Restructuring costs, well be speaking to the ceo in around 30 minutes time. At least two people left dead in ukraine as antigovernment protests escalate. Well spoo well speak to the chairman of the second largest lending bank. And a surprise shakeup at pimco, Mohammed El Erian resigns as ceo as investors are turning from bonds towards stocks. Davos 2014 well and truly kicked off here. We have some brilliant guests coming up at Worldwide Exchange speaking to the r rwe ceo as germany unveils their latest renewables for Renewable Energy. He doesnt pull punches so well be getting his latest thoughts on that and have you heard of the china shale boom . No, but im looking forward to hearing about it. I wonder whether it will be as important for that country as undoubtedly it has been as the United States. Will it be as game changing, one of the big things. Well be speaking to a top expert. How is it there . Pretty cold but im wrapped up warm, fully prepared for this and speaking to some really interesting guests already this morning, one of the crucial things people are saying, when are businesses going to start employing the capital they hold. This is one of the key issues that came out but a sense of great optimism certainly from the number of people weve been speaking to, yes but risks still remain. Lets listen in first to what people have been telling us this morning about when and if companies will start redeploying some of that capital. Companies are so conservative. The ceos, cmos, cios, chief procurement officers, cfos dont want to make mistakes. People talk about m amp were aa which you talked about yesterday i dont think that will happen. I may be totally wrong. I dont think boards, if you look at the return of money to shareholders, you look at the buybacks and the cash position, it doesnt pay. There is actually quite a lot of investment. I think what youre seeing are not a lot of m amp were aa activities, only limited to two or three sectors. Win i speak to investors theyre keen we invest our money appropriately. Were not under appreciateeur to spend it quickly, were under pressure consistently to spend it wisely. Well my first guest is john nelson, chairman of lloyds. John just listening to what some of the Business Leaders, ceos are telling us about just when capitalist is going to be redeployed. Is 2014 the date where we start seeing that in. Were already seeing that to some extent, beginning to see some confidence particularly in the United States and the united kingdom. I think its still at a brittle stage. We could see some things taking us off track but i feel as everybody else does that there are some green shoots and one can feel these economies beginning to grow. Also very importantly i think weve seen some slowing of growth rates in some of the higher emerging growth countries which again seem to be now recovering a little bit, not dramatically but they are recovering. And i think the huge dangling debit of the instability in the Financial System certainly seems to be working its way up. Of course thats terribly important for confidence. The key phrase you mentioned something that takes us off track. Youre a risk assessor. What takes us off track or potentially could take us off track . Well i think, to be honest, i think political instability in some countries could take us off track where the right prudential policies are not being pursued. I think could take us off track. I think if you take, for example, the uk, where we are making Good Progress, but if the pressure is taken off, reducing deficits and Government Debt, at any stage, that could take us off track. What about the risks from within your own business, the insurance business, having to chase higher yields, products such as catastrophe bonds, weve had a warning from fitch this week just where the direction of the business is going. Are we underestimating the risks here . I think for the insurance sector, the key dynamic for the insurance sector is a sustained period of extraordinary low Interest Rates. That has attracted more capital into the insurance space, where youre seeing more graphically in reinsurance which is what a lot of the it he bait is about at the moment, and there you are seeing new kinds of Capital Markets projects coming into the insurance industry. Now, for lloyds, as a market, we are the only Insurance Market in the world. We are the leading specialist insurer in the world. We have the luxury that, as a market, we can frame the way in which we attract capital, the way in which we do business to suit the new dynamics. So we are in a relatively strong position, providing we keep evolving our end business model. Davos is all about new dynam dynamics, looking for new opportunities. You have your plan for 2025. Where is it going to take you in the next year . One year is very short. I wouldnt like to measure that, but i think where we are is were making very Good Progress in terms of increasing our footpoint in china, where we hope to open a branch in beijing, expanding our footrint in Southeast Asia and south america, latin america. I think were making Good Progress. Equally i see in the short term funily muff good opportunities in the developing markets particularly in the United States, lloyds is the number one provider and also in Continental Europe where we have in france and germany very interesting opportunities. Do you think well continue to see the growth rotation away from some of the developing markets into developed markets this year and beyond . Well, i think over the next 10, 15 years were going to see it. Along the way well have years where its all three or four years where the pace is different. I think if i was guessing in 2014 funnily enough for lloyds id see us having good prosecpes for the United States and europe. Were continuing to increase our footprint in emerging companies but that will take time. Youve insured the first vault to protect bit coins. The answer is i couldnt possibly comment. No comment, ill accept that. Thank you so much. Now russ i was talking to you about the potential for chinas shale boom. Were going to talk to the top expert in china about the potential there and whether or not chinas government is investing enough in Energy Security for china, that coming up very shortly. Well wait for that. Thanks for that. Head online for more coverage of thissors davos gathering and stay in touch with the weeks event following cnbc world on twitter. Also online a special report on what the experts here think could be the worlds biggest risks and join in that conversation also on twitter using biggestrisks. Germanys new Energy Minister has warned over making an aggressive transition into renewables in his first major speech, he said the estimated 24 billion a year annual cost for renewables could strike a blow for the countrys key industrial minister. Hell present formal energy plans to Angela Merkel today. What do you think about that in davos . Jules . Thanks, im joined by rwus ceo. You dont pull punches as far as the Energy Sector is concerned. What do you need to hear from germany today about where we take renewables and their process here . The first thing which the new minister already has announced is a change in the subsidy regime for renewables, the eeg needs a revision and thats what theyre working on with high intensity. The eu is going to announce their new process and focus until 2030. Yes. You have the problem going on in germany, strattic policies in different countries. Is this a problem at the eu level, at the individual country level as well in. Its both but the eu needs to give clear direction. We need clear targets for 2030. We dont know 2030 and beyond what the targets are for co2 reduction. Are we going to match them anyway, see a 20 renewables by 2020 . Is that target achievable . Well its certainly achievable but you need to start with co2 reduction. What is the target you want to achieve and if the focus needs to be on co2 reduction, then the Renewables Target is a secondary target and needs to start first with the ets and co2 reduction. We have the u. S. Shale issue playing into this also, importing cheaper coal from them, working against the policy of less co2 emissions. How do we balance those two things . You cant impress targets without expressing larger. Shale gas is one, countries that used to import becoming exporters as far as gas is concerned and it has an impact on europe as well. We need to refine our targets in line with the new realities in the Global Markets and be consistent on that one. If you cant be better maybe you need to be smarter. Where does your business go from here . Youre waiting for new targets from the eu, seen subsidies for Renewable Energy creating havoc for your utilt base. How do you plan to address theser us looking forward in the business . Its unfortunate. We are at a standstill at this moment in time. We dont know what to invest in, how much co reduction, what about coal, what about gas, its not clear. Secondly we dont have the money to invest in those things. The Energy Sector in europe is qualified by the global Capital Markets as uninvestable due to framework and lack of consistency in the policies. The talk youre going to sell off your oil and gas business dwe, the bid prices that are being rumored are fas less than the market value. Can you give us clarity on that and what you will do if you dont achieve market value at least in. I cant give you clarity. We dont speculate on rumors. It is on its way as scheduled and well see what comes out at the end of today. It is important we are focusing our business towards the more decentral and renewable aspects locally with the people. I this i thats the move, with he can develop things like smartphones, smartgrids needed in any transition of society, people need to make more out of the energy that you have and thats what we can very well support in. Quickly, what defines new Energy Context . What will define it oef the next 10 to 15 years . Very simple theres no one size fits all. Well see various solutions on a low voltage grid level at the consumers, heat pumps, photo voltaic, heat puchz, management of that and continue to see large power plants on the high voltage level for the industry, might run as a backup in times when theres no wind and solar so the integration of this system thats a complexity and what well see in the future. Peter terium, rwe, thank you. Thank you very much. Energy costs are far higher for the United States. Right now as far as the Global Markets are in europe, 1 40 into the trading day, just about 6 3, nearly 7 3, vaadvancers are outpacing decliners. The cac is up 0. , the ftse 0. 