Transcripts For CNBC Worldwide Exchange 20121206

Rates and bond purchases. Timothy geithner has drawn a line in the sand. He says the white house is prepared to go over the fiscal cliff if republicans dont give in on higher taxes on the wealthy. You can see were weighted to the up side by a ratio of 8 1 at the moment. Finland is not trading today, so you may see some quotes not doing very well. We saw apple stock having the biggest loss in four years. The ftse yesterday slim gains really. Up 0. 4 , the dax up a quarter of a percent. Is this a this is where we stand as we wait for the announcements from the ecb. Were up at a 52 week high for the xetra dax. Cac 40 up half a percent and ibex up half a percent, as well. Take a look at bond yields. We looked at that auction yesterday from spain. They raised 4. 3 billion. Years went lower. Nevertheless spanish yields today 5. 4 , slightly lower from where we closed, but they did move up substantially after a handle of 5. 2. Well keep our eye on gilts, as well. Well look ahead to the bank of england. Nothing expected from them, of course. 1. 8 . David miles was the only man who voted for more qe at the last meeting. As far as currency rates are concerned, eurodollar at the moment 1. 3068, just below the highs during the says. Dollaryen fairly contained. Sterlingdollar steady 1. 61. So pretty much as you were on some of those compared to this time yesterday. So what about the sazian session . Only one lady to tell us. Thank you, ross. Asian markets ended mix. Japans bourses outperformed the region. Despite a slight improvement in november corporate sentiment showed weakness. Knee sap finished lower as they planned to recall nearly 50,000 cars in japan. Shanghai composite pulled back after yesterdays 3 surge. Investors booked profit. Property developments seemed to have legs. The hang sent also ended marginally in the red. Hsbc came under pressure after reports say it may pay a 1. 8 billion fine over the money dering scandal. In australia, strong jobs data failed to boost the market. The asx 200 finished lower by a quarter percent. Sensex still in action now trading lower by 0. 4 . Back to you. All right. Catch you later. Apple had its worst day in four years dragging down the nasdaq. Different story for the dow. At one point dow was up more than 100 points. The last time the index closed up triple dinlg et gains, the way back in may two 2. Joining us for the first part of the program, nick khar. Thanks for joining us. Xetra dax up 52 week highs. Which is sort of interesting in several. Nokia down 9 over the last five years. And i guess the apple story if youre a bear is a potential nokia story, a story about a company that is dominating its space at the moment, but priced for perfection. So who knows if there is a disappoint coming. But if there is, theres not much margin for error. Gr it all depends on whether well be buying other products other than apple in five years time. Its a very rapidly changing business. The Technology Field is a rapidly changing group. Think of sony at one time. You now theres a recent survey showing that its had a lower than some of the korean mfers. I find xetra dax performance particularly is fascinating bearing in mind where we are in terms of the macro story and germany might well be floating certainly a big departure in the sense that the german stock market has typically traded in line with the German Economy and this is a big divergence. So thats a change. But looking over time, all stocks have the component of what they call the economic return. Speculative return which is it for change and the valuation that the market puts on it. Over time, one is a possum gain and the other is zero sum gain. Sometimes good news, sometimes bad news. But over time the kind of net being nothing. Well see what happens. Good to have you on. Well be out in westminster, joined by the british shadow business secretarier to. Well talk currencies. Find out why one strategist is bullish on the currency. After the ramp up in m a that weve seen this year, well also speak to an expert in los angeles that says the fundamentalses for deal activity in 2013 are looking more solid. So where will the money flow in the new year, thats at 11 20. And the outlook for u. S. Credit market appears less rose city. Well speak to a moodys analyst that says high duration credit could be badly exposed. The European Central bank is announcing either Monetary Policy decisions later today. Economists expect ecb to stay pat on rates. Its revised down its forecasts in 2013. Hot on the heels from her stint in brusselss, silvia has moved back to frankfurt and the ecb headquarters. How more pessimistic might they be today in their forecasts. Thats the big question. If they get too clee to the zero for the forecast next year, anything below lets say 0. 4, 0. 3 would be considered a little bit more bearish and that would of course increase the chances or risks whatever you want to look at it for further rate cut somewhere down the pike early next year, maybe january or february. The consensus for today is as you said no change on rates. Remember a month ago, there were many calling for rate cut this month, but that seems to have receded right now. Maybe also because the data we see out of the eurozone is rather mixed. Everybody quite agrees that foirlt quarter is probably pretty glum, but consensus on the continent with many of the central Bank Economists is that at least for germ any, we probably see more of a sideways and stabilization movement next year, so maybe not the kind of falling off the cliff. So interesting to see how pessimistic the ecb will be in their latest round of forecasts. Also what are we going to hear on the further allotment procedure for their regular repos. How much will they determine or predetermine the full allotment will continue. Many would like to hear that greek assets will be accepted again as collateral. That of course would be a bit of a refinancing game changer. Plenty more to come from silvia over the next four hours. Nick, what are you looking for from the ecb today . I guess theyre going to do nothing. If they downgrade it too much, silvia will wonder whether we do get an Interest Rate cut at some point next year. Thats always possible, but i dont think its really Interest Rate policy thats its not material. Its a bit symbolic at this point. With the absolute level rates so low, if youre a borrowing, its more to do the spread you payoff the magical rate and were definitely in n. Sort of tokyo territory. I mean, if youre paying 100 basis points, no one really were rows at the ecb rate. Thats the point. If i would, i could, you know. We also have the bank of england meeting today, as well. Expected to hold rates. Its more about autumn budget statement. Bank stock purchases currently standing at 375 billion pounds. At the same time, the Opposition Party pouring cold water on osbournes plans. Well speak to the shadow business secretary straight after this. Can i help you . I heard you guys can ship ground for less than the ups store. Thats right. Ive learned the only way to get a holiday deal is to camp out. You know weve been open all night. Is this a trick to get my spot . [ male announcer ] break from the holiday stress. Save on groupping at fedex office. Chinese equities ended mostly flat today. Marginal suggests investors still hope for fresh stimulus. Insurers were in focus. China state picc group raising more than 3 billion. Its the territorys biggest ipo in into years. Still to come, didnt have to price it toward the bottom of the indicative range, maybe a sign that the appetite from the listings remains week. And managing liquidities also a priority. This week the pboc switched back to pumping money into the Banking System after withdrawing more than 40 billion over the last month. Reports suggest possible 1. 