i'm mike huckman in the united states. president obama will tap ben bernanke for a second term as federal reserve chairman. >> i'm maura fogarty. here in asia, news about mr. bernanke fails to overcome the down draft from china. and i'm becky meehan. in europe, shares return from those ten-month highs despite germany returning to growth in the second quarter. hello, everyone. welcome to cnbc's "worldwide exchange." let's get round the markets now start, a look at the ftse cnbc global 300 index. on a broad brush picture, markets are down by 0.4%, certainly retreating from the highs that we've seen recently. that's definitely the case for the european markets. we are seeing declines for all of the major markets here. the ftse 100 is down by just over 0.5%.

declines for 0.6% for each the dax, cac and the smi. let's check on the currently markets today. yen strength continuing to be a bit of a theme there. dollar/yen, 94.28. we are seeing the euro weakening against the dollar, as well, with with the euro down at 1.4269. as far as sterling goes, 1.6357, down by just about 0.4%. as far as the euro/sterling is concerned, 0.8721. sort of puts us on the back foot here in europe, maura. >> yeah. and you would expect mr. bernanke's reappoint might give some boost to the asian markets. not quite so. trying to manage expectations about the chinese economy, that pulled down the shanghai composite, which closed down one point during the trading session. sellers were heavily in the market, pushing the index down

by 0.5%. aside from that, we have the yen crosses unwinding with the yen surging. and the nikkei fell by 0.8%. by the end of the day, the markets settled mostly lower. the hang seng just closing down inti 0.5%. the india sensex trading and for now in positive territory. nymex light sweet crude just off yesterday's high of 74. we're down by about 50 u.s. cents at $73.87. mike, let's take a look at how the futures are shaping up on this tuesday morning. good morning to you, mike. >> thanks, maura. good afternoon to you. and the price of oil was really a big reason why we saw the activity in the markets that we saw yesterday. as for this morning, it does not look like we're going to get much of a bernanke bounce here, as you can see. maybe the exact opposite could

occur today of what happened yesterday when we had the dow ever so slightly higher and the nasdaq and the s&p 500 a tiny fraction lower. as equities relatively fell out of favor, we did see investors bid up the price of treasury notes. and this morning, we have the bund yield following even more. the yield on the benchmark ten-year t-note fell to .49% yesterday. and if we look at it now, it is ticking up just a little bit, but it's basically flat at 3.49%. moving on to gold, on the strength of the dollar, we did see the price of gold go down yesterday more than 1% as investors moved into silver, as well, according to the wall street journal. but today, we do see gold trading higher at $946.20 per troy ounce. so president obama will facilitate ben bernanke to a

second term as fed chairman today. the president will interrupt his summer vacation on martha's vineyard to make that announcement at 9:00 a.m. new york time with bernanke at his side. in a statement, the president says bernanke approached a financial system on the verge of collapse with calm and wisdom. the white house says the president made this decision about one month ago and formally offered bernanke the job just last week. the other main candidates have have been larry summers. bernanke must still be confirmed by the senate. chris dodd promises a thorough hearing, but says the move is probably the right choice. maura. >> joining us now is david karsbol, chief economist at saxo bank. also daphne ross at abern private banking. the markets seemed to focus on

china. what is the concern there? >> tightening liquidity. i think the market gold hold that august loan growth is only about 300 renminbi. and, of course, in the first half of '09, we salons of 7.4 trillion renminbi. not that the market expects, you know, the same kind of growth, but i think they were a little disappointed. 50% of those loan growth in the first half went to short-term view and we know some of those money had crept into the property markets, the a-share markets. now those loans will be repaid, going back to the bank, so some of this money will come out of the a-share markets as well as the property share market. so the market is a little concerned about that. >> david, should we read anything into the fact that asian markets and european markets for now aren't getting much of this bernanke

reappointment bounce? >> i think what is important is it should have been a positive that bernanke stands to be re-elected. but yesterday, we have a ruling from the federal court saying that they were have to be held accountable for the money that has been used to bail out a lot of the big financial institutions, so they will actually have to provide details on these banks and i think that's a negative. that's why we're seeing financials a bit under pressure right here. i think that has more to do with the financials heesh. >> david, from a european perspective, we have seen a negative market open today after 2009 closing highs. they said today we shouldn't draw too much from the fact that we're seeing a bit of a pause in that rally.

what are your thoughts on where we go next? >> i think from a technical perspective, we might get somewhat higher. in the big picture, we are heading for the 50% retracement in the s&p 500, which around 9%, 9.5% higher from here, around 1121 in the cash index after we broke the high of this 1014 level, which is the 34.2% retracement. i have to say fundamentally this rally doesn't make any sense. i believe we are about to see a tsunami of foreclosures in the u.s. a lot of folks have held back because as the banks are falling, they have had to do writouts and they've been reluctant to do so lately and that's why we've seen a lot of stories about americans being allowed to sit in their homes without paying their mortgage. and that begs the question, if

you can observe your neighbor out of job and still be able to sit in his home and you might be talking to him and getting to know that he's not paying his mortgage, why is his home not being foreclosed on and it doesn't make sense for you to continue to pay on your mortgage. i sense anger in the american population towards these bailouts. i think there's a widespread opposition to this. and the fact that you can -- in a lot of u.s. states, you can stop paying on your mortgage and just hand the keys to the bank and say that the problem is yours, this might be seen as a sophisticated way, but just a way to retaliate on a banking system that not too many americans are too happy about right now. >> those are fairly strong comments, really, from david there.

a tsunami of foreclosures could bring -- >> i'm less negative than him. perhaps the u.s. could have a w-shaped recovery. i'm not ruling that out. so far, most of the economic data that we have seen from the european interview as well as the euro pmi has been supplying us on the up side. so i am not that negative. also, even the housing sector, i believe that it's stabilizing. we are actually less negative on that. perhaps there might be a small correction. we have still positioning ourselves in. as a result, we are still underweight in the equities market. >> daphne, this is mike huckman in the states. you just mentioned that you're not going to rule out a w-shaped

recovery. but isn't ben bernanke and his reappointment a good sign that the president believes if anybody can help avoid a w-shaped recovery, it's bernanke because he's such a great student of the great depression? >> exactly. i think he has proven himself well. he has handled the crisis very well, getting most of the goblins and central banks to have a coordinated fiscal stimulus. so we have seen that the credit market has normalized and so far we have seen the earnings results from the second quarter have been quite good. a lot of companies have cut costs aggressively. so going forward, what we really need to see is that in order to be some pick up in demand. that's why i am quite positive on the reappointment of per unanimousky. >> but david, you believe that

