Transcripts For CNBC Worldwide Exchange 20120131

as the polls are set to open but newt gingrich says he won't give up without a fight. something different this morning. there's not the snowy backdrop, the slight chill on the back of my neck. it's warm for a start, christine. that feels a little different. >> yeah, welcome back, ross. we missed you. i was looking forward to the hat you were wearing at davos. i didn't see any. i'm disappointed. a little bit. >> i don't think that works in the studio, does it? a fedora. >> you were wearing a fed 0ora? >> yeah. >> okay. take a look at the equity picture here in asia. a little bit of green, red, a mixed picture. a bit of caution going on as people wait for more conclusion about what will happen in greece, of course. we have the pmi data tomorrow. that's keeping trade cautious. take a look at the shanghai market up 0.3%. gains were up -- the upside was capped because of profit warnings from some companies. the hang seng pushed higher 1.4% mostly on bargain hunting. the 225 up 0.1%. we had industrial output coming in better than expected as companies recovered from the floods over in thailand, but the outlook is still cautious given the strong yen. the kospi is up 0.8%. the taiwan index is up 1.5%. technology stocks continue to be pushed higher. a pretty bleak picture, financials leading the way lower in australia. new zealand down. the sensex in india up 1.2%. a very mixed picture. what does your heat map tell you, ross? >> we are weighted to the upside. more than 8-1 as you see on the dow jones stox 600. the ftse 100 only up for the month. the dax up nearly nine. the same for the cac and the ftse mib up over 1%. we'll keep our eyes on the bond markets. just to recount the german unemployment rate, the adjusted german unemployment rate hit an all-time low. the rate came in at 6.7%. it was 6.8% last time around. some economists might have been expecting even more but, still, german economy doing very well, indeed, in terms of employment. wouldn't they like that over in countries like spain? ten-year bund deal has risen. still at exceptionally low levels. ten-year treasuries. we saw the five yesterday down at levels we haven't seen since the early 1960s. ten year gilt just over aent of a percent. at the moment we are on that mark substantially lower than we were just a few weeks ago. keep our eyes on portugal. as far as the euro is concerned, euro/dollar trading below $1.32. down to the low $1.27 levels. not far away from 11-year highs. the debt restructuring deal between greece and private creditors is hanging in the balance today. eu leaders claim a definitive agreement will be reached by the end of this week. it was going to be two weeks ago, then last week, now the end of this week. the greek prime minister plucas papademos said they have made significant progress and sounded less confident, though, whether athens would need further help. >> translator: it's still too early now to say whether we will need some extra public funding. our goal, of course, is to avert such an alternative. we want to implement the private sector involvement properly. >> and of course while we focus on events in greece, the port geese prime minister says his country will not follow in greece's footsteps. this, of course, continues to see yields rising substantially. five-year debt yielding 21.6%. he plans to come back to the market next year. that's the plan. he has a long way to go to go. in fact, the lowest yield here is the 30 year, 12.4%. probably tells you all you need to know. those comments from the portuguese prime minister came at the european heads of state s summit in brussels where where leaders have approved a fiscal compact to impose stricter discipline. 25 out of 27 leaders agree to impose quasi automatic. britain and the czech republic refused to sign the pact. angela merkel said it was an important step towards a stability union. >> translator: those that look at europe from the outside, those that look at the eurozone from the outside, it's very important that we've shown this degree of commitment. >> silvia is enjoying herself once again at one of these congresses. our guest host is david. we'll bring him in a moment's time. >> reporter: where is my program sound? >> silvia isn't hearing me. are you hearing me? >> reporter: now i am. you see everything being dismantled after the summit. it is being taken down. we're inching closer to a deal. i've been saying cynically we are millimetering in on a deal because we don't have a deal on greece. greece was officially not even on the agenda officially, that is. we had a little mini summit afterwards. we look at papademos and selected members of the euro group where they talked again about the situation in greece and now how close we are to psi. jean-claude juncker in an interview with german radio even said he could not rule out public sector involvement. but we have to take this with a pinch of salt. it was a lead question. he was asked would he rule it out and then he said, no, i can't rule it out. in times like this, of course, you can't rule anything out. greece remains a quagmire. we still don't know how much money might be needed. we honed in on the big thing, on the fiscal compact. but it sounds an awful lot like the stability and growth pact which we had except that this time it's something is that's either going to be in constitutions or in official legislation of the various countries should they already and that's a big if. >> does ireland need a referendum or not? >> reporter: the countries that need a referendum will not very likely -- at least that's the scenario we've heard here -- won't put it in their constitution. they will simply put it in normal legislation which means they don't need a referendum. >> okay. stay with us, silvia. let's bring you in. i was quite amused in davos on friday when olli rehn said it was a crucial few days. >> the eurozone and europe, now is back in recession in the imf last week was warning particularly italy and spain, the two larger of the peripheral economies, could be in fairly deep recession in the first half of the year. so we have this fiscal compact which will employ further fiscal tightening across the region. >> the point about that is if their economic numbers are going to be worse next year which means actually their fiscal position is going to be worse than they've planned under these bailouts or the program that italy is in. >> absolutely. again, the imf thing -- they published updated numbers on the fiscal side for spain and italy. spain is tightening fiscal policy on the plans now a lot more than intended back in september but some of the imf on the back up significantly. spain's government-to-debt gdp ratio. spain is forecast to be in quite serious recession. yeah, you're chasing your tail. >> david, i'm going to switch gears and talk about the imf saying that asia is really quite immune to all the eurozone crisis. do you think that's the case? data from south korea shows a contraction in manufacturing. is asia immune from the crisis in the eurozone? >> i'm no asia expert but going across several times a year it's clear to us at the end of 2011 there was increasing concern as the european banks, for example, came back home and didn't lend into the wide ranging economy, then that would act to slow asian growth. the 0 other thing, of course, you have a real event inside the system and trade credit, for example, wants to dry up. not say iing this will happen b wants to happen that we'll see a repeat of 2008 global trade turned down and particularly for germany and japan, for example, they saw major downturns in gdp numbers. asia is exposed. >> now in terms of where we are with the european position here, until maybe a couple of months ago the markets, in my opinion, foolishly kept believing in the magic bullet, fairy dust, whatever. some big bazooka or small bazooka, are the market settling to the fact the silver bullet is not there? is th is going to be a long, grinding process. but, also, i think the breakups scenario -- the eurozone breakup scenarios have receded. i think that people playing it again but it doesn't make a lot of sense to talk about euro breakup because it doesn't help anybody. do you have the feeling that a market is settling to the long, grinding route and take it from there, maybe not get hyped about every eu summit we have? >> that's absolutely right. the game changer was the announcement of the three-year l it tros and the market is looking forward to the one to be announced at the end of february. and that back stops the banks. the issue here is the eurozone is in recession. i think the point is that the markets will continue to test european policymakers and i think the ecb will have to cut rates further down to zero. i think draghi will have to actually start doing quantitative easing. the way we're doing it here in the uk and the fed. the point is that the market is now a lower probability of a breakup scenario, certainly the case back in september/october. >> reporter: do you actually think the ecb can embark on that kind of quantitative easing? my argument is they do all the quantitative easing they can. ltros, they can keep pushing money down the pike as they do at the moment. they could even have five-year ltros if they wanted to and, yes, can cut interest rates. that's as far as they can go. everything else would be, sorry, illegal. >> no, no, no. under the treaty the threat then is they've run out of policy measures and the eurozone at that point is in a risk to going into deflation. that's a two to three year view. it's quite within the remitt of the ecb to do quantitative easing but it cannot target one bond market over another. it cannot target yields. they have 0 buy the whole lot. >> and what percentage? they have to buy german debt far more than any other kind of debt? >> it has to be in shares. a couple of interviews one from mario draghi himself. smaby has left the government council. he made it quite clear the ecb can do quantitative easing. >> if there's a serious deflation. david, good to have you on. stick around. silvia, we'll catch you later. for now, thank