the developed countries. putting further rate cuts in doubt. hello, kelly. >> hello and good morning. >> good morning. what a morning. my goodness. >> long day in store. >> it's a really interesting week because there's a lot going on and yes we're double-shifting. we're sending a whole bunch of people out all over the place to cover all these events. ecb, so people all over the place. it's interesting being here in the studio and getting all the feeds in. >> people are forgetting that we got the bank of england meeting, ecb meeting. all the while trying to figure out what kind of details we'll get from various regulatory bodies, the next steps in europe. >> also now of course the ftse traders back from their prolonged holiday. maybe the market action will pick up a little bit. on today's show we continue to, with our full coverage, we go the iff conference in copenhagen. buying greek debt is the quote trade the year. find out more in just a couple of minutes. >> plus we'll be live outside of the ecb in frankfurt where the bank is under pressure to help solve the debt crisis. >> we'll speak a lot about australia. he says resources offer value more in 20 minutes. >> the ceo of black label will be joining us. >> we go out to new york city where hewlett-packard ceo will be talking to us on everything from tech to dynamics. we're happy to have her on the show. under pressure ecb will be meeting today to consider options for tackling the eurozone crisis. a rate cut is unlikely although there could be a signal of a move. sylvia is in frankfurt. i'm surprised how quickly we've moved from no expectations of the ecb doing anything at all to seeing more and more copy talking about the potential of the ecb, at least indicating something sooner versus later. >> yeah, i find that particularly odd because at the last press conference and his manner of communicating with the press and markets. wake up. he doesn't hint. it's not like trichet where he says next month we might have something to say. this is completely off the table. either we get a rate cut today, it's very unlikely or we won't hear what's is going to happen next month because simply the ecb will say we keep all our options open. in all honesty do we need that rate cut? we've talked about this before. we're near zero the banks that can refinance themselves in the market are at zero, refinancing rates. the banks that can't refinance in the market has to go to the refeed window of the ecb, below 1% is that something we need to worry about? no. the real problem is solvency problem not a liquidity problem. the ecb punched enough money into the market. no. it's the down to politicians now and that's where the big problem is. the ecb keeps putting a band aid on. they keep buying time for politicians and politicians don't quite deliver. and that's where the market expiration comes from. the magic bull jet from temp cb doesn't exist and the magic bullet from politicians doesn't exist. it will continue to be a low grind. at the moment being in the waiting loop with the greek elections, with the end of june summit, there's really nothing for the ecb to do right now. >> sylvia, stay with us. i want to tro our guest, alan capper. hi, alan. you just heard what sylvia was saying. could they have a rate cut? >> there's a potential. what the market is looking for is some permanent solution to this crisis. the difficulty so far with the ecb and politicians is they keep coming up with band aids. the market is now past that stage. they want to see strength, a clear road map that leads to a resolution. not sure you'll see that today. >> this could be the new bailout. are bailings going to solve spain's banking crisis? >> absolutely not. i think the main thing for spain is how do they find a mechanism to bail out their banks because simply the sovereign doesn't have enough funds to the so and access would lead directly. at the moment the banks don't have that kind of mechanism in place. >> is that your view spain will have to attack some sort of international aid for help? >> i think they are being fairly clear about that over the weekend but that's what their plan is. the difficulty is we need to put some mechanism in place whereby they want to achieve and can be achieved. >> i want to bring sylvia back into this. with regards to the ecb, sylvia, many say they are not doing enough at the moment. we're arguing on one hand that we need to sort spain out around the ecb, on the other side the ecb should directly intervene to help spain out. >> reporter: i don't really know what people want from the ecb. they pump trillions into the market. we've got interest rates below, below 1%. we've got money on tap. we have a bond purchasing program that's dormant, yes they could buy more bond but we know that's a very short-lived mechanism and doesn't turn anything around. so what is the ecb supposed to do? it's a little bit like always calling for the magician show us something else. it's a policy redirection, policy in terms of political scenario. we need structural reforms. we need a growth compact. we need some kind of stimulus. but all this is going to take years. we haven't got years. we only have a few months. maybe a couple of quarters. you can't change. you can't take big economic shifts like the eurozone or single countries around in a few quarters. just remember what happened to germany. we were the sick man of europe after unfication. if in that time frame the eurozone falls apart we'll have a new baseline scenario but you can't do it much faster. >> spot in, sylvia. thank you for that for us from frankfurt. alan real quickly you heard what she said. is there anything you disagree with. are investors in for a rude awakening when no solution is imminent? >> the main danger we have is markets have been waiting for this. we knew when they were constructed there was no monetary union in place. the market patience has now been expired and as a result politicians in the ecb do need to come up with something. >> you have to say in some ways the more intense the crisis the more cover they have, even if in the near term it means further weakness. we'll leave it there for the time being. yes. i want to show you how the markets are performing at the moment if you're just joining us. this is what we're looking at in europe. we got an almost all green screen for you this morning. we had a prolonged weekend, prolonged holiday weekend in the uk. ftse traders back in full. stocks up 600 higher by 1.3%, having a little bit of a peak very early morning trade so far. what we're seeing, though, is green on our main european markets. ftse higher by more than 1%. dax by up 4.5%. ibex adding 2%. what we're seeing also of course stealing the headlines is this ratings cut coming through from moody's. they downgraded six german groups. austria's three largest banks being downgraded. they say they face risk if the crisis continues. not really paying attention to this downgrade by the look of things as these stocks are trading higher. in germany we're looking at the downgrade to southeast lender banks out there. we should be hearing more about the potential for downgrades for some of the larger banking groups out of germany later on. in the bund market, a little bit of selling in the bund. we have a treasury auction coming out of spain on thursday which should be interesting. the currency markets whiz through across rates. we're looking at the euro trading higher ahead of that ecb rate setting decision. no change anticipated today. dollar also trading a little bit higher. so that's what we're looking at here heading towards the ecb's decision which takes place at 11:45 gnt. the commodity story also tells us we're adding across the board, crude higher by 1%. brent up a percent point. gold jumping more than 1% to 1635. kelly. >> thanks. we want to get a quick check of market in asia. tracey chang, good morning. >> good morning to you. asian markets continue to recover after u.s. service sector data showed improvement in may ahead of australia qs. growth surpassed market expectations. trading was thin as investor stayed on the sidelines. the only asian birth in the red, there was a toss up between gross worries. hong kong lifting the market higher. worth pointing out gains for the index in mainland china were retained. the yen against the dollar helped exporter stocks see gains. elsewhere, shares rose only marginally. we'll have more on that for you a little later on the show. a look at india, joining the rally up more than 2.4%. south korean markets are shut for a national holiday but trading will resume tomorrow. kelly, back to you. >> meanwhile in australia its economy grew the fastest clip among developing nation. first quarter gdp rose 1.3% on the quarter blowing past expectations, that was more than 4% on an annualized pace. australian growth was driven by strong household spending. there's also europe's debt crisis to take into account on that front. we're joined by -- >> we see a lot of uncertainty in europe. there's no doubt that that is weighing on confidence globally, and what i would say is they can face that uncertainty. >> australia can face that uncertainty. that's the finance minister speak being earlier on cnbc. we're joined by managing director of ph. good morning. what's the outlook for