the economic forces, especially here in the united states, are way too strong, even for a ben bernanke to fight back? >> yes, i think it's a huge problem that we still have widespread unemployment. there was a lot of brouhaha about this unemployment rate dropping to 9.4%. but i believe you are able to show the graphics that he i sent in. i don't know if you can do it now, but i prepared this graph showing the total employment to the total population ratio of the united states. and the graph shows that this -- we are actually continuing to drop lower and lower and lower. there's no tickup anywhere in the graph in the last year. and it's showing it's at the lowest level since 1987. i believe that's a negative, especially considering the hiring that has been going on

primarily has been in the federal government and to a certain degree also in state governments. there's still a lot of firings going on. and also you are seeing the demographics being against the united states and even politicians now recognizing that we need a reform of the social security and medicaid and medicare. so a lot of the -- we were seeing lots of -- also social article reports on the consumer behavior completely changing. so only focusing at buying the necessities and i don't think it's likely that we'll see any bounce in consumer demand in aggregate figures in the u.s. in the next one or two years. but i do agree that we can see -- if we should look for a recovery, i think it should be led by the asian country webs perhaps ex japan, but other asian countries because they are

having the savings, they are having the capital to do what they want and they will be able to shift their focus towards pollution for the domestic demand rather than the demand that we're seeing now in europe and the u.s. >> david, thanks very much for that, david karsbol. also thanks to daphne ross, head of equity research for asia. let's move on to some of the big stories we're watching for you this morning. general motors might raise funding to keep opel instead of selling that unit. gm declined to endorse a sale at the board mouth on friday, despite that being the german government's preferred buyer. executives are considering other offers including raising more than $4 billion in a attempt to keep opel. natixis shares were sus spended. according to the french newspaper lezeko, it could

provide formal guarantees and prevent the need for more aide state aid. the move would release pressure on the natixis share offerings. sticking with the banks, nicolas sarkozy will urge the heads of some of the biggest banks to crackdown and set a good example at the next g-20 meeting in november. the bank adopted a code of good conduct in february after receiving billions from the government. but they say they're worried cutting counsel on bonuses could drive top talent away. >> becky, here in asia, toyota may ramp up production as demand picks up speed. toyota is planning to make 1 14,500 cars a day. toyota declined to comment on

the report. japan airlines, meantime, may be looking at cost cutting measures that could help it save more than $1 billion in annual costs. jal is looking at a series of plans, including trimming its workforce. jal is asia's largest carrier by revenue. it's under pressure to secure costs after securing a credit line worth $1 billion earlier this year. and u.s. securities regulators are examining weekly meetings at goldman sachs where research analysts offer tips to traders and then their big clients. the s.e.c. and finra will ask goldman for more information. the journal citing document says the short tips given at these meetings differ from long-term reports. however, there have been no accusations that gold man

violated any securities laws. b of a says it did not mislead-in investors, saying they should have known about the $3 million in bonuses. the company notes that merrill disclosed the size of its bonus pool in an earnings report last year. the s.e.c. says the fine fully takes into account the seriousness of the bank's misconduct. in frankfurt, b of a shares right now are under pressure down 1.75% almost. you can get more news, videos and blogs on today's market moving news at cnbc.com. >> you certainly can. coming up on "worldwide exchange," president obama says he brought the u.s. economic back from the brink, but did

bernanke. by providing so much state support for the banks sdmroop plus, the chinese premier, we know jiabao offers blind optimism. nicholas sarkozy goes head to ted with french top bankers. a a

welcome back to "worldwide exchange." straight to our roundup of the global equity markets now. sylvia is with us from germany. in switzerland, we have carolin schober. we have adam with the asian markets today. let me start you off here in london with a quick check of the ftse 100. we are lower today, down by about 0.3%. that's in the context of fresh closing highs for 2009 yesterday. and a run of several days of positive markets action, five days, in fact, of positive market action, today pulling back. amongst the biggest decliners, basic resources stocks which tend to track the feeling about the local story.

kazakhmy's, add miller group pulling back today. that is a uk insurer which is a member of the ftse 100, as well, telling us that they have seen first half profits increasing by 5%. also, they've had a decent six months for growth in the uk business. they are plannin to expand, though. maybe there is concern about that. they are expand, a new business under the el fapt brand, as they call it. they're starting up in the next six months or so in the u.s. let's move on with silvia wadhwa standing by in frankfurt. >> well, becky, it's consolidation, it's profit taking, it doesn't surprise anybody. it's the kind of game we've been playing for a number of weeks now with the future market leading us on with one direction or the other. by and large, there is a couple of weeks ago we had a little bit of an inkling that we might get into overheating territory to the extent that people were

scrambling for cover because there was a fear that there wouldn't be the next dip to buy into. now we settle back into the idea that maybe there will be another dip and another dip and another dip. for the market itself, that's a healthier situation because there's not this strong fear of a real fallback. in terms of corporate stories, we're a little thin on the ground because reporting season is almost fizzling out in germany. if you look at the top gainers and top losers, none of them have particular stories moving around. it's more stock pickers here. we're still talking about gm and opel and what might be happening to it and what the german government will have to say or not have to say about gm keeping opel. i think they're probably in two minds about it. on one hand, they don't want to put up the extra money and on the other hand, they would like opel back in the fatherland, so to speak. what's up in switzerland, carolin inspect. >> it's the same story here in

switzerland. the smi taking a breather here today. we're down 0.r%. we are hitting year highs yesterday at around 6,200 points. let me run you through a couple of the earnings story here today. posting a better than expected 88% drop in first half market was mainly because of restructuring profits. organic growth was a bit of a disappointment. more positive was the fact that the company confirmed its guidance of 2% to 5% revenue growth and confirmed its targets for the full year. over in lichtenstein, bp bank, they reported net outputs of 1 billion swiss franc for the first half of the year. the bank said that its ceo was stepping down and the stock is down almost 3% here. let's talk about roach. the fda is looking into reports of liver injuries of people who

have been taking their weight loss drug xenecol. approximately% of people are having liver problems after taking that drug. while this drug is about to lose its pace in protection, anyway. now to adam in singapore. >> thank you very much, carolin. after a nice pop-up yesterday, the asian markets had a bit of a shakeout here. if you take a look at the shanghai composite, it's one of the day's biggest losers, losing about 5.7%. comments out from the premier yesterday saying that the economy not is not out of the woods yet. on that note, there was a report out saying that the government may increase domestic fuel and gasoline prices because we have seen the sharp rice rise in nymex crude prices to about $74

a barrel. we have seen weaker commodity prices. that brought down property shares. did say, though, that we could see a recovery in the second half because pricing is a bit better on the back of a recovery in the global economy. nevertheless, shares were down a little bit in today's trade. that's the picture in asia today. back to the u.s. with mike. good morning. >> good morning. thanks, adam. one more small note on that diet drug, xenecal, it is a much bigger seller for the british seller glaxosmithkline. so today's economic data may be overshadowed a bit by president obama's reappointment of ben bernanke. at the o'clock a.m., we will get the case shiller home price index. at 10:00 a.m., the conference