you. there's no stopping a sell stellar set of earnings. we've heard from the company's ceo. welcome back to "worldwide exchange." i'm christine tan. ross westgate is in london. radio shack gets unplugged as shares of the consumer electronics retailer slide nearly 20% in after hours on monday. the company is cutting its fourth quarter outlook on significant weakness in its sprint wireless business. ra radio shack says that's more than offsetting sales growth from its partnership with verizon wireless. rising revenues from at&t and higher sales of tablets and ereaders. they expect to earn 13 to 17 cents a share. analysts had expected 37 cents, ross. strong numbers out from a.r.m. today. earnings well above expectations. pretax profits rising 45%. the company whose technology pair is apple products. the ceo said he is confident they will continue to gain market share. >> we're drawing people's attention to what's going on in the outside world but the markets are continuing to grow strongly. >> stock up in a.r.m. today reporting an 8% rise in net profit by bskyb. the operator said it will launch a new internet it tv service for non-sky companies to compete with netflix. we spoke to the company's cfo. >> consumers are shy of making new commitments. the flip side of that is customers we've already got are very loyal. they're staying with us. they're recognizing the value that the bundle in particular brings. we're adding new customers in the period. a drop in profit after extra provisions of 3.2 billion euros were set aside against real astate. stephane likes to do the spanish and the french stocks as well. stephane, spanish banks have had to start selling a lot of capital and there are more regulations within spain itself. how that is that impacted them? >> reporter: it looks like the banks in spain, ross, are anticipating demand from the spanish government to increase the level of provisions for, of course, the conditions and the real estate sector. the largest european banks are not only opposed to the 98% decline in the fourth quarter. 47 million euros, way below $1.7 billion euros we had for this period but is due to another provision against its exposure to the spanish real estate sector. provision of $1.8 billion euro only in the fourth quarter and, therefore, raise its coverage for unbalanced properties to 50% up from previous coverage of 31%. on the four year a decline of its net profit. again, it's been impacted by the high level of provisions. 3.2 billion euros in total in 2012. the recurring net profit was in line with expectations down 14%, more than 7 billion euros although it's originally a spanish bank, it's more like an international group and it's making for the first time last year off of its profits out of latin america, the stock as you mentioned is up 0.7%, ross. >> the german jobless rate has fallen to a record low. patricia has the details and reaction. >> reporter: hi there, ross. the numbers are actually good on the adjusted level between january and december so better than expected. on the unadjusted level, though, there is a bit of an increase of the jobless rate and so in general, though, the market has taken that positive. we had the numbers out and the dax hit a high. talking about stocks, that high is also being held until about a couple of minutes ago was the best performer. we had a deal confirmation. we talked about it for quite some time here on cnbc and it's all about stainless steel, about reducing all the compaapacity i that sector so it has been confirmed they have struck a deal with finland regarding stainless steel business. analysts we speak to here, they actually think it's a good deal for both sides especially for krupp reducing its debt, getting some cash, getting that overcapacity more and more. especially because of its debt situation looking positive indeed. the shares are trading up though we had citigroup down grading from 33 euros to about 30. so all in all thumbs up. it seems thyssenkrupp needs to keep stake of 30% going forward and the linchpin of the entire deal really was negotiations with the unions here that people would -- employees would keep their jobs for quite some time, so that was actually done for the next four years. no redundancy. will be closed but only at the end of 2013. then we had the macro data. the dax today after two days a bit of gro droopiness. we lost 1.5%. today trying to make up for that one, ross. >> a little bit of droopiness, we don't want that. nothing droopy in the oil market. the nymex price below $100 a barrel. brent trading slightly higher. we're keeping our eyes on iran. a three-day visit wrapping up to the can company to diffuse increasing tensions. tehran is under increasing scrutiny. they will keep up the pressure on opec's second biggest oil producer by applying even more sanctions. yousef is in dubai. how do you read it from there? >> reporter: well, ross, several sets of developments here, the iaea wrapping up its visit and, again, they were looking for answers to some suspicions the previous late last year but no news to any tangible results from the delegation. tightlipped when it comes to statements to the media. also, the iranian foreign minister saying if you want to stay longer, feel free to do that. a bit of a softer tone and that's quite safascinating to s. iran is looking for engagement and this is what the west should try, not sanctions. not everybody will play that game. you mentioned the united states and another bill that will be explored tightening the economic noose but there are hopes for a pea peaceful resolution. one of the people that are hopeful is the opec secretary-general and he also said that the current level of prices are fair. >> $100 price is right for consumers. we can invest. also consumers can survive. >> reporter: here is the thing, ross, if the current level of prices are fair, what does that tell you about how much geopolitical risk is priced in at current levels? a lot of good material for further conversation and debate as to where the oil price goes from here. a quick note on the opec reference, some lower by 20 cents closing at $111 a barrel. the reference the 12 types of crude by opec. >> yousef, thank you very much for that. yousef gamal el din. tensions are rising as the white house prepares for a visit by the man who is expected to be china's next leader. "the new york times" says a dprup of unions, democratic politicians, and trade groups are urging the obama administration to file a series of cases against china in the auto industry. they say china unfairly subsidizes local autoparts makers and restricts exports of crucial raw materials. it comes ahead of a visit by the vice president in two weeks who is expected to succeed president jintao. florida residents will start voting in the state's presidential primary. polls show mitt romney is opening a comfortable double digit lead over newt gingrich who just a week ago was the front r front-runner. a majority of those surveyed say romney is the better candidate to fix the u.s. economy. gingrich isn't giving up yet. he's vowing to fight on until the republican convention in september. >> let's get a thought on this from david. i don't know if i'd say this -- well, we are in the states. how much of a distraction is the u.s. election? >> it is a it distraction and it's important. our general feeling is that at the end of the day the u.s., unfortunately, will get downgraded again. we have a recovery, though, that the u.s. is actually growing and the general view from us at least is the u.s. will continue outperforming expectations. >> gdp weaker than expected last week. do you think that will be revised up? >> i'm not sure. the point about these -- >> do you think growth is going to get stronger than that? >> yeah. >> i'm just wondering as we go towards an election is it inconceivable the growth numbers might get better? >> they could well get better. our sense is the u.s. is growing 2%. one quarter may be weaker. one may be stronger. the rate of growth of the u.s. it at the moment is seeing. remember, they're not really tightening the fiscal policy in the way that we're doing in europe and remember the fed is keeping a stance and will likely buy mbs once we come to an end in june. the u.s. is growing and it may surprise on the upside. >> will it have any implications in monetary policy, david? >> well, we think the first rate hike by the fed is going to be a lopping ti long time away. our general view is that most of these major economies are not going to see a monetary tightening for a very long time to come so interest rates are actually zero bound for a long time. >> all right, david. you continue staying with us as our guest host, david owen. up next on "worldwide exchange," a south korean business is getting in on america's baseball industry. find out who is playing ball and why next. this is "worldwide exchange." the headlines today from around the globe, still waiting. no decision from greece yet on its deal with private debt holders but one ecb councilmember acknowledges there is some risk in holding greek government bonds. authorities in portugal try to reensure investors their money is safe. the portugal two-year debt hits a record high. the im f says asia does hav the capacity to weather further economic storms. and in the u.s. mitt romney builds a commanding lead in the florida primary as the polls are set to open but newt gingrich says he won't give up without a fight. we continue to see yields particularly on the two-year extend higher. the portuguese debt insurance costs have also hit a new high this morning. the we've also got some news out of the uk, just recap that for you as well. a uk net december consumer lending just up under half a billion, it was forecast at 1.2 so that's an extremely weak number. mort game approval lower than forecast 54,000. consumer credit in december contracted by 0.4. it was up 400 million and that was also forecast as well. so, again, consumer credit shows the biggest monthly fall since 1993. and the biggest monthly fall since 1998. richard kelly head of european rates and research. david owen is still with us. i want to talk portugal, your