8 billion is a moderate amount compared to what the pboc is used to putting in. Andrew, very strong session yesterday for shanghai. Flat today. After a period of underperformance, will it turn around or not going into 2013 . Well, i think in the recent couple of weeks actually, were seeing quite positive Economic Data coming out of china. Pmi is improving. And Consumer Sentiment is the highest. And for the past five months. But this have not translated into a more robust market. This is because for the past two quarters, there is all bad news. So there was kind of negative feedback loops that caused the market to be oversold. And then it takes time for sentiments to turn around. And theres unless theres very positive numbers coming up and theyre not at the moment. And the lead up to the Party Congress is anything but certain, so there are lots of worries and doubts leading up to the final 18 Party Congress. And now that the leadership is installed, there are more positive signals. And it also takes time to work through. And then you will look at the consumption figures. Generally coming up quite nicely. But tend to be in the mass market because again the leadership has shown quite clear signals to crack down on corruption, and this may have an impact on Luxury Products. Well come on to Luxury Products a little bit later. I want to focus on investor appetite. Picc Group Pricing near the bottom of the rate. Which again suggests there isnt a lot of confidence. Yes, as i was saying, the market is still an uncertain mood remaining. But if you look at not only clear signals, but clear plans and strategies all laid out, there is no doubt that the leadership has been much more powerful than before. There is a great deal of emphasis on sustained long term bou bounds slower high quality growth and this is driven by the Largest Organization process possibly in human history. Were seeing a lot of consumption of the chinas middle class. So i think it all is positive sentiments. The government is pumping more money, drive the infrastructure development. And i think that in the medium term over say the next couple months, the losses should be much better. All right. Andrew, thank you. Stick around. Well come back to you you and talk more about the luxury sector. Nick has views, as well, on the chinese stock market. Speaking to cnbc a day after delivering his autumn statement in parliament, he said the budget plan would continue to attract investment to the british dealt markets. We have to get a control on spending. Thats why im operating benefits by less than the rates of inflation. Its forecast to continue to fall, so we are making progress. Britain started with a large deficit, but were getting it down. Youve drawn criticism about the lack of supporting growth. When will we see measures that booth the long term growth of the economy. I think you see two sorts of measures. Big Structural Reforms to education and welfare, but also yesterday changes to our tax regime. So we now have one of the Lowest Corporation Tax rates of any major economy in the world. Weve just cut it so that it will be 21 , much lower than our competitors. And weve also greatly increased the allowances for small and medium sized firms so they can invest and expand. So where weve been able to help businesses, weve absolutely done that, and weve had very positive reaction from the business community. How concerned are you about the aaa rating and the risk that we continue to drift, still need to cut more and boost growth . Well, weve got to go on commanding the confidence of the world that we can deal with our debts. That is reflected in the very, very low Interest Rates that we get at the moment for gilts. And of course thats the test, how much are investors will to go pay for our money f debt. And it scheme that failed to solve the problem and funding for lending hasnt delivered yet. We thought we would get more details about a Small Business bank to help address this market failure. We didnt see that yesterday. And if you look at the wider picture, yesterday was not at all a cause of celebration. Of course he missed the second of his two fiscal mandates which was to see falling by 2015 16. And yet again where he have seen multiple downgrades on a whole host of measures. Business investment for three of the next four years has been rae viced down. Weve seen the growth forecast for 2012 revised down to 0. 1 . So were still in a very fragile situation. And if we compare ourses to our international competitors, our economy here in the uk is growing by 0. 6 , whereas in germany, weve seen growth of 3. 6 . In the u. S. , growth of. 1 during the same period. So certainly not a cause for celebration. Still a difficult operating environment. Under the former chancellors plan, we would have been borrowing less in the next three years. Because the government has failed to get our economy growing and because the policies have pushed us into recent double dip recession, theyll be pr rowing 212 billion pounds more than they planned. Put that in context, that is the equivalent of what we in the uk will be spending this Financial Year on health, transport and defense in aggregate. You were talking quite rightly about the low level of he have credit growth in the uk, which has obviously been a feature of this period. But theres a question of whats cause and whats effect there. The banks will tell you that that problem is not so much availability of credit, theres Credit Demand and even in the mortgage sector which under normal circumstances you might have been eager to see people borrow money. Were seeing net repayments for the first time for a very, very long time. So you can take the economy to water, but you cant make it drink. How do you respond. I say of course the banks would say that, they would say the problem is all the Economic Outlook and what the government does and of course the government will say its the banks, both of them have to work this tandem to get credit to businesses. We dont have the same kind of culture in our banks here in the uk as they do in germany. Local saving banks which actually see part of their purpose ensuring those access to credits for those Small Businesses. They dont think theyre operating quite the same way here in the uk. For example, local Bank Managers relationship managers are not given the sap kind of discretion to make lending decisions in respect to businesses in their community that they know that they see every day. So we have to change the culture in our banks. But there is also a market failure in terms of having a Financial Services sector of small to medium sized businesses and thats why p opposition is arguing strongly for British Investment bank. Were alone in not having a state backed Investment Institution to plug that market failure. And i think the officer of budget responsibility, our independent Fiscal Council here, has made clear part of what is Holding Back Growth is this credit problem that we have. Now, sure of course the eurozone affects the wholesale money markets, but there are things that you can do domestically to address that. And if you look at, say, sorry to use germany constantly, but during the liquidity crunch in 2009, germany Investment Bank kfw was able to immediately double the amount of money that it was making available to smes when we had the liquidity crunch there. We didnt have a Similar Institution to do the same here in the uk. You could have fully nationalized rbs and then done what you like with it. If banks have to hold more capital, there is less money in the system. It seems to be a fact that politicians dont seem to recognize banks have to hold more cash, there is going to be less money in the economy. With the greatest of respect, weve got member of our financial policy committee, the committee at the bank of england that oversees Financial Stability who have said that is a bit of a red herring. And if that were the case, they wouldnt have seen the bonus paints that weve seen in the Financial Services sector as a whole during the time that theyre supposed to be repairing their Balance Sheets. So im not sure i totally accept that. All right. Thanks very much indeed for joining us. Well take a short break. Still to come, citigroup has shed 11,000 moves. Will the shake up be enough to get the bank back and boost its share price. Well discuss. [singing] hoveround takes me where i wanna go. Where will it send me. One call to hoveround and youll be singing too pick up the phone and call hoveround, the premier 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. 