board is out with the august consumer confidence index. analysts look for a reading of 47. as for earnings, we're going to get numbers today from the likes of bookstore chain borders, burger king, had i co's, medtronic, staples and that is your global stock watch. maura. >> cash for clunkers has been good to toyota. it's paid off, in fact. the japanese carmaker is set to boost output in november. is this a temporary gear change? >> plus, big ben holds on to his job. we'll assess what this means for the future of policy. stay tuned. ííííííííííí

i'm mike huckman 37 in the united states, president obama will tap ben bernanke for a second term as fed chairman, keeping him in place to steer the world's biggest economy out of recession. >> i'm maura fogarty. here in asia, news about mr. bernanke fails to lift major markets. major markets and shanghai all in the red. >> i'm becky meehan. markets remain lower despite

germany returning to growth in the second quarter. >> let's take a look at global markets. the ftse cnbc global 300 is down 0.3% the last time we checked. as far as the european bourses are concerned, we have seen a bit of a pullback in the european markets today and that appears to be continuing. though again, coming off the lows of earlier in the session. we are currently looking at the ftse 100 down by 0.4% for the dax and, again, about 0.3% for the cac, the smi in switzerland trading lower by 0.5%. declines for all of the major indexes here. in the forex markets, we've seen a bit of yen strength so far today. that continues to be the case. dollar/yen, 94.31 is where were currently stand. euro weakness, the euro down against the dollar by 0.2%. sterling currently standing down by about 0.3%. against the dollar, 1.6365.

let's cross over to maura for a check on how asia has been performing. >> you know, the asian markets today you would think would have gotten a lift from mr. bernanke in the second term. but not so much here. the down draft really coming from the yen surging today, putting a lot of pressure on tokyo equities. and on top of that, mr. wen jiabao's comments put a dampener on shanghai stocks. overall, the mood in asia was cautious. the shanghai composite at one point was down 5% today, finally settles down about 0.6% lower. for now, the sensex is in positive territory. as for the better fanky effect on u.s. markets, let's see how the futures are shaping up now. morning, mike. >> thanks, maura. not much of a bernanke effect, here five hours ahead of the

opening bell and 4 and a half hours before president obama makes that announcement this morning regarding the nomination of ben bernanke. it does look choppy, but essentially we're looking at a flat open across the board. we had a mixed session in the markets yesterday and it looks like we're teeing up to have the very same thing today. as equities fell out of favor yesterday, we saw the t-note go up, the dwreeld come down. but here this morning, ahead of a government auction of two-year notes, that's $42 billion worth and a total of about $109 billion worth of government auctions this week alone, we do see the yield basically flat at 3.49%. becky. let's get on to some of the economic issues of the day. joining us now to discuss the global economy is elena. we have some data out this

morning which lena and i have been discussing. uk july net mortgage lending, 1.6 billion pounds. that compares to the june figure of 2.2 billion pounds. so a decline in net mortgage lending. mortgage approval creeping up slightly, about 38.5 million in june. that net figure looked worse than we saw even just last month. >> that's right. mortgage approvals have been picking up, but they're down by some 60% since the beginning of this crisis. that is showing, of course, in a jobless, creditless, low income environment, what we need is improving homeowner confidence and releveraging for things to improve. so clearly, things are normalizing, but they're far from normal. what we've got from the net lending data is that things are still shrinking which is no

surprise, given that the balance sheets are clogged with defaults for mortgages and the secondary market are still very much sdrurpted. also, another voice of caution coming yesterday, i think it was, from the acb mechanic mersch, a couple of the comments we heard saying we should not be overcome by optimism. the danger of a renewed downturn isn't over and the investment slump has been compensated by public spending. while that is still the case, we shouldn't take away from growth. should we take away from that that investors are getting carried away? >> indeed, the last five months and the last five years. a decline rally in stock markets is shared by optimism of the market compared to fundamentals. fundamentals tends to lag behind financial valuations.

in the short-term, we've seen dramatic improvement in the global economy this year driven by three major things. the first thing is the financial industry. the third one is the fiscal stimulus for the auto sector, including consupgz incentive. now, while it is very difficult to see how this will be sustainable given that we all agree there will be further bank losses down the line, given that capacity is so low that will cap any new sentiment. finally, fiscal stimulus has the effect. at the moment, we're seeing the first round effect which will only decline from here onward. >> lena, good morning. this is mike huckman in the united states. i'm wonder, what are your thoughts on ben bernanke? is he the right choice? what about larry summers? what about janet yellen? just a couple of those who are on the short list, presumably, to possibly replace bernanke. >> well, as far as the reappointment of the fed

chairman, i think the market was unanimous that bernanke was the best choice given how he has conducted the fed' reaction to this crisis, how he has with stood political pressure. it could have caused volatility in the dollar among fears of debasement in the u.s. currency and that could have driven volatility along u.s. treasury yields which could have established mortgage markets. so all of these risks have been subsided and i think the market is likely to gain support in the second session as the official announcement is made. >> while the bernanke reappointment shows consistency in at least u.s. monetary policy, we could see big changes in japan's government, i should say, with the elections coming up towards the end of this

month. there is an expectation now that the democratic party might take control of the government. and i'm wondering from your perspective if that makes a difference for the world's second largest economy. well, i think we're very much in a policy and a political cycle driven environment for investor sentiment. these changes could have an impact, but it will take some time to dissect for the market just what that means for policy. i think in the short-term, there are three major drivers that -- behind this rally and i think that i see the sustainability of these drivers as very much a big question mark over the coming months, but certainly at the beginning of 2010. the first one, of course, is that we have seen this dramatic stabilization in financial conditions driven by political consensus. it is important that the consensus remains in place. but much of the stabilization is down to banks shrinking leverage and risk which is good for the

long-term health and the financial system in japan and abroad. >> lena, this is mike. i wanted to follow up if i could for a moment on your comments a minute ago regarding ben bernanke. you said that you think the markets today are going to gain support once the announcement is made. right now, we're seeing the global markets say hohum, the futures look flat in the united states. why do you think that investors actually need to hear this out of president obama's mouth before they make a move on it? >> well, we have a conflicting range of news this morning. of course, the bernanke reappointment was probably very much discounted, so if there was some relief, this might be dampened by the fact that we had renewed head winds from asia and particularly from china overnight with fears about tighter chinese bank capital requirements dampening investors' sense of the level of liquidity that is supporting the global risk rally. >> lena, thank you so much for joining us today, appreciate it.

meantime, we'll get you more information right now. we've got lots here, including the august when japanese go to the polls to vote on their new government. the liberal democrat party has so far had a very strong grip on japan. it's governed japan for half a century. but the opposition democratic party could actually win about 300 seats in parliament's 480 seats lower house. the democrats are putting on a pledge that they will put more money in the hands of consumers here is a look at exactly what is at stake. >> they measure their day in minutes. while mom rushes to work, dad shuttles the two kids to three separate day care centers. but they're lucky.