reaction to the uk if we may, and that collapse this fallen consumer credit. >> i mean, certainly it underpins the fact we need additional qe coming in february. you are still seeing the lag effects and though the economy barely contracted in the fourth quarter and might be marginally better, we're still not growing and there's still not a lot of credit flowing around the system. >> david, one wonders whether the ecb should reverse positions and whether the ecb should have quantitative easing. >> well, that's an interesting point and perhaps also could be buying the paper as well but the point here is that contraction at a fast rate. obviously one of the reasons the quantitative easing was to ensure the balance sheet didn't contract too much so i think this will be of concern to them. i have to say going around meeting investors most people do expect there to be additional qe announced next thursday so the risk they wouldn't do it but on the back of these figures it seems more likely they'll go ahead and do it next week. >> from the uk back to portugal. the two-year bonds, 21%. five year 23%. ten year 16.6% the yields at the moment. there's no chance, richard -- the plan is to come back into the market in 2013. they're likely to need another bailout, aren't they? >> there's no chance they come back in 2013. and my assumption has been you're going to have another imf program because the way the portuguese issues are structured, it isn't straight a debt issue. portugal needs to be out of the market for many years to improve the structural rigidity, get potential growth rate so it can sustain and repay that debt over time. you are not going to be able to do that over the next two years. >> what's the chance portugal decides -- i mean, the eu says you may decide they don't need debt restructuring. what's the chance of portugal it self decides that it might want strategic default? >> it's certainly possible given a stock of debt that's 110%, 120% of gdp and likely given the fact the economy is not going to be nearly as good as people expect and by good we mean only contracting by 2% to 3%. that is going to exacerbate. >> that's the best we can hope for. >> yes. but the point is you can somewhat ignore portuguese yields from the sense that you're in an imf program. they're not having to come in and issue at these yields but you do want to see progress go on and we've seen from ireland if you continue to deliver on the progress and you're out of the market for whatever time you need to actually get that restructuring in place, it does work. portugal needs longer than ireland and the fact that they're sitting around that 120% debt to g dp level, the golden rule, we will not cut debt to anything below that because the markets might get spooked on italy and we're only going to can cut greece down to that much, you were bound to see them go after portugal. >> christine? >> richard, hi. this is christine in asia. what's the best way to play this as we wait for more clues? do we buy the euro in the short term or do we buy the euro in the long term? how does this work or do we stay away from the single currency? is. >> i think given the positioning, there's certainly a risk that you have a sharp move higher coming here in the very near term simply on the risk positive tone and the fact the world is not ending and especially as we build up into the ltro, into the g-20 and another leader summit in the beginning of february and march. if you go back to the uk and you go back to the u.s. when qe started, printing money. printing money is bad for your currency and that's what the three-year ltros are. the more bullish, probably the more you should be on the yeuro in the short term but eventually you have to assume that investors return to fundamentals and say this should be weighing on the euro in the medium term. >> the eurozone is in recession. it needs a much weaker currency. the yeurozone is much more open than the u.s. gdp is exported. if you have a situation where the imf is correct and italian gdp is down this year, spanish gdp is down this year on average, we don't know whether they're forecasting in portugal but clearly forecasting internally lower figures than that. we do have a much weaker euro. mario draghi knows this. we need more monetary easing. we need the eurozone to go and do quantitative easing. >> the eurozone members are beginning to wake up and realize it's all for germany. german unemployment all-time low today. italy's unemployment has hit an 11-year high. interest rates have been set for germany. they get -- when other countries are in trouble they get the benefits of lower rates. is there going to be a backlash or not? >> you've already seen the backlash in the press obviously. it's not surprising to anyone that you have this structural divide and it's not going to go away anytime soon. >> is the structural divide the cause of the problem? >> no. it's just another friction that prevents because you have very different decision processes going on. i think what will be interesting and what you're already start to go see when it was just merkel and sarkozy and you didn't really trust the italian leadership it was easy to keep with the german picture. if you get a change of leadership in france, have an italian government you are willing to rely on, you may start to see more balance as you get into the spring with the negotiating power. the germans don't have the universal bargaining power that they do now. >> a very interesting survey released by the european commission, the ecb for sure follows with gdp by country. germany, shot up sharply but that for france fell very sharply and obviously languishing in recessionary territory. i do also argue we are seeing increasingly signs from france. >> politically, this summit being hailed as merkel's triumph might be her high point. we'll see. richard, thank you for joining us. richard kelly, fx research. chr christine? ross, asian markets are mixed today. investors are staying cautious awaiting more details from graes, of course, and not to mention key manufacturing pmi data from china tomorrow keeping trade cautious. mixed picture. the china market up 0.3% today. we had trade volatile there. of course waiting for the key data. hang seng up. more on bargain hunting. the nikkei is up marginally. we have the strong yen weighing on 0 concerns of t on concerns of exporters. it showed that things are improving because of the supply disruptions coming from the floods in island but the currency continues to weigh on the exporters. the kospi up 0.8%. we had industrial output contracting for the month of december so in a way the markets kind of ignoring those. taiwan weighted index pushing higher, continuing on yesterday's gains. the markets in the red. the australian down. the sensex up 1.9%. trade is cautious and very volatile today, ross. >> we are weighted to the upside. just an hour and a half into the trading day. advancers outpaced decliners. had 1% falls. trying to claw back the losses. up half a percent. the cac up 1.12%. the ftse mib up 1.5%. the dax best performer as we come to the end of the month up nearly 0.9% in the period. data from south korea, ross, factory output fell unexpectedly in december on weak demand at home and abroad. stocks seem to be shrugging off the news. optimism over italy's successful bond auction. to tell us more details about trade over in south korea we have rhia. >> reporter: hey there, christine. i am going to tell you about an interesting story here involving baseball. south korean retailer confirmed a consortium which is among the bidders for the los angeles dodgers baseball team, the famous u.s. baseball franchise has been estimated by korean media to be worth roughly $1.5 billion but there is tough competition. the deal has attracted top nails like billionaire steve cohen, dodgers manager joe torre and basketball legend magic johnson. a state news agency here reported that e-land partnered with the ex-owner of the dodgers who signed south korea's pitcher back in 1994. while e-land's real motivation remains unclear it allows a greater reach into the los angeles market. l.a. has the biggest korean population in the u.s. apart from offering retail discount stores the company has recently brought in its business to include construction, restaurants and resorts. its web sait says the company reported an operating profit more than $400 million in 2010. the winner of the dodgers' bid will be announced in april. back to you, christine. >> rhie-young lim live from south korea. over to japan now, the pain from gentlem japan's strong yen, the currency continues to hit corporate bottom lines. honda motors slashing its profit forecast down 60% for the full fiscal year after reporting a 41% drop in third quarter numbers. the details for us live from tokyo. >> reporter: hi, christine. honda said operating profit announced after the bell dropped a whopping 77% for nine months through december. car sales were sluggish in all areas of the globe. the flood in thailand force it had to close plants from october and disrupted production worldwide. the strong yen as well as a rise in material prices also proved a blow. for the full fiscal year ending march, it projects operating profits to fall by 65% to $262 million. honda assumed exchange rates are now set against the dollar and the euro. that's all from the nikkei business report. back to you, christine. >> thank you very much. let's discuss this more in great er detail. of course with our next guest he is glennwood partner and sales who joins us live. glenn, thank you for being with us. that industrial production number better than expected. apart from the recovery that we're seeing and apart from expected post reconstruction spending, is there anything else that you see on the horizon in japan that makes you optimistic we will see a strong pickup in japan in 2012? >> hi, christine. it's good to be back. there is a lot of things happening in japan that i think investors need to keep their eye on. in particular as you mentioned the reconstruction efforts. there's a lot of money, a lot of capital flowing into the region to help with those