fire. >> any other government minister? >> no. >> it almost worked out okay. we're back for day two. >> back by popular demand. >> parental support has been amazing. thrilled to have you back. ross is out for the rest of the week. we have policemen of news. >> loads. let's give you a rundown. we'll be examining the latest data out of china. we have a senior chinese economist who will be joining us. he said there's no further rate cuts. >> judges will consider whether the german president can okay legislation governing europe's bailout fund. >> research in motion will have a meeting in ontario. how can they face tough competition. >> and warsaw wins the prize for having the worst traffic problems in europe. find out what other cities are grappling with. just before noon central european show before the end of the show. >> if it's just before noon central european time just before 11:00 our time. right? >> also finally we will hone in on norway after the government forces oil workers to settle their pension dispute clearing the way for production to continue. >> eu finance ministers are arriving in brussels and expected to approve a lifeline for spain. they agreed to make 30 million euros to the country's bank. they will continue to discuss other details of the deal. caroline has more now on this from brussels? . this a game changer for spain? >> we knew that this was going to be a basic outline. the final approval will be given later in july, probably july 20th. the loans to the spanish finance sector could be 100 billion euros. he's confident the spanish bank bailout can be reached shortly. interest rates on the spanish bank will be low and no macro economic conditions attached to it. the money for the spanish banks will first come from the efss, the temporary bailout fund. but then the support will be transferred to esm once that's operational. without the seniority status over private bond holders and this is a very important technical detail to keep in mind. of course that wasn't all with regards to spain. the big news came yesterday actually broke during your show yesterday. spain was giving additional breathing time to reach its deficit targets, the 2012 deficit targets was raised by one percentage point and the country has one additional year to reach that crucial threshold of 3% gdp that's because the recession is deeper than expected and some people are saying look it may not be the last time that the debt line will be extended. back to you. >> caroline, i think you are spot on. we're joined by our guest host, nick karn. nick, welcome. so are you being opportunistic in buying into spanish government debt? >> no, i don't think that's quite right, that's quite right yet because for all the reshuffling of the pack and we've seen a bit more of that, but the basic facts remain which is the euro experiment is the biggest credit bubble of all. there are enormous loss jim bedded in that system and the discussion is on who will bear that loss. in these different frame works of whether it's the ecb or a different bailout fund and who will guarantee what that's what it comes down to. the choices are that either it's a lot of austerity for the indebted countries, stretching out as far as the eye can see as they diverse resources into servicing debts or represents loss to the credit countries however you organize it there's no getting away that it's going to be one or the other. >> we must be near the bottom. the european authority seems to be beginning slowly to get their act together, so there must be value for investors to get somewhere around these levels if this is not the absolute bottom must be close. >> i'm not so sure about that. if you cast your mind back since the crisis has been sort of intense we've gone through these periods of remission from time to time where it's looked as if things become so serious but it's going for the thing in the direction of some kind of a debt mutualization which for whatever reason is what the market would like to see. but we've seen those periods of remission be followed by an onset of an acute crisis again and not so very long ago we were looking at iltr o's as the fix for this. >> i wonder then if that leaves europe as a place to be avoid. where do you see opportunity? >> my feeling on the euroland thing and we've discussed this several times on this show in the last couple of years is that i've felt it's very unrewarding to stand around in the battlefield and try to anticipate what the end game is because the only thing that i think is, you know, for sure is that however it ends it will be very, very bitterly fault and we're into a new episode of that in a moment. it's not, none of the outcomes are popular. none of the outcomes seem particularly likely. only certainty is to be bitterly disputed. >> does that mean you're avoiding europe all together? you run a big fund. your job is to figure out where opportunity is. is there opportunity created here or are you just sticking to other parts? >> you know, i think as a broad generalization europe is to avoid not for new reason but for the same reasons that we've had these episodes of kind of acute pain fold by remission fold by another period of acute pain. i think if i was going to look at anything in europe, most optionality in some of the banks is my feeling where on a model through scenario you get 10% a year. >> the fudge that we know. >> the fudge. just generally speaking this environment of a slow and growing economy we're seeing china descending at some kind of a rate. if you group your broad strategies as kind of mean reversion, momentum or carry type strategy, i think we're in a carry type environment. if you can just be paid for things to kind of hang in there kind of thing i think that's still the preferred strategy rather than looking for very distressed things which may go up a lot or trends which may drive on the direction they are going. >> well get more thoughts on nick coming up on the hour. nick carn. stay with us. alcoa reports a second quarter net loss as their revenues fell 10%. the aluminum maker adjusted results which was reported after the "closing bell" in the u.s. last night still managed to slightly beat forecasts. ceo says lower metal price is as a result of the global economic slow down. he expects aluminum prices to rub due to a global supply deficit later on this year. alcoa shares were roughly flat after hours in trading and in frankfurt they are pointed up a little bit this morning. >> indeed. slashing their second quarter outlook the chip maker saw disappointing sales in china and europe. aren't md fell more than 10% after hours down by 11.4% right now in frankfurt. nick carn is still with us. founder of carn advisors. the earnings season then, alcoa has reported. what do you think we'll find out from what businesses are telling us this time around because we must remember companies are still out there making stuff and selling it reasonably effectively. >> indeed. typically as you know companies are not the best lead indicator of things. they tend to tell you what's going on at the moment which is kind of fair enough. i've tended to find it unrewarding to expect companies to give one an insight, specific insight into the kind of the next wiggle in the macro environment. i think what we're definitely seeing at the moment and we saw in the australian mining company yesterday is definite signs of a kind of a slow down in the kind of macro environment which is kind of confirmation from what this sort of more traditional, high level leading indicators have been telling us for some time. we're definitely seeing confirmation of that from company reports, whether that's weak commodity prices, weaker demand in china. >> what you are expecting from what ceos will tell us from the outlook, the numbers may not tell us much what will happen next the way ceos are trying to manage expectations does? >> yes. you know, as you've rightly said the big price of the share price in the short term, however the bad news is providing the news isn't as bad as people expected. what you'll see is they are very cautious not their own financial condition it's usually about how the consumer is behaving which in this deleveraging environment is not new news but hasn't gone away. >> thanks for that. so the bank of england has rejected suggestions he tried to manipulate libor. paul tucker told the parliamentary committee that neither he nor his colleagues at the bank were aware of any rate fixing. he challenged the conversation about barclays libor rates. >> does that note of october 2008 accurately reflect the conversation with him that you've had? >> not completely. >> why don't we do it in stages. is there anything in there that's wrong? >> i think what it doesn't capture -- >> okay. we'll come to that. is there anything in there that's wrong in >> i think the last sentence gives the wrong impression, yes. >> barclays chairman will face a grilling by that same committee. the uk treasury select committee this morning starting in just about an hour's time about 11:00 central european time and we'll bring you that testimony live. >> let's take a look around the markets. quick snapshot what's going on in the equity markets. stoxx 600, a quick glimpse of the equity matters which is down very marginally. let's call it flat. roughly a number of stocks gaining and declining so far today. around the region this is how the picture is shaping up. ftse 100 is down a point. marginally higher for the cac. let's move on and look around a little bit more detail at some individual stocks. asml up over 9%. it's a company that makes chip manufacturing machinery and it has had an injection of cash from intel. they are going to spend over $4 billion for 15% stake in the company. that will help to fund research and development into the next generation of chip making technology. so the stock reacted very positively there. this is an interesting one to look at, vestas, down .4%. opened on a very positive note. the world's biggest wind turbine make terrify stock has been hammered as a slump in demand has hurt this company. there