6. Abb right now down 3. 6 . Warning Fourth Quarter results will be hit by a 260 million charge, it will miss profit targets. The firm says its due to storm related delays and offshore wind farm projects. Later in the program well talk to the companys ceo Ulrich Spiesshoferp coming up at 6 00 the chipmaker, beat Fourth Quarter profit forecasts and dlird a fairly tough demand, a day after advanced microdevices warned of revenue, forecasting a 16 decline in the first three months of 2014. Amd saying sales of gaming could be soles were not going fast enough to offset slowing pc sales so amd in frankfurt down nearly 11 and ibm also down nearly 3 , a slowdown in i. T. Spending by many of chinas Stateowned Enterprises hurting ibms business, total revenue down to 27. 7 billion in the Fourth Quarter. Jules, back to you. Thanks, russ. One of the key focuses in davos is the new Energy Context we were just talking about here, bm sees the growth in energy over the next 15 to 18 years, 25 of it will come from china and a bigger deficit as far as energy goes than the u. S. Or europe. It is a crucial issue. To talk more about the idea is lin boqiang. Were concerned where china demand goes, what the output story looks for china the next few years and one of the proxies we use is electricity demand. Right. How good a proxy really is electricity demand for growth and output . I think electricity demand is a good possibility for economic growth. Chinas economy is so conscious on the industry and they are so kobs traited on the industry so put together they are a real good link between electricity and gdp growth. What is it telling us right now, what is the demand telling us about output for china Going Forward . I this i theres good news and bad news. The good news is that you look at Overall Energy demand, theres primary energy. China has been sold unsubstantially tu to economic slowdown from 10 to less than 8 . Most of this is structural changes that also leads to the slowdown in the Energy Demand. Most important i think that china is treating the environment at this point, big environmental problem last year so china is determined to deal with it so also to the Energy Improvement and Energy Demand declined. I have to wonder how much focus there is on this. China has twothirds of the reserves or twothirds more of the reserves of shale gas than the u. S. Does. Why isnt there more focus on the Chinese Government to unlock the potential here . I think theres issues to duplicate what is successive in the United States, because there is some issue, some environments. U. S. Companies are trying to invest, chevron, exxon mobil, signing agreements to come. What is the problem here . Why is there a stalemate . There is not a problem. Technology could be a small problem because to adapt to the china situation but what china situation, is it regulati regulation, state control . Also environment such as monopoly of the pipelines, that stuff and also theres a water issue in china. The United States doesnt have a water shortage, in china there is. Technology requires a huge amount of water and that could be a problem. By the way, it takes the u. S. Ten years. Be patient. China only started. Youre going to take ten years, with he heard it here first. Li boqiang speaking to us there, you heard it there, ross, ten years and we can talk about a china shale boom here. Okay. I want to quickly flip focus of course. Weve been seeing pictures of ukraine and the tensions going on there, that has an impact to russia and their involvement in the region but the question key, is it impacting the focus on russian business and investment there . Well speak to the chairman of vtb, Andrey Kostin after the break, stay with us. A credit to fault swaps on ukrainian debt has risen to a onemonth high after shots of violent clashes have thank have broken out in the capital city kiev after ukrainepolice broke through barricades and started arresting protesters. They are investigating two deaths. The government stepped away from the partnership in favor of a new deal from russia. Kiev revoked visas of several ukrainians in response to action against protesters. As that unrest continues what impact is it having on businesses that have a presence in the country and the region . For more, jules rejoins us from davos. Thanks so much, russ. Joining me is the president and chairman of vtb group, Andrey Kostin. I want you to go back to the top of the russias relationship with ukraine. First talking about growth, the imf and the world bank hav downgraded quite significantly russias growth estimates, 2 for this year. Is the economy in freefall . Well, we still believe that the economy is in recession but i agree growth is slow and that raises concern for the government, for the business community. The government is trying to resolve this issue in two ways, one is to spend half of the National Wealth fund on infrastructure, making more Government Investment and increasing projects. On the other hand trying to improve the climate. The government is not ready to spend more from the budget, the government is very much committed to a strict budget discipline. How do you improve the Investment Climate in russia with a years history about investors getting involved . I think the government is right in sticking to specific ways. They have a long list socalled road map and i think its moving in the direction. I think we set quite ambitious target moving on the chart climates of the world. Things are changing maybe not as fast as wed like to but i think its becoming good. You talked about development. Talk to me about the sochi olympics, 50 billion, is that a complete waste of money in the country where its needed elsewhere . I dont think so. The hotel where the major sponsor, cocacola, will be placed, and russia never had high class holiday resort, Summer Winter and these are investments not only for sport, they are veminvestments in a holiday sport which are very high standards and of course all olympics are some excessive spending but i think its important for as we mentioned the morale of the nation and also quite important investment project. Talking about the morale of the nation, you have to wonder whether the stagnation that youre seeing in growth at home perhaps makes russia want to be more present on the international stage. How do you see the relationship with russia and the eu playing out in light of whats going on in the ukraine and complaints from georgia yesterday, too . What is russias policy . Our relationship with the eu im afraid is going in the wrong direction. The relationship are not very good. We think in russia that a lot of politics in the world in the eu approach to the economy, to the ukraine as well, we see it, high interest about the eu in ukraine. The issue is quite excessive so from this point of view we would like to go back to our relationship with the eu. I dont think russia will go along the path of deep integration with eu in the near future. I think russia will continue their effort through wto and g20 rather than specifying on the original aspect of developing integration with eu, although eu is still our Major Trading partner. Is improving that relationship with the eu going to allow russia to ease back on some of their control as far as energy is concerned with some of the former soviet states . What is the end game for the likes of ukraine and georgia these countries trying to sign up to further integration and seems like russia is getting in the way of that. Ias position on the ukraine was very clear, if eu is moving in the direction its quote natural its coming from the nature of the trade relationship and control and cessation and everything. Of course its sensitive for us. Ukraine for russia is like scotland for great write tain. I dont know how english people feel about the referendum in scotland but we have a lot of feelings about ukraine. And ray costrey kostin a hig high reward strategy, coming up we speak to the old mutual ceo coming up right on this show. Stay with us. Well certainly do that, jules. Plus the latest data from the uk besides bank of england, how much closer are we to the banks 7 threshold . Well another great thing about all this walking ive been doing is that its given me time to reflect on some of lifes biggest questions. Like, if you could save hundreds on Car Insurance by making one simple call, why wouldnt you make that call . See, the only thing i can think of is that you cant get any. Bars. Ah, thats better. Its a beautiful view. I wonder if i can see mt. Rushmore from here. Geico. Fifteen minutes could save you fifteen percent or more on Car Insurance. Welcome back to Worldwide Exchange. Let me give you some headlines. Hording cash, a survey says companies are sitting on 2. 