in tokyo, 8,000 kids are on the waiting list to get into day care. it's a result of inadequate spending and more mothers trying to work as job cuts weigh on their father's careers. young kids and their families are the center of attention in the upcoming national election. the opposition democrats have promised cash handouts of $250 per child every month. one reason they're ahead in the polls. by pledging more money to households, the democrats hoel hope to push japan out of its worst recession in 60 years. >> it seems more promising than continuing building bridges and roads that nobody use. >> even as japan stays far less than it used to, disposable income has been falling faster. households have 20% less money to spend than they did ten years ago. if the trend continues, it would make even harder to shift japan's economy away from ex

ports and towards domestic demand, a change the country has repeatedly failed to make since the mid '80s. >> next year's economy growth could be impacted by, let's say, between 0.5 and 0.7%. which is not a negligent legible because, you know, the japanese growth rate is still in a very low rack, between 1% and 2%. consumption could grow at a very fast pace, next grier growth by 2%. >> the cash handouts attempt to slow japan's natural attrition rate which hit a record last year. >> not only is japan's population shrinking, but it's aging faster than any other country in the world. that plus more immediate concerns over job security is what is distancing the japanese public from the liberal democratic party and it hasn't happened to this degree in the last 54 years. the ldp is criticizing the opposition cash payout plan as

fiscally irresponsible. a concern echoed among some economists. some say it's a recipe for a financial disaster. at the time when japan's debt to gdp ratio is 170%. that's the highest n world and an anomaly in peaceful times. the last time the ratio neared 200% was during the second world war. she's not sure how she will vote. i'm not sure all the campaign pledges will be carried out in the future, she says. but she is pretty sure what she will do with the $750 the democrats have promised her. save. cnbc, tokyo. >> well, today, japan's nikkei 225 was down 0.8%, off the worst levels of the trading day, however. in shanghai, the biggest loadser, off 2.6%.

china construction bank denied rumors that it is looking to raise more capital. let's get more in china and japan with darius ka wall chee. derek, thank you for joining us on "worldwide exchange." how much of today's fall were based on mr. wen's comments yesterday? >> i think the comments from the prime minister played an important role as the remarks commented on the bubble in asset prices. a lot of companies reported margin of over 50 percentage points. so a huge disappointment here. i believe shanghai markets would be much higher by the end of the year.

>> overall, we didn't see much reaction from the markets on mr. bernanke being re appoiappointi the united states. >> i think our region is very dependent on a consistent policy from the fed because on one hand, it would guarantee a recovery in demand from the u.s. for asian products, something real important for an export dependent region. and on the other hand, it will sustain the favorable liquidity conditions that are attracting riske capital to our region and boosting the equities as well as some currency markets. so i believe in the medium term, reappointment of bernanke is favorable news for asia. >> dariudariusz this is mike hu in the united states. the cash for clunkers program basically came to an end last

night. but all reports say that the cash for clunkers program benefited foreign carmakers and to be more specific, the asian carmakers more than any other automakers and especially those here in the states. so to what extent do you think that the end of that program is going to impact things in asia? >> it is negative in the very short-term, but everybody knew that the program will not continue for a very long time. you are right that in july, the growth rate for imported vehicles which was much stronger than for domestic ones and asian carmakers, including exporters, have benefited from that. but i think that the end of the program is already discounted in prices of the shares here in asia and this was basically a blip on the screen, the same way it was for the overall retail sales in the u.s., which basically shifted away from

nonvehicle consumption to vehicle consumption and declined anyway. so the program overall wouldn't have a big impact either on the u.s. economy or on global markets. >> dariusz, it's becky in london here. can you share with us some of your thoughts on investors right now. how can investors make the most of the chinese market to get in at this stage? i believe that the valuations in china at levels close to 2,900 for shanghai composite index are quite attractive because of the very solid long-term growth for the country. and because of the fact i think lending growth will be stronger for the second half of this year than it was for july. therefore, i think it's a good time to still get into the market and that the positive

mode that should prevail in shanghai in the second half of the year is likely to benefit in neighboring countries, as well. on top of the impact that japan is going to see from the chancellor of power from mpd to dpj. >> darius, thank you so much for joining us today. >> my pleasure. >> let's look in on the indian markets for you and see how they're doing. ayesha faridi joins us now live from mumbai for the india business report. hi there, ayesha. >> hi. thanks for that, maura. it's been a bit of a tug of war of sorts between the bulls and the bears today. when china started slumping, we saw knee jerk sentiment. we dipped below that 4,600 mark. so it's trading quietly. similar is the case not just for the front line, but even the

midcap was fairly lackluster in trade today. while banks are under pressure and are the laggers in trade, oil and gas is looking iffy at this time. here is what is bringing momentum to the entire i.t. space. the management did talk about the growth trajectory and the guidance that it set out and the kind of ip environment that they see in the next quarter and coming quarter. that is lifting sentiment across the i.t. space. meantime, an exclusive bit of space, we are picking up in part and we do hear that significant progress has been made while the cash component may be standing around the deal value will not change low. expect some announcement coming in on the story.

with that, it's back to becky in london. >> thanks for that, ayesha. the financial times is reporting that the rbs is in limbo with the chance for a potential deal to around 3 out of 10. standard chartered is reportedly disappointed to report far more customers than it thought were in. >> jessica beale is the world's most dangerous celebrity, at least on the internet. mcafee say searches for the 27-year-old actress are more likely to lead to online threats such as spyware and viruses than any other famous person. it's the company's third annual report on this subject. last year, brat pitt was the

most dangerous celeb online. following jessica biel, jennifer an son, tom brady and jessica simpson. coming up on "worldwide exchange," french president nicholas sarkozy says on bankers. we will head live to paris where stephane pa addressee has a special live report.

welcome back to "worldwide exchange." we've had some economic data out here in the uk a few moments ago on mortgage lending. sterling under a bit of pressure against the dollar currently at 1.6359. euro at 1.4276. let's get straight to peter rosenstreich on those currency markets. thanks for coming along, peter. >> thank you. >> so far today we've seen yen strength coming off a little bit at this stage. where do you think we currently stand as far as the question trade is concerned? >> well, i think the yen trade is going to be obviously driven by the risk appetite trade, the

rollover that we saw in shanghai, investors from the equity market side are very concerned about where these markets are going. that's going to be a core driver of the japanese yen right now. >> peter, this is mike huckman in the united states. just a few moments ago, we had an economist on who said if ben bernanke were not reappointed, that this could have driven volatility in the markets. do you agree with that? what impact, if any, do you see his reappoint having on currency trading? >> i think bernanke's renomination is stabilizing, but the effect res going to be overall relatively muted. what bernanke did very, very well was stave off a complete economic meltdown. that being said, the quantitative easing program, the massive injection of fiscal and monetary stimulus they threw

into the u.s. economy, that is being highly questioned whether that's going to be good for the longer term, for inflation. so at this point, i think bernanke is relatively interchangeable with someone like a summers and the overall effect, especially in the fx market is going to be muted and those people waiting for the bernanke bounce later in the u.s. equity session i think left lane sorely disappointed. >> peter, the news we got over the weekend seems to indicate that at least for now the world's central banks are dovetailing in their policy. they're in tune. but if mr. better fanky stays on for another five years and we know the europeans are inflation targeting, could there be ash tragedy for investors if you look on for six to nine months? >> absolutely.