efforts and i would not underestimate the effect that will have. year on year gdp numbers will look good. the other thing that i really urge investors to keep their eye on is the political situation in japan. we have a situation where, again, noda is losing power. i think the party is in trouble and there's people jockeying for that prime minister seat already but behind the scenes there's what i call the third force. there is the new osaka movement and both are very different than the current political parties we have in place in that they're focused on inplagues targeting and slimming the balance sheet in japan which would mean growth for the economy and that is clearly the big hope behind the scenes at this point. >> glen, i harp on a strong yen. that's a big concern for many of the manufacturers in japan and the exporters as well but on the other hand if you look at a strong currency it could mean that raw material costs could be cheaper so hows to this net-net weigh on the exporters and the companies over in japan? >> that's exactly right, christine, there is a blessing and a curse to a strong currency. input costs for the manufacturers are much lower as well it's a great opportunity for m&a and they have been on fire in japan the past couple of years. i would expect that to continue with the stronger yen. you are not going to have quantitative easing. japan will be the last to that party, i believe, as the u.s. and the rest of the world has indicated in many cases they're adamant we're not going to have deflation at any cost. japan is happy to have deflation. that's part of the mandate is to have no inflation which to them means deflation. i would expect the stronger currency to stay longer. i would look for more currency intervention even in the near term. the last couple of days we've seen the yen moving back towards that 75 line and that's the line that they drew in the sand last time. >> glen, you mentioned m s&a. which sector should we get into? >> i would look at sectors that have already proven they are good at it and focused on it looking for opportunities in m&a. opportunities like unicharm, a company that has been quite active in m&a in asia and the u.s. as well as the acquisition in vietnam and this company is a well managed, very focused profit driven company. earnings out today were very strong. again, companies like that, i think, will have a very bright future with the yen at these levels. in other areas energy, for example. japan needs to invest in energy. the rest of the world is also in desperate need of new energy sources. it is a great opportunity. japan has two of the best leading lng engineering companies in the world. they revised their earnings numbers today and i would expect even the next five, ten years this secular move away from other fossil fuels like oil to lng. >> and, it's ross here, we have earnings coming out. you say you don't think the numbers will be very good but you would be accumulating the shares. why? >> on a contrarian view, ross, i think sony -- if you look at the share price, the high was 15,000 yen. we're at 1,400 at present. and you get a lot of value for that 1,400 yen. if you look at the brand. if you lack at what sony actually does. if you look at their book value, at their equipment, they've got great resources and they still are a major brand and a major engineering and technology force in the world. so i would look for them to not necessarily surprise on the earnings tomorrow but this valuation level i think it's a great contrarian play. i would expect the next 12 months to see a surprise out of sony and to see the shares move above this level. >> plenty of investment strategy there. thank you very much for that, glen. partner and head of sales live from tokyo. thank you. let's get you some of the big stories we're following from around the world. let's see what they are. over in the u.s. s&p is warning it could down grade several g-20 nations because of spiraling health care costs in those countries. now the ratings agency says developed nations in europe as well as the u.s. and japan could suffer the most over the next 40 years as aging population strain public finances. the longer governments wait to contain health care costs the more difficult it will become politically because as voters get older they'll be less willing to agree to cuts and health benefits. >> the senate has voted overwhelming overwhelmingly to take up a bill banning insider trading by congress. this led to a debate this week. stock trading by lawmakers and the staff has come under increased scrutiny since "60 minutes" questioned the financial activities of several members. the bill would require congress to disclose stock trades within 30 days versus the current annual disclosure. and still to come on "worldwide exchange," we'll find out how president obama is promising to rebuild the u.s. economy literally one job at a time. we're going to talk about president obama and the election fairly shortly. a final word on that from david owen. we've been talking about interesting how s&p, s&p has been talking about the burden of the health care sector. as we look it at the election, when does what concerns about the size of the u.s. debt really start to weigh? >> well, i mean, most of the ratings agency, the general perception is they take a long-term view -- excuse me, a short-term view where the rating should go. and in terms of aging, in demographi demographics, increasing pension provision, health care costs and so forth, very, very long problems and the general perception is if the rating agency is out to 2030, 2040 or even 2050 you would have no aaa at all because increasing health care costs will bear down on the public finances. is the u.s. going to get downgraded again? we think so. >> will it again not have any impact? >> the u.s. is a reserve currency, able to retain all the confidence. where else do they go? our general perception is it won't have a material impact. it could lady to more money flowing into the u.s. in the way that we saw following the initial down grade on the view of if the u.s. will get downgraded what about everywhere else? the eurozone is not really truly a single currency in the way the u.s. is. >> you talk about how you expect rates to stay low. it only takes two members, doesn't it, to change their minds and then our perception of locates would change quite quickly. >> absolutely right. it will be interesting at the press conference in the uk when it is published. king will be asked about why don't you adopt this format to ben bernanke and he'll say i'm sure i don't think we should precommit. everything is dependent. >> it only takes a two-year view. >> two-year view, three-year view. at the end of the day it doesn't want to precommit. ben bernanke is concerned about the u.s. >> will the ecb cut -- >> not next week. they will cut as we go forward into the second quarter. i think they'll wait -- >> on the ltro? >> exactly. >> good stuff. david, thanks for that. david owen, chief european economist at jeffires international. that time of the day when two becomes three. jackie is with us. we have a great hour of programming still to come. jackie? hey, good morning, ross. it's great to see you back from davos. fantastic coverage. it was fantastic to watch. some really great interviews and insight there. meantime, one of the talking points that i want to bring up today, we're watching president obama. he has a lot on his plate these days with running the country and, of course, running for re-election. now he's adding one more task, finding jobs for individual americans. he took on the assignment during a live web chat organized by google. in fact, one online questioner pressed the president on his claims about demand for highly skilled workers saying her husband, an engineer, has been unemployed for three years. >> i meant what i said. if you send me your husband's resume, i would be interested in finding out exactly what's happening right there because the word we're getting is that somebody in that kind of high-tech field, that kind of engineer, should be able to find something right away. i will follow up on this because i'm interested in finding out -- and maybe we can get some information as to why your husband has been having trouble getting placed. we want to encourage more american engineers to be placed, and that's part of the reason it's important to boost american manufacturing. >> my goodness. i wonder where president obama was when i was looking for a job. ross, what do you make of this? >> well, i want to know what they think of her resume? have they sent it in? are they going to help? >> do you think she'll e-mail it to him? >> she would be silly not to, wouldn't she? if he said i'm going to help. i'm guessing -- i'm guessing the president is a fairly well connected man and he might be able to -- when you ask them to put it in front of some other people so i'm guessing, is he going to look for a job within for the government or is he going to give it to one of his mates, his backers to say what can you do with it? i don't know. what would you do? >> it's a good question but i'd be interested in followed up and see if he really takes it all the way and really helps this guy find a job. >> well, i think someone is going to follow up on it. there will be more than one journalist following up on this, don't you think, christine? >> yeah, well, i want to know just basically in that resume, what exactly do you write that makes it stand out? any ideas? i'm just thinking. if i were the president -- >> the first line is you write, the president has read this resume. >> maybe he'll help her with the resume. >> still, can we all -- is everybody going to send their resume to the bhous? >> i want to apply. >> it could be the wave of the future. meantime, i want to take a look -- speaking of the future, look at the futures now and see how we're poised to open on wall street. looks like an up day according to this board. the dow likely to open higher. the nasdaq higher by 14 points. and the s&p 500 higher by six. this is after a down day yesterday but we did manage to claw back from those session