8 trillion worth of cash as leaders in davos say corporates are still reluctant to spend. Companies are so conservative. Ceos, kcmos, chief procurement officers dont want to make mistakes. Major corporates say theyre not getting the right access to capital. The boss of one of germans biggest utility firms rwe says the sector is not finding investors. Shares in abb fall after the swiss engineering giant warns on profit due to project delays and restructuring costs. Well speak to the ceo in a few minutes time. More from jules in a moment. Major data out of the uk, unemployment stands at 7. 1 . The uk Unemployment Rate 7. 1 , just a whisker away from the 7 threshold at which point the bank guided us originally they would think about what to do with policy. Originally just back in november the bank of england had been saying they didnt think there was a chance if we kept rates where they were wed hit that Unemployment Rate in this time in 2015, but right now here we are, were just a percentage a basis p away from hitting that 7 mark in january, and most surprisingly, sterling jumping over the dollar, to 165. 23. In august 2011, interesting the minutes have come out at the same time and they say the unemployment is likely to hit 7 materially earlier than previously thought. No kidding, weve just seen it in these numbers as well but the minutes go out of their way to suggest there is no reason to raise rates even if unemployment hits 7 in the near future. Theres a huge spectrum about when uk rates will rise. Some analysts say the end of this year, some analysts say not until 2017. The number will change the nature of the debate and bring forward expectations for when Interest Rates will come up as well. Statement the latest borrowing figures out of the uk, 12. 089 billion less than the 14 billion expected and Public Sector borrowing for the government as well in the month of december less than expected, unemployment is falling quicker than we might have expected, imf upgraded but still behind what many analysts think will be a 3 growth rate the imf is talking 2. 4 . So a very strong unemployment number, very strong drop in unemployment in the uk at the moment. The number of people for work grows by 280,000 in the three months to november, 280,000, that is an alltime record. See what reaction we get but certainly its boosting sterling and right now the markets are fairly flat. Guilt is where weve seen reaction to the reaction, up to 2. 8 , back over treasury yields currently 2. 84 , sterling rallies not far away from the highs weve seen 2011, 165. 15. Well get more reaction as we turn to davos. Africa was one of the big and actually unexpected themes of davos last year. Cnbc actually spoke to africas richest man earlier, later last night and he actually said that davos itself did a great deal for the Investment Case in the continent, but just how does it stand this year . Listen to what he had to say. For the last 10 to 15 years, africas economy gdp has been growing to 5. 5 and weve done quite a lot in terms of Macro Economic stability, weve done quite a lot in terms of political stability. When you look at the risk you also have to look at the other side which is the benefits. Theres nowhere i can go and make that sense. Thats what you get in africa. Now im joined by julian roberts, ceo of old mutual and julian youre one of the few ceos described emerging markets as healthy. Is that a strategic thing, given your focus and positioning in south africa in particular in. I think there is a fantastic opportunity in africa. There really is. For many, many reasons. Its 23 of the world mass, the land mass. Youve got a growing population. Youve got gdp growth firing through and yes, im very positive and thats why were investing there. 75 of profits is in south africa specifically. How concerned should investors be about the upcome election this year . If you look at the forecast for gdp, South African gdp forecast 2. 8 for 2014. The u. S. And the uk even in roarry mode are not going that high, so you know, theyre still pretty good growth and the economy is still growing well there. Where speccally where else . You mentioned ghana, nigeria, other opportunities for investors. Where should we be looking . For news particular were focusing on in the initial stage of our burst in control in ghana and nigeria and kenya and kenya really represents east africa and thats where our focus is. Obviously youre a sprawling Financial Services business but most notably last year you hired Richard Buxton in the uk as part of your Fund Management business. How important are those rainmakers Superstar Fund managers . Are they worth every penny . Richard has done an extremely good job, many of his customers have followed him to old mutual. In the uk and in the u. S. , effectively we are an asset manager and therefore you have to bring in the top talent. You bring in the top talent, the assets come because investors know that theyll get real good returns. On the inflows into that fund have been huge over 1 billion pounds, right in . Theyve been pretty good. What about in terms of foo hes what, is your outlook on the climate, cost of these is the pressure of that coming down in terms of the uk and also in europe . I think were likely to have in the Asset Management world more of a consolidation, because yes, there is more pressure on things and therefore youre going to, investors are going to move towards the people who are giving good returns and probably the big brands and therefore were building the big brand and therefore we think netnet well be a winner. The smaller firms will have more problems. You talked about the Strong Performance of the u. S. Management asset business. Theres speculation of a potential ipo. Can you give us clarity on whether thats even part of the thinking right now . No. Were in a thats the second ceo to do that to me today. Obviously, though, youve been at the helm for the last five years, a huge restructuring program, seeing shares go up almost five times in that period. Is there more value to unlocking your business . Theres a huge amount more. We are now positioned absolutely perfectly. You mentioned richard uk business has good growth targets. Investors are moving back more into equities. In the u. S. , even the first three quarters of last year the net client cash flows were huge, investors coming back into Asset Management and on top of that the african opportunity. Julian, unfortunately we have to leave it there but really interesting story, ceo of old mutual and our uk business mappinger. Aberdeen Asset Management sold 4. 4 billion worth of outflows citing emerging markets, a different store ye than that weve been talking about. Well talk whether acquiring a European Business will make up for it and where he sees the direction of flow, coming up after the break. Stay with Worldwide Exchange. Abb stocks are down sharply today, 4 in zurich after warning its Fourth Quarter results will be hit by a 260 million charge, meaning it will miss profit targets. The swiss firm is blaming stormrelated delays on offshore wind farm projects. The stock cut off sharply this morning because of that, currently around 4 . Well get from Ulrich Spiesshofer the ceo, with rules. Well be pressuring reaction in dramatic form in the Unemployment Rate in the uk which came out about 12 minutes or so ago. The uk Unemployment Rate down to 7. 1 , much stronger than anybody forecast, it stood at 7. 4 in the three months to november, so last set of results three months to december. The bank of england had been suggesting that this may not be the 7 was the threshold for when they might consider changing policy but they said that wouldnt happen until maybe january next year. Originally they were talking about the end of 2015, changing the dynamic, rapidly changing the dynamics and inflation is of course back down with the bachk of of englands 2 off. Theres one part the bank will be more concerned about, it will be the average earnings. The jobless claim rate the lowest since december 2008. Sterling on the far right certainly reacting to that currently at 1. 6540. Couple weeks ago 1. 59, t6292. The tenyear yielding 2. 87 . We are higher on yields across the board, tenyear treasury note 2. 84 . It widened the spread between the two. We also saw borrowing numbers come out for the government which were lower than expected as well so at the moment the uk government things are looking better, we hope you have that, elections are scheduled early next year. The ftse is fairly flat and the xetra dax. The ftse is doing better up around 0. 