i think that the economic conditions and bernanke will hold rates lower for quite a while in the u.s. i think that the ecb and trichet will be focusing on inflation due to the mass identify input of capital we see globally. we're seeing in places like australia and norway, their central banks coming out slightly more hawkus going to sort of a neutral, even a -- sort of a tightening bias. and that's going to be the main driver of that mortgage for the next six to eight months. >> thanks so much for joining us today. we appreciate it. good to have you in studio, as well. peter rosenstreich of ab advanced current markets strategy. meantime in the next hour of "worldwide exchange," we'll bring you up to speed with all the top stories makesing headlines adross the globe. >> and mauer are will have the report on this being a shoo-in for ben bernanke. he looks set as his second term for analysis will be next.

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i'm mike huckman in the united states. where president obama will tap ben bernanke for a second term as fed chairman this morning, keeping him in place to try to steer the world's biggest economy out of recession. >> i'm maura fogarty. news about mr. bernanke fails to

lift stocks. the major markets and shanghai all trading in the red. >> and i'm becky meehan. news turns to gm as reports show it might raise funding to keep its german unit, opel. >> if you're just joining us in the united states, welcome to the start of your global day which is "worldwide exchange" which is broadcast live from asia and from europe and the united states. in the united states right now, it looks like a mixed picture in the futures market. basically a flat open right now in tien minus four hours. and moving on to the treasury market, we see another government auction today of more than 40 billion dollars worth of two-year notes, but the ten-year t-note, at least on the bund yield, is declining at 3.29%. and the ten-year t-note yield is

essentially flat still at 3.49%. becky, over to you. >> let's take a check on the ftse cnbc global 300 index. we've been tracking text markets lower. we're currently down by about 0.25% for the ftse cnbc global 300, which is off the lows of the day, but still, obviously, a bit of a decline. as far as the european markets are concerned, declines for each of the major markets. but again, we are definitely coming off the lows of earlier in the session, moving higher from what we've seen first thing this morning. it's about 0.4% lower on the smi. as far as currencies are concerned, let's recap quickly. we are seeing yen strength today. we are seeing a bit of euro weakness there, as well.

euro moving lower by about 0.2% against the dollar. sterling/dollar is down by the 0.3%. we heard from mersch, who is a member of the ecb who spoke about those cautious comments mersch made about the unsustainbility of the recover. further comments are coming out now saying smaller banks will be hit harder and the bigger banks have born the brunt of the previous downturn. no sustainability recovery in france and germany, which, of course, amongsted the major economies that have, so far, moved out of recession and into limited growth. so still mersch, maura, is sticking to those cautious

comments about what we can expect this uptick to continue. >> and caution, you could say, was the word of the day for inest vers into this region. we saw investors slumping on a couple of factors. we had the comments out from japanese prime minister wen jiabao and that was a dampening on stocks today. we had pressure on equities in japan where we had both parties campaigning hard. the nikkei 225 off session lows. the shanghai composite closing down 2.5%. at one point, we saw stocks losing about 5%. and the sensex is struggling to find its footing, slipping in and out of positive territory. for now, it is up by 0.4%.

at the same time, we saw dollar weakness versus the jap necessary yen, we saw nymex pulling back as food prices began to pullback. $73.88 is where nymex stands at the moment. brent is trading lower at $73.60 a barrel. mike. >> thanks, maura. and the big story of the day, president obama will facilitate ben bernanke to a second term as fed chairman later this morning. the fed president will interrupt his vacation on martha's vineyard. bernanke approached a financial system on the verge of collapse with calm and wisdom. the white house says the president made this decision, actually, about a month ago and formally offered it to bernanke just this last week. the other main candidate had been former treasury secretary larry summers. banking committee chairman chris

dodd promises a thorough hearing, but says the move is probably the right choice. joining uls for the next hour is tim harris, c he o of harris capital. good morning to you. do you agree that mr. bernanke is the right choice? >> good morning, mike. i think mr. bernanke is played as good a game as you could hope. you get back to the stark days of september/october last year, the feeling of having a steady hand and continuity is an issue here. quantitative easing is something we're going to be wondering about for quite some time to come. so in a way, it would have been rather unusual to pull the man out when the job is as of yet still half done. >> tim, let's get into the

sustainability of this recovery. just to recap, they're saying this recovery is not sustainable, it's underpinned by restocking, but public spending. as long as that's the case, we can't rely on it. would you agree? that seems cautious to me. i think if you have a cold, you take drugs to get you through the first stage, but at some point, you have to get organically better. but there's so much stimulus. we've seen the books thrown at this over the last six to 12 months now. with the surveys coming through, the pmis picking up, this is a clear sign that its fiscal and monetary stimulus, which is carrying us thus far, is the patient able to walk on its own? well, when you look at the consumer data, you look at the consumer debt that's out there, you look at unemployment data, this cycle has a long way to run

before it's pointing upwards on its own two feet. stimulus has got us so far and no have been an island. i'm not sure that that is sustainable. when you look at europe, it didn't have the excesses that we saw in the anglo-saxon world on the way down. i think the integration is such that europe cannot outperform particularly such a mature economy or group of economies. it cannot outperform on its own. >> so tim, it's maura here in asia. as both fiscal and monetary stimuli have gotten us to where we are today and now there's talk of a double dip recession, w-shape type of recovery, is it too soon to even think about perhaps more stimulus? >> continued stimulus, maybe. but of course, i think if you're going to get into this argument or this debate about a w-shaped

recession, i mean, that is a fear. i wouldn't say it's a core view right now. that is a fear. and the fear comes from the fact that fiscal stimulus, monetary stimulus, quantitative easing, they have a cost. when you look at the data we have seen, clearly that degree of stimulus has carried the very viefls that we're seeing in major economies now. q3 gdp in the u.s. is going to run above trend. that is a function open stimulus. you take that stimulus away, then we have to swim with it. what is your greatest concern? it's the withdraw of stimulus and how do you pay for all this? we're still trying to kick start the consumer and the consumer has some long way to go, particularly as i was just

saying with becky, the with the housing data which we still see which is still fragile and unemployment which is a lagging indicator. but bear in mind, unemployment, rate of change of unemployment correlates very closely with rate to change gdp in the long-term. and i think we have to get consumption in the g-7 economies moving up before we have sustainable recovery going along. so it's good while it lasts in the short-term. current data is clearly better in the market, got that joke and it's running with that. but i think in the locker term, there's the withdraw of stimulus and the longer bill. >> tim harris, you are a guest host this hour on "worldwide exchange," so we'll look forward to more from you coming up. to more from you coming up.