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Forecast here forecast at 8. 65, so that is a wide deficit than forecast. Adjusted 4. 5 billion. Sterling not reacting huge amount. European stocks today are firmer. Up 0. 4 for the ftse. Xetra dax continues its strong momentum, we are trading at 52 week highs and up now about 27 for the year. Bond markets which is where we stand with yields, spanish ten year yields slightly lower, but we were 5. 2 beginning of the week was the handle. Currency markets, not huge changes. Eurodollar just below 1. 31, dollaryen 82. 44. Euro trading, though, at a fresh day high it must be said. We have comments coming out of china on the smartphone segment. Apples rang in china Smartphone Market which will become the worlds biggest this year down to number six in the Third Quarter. Facing tougher competition from chinese brands. This is the Research Firm idc coming out with this and that Third Quarter ranking is two spots below the position in the second quarter. This is all in terms of the chinese Smartphone Market share by shipments. It was under 10 in the Third Quarter, as well. So that release comes after the day when apple stock down more than 6 yesterday. We saw nokia stock up 9 yesterday on comments that it was getting with the biggest operator in gchina to sell its smartphones, as well. 3 in frankfurt. So well talk about that. Prada has seen it shares rise more than 80 this year. The retailer due to report earning later today and could pop by 30 in the Third Quarter on a year on year basis. Andrew, you were alluding to this earlier. Government sort of clamps down on corruption, will that make people more averse to spending money on luxury or not . Well, i think at the very top end, youre talking about very expensive diamond watches, youre talking about handbags which was sort of over 100,000, that kind of thing. There will be a great deal of caution as leading Congress Party tishls aofficials are eit on house arrest or charged. Theres bound to affect sentiments of the very top especially government officials ob supporters or bribers if you like. But i think overall the Market Sentiment as far as consumers are concerned, there is no doubt that there will be an uprising trend. Because growing internal domestic consumption is now a Firm National strategy. But the luxury market, i think buyers are slightly more stratified as compared to western markets. So were seeing top Luxury Brands developing the kind of mid price ranges to suit the market. And i think we should watch very closely. But, yes, in the short term, the fight against corruption is bound to have a Short Term Impact on the sale of luxury goods. You had a question earlier about the structure of the Chinese Market. Yes. What i wanted to ask, andrew, when we look at the chinese economy, we can see something thats been we dependent on the high level of Capital Investment spending. And about if we look historically, those episodes with typically ended badly in one way or another. In the short run we have activity coming from the various programs. But how do you see the big picture in china . Theres definitely a narrative that says high levels of Capital Spending lead to poor profitability and maybe thats what the stock markets had a sniff on over the last 18 months. Where do you think we are in that story . Well, no doubt its driven by capital like all Capital Investments. And where are the investments going . Theyre going to chinas massive infrastructure. Dont forget china is still in the middle of a Largest Organization exercise in human history, building Something Like 221 new cities. So theres no did you tell that some of the buildings and roads or even shopping malls may in the short term appear empty. And then that fits into the kind of speculation there will be a huge asset or property bubble thats bound it on burst. But dont forgetbeginning, a lo buildings. And dont forget the speed of the urbanization process is going on in china. But as a National Strategy also to balance the economy away from the capital kind of investment towards domestic consumption as i was earlier referring to, dont forget a lot of the empty buildings and now theyre going to be occupied eventually by workers or having higher wages. And you see the rise of the chinese middle class. So eventually there will be a greater balance toward domestic consumption and the speed is by no means slow. Andrew, thanks very much fors today. On to banks. According to report, exdeutsche workers lodged a capital with the u. S. Authorities alleging the bank failed to recognize 12 billion in unrealized losses at the height of the financial crisis. They claim improper accounting on the part of Deutsche Bank and able to elaborate its Capital Position and avoid a state bailout. At the same time, further settlements for department Standard Chartered Fourth Quarter earnings. Fines of around 30 million will be payable on top of the 340 in fines already paid to new york state regulators in the Third Quarter. But despite that, q4 earnings will still ygrow in the mid single digit range. Presumably actually clarity on fines is good. It brings closure. Several thinking it could be several multiplmultiples. So improved visibility on that is definitely a positive. And here is city saying theyre cut 1g 1,000 jobs. Standard chartered is talking about hiring another 2,000 jobs. And if they get an increase in earnings, another record year. Theyre extremely well positioned. Theyre in the sweet spot of the Global Economy, where thes fastest growth is to some extent. Asia, indonesia, africa. They have a very strong Balance Sheet. So theyre in the position to really gain market share even in the context of a slightly slowing macro picture. But interestingly since the Third Quarter ims, we heard today from Standard Chartered again and they were quite upbeat particularly for the likes of singapore and i sandia and so forth. So outlook for revenue is actually quite positive and its on quite a low multiple and could easily rerate towards 12. So you reckon own it. I think so. Even if the the Growth Prospects were quite limited, i think the Balance Sheet strength alone justifies expansion. I think its quite attractive certainly to the rest of the sector. Citi shedding 11,000 job, around 4 of its workforce. Some say its part of a strategy by the new ceo. Citi shares were up on that. So what do you make of ubs getting out of fixed income, citi shedding a huge chuck of jobs. I would actually go much further than that. Weve had an a revolution. Pure to pure growing at 50 per annum. I think its time to redesign the way they do banking. Some of the peer to peer lenders are ten times more efficient than banks. So there is an argument that you can do Retail Banking with 90 less people. Its quite a radical view, but i think that there is a huge scope for process redesign in terms of Retail Banking. We shouldnt be pushing bits of paper. Whenever i try to make an international payment, i have to talk totosomeone who manually puts all the numbers in to i dont know where. But its much too cumbersome relative to what youre seeing in terms of innovation. Ive hated my bank for sort of 30 years and im still there. They rely us on. Accomplicomplacent banks wilt behind. Or these peer to peer lenders, the whole payment space is also wide open to internet innovation. If the banks dont it fundamentally evolve, they will be replaced. Most industry revolutions dont happen from within. Some kind of new stern comes along. Automatic though in theory you think the guy who is making carriages will make cars, never seems to quite work like that. I take your point, but banking is still the same old crowd in a way, isnt it. Im sure they do hfrthere th new apple, no new organization coming to break. I would agree, but i would go