4 . At the same time we did have minutes out from the bank of england, inflation pressures are likely to stay contained for some time so theyll go out of their way to suggest rates arent going to go up any time soon and when the time comes to raise rates the minutes said it will be fairly gradual but the headwinds for growth will persist for some time as far as that unemployment data is concerned they said the rate was moving an awful lot more quickly than they thought. They didnt know it was going to move this quickly. Thats where we stand with the markets. The World Economic Forum Participants are asked to look beyond Crisis Management hold. Is the Global Economy ready for that . Listen to what our guests have had to say on the state of play in europe. I dont think you can forget the sort of ushall us we talked about before. The eurozone crisis has not gone away, middle east, and of course the u. S. , the deficit, the deficit ceil still hasnt been sorted in the longterm. We dont see the economic environment dramatically improving. We think the u. S. Will be much better in 2014 than 13. Were not going to have another debt ceiling debate in the u. S. We dont believe western europe will dramatically improve, we see strong improvement slightly but not something to get excited about. Things are improving, weve learned the lessons but the legacy of the crisis is very heavy. You got slow growth. You got high unemployment. You got growing inequalities and you got a drastic reduction or actually cataclysmic reduction in trust in the institutions we built in the last 100 years. That makes it very, very difficult. We promised you the ceo of abb and he now joins me after todays profit warning of course. Can you give us more clarity. You mentioned operational shall us, talk about what is going on . The if First Quarter of this last year, we installed offshore platforms, during the installation of the platforms with he had severe storms. It is our responsibility to have safe operations out there. We pulled our teams off the platforms during the storm phase. That resulted in delays and associated costs and that is what is hitting us at the moment. You have a new head of power systems. To what extent about this is clearing out and removing excess . Its purely operational. We have a leadership change. He has the right confidence and background to run this Global Business so the operational hit weve taken that now and we turn on the page and develop the business. It comes on the back of france also warning about operations, power demand. Are you seeing the same thing, is this what youre seeing from your customers also . We see a continue slow decisionmaking on Large Infrastructure Projects on the energy side, this is something we are hopefully Getting Better now that we have the elections over in some of the major European Countries so im quite optimistic in the medium term. Weve been talking about a lack of coherent policy on energy from europe. Do we need to see this and when do we need to see it . I this i there is an opportunity in europe to get their act together in a better with a i, clarity, predictability and going cross border in terms of alignment, major opportunities. If you get that going that would be a wonderful thing do we need that to see corporates investing . This is one of the key things were pulling from davos, reluctance to invest. I think a corporation that acts responsibly needs to have certainty and predictability. I think the bottle neck of Decision Making will be gone. If we get that. At what point will we get that . What do we need to see . The governments are in place so im hopeful this will happen in the near term future. Your economic pickup, as well as a growth pickup in europe, could we be surprised . If you take spain, spain has a recovery in some industry segments which makes me optimistic. You look in exports theyre rolling. France needs to get to the next stage of developments. Theres a big opportunity to get better in europe. Youve won an award for clean tech. Talk to me about that and also i want to understand your flash charge box which is very exciting. We are honored to have won the nobel prize of Renewable Energy. We got the award monday night and were honored. More than of ours is associated with clean energy and we invest in future opportunities. On the sustainable mobility side it brought out a new technology, flash charge and electric station you get it going again, you dont have any petrol on it and thats the future. We do the same on the charging side for electric charge. Abb is on a roll. Sedgwick the new Energy Context what is the key breakthrough in the next five years in. I think we need to have predictability in the environment, of the regulators, we need to have the Technology Used and we need to have a change in behavior over the institutions and individuals to really take tp the opportunitie that are already out there. Ulrich spiesshofer ceo of abb speaking to us, thank you so much for that. In 2013 the fed wreaking havoc with emerging markets. What is 2014 going to hold and where are the opportunities . Listen to what people have been telling us is far this morning. For the last 10 to 15 years, africas economy gdp has been growing to 5. 5 . And you know, youve done quite a lot in terms of Macro Economic stability. Weve done quite a lot in terms of political, you know, stability. When you look at the risk, you also have to look at the other side, which is the benefits. Theres nowhere to go and mac in terms of 30 . Thats what you get in africa. I remain very bullish about Eastern Europe and i have to be bullish about are ushia and poland and germany. Germany is the strong man in europe. The two book ends of western europe, uk and germany have done better. France, italy and spain are the issues. Spain probably on the upstroke. Some of the stuff about the fragile five and talking the tapering stories is really overblown. When you look at where the fastest growth is going to happen in the world, most amount of wealth creation, the growth of the consumer classes is still in the emerging markets. That fundamental torrey hasnt changed and the fact that the u. S. Is picking up thats good for emerging markets. Here at the World Economic Forum Participants are asked to look beyond Crisis Management mode but is the economy actually ready to deal with that . Listen to what people have been telling us about the state of play right now in europe. Actually i dont think that tape is ready well go to my guest, executive director of the emf. Youve raised global estimates this week which is a positive sign but at the same time the underlying message seems to be the liquidity taps need to remain vep on. Is that right . Thats true. The good news is that the growth was positive, we raised to 3. 7 which is a good thing, particularly where we roughly lost 1. 1. To 2. 3, its good particularly for europe recession to 1 of gzp growth rate. The driving forth results from three things, the fiscal driver is much smaller than last year. For example 1 gdp growth for the United States but europe is 1 from fiscal drive, its much, much more smaller. The second issue is the Monetary Policy is still accommodating. The third issue is a lot of cyclical impact because after so long recessions, people move to consensus actions which may raise the jobs further so for that reason weve got to be very ka i fe careful to use this opportunity to do the Structural Reforms and use the fiscal space in a more productive way to promote the growth to make sure not only this year we have 3. 7 gdp growth but next year have strong growth. What are the crucial drivers of growth is the u. S. Economy but theres a risk the better the u. S. Does the highlight, the more liquidity we see from that country in particular. Is your belief that janet yellen of the fed will remain behind the curb and allow the economy to recover almost beyond whats needed in terms of tapering and tightening to the economy . You have a good point. We see the u. S. Have strong growth, this year is roughly 2. 7 which is very good. You also have a more fiscal space now but the growth of saving versus tapering. Strong growth, tapering will catch up. The key issues, whether they go with the growth shoulder by shoulder which is really the challenge youre facing by the fed. You have exactly the point. Were positive and we think the fed will be able to do the job because the fed will lay the policies doing a very good job in communication we believe the fed will be able to make sure the tapering will go with the growth but more than that, another side of the story is whether the market will be able to respond accordingly with the fed policy. The may 22nd to july events indicate the market didnt function at all right. I think these are the key issues. Let me give you one issue for the market. Theres a structure issue because for example the bonds market needs to be cleared by the bonds Market Makers but today the infantry for the advanced maker is lower because of the low Interest Rates, they dont plan to hold a lot of inventories, but the bonds need to be clear, the bar of the Market Makers is huge so theres a huge gap between the size of the bonds that need to be cleared and the market maker capacity able to clear the market. So how this responds to the policy is important where the hallmark response to the ush us are Lessons Learned in may to july, thats the shall u. The second issue we are concerned is also on the markets issues, how the Interest Rates increase because its end of year, its not today, i think, i think phased Interest Rates are in the second. With the tenyear Interest Rates will form globally and may advance when u. S. Increased 90 basis points in the German Market increased 58 basis points and europe. Its just unbelievable. Its going to be a usually issue. Zhu min i have to stop there, but thank you so much for chatting with us this morning, crucial points. Ross, back to you at the desk. Always good to listen to himment thanks jules. Plenty more to come from davos. As the global debate heats up, well be joined by jpmorgans point man on international strategy, dr. Jacob frenkel. The second hour of Worldwide Exchange coming up. Welcome to Worldwide Exchange. Im julia chatterley in davos. Im ross westxwaet here in london. These are the headlines. Hording cash, a Study Shows Companies are sitting on a 2. 