lows. and it does look like we see positive momentum and of course still to come on the program, ross -- >> meanwhile, ahead of the u.s. 0 open european stocks, you could see are firm after a 1% loss yesterday for the german and french markets. up 9% for the month so if we close out today be up nearly 10% for the month of january. what's coming up? yeah, still to come, a lot on the show so we want to you stay with us. now he spent more money in florida and is ahead in the polls but will a win by mitt romney in today's florida primary make him a dead certain for the nominee? plus, greece has been the big headache for europe over the past years but is portugal set to become the new pain for the eurozone? we'll get more eu analysis and, as always, keep your e-mails and tweets coming in. we'll put your questions to our great lineup of guest hosts in the next hour. i was having so much trouble getting around, i thought, end of the line... i was headed to a nursing home. well, i'm staying in my own home now, because we chose hoveround! hoveround's compact round design makes it easier for you to maneuver through the tight spaces in your home. and best of all, 9 out of 10 people pay little or nothing for their hoveround, so call now and you can be the next to pay... zero...i paid nothing for the unit at all. and now only from hoveround, every power chair includes a handy tote bag, so you'll always have access to your favorite items and this sturdy cup holder, so your favorite beverage can ride along with you! the folks at hoveround really thought of everything. that's why i called them and so should you. call them right now! get your free dvd kit. good morning and welcome to the show. the headlines from around the globe this morning in the united states data on housing and the consumer are in focus as the dout and the s&p are poised to wrap up their best january in 15 years. >> still waiting, no decision from greece yet on its deal with private debt holders but one ecb councilmember acknowledges there is some risk for the central bank in holding greek government debt. that is as authorities try to reassure their money is safe. the two-year debt hits a record high. and mitt romney builds a commanding lead in the florida presidential primary. as the polls are set to open but newt gingrich says he won't give up without a fight. you're watching "worldwide exchange" with christine tan, ross westgate, and i'm jackie deangelis here in the states. how we're likely to open on wall street, looks like a positive day. the dow could open higher. the nasdaq up by 14 and the s&p 500 higher by nearly seven. this, ross, after a down day. we came back from those session lows and managed to claw our way back to the flat line so it wasn't as bad as it could have been. how are things by you? >> we don't have the map up at the moment. advancers have been outpacing decliners by around about 8-1 ahead of the u.s. open this morning. we've seen stocks up about a percent after being down some 1% yesterday. that's kind of where we stand at the moment. the xetra dax up some 9% for the month. in focus is the debt restructuring deal by greece. still hanging in the balance as we have been the last two weeks. a definitive agreement will be reached by the end of this week. not the end of last week or the week before that which is what they're talking about. prime minister lucas papademos says negotiations have made, apparently, significant progress. although he sounds less confident on whether athens will need even more help. >> translator: it's still too early now to say whether we will need some extra public funding. our goal, of course, is to avert such an alternative. we want to implement the private sector involvement properly. >> portugal's prime minister says his country is not going to follow in greece's footsteps. he claims that bond dollars aren't going to face a haircut on their investments despite this two-year government debt today did hit a fresh record high up 21.5%, lower than 21.35% the yield. those comments, of course, came at the european heads of state summit in brussels where leaders have approved a new fiscal compact to impose stricter budget discipline. 25 out of 27 leaders agreed to impose these quasi automatic sanctionses on states that violate deficit limits. britain and the czech republic were the two that refused to sign. german chancellor merkel said it was an important step towards a stability union. >> translator: those that look at europe from the outside or those that look at the eurozone from the outside, it's very important that we have shown this degree of commitment. >> silvia is in brussels where those agreements were inked in. silvia, which week and which weekend is it? i'm still waiting for an agreement. i've waited a lot of weekends. i've lost count. >> reporter: you're not the only one. i think everyone has that feeling including the leaders who were meeting at the summit. they didn't even official ly pu grease on the agenda. please, put it away. and when you talk to people behind closed doors or in the corridors here, they see no real progress. they see no real -- they see no real solution to their privatization progress to the decluttering of the administration, et cetera. there's a long, strong, gloomy, sinking feeling out there this is like a bottomless pit but already no alternatives. they kick greece out of the euro and then don't we have to save hungary even though they're not in the yeuro? it would be easy to say the moment you are outside the euro you are no longer our problem but that is not the case. the greek economy will sink even faster and we still have the problem to pay for it. so the greek thing, you're going to wait a lot more weekends before we're inching closer to a solution. that's why they finally put something on the table that looked more complicated. fiscal compact, okay, at this stage, just a letter of intent but 25, are that's 17 plus 8 of the eu nations, have said we want to put the golden rule, they call it in english now, the debt ceiling, into either our constitution where we need a referendum into normal national law. a year ago the germans were almost the only ones who said they wanted to do that. nobody agreed. so we move a step forward. if it remains only a letter of intent, without actually the firepower behind it, the will and the power to punish budgets, then we are back to the stability and growth signed in 1992 which proved to be very truthless the moment germany and france broke it and they just said, okay, extraordinary circumstances, move on. we're not going to pay anything. >> silvia, here from new york, what do you think is the fundamental problem? >> reporter: yeah -- where shall i start? >> we have our guest host here from wells fargo. that was his question to you. i just wanted to introduce him for the audience. >> reporter: okay. john, where shall i start when we say the fundamental problems for the eu and the eurozone. the fundamental problems are ultimately if you talk about the fiscal compact is who will decide what to do when a country breaks the rule? okay, we have the debt ceiling, fine. for a lot of countries that means a strong effort to start saving. it could even be economic growth. let's set that aside. let's say a country, spain, breaks the golden rule. the you'european -- the eu commission or the council of ministers decide you broke the rules. now you have to do what? pay a fine? does that really help? is there going to be these kind of sanctions or another discussion that's always been thrown in the rink, throw for part of your eu membership. all that have is very tricky. the past has proved that whenever a country breaks the rules, it depends on -- it's like animal farm. some animals are equal but some are more equal than others. the germans and the french were the first to break the treaty rules. they were never fined. other countries were warned but not fined really. so i think this getting people together on fiscal compact is a little bit cuckoo land. they need to try and to move on. they need to rectify the treaty which is another several months down the road. >> fiscal union and compact is one piece of the picture, john, but also another piece of the picture is growth in the eurozone and how we can grow forward that is something these leaders are not talking about so much. does that really concern you. >> no, it concerns us a lot. you've seen that in the spanish data that just came out, that they're not growing and one of the questions with both greece and portugal is where is the growth that will generate the revenues to pay these bills? >> right. >> so growth is the number one issue as far as i think most americans would perceive it. you don't have the growth to pay the bills. you need the growth. >> that's just not what we're getting it, is it, john? the latest imf forecast for spain, italy, portugal. these countries will contract more than was in the original budget plan, which means their budget situation will get worse not better. >> oh, it is. it's that imbalance between these very high interest rates on the debt and, therefore, your interest burden is growing and your economy is not. the economy is the way to pay that interest burden. i think you have it right, ross. there's this imbalance out there that will persist over time and we try to keep on catching up all the time but we're getting into this crisis fatigue in the marketplace and that's why i think an investor looking at this says, heck, the euro is going to weaken. interest rates in europe are going up. i want to be some place else. i'll be in emerging markets. i'll be in the u.s. equity market. i just want to avoid europe right now because of the fatigue in terms of crisis. >> john, hi, this is christine here in asia. we've heard the imf say they are resilient. how resilient is the u.s. economy to what's happening over in the eurozone? >> well, i think the asia is far more resilient than anyone because they have the growth. people want to invest in that growth. from the u.s. point of view as long as we're only focused on the trade aspect, i think the u.s. economy is fairly resilient. exports have added to economic