Transcripts For CNBC Worldwide Exchange 20120130

spinning today. deals involving can companies in the u.s., europe and asia are now on the books or in the works. bye-bye bonus. steven hester kisses a $1.5 million bonus good-bye in the face of political and public pressure. hello. you're watching "worldwide exchange" with christine tan and i'm karen tso. hey, karen, good to have you with us. we have a spectacular guest host none other than of course jim rogers, ceo and chairman. any e-mails, you know where to send them, right, karen, this man sitting here waiting rearing to go i can tell. he has his cup of tea and i think maltese and chocolate -- >> a martini. >> couldn't tell. >> it's fantastic to have jim on the show. don't forget to send those e-mails. we will try to get to them. and let's take a look meantime at asian markets are christine. this is how the picture is looking in terms of the outlook. looking pretty negative today. while we're waiting for details coming up on the greek restructuring plan the eu summit happening today so investors are staying cautious. as a result china coming back from a weeklong lunar new year who wi holiday to move lower. why? because there was an expected expectation that the rrr cut from banks but that didn't happen so they were disappointed. the hang seng got dragged down low as a result 1.7%. over in japan 0.5%. some people taking profits but earnings continue to be in focus today. the kospi down 1.2%. marginal losses there. the taiwan weighted index, up 2.4%. why? we had the surge in apple shares to help propel technology shares over in taiwan. the sensex down and the straits times down 1%. a negative session. a lot of caution in markets. some of that negativity coming this way. risk aversion on friday when we had that weaker than expected u.s. advanced gdp number for the fourth quarter. now the fact we don't have a conclusion on the psi talks also damaging sentiment and you can see as we're moving throughout the morning session the market winding down nearly 1% now. let's take a look at key markets to see what we're looking at. in the lit i ftse mib down so a weak start to kick off the week. more than a 1% pull bashg on the french market. the dax is almost down about 1% as well so fairly consistent picture we're looking at. the ftse in london down about 0.8%. bund markets, a bit of a move into the safe haven trade. the u.s. dollar but also no sprays to see prices up 1.83%. the gap close to the ten-year treasury note yield 1.87%. the portuguese market with some news out today. the ten-year yield at a high. 15.66%. 15.38%. elsewhere this is what we're looking at in spain, too. the ten-year bond sitting about 5% on the yield. itly firmly in focus today against the weaker backdrop as we've seen markets up negatively. a yield today of 8 billion euros worth of debt on the five and ten year sector so a lot of focus to see how much appetite there is for this. elsewhere greek prime minister lucas papademos will meet with the european heads of states in brussels in hopes to secure a second bailout with $170 billion. this as athens appears on the verge of a debt deal with private investors. >> translator: we are just one step away from the final agreement. i believe that we have acted completely within the framework of the directions that we were given by the euro group. >> as we've been talk iing abou tensions mounting ahead of today's summit as it emerged germany is pushing for tighter eu control over greece's budget process. athens has dismissed the idea saying that greece alone has the responsibility and incentive to implement economic reforms. silvia is in brussels today. let's take a look at some of these comments first. what did you make of the extra pressure germany is now piling on greece? >> reporter: i'm surprised the greeks are so surprised by this because this is what we talk about when we talk about fiscal compact, that part of your budget control, of your spending control is no longer going to be in national hands and that at the moment the greeks had two years to deliver. they've promised, they've promised, and they've promised a bit more and didn't deliver. of course there's a certain sense of ex asperation saying i you can't do it maybe you need some advice to help you decide how to spend your budget that this doesn't go down very well, that this isn't diplomatically wise to leak this out of where it came from. that's a different story. but ultimately whether the greeks like it or not, whether there is going to be an eu commissioner sitting in athens or not, there's going to be a certain amount of control by the troika, by the imf, the eu, and the eurozone, whatever, and the ecb in that instance exerted on how they spend their budget because they want the rest of europe to pay for their budget. >> jim has something he wants to ask you. >> sylvia, where do the greeks think they're going to get the money if they don't list en to the rest of the people? >> that's exactly the point. they go out -- i understand that they have their difficulties in implementing the kind of measures they promised a long time ago but essentially, cynically, they go 0 out with a begging boat to pay for their debt. so that's -- if you go to the bank and you tell them i've got no money, give me money. the bank gives you the conditions under which you can get the money, and then you have to either take it or not get the money. this is the same that will happen here. the rest is saber rattling and posturing and ultimately either the greeks will deliver and it doesn't look like they do, there will be some kind of eu control or eu/imf/troika control. they will call it a nicer name. ultimately something like that will happen because otherwise they won't get the money and they will get the money because we know that this is the way to move forward are. >> let's get to the politics in play here. what's your read of how the reaction would be on the ground from local greeks, of course, protesting against measures such as austerity. what would the reaction be if athens did hand over the budget reins? >> reporter: of course there's not going to -- none of this goes down well. we're sitting here in brussels where we have the first general strike in over 20 years because of what? because of austerity measures. because they don't want to raise the age for retirement, et cetera. we have the same problems, maybe not with the same immediacy of pain everywhere else around europe. whenever any country is trying to implement austerity, it doesn't go down well. people will have to give up some things. and that never goes down well and politicians then fear of not being elected again which we'll see with nicolas sarkozy this year in france and some other election that is are coming up. this is going to be the same problem everywhere and for the greeks, of course, the pain is bigger than for everybody else because their government, let's say, ignored the writing on the wall maybe more adamantly than anybody else. >> when you hear what silvia spoke about, austerity reforms, that's a second bailout we're talking about now. do you think -- >> christine, it's the third or fourth or fifth. every time i come here we're talking about greece. >> but do you think it's going to be this year we see greece leave the eurozone? >> no. i don't think we'll see anybody leave the eurozone in 2012. we'll have more problems in 2 2012, but there are 40 elections around the world in 2012, christine. governments everywhere are going to be doing their best to make sure we get through the election. maybe 2013 you should be panicked, certainly by 2014. 2012 i think we'll be okay. not panicked but okay. >> does 2012 mean there could be a slight change in strategy on your part? >> still short european stocks and i'm still long the euro. i'm wondering why i'm short european stocks, since they've been going up in january. no, i'm still short european stoc stocks. >> what news would you like to hear to start buying european stocks again? >> i would love to say, okay, it's a disaster. everybody is going to take big losses, banks, bondholders, shareholders of the banks, all take big losses, we're going to start over. everything would collapse. i would buy all the euros i could and all the stocks i could. i don't think it will happen quite that way. >> jim, let me ask you a little bit about the eu summit in brussels because there's a suggestion that we will hear more about the esm, the permanent rescue fund which may run parallel, if this happens and there's a significant firewall there, would this make a difference to short-term can confidence for you? >> karen, we've been having european summits i think every week or so, two or three times a month the last two years, haven't we? i wasn't even aware there was a summit today. that shows you how much attention i paid to them. it's all a charade. it's all a charade. tear just trying to make sure they get through the french election and whatever other elections are coming up. i'm not going to pay too much attention until there's real action. >> all right, jim. we continue to stay with us as our guest host for the entire two hours. if you have any questions e-mail us. >> reporter: it really puts it in context, doesn't it? what investors are focused on still are a number of earnings results. today shares in phillips tracking down more than 2%. this after the dutch electronics giant post ed a net loss of 162 million euros in the fourth quarter. the weak ness in the european markets and losses from its tv business. phillips ceo said 2012 would be difficult for the company. >> this is a multiyear program. there's some proof points in q4 that shows you're on the right path. also businesses had high single digit growth but clearly still have a lot to do as the overall results were disappointing. >> we have seen better numbers coming out in the airline space. easy jet and now the competitor ryanair has raised its guidance after swinging into a third quarter