back to i think it was bill gates said people tend to overestimate what they can do in three years, but underestimate what they can do in ten years. Maybe for banks its 20 years. But if you go out to to 20 30, i would argue the banking landscape will be hugely changed. Good to see you. Aerospace shareholders have agreed on a deal designed to make eads more independent and will hand an equal 12 stake in the company. Stefane joining us thousand. Is this going to happen and if they get to this position, will they try and have another go with bae . We dont know if they will go with bae, but the plan a few months ago was the main reason they needed to share their governance policy. But it will reduce political interference in the company and make it more attractive to private investors. Government will cut their total stake to 30 which means that 70 of eads will float freely on the market. The french and German Government have agreed to have a 1212 stake each in the company. Spain will have 4 stake. Which means european government will no longer have their say in running the company. Apart from strategy differences, they will no longer be able to name Board Members and they wont have veto rights anymore on commercial decisions. But the new government rules wont take effect up mid 2013 at the earliest because the shareholders will immediate to vote on that new governance and Share Holding structure. For the french government, it currently has 15 stake, so basically it will put a part of his stake in a trust fund and will have to give up the voting rights. Held have to buy 12 from daimler. And theyve decided to sell 7. 5 . 61 million shares. Its been announced just a few minutes ago. Has anybody spoken to Angela Merkel to see whether shes happy with this . Apparently both governments say theyre happy with this decision. But after the last time when they didnt bother to check with the german chancellor and assured us that it was all fine. I just wonder if thats done it properly this time. Stefane, thanks for that. Off to japan thousanow where ni has had a set back. The story from tokyo. Nissan says it was recall half a million compact calls starting tomorrow. It covers the c plus c produced between february 2002 and february 2009. Rear lights may not work when reversing and braking due to wiring problems and they will offer free repairs. The problem hasnt caused any accidents or injuries so far and only applies to cars sold it in japan. In china, auto sales are slowly recovering and this is good it news for nissan as the Chinese Market accounted for 26 of its global sales in fiscal 2011. More than its japanese peers. Nissan sales in most of were down 30 from the previous year, but a slight improvement from october when they sold more than 40 due to political tensions between china and japan. Nissan says that the number of customers walking in to its chinese dealerships is returning to previous levels. Thats all from me. Back to you. Okay. Thanks very much. Still to come on the program, as Western Banks continue to struggle in the aftermath of the financial crisis, well find out why one firm is betting on it. Now going to south korea. Grew just a 0. 1 from the previous quarter which is the level we saw in the 2008 Global Financial crisis. This come oscos delaying putting capital to work given one stalled exports to high Household Debt shrinking consumer spending. And local firms on which hold back on Capital Spending ahead of a president ial election and we have one on the 19th of this month. Market consensus is that the bank of korea will cut key rates again in the first half of next year to perk up the economy. And in reaction to this, the korean yuan weakened against the dollar and many traders stayed on the sidelines while keeping an eye out for the possible intervention. The yuan thats gained about 9 since may is worrying to korean officials here since the economy is very much driven by its exports. Ross, back to you. Joining us for more, strategist at bnp paribas. So, look, growth came in at more than three year low. What happens to the korean yuan now . Well, it has been quite well supported, but it hasnt been able to put the mark against the u. S. Dollar. Bok is worried that the yuan is a little too strong against the yen. So i think its interception that stopped the yuan from appreciating. The macro drivers be it strong fundamentals, relatively high yielding currency, that still i think puts it in fairly good light of appreciation. Japanese government bpds, ten year futures at a record high. Media reports suggesting Opposition Party could win a solid majority the next election. So what is the on the yen side of that trade, what are you forecasting . The market is aware of that and the Opposition Party if they do win, they could pressure the boj to try to do more in qe and that would tend to weaken the yen. So the yen is a carry trade back into play over the last one month and shorts have increased significantly over the last one month. So i think that as well as the better macro story in asia has led to quite a few carry trades against the yen and the yuan being one where it has outperformed the yen significantly over the past two, three months. South korea sort of dumping a lot of the currency in november, trying to slow the rally. Are they going to be anymore successful than they have been . Its a mixture of that as well as attempts to reduce speculative lays on the forward so they have for example reduce d the cap on swaps outstanding. But i think players are a mixture of real players and if you do believe that the Global Economy is on a better footing next year, then certainly exports would start to look better and that would feed into stronger trades which will support the korea yuan. I think there is still asian assets not least well graded sovereign investments, particularly korea. So the inflows of the korean stock and bond markets remain strong particularly as well if you think bok has another lost rate cut in its pipeline that will serve to support korean assets and therefore the korean cr yuan. All right. Thanks so much for that. Good to see you, a well, this morning. Thank you very much. Stricter regulation in the worlds Top Financial Centers like london and new york, more investors are wondering whether they might want to use the middle east to trade in foreign currencies and commodities. One up and comer, ads securities. Yousef spoke to the managing director. With a kind of mood was he in, yousef . Well, thats a good point to pick up on. There is growing interest. Not just within the region, but from around the world. I saw down with one of the industry players from ads and heres what he had to say when it comes to why abu dhabi met the bill. Infrastructure. People, the workforce. We have quality people coming here here. Three the relations that you have, the whole world wants to play to abu dhabi, they think they come with the briefcase, take the moechb and go back home. We have them here. We meet them comfortably and we do the deals with them here. So with a do what do you want that . Their argument is theyre trying to fill a gap in the Global Trading cycles and ultimately build a price for abu dhabi. Its a fascinating conversation. Tune in later today for his outlook on 2013. All right. Thats the latest out of the middle east. Dont forget still to come, companies speeding up Dividend Payments and rushing to close deals before the end of the rear. Will the looming fiscal cliff cast a cloud or not . A new report from pricewaterhouse cooper. Recap of the headline, Timothy Geithner draws a line in the sand. Tells cnbc the white house is prepared to go over the fiscal cliff if p republicans dont give in on higher taxes on the wealthy. No change seen at the ecb. Draghi expected to hold off on rates and bond purchases. Central bank may cut its forecasts for 2013. European stocks in the green in early trade. Cheering the new aerospace Ownership Structure. Yesterday dow with triple digit gains, nasdaq negative move. Rate now about 24 1 2 points above fair value for the dow. S p 500 four points above fair value. And were, what, two and a quarter points above fair value for the s p 500. Ftse 100 up third of a percent. Xetra dax up a 52 week high at the moment. 