australia this year given its economy in the first quarter was stronger than expected but there are many concerns about the coming months. >> yeah. there certainly is. our index back below 4,000. it was back there last october. it was much easier to play last october because we had a lot of our banks, a lot of our top companies that paid very high dividend yields. way oversold late last year. made a lot of money buying the market at that point and our banks and things are up 10%, 20% and paid 5% since then. this time when we dropped down below 4,000 most of our quality industrials and high yielding stocks have hardly fallen. several of them are still at their highs. banks have come off a little bit. still 10%, 15% higher than where they were last year. so for the moment, our big resource stocks have been sold off across the board. a lot of that has to do with number one what's happening with europe but we're pretty confident that it's cheaper for the germans to be in the eurozone rather than out so we think that's the probable outcome which i think will lead to a sharp rally to risk in our economy. second thing is china. we've discussed china several times before. we had everybody around the world complaining we're growing too fast above 10%. so they tightened nine times their policies. now that they said they will slow to 7.5% about two months ago they did what they said they would do, slowed it. they've only loosened the monetary policy about three times. interest rates in china are 6%. plenty of space for them to continue to loosen. another reason for me to be positive in buying stocks in the australia market. >> anything other than resource stocks that you're looking at. we talk often about this story but we don't want to ignore everything else that's taking place in australia as well. >> yeah. it's quite difficult. when people have another 2.5 interest cut today and we believe there will be further interest rate cuts in australia, still across the board we have, you know, we're looking to raise it even though our banks and industrials and things like that are 10%, 15% higher than late last year. people talk about cash is king. if you're looking at most top quality companies, they are yielding over 5% at this stage. a basket of our stocks is looking cheap while the cheapest for 10, 20 years for a very long time. but most of the damage really has been done in those mid-cap range stocks. some of our plays like atlas iron has fall been from $2 to $3. one of our top copper stocks, not enough supply in the second half the year, expect that to spike. that's worthwhile looking at approximately big story on gold, gold price has come up somewhat but at the end of the day our gold equities here have been severely oversold so there are things like -- >> sure. >> silver down to $2.20. starting to rally. >> chris briefly, our guest host has a question. >> just very briefly. suppose they reach a resolution in europe. will we then see australian stocks sell off or will they just continue with the rise on the back of that? which way do we go? >> yeah. i think we'll have a sharp bounce back either way. i think really a lot of it is sentiment. australian savings is the highest it's been for a very long, long period of time pap lot of money sitting on the sidelines. yields are getting lower and lower. all they need is the certainty. we think rates will stay. either way -- >> wouldn't we all like that. >> all right. you got his level. thank you so much, sir. moving on greece's power market operator will be receiving 250 million euros in emergency state funds to avert energy cuts. julia chatterley joins us from athens. julia the power suppliers now getting involved in this. >> reporter: yeah, absolutely. so this money that has gone to the state fund that manages the power supply covers a deficit estimated to be around 300 million euros. a question over there the amount of cash here already. this deficit has built up for a couple of reasons, a couple of energy providers went out of business last year. also subsidies for the renewable sector, pays five times the selling price for renewable energy and that's fixed until 2034. so obviously a problem with regulation in the utility sector here. it for now they have funding. coming from the finance minister. it was signed off on friday by the european commission. they have been holding off over concerns that this would be considered an illegal state aid payment they believe to perhaps not surprisingly they didn't don't involved in that same power cuts in greece at least for power cuts in greece. it does highlight two issues. first regulation here. and two, we have an ongoing liquidity problem with businesses, with payments here that i can't see an end to leading to the election and we don't have clarity beyond that. >> julia we'll see you very soon. thank you very much. >> meanwhile our question of the day what do you expect from the european central bank policy meeting. if you want to join the conversation weigh in, get in touch with us at worldwide @cnbc.com or tweet us or directly at kelly underscore evans. >> indeed, kelly. coming up next we'll be talking to a guest who says that greek bonds are the trade the year. how does that work? find out more in a moment. ment. [ male announcer ] this is the at&t network. a living, breathing intelligence helping business, do more business. in here, opportunities are created and protected. gonna need more wool! demand is instantly recognized and securely acted on across the company. around the world. turning a new trend, into a global phenomenon. it's the at&t network -- securing a world of new opportunities. ♪ welcome back to the program. this is worldwide exchange. europe's internal markets commissioner today will unveil new plans for dealing with failing lenders in what cube further step towards banking union in europe. the eu is expected to push for closer coordination between countries along with powers to force loss on bank loan holders. they favor a banking union. the lawmakers are still divided over exactly what the integration will entail. leading bankers and policymakers are meeting in denmark for the spring conference of the institute of international finance. lisa should be there to show them where to get the best pastries. there's growing concerns about spain's lenders and a greek exit from the euro. our guest host on set with us this hour, alan capper stays with us. alan, when it comes to this plan to potentially help bailout spain's banks, you know, i wonder if there isn't a risk here that policymakers scare off investors instead of, you know, drawing them into the region's debt. >> i think the real challenge is if they inject funds into spanish banks direct from the eu how exactly do we monitor whether that process is appropriate, in other words the funds being injected into greece, for example the monetary process is very complicated and that's one simplify rent where you have a multitude of banks it seems the process would be very complicated indeed. >> we have a situation now where they are stepping in to form the banking union which is a precursor towards a fuller fiscal crisis. so there's several steps before we see this fiscal union coming to play out. also the issue is whether it will be quickly enough for the spanish banks. the esm can't insert money into the spanish banks directly and with these proposals that are on the table today they would be first under way in 2014. >> the market really wants to see is a road map. it doesn't need to have the fine details laid out. what it need to understand is willingness on the part of the policymakers to move in a sensible direction. i think the market is realistic about that. >> i guess too what i was referring to about scaring off investors is the point you made quite well, better than i can. a move like bailing may not help bond holders. does it push people further down the capital structure now that temp cb may be involved in holding so much debt. >> the challenge is who are the natural buyers of this debt? it's very difficult to evaluate it ma they ma th-- we struggle understand who the natural investor base might actually be. >> what would it take to get you as an investor. >> ultimately, it's down to pricing and the pricing is very, very attractive. so i think one of the key -- the pricing is attractive. the risk is not very attractive. >> we were just talking about this trade in greece and whether or not it makes sense to be buying into greek debt still. in copenhagen the meeting is taking place. the president of gray lock capital is joining us. we're very pleased you're joining us. i think it would be a good point to start on, the parallels if there are any, if we were to see a greek default whether there are parallels with the argentinian default. i would argue with argentina and russia what they saw differently is a really boom in the commodities market which helped them coming back from this real deflation that they had to see in their currencies which greece wouldn't have. >> yeah. that's a fair point and i think a lot of people have commented on the fact that greece within the euro wouldn't have an advantage of a rapid devaluation like argentina did when they broke from the dollar. when you mention, you know, the possibility of greek default we already had