8 trillion cash bar, leaders in davos say corporates are reluctant to spend. Investment is about half the cruising speed and investment is tomorrows growth. That should concern us a lot. And the subis sun is shining in davos, many participants have a Bright Outlook about the recovery. Investors should be ready for a strong year stateside. I am in fact quite confident about the prospects for the u. S. Economy and indeed im more optimistic than the consensus. I think 3 growth in 2014 is a slam dunk. The stars are aligning for the United States. And shares in abb fall, the swiss engineering giants warned on profit in its Power Division due to project delays and restructuring costs. The leadership tells theyve turned a new corner. He has the right background to run the business so the operational hit weve taken that now and we move on. British unemployment falls sharply to a rate of 7. 1 , just above the bank of englands threshold that has sent the pound sharply higher. The overriding sense here in davos is, yes, the recovery is taking place, were picking up. Theres some Energy Behind the recovery were seeing as far as the developed markets are concerned but a mixed view as far as the diverging or emerging markets is concerned. We still have plenty of guests coming up well be talking the u. S. Economy with dr. Jacob frenkel the chairman of Jpmorgan International and size and security and how to monetize mobile with the app nexus founder and ceo Brian Okelley and dr. Nariman behravesh. Ross, what are your thoughts, takeaways so far this morning . Its always interesting to look at the level of confidence and one wonders if it davos is contraindicating, where they never quite get it right, jules, in terms of where were going. People like to feel part of the collective, dont they . Whats your sense, clearly people are worried about emerging markets. What is your sense what they feel from now hearing from a moment now about the u. S. . Its interesting, a number of people this morning saying the stars are aligning for the u. S. This year and obviously thats going to have Global Implications so very much the belief here, i think that the u. S. Is really going to drive this rofry. Youve had a number of people talk. A synchronized recovery and fine lets talk about the synchronized recovery as far as the developed markets are concerned. As you rightly said its a very different picture, a diverges picture as far as the emerging markets are concerned. Im going to pick up on both points with my next guest, dr. Jacob frenkel the chairman of jpmorg Jpmorgan International. Are the stars aligning for the u. S. Economy . The picture is obviously better than what it used to be. It is important to remember when we were standing here last year the stars werent aligned, two years ago people were gloomy. People were eager to find signs of alignment and they have found. There is no question most forecasters are converging here that the recovery in the industrial world is there, every single bloc including the eurozone is going to grow at a positive rate. There are still risks on the horizon, which we can discuss a little later, but by and large, yes, the picture is better. Positive, youre positive on the eurozone at 1 growth . Isnt that a traf stoo vestytra. Im glad you calibrate it. There is nothing to celebrate with the 1 growth except we remember that some of the doomsday predictions were there will be a complete collapse but the fact that it is only 1 growth indicates there is still a long way to go. Unemployment is still high. Europe is still very divergent, unemployment with spain and greece is still over 25 , Labor Force Participation is what it is. Duration of unemployment is very long, more than 50 of those who are unemployed today have been already unemployed for more than a year, so there is a huge challenge. It is a structural challenge to improve competitiveness, to improve mobility, to increase the flexibility of the economic system, to strengthen the Financial System, all of this is down the road, but it is comforting to know that you have to do this agenda not in the context of crisis but in the context of strategy which has to be understood as a multiyear strategy. You sound like youve been reading the davos performer of moving on from crisis. I want to pick up on the point you made about the duration of unemployment because thats a crucial issue in the u. S. Yes, we see the Unemployment Rate plummeting like a stone as you said to me but what is going on as far as the duration of unemployment . Thats almost doubled since the crisis. Is the u. S. Out of the woods yet . Not completely but remember in 2010 both the u. S. And europe were having up employment of about 10 . Since then europes unemployment went up to 12 plus and u. S. Unemployment went down to 6. 7 . Is this the time to celebrate in the u. S. . Well it is good news but as you indicated, a very large proportion of this improvement came from people who left the labor force. They were discouraged. Labor force participation has declined significantly and therefore the effort to draw them back into the labor force is a structural issue and indeed the duration of unemployment is the key challenge. Today, about 35 or even more of those who are unemployed have been already unemployed for more than six months. Thats a very large challenge because it is not easy for these people to come back to gainful employment even if the tide goes up. Therefore, the challenge is job retraining all the time, firms have to higher and improve and improve and improve. Thats the key point. I want to ask you, a change of gear here, former Central Bank Governor you understand the mentality and the direction of the country, weve got Benjamin Benjamin netanyahu here and raw h rauhani here. What do you think the dialogue will be if we even get it. I underscore if we even get it. The Prime Minister would love to get it. The key issue is to get to the table if possible and to agree on basic principles of mutual coexistence of no threat of existence, of no threats of annihilation and basically to converse and communicate like two civilized nations in a civilized world. We are far away from this and we look forward to see how things are going. There is a great gap between the rhetoric and the substance but let me say one more word. I am not in the political arena, fortunately so for me but there is no doubt that political arena is influenced by the economy and the economy is influenced by the political arena, and thats why its not an accident that in a davos conference, which is called the World Economic forum, there is such a high weight to Geopolitical Development because they are key for atmosphere and environment. Dr. Jacob frenkel brill want to talk to you, the chairman of Jpmorgan International. Always good to see jacob. I havent caught up with him since we were in italy. U. S. Futures mixed at the moment. The dow yesterday down 44 points, the s p up. The dow dragged down by the likes of verizon, travelers and Johnson Johnson. The nasdaq is about a point above and the dow of course plenty more earnings coming out the dow is currently some what 12 points below fair value at the moment. European markets meanwhile have been trying to go a little bit higher, the ftse 100 is completely flat. Unemployment fell down to 7. 1 , just above the bank of englands threshold, if it i can say it, of 7 which is where they consider changing monster policy. Xetra dax is up 0. 1 and ftse 0. 3 . Sharp selloff in the price of uk Government Debt post that unemployment number. Worth pointing out the bank ofening xwland had originally been saying maybe we might hit the 7 threshold sometime in january 2015, that forecast late 2015. One suspects theyll move that forecast forward in the next quarterly Inflation Report as well and in the minutes today they had said we expect the rate to fall faster than we originally thought. No kidding. Sterling as a result is the major mover up sharply this morning, back up to 1. 6542, not far away from the 1. 6570 we were at at the beginning of the year which is the level weve even sterling against the dollar wince around august 2011. Dollar yen with the 104 and euro dollar above 1. 35, the level we tracked earlier this week. Thats where we stand with asset prices. Lets take you back to jules in davos. Thanks so much, russell. Were continuing our emerging market theme. Im joined by the ceo of aberdeen Asset Management, Martin Gilbert and ibrahima right back with me. Martin, 4. 