growth in the united states the last two years as one of the positive factors going forward. i think the financial is the more concern -- the greater concern, christine, because we don't know what the linkages are. it almost goes back to 2007-2008. we don't know who is tied in with whom and who owes the money. while we do know the french banks or the portuguese banks are highly tied to the greek situation, the french are tied to the italian situation, it's that third level of interrelationships that are tricky. >> yeah, a really good point. thank you to silvia wadhwa for her report and john silvia at wells fargo as our guest host who will stay with us and given us plenty more insight. coming up later on the program, we're finally going to get some clarity on the republican preside presidential nominee or we hope we will. every time it looks like mitt romney, a new front-runner seems to emerge. we'll look at what the florida primary has in store for us. up next, the mood for the markets as expectations for a greek deal get pushed back again. welcome back. you're watching "worldwide exchange" and it's time for your global markets report. let's start here in the united states. take a look at the futures and see how we're set to open on wall street. the positive momentum in asia and europe today is trickling down here. the dow looks to be higher by 61 points. the nasdaq by 12.6 and the s&p 500 looks like it will open higher by six and change. ross, does it still look as strong on your end? >> yeah. we're about 8 to 1 outpacing decline e decliners as we have done for most of the show. so here we are about two and a half hours into the trading session trying to pull back the losses from yesterday. the ftse 100 up three-quarters. the cac up about 1% as well. the ftse only up about 2% for the month. xetra dax up. in focus today british chip maker a.r.m. with earnings well above expectations. profit up 45%. this is the company whose technology powers apple's products amongst others. it's confident it will continue to gain market share. the stock up 4.7%. bskyb shares up 3%. it reported an 8% rise in its net profit earnings boosted by new base of television and broad band customers. british operator said it will la launch a new internet tv service for non-sky customers to allow it to compete with the likes of netflix. as far as the major bond markets are concerned, we look to portugal, of course. ten-year bunds high on the yield but still low 1.82%. we saw the five-year treasury, ten-year yields, still earning more than bunds. gilt not a huge reaction. a little bit to very weak consumer credit numbers out and a big, sharp contraction in m money supply in december has probably tipped the hat in favor of lawn pg more easing. the ten-year btp back below 6%. we're all the way down to below 6%. now we talked about the portuguese prime minister trying to tell everybody last night i don't know why we're going to have a restructuring like greece but plenty think they will. two-year government bonds, this morning we hit a fresh record high yield around 21.5%. as far as euro is concerned, slightly firm against the dollar this morning, pretty steady really. euro/yen, i saw the 100 mark on euro/sterling. that's a pretty flat session. how is it faring in asia? trade is volatile given what's happening in the eurozone. inve investors are cautious about that, also, not to mention pmi data will show the state of the chinese economy and that's crucial for the entire asia region. the china market, of course, sentiment 0.3% higher but still moving to the upside but the hong kong market up 1.1%. the in kay 225 is up marginally. we had industrial output coming in for the month of december showing a recovery as companies recovered from disruptions from the flights over in thailand so that's giving a little bit of lift but traders cautious because the strong yen continues to hamper the exporters. the kospi up 0.8%. the markets shrugging off news that key industrial output contracted for the month of december so moving high er as a result. elsewhere the taiwan weighted index extending gains. yesterday, remember, this market moved higher 2.4% continuing to push higher 1.5% today. down under weak session. australian market down. financials were a drag. over in india up 1.9%, almost 2%. so overall a mixed picture. i'll be back tomorrow with the news that is moving markets in asia. we like the one in december. now european banks could tap the ecb for twas as much in its next ltro auction in february. according to the financial times heads of banks say they will not be so shy this time around. remember the ecb supplied 180 billion yeuros in its first funding operation designed to ease liquidity problems in europe's banking system. estimates are that this could now soar to $1 trillion in the next auction on february the 29th. the key, jackie, will still be on collateral so that might be a limiting factor. >> yeah, absolutely. the s&p is warning that it could down grade several g-20 nations in the next three years because of spiraling health care costs in those countries. now the ratings agency says that developed nations in europe as well as in the u.s. and japan could suffer the most over the next 40 years as aging populations strain their public finances. the s&p says the longer governments wait to contain health care costs the more difficult it will become politically. as voters get older they'll be less willing to agree to cuts in health care benefits. and the pain from japan's strong yen continues in terms of corporate bottom lines. honda motor slashed its profit forecast down, worse than expected 60% for the full fiscal year after reporting a 41% drop in third quarter numbers. honda said its profit was hit hard by flooded factories in thailand. japanese carmakers like honda are bank iing on government subsidies to help lift domestic sales. the subsidies are due later this year. and radio shack gets unplugged as shares of the consumer electronics retailer slide nearly 20% in the after hours session on monday. the company is cutting its fourth quarter outlook on significant weakness in its sprint wireless business. radio shack says that's more than offsetting sales growth from its partnership with verizon wireless. rising revenue and higher sales of tablets and ereaders. they expect to earn 11 to 13 cents a share. 37 cents was expected. that's a big discontent there. big disparity in those numbers. still to come, the tension between iran and the west shows no signs of easing as the u.s. hints that it will apply more pressure on tehran. we'll discuss what that means for oil prices up next.  ?? oil prices firmer again this morning. we've seen brent ticking up to $111.74. nymex around the $100 mark. trying to defuse tensions. tehran is under intense scrutiny. u.s. lawmakers signaled they will keep up the pressure by applying even more sanctions. yousef is monitoring events for us in dubai. >> reporter: well, ross, the hope was this delegation visit to iran would answer the suspicions the iaea had in its original report late last year. we still don't have any tangible developments on that front. we know they're wrapping up their visit. the iranian foreign minister has offered to the delegation a longer stay but, again, we don't know they've taken up that. the iranian foreign minister said they are opening up talks. we've seen a soft er tone in th last few days but, again, the western countries, the west is piling up the pressure. you mentioned that u.s. bill that is going to be explored further, later this week, which would target specifically the national iranian company and companies that do business with that. so tightening that economic noose even more. also news out over the last hour or two germany will be trying to pursue china to reduce their oil imports from iran. of course china is one of iran's major customers. the iranians have maintained that they can handle the draw downfrom the european union of about half a million barrels per day. if you add the chinese imports to that, another half a million, you are talking about 50% of iran's exports and, remember, that is the life line of iran's economy, government revenues over 50% come from oil exports. >> yeah, that's a great point, yousef. still with us is john silvia. i want to bring you in on this discussion and talk about the oil prices. despite the fact that we've had the threat of sanctions and that there's been some uncertainty within the middle east, we've seen oil prices stay stable. what do you think will happen as it starts getting even more tense? we were talking about that during the break, that the prices will go up but by how much? >> not very much, jackie. we talked and i think everyone knows that globally oil is traded. around the globe 24 hours a day. it will cause some dislocation in terms of who is buying the iranian oil, where it is shipped and how it goes but the oil will go somewhere and other people will supply it to the u.s. market so i think there's a slight bias upwards but i don't think there's a big significant spike because of this. >> and at the end of the day the issue is over the nuclear program in iran. it's not really so much about the oil right now and a lot of analysts have been saying we really need to get away from that issue and deal with the main issue. how do you think our administration and domestically we're handling the situation with iran in the middle east? >> for most economists, sanctions tend not to be very effective over time. even since the great world war ii and i, sanctions don't have that much effect over time. i don't think it will make all that much difference. oftentimes we get into these situations we don't go directly to the problem and we heard silvia talk earlier about the euro and what the real problem was and sometimes we sort of do this but the real problem is over here. >> an attack at the source. of course that's something everyone can try to do better. john silvia will stay with us. we'll get some more insight from him the rest of the hour. and coming up on the show, our next guest says that the big surprise in 2012 may be how fast the u.s. economy picks up steam and double