt? >> i'm matt nesto in the states. >> i'm steve sedgwick in europe. >> and here in asia, i'm christine tan. thanks for watching. welcome to the now network, population 49 million. right now 1.2 million people are on sprint mobile broadband. 31 are streaming a sales conference from the road. 154 are tracking shipments on a train. 33 are iming on a ferry. and 1300 are secretly checking email on a vacation. that's happening now. america's most dependable 3g network. bringing you the first and only wireless 4g network. right now get a free 3g/4g device for your laptop. sprint. the now network. deaf, hard-of-hearing and people with speech disabilities access www.sprintrelay.com good morning. monday markets, the dollar dropping, commodities climbing, and it's the economy. four days of trading this week and a flurry of economic data. the picture at this point, though, green arrows across europe and asia with futures pointing to a positive start. "squawk box" begins right now.

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