profit. this compared to a forecast of 16 million euro loss. they said an increase in fares helped offset a rise in fuel costs and weather conditions have been favorable. >> it has been positive for business. also we're in the teeth of a recession now and we are seeing people trade down, consumers are becoming more price sense it tiff and during recessions previously have done well. >> shares in the frankfurt listed thomas and betts are currently tracking 23% after abb struck a deal to buy the u.s. manufacturer for $3.9 billion in cash. abb is paying $72 a share for thomas and betts and it's a 24% premium to friday's closing price explaining the balance on the share price today. abb's ceo hogan spoke about the deal earlier on europe's "squawk box." >> showing a lot of resilience from the economic standpoint over the last six months and seems to have momentum, too. it gives us confidence, also. >> well, it's been also mega monday merger stories elsewhere here in asia and in the u.s. we're looking at exxon mobil, the company is selling, of course, its japanese refining and marketing unit to partner tomen general. they will drop from 50% to 22%. exxon has been selling refining operations in recent years especially in developed markets where fuel demand has been weak. exxon and tonen general were trading -- we don't have the board but we will continue to monitor those shares for you, of course. very interestingly facebook, everyone is aware of that company, is about to update its status. the social networking site could file its ipo papers on wednesday. what will be almost certainly the largest internet offering 0 ever. facebook reportedly aims to raise up to $10 billion which would value it at upwards of $100 billion. to put it in perspective, that's roughly one mcdonald's and a half of walmart. at a debate in davos facebook's ceo cheryl sandberg talked about the merits of an ipo. >> i think the best thing it can represent is the kind of growth that creeds jobs. facebook's a company that's barely seven years old and has created -- we have 3,000 employees around the world, not shech but just the studies in the last year say we've created 450,000 jobs just in europe and the u.s. and obviously much more around the world. >> so if facebook were to go for an ipo, jim, would you be interested? >> no, no. that kind of stock i don't buy. they're usually very, very expensive and a lot of people like to buy expensive stocks like that. i do not. >> it was not facebook in terms of technology, would you see a surge in technology shares because of what happened to apple, would you be interested in some shape or form? >> i'm short technology so, yeah, i'm interested in some shape or form but can't imagine buying. they're all bubblish, a little bit hot these days, as you know, and have been for two or three months. that's why i'm short. but i don't really buy high-priced stocks. >> jim, we know that so far morgan stanley and goldman sachs are lining up to help with this ipo. some key brokers on the scene there. what do you make of the timing facebook is bringing the ipo to market? >> well, karen, it's been demonstrated many times the sellers usually are smarter than buyers. facebook knows when the best time to sell is and they're doing it. i'm not suggesting that there's something is wrong down the road but sellers usually are smarter than buyers at least for a while. >> jim, what do you make of all this news in the spotlight? it's a new trend, isn't it? is this something you could be interested in? >> last year the numbers were very low. volume number was low on the stock exchanges and m&a was low. investment bankers didn't do well last year at all. maybe something is going to be better this year, as i said before, i expect 2012 to be better than most people expect. maybe that's part of it. >> interesting point to make. >> so cnbc will do better. >> okay. read behind the lines of that. stay with us. jim rogers our guest host. if you have any questions e-mail us worldwide @cnbc. >> i like jim's forecast there. coming up, france's president nicolas sarkozy is facing a tough re-election campaign this year but can he count on help from an unexpected quarter? find out who will hit the trail with him after the break. ♪ ( whirring and crackling sounds ) man: assembly lines that fix themselves. the most innovative companies are doing things they never could before, by building on the cisco intelligent network. welcome back to "worldwide exchange." i'm karen tso europe and christine tan. nicolas sarkozy has used an int interview to detail new measures to boost the country's economy and create jobs. let's get to paris with stephane ped pedr pedrozzi stands by. we hear angela merkel might be hitting the campaign trail with nicolas sarkozy. >> reporter: that would be a way to help nicholas sar koolas sar could cruiserweight a weird situation in case he would not be re-elected. that's an option. he is not leading the race and refuses to confirm yesterday that he would stand for re-election although the comments and the proposal last night were clearly a step in that direction. sarkozy has announced that the rate in france will increase from 19.6 to 21.2%. the process will not be used to reduce the deficit but lower taxes, a way to boost their x competitiveness. the new rate will be implemented in october. meanwhile sarkozy hopes that in the meantime people would accelerate some spending and this could help to support the french economy. sarkozy also announced yesterday more flexibility in terms of working tame. they will have a way to avoid the 35-hour working week and also sarkozy confirms the new tax of 0.1% on financial transactions will be implemented from the first. karen? >> stephane, angela merkel hitting the campaign trail with sarkozy says something about franco-german relations. is it a hope or hindrance? >> reporter: definitely it would help sarkozy and that's part of the communication for a while. if you remember there's even a name for that. and yesterday evening on television sarkozy mentioned germany and said germany as an example on five times definitely wants to be seen in france as the president who is working on the convergence with germany. it would make sense to have angela merkel involved in the french campaign but still it would more complicated for merkel in case sarkozy is defeated. >> stephane, this is jim rogers. can sarkozy win the election? i mean, especially if he goes around with merkel saying everybody has to cut spending, can he win the election on that kind of platform? >> reporter: well, he made things clear for not a couple of weeks. sarkozy saying they didn't want to lie to french people so will make the campaign base d on the promise to reduce the public deficit and the debt level. now it's true that the loss of the aaa rating for france a couple weeks ago have made things even more completed for sarkozy and if you look at the opinion poll for the time being, the socialist is leading the race. sarkozy wants -- which is going to be short. some will accommodate in the first two weeks of march which means that the campaign would last for only a couple of weeks but the task for him is really hard if he wants to be re-elected. >> thanks so much for that, stephane. elsewhere, a decline in steel demand this year. the ceo told a german newspaper that the company is preparing for a drop of 5% or more. pe are joined by patricia. good morning. >> reporter: another quote we get from the ceo of kloeckner says it is greater now than in 2008. as far as a trade as far as he is concerned is not looking good down 5% in europe or more because of the eurozone debt crisis. european countries will slip into a recession as far as he's concerned and the stocks in that sector are slipping into the negative and the red. down as we speak. also one of the can companies in that sector down about 3% and also suffering substantially down around 4%. interesting to see that the european steel association actually only expects growth. it is marginal but they see up about 1% to 2%. short term there might be a bit of a boost in demand for 2012 in total as far as the ceo of kloecner will look tough and rough. the market is under the weather. the dax trading down about 1%. >> patricia, many thanks for that. good to see you. here in asia and china premier wen jiabao says the government's debt is safe and controllable level. his comments, though, quoted by the official people's daily today were made in a speech earlier this month. that's roughly when china's date ordered reveal $84 billion worth of irregularities involving local government debt. wen promised the management reforms but said the steps will not trigger risk to economy on the yen. repeated china's vow to make its currency exchange rate system more plexable. he added that china has plans to further diversify its more than $3 trillion forex reserves. some reaction, jim, when you hear wen jiabao coming out to say that the debt is manageable and controllable at the same time we hear that $84 billion worth of irregularities involving local debt, what's the first thing that comes to your mind? >> it doesn't bother me at all. that's not so much when you hear they have a true trillion in reserves, but what's worse is that he's even saying anything because when the politicians start denying that there are problems, that means they're usually serious problems somewhere. so it may be more than $84 billion t. but i suspect china will continue to be solvent. if china is not solvent, you have a lot more -- then cnbc will not have a good year if they're not solvent. the whole world will cave. >> we also have a shock in the property market. not many people have priced that in yet. it is starting to correct. and there are lots of concerns. >> really it's been two and a half years now. if people are not aware of that, they'd better watch cnbc more. china has raised interest rates, what, six times, raised reserve a dozen times. they've been doing everything