a default, a technical default, cbs has triggered and private-sector took 75 current present value hit. there's been a strict during. if there's any further modifications to the outstanding debt that greece has it's going to have to come from somewhere other than the private-sector. in terms of how effective the valuation can be in promoting balancing out their economy, it can work. it really, obviously, will create a lot more potential for exports, consumption of imports will drop dramatically and i think there are ways that greece may be able to achieve that within the euro, an exit from euro, i think at this point, given the potential for contagion and the effect on the rest of the eurozone could be catastrophic. the reality is if you look at what happened with argentina, yes there was a really, in the satisfaction with russia, that they were quite lucky they had a huge rebound in russia's case with oil prices and in argentina's case with soybean prices and that was able to lift up the economies. if you look at both of those economies right now they got some serious structural issues that to some extent became dependent on the revenues from these exports and they weren't able to or they didn't need to implement the kind of long term reforms that are probably need for a successful economy. i think you can pay in a case with greece if it stays in the euro and subjects itself to southeast further programs, i mean, you know, my argument would be the austerity that the europeans until recently have been promoting might be too much. >> do you still find greek bonds -- do you still buy greek bonds? that was one of your previous calls that you should be buying greek debt and you have in the past. >> yeah. listen, i've been in this market for a long time and when you see a sovereign debt obligation trading at 10 cents on the dollar it's almost better to close your eyes and buy it. the yields of the greek bonds are around 30%. i think that if you look at resolution of some of the issues in spain, that's going to have a dramatic impact on what might happen. >> are you saying there will not be another restructuring of greek debt? >> you know, if there is another restructuring my sense is it's going to be something that won't be a headline type restructuring, it will probably be an amendment of the terms of the official sector. remember, 60 billion of the bonds that were restructured that we owned were in the hands of the central banks of one ecb and the other european countries. those banks would take it out of the restructuring, swapped at par and many of these were bought at a discount. so i think the official sector debt will need to be modified if there's another restructuring. the private-sector debt is under uk law, there's been tremendous selling from the johnson banks. it's very reminiscent what happened after the russia crisis. >> just one question. you mentioned devaluation earlier. if greece were to leave the eu, i struggle with this, how would valuation help them? i'm struggling. it's hard to make a call on devaluation but if they you could be in a rather worse position. >> well, i'm sorry, why are you suggesting that the restructured bonds would get devalued as well. >> there's a possibility if greece devalues that would benefit the economy. given it's quite a closed economy how would that benefit the owner of the greek government debt? >> well, i'm not sure there's a direct benefit. i mean one, the bonds that are restructuring would stay denominated in euros unless the euros fragmented but you wouldn't go to drachmas in this situation. a devaluation would give a boost to the economy and what i was speaking about there is the impact on the economy. you get an immediate improvement in the balance of payments because, you work with the consumption of imports would drop-off, exports would increase. in terms of -- you have to understand, i mean there would be a significant hit to the gdp but there already has been and the servicing of the private-sector debt is relatively incidental. even with a contraction of gdp post- departure from the euro, i don't think that the private sector debt would be the problem. but our forecast in this is the greeks will and i think goldman sachs agrees with us muddle through. really for the eurozone in general i think -- >> hans we have to leave it there. sorry the line was a little bit difficult. hans is president and ceo of gray lock capital. they are talking about the greek debt restructuring. >> to mention some data that hit our wires within the last couple of minutes, the may construction pmi data coming through at 54.4 which is down a bit from what we saw in april. it's slightly higher than reuters poll anticipating. what we're seeing is construction growth is slowing a bit. they say that optimism about the coming year has weakened sharply again according to this latest survey, anything above 60 is a contraction. >> it's slowing. >> exactly. degrees of change or something. coming up next, we talked to a guest who says maybe a bank run isn't the worse thing in the world. controversial? you bet. stay with us and find out more. hi, everybody, welcome back. you're watching worldwide exchange. welcome. we're glad you're with us. european stocks are trading higher as investors await the out come of the ecb meeting. >> reports say the fed is weighing whether to step in on a small or large scale with the u.s. economic outlook takes a turn for the worse. >> the eu commission gets set to unveil a framework to deal with failing banks but is it too little too late as policymakers wrangle over resolutions for spain's troubled lenders. so are european markets this morning, we've opened on a slightly brighter note. we're feeling more perky this morning. ftse traders back in full. no more holiday four. we have a higher trade across the board really, the dax up by 2%. ibex up by 3% in spain. >> that's better than they did in the last couple of months. let's look what's happening in bonds. this is the big story. today a bit quieter, more encouraging on the risk front. the german bund is up. spain down to 6.27%. italy at 5.6. in the uk as people get back to the work the gilt is at 1.65%. >> there's been speculation about the possible funding of spain's banks. the spanish financial daily claims the government will tell lends that they need to set aside further provisions for losses on 3% of mortgages, 12% of business loans and 20% of consumer credit. meanwhile german media reports are suggesting europe is suggesting a precaution engineer line allowing spanish banks to fund themselves by other means. a senior bank analyst at credit research. the spanish banks, it sounds quite dire and we had the comments that were being interpreted yesterday from the finance minute certificate in spain to mean the credit markets are shot for business in spain. is it that bad at this stage? >> i think so, yes. essentially everybody expects that the spanish banks have been on life support for quite some time. but as we've seen that sort of has run out and the attention is squarely back on the spanish banging sector which has been in crisis for quite some time but things are coming to a head now. >> will bail in bailout spanish banks? >> there's a risk as you mentioned the european commission is unveiling its bail in proposal later today and that's definitely something that's on the table particularly with the comments over the weekend about the banking union and what that would entail which would involve an entity on the european wide basis that can make the decision to impose losses upon bond holders, et cetera, across the system and definitely there's a risk there. the problem is that the spanish government will have to make a decision on where the money comes from to recapitalize its banks and clearly it wouldn't want to take it. >> precisely on that point the european commission setting out this new framework today it can only take effect from 2014 from the earliest. we're still looking at the option on the table for money to go directly into the spanish rescue funds? >> the fund has limited resources at the moment, i believe it has a cash position and it does have plenty of room for the government to give it extra capital. however, you know, the question is whether the government can raise the funds to lend it to which can then give to it the banks. if frob issues it it date of birth spanish banks themselves because nobody else wants to buy frob bonds. >> one question for you is over the last several months the senior bank debt being outperforming the nonfinancials. what would make you turn positive on banks relative to nonfinancial accounts? is there anything today that could change your mind? >> quite frankly we see the link, the nexus between spain and its government as being electronicer than ever particularly after the banks went default more or after more of their spanish sovereign debt. the nondomestic ownership of spanish sovereign debt has fallen to below 40%. the spanish banks are loaded up. if spain gets into difficulty the banks get into difficulty, and vice versa, what's more definite solution for the spanish banking solution for definite solution for the eurozone crisis. >> fantastic seeing you this morning. your enjoying being back at work? >> of course after all that shouting. >> after