japan and malaysia are closed for a public holiday. volumes are kind of capped, as well. kospi is up 1.4%. the shanghai market down 2.3%. there are concerns of oversupply of ipos coming on to the market. the hang seng closed up 1.1%. energy stocks, airlines getting a lift on the brief drop in oil prices overnight and the aussie market moderately down 0.3%. nymex light sweet crude is up, $70.47 a barrel. brent is up, as well, $69.44 a barrel. hello, julia. good to see you. >> good to see you, too. here in the u.s., futures are pointing towards a higher open. it looks like dow futures are up quite a bit, the nasdaq and the

s&p 500 also unquite a bit. the nasdaq did push higher on monday whereas the dow and the s&p both slipped a bit. let's take a quick look at the bund yield. that is now up 0.043 at 3.44%. and ahead of the $43 billion auction of two-year notes today, the 10-year t-note is up 0.026 at .51%. gold, of course, has been bouncing from that one-week low as the dollar comes up from its gains. gold is now at $1,013. louisa, over to you. thank you for that. christian blaabjerg is with us and uberg pape is from cantor fitzgerald. welcome to you both. christian, let's start with you. we've seen a document outlining the u.s. position ahead of the g-20 the summit. we saw that yesterday.

exporters they say, including china and japan, for example, they should consume more and countries that in debt like the u.s., they should be boosting their savings. it seems pretty straightforward. do you think this is the u.s. indicating that they want to take slightly more of a back seat to this global recovery story? in other words, don't rely too much on us right now, we've got enough to deal with in our own country? >> well, basically, yes, that's our main picture. if you look at the debt on the side, that is important. the only ones who can afford to spend is china and other asian countries. i think we'll have a shift in balance in economic terms, at least in the short terms, that china especially will drive the growth train while the u.s. will remain back seaters.

>> and what does that mean for your positioning in portfolios? >> well, our position is basically that we are heavily exposed into emerging markets, even though the volatility is quite larger here than compared to the u.s. or european markets. and we are downsizing our positions in u.s. and europe. currently, we believe that the u.s. is a bit overvalued compared to europe historically, so we have a slight overweight europe versus the u.s. but basically, we are into the bric countries. >> billions of dollars of cdos are being liquidated, enabling banks and insurance companies and others to get toxic assets off their balance sheets. are we seeing a sign that one of the major problems that brought us into this financial crisis is

resolved? >> i think resolved is a bit early to say. there's no question that the banking system from these once alleged toxic assets has been quite remarkable and has driven bank earnings in the first and especially the second quarter of this year. so there is cash around and banks are ready to lend again, which i think is important especially in terms of m&a activity. >> so what is your outlook for the recovery? what shape recovery do you think we're going to see here? >> it's going to be a very, very slow recovery. we're not going to see any modelist jumps. i don't like these different letters there that are often used, but basically, it's going to take quite some time to u.s. consumption and for global trade

to get back to the levels that we were used to in 2006, into the early parts of 2007. especially the decline in world trade is remarkable and we're going to have to wait for quite some time to get back to normal levels. but that said, given the low levels and i can't infer inflation anywhere in the system, this is a pretty good scenario for slow recovery. >> speaking of recovery, the asia development bank raised its growth forecast for the 2009-2010 saying they're more resilient, how supportive is that of asian equity markets? >> generally speaking, i think we can all expect that asia, not just the emerging asia, but asia including japan is going to

outperform in economic terms the rest of the world, at least for a period of nine to 12 months. we are going to see some recovery in ex ports and the asian exporters are better positioned to take advantage of that. so overall, i think the positive outlook that the adp provides is indeed supported by reality. the one thing i didn't like in their report is the notion that chinese stimulus is somehow hindering consumption in china. i think frankly that's nonsense. i think china needs to, indeed, use stimulus. and if it's used in the right way, for social and physical infrastructure, that will bring consumption up with it. >> christian, what about you? how optimistic are you about asia? >> well, as i said, we are overweight in asia in overall

equity portfolio and that's mainly due to the fact that we believe the economic growth is going to be there for a while. also, as a given that especially the debt side of what we are concerned about for europe and the u.s., it doesn't exist in that amount in asia. and the fact is, there are no indications of rising inflation, so there should be enough prosperous -- prosperous prospects for an economic upturn in asia, especially. >> don't worry, christian, i get tongue tied all the time. it happens every other minute. i do want to zb i'm going to an event tonight where we're going to be listening to wise heads talking about how the world looks in europe 2050. i can't get my head around how the world looks next year in 2010. what happens once stimulus starts to be removed from the markets? what happens once we see central

