All right. Were back. Hello, welcome to Worldwide Exchange. Im ross westgate. And im kelly evans. These are your headlines from around the world. Heavy metal profits brings the first u. S. Company out of the gate with earnings season. But results will continue to be pressured by weak demand. Samsung electronics operates a fifth straight quarter, but sales flip. And government is on track for the austerity measures as Angela Merkel gives up for election. And aig just finished off paying off its massive bailout, but the company is now weighing on whether to sue the u. S. Government over that very rescue. Now 2013. Its been so long. How long has it been . Months. Better make the most of it, though. Two days. Yeah. Two days. Then its onward. Anyway, look, were here. I still dont know what time zone and country im in. There was snow, right . There was. It was beautiful. On todays show, we hone in on samsung in seoul. Im all frufterred because youre back. The electronic giant will expand its lead over apple this year. And weve got our chips in. And well head out to las vegas for the latest on the Consumer Electronics show. The trade deficit widens to its largest level in five years. And well get the latest from wall street on just how happy a new year bankers are likely to have. I hope its not that happy. Some will be okay. Generally speaking. Now, the greek Prime MinisterAnthony Samaras is in germany to discuss Angela Merkel. Joining us today, james sokin. How are you . Good morning. Very well. Thanks. Nice to see you. And we should kick off our discussions. We were going to ask you about whats happening across europe. Now we have samaras and the greek Prime Minister saying we are looking at optimism. And athens is delivering. I think it was one of the famous old americans who said that givers have to say when enough is enough because takers rarely do. So if the greeks say theyre full of optimism for the coming year, its probably sending a cold chill down the spine of the average germans. Yeah. Because it means they expect additional help Going Forward. Theyve worked out how to keep milking the cow. We started this year with a lot of tailwind from last year. China hasnt had a hard landing and greece didnt get kicked out of the eurozone. If it keeps going, then why is anything going to change on that . Look at all those negatives or negatives that didnt happen. America didnt boil over the fiscal cliff. What does that mean . What that means is that america, which is now nearly robust now is able to stand on its own feet with tax cuts and overextended Spending Plans decided not to necessarily do that. But actually, that would be the best sign of intermediate health that you could have. So we have this weirdly twisted view of the world at the moment where really in the longterm is good, its considered in the shortterm bad and, therefore, markets are how about regulation . Very much so. Funny you should mention that. Mervyn king calls this a paradox. And exactly what has happened is them coming out and saying they will give much more time is exactly what mervyn king said they should do. But you know why he said that . He said that because thats not really the issue. And theyre on the Balance Sheet. Everyone in the market is responding always to the first derivative of innocence. Not really to the second or third. Theyre still bust, they still cant pay their without and they cant without major Debt Forgiveness. When a Prime Minister comes up to you and says hes full of confidence for the new year, hes saying he needs help and hes optimistic. On that note, james will stay with us. We want to get some news out of spain, too. That country is set to start its new year with bond auctions. This year, the government must raise more than 2 million billion euros in debt. The treasurys funding this year is being outlined in madrid as we speak. As we get details on that, well absolutely bring them to you. Were talking about nations showing up and saying, give us the help. But spain hasnt even had to go that far. The spanish base can get some of on their money if they declare official emergencies. What theyre trying to do is to avoid saying we really need the help, were in trouble. All these countries, as the situation continues, its clear they wont appear to be the only ones to call the situation off. And the spanish are aware of the fact that everyone else is aware of. We can deal with these countries. Spain itself is a significantly different issue. This is a european problem, a potentially fatal one, but one that the spanish isnt really up to. Can we still get beyond the german elections before there is any activation of the omc . Were talking about or can we go everywhere . The issue with the omt, if youre a central bankers performance, its all these acronyms and different names. Its worth bearing in mind that the really important thing that you do if youre printing money, as a central bank, is qe. And by that, i even mean anglo sackson qe. That is the purchase of long dated bonds. And thats what the ecb is not allowed to do. So they talk a lot about what theyre doing in terms of ltro and omt and the others. But theirs are still normal convingzal transactions. What theyre going for with the german sess getting permission to have normal bank antibiotics and thats what we call money printing. We think weve gone to that for september because its basically you need to somehow convince the germans or have a long time to explain it. Especially during elections. James is with us. Any questions for him or for any of us here, shoot them into worldwide cnbc. Com. Lets bring you up to speed where where we stand on european markets. Pretty even steven, actually. We are up at the session highs. Its actually pretty flat. The ftse 100 yesterday down from 25 points. Still above the 6,000 level. Up 8 points this morning. Great Sales Numbers today from debanon. All having a pretty good christmas as a stand out so far. Xetra dax down 12 points, ibex down 7. The cac 40 gain up 5 and the ftse 1100 gains 8. Treasury yields, still around that 11. 