87 points higher. And the cac 40 up 0. 6 . Its worth pointing out nearly 26 is the gains this year for the german market. We did tease you with the bonds. Spanish 5. 1 , slightly lower today. Didnt quite raise the maximum with that auction that we spoke about yesterday. So this is where we stand at the moment on the currency markets. Eurodollar steady at 1. 3078, but not far off the session high. For a recap of asia, lets bring in lisa once again in singapore. Thank you, ross. Mixed day of trade for asian markets after yesterdays rally. The nikkei outperformed hitting a more than seven month high on a softer yen. Despite a slight improvement in november, Japanese Corporate mood showed persistent weakness prompting more easing hopes after the election. Electronics and automakers were broadly higher, but nissan finished lower as it planned to recall nearly 500,000 cars in japan. The shanghai com positive the pulled back a bit after yesterdays 3 surge. Investors booked profit. But Property Developers extended gains from yesterday. Hsbc came under pressure after reports saying it may pay a 1. 8 billion fine over the Money Laundering scandal. Gains in steel makers helped push the kospi higher despite korea q3 gdp grew at the slowest pace since lehman crisis. Australia, investors shrugged off strong jobs data. Sensex gained 0. 6 today. John boehner and president obama speaking by phone, but no announcement of any upcoming face to face budget talks. Earlier the president told the business round table that a deal to avoid the fiscal cliff could be reached quickly if republicans drop their opposition to raising tax rates on the wealthy. And in an interview on cnbc, Timothy Geithner says the gop is making a little bit of practice, but the white house is absolutely ready to go over the cliff if tax rates on the top 2 dont rise. Our obligation is first do no harl. We need to lift that threat over the economy. And now as part of that, wed like to put in place as i said a carefully designed mix of reforms to put our fiscal balance in the path of sustainability. As long as there is recognition by the other side that those rates will go up, we think we can reach an agreement on the set of reforms as i said that will be good for the economy. Republicans were quick to hit back. Orrin hatch called them stunning and irresponsible, but there may be more cracks in the ranks. Washington post reports some moderate and conservative republicans are calling on boehner to concede on taxes now while he still has leverage to ask for something in return likely sbiltsment reforms. Larry hathaway joins us for more. Wlarry, good to see you. Geithner says do no harm but theyre prepared to go over the cliff. I think its rather disingenuous. The administration feel it is has wind in its sails from the election and is trying to push the mandate on the issue of mar again al tax rates. I think the risks of going off the cliff are quite high. It may not be the base case just yet, but a greater than one this three chance simply because either the leadership in the house and the white house wont find agreement, or the rank and file in the house wont go along with the compromise that its leadership strikes. Ive been working on the assumption that theyre not that stupid or are there tactics if its only for a few days then we can get Something Else going . Im not so sure about the idea that you can sort of go over the cliff and rapidly pull it back. Legislation takes time to work its way through the system. With holding taxes will put a dent in the purchasing power of consumers and that will dent confidence in the consumer sector. It could begin a snowball flooz would be difficult to reverse. One in three is worryingly high. I would agree. And i dont believe the markets have any such concept of that. Which is one of the reasons why im suggesting to people when i speak to them be careful, the next few weeks could actually be problematic. We didnt have an awful lot of time here because you say it takes time to get legislation together. Just from the practicality purposes of scheduling it, voting trk enacting it, weve only got until the end of next week. I would tend to degree. Your possible drop dead date is december 21st which obvious let congress and the president will essentially want to enjoy their holidays like the rest of us. And that doesnt leave us much time, a little over two weeks. So whats the key then to getting a deal done . The key is going to be along the lines what have geithner said. Is there any way the administration is going to drop doesnt seem theres any way theyll drop the 2 having to he pay more taxes. Thats like that is a red line. So the old adage politics is the art of the possible. So the red line can of course be shifted somewhat. The top rate could go up. A figure leaf for the administration, a form of compromise that many republicans might be able to agree on. But i think its on the other side. Its the willingness of the administration and the entire Democratic Party to put entitlement reform on the table. If they do that, republicans can say that for every dollar of additional tax revenues, were getting, say, 2 1 2 dollars worth of expenditure cuts, a deal probably can be found. So we have to look on the entitlement side. Indeed. All right. Stick around. Its that time of the month, ecb announcing policy. They think they will revise downward drafts for 2013. Sti silvia is in frankfurt. How much more down beat might they be about 2013 and what are the policy implications of that . Thats exactly the sort of million eurodollar yen or whatever question. If they go significantly below the 0. 5, lets say below 0. 3 closer to the flat line, i think the chances rise exponentially that well see another rate cut in january, maybe february, but sometime in the first quarter. If they stay close to the 0. 5 , then maybe we can keep rates on hold as it is. Bottom line is the rates where they are, it doesnt make an awful lot of did i have any more in terms of boosting the economy. Lets face it, if somebody really has a refinancing costs that are close to where we are at the moment or in the real economy, real Interest Rates are often enough even below the 0. 75 , that complaiant be the breaker other maker. I think its the confidence that needs to return to the economy and to the markets. And thats of course very tight rope act for the Monetary Policy. The big game changer in terms of sentiment so far has been the announcement of the omt program. It might be the cheapest program yet if they never actually have to embark on it if the verbal intervention did it all together, but we still have problems with the often cited transmission process in the markets, we still have problems with money not ending up in the socalled real economy, but sort of basically dead ending in the banking sector. So were going to hear a little more about that. At the moment, the feeling is the prevailing view when you talk to economists from the Central Banks that for the core eurozone, we still have more size ways movement into the new year. So we still live on the hope factor. Not impacting german stocks. Up 26 this year. Amazing. You might not think there was a crisis if you look at the stock market. Silvia, for now thank you. The bank of england going to hold rates steady at half a percent. The question is of course after the bleak growth of fiscal prospects outlined yesterday, whether they may reopen the taps in terms of most of quantitative easing. Larry, is there an argument for the bank of especialof england . I think there is, but i doubt that they will. For a couple of reasons. First of all, youve lost your biggest row poe nen biggest proponent of doing more. The balance of votes is much more neutral than before. Theyll probably let the funding scheme run a while longer. Maybe they could be more imagine difference instead of just buying government gilts, whether they could buy other