the queen's celebration. excellent. that's what we like to hear. moody has cut the ratings of six german banks including the country's second largest. it heightened risk are behind the decision. patricia is in frankfurt with this decision. did it catch people by surprise? >> reporter: no. rating agencies have been a little bit behind the curve. actually we heard a comment out from the ecb that of course is the head of the central bank in austria, austrian banks being downgraded. he wasn't surprised and shouldn't be overrated by this step by moody's. the austrian banks are very much exposed to stabler markets in eastern europe. so the german downgrade not doing anything. com mercury rzba lost quite a bit. so today if knigit is just partaking a little bit. the dax at 1.8%. interesting to see, though, the kind of details of what moody had to say, why they had to do this step. they think they needed to do this in line of a, perhaps worsening eurozone debt crisis and alongside that the banks incapability to manage that eu debt. they don't have enough equity cushion and still quite a bit of expos our to these countries that are still under pressure, perhaps continue to be so or even worse. my question, of course, is what are they seeing. these speculators in the market looking at especially the two year yield turning negative at some point are seeing important the eu going forward. at the moment, it's not reacting. if anything, some traders say from a technical basis once we get above the resistance of one euro 40, one with youro 32 we may see more upside. >> one euro 40. thanks for that. turning our attention to japan where the yen is trading lower against the green back. we have more details from the nikkei and he has the story. >> reporter: thanks, kelly. concerns about the strong gwen. he urged them to reaffirm they will cooperate on foreign exchange markets. he said he heard no objection. his comments caused speculation about possible yen selling intervention lifting the dollar to the upper 78 yen level. on the stock market shares of most exporters advanced as cheaper yen helped ease concern about their earnings. during the teleconference, together with u.s. and canadian officials urged europe to manage its debt crisis properly and responsibly to reduce uncertainty in global financial markets opinion it was a message he repeated to the press this morning. back to you. >> all right. thank you. we want to just bring you some quick news here crossing the wire. the company is in talks to sell gas to china. says discussion are on the best price for all parties involved. that it will be difficult, those to enter the chinese gas market. now this comes as russia president vladimir putin is in china. those leaders have been meeting and looking at partnership opportunities there. keep that in mind when we follow this story for you this morning. >> i love that shot when they come down the airplane stairs there. like the world at their feet, you know. anyway, in u.s. politics, energy policy is likely to play a role in the presidential campaigns and the shale gas boom is having an impact. it's putting the u.s. on the road to self-sue efficiefficien. >> delegates are calling at it golden age for the gas industry over here in asia and it's not difficult to see why. the economics of transporting or shipping natural gas in the form of energy from north america where the market arguably prices are very low. it was over here, take a look at the spread of prices between what you see in north america and aisha that spread has widened to a record high. it makes a lot of economic sense, economics 101 is how one gas executive puts it is to ship chargeos over here to asia far more profitable than to sell over at north america. having said that a lot of delegates are talking about the opportunities and the challenges in developing the natural gas market and the potential over in the u.s. and canada, north america broadly. there are huge opportunities here that some people are saying that the u.s. could be energy self-sufficient in 2012 but there are policy challenges as well. the chairman of ihs energy was talking about this to us and he said that the developments of the shale gas industry could be transformative for the u.s. economy. >> people talk about when will shale gas come. it's here. it's 30% of u.s. production already. it's brought down prices and i think the change is not only changed the supply outlook putting the u.s. in a position as an exporter but the economic impact it's having in terms of job creation, in terms of economic development. >> so the challenge is coming from the policy front, clearly need to see more direction from washington. oil and gas, energy policy is bound to become a central campaign issue for both parties. we already seen the american petroleum institute on the campaign agenda. it will be interesting to see if we get any clarity on the policy front on this very dynamic issue. back to you. >> all right. meanwhile china's largest nuclear plant developer may be looking to generate not just energy but a whole lot of cash and what could be one of the country's largest ipos, china national power wants to raise funding for five projects worth more than $27 billion. the ministry said they approved the ipo plan but needs the green light. time is right for china to cut interest rates according to a state backed newspaper. tracey chang has the details. >> hi there. well state-run china securities journal made the case for a rate cut in a front page commentary. the newspaper argues that inflation is likely to continue moderating in the second and third quarter and deflation risks are popping up in some production sectors. it points out chinese economy is still seeking a bottom and many indicators show demand don't slow. the publication argues to urge beijing to follow other emerging economies to cut interest rates to build confidence and avoid growth volatility. they are cautious that a massive injection of stimulus on the scale of $628 billion program launched back in 2009 is still highly unlikely. back to you. i just want to mention, we're looking at some flashes that have been hitting the wires. the spanish finance minister said they are not seeking immediate bank aid in spain they are awaiting the results of the audits to outline the recapitalization needs of the banks. it makes stones me. >> this confirms a story that reuters had earlier this morning that said don't expect them to take any action until they got their arms around the sides of the problem. but there's three things that need happen. first the imf has to come out by next week with its analysis of what they think spain's capital needs are. then we got two private consultants doing this audit by ten of june. big four which are doing their audits and those are due around the september-august time frame. bottom line is if he's out there saying they are going to wait for aid until the results of those he could be talking anything from next week until a couple months time. >> then we're back to the market moves, whether or not the market will permit those rates to pass before we ask for money if need be. you need to see the health of the spanish banking sector in real terms. >> this is what you're saying. i think what bothers me from the market point of view we know there's a fairly substantial problem. we know the order of magnitude will be very difficult to fix. the details don't really matter. we just need to see what is the plan. i suppose what the market is the struggling with, within the existing framework there. >> plan and hard to construct a plan. >> this remind me of the treasure test both europe and u.s. said they were the turning point and i wonder, quick comment if the same can be said of spain or if this is a different kind of problem that requires a different kind of solution. >> don't think here there's any one turning point for the market. instead there's a series of different paths we can take and eventually some of those will cause a return to confidence unless one would be direct monetarization of debt. there's other paths they can take. we have to wait and see. >> we'll be talking investments in the drinks industry with the ceo of diageo. >> i hope he brought some dinner. [ male announcer ] this is the at&t network. a living, breathing intelligence helping business, do more business. in here, opportunities are created and protected. gonna need more wool! demand is instantly recognized and securely acted on across the company. around the world. turning a new trend, into a global phenomenon. it's the at&t network -- securing a world of new opportunities. ♪ frob dago. diggodiageo test diag. >> on banking reforms we received a tweet, hope i'm wrong, but i suspect there will be little more than another round of fingerprinting about bankers. it would be greet to see a bold move. another tweet, a bank runco take care of banks being too big. europe can't be half slave and half referee. it doesn't work. that's the verdict of billionaire investor warren buffett. speaking in washington he said europe could not share a common currency without fiscal and cultural union. we're going discussing this until the cows come home, alan, for the time being. i'm curious from a market perspective at what stage do we know that we have reached