has been reports that the chinese business has been interested in acquiring the company, that business came out today and denied those reports. the stock has been very volatile. very interesting to watch for developments because this has been cited as a take over target. and marks and spencer came out, sales down by .8%. very bad weather in london. it has hurt sales particularly in women's wear. pretty much in line with expectations but also telling us they are having more management changes in the business too. the head of the nonfood business is leaving the company. her role which is a crucial one to the outlook for this business will be taken over by the head of the food business. more turn around coming for that company. let's get on to what's going on in the bond markets. very low yields as we come to expect in germany, also the uk. 10 year bund 1.3% right now. in spain still hovering around the 7% level. still very dangerously high yields on these spanish debt, we've been talk about the spanish bailout. just to say that 6.97% is where we stand on the spannish debt. italian debt, 6.3% roughly. on to the commodity markets where we have a couple of things we were highlight towing in yesterday's session. in the oil markets in particular, we're watching this norwegian strike threat. that had particularly driven up brent to over $100 a barrel. currently nymex is trading down. brent is down by 1.7%. definitely below that $100 level, 98.62 is where we stand. overnight we had word the norwegian government stepped in to the competent they forced them to settle with the norwegian oil workers, disputing pension and conditions. a threat of an out and out cutoff in norway has disappeared. that's taken out southeast heat. china's crude imports for june down to the lowest rate this year versus a record high in may. the month on month figure down 12%. makes an impact on the oil price there. also, we are seeing a bit of easing from record highs that we in the grain complex as well. just think to the weather we've had over the past few weeks in the states, very hot, dry weather which has had a negative impact on the crops over there. so that had sent wheat, corn, soy beans very high but we've had a bit of a respite, wheat down by 1.6%, corn down 1.8%. tomorrow we'll have the crop report coming out from the states as well. so let's move on. show you what's going on across asia. little bit of a mixed picture. some spots of green. higher for the sensex. green in various places. jakarta composite up. shanghai losing some ground. let's go to tracey chang. good morning to you becky. asian markets tumble for the second straight session this week as china's trade data is struggling with slowing demand at home. china's main stock composite hit a six month loss. second quarter reporting season approaches investors concerns over corporate profitability alsoawayed on the sentiment. the hang seng tried hard to stay in positive trade but ended flat. growth sectors were the biggest drag. shares of phone maker dropped to its lowest level in more than three years on concern of its first half earnings. and oil refiners saw loss hurt by news beijing will lower prices of diesel and gas tomorrow. and investors were spooked. stocks fell for the fourth straight session closing down .4%. in south korea kospi is down on heavy foreign selling. australian shares finished lower as well with the china growth resource sector suffering the biggest loss and we'll have more on those china trade numbers coming up with our guest out of hong kong. let's quickly check on the india sensex. bucking the trend gaining .6%. back to you. tracey chang, thanks for that report. apple lost a uk high court case against samsung with the judge saying consumers won't confuse samsung's tap let with the apple as it wasn't as cool. is that legitimate. how do you define cool? is at any time old saying you know it when you see it. if you want to join the conversation, get in touch with us. e-mail us at world world or tweet us @cnbcwex. >> still to come do you think the traffic on your morning commute is bad? find out if you live in one of europe's most congested cities when we speak to an expert in less than 30 minutes time. don't go away, we'll be right back. >> >> welcome back. china's trade surplus widens in june as exports and import gross. tracey chang has more details. >> what's really alarm is how fast import growth dwindled rose 6% from a year earlier much less than expected 13% rise. officials said falling commodity prices played a role but weaker domestic demand a crucial support was the real reason. export growth higher spelled trouble. exports to the eu fell in the first half as the united states replaced europe as china's largest export market. but analysts say the u.s. economic recovery is not solid meaning demand for chinese goods will also likely be very unstable. the vice commerce minister has a more optimistic view for china's trade. he expects trade numbers to be much better in the second half of this year. some economists are also playing down costs for panic since those trade numbers are still better than those that we saw during a financial crisis so they say a multitrillion run program is still not needed at this point. back to you. >> let's get out now to the senior economist, dariu darius kowalczyk. how much concern does the growth raise in your mind about domestic demand? >> the weakness in imports is somewhat worrying but i wouldn't overdramatize it. commodity imports grinds to a halt. it's down from 20% last month. so it shows that infrastructure spending slowed in china and that is weighing on infrastructure growth. perhaps exporters seeing weak export orders which we know from manufacturing pmi survey basically reduced demand for foreign components that normally they would use to then manufacture higher exports. so it's not just the domestic demand that's weak, anticipation of foreign demand is not so good. in fact in seasonally adjusted terms imports were much better, up in double digits. i wouldn't be too concerned. china did slow in q2 but we believe it will recover in the second half the year. >> dariusz, i was wonder there were various stories about how reliable chinese economic statistics are and i know it's a hard economy to follow. the "new york times" had an article about the reliability of electricity consumption and i wonder what your take is on this given we have this debate on what sort of shape china's economy should take between broadly to the right and the left there? >> sure. i think that by and large the data should be fine. and there's many ways to confirm that the economy continues to grow. electricity usage, for example, is still rising. not rising as fast as the whole economy probably because it's the heavy industry that slowed the most, which is related to the decline in commodity imports. but traveling in china very often and, you know, talking to the businessman and bankers, my feeling is that growth is, yes, slower. three year low probably. but it's still solid and based on the kind of figures that's been announced i'm confident growth will rise in the second half the year even if you do not precisely trust the data, i can still say that this is an economy that's growing at a healthy clip. >> we'll leave it there. still to come on this show, blackberry maker research in motion is set to face angry shareholders later. find out what's irking investors if that's not clear. that's next. t. . welcome back to the show. thanks for staying with us. eurozone finance ministers agree to meet spain's most urgent needs. but they continue to haggle over other details of the bailout. >> alcoa begins earnings season in the u.s. with a set of mixed results as the company posts a net loss but still beats forecast and expects a rebound in aluminum prices. >> chinese imports fall in june, based on beijings trade service. outgoing barclays chairman marcus agius will face lawmakers in an hour's time one day after paul tucker comes under fire. >> did they ask you -- >> no, no. >> or any other government minister? >> no. thanks very much for sticking with us on the show. you're watching "worldwide exchange". the ftse 100 is up just shy of .2%. small decline for the german markets. up for the cac and ibex. just about a quarter of a percent higher for the spanish markets as well. >> let's look at spain's bond markets. back below 7%, 6.94% is the yield. italy sitting on that 6% level pap bit of relief after the widening we saw yesterday. meanwhile gilt and bunds benefiting with the yields rising a little bit there as a result of investors, perhaps becoming a bit more comfortable with risk. let's take a look at what noyer. the ecb stands ready took within the framework of its mandate. ready to act is the language they choose to use. >> what's interesting to me is he's commenting on economies across the eurozone. he says france which is a country that investors are increasingly focused on france must respect the deficit reduction commitments and france remains incapable of creating jobs something which may be true but the french will not appreciate. he also talks about the need to separate or sideline purely speculative banking activities and course with regards to the relief funds that are being debated here throughout the eurozone he says it's urgent to make them put temporary and permanent fully operational as soon as possible. >> let's just look at sterling. had a little bit of data here in the uk which is pushing sterling higher, rising to a session high in the past few moments over 155.30. gilt slipping too after uk manufacturing data came in stronger than expected. seeing that spike coming through. at the moment the data hit about two minutes or so ago. the uk may industrial output figures up for the month of may. unexpectedly strong. seems to be something to do with the extra working day due to the postponed public holiday. we have a jubilee weekend. we postponed it to a week later than usual. also downward revision to previous industrial output in manufacturing numbers too. so the uk is in recession but in may manufacturing