they can. if there are people that don't know that about china, they should not be investing anywhere. >> are you long or short on china now? >> i own chinese shares and the currency. but my chinese shares i don't really -- whenever the chinese stock market collapses, i buy chinese shares. and i hope some day my kids are going to say he was a smart guy. >> i'm sure they say that about you now. we'll talk about that. hold on to that thought. jim rogers, our guest host today. coming up next on "worldwide exchange," we get out to the middle east to look at the iran story about preemtive reaction. plus, while we're all f focused on greece and waiting for the latest news with the negotiations of private debt holders let's not forget about portugal. we look at one of the eurozone's other trouble spots after the break. welcome to the show. the headlines today nearly there on a deal for greece. nearly there on a permanent rescue fund for the eurozone. with you but despite positive noises from negotiators, final hurdles remain. chinese equities tumble on the lunar new year disappointed by crushed hopes of a rrr cut. meantime premier wen jiabao talks reforms and assures the market china's government did debt is safe. the m&a wheel is spinning today. deals involving companies in the u.s., europe and asia are now on the books or in the works. bye-bye bonus. hester kisses a $1.5 million bonus good-bye in the face of political and public pressure. as greece waits for eu leaders to sign off on its second bailout package, fears are worried portugal may be the next to ask for a happenedout. it was down graded to junk. the yields on its ten-year bond hitting highs this morning. short term two and five year debt yielding higher than long-term debt. the trend mirrors what happened to greece before it had to request a second bailout. let's bring in antonio garcia pasqual, chief southern european economist at barclay's capital. thank you for joining us today. let's talk about portugal because we saw all last week that portuguese yields seemed very much trapped in the situation out of greece and even today more pressure on yields. what's your read now how portugal yields are priced? >> the problem with portuguese yields is that the market trading is extremely thin so buying or selling moves the markets massively so they're not great indicator actually of where the risks are. the risks are high because, as you know, the program provides through 2013 and it's unclear whether that will be sufficient. >> the markets worry we may see haircuts on debt similar to greece and the whole way through last week in davos we heard from germany saying greece is a unique situation. it's one off. do you think we will see haircuts on portuguese debts? >> this is a very difficult question at this stage. there is an important difference between greece and portugal. in portugal when the program was initiated in june last year. both signed the program so the program implementation which was really bad in greece may be better in portugal and if they do implement what they committed to, even if they deliver -- they don't want to meet the targets but if they implement we may see more coming from the eu and we may not necessarily see bsi. >> this is jim rogers here in singapore. portugal, even under the best of circumstances, they're still going to have increasing debt over the next several years. i'm not so sure why you think it will be okay in the end. >> i'm not saying that it's going to be okay. when you look at the g ddp it looks incredibly challenging. next year with the budget deficit still high, it will be increasing. what i'm saying is that if implementation is solid weight, even if they fail to reduce the debt gdp, it may be that they provide more funding longer term and it's cheaper financing and that provides debt relief. portugal may find itself in that predicament. >> antonio, where is all this money going to come from? even the germans are starting to run out of money. who will come up with the money? >> well, this is the question. i mean, if the european leaders are what they say that greece is one off, they have to stand ready to actually provide a full backstop for portugal and spain, italy and the others without additional resources, without the bigger firewall. not sure whether the strategy of the one off in greece is going to work out. >> antonio, last week it is worth noting we did see improvement right across europe but then some of the risk aversion coming in later in the week. but people were putting some of this improvement down to liqu liquidity that the ecb has injected into the system. at what point will this find its way into the portuguese bond market? >> well, you really see some of that in the portuguese bond market for the banks, for the large banks. prior to the three year ltro you could see some of the bonds in portuguese bonds trading at around $60, $65 right after the three-year euro you do see those actually rally, trading 80 or 85. the credit risk for those kinds of institutions in portugal have declined considerably on the back of the three year ltro from the ecb. >> antonio garcia pasqual, chief southern european market capital, thank you very much for your thoughts. jim rogers will stay on with our guest host. another story tracking today. iran is threaten iing to turn t tables on the eu by stopping oil sales to some countries. it follows europe's decision to stop importing iranian oil by july. inspectors are visiting the country to determine nuclear ambitions. they expect the second biggest exporter is intending to build a nuclear weapon. let's take a look at some of the levels we saw on the charts. in fact, we have crude oil currently tracking below the $99 a barrel point brent crude where we're seeing the fallout from the iranian story is currently priced at $110. spot gold out higher. yousef, tell us your read on the situation and the impact this is having on oil markets. >> reporter: well, karen, there are two tracks you need to watch carefully here. first of all, what seems like the escalating tit for tat with this new bill expected to be debate debated in the iranian parliament that would halt those sales to europe immediately trying to retaliate a move by the european union and that r l really carries several obstacles, karen. it's not that easy on a logistical front to do that and then also if it does happen, the eu does have defense mechanisms, shock absorbers. talking about 90 days of average consumption in the emergency stockpile so of course the other side that we're watching is the iea visit to eiran, the delegation is there to find out more about the scope of the country's nuclear program. the country maintains that it is for peaceful purposes, the foreign minister has said that they are open to answering all questions. he also said -- and this is interesting to note, karen, that he was optimistic about the mission and the outcome of the iea visit. so we're watching the diplomacy/sanctions front very chosely and, of course, the escalating rhetoric between the two sides. it's a complicated picture to look through. and then spare capacity, you have saudi arabia saying it's willing to step into the market if necessary and other 0 opec members are saying, you know what, we're not so sure about that. example being algeria. >> mixed signals to try to read price oil. let's bring in our guest host again. jim rogers, ceo and chairman of rogers holdings staying with us. the fact that the eu imposed or is phasing in those sanctions, iran might try and preempt it by cutting off some of its exports. what do you think this means for the price of oil? >> i don't think it means too much of anything. in fact, i was going to ask yousef, aren't there other place that is would buy the oil like india? they have started saying they want to do more with the iranians. the chinese said they will buy more oil. so the iranians sell their oil somewhere else and the people who were buying it, they buy -- the europeans buy somewhere else. oil is very fluid. 0 oil is oil. >> we don't have yousef with us. he just dived out of the set. if i can ask you, one of the key comments last year right through the course of 2011 the difference between now and 2008 is the price of oil is lower but now as we have these strains in the middle east do you still have the hope that we have this tail wind of lower oil prices or is it going to be a problem in 2012? >> well, no, oil prices will surprise, karen, how high the price of oil stays and how high it goes because we do have supply problems throughout the world with oil. the world is running out of known reserves of oil whether we like it or not. we will have these political ups and downs but essentially i own oil. i'm long oil. i have no intentions of selling any of my energy because oil prices have to go much higher over the rest of this decade. by the way, karen, you probably know that oil prices in 2011 actually averaged higher prices than they did in 2008. the peak was in 2008. but on average prices were higher last year than that big run-up in 2008. >> when you say you own oil, are you owning chinese energy shares, just -- >> futures. >> futures. >> yes, i roll over futures. that's the way i own oil because if you're a really good stock, you'll make a lot of money buying the right stocks. but the studies show unless you're a really good stock picker you're better off picking futures. i'm too lazy and not smart enough so i just buy the futures. >> that's going to be a quote of the day. jim rogers says he's not smart enough. yeah, right. >> i promise you, he's not. you write it down. he's not. >> karen, i'm writing down that jim rogers says he's not smart enough. >> put it on the wall. >> let's just see. how many people -- hey, you want to write in, do write in worldwide@cnbc.com. >> i'll write in first. >> i feel like a dummy if jim is saying he's not smart enough. we have red really much in play. the stoxx europe 600. we kick off the week seeing a