91 . That was that eightmonth high that we hit later monday. Still tracking around there. Italian yield, 4. 3 . Spanish yields still below 5, 5 a. 089 . Currency markets, a lot of focus on euro yen today. 114. 66 is where we stand. The japanese finance minister saying the japanese government will buy bonds from the european stability mechanism. They had only done it previously from the esfs, which is a permanent bailout fund. Dollar yen, 87. 38. Profit taking still after hitting that 29month high of 88 of 48. Euro dollar at 1. 3124. Friday we were just below the 1. 30 level. Thats where we stand right now in europe. Lets bring you up to speed with the asian trading session. Will i sixuan joins us for the first time today in singapore. Thank you, ross. A weak handover from wall street. The nikkei came off its peak ending nearly 1 lower despite japans new Prime Minister stepping up the call for aid yet again. Exporters extended losses, but sharp shares jumped after the struggling tvmaker said better than operating profits for the last quarter of 2012. In china, the shanghai composite slipped more than. 4 . The shanghai fell. 4 . Raising doubts over that 9. 4 billion deal. China pacific insurance sharply lower after the u. S. Callout a reported stake in the country. In taiwan, suppliers wait on the markets with the taiex ending lower by. 4 . The kospi was lower. Bellwether Samsung Electronics slipped by 1. 3 despite its Earnings Guidance indicating yet another record quarter. Meanwhile, Australian Shares fell the most in five weeks dragged down by miners, banks and industrials. Back to you, ross. Thank you. Now, speaking of samsung, the company may not need any excuses to explain its Solid Earnings, but several companies are expected to dip up scape goats this month when they report earnings. Superstorm sandy is expected to top the excuses. And there may not be a lot of love to go around in washington around valentines day this year. If lawmakers fail to come together on debt talks. According to fresh numbers, the u. S. Could hit the debt ceiling by early as mid february. John harwood explains all the details, a couple of reasons to go and visit that website this morning. Cnbc. Com. Still to come, why property is up at Samsung Electronics, but the share price is down. See you in a moment. Welcome back. Alcoa gets the earnings reports started today. Slower growth in the economy, the eu debt crisis and Superstorm Sandy are expected to top issues. Take a look at shares this morning. Before the report, theyre down. 75 in frankfurt. So trailing the 34k9. They have been roughly flat over the last few months. James is a huge fan of werings season. Youre so excited about this one, i know. I live for the wering hes season. You could spend almost your entire time theres only about three months of the year when youre not engaged in looking at earnings. Ask youre probably on holiday. And are we too focused on werings season . Samsung, Earnings Results up, share price down. If you think earnings is relative for share price performance, it isnt. Were talking about the reporting season rather than the underlying earnings. They have quite a lot of leeway. Theyve given guidance to the analysts about what those earnings might look like in the near term. All the analysts are pawing at the results. All in all, a huge amount of activity and brain power wasted on something which in the near term has been well flagged, isnt that important. At the same time, though, there are analysts who and weve seen this. Who will get the set of numberes and will go, relative to what i expected, they said x about samestore sales and y about aluminum pricing and there is information theyre getting out of these results and out of the conference calls, too. Absolutely. Its whats behind the headline results thats informational and instructive. And thats what the analysts will be taking out of it. Before they can get into that, they have to flesh out with their notes and tell clients overnight, we are forecasting this, we were. 1 out or whatever. I wonder, is there an expectation you have about how earnings might go . Forget the seasoned part identity. Were looking at the end of the year in the u. S. How important is it that these earnings look okay . Well, one thing is very interesting. Obviously, the stock market has done very well in the u. S. We know that profit margin res very high. Weve got this longterm risk that margins meet them in revert. However, in the near term, something quite interesting is happening, which is that although demand is fairly lackluster, we know that wage cuts are being held back. Commodities, they have a very high impact at the moment in terms of which way we go over the in the next quarter. And, of course, demand does mean those are under pressure. Even at a very high level for Profit Margins in the u. S. , we have them to nudge even higher. Extraordinary. Yeah. More to come from you, james. Well looking at samsung reporting earnings. But investors essentially appear all that interest. Sherry has more details from seol. Whats the reaction . The reaction was pretty bad, actually. The stock market, though, its shares were down, off by more than 1 today. But this is not a surprise, ross, given its track record. For the past 12 quarters, three years, that is, the stock has underperformed the index with five straight sessions out of each guidance. As for its werings, strong sales led to a slash of models and thats pleased to be the main driver of these strong numbers. The company bombarded the market last year with close to 40 variants of smart products when am was out with just a single model of iphone 5. Now, Fourth Quarter sales came in at 56 trillion one and operating profit at 8. 8 trillion, which is roughly about 8. 