the point of capitulation. >> very difficult. the credit, the money has to go somewhere. investors are looking for yield and at the moment yields are very low not on the by products but on the fear of further quantitative easing. fennelly bonds go back into credit and bank debt. my sense is if we go much wider than where we are right now then you'll start to see funds come back in the market and, therefore, the payoff on the credit is positive on a six month year. >> so there's going be more volatility to come where do you think in the equity markets or credit markets? >> both will have volatility at least for the next couple of months. the difference is credit because of the amount of money coming in to that market is relatively high demand for yield is relatively high. the risk is asymmetric. equities given the status of banks you won't see a bank rally any time soon. >> lovely having you in the studio today. thank you very much for joining us for this first hour. alan capper. we have a full hour to come. >> lot was going. >> we'll joined by former hp chairman carly fiorina. she will be our guest host for the next hour. stay with us. . welcome to worldwide exchange. if you're just joining us these are your headlines. >> european stocks rally as investors await the outcome of today's ecb meeting. the bank isn't expected to cut rates but will there be any clues of alternative stimulus measures. >> the fed is weighing whether to step in on a small or large scale if the u.s. economic outlook takes a turn for the worse. >> spanish stores rallying as the spanish government says the government is not seeking immediate aid. >> the eu commission unveils a framework to deal with failing banks. is it too little too late? yes, welcome back. you are watching worldwide exchange still here on cnbc. we're sitting tight waiting for the gdp data to baby for the eu. eurozone gdp just coming through. flat. 0.0% quarter on quarter. we're look telegraph first quarter of gdp revised at minus 0.1% year on year which is worse than the completely zero level we saw before. so zero percent quarter on quarter. unrevised figure. we've been getting worse and worse with some of the data points showing us germany isn't holding up as well as what some people thought. that's hat we're looking at on the gdp data. >> may be getting worse and worse on the data front but a better tone from stocks. u.s. futures are poised for the morning, the dow could be opening up triple digits. this is after a small rally yesterday. nasdaq pointed up about 1% range there as well. s&p 500 opening higher too. take a look at the overnight picture from european markets. the ftse global 300 now that everyone is back in business is up .7%. focusing in on boards across the continent, ftse up 1.3%. a lot of green. xetra dax, a tough couple of days. cac 40 up 2%. ibex in spain up 3%, you can help but wonder how much investors are starting to position for some more global policy action. that's the problem. we don't get that kind of action what reaction that will spur. >> whether that will lead to huge disappointment. we heard our guest host talk about when is the time to get in. that's a real interesting question. when do you decide enough is enough. the fact that nice entry point to see some returns on the equity markets gain. the euro/dollar higher ahead of the ecb rate decision later on. a press conference, sylvia will be there. the dollar/yen higher in trade. aussie dollar higher. bank of england meeting tomorrow. what we're seeing just a little bit of a reversal from the previous safe haven trades that we've seen cemented into the markets especially during last week. ten year spanish paper and ten year italian being bought up a little here in this morning's trade. kelly. >> let's take a quick look on what's the agenda today in the u.s. revised first quarter productist and labor costs will be out at 8:30. at 2:00 beigebook from the fed. fed officials are speaking, atlanta fed president at 8:15 a.m. john williams at 3:30 p.m. fed vice chair yellen tonight at 7:00 p.m. in boston. she will be taking questions. yellen is seen as close to the vest with chairman ben bernanke who we'll hear from on thursday. on the earnings calendar look for results from the likes of drinks maker brown foreman. a busy calendar but people are at this point on the policy watch. we saw as i like to call a by line watch. we got talk what the fed will do to step up to the fore as u.s. policymakers worry about the economy. >> then you hear things the economy is going quite well. everybody i've been talking about, things are looking quite good. then you get the payroll data i don't believe any of you any more. >> it's such a disappointment. people look at the beig ebook to see how things are doing. it's a game. >> the ecb is under pressure as we were saying to pull a rabbit out of the hat. at today's rate setting meeting in frankfurt. the bank is not expected to cut rates but markets will be looking for signs that there's some issue to tack tell eurozone debt crisis. sylvia joins us from frankfurt again. we were discussing last hour whether or not the expectations for the ecb to do anything or whether they've become bonkers in the last week or so given the market pressure. >> reporter: i've seen none of it ever at any ecb press conference. so, yes you're quite right. it's the knee jerk reaction every time there's an ecb meeting all of a sudden there's expectations, it's coming to a boiling point if the ecb doesn't step up. let's face it, we're ahead of, a capital weeks ahead of the greek elections. a couple more weeks ahead of the eu summit and we've got a few other dates in between like german coalition talks about esm. why should the ecb do anything right now and what could they possibly do that would alleviate the situation. we've funded trillions of euros into the banking system and still have an almost dysfunctional interbanking market. we have money on tap by the regular financing operations. we have collateral that's so much lower that everybody is complaining about it and interest rates are non-existent. the ecb has simply run out of ammunition to help the market. what would help the market is political reforms but they are not forthcoming fast enough. >> sylvia, thank. she will be with us in frankfurt for the rest of the day keeping an eye on the european smerl bank. joining us now is carly fiorina former ceo and chairman of hewlett-packard and cnbc contributor. carly, good morning. wisconsin governor scott walker kept his job. explain to the view terrify significance of this vote. >> let me say that in any political election the losers always say that it is local and specific and the winners always say that it is national and general. and that's true in england or germany or the united states. so what you have going on here is the democrats saying well this was really a local election about local specific issues. but i think the truth is that this was a national election. even though it was the recall of a wisconsin governor. it was national because what was at issue in wisconsin was should elected officials take on public employee unions in an attempt to solve fiscal crises. governor walker took on a very contentious situation. but he has delivered on his promises to the voters. and i think his victory was actually quite overwhelming, it wasn't even close. so i think people will be studying this and say wow leaders can actually take on entrenched interests and do the tough stuff to get their fiscal house in order. >> and just making a segue from that, just looking at the broader picture in europe, we were just talking to sylvia in frankfurt about what the ecb might or might not indicate today. do you think that the european leaders should be doing more to try to stem the financial cry sues that we're seeing coming out of the eurozone, the credit crisis, should we look for a rate cut from temp cb, should we be looking for more stimulus in europe as well? >> well, i certainly think a rate cut should be on the table and i think there has been, perhaps a lot of deserved criticism for the ecb being a bit slow to make those kinds of rate cuts, growth is obviously critically important as important as fiscal discipline. on the other hand, i think it's quite difficult for those of us in the united states to try and advise from over here because what's at stake right now in the european discussions is not simply the spanish economy or the greek economy, it really is what is the future that the eurozone wants for itself. this is as much a discussion about political unity, cultural unity as it is about fiscal discipline and fiscal unity. and those are very important and indeed great questions. i think the concern that ripples over is the political process really able to deal with these fundamental questions in the time frame that is necessary when clearly the medicine is politically unpalpable and voters are revolting at this point. >> the time frame, carly is an important focus. federal reserve in the u.s. is considering whether the recent string of disappointing u.s. economic data, the downturn in markets and increasing worries about europe's debt crisis. the "wall street journal" this morning saying it's likely the fed won't make any moves. options could in the future involve taking small