negative selling picture across the charts. let's get into the major indices to see how we're tracking across the continent. in particular the eye titalian market. you can see the ftse mib is off about 0.9% holding the 15,800 mark. in france we have a lot of selling. some of the most sold down stocks are the likes of bnp paribas pulling the market down 1%. elsewhere germany's market now also unwind iing further than their last check, down about 1%, 644 on the chart. that's a pull back of a percent. forex markets. the picture is one of euro dollar strength. the risk aversion back on the cards. the u.s. dollar being bid up. rates 1.3132. a strong week to report last week. sterling also under pressure today down about 0.4% and dollar/yen rates causing a headache for japanese authorities that the dollar/swiss is tracking firmer up you 0.6% as well. also watching bond markets. let's take a look at portuguese debt in particular. this has been one of the real standouts. take a look at this level almost at 15.5% on the yaeld and very much concerned about whether portugal could be the next greece in terms of taking haircuts,terms of default. investors pricing this badly. elsewhere the money is going into these safe haven trades which is why you're seeing green and also bonds. elsewhere against this backdrop of some negativity, the italian debt market in focus and as the government returns, you can see how this is priced currently on the five year. we're a little bit above the 5% yield and i want to show you the ten year as well currently above 6% so focus as to whether that gets below the 6% mark or indeed whether it's right on the money. christine? here in asia a negative picture. china coming back from a weeklong holiday to end lower 1.5% and expected cut in rrr failed to materialize. that dragged down the hang seng as a result as well, down 1.7% but still holding on to the key 20,000 level as you can see. the nikkei 225 is off. once again earnings continue to be in foe ccfocus. the market foreign 0 investors sell out. australian market down 0 30i.4. the taiwan weighted index up 2.4%. shares in apple shares in the u.s. propelling technology stocks over in taiwan up 2.4. the sensex down and the straits times index down 1%. stow overall it's a negative picture. in south korea stocks are snapping a stellar 12th session winning streak on uncertainties of a debt situation and the outcome of the summit. >> reporter: christine, foreign investors seem eager to walk away with positives from across most sectors. we saw losses in the auto space falling more than 7% on disappointing fourth quarter earnings. steel maker construction took a big hit on the economic front south korea's surplus fell from 13-month high peak. global demand. last year a surplus for 14 years in a row $28 billion but even that figure was down from 2010. they expect the surplus to shrink even more this year, to the tune of $13 billion. we've also this several warnings that the country could log its first trade deficit in january since october 2009. south korea's finance minister said he's bracing for a weak first quarter but said he will refrain from gdp growth forecast for 2012 and currently tagged at 3.7%. some of that growth has to do with where energy priceses are likely to head. they are scheduled to visit major oil exporting countries in the east in an effort to secure stable sources of energy amid growing pressure from the u.s. the joint sanctions against iranian crude imports. south korea sourced nearly 87% of crude imports from the middle east last year. back to you, christine. >> thank you very much for that. live from south korea. over in japan tokyo stocks continue to head south. exporter stocks leading losses as the yen edged to a two-week high against the dollar. >> reporter: hi, christine. camera maker canon up 1% to about $3.2 billion for the year ending december 2011. sales had fallen due to the march 11 disaster and supply disruptions from thailand but the firm managed to see some growth through cost cutting measures but canon shares may slide tomorrow on the company's upsetting earnings forecast. canon is expecting a smaller 1% growth in net profit for the year 2012 setting its exchange rate slightly above the current rate at 75 yen against the dollar. they said its president will resign from his position following 0 the camera and printer maker's fall outlook. but fuji film appears undeterred. despite reporting a 59% fall in net profit for about $300 million during the third quarter through december the company went ahead and made a formal proposal for a tie-up with olympus. and in other news, a new government report says japan's population will shrink 30% are from its current level to less than 87 million people by 2016. they will increase to about two out of five persons is estimated to be over 65 years old. >> thank you very much from the nikkei. karen? the european debt crisis and slowing global demand has taken its toll on another joined in the electronics secotor. philips reported a 45% fall in fourth quarter profits. poor results in siemens fell 23%. joining us now is the senior sales trader at silver wind securities. darren, you've got a sell object siemens, the eurozone bellwether, but you seem negative on philips. tell us why. >> i can't remember the last tile philips produced anything but bad news. look back even to the time previous in 2008, philips has been a perennial disappointment. they've been restructuring the business it seems forever closing down division after division and the medical device specializing now. they're obviously struggling to make any kind of positive headway. a clear read into siemens itself reporting a 16% fall in orders just last week. weep saw orders turning up sharply to the end of the year and what we're really seeing is the manifestation in corporate profits or lack of them. >> how much rough water do you think these companies have to ride out here? >> i think quite a lot really. siemens has $100 billion. we're not saying that they're scratching around for something to do. there's a business mix that it may not be the correct for the company. wind turbines is where a lot of the problems have is come from siemens. that's a poison chalice for wind systems and also, of course, there's an exposure to china. 0 orders were slowing down. again, factored in a slowdown in business from china. the eurozone not so much as well. >> speaking of china, i want to bring up fear because you have a buy not necessarily all bad news for manufacturers over this way but if you take a look at the china numbers, morgan stanley analyst was skeptical about what we might see out of autos in china this year saying it's expected to grow about 10% this year. there's a lot of overcompaapacin this market as well. >> well, that's tremendous true. and of course chinese demand has been quite polarized. very much demand at the high end. at the lower end, of course, you can compete with local manufacturers. that fits not all about china. 58% shareholders in chrysler now and a dramatic rebound in the u.s. car market and that's obviously helping fear restructuring story as well. it now owns chrysler. a deal many people thought was madness at the time they bought into a defunct business has turned out to be the jewel in the crown as it were. u.s. auto sales will average around 14 million. the combined group will sell 4 million vehicles globally so, yes, there is a concern about china but, let's be honest, china gdp is still looking to 8.2% for the year. many other countries likely even a fraction of that. >> let's get you in here. >> jim? >> darren, one question. i understand that you're optimistic about italian defense company is not very good. the company has had a lot of problems which always interests me. why are you bull iish? >> jim, it has had a lot of problems and was dogged by a corruption investigation before christmas and resulted in the resignation of the chairman but, look, finmeccanica out with the old, berlusconi is gone. direct directly responsible for a 30% stake in the company which the italian treasury owns and we think it's something of a new one. three companies are in hopefully in line for a decent contract from the union government. i think one today was announced for a new missile program. we think it's a proxy for a cleanup of italian business. yes, the corruption investigation will hamper them. yes, of course, they're not immune from the eurozone and italy. coming from a low base and we think this is the one with the most potential on the upside in that sector. >> darren, we very much enjoyed speaking stocks with you. senior sales trader at silverwind securities and jim rogers of rogers holdings will stay with us. in fact, speaking of which, coming up on "worldwide exchange," jim rogers says the swiss franc is the best pick among the currencies. ♪ ♪ you and me and the big old tree ♪ ♪ side by side, one, two, three ♪ ♪ count the birds in the big old tree ♪ ♪ la la la [ male announcer ] the inspiring story of how a shipping giant can befriend a forest may seem like the stuff of fairy tales. ♪ ♪ you and me and the big old tree side by side ♪ but if you take away the faces on the trees... take away the pixie dust. take away the singing animals, and the charming outfits. take away the sprites, and the storybook narrator... 