digit return for stocks is not out of the question. which could benefit the most straight ahead. good morning and welcome to the show. the headlines from around the globe today in the united states data on housing and the consumer in foe can cuss cus as they wra best january in 15 years. still waiting, no decision from greece yet on its deal with private debt hold eers. one ecb councilmember has acknowledged there is some risk for the central bank in holding greek government bonds. plus, the portuguese prime minister tries to reassure vestors their money is safe. two-year debt records another record high. and mitt romney builds a commanding lead in the florida presidential primary as the polls are set to open, but newt gingrich says that he won't give up without a fight. so if you've just joined us, a very good morning to you. ahead of the u.s. open later, european stocks are firmer after some slim losses yesterday. we tried to claw most of those back. the xetra dax down about a percent. this morning here on tuesday, the cac up 1.2%. the ftse mib as well 1.5%. german adjusted jobless rate hit an all-time low. this as italian unemployment has hit an a 11-year high. we're keeping our eye on what's going on with portugal. the portuguese prime minister trying his best to say, look, because greece is restructuring doesn't mean we're going to although it's clear they are going to need another bailout next year. they had planned to return to the market but that clearly is unsustainable so we have seen two-year yields in particular today hit a fresh record high. 21.5% is what we got. we're just below that at the moment with 21.38. the five year at 23%. so they're going to be a program, i think, jackie, for quite some time. >> the optimism is feeding here in the united states as we check out the futures. the markets will open higher. the dow higher by 66. the nasdaq by 13 and change and the s&p 500 by just about seven points after a day of losses yesterday as well. we also managed in the u.s. to claw back from those session lows and climb closer to the flat line. me meantime, january has been very kind to the u.s. markets with just one day to go the dow and the s&p 500 are on track for their best january percentage wise we're talking about since 1997. the nasdaq is set for its best january since 2001. and joining us now is bill, the ceo, and still with us our guest host john silvia, chief economist at wells fargo. i want to talk about the markets. i know we had a very good run in the beginning of the year as we saw a lot of strength coming out of the end of 2011 there. but it seems like we're teetering a little bit. it still feels uneven. it still feels like we're listening to news out of europe, reacting to that. we've had an earnings season that hasn't been as stellar as it could have been. what's your take as we go forward? >> well, i think you have to take a look back and say that since october when markets bottomed when everybody was so fe fearful, we've had a 22% to 23% move up. we had a great january, as you just said. feels good. i think the momentum is the best we've seen since last april. i think that's going to be the big story. 2012 is all about a convincing yankee-led recovery. and the numbers are going to continue to move our way step-by-step and you'll have pullbacks here and there. it's all good, i think. >> and as we see some of the data seeming to improve a little bit, the markets focus on that, they're also foe can cussing on corporate earnings. but we've also had a lot of m&a activity, a little bit of a pickup in ipos. speaking of which we might hear that facebook is filing for its ipo tomorrow. what's your take on the facebook story? >> probably a classic example of popular delusion, probably be valued where i would never own it but that's me. i'm a conservative. you won't be able to get enough, i'm sure. the big story this year is the comeback of cars and houses. >> so, bill, how does an investor distinguish between a technology stock which is a lot of hype as 0 opposed to some th have real value? capital goods orders, business investment, especially in technology and communications is very strong, so there must be some demand there. as an investor, how do you distinguish between the real story and that that's mostly hype? >> that's the art. it's very difficult. i've been in this for more decades than i care to admit and we've seen hot names come and go and disruptive technology eat alive the 0 old guard. things tough to understand, i would rather go away. ibm and facebook, i'm not sure how they compete going forward with their competition. who is the new competition? let somebody else worry about that. i'd rather have a predictable business model that i understand and that you can see the value. >> so, bill, just explain to us this cars and housing strategy then. how does that -- how do you expose yourself to that and why? >> well, you look at the economy that's been through a pretty bloody, violent four-year soiree, the one thing absent has been housing which is a big driver in the u.s. economy and autos. the average auto on american highways is well over 11 years old. that's a phenomenon that's a rarity. housing, which everybody has written off as the end of the game, is starting to perk up and not the single family but multifamily housing. that has a very positive impact on what i call the feel good part of the economy, bringing jobs back, starting to see business activity. these are key ingredients that are going to be a big driver in gdp above 3%, 3.25% over the quarters ahead. >> that's a great point. we'll leave it there for the moment. bill spiroupolous and john silvia. most residents head out to vote in the state's primary today. so is the republican nomination now his to lose? we'll talk presidential politics right after the break. welcome back. you're watching "worldwide exchange." thanks for joining us this morning. in just a few, short hours, florida residents will start voting in the state's presidential primary. polls show that mitt romney is opening a comfortable double digit lead over newt gingrich who just a week ago was the front-runner. the majority of those surveyed are saying that romney is the b better candidate to fix the u.s. economy but gingrich isn't giving up just yet. he is vowing to fight on until the convention in september. joining us now is the editor of the enterprise blog at the american enterprise institute and the cnbc contributor. thank you for being with us. let's talk about the florida primary today and the momentum that we've seen. romney looks like he's ahead here but newt came out of south carolina very strong. where has he lost his footing and why is he not likely to move ahead in florida? >> listen, mitt romney certainly opened a blizzard of negative ads on newt gingrich and highlighted both his time as speaker of the house where he was under ethics violations and also his links to freddie mac which a lot of republicans blame fannie mae and freddie mac. so saying you are linked no those is about the worst thing you can say about it. mitt romney has a big lead but i don't think newt gingrich will go away. >> right. he couldn't go away. in terms of the sort of not romney vote in florida right now, do you think it will be split between gingrich and santorum but enough of a lead that romney still moves ahead? >> they've done polls where they take rick santorum out of it and he is still beating newt gingrich by a healthy amount. that not romney vote will still be there, another reason they will stick around and collect those not romney votes. we had a tremendous boost from mitt romney to really go through the entire month of february winning and then we'll see what happens when the southern states vote. >> absolutely. and we have joining us the democratic strategist, former candidate for congress in hav a virginia. crystal, i want to get your view on this as well. we've seen these debates. a lot of hot button issues. health care seems to be on the docket with the news coming out about the s&p. what will shape what happens in florida today? >> well, you know, interestingly i think it's been more about the candidates' personas, more about their styles than it has been about their economic plans or health care plans. as was just mentioned, not only was it the $16 million worth of negative ads that were dropped on newt gingrich but also some very aggressive debate performances by mitt romney last week, two of them, and some rather subpar performances on the other hand by newt gingrich. so that's what's been driving the conversation. i was at a rally yesterday for newt gingrich. the crowd was quite small, very enthusiastic, they were very antiestablishment, but newt showed up about two hours late. it was quite chaotic and, again, it would be generous to say there were maybe 200 people in the crowd. >> this is ross. do you foresee this will ever turn into a debate about policies or is it always going to be personality? >> well, you know, honestly in this field to given the voters and the candidates some credit, the folks -- the candidates are very close in terms of policy. their positions aren't that different. so it's kind of come down to the battle between the establishment republican and the more tea party conservative, antiestablishment wing of the party. yesterday one of the big applause lines in the intros was that newt gingrich would be the candidate to take on the rnc, the republican national committee as well as the dnc. so, in a lot of ways these contests always come down to personality and style. >> and speaking of personality and style when you look at the candidates on the republican side attacking each other as we move forward and eventually we'll get down to one nominee that goes up against president obama, does this really sort of attack their credibility and make it difficult to move forward when we get into the real race? >> i think you've hit the nail on the head. i mean, for mitt romney, the $16 million worth of negative ads that he has run here in the state of florida, will help him win today more than likely, but, looking forward to if he is the eventual nominee, florida is a critical