banks pulling back on the cash that they've been putting in? what will the impact be on the equity session? >> the impact will most likely be a retracement of equity markets. what has been driving equity markets so far since march is basically stimulus packets and very, very low interest rates. in order to service that debt, they need cash. but as long as the amount of money needed to service that debt is very low due to low interest rates, they can continue and make nice profits. at the time where interest rates start rising or they signal that they will start rising again, then you will see ekts going lower because profits will be deteriorate. it will dampen in some way. >> uwe, i hear what christian is saying. i'm not sure that i agree with that, especially when you look at the amount of cash that companies have been piling up, we could be looking at another

wave of m&a activity around the corner. >> yeah. i'm not so sure about this scenario. i think the question is how much did stimulus have to do with the recovery in the first place? i think the main stimulus in the world economy is right now that we have very low interest rates and that we have no inflation in the system, which is extremely supportive for growth in all sectors. there's a lot of cash sitting on the sidelines, there's not that much money that has flowed into equities. we've seen mutual funds putting 90% of their money into bond funds. there will be a rotation out of that into equities.

so i don't see any thing at the moment that implies that we're going to see a significant dip or downturn in the equity markets ahead. >> all right, uwe, we'll have to leave it there. glad you could join us today, uwe parpart and christian blaabjerg, thank you, as well. world leaders will continue gather at the united nations in new york for a one-day summit on climate change. representatives from 190 nations will try to work on a deal to fight global warming in preparation of a final meeting in copenhagen in december. ahead of the u.n. climate change, badi sounded optimistic. >> i think we can do a deal in copen haeger. i think you need to be realistic about what that deal can encompass. but i have, at the same time, the feeling that the spotlight, including your spotlight, is

focused on climate change in a way that has never happened before. so we've got the politicians in the headlamps. and let's make sure that they deliver. >> a lot of focus at today's gathering will be on the chinese president, hu jintao who is expected to significantly reduce his country's emissions. they say china is leaping ahead of the u.s. in domestic plans for renewable energy, closures of dirty plants. >> also recently, china and india have announced very ambitious plans. last week, major investors met 181 investment companies representing $13 trillion in investment capital according for a clear and ambitious deal in

copenhagen. i think things are moving in the right direction. the big question mark is the u.s. >> european leaders have expressed frustration with the u.s. the u.n. danish minister said things are looking difficult. they also say that the white house lacks focus on climate change because it's consumed by the health care debate. the german finance minister has said his social democratic party is expected to introduce a to bein tax. he said if there was no agreement at g-20 or at least europe wide, they would have to consider ternls at a national level. the asian development bank has upped its forecast for the region saying asia has proven to be more resilient than expected. they say thanks to government stimulus measures, asia why and economic growth should rebound in 2009. it adds gdp growth will come in

at 6.4%. as for china, the annual gdp will hit 8.2% in 2009. however, it's said the roefr remains fragile and warned against an early withdrawal of stimulus policies. and the fdic may ask banks for billions of dollars to shore up insurance fund. it is more positive than the alternative of tap ago credit line with the treasury department. the agency is reluctant to do that because that may be viewed as another government bailout. the times says the fdic may issue a proposal on replenishing the funds next week. meanwhile, president obama continued his media blitz last night while appearing on "the

late show" with david letterman. he says the economy is improving. he says it's going to take time to make things whole again. >> we're not going to recover overnight. unemployment is still going to be a big problem for at least another year. and if we are steady, we stay the course, we do what we need to do, then i'm confident over time we're going to come back stronger than before. >> this was president obama's seventh appearance on "the letterman show." >> when you wake up on a day like this, is this something you relish, or is it something you say, oh, for heaven's sakes, i have to go see letterman. >> that was unexpected, seeing that appear on the schedule.

tease when you ask your advisers, who is responsible for this? and everybody kind of looks down and they pull out their blackberrys and nobody is accountable. >> the president heads to the united nations today where he'll speak at a climate change conference at about 9:30 a.m. new york time. he'll be meeting with israeli, palestinian leaders as well as the chinese president hu jintao this afternoon. you can get more news, videos and blogs on today's market moving news at cnbc.com. louisa. >> coming up here on "worldwide exchange," asian growth is better than expected according to the latest forecast from the asian development bank. but will the reliance on government banks lead to complacentsy? the fdic may soon ask banks for a bailout. we'll analyze the proposal. and world leaders are gathering for a one-day summit

on climate change. uuuuuuuuuuuuuu

legal low, everyone. you're back for our global equity roundup. we're joined by becky in our studio. >> the ftse 100 is higher this morning after losing a bit of ground yesterday. we're up almost 1%. about 51 points or so. we are mosh more than making up for declines that we saw yesterday. as far as the gainers are concerned, the basic resources stocks not doing too badly. tulw oil is not the doing too bad, as well. carnival also featuring there, shares of carnival adding almost 3%, in fact. they're coming out with their earnings later in the day, the third quarter earnings. in the meantime, though, bank of

america and merrill lynch have added to the stock today. okay. i'll let you have a go, stephane. >> thank you. on the french markets today, we have agricole trading higher today after the company gave a priority to its debt reduction. after they decided to sell to a group of private investors. it will dedicate a large part of this money to the debt reduction. accor is one of the top gainers on the cac 40. we've got a po positive session for the carmakers. citigroup raised its estimates for carmakers from 22 to 30 euros per share for renault. citron wants to enter the low cost sector.