4 billion pounds of outflow, you said sentiment was poor in emerging markets. Do you think that negative sentiment is overdone . I do. Normally things overshoot one way or another so sentiments either too good or too bad. I this i it probably is and a lot of the smart money will look at what has underperformed over the last few years and start coming in, because its almost too late now for europe and the u. S. , but also i think one of the reasons we did lose so much was we closed our products to new money and the sad thing is money still goes out but money doesnt come in. It was a tough quarter for us. Are you expecting that to come back . I think in time. Emerging markets are growing rapidly. Unilever emerging markets are doing well. I do, im bullish of emerging markets longterm. You recently obviously did the Scottish Widows teal deal lloyds, you proved oef the years youre a very good buyer of bank assets, whether thats deutsche or rbs or credit suisse. Which has been the most transformative . Suisse. Scottish withdows . Yes, sorry. Not that assets under management are the crucial thing but it gives you credibility in the u. S. Market. The u. S. Market is the most important in the world, it has half the worlds assets under management and so size does matter and then its a great deal for us and a great deal for lloyds as well. And is there more to be done there, more consolidation or more Asset Management businesses that you could look at . I dont think we can because this is going to take us two years to integrate, but interestingly at the moment there are more buyers than sellers. In the last four or five years more sellers than buyers. We prefer to buy when there are more sellers than buyers. The key thing about this transaction its good for the customers and thats what the regulator is focusing on is how good, why are you doing this, is it for the customers benefit. And where are you on Regulatory Approval . We hope to get it in the next month or so. Regulators are looking at all transactions lyclosely especially big transactions like this. Diversification do you want to reduce your extoereur in the markets . I think wed have been better doing it a year ago but no, we dont want to diversify away from emerging markets. Its still the biggest bit of our business, one of the biggest in the world and thats where the growth is, still all the predictions are in 20, 30 years the asian markets will be bigger than the u. S. Markets. Im not convinced that will be true because america still has got this vast wealth thats built up. Its a great area to be. We want to build other bits of the business, fixed Income Property and solutions. You disclose your pay to shareholders. The downside of being a public company. Do you think shareholders are the best monitors of ceo pays, this activism on the part of shareholders is a good thing . I thisnk it is. We have to vote against at all agms now but i can assure you the worst people to vote on Fund Managers pay are other Fund Managers. They take particular glee in it but we had a 12 vote against which is modest i think in this day and age but so we were quite pleased with that. How much of an impact do you think it will have on businesses like yours and broader Going Forward if shareholders can be more active . Does it restrict the operations and activities youll engage in . I dont think so. It will simplify retune inration. Remunerati remuneration, they have to be back to a secimple bonus. Simple check. No, a simple bonus, simple big check paid in shares which you cant cash in for a number of years. We have to hold them for four years. I this i thats the key. Martin brilliant to talk to you. Ceo of aberdeen Asset Management. Mohammed el erian in a shocking resignation. Well discuss that later and plus back in davos find out what Marissa Meyer has an saying about innovations in technology. [ male announcer ] this is the story of the dusty basement at 1406 35th street the old dining table at 25th and hoffman. And the little room above the strip mall off roble avenue. This magic moment it is the story of where every great idea begins. And of those who believed they had the power to do more. Dell is honored to be part of some of the worlds great stories. That began much the same way ours did. In a little dorm room 2713. This magic moment recap of the headlines, british unemployment falls sharply. Ukraine protests leave at least three dead as the u. S. Revokes several visas over the violence and pimcos Mohammed El Erian resigns unexpectedly as the ceo. The internet revolutionized the world of advertising. What about mobile and what is the future there and where is the moneymaking opportunity . Coming up well be speaking to one of those at the forefront of this technology, the ceo of appneck us Brian Okelley, thats coming right up. Opportunities arent always obvious. Sometimes they just drop in. Cme group can help you navigate risks and capture opportunities. We enable you to reach Global Markets and drive forward with broader possibilities. Cme group how the world advances. Right after the mixed day we had on the u. S. Yesterday the dow being dragged down by a number of earnings right now, currently imemployplied with a open of 10 points. The s p up by about a point and the nasdaq up about two points and well see what happens as we get closer towards that. Plenty of Unanswered Questions are swirling about a major internet disruption in china. Major websites were inaccessible for around an hour today, online users were redirected to the Dynamic Internet Technology a smaller u. S. Firm that opposes beijings restrictions. It says its not to blame. Tech experts are divided as to whether hacking or a root server outage was the cause. Meanwhile in davos, tech leaders have been holding a session on the new digital context and unsurprisingly a lot of the focus has been on mobile. Take a listen to what yahoo s Ceo Marissa Mayer had to say a little bit earlier this morning. For us we have sophisticated models that look at whats going to happen for traffic this year and for yahoo 2014 is the europe crossor. By the end of this year well have more mobile users and more mobile traffic than we have pc traffic so you have to be prepared for that. We pride ourselves on running the Worlds Largest startup. Can you be a big company and be flat, transparent and give lots of autonomy. And we can expand a bit more on that idea of the mobile growth theyre expected to see. Im joined by Brian Okelley, ceo and cofounder of appnexus. One of the key challenges is transferring your Online Advertising business to mobile, and actually youre late to the party. What are you doing to address that issue . Well, sometimes its nice to be a little late to the party. You can figure out which party is the right one to go to and of course here at davos theres lots of parties and lots of long lines so what weve done is wait until standards emerge, wait until we figure out what it will take to make mobile advertising work. The truth is the challenge isnt one of technology. As a Technology Company our focus is on kind of the same thing this whole conference is about, which is theyre reshaping the world. Were trying to reshape the internet and mobile is the future of the internet. So our main idea here is figure out how to make advertising more effective on mobile than it is on the traditional pcbased internet and advertising dollars will follow and that funds content. When you talk to someone who is working at a magazine and publishing and says i cant make money from advertising, were going to fix that. Bingo. How are you going to make money from mobile advertising . How do you make money from mobile . Well, advertising is a 500 billion industry. This isnt a new thing. Im not inventing a new industry. Were saying the way advertising works traditionally online is very ineffective. You have a small banner at the corner of a website. On mobile you have a phone eight inches from your face. You can put not just a pretty ad but one that you can swipe, click, call, access content, do all kinds of things and its a much more interactive experience for any marketer than what they have traditionally had. Its a much easier problem than people make it out to be. Its a matter of timing. The big brands havent figured this out yet. Many of the publishers used to publishing on paper or even on the web havent figured out how to make apps effective. So thats what were trying to do, build the technology that will be there when the market is ready and evolved. So one of your Key Competitors is google. How does that fork for you . They havent figured this out either. So theyre behind the curve, too . Thats the thing, no one knows what the answer is. I think we all know the world is going in that direction. What google has done to be the biggest in mobile is tell their customers that when they run a search ad it will run either on the web or on mobile. Those arent mobile spec apps. Its not that theyve figured out how to make mobile work. They said lets make mobile like the web. I think our approach is different. We acknowledge there are dirn formats, dirn kinds of Consumer Experiences are necessary when you have a device that has a motion sensor that knows exactly where you are and google does not do that any better than anyone else. Its a wide open field and were excited to be i think on the forefront, if you look at this ten years from now youll say wow, appnexus was an innovator. Are you going to be educating others on what they need to do . Educating your competitors is not one of our core strategies. I think were on the same side of this one. Its good for everyone to have mobile work better and if we can save journalism i think that would be a great outcome for the world, for democracy to be honest. Absolutely. Brian okelley, ceo and founder of appnexus speaking to us. Ross, back to you. Thanks for that, jules. Just to show you where we stand with futures about ever we head into the break, fairly mixed open. The s p ugt caught up a point. Verizon and travelers and Johnson Johnson dragged down the dow. Well hear from coach and General Dynamics before the open as well. Plenty more to come meanwhile in the last part of the show leaders in davos are discussing the u. S. Recovery, is it really the comeback . Well talk about it with dr. Nariman behravesh, chief investment economist in a moment. H, fifteen minutes could save you fifteen percent or more on Car Insurance. Yeah. Everybody knows that. Did you know there is an oldest trick in the book . What . Trick number one. Lookest over there. Ha ha. Madeest thou look. So endeth the trick. Hey. Yes. Geico. Fifteen minutes could save you. Well, you know. Welcome to Worldwide Exchange. Im julia chatterley coming to you from davos. Im ross westgate. Here are the headlines from around the globe. Hording cash. Companies are sitting on a . 