steps like extending operation twist or signalling bigger moves like another round of qe. we're going to hear from vice chair yellen tonight in boston. ben bernanke tomorrow testifying before congress. carly, with that in mind, you just described this as kind of a question for europe. should the u.s. step up and fill that void that policymakers have left? >> must say that i'm not a big fan of further action on the fed's part and the reason i say that is because i don't think it's worked particularly well. yes, it has worked to boost the stock market temporarily. but every boost in the stock market that has resulted from the fed's action we now know has been fairly temporary. we're now, we basically erased all the gains the year on the stock market. i'm not sure operation twist or qe3 will do any good. the reality is that the u.s. faces some structural difficulties in our economy that's holding back growth. one of the most important of those is we have more small businesses failing and fewer starting right now than in the last 40 years. those small businesses are struggling with an incredibly complex tax code, a thicket of regulation. in other words, we actually need policy changes now. not simply more money flooding the system, in my view. >> carly, stay with us. we'll get more thoughts in just a minute. >> looking at some flashes hitting our wires. there are talks with the chinese partners to sell gas to china. we heard of that in the last hour. they went on to say it's difficult to enter the chinese gas mark. they say other wishs china have been settled, that the start up price is the only issue in piping it was to china via the western corridor. that seems to be one of the biggest sticking points. they have good chances to remain the partners and with regards to tnk bp, we're seeing they have, they have been looking to sell a stake, bp has been looking to sell a stake in tnk. we got gazprom executive saying they need to due diligence before they state any more. due diligence has to be done in that particular unit. there's been speculation for a long time that that unit would be sold off from bp. but it's interesting to see what type of scenarios we see, what type of tie ups we see coming out of this. >> let's get a check on today's other top stories as well. >> stimulus hopes fueled in china as its official securities journal makes a case for cutting interest rates. >> we keep hearing these. they say they might do more. that started the rally in asia overnight. continuing this morning. moody's cutting the rating of us six german rates. >> a lot of german banks that were cut were the lenders banks, the kind of big middle type banks the ones where the mom and pop, they have their monday in those types of things and people are speculating whether the bank could see a rating cut as well. >> the new ceo of ypf saying the company will need to invest $7 billion a year to increase oil and natural gas production. >> argentina has nationalized its company and announced we'll spend all this money investing, we'll do it from cash flow but this is justification for doing it in the first place. australian gdp exceeding expect jaguarses. it was almost a 4.5% annualized growth rate. >> our guest earlier sees upside in australia. there's a lowdown in china, pretty solid trading partner in australia for the time being. >> and the australian finance minister telling the "squawk box" team earlier she's confident the country's economy can with stand global headwinds. >> not a doubt we see a lot of uncertainty in europe. not a doubt that is why it's weighing on confidence globally. what i would say is australia can face that uncertainty. >> all right. we're just seeing as well that michelle is speaking at the moment. we have lods of leaders gathering at copenhagen gathering at this imf spring conference. they will be discussing whether or not we're going to be looking closer at these measures to stem the banking crisis. >> we'll see what he details. in the meantime if you want to join the conversation, get in touch with us. e-mail us at worldwide@cnbc.com. you can tweet us at cnbc west or e-mail us directly. but up next, we'll be looking closer at proposals to deal with the banks. stay with us important the latest we're on worldwide exchange. optionsxpress, the broker smart traders deserve. open an account today at optionsxpress.com. hi. welcome back to the program. the eu commission is currently unveiling a new framework in order to try to discuss what's taking place in europe. they are set to unveil a new framework to deal with failing banks. they are looking to step towards the banking union that the eu has demanded to secure the euro. it's a step in the direction of forming a banking union. it means they are saying yes to proposals for a fiscal union. >> the only details we have this point coming from dow jones, outlining proposals for bank resolution. it could raise banking costs by five to 15 basis points. and it would give authority stepped up forces intervene. a bail end tool. we've been asking guests about that all morning. european stocks are awaiting the outcome of today's ecb meeting and in the meantime they are rallying. >> "wall street journal report" is suggesting the fed is weighing whether to step in if the economy worsens. >> spain's finance minister says the government is not seeking immediate aid for banks. well nasdaq is expected to release details today on a plan to compensate some banks and brokers for losses suffered from facebook's botched ipo. reports say the exchange has reached out to at least one brokerageage firms. nasdaq's liability trading glitches are restricted by regulators and contracts with customers to $3 million per month. nasdaq currently -- well on the nasdaq or german listing trading higher by some 2.5%. the tech sector has been under pressure over the past few months. hp is one of the worst performers. the stock price hovering to a seven year low although gaining in yesterday's session. still with us is carly fiorina, former chairman and ceo of hewlett-packard. do you think that we're seeing a switch in the notion of what healthy is when looking at the equity markets at the moment? we're looking at an ipo that didn't go off so well due to a number of factors that are being looked into now, the facebook ipo but the expectations had been so great and at the same time also we've been talking about the hewlett-packard share price performance and not just hewlett-packard, technology coming back quite a bit and this is supposed to be one of the areas of substantial growth. >> well, i think let's separate the issues. first facebook, facebook as you just mentioned the expectations for the facebook ipo were so high that it couldn't possibly meet them. remember the discussion during the week leading up to that ipo was that the closing price on the day of the ipo would be $45. clearly an unrealistic expectation pap lot of things went wrong, the nasdaq trading glitches most port and we don't have sufficient explanation for that. now you have a stock in facebook where the sentiment has turned so unbelievably negative in the absence of a lot of information that the company will provide and i hope in the future but has not yet been able to provide given that its still in a quiet period and as i've said many times on the air, facebook to me is a stock you buy and hold and wait and see. not a stock you should think about making money in the short term on. it's a relatively risky investment. i'm bullish on the company it's a bet on the way the world is going, more connected, more personal. hp is a company specific issue. you have a company that has majored in cost-cutting for, in my view, too long, five or six years. a company that has underinvested in r and d marketing for too long and now a company that is really struggling to articulate its growth strategy. its principle business in terms of generation of profit and cash flow printing is deteriorating fairly rapidly. the businesses that they have invested a lot in, like autonomy, like unstructured data haven't come up. so the question is as they continue to cut costs what is the growth strategy going forward? then finally for the tech sector in general what you're seeing is a recognition we may be facing a simultaneous global economic slowdown that customers of technology, enterprises, governments are feeling the pinch. and so perhaps expectations are coming a bit back down earth based on a general economic condition out there. >> all right, carly, stay with us because we want our thoughts on bill clinton just after the break. former u.s. president, that is he's wading into deficit. undercutting potentially the position by the man who currently occupies the white house, president obama. we'll have more just after this. mcallen, texas. in here, heavy rental equipment in the middle of nowhere, is always headed somewhere. to give it a sense of direction, at&t created a mobile asset solution to protect and track everything. so every piece of equipment knows where it is, how it's doing or where it goes next. ♪ this is the bell on the cat. [ male announcer ] it's a network of possibilities -- helping you do what you do... even better. ♪ welcome back to the program. and let's take a quick check of how futures are looking. the dow jones pointed up triple