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[ male announcer ] sustainable solutions. fedex. solutions that matter. welcome back to "worldwide exchange." we asked you for e-mails for our guest host, jim rogers, and we have many coming through. one is from matthew mccormack asking when, if ever, will gold stocks reflect the rise in the price of gold. and your answer, jim? >> well, matthew, i own gold. i own probably more gold and agriculture and silver of any commodities at all. so i'm optimistic. i don't own any gold shares because, as i said before to christine, you are better off normally investing in the commodity itself unless you're a very good stock picker. and these days it's easy for people to buy gold. you can buy coins, futures, you can buy etfs. and there are so many, many problems gold companies over the last century that i, for one, don't bother with gold stocks. if you get the right one, matthew, if you get the right ones, you are going to make a staggering amount of money, much more than me. i'm staying with gold itself. >> jim, you will continue to stay on with us as our guest host. jim rogers as our guest host. please send your e-mails in as always. we would love to hear from you. keep those questions in. yes, we have one full hour of programming to go and who else do we have? someone else who will be with us is jackie dean dwgelis. good morning. lots coming up on the program and great to be with you for this hour. we are still going to get more insight from jim rogers talking about europe, commodities, and getting his take on where the safe havens are, of course. very, very important trading and also e-mail us. you can e-mail us to our e-mail account or twitter us your questions. good morning and welcome to the show. the headlines from around the globe this morning. here in the united states, the m m&a wheel is spinning today. $15 billion in deals involving companies in the u.s., europe, and asia. they are now on the books or in the works. nearly there on a deal for greece and a permanent rescue fund. despite positive noises from negotiators, final hurdles remain. and chinese equities tumble in the first trading day of the lunar new year. disappointed by crushed hopes of a rrr cut. meantime premier wen jiabao assures markets china's government debt is safe. good morning. you're watching "worldwide exchange" with christine tan and, of course, we have karen tso in london. i'm jackie deangelis in the states. let's get you set up for the trading day ahead on wall street and take a look at the futures and see where we stand now. if the markets were to open now the dow would be lower by 67 1/2 points, the nasdaq by nearly 19 points and the s&p 500 by eight and change. looking to be a down day after we saw a mixed session on friday with the dow logging a 74-point loss. we did see some strength in the nasdaq. karen? >> yes, the picture looks consi consistent with what we're seeing in europe and asia today. greek's prime minister lucas papademos will meet in brussels to secure a second bailout worth $170 billion. this as athens appears on a debt deal with private investors. >> translator: we are just one step away from the final agreement. i believe that we have acted comple completely within the framework and the directions we were given by the euro group. >> tensions are mounting ahead of today's summit. as it emerge that had germany is pushing for tighter eu control over the budget process. athens has dismissed the idea saying greece alone has the responsibility and incentive to implement economic reforms. let's get to silvia in brussels on this. the german proposal was taken as insulting by the greeks who brought up national dignity. >> reporter: i think they haven't read anything that's in this intergovernment agreement that will be called fiscal compact because this is what it's all about, about relinquishing some of your national budget control and handing it over to brussels. then, of course, with the urgency of what's happening with greece at the moment, that might come faster than it comes to everybody else. that's a different story. it's also not very diplomatic to leak this kind of thing out of berlin of all places where there's already a perception that the germans are taking over. they're not but they're paying for it so they have a right to decide where the money is spent that they're giving people, i think, and this is what this is all about but this is what we're moving for. we're moving for closer fiscal integration. closer fiscal integration means you have national budgets which you depp ba debate in paris, in athens, whatever. and then you take that to brussels essentially and say this is how we propose to spend our budgets and then brussels and that's the big question, what does that mean, brussels? does it mean the eu parliament? does it mean the council of ministers, et cetera, but then some way or another brussels then says, yes, i think this is a good way to spend your budget or, no, i think you shouldn't buy 150 tanks or whatever. because you haven't got the money for it and this is essentially proposed for greece. >> indeed. the fact that greek capital has been raise d is interesting in context because the french also had some concerns about external institutions ultimately having the say over their own budget as well. the fiscal pact will get you today and the role of those institutions. >> reporter: this is nobody likes to relinquish some of their authority whether it's berlin or paris or athens or rome or london for that matter. either we move forward into some kind of fiscal integration because of decided monetary -- hang on a minute, that doesn't really work. so we have to do something about that. so we have to move forward. and it's inching. it's giving and taking. how much can you relinquish and who is ultimately going to have control. we don't know, for example, is this going to be the eu parliament? not very likely because the parliament -- they don't let the parliament decide anything. is it going to be the eu court where ultimately the germans are suggesting have this outside politics altogether, also not very likely. so probably we're going to have some kind of budget commission or whatever in the eu, however that's going to be appointed that ultimately makes suggestions or approves or disapproves, whatever, and that's give and take. it's not going to be easy. they all know it. on the other hand with our backs against the wall in trying to save the euro and if they don't come together then they know this euro project might be up on the brinks. >> this is christine. i have a question. if control is handed over to a third party does this set the other periphery if portugal were to ask for another bailout? how does this work for the other periphery? >> reporter: well, let's be fair. it's very difficult for greece. more difficult maybe than for the other countries because they haven't gotten an economic model that works. essentially a kcountry that is almost -- a country that is bankrupt like a bankrupt like gm was bankrupt. they have like investor protection out there. they have something they love. when you do that, you have somebody who takes control over your finances. so that shouldn't surprise us. the greeks had two years to deliver on things like privatization. did it happen? how many companies have been privatized and big companies in control. i think zero is the right answer for that. and the same counts for a lot of other things that they promised to deliver but they didn't deliver. i'm not saying it was easy for them. the economy is collapsing around their ears. it's not that easy to try to sell something with a profit when everybody knows it can go for a song. but they didn't deliver on a lot of things they have promised and that's the sense of exasperation they keep promising something and then the eu or the imf say, wonderful, if that's what you're going to come up with, then we're going to give you money and three months later, hang on a minute. you want more money but you haven't delivered. it doesn't work like that. portugal, ireland, spain, they have delivered to a great extent of what they promised. that's what the difference is. >> thank you very much for your take. always great talking to you. live from brussels. let's talk about something more controversial. rbs ceo hesers has waived his bonus worth $1.6 million. the proposed payout for the chief of the majority state-owned bank had drawn widespread criticism at a time when most of the british population is feeling the impact of austerity measures. meanwhile, credit suisse board member has said banker bonuses are likely to shrink by half n. an interview, added that investment bankers are set to be hit hardest. job cuts were likely. more from jim rogers. are you happy to hear that? >> finance is going to be a terrible place to be for the next 10 or 15 years. all of these guys getting mbas making terrible mistakes because there's not going to be a lot of money in finance. as far as the guy at rbs, i'm glad he didn't get his bonus. it seems to me he's doing what he's paid to do. if he really thinks he should get something, he should get options, you know, ten-year options so if he does produce something, or five-year options, then he can benefit. but just to get money coming there -- those days are over, christine. all those guys in finance who think they deserve a big bonus every year, that's finished. that's finished. they're in the wrong field. >> hey, jim, it's jackie in the states. i don't know if we're finished with the big bonuses but certainly definitely going to put them on hold for a while. meantime, i want to get your take when we talk about the conversation in europe a little bit and what silvia talked about. when you look at the states right now, do you agree with some of the analysts and some of the others out there who feel we really are decoupling from europe and in fact 2012 will be a year that's dominated for the domestic markets by u.s. headlines, by growth, by the earnings season that we're seeing and less by the headlines out of europe? >> jackie, there's an election in november of 2012. every time that there's an election, the government spends and pumps as much money as it can to win the election. it doesn't always work. it didn't work in 2008. but they always do it so, yes, of course, things are going to look and feel better in the united states this year because you've got bernanke printing money and you've got what's his name, obama, spending money. things will feel better. it's not just in america. there are 40 elections around the world this year, jackie, and all the