8 trillion cash pile as they are reluctant to spend. Investment is about half the cruising speed and investment is tomorrows growth. That should concern us a lot. The sun is shining. Economists barry eisengreen says investors should be ready for a stronglier stateside. I am confident about the prospects for the u. S. Economy and indeed im more optimistic than the consensus. I think 3 growth in 2014 is a slam durnink. The stars are aligning for the United States. Shares in apb fall after the swiss engineering giant warns due to project delaying and restructuring costs. The ceo said they have turned the corner. How fast we can get speed as kro the internet is extremely fighting. Weve been testing g fast which allows you to get over a gig into a premise and i think a few years ago nobody would have thought that would have been possible. And the mountains of davos may have nothing on the amount of snow dumped on the east coast of the u. S. Which now faces a second day of travel delays and frigid temperatures. If you just joined us from the states, good morning to you. Plenty of coverage from davos on the first meeting of the World Economic forum meeting. On the agjegenda in the States Economic day da but plenty of Earnings Report from united technologist, coach, General Dynamics before the open. After the close well hear from ebay, netflix and stryker. Yesterday verizon, travelers and Johnson Johnson earnings dragged the dow down off some 44 points. The dow is below down by 21 points or so. The nasdaq at the moment is on fair value. The s p yesterday which was up some five points at the moment is just a smidgen below fair value so fairly slight, slightly down for u. S. Markets. Ftse to the slow session, turned lightly more negative in europe. Flat for the if ftse 100. The big news out of the uk was the unemployment data making a surprise tick down to 7. 1 . Remember the bank of england said in the summer we have a threshold target of 7 before we consider changing Monetary Policy. Were there a year earlier than the bank of england potentially thought. The ftse is up 0. 25 . Here at the european, the World Economic forum here in davos, participants are being encouraged to think beyond the crisis, but the question is, are we really ready for that here in europe . Just take a listen to what some of the participants have been telling cnbc all morning just whats going on in the european recovery story. We tend to look at one big europe. Europe isnt one big europe. Uk follows the u. S. Market with a lag. Erm know used to kind of been strong and because theyre so export dependent and the markets, a large part of the markets are the u. S. They necessarily have to spend. The world is starting to be tired of discussing crisis and the folds in action for Emergency Management and yes, so there is positive spirits coming back on the boards and people are looking forward to having better times. We are at a good point in time where we can be optimistic that there will be a pickup and do we believe it will be fantastic growth . I dont think so. I think europe still has a lot of restructuring to do. Lets add one more voice to that case, im joined by dr. Nariman berahovic, chief economist at ihs. I think we are beyond the crisis in the sense the worst of it is behind us but theres still a lot of work to be done if you think about Southern Europe theyre struggling. Northern europe is doing fine. Southern europe is struggling youth Unemployment Rate is high. Theres a long road ahead but probably the worst of the crisis is behind us. Lets separate out what governments need to do versus what the central bank and the ecb needs to do. I think the ecb needs to be more generous in terms of qe or longterm repurchasing and the refinancing operations. I think money is too tight in europe, its part of the reason why europe isnt recovering like the u. S. Or say the uk. So the ecb theneeds to be more success. I think this year theyll do longterm operations. Inflation is coming down as you know, bank lending is contracting, so i think theyre quite worried about this. My guess is theyll do something. We were talking to the Deputy Director of the imf and he doesnt think this year is perhaps a problem for europe, next year could be a real issue. Do you see Something Like that playing out for europe, too,ris. Is 2015 a more crucial year for europe . I think both are crucial. Germany is doing well, probably over 2 this year but the rest is not doing so well. So i would say this year as well as next year im worried about. Lets shift it out to the u. S. , stars aligning to are u. S. Growth this year . I think the answer is yes. We are looking for growth between say 2. 5 and 3 for the u. S. This year. The big difference between this year and last year is the drag from fiscal policy will be a lot smaller and so that will make a big difference and the underlying strengths of the economy will come to the surface. Business investment are we going to see Business Investment . This is one of the crucial issues that keeps coming out in davos. It is indeed as you say earlier huge cash piles that arent being spent. Well start to see that in the u. S. , confidence is rising if if you look at the various measures, businesses are feeling a little bit betber things. I think theyll spend more. What about the unemployment situation and wages in particular, something that were not seeing is wage growth, inequality is a key theme here, too. If i look at the uk, discussions about minimum wage, germany, the u. S. Is also talking about it, too. Are we seeing a sea change here as the squished workers now actually fight back . Well theres a little bit of that, of course, but i dont see it as a sea change, and in terms of the minimum wage this has become a political sort of fight over this issue but the changes most people are talking about including in the u. S. Are barely catching up with inflation. I dont view this as sort of a job destroying rise in the minimum wage. Catch up. If you raise it too much you destroy jobs but whats been talked about here is just basically catch up as youre saying, yes. Right, key risks in 2014, what should investors be aware of . With he worry a lot about the emerging markets including china. The growth slowdown in the emerging world has been quite dramatic, and growth has continued to disappoint, brazil is struggling, russia is struggling, india is struggling. This is the big worry as far as the Global Economy is concerned so i view those as big risks right now. Same story emerging markets, diverging markets is the one to watch. Nariman behravesh chief xh economist at ihs. My mouth is starting to freeze, getting to me. It be use hot chocolate always works. Well be back with you in a moment, jules. Some of the other stories with are following, ibms Fourth Quarter profit beat forecasts. The revenues missed estimates for the fourth straight quarter on continued weakness for ser r serbers and storage in china. 40 of the 5 business in china is hardware sales. They will forego their annual incentive payments as the company failed to boost revenue. Ibm has affirmed 2015 targets as well. Shares were down 3 in afterhours and currently up 3. 5 in frankfurt trading. Texas instruments Fourth Quarter results beat forecasts even as demand for chips remained fairly muted. The company is cutting 1,100 jobs in the United States, japan and india a move will save 130 million a year. Texas will no longer provide mid quarter updates either as its business reflects broader Industry Trends versus major decisions by customers. Shares were down 1 after hours in the states, about a quarter in frankfurt. Still to come a surprise change at the top of pimco, Mohammed El Erian bowed out as ceo. What might be behind his departure and what is ahead for bill gross and the investment giant coming up. [ male announcer ] this is the story of the little room over the pizza place on Chestnut Street the modest first floor bedroom in tallinn, estonia and the southbound bus barreling down i95. This magic moment it is the story of where every great idea begins. And of those who believed they had the power to do more. Dell is honored to be part of some of the worlds great stories. That began much the same way ours did. In a little dorm room 2713. This magic moment british unemployment falls sharply coming within a hairs breath of the bank of englands own threshold. Ukraine protests leave three dead as the u. S. Revokes several visas over the violence and him lows Mohammed El Erian resigns as ceo unexpectedly. Millions of u. S. Residents from kentucky to new england are digging out from a major winter