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french president nick laws

sarkozy will urge banks to crack down on large bonus spending. banks are worried that cutting down on bonuses could drive top talents away. stephane pedrazzi is outside of paris with more on this story. >> reporter: there was a technical meeting jed of the finance treasury. the banks would be ready to make gi more transparency on the way bonuses areder to get more transparent smoother and that's probably the -- that nick laws sarkozy will make later. i'm joined by madge solsto, reporter from the national tribune. how do you explain the position of nick laws sarkozy given that france is one of the people in terms of transparency and also in terms of -- >> i think to a large extent it's populism because there was a huge outcry in france earlier this year at the end of last

year when the governments had to bail out of help out a lot of the banks and it emerged that they were still paying high bonus peps you've gone unemployment rising, social tensions, unions that are edgy at the moment and sarkozy is aware of this. he's head in the opinion polls, but he's a politician and he wants to stay ahead in the opinion polls. >> how far can get with the bankers? >> difficult to do that. you have to look at what's going on in the world. and in the u.s. and the uk, it doesn't look like that's happening at the moment. if it doesn't happen over there, the french bankers will be able to argue that it's not fair. and their ultimate argument is that paris could lose out and a lot of talent could go across to london and over to the states and that's an argument that the government is well aware of. so there's probably a limit on how far they can go with this?

>> reporter: what about the next g-20 meetings? do you think he will have that from germany and from england? >> he'll have the backing of angela merkel from germany. in the uk, eats less clear. the authority that regular ewe late the sector in the uk issued guidelines that were voluntary at this point. it gave people the impression that maybe this is not going to go too far. so there will be an interesting discussion at both of the upcoming g-20 meetings how far it goes remains to be seen, really. >> you know that in france, it's always been a bit suspicious, today sounds like a french revolution against big salaries, not only in the financial sector. is that your point of view? >> i would agree with that. the french have always felt uncomfortable with large amounts of money, that's true.

and when it emerged this month that bnp was going to put aside billion euros in bonuses, it caused an outcry. there is an element of popularity in here. >> thank you very much for coming with us to discuss this meeting. we'll follow and give you an update later. thank you. >> thank you, stephane. more from him later on cnbc. >> research analysts offered tips allegedly to traderes and then their big clients. the regular layer services authority and s.e.c. will ask goldman for more information. the short-term tips given at these meetings differed from long-term research reports. however, there have been no accusations goldman violated any securities laws.

>> mike, woolworth is going diy. woolley's, as it's commonly known, as teamed one lowe's to offer home improvement stores in australia in 2011. the two companies plan a takeover of danks. shares of danks skyrocketed. still to kos on "worldwide exchange," as always, we've got lots more news and you can get that news, as well, on our website where you can get news, videos and blogs on today's market-moving stories. head to cnbc.com. after months of negotiations, general motors might not sell opel after all. the automaker could attempt to

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let's check knot global equity markets. we're going to go around europe to start with, sylvia and corolin, and we'll speak to adam who will run us through the action out in asia. let's met start, though, with

the ftse 100 and the action we're seeing there. we continue to recover, only down now by about 7 points or so. we had earnings this morning from persimmon, echoing what we heard yesterday from bovas homes. both of those companies telling us that they have seen a bit of stability coming back is into uk housing prices. but also underlines what some people have been taking, that things in the uk are starting to bottom out. the housing market has been a big headache for the uk in general. we're seeing the likes of persimmon themselves, barratt, pulling back a little bit. on the down side, admiral has been struggling. among the biggest decliners on the uk markets, this is a uk insurer, they told us this morning they're up by 5% on the

first half profits. they're pushing their expansion plans to the u.s. hoping to launch elephant insurance brands. let's cross over to germany and check in with silvia wadhwa. >> we're clawing our way back up here today. it doesn't look like such a bad day. if you look at it, almost made it back to the flat line. looking at exactly what kind of condition the market is in, we're prone to profit taking. there's always a bit of bottom fishing in there and people buying themselves back into the market. that is something that is a feeling we could see for the next few weeks, maybe even couple of months. it might help or not help that we haven't got much corporate news to float around. a bit of shenanigans that we have going on. meeting at the end of the week to sort out the merger plans. this improvement is not exactly the flavor of the day. volkswagen again on the loser board. but really, we're picking some of the stocks out that either

has a bad environment or they've had a good run for their money and hitting them on the head, volkswagen doesn't seem to find knit bottom as it were. carolin, how does it look in switzerland? >> we're down 0. 1% on the smi. but defenses are better on a day like this when markets are pulling back. novartis is trading higher. swiss clockland pruitter lindt & spruengli posted a better than expected in the u.s. we're seeing comments out from the ceo. in terms of the outlook, he is saying that he sees growth and market shares in the second half of the your and says he sees a return to long-term goals in 20 1. what was positive about these earnings is that the company has confirmed the outlook for 2010. they're confirming guidance of

2.5% revenue growth and confirming their the target for this year. in lichtenstein, that stock is down more than 5%, a very disappointing net outpost number of 1 billion franks. the bank said that their ceo is leaving over differences over strategy. quickly here, swash is off about 2.8%. that's after rbs downgraded that stock to sell. it's saying it doesn't believe in short-term earnings upgrade here. now over to am in singapore. >> thanks very much. it was a tough day for asian stock markets. the biggest loser in today's trade, the shanghai composite. after dropping about 5.7% at the worst point of the day, the market did management to close back above that 2,900 level. investors were concerned about

premier's wen jiabao's comments yesterday saying that the market may not be out of the woods here. and maybe the government may be rising gasoline and diesel and oil prices. overall, we saw softness in the commodities central stock. of course, the earnings are out for the first half showing that profits are off 58%. that lost a lot of ground along with its peer in china. moving to the north asian markets, they were tacking the losses to some degree in shanghai. the yap niece equity markets were above the levels. that affected some of the exporter stocks in japan at least. now back to mike in the u.s. good morning. >> thanks again, adam.

today's economic data may be overshadowed a bit by president obama's nomination of been back seat to a second term as federal reserve chairman. about that same time, we'll get the case shiller index. at 10:00 a.m., the conference board is out with the august consumer confidence index. analysts looking for a reading of 47. as for earnings, we'll get numbers today from the likes of bookstore chain borders, burger king, chico's, medtronnic, staples and that is your global stock watch. >> coming up next, yesterday it was equities that got a bernanke bounce. today it's mr. bernanke himself who gets the thumbs up. the fed chairman is a shoo-in for a second term. we'll discuss what this means for interest rate policies, stimulus programs and interest rate markets.