assets that might be more beneficial. There seem to be signs that theyre thinking along those lines. Yeah. Central bankers are i think gradually coming to the conclusion a loot of the tools that have been put in place now havedy minute ugs returns. Precommitments to holding rates lower, asset purchases of an ordinary variety. So they are thinking differently. Funding for lending has i think caught on. Capture the imagination. Ultimately in a small economy, you can certainly think about the currency, although i rather doubt theyll go in that direction. Seems to be having some impact in Mortgage Rates. Seems to be Mortgage Rates now, competition in the mortgage market. A bit more going on there. And again the reason why the banks will probably hold for a bit. Okay. Larry, youre leaving. Sorry. I thought we had more with you. But thank you vef. Dont forget cnbc has extended Coverage Today in europe for that bank of england Rate Decision. Thats at 12 00 london time. Apple mad its worst stock drop in four years and we see their market share in china declining, as well. Is this reason for investors to lose their appetite for the tech darling. Having you ship my gifts couldnt be easier. Well, having a ton of locations doesnt hurt. And a santa to boot [ chuckles ] right, baby. Oh, sir. That is a customer. Oh. Sorry about that. [ male announcer ] break from the holiday stress. Fedex office. Yep. The longer you stay with us, the more you save. And when you switch from another company to us, we even reward you for the time you spent there. Genius. Yeah, genius. You guys must have your own loyalty program, right . Well, we have something. Show her, tom. Huh . You should see november oh, yeah . Giving you more. Now thats progressive. Call or click today. Timothy geithner says the white house is ready to go over the fiscal cliff if tax rates on the wealthiest dont rise. Investors looking for ecb guidance when draghi announces the Bank Decision later today. And stocks in europe are trading higher. Aerospace giant has unveiled its ownership restructuring plans. Apple and samsung are heading back to a californian courtroom today to renew their dispute. Hearing starts at 4 30 eastern. Samsung wants the court to toss out a jury verdict for patent infringement. Apple wants to block some sales of Samsung Smartphones in the united states. Apple suffered its worst day in four years and may be creediedi ground in the market. 417 companies in the s p have a market cap below 35 billion. In frankfurt right now, apple stock down 3 . Im afraid more bad news, as well, coming out of china. Because apparently apples rang in china Smartphone Market which will become the largest this year is down two spots to number six in the Third Quarter. Suffering tough competition from chinese brands. This is according to idc. They say the u. S. Market share in china under 10 in the Third Quarter. Idcs release comes a day after the stock fall. So there will be more concerns about where aem goes in terms of its pricing and sales and shipments. Elsewhere a study has found reforms adopted in 2010 helped to strengthen the Money Market Fund industry. But it wouldnt have been able to prevent breaking the buck. Calling for below 1 billion a share. Doesnt make any new policy recommendations, but was ordered by three sec commissioners and theyve been reluctant to support any new reforms put forth by mary shapiro. And john mcafee has been arrested in guatemala just hours after he applied for political asylum. Hes expected to be expelled to belize where hes wanted for questioning as a person of interest in the murder of his next door neighbor. He says he fears authorities would kill him if he returns to belize. The countrys Prime Minister denies the claim. He calls mcafee paranoid and bonkers. Mcafee founded the Software Company that bears his name but is no longer affiliated with the firm now opened by intel. Still to come, firms are declaring special dividends and rush to go close deals before the end of the deal to avoid potential higher taxes next year. Will the fiscal cliff cast a dark cloud over m and a. Mom . Dad . Guys . [ engine turns over ] [ engine revs ] hell be fine. [ male announcer ] more people are leaving bmw, mercedes and lexus for audi than ever before. Take advantage of exceptional values during the season of audi event. More than 150 companies have declared special dividends to get ahead of the higher taxes next year. But some say companies are rushing to complete deals. So is the fiscal cliff the biggest impediment right now for the m a market . Joining us is u. S. Leader of m a practice at pricewaterhouse which is forecasting sustaineded activity. What impact is the fiscal cliff having . Its impacting the level of activity in the final quarter of 2012. We are seeing acceleration. If we look at volume and values of deals in october and november, we popped up 10 , 15 above the average after the previous nine months. So i think if you were contemplating the deal between september of this year and march of next, the likelihood is youll try to pull it forward to try to take advantage of the Capital Gains tax certainlily. So if youre rushing through this year, there will be a lull in the first quarter. Yeah. I agree. I think we will potentially see a lull in the first quarter. But on the assumption that we do get past the fiscal cliff with successful resolution, which i think were all optimistic we will, i think fundamentals are strong. We have corporate Balance Sheets still strong. We have private equity with a lot of available cash. And general improvement in confidence. And i think with the certainty of the uncertainty of the president ial election behind will us, im a optimistic that well see more activity through 2013. Whats the rationale . Are they buying growth, expertise . Why are deals being done . If you look at the drivers, there is a lot of private equity activity. Thats been the very he sort of positive factor in my mind when you look at the overall decline in deals in the u. S. Pe is investing because theres opportunity to add on to portfolio companies. I think they have available capital. I think there are good assets being brought to market. And i think if you have available capital, you can take advantage of Pretty Healthy debt markets. You can get deals done in this market. And so this is interesting because that suggests theres people prepared to fund these. Are they able to raise debt easier than they were, an appetite for high yield . Absolutely. The debt markets have been very healthy and thats been a stimulus. Weve been spending a lot of our time at pwc working with private equity clients. And generally the debt markets are a stimulus at that point. What about across sectors. Whats the standout and what will be the leader next year . I think it would be telt care, Financial Services. Again, all will benefit from the point of view that there is more certainty. Technology is a sector we continue to see our clients busy in. And in consumer and industrial, were seeing increased level of divesti divestity chur activity. So thats again we could see plenty of good assets coming into market. All right, martin, thanks for that. I know its still early doors. Just a reminder on the agenda today in the united states, weekly jobless claims at 8 30 eastern. Forecast to drop by 18,000 to a total of 375,000. On the earnings front, look for results today from h r block, cibc, td bank, smithfield foods, Harry Winston diamonds and eclectic bunch of companies. Still to come, what other rate risks lie ahead in 2013. An outlook from moody analytics. Still to come, what other rate here will your headlines today from around the world. Timothy geithner tells cnbc the swhous prepared to go over the fiscal cliff if republicans dont give in on higher taxes on the wealthy. No change seen at the ecb, draghi expected to hold off on rate and bond purchases as he awaits spains request for help. The central bank may cut its forecast for 2013. And european stocks firmly in the green in early trade led higher by eads as the new Ownership Structure