storm that left up to a foot of no he in some spaplaces. One town on the jersey shore got 16 inches, more than 3,300 flights were canceled yesterday and another 1,500 have been strapped today, extreme cold temperatures caused by an arctic blast from canada are expected over the next two days. Reynolds wolf from the Weather Channel joins us with the latest. Reynolds we had the snow. How cold is it going to get . Many prayses could go down to single digits. Theres the potential some places could be well below zero actually in degrees fahrenheit. This is the latest we have of winter storm janice, the center of circulation the green is the rain and the blue is the snow. At times the snow could be incredibly heavy. We take you hour by hour well see the snow begin to fizzle out, the cold air begins to tumble and cold air will drop anchor, going to set up over the next several days. Were going to see more snowfall and not going to go anywhere unless its plowed or shoveled away, its going to stay here for a while. Hyannis and proveistown some of the heaviest snowfalls today, not including some spots that already had up to a foot, they may see additional three to five inches of snowfall for today which translates to metrics roughly 12 centimeters, 13 centimet centimeters, so were not done just yet. How is this affecting people in the u. S. . In terms of travel it will affect them negatively especially in new york, major delays, philadelphia the same deal, boston major backups and chicago mainly volume delays we might see quite a few there as well. Lets send it back to you. Reynolds thanks. Thats whats coming up for the weather. Theres a big shakeup at pimco. One of the public faces of the investment giant decided to call it quits. Whats behind it all . Im not sure we know. Courtney is with us with details. Court, were not quite getting whats going on here, do we . Yes. Ill tell you what we know. Mohammed el erian is resigning as pimcos ceo and cocio after seven years, stepping down in mid march but will remain as a consultant to allians. The move comes as investors are increasingly shunning bonds which pimco specializes for stocks. Customers pulled more than 41 billion from pimcos flagship total return fund last year as opposed to first annual loss since 1999 and worst performance since 199 had. Bill gross who founded the company in 1971 will become the sole cio. Just two years ago gross said he expected el erian to take over that role when he retired so i guess theyve changed. Pimco is fully engaged. Batteries 110 charged. Im ready to if for another 40 years he praised el erian says hes been a great leader. Mohamed el erian was Deputy Director at the imf before joining pimco in 1991. He left to oversee harvard funds in 2000 of. He was wooed back before the financial crisis. Hell be replaced by ceo doug hodge. The deputy cios will set him up to succeed gross. In 2009 they hired Neel Kashkari to build a stock portfolio but thats slow going as he quit in december. Tuesday kashkari announced hes running for governor of california this fall so pimco made lots of headlines yesterday. Ross back to you . Yes, i have a feeling its a few more might be coming out. Well see what happens. Court, thanks for that. Also a shakeup at dow jones. Lex fenwick resigns less than two years after taking the job, previously spent more than two decades at bloomberg. Replaced about i William Lewis on an interim basis. He was a controversial lead we are a hard charging personality and pro feign outbursts. They flagged weakness in the dmg institutional business fenwick was brute in to fix in the past few Earnings Reports. Well take a short break. Still to come back in davos for a closer look at some of the worlds Business Leaders are predicting for the year ahead. European action is slightlily softer, the xetra dax off 0. 3 and the cac 0. 1. Major data out of europe, Unemployment Rate dropping to. 1 , it was 7. 4 previously. No one was forecasting that and more importantly just a smidgen above the 7 threshold the bank ofening gland set in its forecast last summer when theyd consider changing Monetary Policy. We have come out in minutes as well, they thought the rate would fall further but they will go interesting enough to see where they think now what they should do. We hit 7 next month, theyll probably come out and lower the threshold and say look inflation is not a problem or average earnings did tick up a little bit to 0. 9 . Still less than half the annual inflation rate which is 2 . Meanwhile on the agenda in the United States today theres no Economic Data but plenty of Earnings Reports. It was earnings yesterday that dragged the dow down. Today we get to hear from component united technologies, also coach and General Dynamics there before the open. After the close well hear from ebay, netflix and striker. U. S. Futures have also ticked lower in the last half hour or so and were currently now some 26 points below fair value about a point below fair value for the nasdaq, the s p as well a point below fair value. Lets if from there back to jules at the World Economic forum, find out what they think about the year ahead, jules . Absolutely, ross, that was the markets of today, of course. What about the markets throughout 2014 . Tlop what some of the davos participants have been telling us this morning about the outlook. The whole question is will the stock market do as well as it has historically. Lots of people talk about the last century or two where real attorneys have been phenomenal. The problem is theres no economic theory to say they should do that another century. So we just, you know, its called the equity premium puzzle so im not as optimistic about just based on history. Thats chasing past return. We just dont know. Im sort of optimistic. Im an optimistic person. Im in the market but im not theres a potential for another collapse, definitely. I think the markets have swung now from one extreme where they were pessimistic overly pessimistic about europe to now theyre euphoric, european spreads compressed beyond all reason as one of your earlier guests said, the eurozone crisis has not been resolved. Ross, one of the interesting things i think came out is the focus putting on a u. S. Recovery and how the stars are aligning for the u. S. But at the same time one of the key risks of course tapering and tightening and of course its a selfreinforcing circle, it will be interesting to see how that plays out this year. Paul pullman from unien lever said there is a great deal but from his perspective incomes in the states havent done anything for six or seven years so you kind of think if were not getting Income Growth what are we building in terms of sustainable economy as well. So that was the interesting thing. Its kind of interesting listening to him talking about trades. Trading cheaper than both the u. S. And the uk, i wonder whether many people are saying thats justified. Convergence h extraordinary. The question is can that continue . You heard dr. Nariman saying theres still concerns. Off camera speaking to the Deputy Director of the imf he said this year isnt the biggest concern for europe its next year, that is the view hes taking. They warned about the risk of disinflation and deflation. Is there a disconnect between whats going on in the real economy and what markets are saying as far as europe is concerned. And then plenty of interviews still to come as well from davos. Dont forget, this afternoon on closing bell in europe well be joined by Klaus Regling and sir roger carr, chairman of bae systems speaking about the challenges facing the defense firm. Plenty to come on closing bell. You had your first two hours in davos down and dusted, pretty good id say. I know, and i survived. Im going to get that hot chocolate that you were talking about earlier youll always find a little bit of too et cetera a, youre never far away from a piece of pizza in davos. I might try to stay as far away from the pizza as i can possibly get. Jules in davos and from me in london, have a comfortable day. Squawk box is coming up next. Orbiting the moon in 1971. [ male announcer ] once its earned, usaa Auto Insurance is often handed down from generation to generation. Because it offers a superior level of protection. And because usaas commitment to serve current and former military members and their families is without equal. Begin your legacy. Get an Auto Insurance quote. Usaa. We know what it means to serve. Welcome to a special edition of squawk box live from the World Economic forum in davos. With he made the interest ek to switzerland to bring you interviews with the worlds power players. This hour the ceos of aetna. It is wednesday, january 2 itnd and its cold outside, campers. Squawk box begins right now. Good morning, everybody. Welcome to a very special edition of squawk box here on cnbc, we are live from davos, switzerland. This is the host city for the World Economic far uhm. This is it, guys, we are here. Funlly a finally all togethe. Yesterday cleansed all the air, yesterday it was dreary and drizz drizzle. Not so beautiful back home. 10 degrees. Polar vortex, too. I keep reminding them theyre inside, were outside. Im becky quick along withjoer can kernan and andrew ross sorkin. Mark bertolini will be up and ray dalio of bridgewater, william bratter, Thomas Donohue of the u. S. Chamber of commerce and david rubenstein, james gorman and matt damon. Thats right. Tomorrow an interview with jpmorgan chairman and ceo