output rose by 1.2% after that .8% drop for the month of april. we will now check in with silvia wadhwa, germany's senior judges will decide where they can govern esm. several officials are seeking a temporary inyungs to prevent the legislation from passing. silvia wadhwa joins us from germany. what can we expect? >> reporter: well, essentially there's no decision going to be made today. today there's a hearing. the president of the german constitutional court and chairman of the second senate of the constitutional court was deciding this complaint and this filing for temporary injunction against our president signing the esm fiscal pact legislation. he had his opening remarks and he said -- he pointed out once again we're not deciding whether the fiscal impact of the esm in breach of the constitution. we're not deciding in the main is to speak. all we're doing is hearing arguments for and against this injunction that has been filed. and we have to weigh the disadvantages and the advantages and see where the damage could be bigger. the concern is clearly this. if the federal president signs the esm and fiscal pact legislation germany is bound by international law to implement it. but if in a few months or a few weeks from now then the german constitutional court in the main matter, in the main complaint decides that earn sm and fiscal pact are in breach with the fwer man constitution then, of course, we got a rob because german is in breach of the constitution but has to abide by international laws. before the hearing has started we caught up with one of the main plaintiffs here, a former minister for the former german government but now he is the core representative for a group called new democracy and her co-complainants are worried about dwindling democracies in europe. >> the main situation that we see is that democracy in europe is dwindling away and we don't like that and these are more than 21,000 people, normal people, and they do not want to wake up tomorrow and have to elect a german parliament that has no say in fiscal affairs. >> reporter: actually the group is called more democracy not new democracy but their complaints are the same and she's supported by 11,000 members of the german public who all have the same concerns. there was a small demonstration going on here outside from disgruntled german citizens who said we're afraid you're giving our sovereignty away, we're afraid you're giving our wealth away. there's clearly a lot of concern. german government is also very concerned because several will be held for the german government. of course many, many more from the academic side and political side who will argue the pros and cons. >> we'll let you get to that hearing and we want caroline to join us what she's seeing from brussels. european finance ministers are gathering to discuss europe's bailout fund. you just heard silvia's report there. how are things going down in brussels? >> critiques would say not a lot of progress was made in the course of two days in terms of the esm. i want to remind everyone that before a banking supervisory body is set up there's nothing the esm can do in terms of bond buying. that's really going to take another month or even years before that's actually happening. but there were some very important decisions being made on a personnel level because the central bank governor of luxemburg was appointed. even though we're one big european nation or one big european union, national interests have been playing out. his appointment was the precondition for the prime minister of luxemburg to say on as head of the powerful euro group. his term was going to be running out by the end of july. now he's staying for another six months. but a permanent successor hasn't been found. on top of that, the chief of the temporary bailout fund the esff was nominated to become the chief of the permanent bailout fund temp sm once it's operational but as you see right now everyone is happy in euroland but we have this north/south divide playing out. of course there's still many national interests. >> caroline, thanks for that. we'll be back with more. >> let me update you on what's going on at barclays. dow jones is reporting bob diamond the ex-ceo of barclays and could we see the severance pay between 1.5 and 2 million pounds after he was let go as the ceo of barclays last week. this being reported by dow jones citing an unidentified source at this stage. still very early in this story. there has been talks about a 17 million pound payoff for bob diamond. that's the figure, the maximum figure that's been floating around and worth noting too he's supposed to receive 100 million pounds plus in pay pension bonuses since 2005, so very elite, 1.5 to 2 million pound. that's the report we're hearing from dow jones. >> we'll see how that goes down with public. we'll see how the front pages handle that one tomorrow morning. uk prime minister david cameron will welcome the french president to london today. there's a lot going on today. it is francois hollande's first official visit to britain since taking office. stephane pedrazzi has more. what's the purpose of this trip? >> reporter: it's the first contact, first official one to one meeting between david cameron and hold. the last time hold went to london he met with the labor leader, but he didn't meet the prime minister, the british prime minister. so it's the first official one to one. obviously french socialist president and british conservative prime minister can't have the same view on plenty of topics. they don't share, for instance the same conception and same vision for europe. francois hollande recently said europe was not a cash dispenser nor a self-service. the comments were made for david cameron. they don't have the same approach when it comes to financial regulation. francois hollande would like more regulation and would like more taxes on financial transaction. david cameron is opposed to the plan. they don't share the same view on taxes be, generally speaking hold wants time pleament 17% on taxes in france. david cameron was really sarcastic about the plan. he said french wealthy people, bankers and companies would be very welcome to the united kingdom to pay, for instance for british schools and public services. so probably won't become best friends even if probably the relationship would be better than the one between nicholas sarkozy and david cameron. the british prime minister and former french president couldn't stand each other. sarkozy said he was sick and tired of david cameron giving lessons to the eurozone leaders and david cameron was sick and tired of france and germany making decisions for everyone else in europe. in that want sense, francois hollande will change compared nicholas sarkozy because he showed clearly in the last couple of weeks he doesn't want to build everything on the franco-german relationship. french and german people always had some sort of love and hate relationship. let's see. >> we love you here. good to see you this morning. appreciate that. we'll keep an eye on that event. samsung's apparent lack of cool has helped to fend off apple. apple brought a suit alleging samsung's tablet was infringing on apple. but the judge disagreed saying the tablet wasn't as cool as apple's. another apple competitor, research in motion will should its annual general meeting in canada. tough year for and make thor of blackberry. saw both co-ceos step down and share price plummet. dave wagner joins us now. welcome. first, what should we expect from this annual meeting that rimm is holding there in canada? >> most of the news is out already. rimm had a new platform that they are bringing out in january of 2013. people are waiting to see what happens with that. at the moment the expectation and sentiment is down on the company. i think that sometimes the markets orreact in these things because ultimately this is a very well used business platform. it does have a large share 7% of the market globally. it's had some decline in its market share. >> you still think it's a buy? >> it might be but i think what's interest is we must not forget it has tremendous credentials in the business sector and well used by business people. it lost its way a bit trying to attract a different audience. there's fierce competition. they get a lot of commitment from their loyal users. they get 6 million downloads of their apps every day. i think consumers are fickle today. i'm an iphone user but i could move to a new rimm device if it's good and it comes out. >> so, you're speaking about this company from a kind of a partnership perspective rather than an investor perspective i suppose which is interesting because that's not necessarily how we get from these kind of businesses. it's all about apps. it's having the right apps that makes these companies attract and keep their customers, what can research in motion and its designers, the whole blackberry universe do to better engage with people like you and the next big, next big app developers. >> they should be courting the business apps rather than the angry birds and gaming type apps. i think they will do that. we're agnostic to the platform itself. we'll provide apps on iphone, android, blackberry and windows. blackberry has an opportunity to recapture the minds and hearts of the business user because they have that credential and that background and they were the innovators in that space not so long ago. >> what's your experience ever engage with apple versus engaging with research in motion. is it a very different, very different company. very different from your perspective? >> no. i think the model that apple laid out with their app store was the innovator and which everybody has basically copied so the interaction with these application environments are pretty similar. but that's not really the point. i think the point is that the audience that these customers go after need to be distinguished and blackberry has the best opportunity to distinguish itself in the business sector. >> real quickly because i love this comment from the judge in the sam shunning/apple