38 billion, up 83 on year. So this is the fifth Straight Record quarterly operating profit. Now, another factor here is a pick up in demand for chips, especially for advanced chips like nans and mobile ap, which are expected to a play a bigger role in samsung profit Going Forward. Now, the company said today at the consumer electric iics show in las vegas that its on track to be the worlds top home appliancemaker by 2015. The las this month, january 25th. Guys. All right. Chery, thank you. Lets bring in andrew milroy, from itt pacific in singapore. Well keep chery in seoul, as well. Andrew, the reaction to the news there from investors, where samsung is clearly beating apple, though, which is interesting is in the smartphone segment. Do you think thats going to continue . Theyre taking a lot of share of on smartphones. Is that going to continue . Yeah, i mean, i think the strategy has been very successful against apple and i think chery made one of the key points. Last year, samsung launched nearly 40 new products and is apple launched just one. So theyve got a strategy to offer smartphones to a huge variety of market segments. Theyve got a strategy to produce a variety of different form factores and theyre leading this new market for the socalled fablets, devices that are too small to be a tablet, too big to be a smartphone. Theyve been very innovative in their approach to targeting a variety of different segments whereas apple hasnt had as much differ enation in their products, as well. This has been very successful. Does that mean that they can take share away from apple in the tablet and theyre creating a new sort of market that will take products away from apple even in the tablet stage . Yeah. I think thats why were going to see a lot of the action in 2013. So i think, you know, they really do now dominate the Smartphone Market and theres no doubt about that, at least on a global basis. I think next year i mean, apple is still dominant in the tablet space. I think next year well see samsung and others turn their attention to a much greater extent to the tablet market on the socalled fablet market. The hybrid smartphone tablet market. I love it. We have a new phrase, fablet. Do you like that . I dont like that. Its so cheesy. How do you spell that, andrew . Is that with an f or a ph. [ yeah, its phablet, cross between tablet and phone. Oh, i see. It sounds like a fabulous tablet or something. Chery. Yes. There are some who are concerned, though, that samsung is growing too dependent on its mobile business. That accounts for 70 of samsungs operating profit. What are your take on those concerns . Yeah. I think there is a concern that the market that theyve generated so much of their own in growth is actually maturing. So the Smartphone Market as we know it today is pretty mature in most advanced profits. I think obviously investors are concerned about the impact that will have in samsungs profitability overall. But as we mentioned, i think we can expect to see them move into adjacent markets in the tablet market and this other new market thats recently been transcribed as the phablet market. Talk about where theyre going to. How important is china . Thats been one area apple has come under criticism for not getting it right. How important is china Going Forward . I think a lot of other hand setmakers are obviously strong in china. I think there are a lot more players. I think some of the more advanced markets are dominated right now by samsung and apple. There other players that we cant ignore like blackberry and hltgc. In china, were seeing some of the local players like vt becoming strong there. But i think the whole android approach is potentially more successful in china on the grounds that there is much more scope for localization. Its much more flexible than the Apple Ecosystem in many ways. You know, some people say that the Apple Ecosystem is more secure and reliable and a lot of enterprises are more comfortable with that than the android one. But the android one offers the flexibility that is needed in localizations where something is needed in the market. It will offer competition for some of the local chinesemakers than in some of the other facets. Just on a side note wrb where does that leave microsoft . Thats a very good question to ask, indeed. Obviously, you know, microsoft have come out with windows 8el. A number of manufactures are pushing windows 8el devices aggressively at the moment. We expect to see them take some share and provide samsung and apple with some competition. Because i guess the strategy they have is for the common User Experience across multiple devices. So pcs, tablets, and smartphones and other devices all running this common operating system. And we think they may have some success with ernter prices who find out a more secure and reliable and easy to manage approach, especially with the growth of people bringing their own devices into the workplace. So we think they will provide some competition in 2013. Andrew, good to see you. Thanks for that. Schery, good to see you, as well, from seoul. Now, the Associated Press sent out its first sponsor tweet promoting samsung at the Consumer Electronics show and in effect turning its twitter page into a source of advertising revenue. The ap isnt the first News Organization to get paid for a tweet. Slate has sent out sponsored tweets and celebrities have made money off sponsored tweets from their own accounts. Some of the aps followers arent bothered by the news. Is that live . Can we click on the i dont think. Click on that one. Click on that. Why dont i take you through it to the samsung page, theoretically. Right. The link on ap. There we go. So thats what it takes you to. So were now doing samsungs advertising for them. Thats an interesting you click on that and you go to the samsung ces page. Its relevant to what the tweet is about. Well, of course. From samsungs point of view, this makes a lot of sense. 1. 5 million twitter followers. When peopl