swing state for november for the general election. now independents are moving away from mitt romney because they don't like the negative ads. president obama is winning independents by a margin of 50 to 36. this is doing long-term damage to the candidates' credibility. >> james, krystal talks about the money spent there. how about the fact he has a better organization helping as we go beyond this into march? >> well, that's tremendously important 0. once we get out of florida we're not going to be having all of these debates which newt gingrich has relied upon to help boost his popularity. now it will be about organization, about money. mitt romney spent a lot of money, he will raise more money. that's not going to be a problem for him. a month of an open field for mitt romney to run ads, spend money, win caucuses and states before you get to march. it will be very tough for newt gingrich to come back in march and retake the lead again. >> yeah, and even if he can hang on through february where there are this continued schedule of one-off primaries, and then to march and super tuesday and i don't think that gingrich has the organization to compete in more than one state at once so that's when it really comes to organizational skills and, again, to money. >> jim, let me ask you a question. one of the famous political stories was when abraham lincoln was running. he had a lot of disparate. how might mitt romney take the different views coalesce a winning group? >> mitt romney has tried to be a full spectrum conservative, full spectrum republican, economic policy, pro-life, very aggressive and robust foreign policy. so i think on the issues, he's already there. it's just people have confidence in him. do they think he's a good messenger and do they believe him? he has quite a few months to continue to make that case. but i think people have been scared a little bit by the gingrich boom that he was going to be the nominee and might bring down the party. after this i think mitt romney will start looking better. >> hopefully his wall street background and ability to lead as a businessman won't be attacked by the other side. hopefully that will be seen as a positive. thank you so much, krystal ball for joining us from the remote and, james, thank you for coming in early and joining us on the program. meantime, still to come on "worldwide exchange," all eyes are on exxon mobil, pfizer and amazon, reporting results today. we'll discuss the potential winners and losers as we look ahead to the trading day on wall street. we have a fresh antitrust proceedings opened by the european commission against samsung. they suggest samsung may have abused standard essential patent rights. it all comes down to the patent dispute that they have with apple. they say eu says the opening of the antitrust investigation does not predict the outcome but they are under investigation. elsewhere, of course, we're still waiting for greece. we're keeping our eyes on that. the debt restructuring deal between greece and private creditors is still in the balance. eu leaders claim an agreement will be reached by the end of this week after it was supposed to be the end of last week and originally the week before that. p lucas papademos says the negotiations have made significant progress. silvia is monitoring it from brussels where of course the heads of state wrapped up with an agreement to put in a fiscal budget plan in 25 out of the 27 states. the czech republic, silvia, in the uk didn't sign it. so what happens now? >> reporter: my favorite headline is we're inching closer to a deal on greece. i think we've had that for the last three months, that we're inching closer somewhere. we still haven't got a deal on greece. we might have it by the middle of february. we know when the deadline is. come march they need the money but still don't know how much money they need. there's a great sense of exasperation, resignation about the whole greek situation. we know we have to save it one way or another. it doesn't matter whether we're inside the euro or outside the euro. it's a quagmire and we don't seem to get out of it. different situation in portugal. a different situation in ireland. different situation in spain and italy where where significant progress is being made. the rest, of course, a fiscal compact we talked about before. yes, it's a step forward. it's a step forward to closer fiscal integration and to closer fiscal union but at the moment it's no more than a letter of intent. it has to be rectified. it has to be sanctioned by all the various parliaments involved and then we have to know whether sanctions will actually be imposed on budgets and that's a long if, if, if. >> yes. that's why -- now you said we're not inching, we're mill metering towards an agreement on greece. i think we might be micro metering. a micron is a millionth of a meter. i think we might be going at that pace. >> reporter: the closer to march, i think the closer we are, yes. >> exactly. they have time. march 20th. >> reporter: exactly. >> take your time. we've got it. sylvia, thanks very much indeed. remember, down 1% yesterday, the xetra dax and the ftse up. those losses firm on the cac and the ftse mib, the ibex up 0.5%. the adjusted unemployment rate. this is italian jobless, an 11-year high so you can quite clearly seep the imbalances within the eurozone, jackie. >> yeah, and the green arrows you see on your end translating over here as well as we take a look at the futures and getting ready for a trade on wall street. it does look like a higher open. it continues to creep even higher. the dow higher by 74 now. the nasdaq by nearly 15 and the s&p 500 looking to open higher by nearly eight points. meantime, the fourth quarter unemployment numbers as well, the cost index is out at 8:30 a.m. eastern time. forecast to rise half a percent. at 9:00 a.m. we're going to get the november s&p case-shiller index. forecast to drop at 3.2%. analysts are look for a reading of 68, up 3 1/2 points from tease. also the january chicago pmi, expecting 62.2. unchanged from last month. and then there's earnings. exxon mobil will be reporting before the opening bell as do drug makers eli lilly, pfizer, mattel and u.s. steel. after the close we'll hear from amazon, aflac and seagate technology. a lot of big companies today. and still with us is bill and john silvia. bill, i want to go out to you. in terms of the data we're looking at today, what do you think is the most important point we're going to get? is it that consumer confidence number? >> i would say most likely that will be the best number of the day. case-shillor shows an uptick i think that will expire rapidly. >> and what about your view on earnings? we have a lot of big companies coming out, exxon, amazon, seagate. what's your take? do you think we'll see a stellar day or more of the same, a mixed bag? >> i think you're going to see some bumping and grinding but it's going to be generally to the plus, outside expectation. i think the earnings are going to be a great story. 60%, 70% ahead of target. >> i see five-year treasury deals. a lot of people got burnt last year calling the end of this treasury bond market, a bull bond market. do you want to have a go now? >> sure. mr. bull -- mr. bond bull is 29 years old, and i think it's getting very late in the game and the public has been batted around and terrified. it's been a safe place for them to hide. when the music turns back to normal, it could be a real it tough ball game. >> when is that, bill? >> a ten-year treasury. well, if our perception is right that 2012 is the year that the great american recovery has traction, is convincing, and we start to see other animal spheres besides fear, i think that's what you'll see in the ten year. you have a big calendar for refy. >> john? >> well, for me i think it's going to be kind of interesting. look at amazon. it seems to be a lot of stories out there that we've had good online retail sales in the fourth quarter. amazon may be a surprise on the upside there. i like your point, jackie, earlier about consumer confidence. consumer confidence seems to have improved partly because of stocks but the good employment numbers and then the chicago survey which is not just manufacturing but a broader index shows continuing momentum going forward. there are good signs for investors. >> and i want to get your take on the nonforeign payrolls on friday as well. that's a huge number. do you think we're going to see a slight tick up? >> relative to last month our expectations are about 125,000. again, picking up on the amazon story about 40,000 of last month's numbers were couriers. that will probably come out and then another 10,000 decline maybe in state and local government. so i think more modest number. >> okay, all right. great. thank you, bill spiropoulos. thank you for joining us from wells fargo. and that's it for today's show. i'm jackie deangelis in the united states. >> and i'm ross westgate. up next "squawk box" and the countdown to the opening of trade state side. whatever happens we hope you have a profitable day. the employee of the month is... spark card from capital one. spark cash gives me the most rewards of any small business credit card. it's hard for my crew to keep up with 2% cash back on every purchase, every day. 2% cash back. that's setting the bar pretty high. thanks to spark, owning my own business has never been more rewarding. [ 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? this guy's amazing. good morning. a january jolt. the bulls off and running in the first month of the year. earnings and the economy, key reads this morning on housing, manufacturing, and the consumer. plus, primary voters go to polls in florida. watch out for the python. it's tuesday, january 31st, 2012. "squawk box" begins right now. ♪ i'd rather leave than never believe ♪ ♪ if this is it please let me know ♪ ♪ if this ain't love good morning, everybody. welcome to "squawk box" here on cnbc. i'm becky quick along with joe kernen and andrew ross sorkin. with one trading day left in the month the dow and s&p are on track for

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