case. does it strike you odd or is there a point you can't infringe on somebody's patent if you're copying it and your copy isn't at good? >> no. it's an extraordinary thing for a judge to say. i think some samsung tablets are pretty cool, awesome is the word. but the apple ones are too. as i said before consumers are fickle, a new tablet comes occupant that's kooshlgs people will bit. new iphone comes out from blackberry and that's useful to the business communities they will buy it. >> there's legitimate claim that apple made that it copied its product. >> that might be more difficult to prove in a new court with a different judge. >> that's for sure. dan wagner with us there. thanks for your thoughts on all of these issues in tech. we want to mention, we asked viewers about this very issue, the court case that apple lost against samsung in which the judge said the ipad or the samsung tablet wasn't as cool. did you agree? jeff from seattle tweeted typical snobbery of apple users who gleefully shell over for apple's high margin overpriced wares to join the in crowd. what do you think about the case and this extraordinary comment from the judge? let us know. you know how to reach us, @cnbcwex. >> you are either in or out. >> i'm so out. let's go to a quick break. barclays remains center stage. we'll preview live testimony by marcus agius and take a look at bob diamond's proposed severance package. stay tuned. welcome back. warsaw is europe's most congested city according to a report released by tom tom. exerts in the in car navigation specialists say rome, brussels and paris are the other top four cities with the worst traffic problems in the region. for more on findings we're joined by nick cohen. >> i want that job. >> it's fascinating. traffic is an important part of experience in the way people pick to do business in cities. >> absolutely. delays cost everybody a lot of frustration and money. for business it's bad for everyone doing its work it's bad. >> why warsaw? what's particularly awful about warsaw that makes it worse than any other european city? >> we do a lot of work in poland. what our customers told us that are using our navigation systems is that there's been a lot of growth, a lot of growth in car ownership, the economy has done well but the infrastructure is still catching up and that's what you see reflected. >> what do these top five cities have in common with each other that makes them particularly congested. we look at the map right now they are spread across europe. very different sizes of cities. there doesn't appear to be anything for them to be congested for the same reason. >> congestion is construction, weather, accidents, can be any kinds of things. one thing we do see is that some cities have more alternative routes than others. what's also true is that people don't always know what their choices are. all this information is actually in our maps and navigation device so if drivers are using this they can actually route around it and use some of the alternatives. >> is this a failure of investment either private or public? >> i think it's a combination of traffic behavior, the local infrastructure, weather conditions, all kinds of factors. >> how does it stack up generally with north america. you've taken a look at traffic. >> what we see in europe is cities are more compact. we're focused, there may be actually fewer alternatives, activities less spread around, more concentrated. so that means that congestion levels tend to be more concentrated than in north america. >> london is far and away the biggest city in europe, the olympics are very soon and it comes eighth on the list which would seem like quite a success. maybe i'm biassed being british but it's something of a success that london, although it's a big city in europe and very busy place is only the eighth most congested. >> there's a lot of alternatives in london. it's a big network. so there are a lot of alternatives in the road network, there's a good public transport system. there are options even if at certain moments if someone is stuck in a traffic jam doesn't have real-time information to change their route. >> would it be a disaster at the olympics? >> this summer a number of things happening. first of all all this information is available. if you use a tom tom you can route around a lot of the standard bottle next. real-time information is there as well. we'll be updating map share showing closures in london all summer every day so people can connect and get all those updates free. >> okay. nick thanks very much. interesting stuff. congestion academic at tom tom. japan's largest bank suspended two traders as the libor investigation intensifies. the suspension was not because of work done. >> meantime barclays chairman marcus agius will face a grilling. bring you live coverage of that hearing at the top of the hour as soon as it gets under way. let's get our final thoughts from our guest host nick carn. do you share the view that perhaps there's an opportunity created in this selloff at barclays? >> well, definitely. i mean, you know, people obviously are not keen on bob diamond but he built a very global franchise there for barclays to be the only non-american firm to put itself in that position and that was one of the reasons why that stock was attractive a couple of years ago and some of those reasons are still true. >> what about the report it could spinoff it's investment bank. >> that's going to be largely regulated driven by the regulators if we -- >> sure. if they do that, i think of a bernstein report yesterday where they said sort of specter of this. we worry about these elements. does that impact in a negative way the impact for shares? >> think every single bank in the world, particularly every bank in europe has got enormous uncertainties around it, regulation, bail in, bailouts, who will bear the losses for the european credit bubble. these are enormous questions that won't be settled any time soon. as one of your previous guests of saying, the question is whether on these very low, low value accelerations those risks are properly reflected. >> what's your favorite investment idea right now? my favorite investment is short euros and short australian dollars. >> nick carn, thanks so much for joining us throughout the program this morning. founder of carn macro advisers. >> we'll be back very shortly. marcus agius is set to face a grilling. we'll bring you all of that live after this short break. don't go away. power chair. hoveround makes it easier than any other power chair. hoveround is more maneuverable to get you through the tightest doors and hallways. more reliable. hoveround employees build your chair, deliver your chair, and will service your chair for as long as you own your chair. most importantly, 9 out of 10 people got their hoveround for little or no cost. call now for your free dvd and information kit. you don't really have to give up living, because you don't have your legs. hoveround replaced the legs. and now every hoveround comes with this handy tote bag and cup holder for access to your favorite items. and right now, get this limited edition hoveround america travel mug free with your hoveround delivery. [singing] hoveround takes me where i wanna go. call or log on to hoveround.com to find out where a hoveround can take you! welcome to "worldwide exchange" this morning. if you're just joining us i'm kelly evans. >> and i'm becky meehan. >> agius in the hot seat. he's about to give uk lawmakers his version of events surrounding the libor scandal. >> alcoa kicks off u.s. earnings season. >> eurozone finance ministers agree to meet spain's most urgent needs vowing to make 30 billion euros to its banks this month. >> chinese imports fall in june boosting beijing's trade surplus and raising concerns over domestic demand in the world's second largest economy. all right. once again thanks for joining us on the program this morning. we're of course wait forge the feed of marcus agius testifying. we'll bring that as soon as we get it. i want to bring you up to speed how markets are doing before the u.s. open. first let's take a look at u.s. futures. here we got the dow jones in the green pointed higher by 39 points. s&p 500 by about four, the nasdaq by six or seven. becky, i'm reminded from a factoid last night monday has been a bad day for the market but tuesday has been a better one. we'll see if that pattern holds up. >> european markets? >> the hand we're dealt from europe is again consistent with this theme of a rally. across the board we're seeing gains of two thirds of a percent of the ftse. even spain that ibex up 1%. >> such improvement on the european markets. we had seen declines. >> this is what's going on in the other market action. taking a quick look at the currency markets. euro is 12.2312. dollar against the yen is 79.28. the sterling rates have been bumped up earlier because we had better than expected uk money manufacturing data, construction data which gave a pop to sterling. the bond markets and our attention has been very much focused on spanish yields in particular. yesterday around this same time we told you spanish yields were still above that 7% level. just underneath that right now, getting more respite in the past hour or so. 6.9%, just below 6.9% on the ten year. italy just below the 6%. 