digits at this hour, that continues stronger moves in asia overnight. may have something to do with reports in chinese media about further stimulus in that country. the data out of europe hasn't been super strong. president clinton jumping into the debate over the u.s. deficit and tax policy. in an interview the former president said congress may have to extend the bush tax cuts temporarily to give lawmakers a longer term plan to exclude the wealthiest americans. this runs counter to president obama who want the tax cuts to expire at the end the year. >> what i think we need to do is to find some way to avoid the fiscal cliff, to avoid doing anything that would contract the economy now. and then deal with what's necessary in the long term debt reduction plan as soon as they can. >> that upset the president obama election campaign an asked him to correct his remarks. the former president doesn't believe wealtax cuts for the wealthiest should be extended. carly, do these comments indicate sort of a serious breach of etiquette here? is the point ultimately be we'll see an extension of the tax cuts one way or another? >> first i think president clinton is doing what he said the other day that he liked doing now that he's out of the white house which is speaking his mind. and secondly, i think president clinton forgets sometimes that obama thinks he's a surrogate for the presidential re-elect campaign. we ought to be calling these the bush-obama tax cuts. the truth is president obama a couple of wears ago also said that in a weak economic period that in a time when americans are hurting for jobs that no one should be raising taxes on anyone. the truth is that remains the case. i think bill clinton was saying what so many people on both sides of the aisle agree with, which is that this is a tough economic time. we just got bad reports across the board in terms of gdp growth, in terms of job growth. there's structural issues with our economy. so of course we shouldn't be raising taxes. i think there's some question as to why president obama pushes that other than he's appealing to his base for his re-elect. >> carly, thank you very much for now. carly fiorina, former chairman of hewlett-packard. coming up here on "worldwide exchange" we'll bring you the latest on j.p. morgan's trading losses, and diageo's investment plans. everything in just a minute. [ male announcer ] we began with the rx. ♪ then we turned the page, creating the rx hybrid. ♪ now we've turned the page again with the all-new rx f sport. ♪ this is the next chapter for the rx. this is the next chapter for lexus. this is the pursuit of perfection. all in one account. keep watch on the markets. or use our exclusive tools to help find ideas. it's powerful, easy-to-use technology for trading stocks, options, and futures. keep trading whether you're at home, in the office, or on the go. optionsxpress, the broker smart traders deserve. open an account today at optionsxpress.com. welcome to "worldwide exchange". if you're just tuning in, i'm kelly evans. >> these are our headlines. >> european stocks are up as investors await the outcome of today's ecb meeting. >> according to the "wall street journal" the fed is weighing whether to step in on a small or large scale if the u.s. economic outlook takes a turn for the worse. >> spain's finance minister says the government is not seeking immediate aid for banks. awaiting the results for an audit. >> the eu commission unveils a framework for dealing with failing banks. is it too little too late? if you're just tuning in take a look behind me. we have some green on the board for the u.s.. s&p will be opening higher, nasdaq and dow would be opening higher by triple digits if we hold. ftse global 300 gives you a sense of what's going on across the globe. the uk jumping back into the trading action after the long weekend. the ftse 100 is now up 1.5%. the dax up 1.7%. in spain the ibex was bullpen 3%. we're looking at these proposals sent out by the eu commissioner. we'll keep you updated on what happens via the european commission. let's move on, those to a corporate story. diageo is to invest a billion pounds of scotch whiskey. the maker of whiskey brands are making the vecht in order to meet growing demand from asia, latin america and africa. we're joined now first on cnbc by paul walsh. paul, good to see you again. you're investing a billion euros over the next five years in scotch whiskey production. that's a lot of money to be investing at a time when we hear that the crisis is still raging. >> yeah. actually it's a billion pounds. this will serve to increase our capacity in distillation and will allow us to continue to serve the new consumers in the new markets and continue the attractive growth rates that we've seen for the scotch whiskey category. >> paul, that investment will add something like 100 jobs, maybe add 100 more positions for apprenticeships across the region. good news on that front. sthnt for you twice to save face after that bru-ha-ha of sorts in the local brewery competition just a little while ago? >> oh, i think that is quite an irrelevant versus the magnitude of went out today. i can assure the plans we're outlining today have been in the works for a long, long time. the other thing i would say about the job front is that bear in mind the nature of our business is that for every job we create in the communities in which we operate, there's probably four to five additional jobs created. so the job story is much bigger than simply the direct employment that we will stimulate. >> so, paul, just talk us through where exactly it is that you're seeing or your anticipate most of this growth. you're talking about emerging markets but that's a very broad spectrum. do you anticipate people are looking to buy the high end whiskey brand or are you positioning yourself in the lower end branding area too? >> well, first of all, we as diageo have a wonderful global footprint. we operate in over 180 markets around the world. and by investing in our roots to market, we've establish ad good baseline level of sales. and as you get attractive growth rates on top of now sizable businesses, that is what leads to this level of demand. we've moved much beyond the traditional bricks. it's no longer brazil, india, russia, china. it's vietnam, indonesia, colombia. it's also sub sahara africa. and not all these economies will develop in a straight line manner. if we see softness in one market we can deploy that distillate into another market because the asset is held in scotland. we can divert it to whatever market in the world off terrifies best opportunity. to your point on price pouts, clearly these new high growth markets have got a huge emerging middle class that can now access our products. they are doing it at the lower price point levels, but all the time they will trade up. so we kind of get it both ways. >> paul, thank you very much. paul walsh the ceo of diageo talking about this one billion pound investment they are making in scotch whiskey production. stay with us, though, because spain's finance minister says that the government has no plans to seek immediate aid for the country's troubled lenders. he says spain is awaiting the results of an audit of the banking sector before taking any new steps. >> meanwhile ford has made contingency plans in greece if that country exits the eurozone. cfo bob shanks says so for the fluctuation has been limited. greece is a small market in the grand scheme of things for ford. south america in particular, brazil has presented bigger headwinds for the automaker. so for more on this, that is how the world is changing let's link back to carly fiorina former chairman anne ceo of hewlett-packard. we've been talking about republican presidential politics and bill clinton. we were just talking with the ceo of diageo he said it's not the brics. it's vietnam, sub sahara africa where the real growth is. what challenge does that present for u.s. policymakers in >> look we all understand that the economy now truly is global. we all understand that what goes on in one region of the world has a direct impact on job creation in the united states, in europe. and i think that is challenging when you think about the truism that all politics is local. and so one of the great concerns that i think overhangs the business community in the united states, in europe, is whether or not politicians and policymakers have the wherewithal, perhaps even the experience to deal with a rapidly changing global economy in a political process that's still quite driven by local issues. so, you know, we look at the united states. i think a great deal of business people's concern is when they look to washington, d.c. and listen to the debates that go on capitol hill they think to themselves deep down in their heart of hearts can these people really deal with the issues we're facing. >> yeah. >> now the good news is exporters from the united states are in some of the strongest position they've been in a long time. exports out of the united states have provided lift to our economy. nevertheless, the job creation in the united states is not what it should be nor should our gdp, nor is our gdp growth. but the small businesses are struggling. >> carly, you're staying with us for the rest of the hour. a very