is cheerd. Plus apple shares take another leg down after recording their worst day in four years. Very good morning if youve just joined us state side. Things have turned down from the early optimism. The s p 500 now just over a point above fair value. The nasdaq after being down yesterday right now just a point and a half above fair value. And the dow around about 12 points above fair value at the moment. As far as european stocks, just turning down a little bit from the highs we hit an hour or so ago. European stocks, slim gains yesterday, a little bit better today. Xetra dax up over 1 during the session this morning. In fact xetra dax now at fresh 52 week highs. You can see up about nearly a percent at the moment. And its up over 27 for the year. The ftse 100 up nine points unfazed by the chancellors statement yet. Thats where we stand ahead of the u. S. Open today. What are investors to do . Heres a recap of some of the experts already on the channel. Its quite interesting to know that so the way up to the high since september really, investors were choose to go focus on positives, ignoring negatives. That is the growing evidence com play answ com play ansi keeping back in. I think given the uncertainty coming up, wed still like to being long bonds. P play ansi ke. I think given the uncertainty coming up, wed still like to being long bonds. La play ansi k in. I think given the uncertainty coming up, wed still like to being long bonds. I think givy coming up, wed still like to being long bonds. In. I think given the uncertainty coming up, wed still like to being long bonds. I think givy coming up, wed still like to being long bonds. I think the rally is about done heading in to the new year. We stay bullish. President obama and House Speaker john boehner spoke by phone wednesday, but theres been no announcement by either side of any upcoming face to face budget talks. Earlier the president told the business round table a deal to avoid the fiscal cliff could be reached quickly if republicans drop their opposition to raising tax rates on the wealthy. In an interview on cnbc, Timothy Geithner says the gop is making a little bit of progress, but the white house is absolutely ready to go over the cliff if tax rates on the top 2 dont rise. I want to understand the administrations position when it comes to raising taxes on the wealthy, those making more than 250,000. If republicans do not agree to that, is the administration prepared to go over the fiscal cliff . Absolutely. Again, there is no prospect to an agreement that doesnt involve those rates going up on the top 2 of the wealthiest. Remember, its only 2 . With both sides in washington publicly digging in their heels, how much will the fiscal cliff impact the credit markets . Ben garber joins us for more. Ben, good morning. Clearly were focused on the down side risk from the budget standoff and then theres beyond that. Lets talk about the short term at the moment. What impact is that having . I think people have to be defensive in the short term. There will be a lot of rancor on both sides. So within the next month or so, as the fiscal cliff debate developments, there is limited up side for Interest Rates and its hard to see stocks moving much higher. So lets suppose we get an agreement. That should increase confidence. Does that mean the economy performs better next year than we expect and then whats the feed through from that . Yeah, i think while were now focused on a lot of the down side risks not only from the fiscal cliff but obviously also from the eurozone crisis, we may have overlooked some of these up side potential for next year. So if we get a favorable resolution for the fiscal cliff, i think we can see Interest Rates move up quite sharply. That would be because expectations for growth could be much higher, so if growth is around the 2 in the first half of the year, we could be haufing over the 3 range in the second half of the rear. That would mean higher Interest Rates and that could be a very poor result for top quality bonds. And when youre talk about Interest Rates, youre talking about market rates as opposed to fed rates, right . The treasury rate, baseline underwhich say Corporate Bonds move. Okay. You mentioned how much. So what would be the long term impact of that . In a very short amount of time, you could see say the ten year treasury yelled jump from current range of around 1. 6 quickly up near 2. 7 towards the middle of the year, we saw during previous fed quantitative easing programs that while those programs were still going on, people took a mores positive outlook about the economy and Interest Rates moved sharply higher. I think we can see some of the same thing occurred next year and potentially if the fiscal cliff debate is resolved, that gives more certainty over the next two year period, that can have a Lasting Impact on raising rates through the end of next year. We saw ten year yields last year hit a high of 375 or something. Is that what youre thinking in terms of where they might go . I dont think theyve reached that high. Of course were having another round of quantitative easing and you can get something of a shift in fed policy. We have operate twist coming to a close this month. I think theyll start doing outright purchases of treasury bonds. So that holds down rates somewhat. But if we get positive growth, Consumer Confidence rebounds from possible short term weakness, that still means that we have a substantial rise in Interest Rates perhaps towards 3 . Will there be a coarimpact o rates . Both looking at consumer signals and market signals, i think participants have to come to a realization that inflation likely wont fall off dramatically, some of the deflation risks have subsided. So i think in the long term, that really points to stabilizing at higher pace. So exposed if we get a deal on the fiscal cliff. Because then it would be a different game, i presume. So what is your own chances of us not getting a deal done, how high or low do you raid that . I think its relatively low, but we also have to bear in mind that january 1st is something of a false dead line. Government agencies can still spend as if the budget cuts are not going to happen until say later in the year. So i believe that eventually even though there is a chance that you cant disregard the chance of no deal being made, i think within the early months of next year, theres a strong chance of a favorable resolution to the budget deficit. Ben, thanks for that. The british chancellor George Osbourne has defended the governments plan to turn the economy around and rein in spending. We have to get control on spending. Thats why im operating benefits by less than the rate of inflation. Thats why ive curbed the tax relief for the largest pensions. But we are making progress. The can deficit is down by 25 . Forecasts are continued to fall, so we are making progress. We started with a very large deficit, but were getting it down. Still to come, well talk citigroup with a guest who says yesterdays massive job cuts announcement may be the opening of a wave of cost cuts for the banking giant. I always wait until the last minute. Can i still ship a gift in time for christmas . Yeah, sure you can. Great. Wheres your gift . Uh. Whew. [ male announcer ] break from the holiday stress. Ship Fedex Express [ maby december 22nd break from the holiday stress. For christmas delivery. Ftse just up nine points. Xetra dax up nearly a percent. Ibex up a third. Extake trake xetra dax up to 5 highs. Elsewhere in the european corporate sector, investors have welcome eads new Ownership Structure. Shareholders have agreed on a deal designed to make the eads more independent and will hand germany and france an equal 12 stake in the company. And Timothy Geithner has told the cnbc the swhous ready to go over the fiscal cliff if tax rates on the nations wealthiest dont rise. Dag gri announces the Rate Decision later about plus apple shares still down in frankfurt. And its shares of the Chinese Market drop in the Third Quarter. Deutsche bank has hit back at allegations of