it is almost 30 minutes past the hour right now. here are the top stories from around 2 world. president obama will tap ben bernanke for a second term, trying to steer him towards keeping the largest economy out of recession. >> and in europe, germany returns to growth in the second quarter. >> here in asia, i'm maura fogarty. news about mr. bernanke fails to lift major markets. shanghai trade and major markets all trading in the red. >> and welcome back to "worldwide exchange." four hoers hours ahead of the open in the united states and 3 1/2 hours ahead of president obama's renomination of ben bernanke, the futures are improving this morning, although

i don't know if you could go so far as this point given the numbers that you could call this a bernanke bounce. we had a chief economist saying that they thinks the equities will bolster the markets later in the day. then we had another person who said those expecting a bounce will be sorely disappointed. the ten-year t- ♪ after the price went up, it is essentially flat this morning at 3.49% as the government comes in with another two-year note action of more than $40 billion worth today and a total of $109 billion worth of auction going on by the government this week. becky, back to you. >> let's take a look at the data out there at the moment. checking on the european bourses, we seem to have improved a bit, the ftse 100 is

only lower by about 0.2%. 0.1% for the dax, cac and smi, too. after a negative start to the session, it looks like we are recovering, actually approaching that unchanged level at this point. as far as sterling/dollar is concerned, 176388 is where we stand there. maura, how is the asian session going today? >> as we saw strength in the japanese yen, that accelerate today selling that we saw in japanese equities today. the mood was rather nervous even though we did get confirmation that mr. bernanke was going to be reappointed for a second term.

the nikkei 225 clousing down by 0.8%. the kospi closing down in inti 0.7%. crude prices are falling back was as well. we saw my mechanics pulling back. brent crude is trading lower at $73.53. mike. >> thanks, maura. president obama will facilitate ben bernanke to a second term today. the president will interrupt his vacation at martha's vineyard to make the statement. the white house says that the president made the decision about a month ago and formally offered bernanke the job just

last week. the other main candidate had reportedly been former treasury secretary larry summers. bernanke must still be confirmed by the senate. banking chairman chris dodd, though, promises a thorough hearing, but says the move is probably the right choice. joining us now for market strategy is hue johnson, chairman and chief investment officer at johnson illington advisers and tim harris is still with us as our guest host. hugh, good morning to you. i mentioned a moment ago that we've had one guest saying this will support a rally in the market, and another one saying that people are thinking there is going to be a bounce today and stocks are going to be sorely disapointed. why do you fall? >> i'm in the sorely disappointed camp. if we would have had news saying ben bernanke wanlt going to be

reappointed, that would be bad. but in some ways, the markets were expecting ben bernanke to be reappointed. so it would have been a disappointment if he wasn't. it's just a sense of relief. >> is he the right choice? >> yeah, in my judgment, he's the right choice. obviously, he got us through this financial crisis. i think probably the biggest reason of all is he's the one person in a policymaker policy that is steeped in financial and economic history. we all know he's learned his lessons from the depression. he spent a lot of time worrying about and focusing on the financial crisis. obviously, those lessons were well learned. they were helpful in this financial crisis. you have to have somebody that has a real sense of financial and economic history to know how

to deal with these events. believe me, this is not something you can make up as you go along. you have to have a sense of history. that's what has made him so good. obviously, he's done a wonderful, creative job and he's done an aggressive job. he understands that as lender of last resort, you have to be very aggressive. thankfully, he was there at the helm at that time. >> good morning, hugh. it's tim harris here. i guess we're looking at continuity on the back of this appointment. that's a given. i guess interest rate policy, that's something which is not going to be overly controversial, at least from the medium term outalthough, but rather quantitative easing. do you see them continuing to be so stimulative or do you see pullback on a forecastable time scale there? >> i think the real challenge will come in the early part of 2010. the current consensus is inflation will be about 1.8% to

2% in the first twoo quarters of 2010. as i crunch the numbers, i think the number could come in close to just about 3%. so when you have a 3% to 3.2% inflation rate in the first toile quarters of 2010, it's going to on put enormous pressure, in my judgment, on the federal reserve to state raising short-term interest rates to take back the excess liquidity that they've added to the financial system soon enough to avoid inflation. so the real challenge, yes, there was a challenge on the financial crisis, but the real challenge ahead is how is he going to remove that level of liquidity before we start to see higher rates of inflation? that's the big question phasing the markets and will be facing the federal reserve. >> and yet, hugh, back in the studio here, plenty of guests that we speak to say inflation isn't an issue, that's there's huge overcapacity in the u.s. economy and it should be the last thing we're worrying about.

>> he yeah, the capacity utilization rate is around 68%. ordinarily you would think it's hard to make the case for higher inflation. but as i crunch the numbers, whether we look at the percentage of purchasing managers paying higher prices, take a look at those tea leaves that tell you where inflation is going. as i crunch the numbers, at the they will me inflation will be around 3%, maybe 3.2% in the first couple of quarters of next year and that's going present a real challenge. it's hard to reconcile that with the excess xat. understand that. but nevertheless, some of those numbers are not looking very good. >> hugh, it's maura here in asia. as you crunch the numbers, then, in terms of strategy, where does that tell you to put your money right now? >> that's a great question. you know, despite the fact that you have that challenge, it's not unusual to have a bull

market or a rise in the stock market and rising short and long-term interest rates. in fact, that's pretty common. since i think we're in the early stages of a bull market, you have to reallocate their u your assets to equities away from fixed incomes and in the equity portion of your portfolio, not only a meaningful allocation to equities overall, but make sure you have the bull market sectors overweighted and that includes materials at consumer cyclicals, maybe industrials and technology. those are the so-called economically sensitive bull market sectors which, of course, means underwait equities and consumer staples. >> hugh, thanks for joining us. stay with us, in fact. tim harris will be staying with us for the entire hour, as well. meantime, tokyo stocks today, what a day it was for the

markets there. we sea japanese stocks leadsing ground. ken moriyasu as the details for us. >> as investors sold to lock in profit after a strong rally yesterday. with the general election to take place this sunday, many investors are taking a wait and said approach. they will team up with ko university to develop electric cars. their vehicles are powered by in wheel motors. japan airlines is focused on lucrative business routes. routes to getaways like hawaii and guam will be transferred to either a new company or subsidiary in order to slash

operation costs and shrink its workforce. past retailing, the operator of uniclose said it and walt disney have formed a licensing agreement and will sell disney cloedz clothes. the first items will hit shelves in september. that was the nikkei business report for today. back to you, maura. ken, thanks for joining us, ken moriyasu from the nikkei. >> still to come on "worldwide exchange," is $33 million enough? the fight against b of a is a sufficient penalty? a federal judge may feel differently. ♪ well i was shoppir a new car, ♪