good thing indeed. talking about,000 rein in your dent or country's debt. i'm looking at some flashes on the wire again. the french government, they've signed off on a decree to lower the retirement age to 60 in certain circumstances according to the minister being quoted by reuters. the first decree to lower the age will increase the euros. >> it makes a lot of sense. >> this is one of the things that francois hollande wanted to do. they say in certain circumstances, we don't know which circumstances, but if you owe money as a government, this is one of the obvious ways to get money. i won't argue at what's the right age to raise it. >> raising it to 62 was enough to get sarkozy booted. >> regulators on the hill. jpmorgan's massive trading loss. we'll discuss that next. you're watching "worldwide exchange". how do you make money in these markets? here is what some of the experts have been telling us this morning. >> for now on the down side we're potentially, you know, we've run out of setting interest on oil and looking for a pop up towards the $90 mark. >> the health care, et cetera, but i also apartment balanced portfolio with some cyclicals. >> interest rates in china are at 6%. plenty of space for them to continue to loosen. another reason to remain positive in buying resource stocks in the australian market. when you see a sovereign debt obligation trading at close to 10 cents on the dollar, it's almost better to just close your eyes and buy them. that price like a call option without an expiration. plenty of fodder there if you're just waking up this morning. we'll bring you latest news. we're getting reports from various countries talking about plans as we move forward with europe's grand scheme for capitalize its banks. the french finance minute certificate will be meeting the spanish finance minister this afternoon. the french finance minister said favors using the ism and imf to recapitalize banks. >> he's saying spain also favors using esm and esf. these finance ministers, they give commentary, come out of the meeting, somebody puts up a mic, they say whatever and at the same time we heard the spanish barn banks still need to figure out. >> they are going through months long audit process. i think we can quote paul donovan here, this morning he says given the g7 conference call we had yesterday that achieved basically nothing the participants could have texted each other smiley face and would have had the same impact on the economy. we're seeing a rally across the board today so this may be encouraging people somewhat. >> the senate banking committee holds a hearing on jpmorgan trading losses. top officials from the financial regulators are set to testify. the occ chief says his agency will review whether jpmorgan executives should give back some compensation. fed governor will be telling lawmakers at the central bank is working to reduce risks in jpmorgan's investment portfolio. carly fiorina former chairman and ceo of hewlett-packard is still with us. the jpmorgan case is an ongoing case for a while, one would assume. do you think we'll see more regulation, more direct regulation coming out of this? are we going to be able to havening quantitative coming out of the jpmorgan investigation? >> i think certainly the mood is for more regulation, and i would hope that people would step back for a moment and take a deep breath and consider that banks invest known make money but can you not make money without sometimes losing money. so the issue is not whether banks lose money. course, sometimes they will. the issue is who lost the money. whose money of it? how big was the loss? and whether the losses create systemic risks? and i say all that because i'm struck by the difference in tone, for example, or the lack of follow through in the mf global case which was arguably a far more devastating loss with customers own large, much larger in proportion to the size of the company and the size of arriving that was taken as compared to jpmorgan. in some cases j.p. morgan's loss will be used as an excuse to push forward regulations that some folks already wanted. and i always get nervous when the senate acts quickly because the consequences of quick action are sometimes really not good. we can think of sarbanes-oxley which did some good things, but all in all across the board there was more harm than good done by that piece of legislation. >> carly fiorina, former chairman and ceo of hewlett-packard, republican and c dplib cnbc contributor. >> european stocks are rallying as investors await today's outcome of today's ecb meeting. a "wall street journal report" says the fed is weighing whether to step in. and spain's finance minister says the government is not seeking immediate aid for banks. they are awaiting the out come of audits. optionsxpress, where you can trade your favorite products, all in one account. keep watch on the markets. or use our exclusive tools to help find ideas. it's 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[ whirring and beeping ] it's the at&t network -- doing more with data to help business do more for customers. ♪ . hi, everybody, welcome back. still watching "worldwide exchange" as we head to the top of the hour. european markets still holding on to gains. ibex up 3%. green screen across the board. >> big change. let's take a quick check on today's agenda in the u.s.. busy day. we'll get revised first quarter productivity and labor cost at 8:00. the beig ebook from the fed. lockhart speech at 8:15. and fed vice chair janice yellen at 7:00 p.m. before we hear from the chairman ben bernanke. fed is considering whether the recent string of disappointing u.s. economic data, the downturn in markets and increase worries about europe's debt crisis may warrant taking action. the "wall street journal" says it's likely the fed won't make any moves. but we'll see what language they use to indicate what their plans might be going for. a look at how u.s. futures are doing this morning, keying off those gains that we saw that were just mentioned across europe. the dow opening up in triple-digit range and that follows some gains yesterday as well. joining us now for a preview is greg mcdaniel, president of mcdaniel corporation. craig, gurng. what's driving the day in the u.s.? are you surprised we're not seeing more concern in markets? >> well, you know, there's a lot of uncertainty in the marketplace right now. and, you know, i'm more of a big picture type guy and i'm actually on the front line working with my clients and my client are pretty concerned and pretty scared about all the, you know, all the volatility and the -- when people are scared tend to leave their money in safer places and so i think if we can get a little more -- you know in the last month, gosh, may has been the worse month in the last two years. if we can get a little more stability, i think people will be a little more comfortable with things out of money markets. >> where are your recommending then? good to see you. where are you recommending people put their money? >> well, right now -- right now we're looking at mixes of about, of about 40% in the market. on the equity side and about 60% on the bond side. and for some of our clients we're actually going to just 20% on the equity side and 80% on the bond side. shorter term bond side. if we see a stimulus package which it looks like we might then we'll probably tend to take a, gho more on the equity side. if we have a stimulus. if we have a qe3 or something like which we think is likely. >> you'll wait until you get that announcement, until you get that stimulus before you put clients more into equities? >> yes, i will. right now we're going to stay on a little more on the conservative side. most of my clients are retired, at least within five years of retirement or already retire. so, yes, we're going wait and see if we get any type of stimulus package to go more into the market and then even if we do that we're thinking about that stimulus package may not -- we don't think it will last as long, the effects will last as long as qe2, and so we may, after the first the year go back to being more conservative. >> that's craig mcdaniel from the mcdaniel corporation joining us from columbia, south carolina this morning. >> fantastic show. thank you for joining us. >> we'll be back tomorrow. i'm with you for another two hours with becky. we'll see you then. >> sorry, u.s. viewers. you have to come over here to catch it. now over to "squawk". optionsxpress, where you can trade your favorite products all in one account. it's powerful, easy to use technology for trading stocks, options, and futures. optionsxpress, the broker smart traders deserve. open an account today at optionsxpress.com. good morning. today's top stories who can save europe, the ecb, the united states? europe itself? jpmorgan under fire again, a key hearing on capitol hill today plus wisconsin governor scott walker survives a recall in an election that could have some far reaching implications for the nation. it's wednesday, june 6, 2012. "squawk box" begins right now. good morning, everybody. welcome to "squawk box" here on cnbc. i'm becky quick along with joe kernen and sore. this morning we have market moving headlines. ecb decision is e
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