governments will be pumping out money. you should worry about next year and the year after. >> you're buying the euro not because you think the eurozone will improve but because the prospects for the u.s. look dim, is that it? >> the prospects for the u.s. look better, is what i'm saying. >> when do you start buying the u.s. dollar? >> i have owned the u.s. dollar for a while and i own the euro. everybody has a big stake in getting through the elections. the whole world does. somehow or another they want to fool all of us saps, get us through the elections, and then they'll say we'll worry about those next year. we're the saps. >> jim rogers says he's a sap. that's another quote. we have plenty coming through in the e-mails. we'll get through some of them. still ahead, one of the more interesting political stories today, france's president sarkozy is to get the help of merkel on his campaign trail. we'll discuss the details next. welcome back. you're watching "worldwide exchange." and it's time for your global markets report. let's start with the u.s. markets and see how our markets are likely to open as we get ready for the day of trade on wall street. it looks like a down day after what we've seen in asia and europe. if the markets were to open now, the dow would be lower by 75.5. the nasdaq lower by nearly 20 and the s&p 500 lower by nearly nine. this was after a mixed session on friday. we saw some losses in terms of the dow. it was down 74 points. the nasdaq was up 11 and so we saw strength in tech making up for it. karen, how does it look on your end? >> the same story here. the negative sentiment really came in on the front end and the back of that gdp number out of the states but, of course, some negative news this way as well waiting for resolution to the greek bsi talks. the stoxx europe 600 was down, down almost 0.8%. basic resources is one of the big weights today. the italian market off 0.75. in france no surprise bnp paribas and the cac is up 1%. the german market has shed about 0.9% sitting below the 6,500 handle. let's take a look at philips shares in trade. down more than 2.5%. this after the dutch electronics giant posted a net loss of 162 million euros in the fourth quarter. losses from its tv business have been weighing on earnings. philips ceo said 2012 would be difficult for the company. shares in frankfurt, a list of thomas and betts on the move, 23%. one of the big performers today. this is after abb said they would buy them for $3.9 billion in cash. a 24% premium to friday's price. a look at bond markets now. we are seeing some of the safe havens. we have foe far bunds tracking higher. the lower yield as investors put their money in some of the safe haven trades today. portuguese firmly in focus. a euro high this morning on the 15.66% and you can see we're tracking pretty close to that as well. also worth noting we're seeing a move on the yields in the five year and the two year. at the shorter end of the curve, spanish debt facing a little bit of pressure as well. yields currently at 5%. watching the italian market very closely, we're expecting to see some news out shortly on the current option worth about $8 billion euros worth of debt. also four and nine years up for option today. so take a look at this. we have the yield above 6% on the ten year so we're going to watch closely to see what the yield is, going to be priced at nine year. into the five year, you can see the level 5.17% so not too far off. only really about 100 basis points off the ten year and at the short end of the curve we're at the four year. christine? >> that italian auction will be front and center. reaction from markets here tomorrow. here in asia equity markets are turning red today. china coming back from a weeklong holiday, a lunar holiday to end lower. we had expectations there was going to be a cut. that didn't happen so the banks got dragged lower as a result and that filtered over into the hong kong market down 1.6% but still holding firmly to the key 20,000 level as you can see. the nikkei 225 earnings continue to be in focus. not helping sentiment is a strong yen driving some of these exporter shares lower. the kospi is off. the australian market down marginally 0.4%. t taiwan weighted index up 2.4%. that surge in apple shares on friday really helped to propel some of these technology shares higher. sensex more than 2%. straits times down almost 1%. and that's a wrap of the asia stock market action. thanks very much, christine. we have some news crossing the italian bond auction. the $2 billion march 2022. the yaeld at 6.08% so this is lower than what we're seeing currently on the market, just a fraction lower, in fact. also worth noting the five year currently the yield crosses at 5.39%. this was 3.574 billion euros worth of the five year so just matching up those yields we're currently seeing 5.17% on markets so the five year priced a little bit higher in this auction. so some key numbers just crossing there. elsewhere we have the italian may 2017 received 4.6 billion worth of bids so that's the latest on the italian bond market. elsewhere, stories we're tracking for you. french president nicolas sarkozy has used an interview on prime time television to boost the country's economy and create jobs. over in paris we have stephane pedrazzi tracking this. what were the key measures unveiled? >> reporter: first of all sarkozy will increase the tax rate from 19.6 to 21.2%. the profit will not be used to reduce the public deficit but to lower the social taxes for companies in order to reinforce their competitiveness. that was the main announcement. the second one is about the flexibility in terms of when companies will be able to negotiate with their employees in order to avoid the legal frame of 35 hours working time a week. sarkozy confirmed that the new tax transaction tax will be implemented the 1st of august, 0.1% for the transactions and all companies listed on the french market. it will also be implemented on the cds and computer generated transaction. sarkozy said yesterday evening. clearly that was the first in that direction. yesterday evening on several occasionses sarkozy gave germany as an example to justify the reform that he has announced to the french public. back to you. >> stephane, thanks so much for that. still to come is iran hurting itself more than anyone else by threatening to preemptively cut off oil to some countries? 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[ male announcer ] introducing spark the small business credit cards from capital one. get more by choosing unlimited double miles or 2% cash back on every purchase, every day. what's in your wallet?  welcome back to "worldwide exchange." jackie deangelis is on the u.s. east coast. i'm christine tan here with karen tso in europe. we're watching what's happening over in iran as well. the country is threatening to turn the tables on the eu by stopping oil sales to some countries that follows the stop of iranian oil by july. nuclear inspectors are currently visiting a country to determine iran's nuclear ambitions. to tell us more we are joined now live by yousef. what can you tell us is the latest? >> reporter: well, it's a three-day visit by the iaea. the iranians say they have nothing to hide. they are engaging in a transparent policy on its nuclear program and that he is optimistic about the mission and its purpose and ultimately its outcome as well. a lot of countries looking to the iaa -- rather the nuclear watchdog to find out what's going on. we're watching, of course, what's going on in the iranian parliament. they will be debating to halt those sales towards europe and it's not such an easy thing to figure out because on the one hand logistically it will take time to implement and the other concern revenues and there's the point that has to be made which is, of course, a reputation as a reliable energy supplier. >> interesting. yousef, thank you very much. yousef gamal el-din. the managing director of oil and gas, and jim rogers is still with us. ayden, your take on the standoff. we have elections coming up in march. how do you see this panning out and what does this mean for the price of oil? >> ahead of those elections the 2nd of march is key to the market. i think ahead of the elections you will continue to see the posturing from iran. i think the noise levels will increase. the outcome of those elections will be key to the direction of the oil market and the oil price afterwards. i think if they are benign in terms of benign for the current regime then i think you'll see a lot of that posturing tail off. and perhaps more accommodating approach. however, if you see a repeat of what we saw in 2009, then the defense mechanism will kick in and who knows where the tension may go in the months post the election. >> jim brought up a good question earlier and i sure he will pose that to you now. >> i was going to say not going to sell to the europeans, plenty of people buy the oil. they just made a deal with the indians recently. indians said we'll give you gold for your oil. i would rather have gold for my oil than euros or u.s. dollars, paper money. so i think this is is all posturing. the iranians know they can sell their oil. >> absolutely. another point, and i'm no political expert, but i do spend a lot of time speaking to experts on the middle east. and there's not even agreement amongst them that, you know, sanctions iran and cutting off iranian oil exports is the best thing to do in the medium to long term anyway. and if you force a regime change, if that's the objective here, what regime do you get afterwards? could it even be more anti-western than the one we have? it's posturing on both sides and i think it's ahead of that key data 2nd of march. >> what happens if india and china continues to buy oil from iran? will they get backlash from the other countries? is that risk we're not pricing in yet? >> i think they could but it's going to be verbal. what actually