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welcome to cnbc's "worldwide exchange." here are some of the top stories we're watching from around the world. bank of america and the s.e.c. are defending their proposed $33 million settlement over executive bonuses paid out by merrill lynch. a judge has held off approving the settlement. b of a says investors should have known about $3.6 billion in bonuses giving the media

attention. merrill disclosed the size of its bonus pool in an earnings report last year. the s.e.c. says the fine fully takes into account the seriousness of the bank's conduct. in europe this morning, bank of america shares are down 1%. citigroup says it substantially boosted efforts to modify mortgages in recent weeks. the move comes in response to the treasury department's callout to speed the process and stem the tide of foreclose yurss. in a report out today, citi says it helped 108,000 homeowners modified their loans in the first quarter. citi says most changes have come by reducing interest rates or extending payment periods. and a federal appeals court says allan stanford must stay in jail until his fraud trial. stanford, accused of running ads 7 billion fraud involving bank certificates or deposits or cd has been behind bars since that

time. stn ford was ruled a flight risk and should remain in custody. no trial date has been set yet, but stanford is due in court later this week. >> toyota is planning to make 1414,500 cars a day in november. toyota has declined to comment on that report and today we saw their shares down about 0.5% in tokyo trade. >> gm may decide on the fate of opel within the next 24 hours according tot leader. the comments follow a report, suggestion that they might raise funding to keep opel instead of selling its units. gm declined to approve sales to magna, international, despite that being germany's best option for a buyer.

let's get a final thought now from tim harris. we do appreciate your time. what's your thinking at the moment? the last guest we spoke to, coming up again in a few moments time, is fairly optimistic, really, about how things will shape up. can you share in the optimism? >> i think if you stand back in a mature economy, of of the demand of the economy is defined by consumption. obviously, where we're nowhere near yet is the housing, financial restrictions and financial conditions in that part of the world. even know, availability of credit and the employment cycle all sort of working against an early upturn there. so i think we're going to see monetary fiscal conditions they can be for some time. so i think it's too early to step back from the cyclical

trade. where i would have exposure are in the industrial sectors, in the material sectors, obviously. there's a lot of companies which haven't gotten back on their feet in terms of the revaulg ewation in the market has had to buy a early recovery stocks rather than the kwaut plays. i think if you look in the health care sectors, there are some good cash flows and yield stories to be seen there. i think i would probably be running europe as opposed to the u.s. the single story of the u.s. today is we could be looking into the pit of a $40 bottomless cycle. that's when it hit 666. now we're talking backside 60 bottom of the cycle. so it's not restrictive to the bull story running on in the short-term. i think we're going to have many, many issues when we sort

this whole thing out in terms of financing, in terms of taking back stimulus next year and rebalancing. >> tim, thanks very much for sharing your picks with us, tim harris, from harris capital. u.s. "squawk box" follows "worldwide exchange" for viewers in asia, europe and the u.s. carl is with us now. what's going on on the show? >> we tore up our show last night to talk about all things bernanke, no surprise there. the president will be speaking from his vacation at martha's vineyard. john harwood will be at the white house, steve leisman calling in from his vacation, former white house fed, dallas the mctier and from the trader floor to our studio, art cashin. we'll get some reaction to the bernanke nomination from minnesota governor tim paul endy. as you know, becky, there is

really only one story today, markets aside, health care aside, and it's all about the chairman of the federal reserve. we'll begin here in about 11 minutes time. >> we'll look forward to that, carl. mike, let's send it back to you. >> thanks, becky. up next, will markets get any momentum from the previously mentioned better fanky renomination today? find out.

obviously the bernanke story is going to get all the media attention today, but what's going to be more important to traders and invests? is it going to be that or the data like the case shiller home price index and the consumer confidence numbers that we're going to get out of the conference board? >> well, i think the bernanke announcement will give us a sense of relief, so we won't have to deal with that. and then we can focus on the

consumer confidence and the case shiller numbers. and obviously, you know, who knows what those are going to be. but especially the case shiller numbers. everybody is asking the question, have we seen a bottom in housing? so we'll watch those case shiller numbers to try to get some sense as to whether housing is indeed in the process of turning around. the consumer confidence numbers are less important because they're from the conference board. we've seen the university of michigan numbers earlier in the month. so they're not going to be a market driver. but the case shiller numbers will be important. housing is a big focus of a lot of investors. >> hugh, it's maura here in asia. you said earlier mr. bernanke is the right man of the job right now because he's a student of history. is he going to lead the u.s. economy out to a v-shaped or perhaps a w-shaped recovery picture? >> nobody knows. and especially, you know, folks like nur el roubini, lots of

folks are telling us we'll have a double dip, maybe it will be w, who knows. nobody knows. probably the consensus is we're going to have a u-shaped recovery starting at 2.2% growth third quarter, ramping up to 279% in the fourth quarter of 2010. that's saucer like. i think that's the most logical outcome. although i will add one small point. we're seeing the consensus forecast for 2010 starting to pull higher. it's 2.3% for all of 2010. when we saturday to pull in one direction, we tend to stay pulling in that direction. so the big surprise might be that the economy in 2010 is stronger than is currently expected. that would be a big surprise. >> hugh, let me talk to you about treasuries, as well. another big auction coming through this week, there have been recurring concerns that we could see a drop-off in demand. that doesn't seem to have happened quite yet. how do you think the demand will

look this week? >> that's a big question. you know, there were rumors that the chinese sat out the auctions that we saw in july. i don't think that that's either a rumor or a possibility in this case, but obviously, these auctions are -- you know, you talked before about $109 billion for this week alone. that's a huge amount that has to be auctioned off. this is going to be a problem for not only the credit markets, but obviously, the equity markets going forward. yes, we can have rising interest rates. yes, we can have rising stolg stock prices despite this unusual demand for credit by the federal government. but it's going to -- it just slows things down for the equity markets. it makes it difficult. it's a challenge. it's a real struggle. i'm just crossing my finger and hoping that the demand is there that we could get these auctions done around current levels. >> and we'll find out later today with that two-year note

auction of more than $40 billion. hugh johnson, chairman and investment officers at illington advisers. thanks for being with us this morning. futures here in the united states are perking up a bit this morning, but we have a long ways to go. that's it for today's program. i'm mike huckman in the united states. >> i'm beckimy had an in europe. >> and i'm maura fogarty in asia. thanks for watching "worldwide exchange." tdd#: 1-800-345-2550 if i'm breathing, i'm thinking about trading. tdd#: 1-800-345-2550 i always have my eye out for a stock on the move. tdd#: 1-800-345-2550 doesn't matter if a company sells computer chips tdd#: 1-800-345-2550 or, i don't know, fish and chips. tdd#: 1-800-345-2550 i'll look at all kinds of stocks before i settle on one. tdd#: 1-800-345-2550 if i think i'm onto something i'll check it out, tdd#: 1-800-345-2550 you know, see what other traders are up to. tdd#: 1-800-345-2550 when everything feels right though,

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