5.96%. >> bank of england deputy need -- paul tucker said neither he nor his colleagues were aware of rate fixing. he challenged bob diamond of a conversation dating back to late 2008 about the company's libor rates. >> does that file note of 29th october, 2008, accurately reflect the conversation with him that you've had? >> not completely. would it help to explain? >> let's do it in stages. is there anything in there that's wrong? >> i think the last sentence gives the wrong impression. yes. >> all right. joining us now is iain gordon head of banks research at invest tech securities. iain, welcome. first of all, it's an incredible series of events that happened for barclays over a period of several days. how fundamentally has all of this changed your view of the company? >> well, as i've said on many occasions, i don't think this is about a specific issue and in the months ahead we'll discover it's a much broader issue. i think the exclusive focus on barclays is quite wrong and quite misleading. clearly some of the evidence which has come out has been quite shock but what that evidence does point to is a pattern of behavior across a number of banks and until we've gotten through the evidence from other banks and indeed any forensic evidence the regulatory authorities about their involvement it's rather difficult to draw conclusions. >> one interesting thing to hear tucker speak yesterday the extent to which the bank of england was upset for barclays for submitting its rates too high, thought it was interfering with the effectiveness of monetary policy at the time. again, kind of unusual revelation. >> absolutely. i mean in truth there's been far too much focus on this so-called diamond-tucker conversation in late 2008. what we do know is from the minutes in november 2007, the bank of england was well aware that there was widespread concern about low balling of libor rates from other banks not barclays. >> why is it in barclays i want to be high ball these rates if in fact that's what it was doing. >> i wouldn't. barclays was merely submitting the rate they deemed to be appropriate. what we haven't yet seen is the evidence why other banks appeared to be submitting rates well below what they could raise funds at. >> just a bit of break being news. speaking about the unemployment picture, and this backs up the funds of the growth agenda. raising their end of 2012 unemployment rate forecast to 8% from previous 7.1%. warning of long term damage to workers and economies if we see this kind of trend continuing. backing targeted subcy decides for job creation rather than tax cuts and saying they see further signs ever weaker global economic prospects that it's imperative that the g-20 fiscal monetary stimulus where possible. the social cost of the financial crisis and aftermath have been huge says the ocd. we need to avoid the risk of a lost generation. really backing the growth agenda rather than the austerity agenda, saying it could trim back the prospects of future growth if these kind of targets are not set right now. >> a sense of urgency. you wish they could have gone back in time and tell the imf in 2008 and 2009 to worry about this issue. spain says europe will not impose macro economic conditions on its bailout. finance minister has suggested that interest charged on any bank is likely to be low. finance ministers reached a basic agreement on this package overnight. but the appointed chief says there's still work to be done. >> we are aiming to reaching bank recapitalization in july taking into account national parliamentary procedures, allowing for first dispersement of 30 billion euros by the end of the month to be mobilized as a contingency. >> we're waiting for the testimony of marcus agius, the chairman of barclays. we'll be joining the committee very shortly. had some flashes so far this morning which suggested that he could say something about bob diamond's severance package as well. dow jones reporting he'll get a severance package of 1.5 to 2 million pounds. and he could announce that at this hearing. we'll get you to it just as soon as he gets up to speak. in the meantime let's get out to caroline who is standing by in brussels. >> you mentioned some real important comments that the spanish finance and economy minister made upon arriving here in brussels for the second day set no macro economic conditions are attached to the bank interest rates on spanish bank and it will be very low. quite confident that the spanish bank bailout will be reached shortly. a preliminary outline was agreed on yesterday by eurozone finance ministers and initial 30 billion euros will be made available to the spanish banking sector by the end of july. we're waiting for the final approval and likely to come towards the end of the month. now there may not be any macro economic conditions attached to the bank bailout, but certainly spain is expected to build a bad bank for those toxic assets. smaller banks in spain are expected to conform to higher capital levels in line with what the bigger banks have to conform. course the other big story for spain was the easing of conditions, the fiscal deficit to gdp targets. now, the 3% threshold target that was pushed out the 204. given the recession was deeper and harsher than expected it only made sense for the european commission to ease those targets. >> let me cut you off. we're about to hear marcus agius who is giving evidence to the treasury select meet. that's the committee we're looking at right there. marcus agius is just about to sit down and start to face questions from the lawmakers who populate the treasury select committee. he is speaking, of course, after tucker spoke in the same room yesterday. we also heard, of course, from bob diamond who is very reserved in the comments he had taken. he's likely to be stuck there for some time facing questions. marcus agius is the outgoing chairman. he is going to stay in place to appoint a new ceo and just sitting down now to take the first question from the uk treasury select committee. let's listen in. >> so with respect to that i think now is an opportunity. i understand that negotiations have been continuing with mr. diamond about his severance and if you have anything you want to say on that do tell us now as well. >> fine. thank you, mr. chairman. as far as my own resignation i imagine there's a chance during questions and answers to give my version. but what i do want to do is take the opportunity now to tell the committee about mr. diamond's severance package because i understand it's of national interest. shortly before i came here this morning, we reached, i received a notice of about what's to happen. rather than put out a press notice ahead of this committee i rather show the respect to the committee by announcing it here this morning. what's happened is that bob diamond that's voluntarily decided to forego any deferred consideration and deferred bonuses would to which he otherwise would be entitled. >> what's the value of that? >> it's not a precise figure because it depends on -- >> current valuations. >> the maximum amount is 20 million pounds. >> anything else you would like to add? >> no. i just would say that, obviously, that's a decision for him, but frankly i think that it's something that the board of barclays welcomes and glad that he's done that. >> thank you for those opening remarks. you've seen martin taylor's remark in the newspapers the other day. "i deserve blame for being among the same to succumb to the myth of bob diamond's susceptibility." >> i was chairman when bob diamond was appointed chief executive. i think it's one of the most important actions of any chairman to manage a chief executive succession because so much depends on the choice. >> have you resigned because you didn't? >> because i didn't -- >> manage your chief executive successfully? >> no that's not reason i resign. in fact, we'll deal with the second part first. when bob diamond told me his intention to retire, obviously a matter of great concern who his successor should be. bob diamond was not the candidate. i was very concerned as indeed the rest of the board it being a board appointment not a chair appointment that we should use someone who would be the right person to lead the bank forward. we talked to other people. we benchmarked the available talent and the boar was unanimous in its decision that bob diamond was the right attorney become the chief executive of barclays. >> i wrote to you asking for two letters from the fsa, the first at the time of bob diamond's appointment as chief executive and the second in the spring of this year. you've redacted, you sent these to us as we requested but you redacted them out first consulting us. i'll bring michael fallon in. >> thank you. what's the purr post office these reductions? >> because the items which have been redacted are commercially sensitive and not relevant to this inquiry. >> they are entirely commercial and not legally sensitive. >> no. >> they refer to commercial operations or bid? >> they are commercially sensitive. >> or matters of that kind? >> yes. and we did discuss them and they were in agreement that these redaktions are appropriate. >> you were requested to use them with me. >> my staff discussed them with your staff. i didn't discuss it with you. >> those letters show that it's not just people in barclays or ex-barclays such as martin taylor, the regulators were very concern. >> one was an approval of a letter that bob diamond sent to me. with respect to that he makes a number of points. >> let's take the first letter first, the 2010 letter. what did you take to mean from the fsa's description of what they expect from bob diamond as chief executive that they want to close open a transparent relationship and their specific expression of concern that there is, tlat be an appropriate oversight of bob diamond's immediate subordinates? >> there are two points together now. the first point i believe is a statement they would have made toni chief executive nuclear weapon think that's the sort of thing they put in every letter, they lift that as some kind of cut and paste. noon surprising if they didn't make that statement. >> the fsa expects bob diamond to continue to develop not keep, to continue to develop a close, open transparent relationship with these regulators. they come out with that klein. >> prior to being appointed was the president. he wasn't the leading executive in the bank. that was john fallon. bob diamond was one removed. for them to expect for him to develop a close relationship coming into the job is exactly what i would do and expect them to say. >> and the team? >> the point -- >> we require there's appropriate clarity and oversight and responsibility and an independent challenge is provide by bob diamond in his role as group ceo to them. >> yes. that was a point being made separately