financial impropriety brought by three former employees. According to reports, the exdeutsche workers have launched a complaint with u. S. Authorities alleging the bank failed to recognize 12 billion in unrealized losses at the height of the financial crisis. They claim improper accounting on the part of the Deutsche Bank enabled the lender to exaggerate its Capital Position. And citigroup plans to shed 11,000 jobs around the world which equals around 4 of its workforce. Some experts say this is part of a strategy led by their new coe who took job in october, however others say it has the finger prints of chairman michael oneal. Citi shares reacted positively to the news, though the stockstill trading at around 70 of its tangible book value. You can see the stock in the u. S. Closing up 6 . Ill trading its tangible book value. You can see the stock in the u. S. Closing up 6 . I dont know if we have a frankfurt trade. But anyway, thats where citi stands. Joining us for more, european banking editor at the wall street journal. Does it matter who was behind the strategy . Its certainly an interesting question. I think the answer is that they were both behind the strategy. Oneal recruited corbett to come on with a clear mandate to aggressively cut costs. I dont think he was presiding over great detail of how the costs would be cut. Corbett is a detail oriented guy. Is this the start of a longer term strategy . How different will the bank look in a few years . I think the goal is to certainly look a lot less bloated. I dont think that will entail major structural changes. I think the two areas that will strike me as plausible places for them to get out of is u. S. Retail banking where theyve consistently been sub bar. The other is their big mexican Global Banking operation that wouldnt be too hard for them to just chop off and something that could fetch a lot of interest from other buyers and possibly some of the individuals currently at citigroup would be interested in buying that themselves. Ris cost at about a tenth. So what is the future of Retail Banking because clearly their costs are way too high. This debate has been going on for as long as the internet has existed. Initially they said you dont, so they neglected billion new branchs and fell behind. I think if youre going to be a big global bank especially in the u. S. , you do need a significant presence at least in certain key markets. And thats one of the areas where citigroup and theyre big on like a five or six markets, but beyond that, they really arent. Thats one of the areas where theyve been looking to prune. Whats fascinating is we heard from Standard Chartered today which is the london listed asian bank, and theyre now looking to make it could be tenth year of record profits for the bank. Looking like they could be hiring 2,000 people. And its such a different story compared to the likes of city and ubs and of course a lot of others. Doing better than those clustered in citigroup is acts bit of a weird case. Theyre so mismanaged, but they do have huge presences in emerging markets and havent been able to capitalize on that as well as some others. But, yeah, its kind of haves and have nots in the banking industry. Standard chartered is clearly one of the winners. But youre seeing banks like barclays consolidating control over its african operations, banks are clearly making a play to get out of some of the Slower Growth markets especially in europe and move south and east. And you wrote about this, the ecb meeting today, were only just a year on from when they announced the first l it tro. This was three year money. But you think some banks will be starting to pay that back. What does that mean . Is that a good thing . It depends where you ask. The ones planning to repay are commerzbank and probably the big three. They want to flex their muscles, show they are not addicted to ecb cash. And the worry of some people in the market, some people think it shows the markets are returning to health. The down side potentially is that that stigmatizes the other banks that arent repaying, maybe encourages other slightly weaker banks to rush to exit themselves before theyre quite ready. Well see what happens. Thanks very much. Good to see you. As wall street tees up for the crucial u. S. Employment report on friday, well get a look at weekly jobless claims ahead of the opening bell. Look for results from h r block, td bank, smithfield foods, Harry Winston diamonds and smith and wednesday ssson. U. S. Futures ahead of the opening pointing to a mildly upward start. Dow called some 17 points higher. The nasdaq is called some 4 and the s p 1 1 2. This after apple had its who day in four years dragging down the nasdaq to double digit losses. Shares still trading lower in frankfurt, as well. The company losing ground in the chinese smart phone market. Apples rank fell two spots to number six. Different day for the dow which closed at one point highs and at one point during the trade the dow poised to close up more than 100 points. The last time was may 2002. Strange kind of day to see that divergence. Does it mean much . I dont think it means quite a bit just for one day. It is interesting, though, that geithner says the administrations prepared to go over the fiscal cliff and yet the dow was up 100 points based on good bank new, shedding jobs, some good chinese economic news. So i found that very interesting yesterday. Geithner says our job is to prevent anything from bad happening, but at the same time, were prepared to gooff the fiscal cliff. So which statement shy believe more . Like any foesh yags, theres a lot of posturing going on right now. And i do think at some point theyll reach an agreement. One of your previous guests made a good point that january 1st in some ways is a soft deadline. These cost cuts tonight go into effect until down the road. Maybe we get a deal done by january 1s, maybe not. Keep in mind, too, that the stock market is continually discounting the possibilities. So i think a lot of this is in stocks already. And u. S. Stocks anyway. We have jobless claims today. Is this going to shift sentiment an awful lot bearing in mind discussions in washington . Probably not. We got the big distortions from san sandy. Slowly working through that. So i think if theres an outlier, investors will yawn and wait for the big nonfarm payroll report tomorrow. Are we comfortable mfi dont know how comfortable we are. Consumers seem to be in better fettl eflt. In spite of this anemic job growth that weve had during the entire jobless recovery, it seems like consumers sense the their Balance Sheets have improved pretty dramatically. So, yeah, consumers and thats led to consumers spending slightly more than what experts thought they would spend. So youre overweight large cap versus small cap. Why . The large cap u. S. Multinationals, they typically have overseas subsidiaries that can reach into the emerging pockets of growth. I like the dividends payers, as well, because in these choppy markets which well continue to have get nice dividends. All right much ha. Have a good day. Thats it for todays program. Squawk box it is next. [ male announcer ] how could a luminous protein in jellyfish, impact Life Expectancy in the u. S. , real estate in hong kong, and the optics industry in germany . At t. Rowe price, we understand the connections of a complex, Global Economy. Its just one reason over 75 of our mutual funds beat their 10year lipper average. T. Rowe price. Invest with confidence. Request a prospectus or summary prospectus with investment information, risks, fees and expenses to read and consider carefully ore investing. Political brinkmanship with the American Economy on the line. I want to understand the administrations position when it comes to raising taxes on the wealthy. If republicans do not agree to that, is the administration prepared to go over the fiscal cliff . Oh, absolutely. Again, there is no prospect to an agreement that doesnt involve hose rates going up on the top 2 of the wealthiest. Remember, its only 2 . Treasury secretary tim