can you do to prevent india, china, japan, et cetera, buying iranian oil if it's available in the market and perhaps even at a discount? >> yeah, what do they care? what does the chinese care if people say, oh, you horrible people selling and buying oil from the iranians or the indians. the indians have gold. i'd rather have gold. >> you'd rather have gold. i know you're buying energy. what is your target for the price of gold 2012. >> price of oil? >> oil, sorry. >> around $100 mark. i think that's partially because of the iranian tension and the oil is in very tight supply. we doubt they have the spare compa capacity they claim. on the other hand you have the issues in the u.s. and europe and i think $100 to $110 oil given that economic backdrop is a very, very bullish signal for the oil market long er term. >> all right. good point to make, aiden. good talking to you today. that was aiden bradley. of course our guest host jim rogers is still with us. we will continue to monitor the e-mails that you are sending. jackie, plenty of them coming through right now. >> that's right. more coming up as well on the show. we're going to look at the quest for the golden cross. no, it's not the title of the next indiana jones movie, it's a market phenomenon that could signal more good times are ahead. should you buy in and follow the trend? we're going to head to the bond pits in chicago to talk technicals up next. ♪ ♪ you and me and the big old tree ♪ ♪ side by side, one, two, three ♪ ♪ count the birds in the big old tree ♪ ♪ la la la [ male announcer ] the inspiring story of how a shipping giant can befriend a forest may seem like the stuff of fairy tales. ♪ ♪ you and me and the big old tree side by side ♪ but if you take away the faces on the trees... take away the pixie dust. take away the singing animals, and the charming outfits. take away the sprites, and the storybook narrator... 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[ male announcer ] sustainable solutions. fedex. solutions that matter. good morning and welcome to the show. the headlines from around the globe today in the united states the m&a wheel is spinning today. $15 billion in deals involving companies in the u.s., europe and asia are on the books or in the works. nearly there on a deal for greece. nearly there on a permanent rescue fund for the eurozone. despite positive noises from negotiators, final hurdles remain. chinese equities tumble on the first trading day of the lunar new year. disappointed by crushed hopes of a rrr cut. meantime bring mir wpremier wens the debt is safe. nice to have you here on "worldwide exchange" this morning. let's take a look at the futures board to see how we're likely to open in u.s. trade. it does look like the markets are coming back slightly, down less than earlier when we were looking at the same board. the dow would be lower by 60. the nasdaq lower by 16 and change and the s&p 500 by a little more than nine points. and of course this is coming from some of the weakness we've been seeing in asia and europe. care, over by you the picture is -- >> yes, indeed. a negative picture. i want a recap on some of the bond market action. we've had news out on the foreign nine-year debt out of italy and italy did plan to sell about $1 billion to $2 billion april 2016 mark. it received bids for march 2021. throughout today some support for this italian debt. what is of are interest if we take a look at what was raised on the it ten year and the five year, this has been interesting to see we've raise d btp, the bond sale, versus the 5.5 billion euros that italy had intended to raise. you can see this is at the top end of the range. look at the pricing on this. if we look at the rate currently just take a look at the yield on market. it is currently 5.13%. now on the option, this is higher on market than 5.39%. but in context, back in mid-december, the yield was at 6.47% so we are seeing this come down from the high. also worth looking at the ten-year. 6.15% is what we have on market. the level today was lower than that. at 6.08% and this is down from the level we saw nearly at 13 in mid-december so we are seeing support for the ten year which is bringing those yields lower. where we are seeing pressure today still, though, is on portugal bonds and this is very much captured to the fortunes of what's coming out of greece. many investors are concerned we will see some sort of haircut and greece seeing a litmus test. we are seeing a spike at 17.42%. the five year is where a lot of the pressure is kmg to bear t. 21.7% and almost at 16% on the ten year. well, it is also a busy day for m&a. striking a deal to buy manufacturer thomas and betts for $3.9 billion in cash. abb is paying $72 a share for thomas and betts, a premium to friday's closing price, jackie. perhaps an indication of what we can see on thomas and betts in your session. >> absolutely. we're looking at m& a here. exxon mobil is looking to sell to tonen general. the stake will drop from 50% to 2 22%. meantime a group led by apollo management has reportedly emerged as the front-runner to buy el paso's oil exploration business. "the wall street journal" says the group is in advanced talks to buy for $7 million. joining us now is ken cooke, senior stock strategist and still with us, of course, our guest host jim rogers. kevin, i want to start with you quickly on this m&a picture is 2012 going to be a new era is this a lot of companies have cash on the balance sheet and so are acquisitions the way to go? >> i don't think it will be a spectacular record breaking year but obviously there's a lot of built-up potential. on the one hand you have all this cash and on the other hand great valuation. i especially focus on energy and biotech which have been the strongest secotors for acquisitions. you're looking at foreign companies. the chinese and the french coming in here and building stakes with natural gas companies because they want access to our natural gas field for these liquid derivatives and then in biotech there's always great stories there. >> yeah, there's some fantastic stories there. we are approaching a critical point for the markets and we are talk i talking about the golden cross and, in fact, it occurs when the s&p 50050-day moving average rises above the 200-day moving average we are quite close and when we do see that happen historically we've seen the markets react positively and rise going into the rest of the year. what is your take on sort of how likely it is we're going to reach that point and how likely it is we go higher from here. >> well, i'm a bull and i have been since the october reversal bottom. and these two moving averages are going to cross. we're going to get the golden cro cross. we are going to go higher but not because of that. we have to look back to october. after that reversal bottom when the 50-day moving average turned up sharply, it was sort of inevitable. it was predictable that the 50 and 200 day would cross as long as you saw the price action and mome momentum building to the upside and we did a lot of great consolidation on the s&p 500 recovering the 1250 level which was key. now what's interesting is that the 50 and 200 day will cross around 1255 on the s&p so that is bullish but since that was predictable we have this run-up to above 1,300. we are due for a pause or a pullback. i see consolidation around 1,300. that was a sort of head and shoulders top in the first half of last year. it's going to take a few tries to get through there. >> one of the key concerns that a lot of investors have is whether earnings are going to hold up in 2012 given the way the consumer is, the macroeconomic factors, some of the strains from europe. you are questioning what the fourth quarter will look like as well. what's your feeling? >> yeah, boy, this has been the weakest start to earnings in kuwait a few quarters so you are starting to see estimates continue to be ratcheted down. when we were this, let's say, the middle of september when recession fears were at their highest and fears about the eurozone were at their highest, estimates were still not coming down for 2012. that takes -- that's a lopping process where analysts are looking out at the economy and at a company's individual business but you are seeing those estimates come down for the s&p as a whole from $110 for 2012 to below $104 and i expect those estimates to continue to come down, but i think as long as the outlook is that the s&p will earn a record breaking $100 per share in 2012 that the market will sustain higher and even 2% gdp growth is good for equities here in this low interest rate environment. >> kevin, hi, it's jim rogers here. i'm somewhat optimistic about 2012 for a variety of reasons but we do have a situation where profit margins are at an al all-time high or near an all-time high. how much further can this go? >> you know, that's -- that's a big concern. margins are starting to come in so the -- if we had the best priced in for 2012, those expectations are going to be ratcheted back. i still think that when you look at the global economy as a whole that the cyclical recovery is still on and china tapping the brakes pour the past 18 months was very healthy and now they're ready to restimulate so that's why you're seeing copper and gold higher. look at the earnings from c caterpillar last week. caterpillar has been my ba rom terp of the global cyclical economy since 2009 and they're telling you that the trade is still on. >> kevin, i agree with everything -- with most of what you've said but how long is it going to last? it's going to 2013-'14. elections are in november. should we sell in the fall? how much further can this go? >> you know what? right. i think we're going to get a pretty strong first half here. while most people said, oh, the first half will be weak and we have to wait until europe is resolved and look at a better second half i've been the opposite since january 1st. we're going to see equities, look tough here in the first half and then it could be a typical sell in may reaction. the summer is always the weakest months. so when you look out to say 2013 what is the global economy look like? a lot hinges on europe. germany, we're look iing at thi deficit control treaty. germany tries to remake the y eurozone by their own design and if that goes smoothly, then i think things are still good for the global economy. you've got housing market here in the u.s. that is going through a nice bottoming process. i think that's healthy. and the energy plays her in the u.s. fantastic opportunities. so i'm a bull. >> yeah. and, kevin, of course europe is still the focus today as we're waiting for some word out on greece, of course, in that situation and whether they can strike a deal with their creditors there. thank you so much. jim rogers is going to stay with us. more insight from him up next. still to come on the program we're going to get back out to brussels speaking of europe. now we've been told all weekend that a deal on greece and an agreement on the permanent bailout mechanism is coming any moment now. have we reached that moment? 