to bob. self-evidently because he had grown up in the investment bank. it's my thought that whenever a person makes a move from one division to the center he disassociates himself, becomes more objective than he would otherwise be here to. >> he wasn't challenged was he? and he got on with misinterpreting mr. diamond's e-mail and ended up authorizing false libor returns in late october and november of 2008, didn't he? >> i was not involved in that exchange. >> that's what -- >> yes. >> so am i right or wrong? >> that's what the final notice says. >> okay. the fsa said in that letter they placed quote considerable emphasis on the chief executive setting the right culture, risk appetite and control framework. >> yes. >> did you agree that we now know that we had the wrong culture, the wrong risk appetite and the wrong control framework? >> i would say with respect to that, that the problems is a subject of the inquiry the actions happened in 2005, 2006, 2007 all happened before bob diamond's appointment. they were known the fsa, whoever approved his appointment. they must have been satisfied the fsa. >> the fsa's fears and concerns expressed in that letter were borne out, weren't they, first of all there was what happened in 2009 and the cba positions and over the course of things that happened zwoent that letter. indeed these are sent out in a letter to you on the 10th of april. which is pretty explicit, isn't it? and took place after you had a meeting with lord turner. you say incidentally in your letter of april the tone from the top was one of the fsa's specific concerns. if we turn to the transcript, when i asked bob diamond that exact question he says the fsa was specifically pleased with the tone at the top. do you think this committee was misled by mr. diamond? >> what mr. diamond was referring to in that transcript was a visit by andrew bailey, the acting senior officer. he effectively is the successor and will have an ongoing role once the regulations emerge. he came to our board together with a colleague in february of this year. during the course of that session at barclays bank he said, we are satisfied with the tone at the top of barclays, particularly with respect to barclay. >> so lord turner's letter or rather your letter about your meeting with lord turner that's misleading in this case? >> not misleading. i think they are talking about different things. if i could try to get some context with that lord turner letter. >> i think what we'll do is ask the fsa about this and we might come back to this, colleagues might come back to this. i would just like to move on to the letter. i think it's worth reading out what he actually said. i wish to bring to your attention our concerns about the cumulative impression created by patent behavior over the past few years in which barclays often seems to be seeking to gain advantage through the use of complex structure or regulatory approaches which are at the aggressive end of interpretation. is that something you recognized? >> when any bank deals with its regulator it has to deal with very complex matters. it's not like a speed cop catching you forgoing more than 30 mile-per-hour speed limit. very often the points that are raised, the issues that are discussed are complex and not capable of interpretation or debate. we have historically chosen to debate with our regulators whenever we thought it was appropriate whenever regulator decision was arrived at was the present one under the circumstances. >> whether you're sailing close to the wind or driving at the speed limit you're clearly being asked by the fsa to take more care, aren't you? >> what i took from lord taylor's interview and subsequent correspondence was look you do this too much. it's not helping your relationship with the regulator. would you please rethink this. i took that point. >> if we go through the list of concerns it's a long one. one even with the redaktions. we've got the risk weighting of capital. we got index hedges. perhaps it's just reading out what it says on that. your desire to move index hedges of your own credit from the trading book to the banking book has used up our resource and goodwill. >> that's what it says. >> doesn't sound very good, does it? >> as i said before, we invariably seek to try to achieve the best regulator outcome with our regulators by engaging them not with a view of doing anything we should not do, we're just trying to manage the process and very often we say fine we understand what you're trying to do. sometimes they say we see your point and a different outcome is reached. what that letter is saying we overdid it. >> you don't think you overdid it, yes. you don't think that all in all a more cautious approach might have been called for from you? >> when we discussed the relationship with the others, particularly after the visit, the conclusion of the board was that it served no useful purpose for us to have anything other than a positive and constructive relationship with our regulator. >> it looked as if it was positive and constructive. here we are on the stress test i quote confusing and potentially misleading, so you were misleading regulators, misleading impression created by barclays initial presentation of its position under the eba stress test. created an impression that barclays was seeking to spin its messages in an unhelpful fashion. >> this was occasioned by a rather hectic period just prior to the end of last year when there was a great deal of focus on banks capital ratio and in particular barclays capital ratio. in order to accommodate the end the year picture in a way that was going to make most sense all around we had to have an acceleration of changes with our regulator and i think the stress of that pressure showed on both sides. >> what about the tax management issue, the net impact has clearly been unfavorable to the degree of external trust of barclays use such as tax regulation and accounting. >> i can't disagree with that. the toish which you refer has been talked about quite a lot. we engaged in some tax planning at that time. perfectly legal. we took external advice from leading accounting firm, leading law firm that the governments, i can assure you is impeccable. after we've done it there was some retrospective legislation and the impact was severe. >> here's lord turner's conclusion on behalf of the fsa. the cumulative effect leaves us with an impression that barclays has a tendency to continually seek advantage from complex structures or regulatory interprettyations. these concerns are great that i felt it was appropriate to communicate them directly to you and encourage you to have a tone of full cooperation and transparency. you thought there wasn't at that time a tone of full cooperation and transparency or else he wouldn't have written it. >> the message was well received. it was discussed with the board -- >> just a couple of months ago, isn't it? >> yes. >> yeah. so things were in pretty desperate state with respect to your relationship with the regulator? >> i don't accept the word desperate. >> what word would you like? >> i think that lord turner was interviewing me as chairman of barclays as he should have done and say look when we deal with you, you try too hard and doesn't say that we were trying to do anything improper or incorrect but seeking the best outcome for the bank. testing the goodwill of his staff. and i one that. >> do you think that this is proper and correct conduct by a regulated firm? >> i think our job is to operate absolutely within the regulations, absolutely within the norm. our job is to do everything right and proper we should do but i also understand and know full well we operate in a an extraordinarily competitive international industry and our job is to try to do within the constraints that i just mentioned right now, regulation constraints, our job do the best we can for all of our stakeholders. >> i'll give you another go. what word would you like to try to summarize your relationship with the regulator here? strained, difficult? >> strained would be fine. >> when mr. diamond came before us he didn't give any impression of that strain, did he? he didn't give a fair and full representation of his relationship with the fsa when asked about it, did he? he gave the opposite impression didn't he? i have the transcript here. >> what he focused, what you referred to earlier, he said when andrew bailey came to see us he said the tone at the top is satisfactory. designee described these exchanges as nor than a conversation. >> as i said before when any bank and indeed i mentioned any other industry, when you interact with a regulator on complex matters, in particular capable of different interpretations i think it's within reason that the job of the regulated entity, in this case a bank, to put its side of the case as favorably as kit. that's what it has to do. >> can you think of any reason why we shouldn't conclude he treated parliament with the cavalier attitude that he was treating the fsa. >> i'm sure that's not his intention. i'm asking if that's the effect. >> that's for to you judge. >> isn't why he's had to go? >> the reason why he had to go, would you like me to go on about that. >> is that the reason why he had to go, it's the culture of bar clarks isn't it that came from the top, came from the chief executive that you didn't keep under control. >> the reason he had to go is different from that. >> okay. well you better tell us what this different reason is. >> mr. tucker alluded to it in testimony yesterday. indulge me in the history of this. we've known about these various correspondence for some time. they were not cumulative until we reached settlement and made the announcement on wednesday two weeks ago. one of the agencies that was involved in this was the fsa. all of the information that we passed to the cfdc was passed through the fsa, and very, very little information there was too. that was in the findings that were settled and we had to make an announcement. we had to decide as a board what should our reaction be to having had to make the settlement and having to pay these fines. and we debated it as you would expect and we differentiated between culpability and responsibility. and what we took comfort from, more than comfort, is the fact that the fsa did not find against that right expression, loose language, did not find against bob diamond or any other senior managers of the business in terms of culpability. however, you can't see a settlement like that without recognizing that responsibility is required. >> we'll continue to watch marcus agius there the outgoing chairman of barclays testifying before that committee. if it's anything like the last couple of hearings this one will drag on for quite some time and perhaps most interested in what his comments are regarding libor back in the fall of 2008 but as you can hear just now most of the commentary has focused on barclays general relationship with regulators and the culture of the firm. we'll be back with more and follow the headlines from this event. a couple of other stories i want to brief you on before we do. first of all, we're is going take a quick look how futures are trading ahead of the open on wall street. we're still in the green here across the board. barclays is one of those banks mentioned. we'll take a look again at the impact of alcoa's better than expected earnings report after the bell. we'll be watching the eurozone finance ministers meeting on spain and china's data showing some weakness in its trade position relative to what we expected. let's go back and listen to testimony from marcus agius. >> one outcome that the shareholders didn't want to see was the removal of bob diamond. that was the outcome they didn't want to see because they believed in him as a very effective chief executive. we as the board believed in him that's why we approved his appointment in september of 2010. as we went into that weekend i was faced as chairman with the dilemma that was far greater representational damage than we had anticipated and far greater than we thought that there was a requirement for some further action from the bank, and that's why i felt as the ultimate person responsible for the reputation of the bank that it should resign and i made that decision personally on saturday. i conveyed to it the board on sunday, announced on monday morning. >> you resigned because although you had a great chief executive you acknowledged you hadn't kept him under adequate control. >> i resigned for the reasons i stated, mr. chairman. i felt responsible, ultimately responsible for the reputation of the bank. >> you don't think that those who argue that particularly some shareholders that this is a firm that's being wrecked by poor corporate governance have a case? >> i'll divert on that if you would like notice. on the question of governance, there's an interesting exchange because one of the activities of the fsa in recent times has been an increased supervision over all their banks. one of the supervisory activities they engaged in is what they called a governance review. we received a letter from the relevant official at the fsa, saying that they had examined governance at barclays and found it satisfactory. if i can breach a confidence on the way to the lift to show the official down she said i normally rather fear these interviews with banks because i never have good news to give. i was happy with yours. i did have good news as far as the government with barclays, in fact i would rank you best in class. this is from the fsa. >> i dread to think what will happen when we get the reports from the regulators on all the rest of the libor cases, but there we are. john mann. >> have you received professional assistance in preparing for today's hearing? >> i had a team of people at barclays who told me what questions i might expect, yes. >> because you were quoting exactly the same phrases mr. diamond had used. identically. and did your bank this morning brief journalists before 8:00 that you were going to make an announcement on the renew mr.ation of this committee. >> die not. i have no knowledge of that. >> you would be upset? >> yes. you would be upset if that's the case. you don't know if your bank did or not? the letter of the 10th of april, in which you are seeking to play down -- >> i'm not seeking to play down. >> the board meeting of the 9th of february, some disagreement about what was said. could we have a transcript of the section of the board meeting where mr. bailey was in attendance so we can make -- >> yes. we produced transcripts and you can have a copy of the minutes. >> you recorded a meeting so can we have a copy of the recording, not section of the meeting. >> we don't make a transcript verbatim. we take minutes. >> you recorded the meeting. can we have a recording, regarding that section. >> we don't record our board meetings. >> that's convenient. >> i'm sorry. i'm happy to let you see a copy of the minutes. the minutes do include reference specifically to the comment i just made. >> this letter from lord turner, where he -- and i'll read out what was said. i wish to bring to your attention our concerns about the cumulative impression created by the patent behavior over the last few years in which barclays often seems to be seeking to gain advantage through the use of complex structures or to answer for regulatory approaches which can be aggressive and interpretation of relevant rules and regulations. mr. diamond described this in his evidence to us as we took this as quote this is the annual review from the fsa. so is that what the fsa said to you every year. >> you're confusing two things. annual review is the visit of the board in february by mr. bailey. the letter from mr. turner is second. >> know the letter then goes on the say andrew bailey expressed these concerns at your board meeting. so i'm not confusing anything. did the fsa say these things to you every year in this, as mr. diamond described this as the annual review. >> every year as the fsa comes to see you doesn't say everything you're doing is absolutely perfect. what they do is they seek to find those areas where they tend to seek improvement. >> a letter from lord turner, highlights quote protective communications between ourselves and barclays. and continue to argue for capitalization to use for goodwill. as well as saying this is merely the annual review from the fsa. mr. diamond told us that the fsa was specifically pleased with us. that doesn't sound very pleased. >> again, i think -- i assume what he's referring to is this came from the top. comments specifically made by mr. bailey at that board meeting. >> that's in relation to the precise question i just put to you, put to mr. diamond by our chairman. >> i'm sorry. >> precisely the question i put to you is a question our chairman put to mr. diamond. >> which was? >> mr. diamond -- >> we're going get more from hearing with marcus agius. likely of course take a couple of hours and if it's anything like the ones we previously heard. i want to get reaction. your thoughts? >> this morning a bit disappointing. yesterday to my surprise and quite intelligent and coordinated questioning coming from the panel. today we're revisiting issues of the past, we're not talk about libor. i can't remember the last time i remember hearing libor mentioned. we're the hearing old vendetta about the culture at barclays being played out whereas to remind ourselves the libor specific issues were adressed and dealt with and internal controls were put in place in december of 2009. the issues surrounding aggressive techniques is being addressed, dealt with and barclays stepped back from some of those activities. that was all within the law. so this is not particularly relevant to the libor issue. >> barclay shares up almost 2%. they haven't moved around too much. do you think it has anything to do with what we're hearing this morning. >> day-to-day we'll see more volatile moments. as time progresses my overriding belief is that the libor issues will be seen as a broader sector-wide issue and the intense, overly intense focus on barclays which has led to its underperformance two weeks ago should reverse. since barclays rebound -- >> there's a suggestion in the questions we did hear this morning there was a tense relationship between barclays and the regulators over the years. is that not something that would concern you concerning regulatory scrutiny. >> we're gets specific comments coming out from lord turner. i would suggest lord turner has a specific agenda. in terms of barclays relationship with the regulator, yes there have been some issues where there has been greater for use. i'm not defending the transaction but it was a transparent transaction when chris lucas the cfo described to the market he was utterly clear it was a transaction not changing the barclays risk profile but one obvious side effect is that it did marginally improve the reported capital ratios of barclays at the time. we understood what it meant whether or not it was an appropriate transaction for us to judge and in any event we're talking about the events in the past. >> you believe that there's too much focus on barclays at this stage but many of these issues would crop up again in the context of other financial institutions around london. when we talk about the overly aggressive culture that the fsa believes was employed by barclays how will the other banks come under the spotlight. >> two issues. in terms. broader libor issues many of the things discussed in relation to barclays, for example, if i can call at any time low balling debate throughout 2007 banks other than barclays explicitly excluding barclays fire have been low balling libor's missions. now at this stage we simply don't have sight of evidence from those banks and indeed from the regulatory authorities. >> you have to wonder if they weren't more worried about the banks that appear to be oversubmitting their bids. >> my personal views you're spot on. i think there is at least the suggestion that some of the establishment had a dn invested interest. >> you think low balling would have been the most appropriate activity. >> if all