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[ male announcer ] tempur-pedic brand owners are more satisfied than owners of any traditional mattress brand. ♪ to learn more or find an authorized retailer near you, visit tempurpedic.com. tempur-pedic. the most highly recommended bed in america. welcome back. you're watching "worldwide exchange." the greek prime minister lucas papademos will meet in brussels today to secure a second bailout. this as athens appears on the verge of a debt deal with private investors. silvia is joining us again. olli rehn said we would have the deal friday or the weekend the latest. here we are monday and don't have any concrete evidence of that. >> reporter: i thought that was optimistic because the greek finance minister said after last week's meeting, after the euro group and eu finance minister's meeting they would have a psi deal. all of these deadlines people are tossing out, please take it with a pinch of salt. we know what time they need the money. that's march. by that time they will have a deal. we've had five or six like these deals and every time it was next week, next week, next week. we're running out of money next week and then we still have. that's not a surprise. we keep hearing these headlines. we're inching closer to a deal. i was cynically saying before we are a millimeter closer now. it's still the who blinks first, the give and take, how much we know the line in the sand of the private investors made last week with the 70% haircut and not going below the 4% yield and this is something we have to give where we'll end up in the middle. we will get the deal but very unlikely today. >> okay. thank you for putting it into context for us. elsewhere, details out of italy's latest auction. its ten-year borrowing costs have fallen from almost 7% and rome's bond year auction dropped from a lifetime high of 6.5% to the previous sale in mid-december. let's get some thoughts on this. we're joined by the senior rates strategist at ing and staying with us our guest host jim rogers. let's get some thoughts because it seems as though this auction was well supported today. the yields have come down from what we saw in december. is this further evidence of the positive impact of the ltro? >> yes. we have seen in the past months the italian and spanish spreads showed quite substantial tightening especially the front end. we can see that this was quite supportive on the l it tro that was done the first of december. another one the end of february. what this deal is missing especially inially is the fact the long term yields are still quite high. we have a decrease recently but we are seeing 6%. we have seen today that the auction has been weak and not successful like we had last week. and spain we can see that it's a support from its banking system has been domestic banks of government bonds so they can make more pressure on the yields of the spanish government bond and for italian government bonds. >> this is jim rogers. if i understood you to say it's the european banks themselves that are buying this paper? who is buying is what i'm trying to figure out. is this smart money, or is it government money? >> we can say that we have recently a huge chunk was driven by bank of government bond -- other banks he especially domes banks trying to support the issuance in spain and italy that we've to face quite substantial redemption in the next months. then we have to say that there's been an increase of demand from foreign investors. foreign investors have been net sellers of italian debt last year. and recently with the new government in italy that has been more convincing for the investors we have seen some kind of coming back from foreign investors buying this debt and then we are not to forget the importance of the ecb with the program that is supporting the secondary market. italian and spanish bonds. >> thank you so much for your perspective today, so, jackie, we are seeing today that the italian market well supported but a lot of pressure on portuguese bonds tracking at highs today. >> yeah, and as we continue to watch the impact on the market, the economic calendar here in the u.s. full of reports this week. will investors focus on items like consumer confidence or home prices or are they going to sit back until we get the job numbers on try day? we'll look at the trading week ahead on wall street after the break. [ male announcer ] how can power consumption in china, impact wool exports from new zealand, textile production in spain, and the use of medical technology in the u.s.? at t. rowe price, we understand the connections of a complex, global economy. it's just one reason over 75% 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 before investing. welcome back to the show. a quick look at futures right now as we get poised for our trading day on wall street. it looks like it's going to be a down day in terms of our three indices. if the markets were to open now, lower by 65 points. the nasdaq lower by 17 and the s&p 500 lower by seven and change and it is a busy week for economic data in the united states with numbers on home prices, consume earp confidence, pr productivity and topped off by friday's jobs report. and today, december personal income and spending is out at 8:30 a.m. eastern time. income is forecast to rise 0.4%. spending by 0.1%. meantime, cnbc's steve liesman has an exclusive interview with philly fed president charles plosser at 10:00 a.m. eastern time on "squawk on the street." tune in to that. jim rogers is still with us. jim, your take on friday's jobs numbers that we are expecting. we saw a down tick, obviously an important issue for president obama. is there enough data points in the market, and do you feel you're seeing enough to anticipate this number could tick down or are we going to tread water where we are? >> jackie, this is 2012. there's an election in november. you're going to see some nice numbers coming out of the u.s. government all year long because mr. obama likes his job and wants to keep it. you've got to understand this happens every four years. they fake the numbers all the time, but especially in election years. i don't know if you noticed mr. bernanke last week said he's going to change the way inflation numbers are reported so that they look better. i mean, this is 2012. there's nothing new. you are going to see better inflation numbers reported because they changed the method again. you are going to see all sorts of wonderful improvements in 2012. >> jim, we have some e-mails to get through. joseph in canada is asking you, i agree wholeheartedly with your expectations longer term. what do you think of the u.s. fed's decision to keep rates unchanged until 2014? won't this sink the u.s. dollar much lower and lift the precious metals much higher over the next two and a half years? >> yes, not just two that have years but the rest of the decade. with these guys in the end. >> and we have another e-mail from patrick. jim, can mr. rogers explain why since the start of the euro gold has gone up everywhere and 60% of the euro reserves are now marked to market on gold, on the ecb balance sheet this should be bullish for gold? >> well, yes. as i said before, i own gold. gold has been going up for 11 years in a row. one of the main reasons is it was down tore 20 years. gold was in a serious bear market for a long time, production started declining. then eventually it hit a bottom and started going back up. now i own gold but i would caution you gold has been up 11 years in a row. that's very unusual for any asset. it would not surprise me if gold doesn't continue to consolidate this year. i bought more gold today but it went down. it doesn't mean it's not going to continue to go down f. it goes down a lot, i hope i'm smart enough to buy a lot more gold. but it could go down a lot. it's nothing unusual about a big correction after 11 years of an ongoing bull market. >> all right, jim, are we'll have to leave it. thank you for your insights. good having you as our guest host. welcome back anytime. that was jim rogers. that's it for today's show, christine. i'm jackie deangelis. >> and i'm karen tso. >> i'm christine tan. good morning. we have a busy week ahead. facebook expected to announce a hotly awaited ipo. greece nearing a deal with international lenders. and the markets are waiting for friday's u.s. jobs report. it's true. february is coming. it's monday, january 30th, 2012. "squawk box" begins right now. ♪ everybody get into it get stoked, get it started get it started ♪ ♪ let's get it started let's get it started in here ♪ good morning, everybody. welcome to "squawk box" here on cn cnbc. i'm becky quick along with joe kernen and andrew ross sorkin who is back from davos. welcome back. >> thank

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