the banks or engaging in this kind of behavior not just against libor but inappropriately behavior, he will emerge as having engaged even further than barclays. >> inappropriate aggressive behavior is a subjective judgment. again to be clear all tissues raised in lord taylor's letter to barclays, talking about legal activities. now there is an ongoing dialogue between a regulator and the bank in terms of how it conducts itself, what activities it pursue, but let's be clear. barclays in lord turner's letter of april of this year does not appear to being accused of any illegal activity and such activities which are disapproved of can be, you know, behavior in those arenas can be changed through dialogue between the bank and regulator and i would suggest furthermore that's got little to do with the regulator/political decision to encourage bob diamond's removal last week. >> thank you for joining us on set for that testimony and sharing your thoughts afterwards. we'll of course continue to watch headlines from marcus agius as he don't testify. it will drag not but not drag on but continue for some time. >> yes. >> exactly much pc waive putting it. let's check on your headlines. alcoa kicks off earnings season with a mixed set of results. >> finance minute serious meet spain's most urgent needs. >> chinese imports fall in june raising concerns over domestic demand. >> okay. meantime eu finance ministers just arriving in brussels are expected to approve an immediate lifeline for spain after euro group officials agree to make 30 billion euros available to the country's banks by the end of the month. they haven't decided on the full size of the bailout and discuss other asects of the deal as well. >> germany's constitutional court is considering whether the president can fully ratify legislation governing the esm and europe's fiscal compact. several complainants are seeking a temporary injunction to prevent the legislation passing. we got some help in understanding what's going on. silvia wadhwa is joining us. caroline is in bruise sells. let's start off with caroline. >> reporter: well there were so many topics on the agenda yesterday and today but really spain wants to grab the headlines really. of course first of all as you mentioned the finance ministers agreed on the basic framework for the band recapitalization for the spanish banking sector and additional 30 billion euros will be made to the banks by the end of july. we don't know the final figure. we'll get that figure by july 20th that's when eurozone finance ministers gather together again maybe through a telephone conference. that wasn't all. spain was given concessions in terms of meeting the fiscal deficit targets for 2013 and 2014. now it's supposed to reach the 3% magic threshold by 2014. it's been given one additional year. because the recession was deeper than expected. in return for that eu officials do want to see additional austerity measures and this is what spain is going to out line tomorrow. we're expecting an additional 30 billion euros. >> okay. thank you very much r that caroline. let's cross out the silvia and get a perspective out of germany. >> reporter: the a student, the driving force behind such things as fiscal compact, et cetera, the a student at the moment is sitting down again and mulling over it. we have the constitutional court to decide whether or not the german president should sign the esm legislation or not. or whether he should wait until this constitutional courtize in the main matter whether esm and fiscal conflicts with the german constitution. the german government laying do in his view how essential esm and fiscal pact were for the whole earn u process and also for saving the euro, and for calming the markets. he warned that if this legislation wouldn't go through there would be further insecurity injected in the market and repercussions that nobody could estimate and that's exactly what this court has to worry about. is the greater damage if they sign up on this deal essentially, if they threat president sign it and maybe later decide in another direction is the greater damage if they stop it right here and there. >> silvia thanks for that. good overview of what's going on with the european story. let's see what text markets are doing. when we first came on the air here on "worldwide exchange" markets were lower. now they are up. across the board as well. in fact we have gains of well 1.5% for the ibex. the dax is up 1.2%. nearly 1.3% for the cac. beginning to show significant move to the upside. >> freeze warningly no real news although it does appear the prospect of another bailout for spain shepg. let's see what's helping to u.s. futures. we had some green arrows there turning things around from several days of selloff. dow jones up, nasdaq up and s&p 500 up. >> let's update you on a couple of other series. amd slashing its second quarter outlook. amd now expects revenue to drop 11%. that's the worst quarter on quarter decline cities in fourth quarter of 2008. back then sales plunged by 35%. amd fell in after hours, frankfurt trade down by 11.5%. >> alcoa reporting a second quarter net loss as revenues fell 10% on aluminum price. company's adjusted results managed to be forecast. the ceo says lower aluminum supplies as a result of global economic slow down. he be expects aluminum prices to rub. joining us now on the line is david lipschitz. do investors broadly speaking still like what they hear from the company? >> well, i think you definitely can see some read across, the aerospace market, the auto market is extremely strong while trucks are extremely weak. for the company, i still think with the metal, extreme is your muse situation, with a lot of inventory. the end markets for southeast other stocks that feed into aerospace is good. >> david, a report that caught my eye for the material sector fourth quarter earnings were expected to grow 40% still year on year. do you think estimates are still too high and given the comments do you think there's the pr prospect for a rebound won't happen. >> earnings have to come down. you know right now aluminum price is 85 cents. most people's earnings are using 85 cents or a dollar for the aluminum price. i guess the big question really is what happens with china in the second half the year. if they grow significantly more than what they are doing now there's a lot of noerp the metal markets to be in deficit and earnings to be a lot higher. china continues to slow at a slower pace i just don't think hat we're going to see those type of numbers in the second half. >> how do you expect the china figures to pan out. we have the gdp data coming out. we had data today which sparked concern by some of the folks that domestic demand is slowing down there. how is this going to feed through? >> well, we're looking still for about 8% gdp growth out of china but i think over time continuing to slow. and i think it will continue to slow from an from your and metal perspective. i think they will continue to grow the consumer and some of the internal type of stuff. from a steel, aluminum, copper that type of a perspective that will continue to slow into the future. i think the material sector will go into structural decline over the next several years. >> what's your price target for alcoa at this time and who are you turning your focus to now? >> have an $8 price target. we have a sell rating on the stock. we're looking to buy anything for you from at that long term perspective we would look at some of the coal stocks who have been beaten down considerably. if we think there's an economic recovery and wrong we could be playing a freeport-mcmoran. >> we'll keep an eye on price and those companies as a result. david appreciate that. >> so google will pay a fine to settle charges it bypassed the privacy settings. this is the largest fine levied on a single company. the case involves google's use of code or cookies to trick safari into allowing users frk tracked. u.s. regulators barred futures broker from doing further business. the moves come amid a prove of misappropriating funds. the national features association says peregrine claimed to have $400 million in customer accounts. >> we heard that one before. corn and soybean prices surge monday after the usda report ad widespread drought and the midwest is hurting crops. government says 30% of corn in 18 states is considered in poor condition. indiana and illinois that number above half. the usda says nearly a quarter or more than a quarter of the soybean crop is in poor condition. take a look at what's happening at price. july corn futures were up on monday. denny's is taking its grand slam breakfast and moons over miami omelette to china. they signed a franchise deal with great china international group to open 50 new rest ants in the country over the next 15 years. the first location could open its doors as soon as next year. it's time to invest in china health care stocks. >> makes me hungry. let's just recap four what's been going over on at barclays. the outgoing chairman of barclays, marcus agius, sticking around to passaic new ceo is testifying to treasury select committee here as we speak answering questions from lawmakers in this country. he also announced fright the beginning of that testimony that bob diamond has foregone his severance package. he'll take pay, pension and benefits for this 12 months but he's foregone 20 million pounds of his severance package and saying relations with the fsa have been strained and he left because he felt responsible for barclays reputation. thanks for watching. >> we'll both be back tomorrow. here's u.s. "squawk". >> good morning. if you're waking up and groggy, it's tuesday it says here, july 10th, 2012. among our top stories china's trade surplus soars to the highest since january of 20 oat. alcoa kick off earnings season with a better than expected report although a loss and $8 stock and has been forever. more than $200 million in client money is missing from a midwest brokerage. b "squawk box" starts right now. good morning and welcome to "squawk box". you're on cnbc. i'm a