a quick look at the krk 40, christine lagarde is saying that the name of the next ceo has not been decided yet. some newspapers in france were reporting that the ceo will become the ceo of pedia. patricia, how is it looking in frankfurt? >> it's looking good so far, but look at the trading volumes. barely 19 million shares have traded. so i think it's a bit exaggerated. just take the entire move with a pinch of salt. so lufthansa at the moment, up about 4%. it's interesting to see because a new poll we have was cautious coming through from lufthansa. and just now, flatting says the european airline industry is not in recovery yet.

so there's a lot of enthusiasm in lufthansa stock these morning. there's a lot of caution talking from the fundamental side of things. immune issue re, basf all doing quite well. we don't have a single stock in negative territory. that is frankfurt for you. over to switzerland with carolin. >> thank you, patricia. we're higher by 1%. a lot of green is on the board. swes watch expert out for august, we saw a decline of 19% in real terms. that is a big drop. but again, better than expected and better than what we saw in the previous months, really. once again, we saw the biggest declines in some of the key markets such as the u.s., a drop of 37%. hong kong was down, so not very

good with a minus of almo almost 0.3%. definitely some bright spots here. watch china, rose 20% last month. before i let you go, let take a quick look at credit suisse. the company is holding its investors day of its private banking day. it's confident that it will gain market share in the private banking business and it says it's on track to grow net in the medium term. now to adam in singapore. >> thank you very much, carolin. the benchmark kospi index was sent to fresh six-month highs. take a look at the blue chip session, just to get a sense of how powerful the trading session was. samsung electronics scaling to

record highs after citigroup upgraded to profit forecasts and hiked its price target to over is 1 million korean juans per share. murrah said it will post month on month sales gains in the month of september. cash for clunkers may not have been a one off wonder for some of these automakers. as we have this bulis momentum in that space, batteries had a very strong session. as a result, though, of this foreign buying, the korean juan did strengthen to fresh 11-month highs versus the u.s. dollar. it's probably going to be a concern to the bank of korea ya. keep an eye on that. meanwhile, in the greater china region, the shanghai market ending the day weaker by 2.3% and that's a two-week closing low after ongoing concerns about more ipos on the that market. back to julia in the u.s. good morning.

>> good morning to you, adam. it's a fairly quiet day. the fed begins its two-day policy meeting at 1:00 p.m. new york time. that is your global stock watch. christine. coming up on "worldwide exchange," asia will expand faster this year and next, according to the asian development bank. but could a hasty withdrawal of stimulus spending potentially express growth? >> and gordon brown will be awarded the world statesman of the year? does he deserve it? what's your opinion? e-mail us.

t. oh please. you got the presentation? oh yeah right here. let me stow that for you, sir. thank you. you know, just to be safe i used fedex office print online. oh you did? yeah -- they printed and bound 20 copies of the presentation, shipped it to portland, they're gonna be there waiting for us. that's a good idea. yeah. you have a nice flight. thank you. (announcer) print online...you upload your document -- we'll take care of the rest.

i'm christine tan. in asia, chinese stocks on lows about more raising and shared supply. >> and hello, everybody. i'm louisa bojesen. stocks continue a climb fueled by energy stocks. and i'm julia boorstin in the u.s. the fdic may ask for a bailout

from banks. let's get straight to it. our markets in europe opened on a slightly higher footing, up by 1% or so. we are being driven by not only the oil companies pulling up a bit, we saw a reversal to that drop in oil prices. also, the basic resource companies are on a rise this morning. the likes of bhp billiton lifted most of the metal forecasters to asia. that minutes it's underlining the global growth story and still remains relatively intact if you look at it from this angle. other thepgs in focus this week are the g-20. that's taking place on thursday and friday in the u.s. and the fed's rate decision is due to be announced tomorrow. the dollar/yen, coming off just a little bit. we're going to be talking about whether or not we still want

this strong dollar policy intact in the u.s. the euro slshl dollar, 1.4790. hello again, christine. >> hi, louisa. here in asia, it's a mixed finish. japan, indonesia and malaysia are closed for public holidays, so volumes are light here in asia. in south korea, the kospi is up 1.4%. we are getting news coming off the wires right now from a south korean business group. it's submitted a letter of intent to buy a $3 million stakes in hynix semi conductor. this is the world's number two semi conductor chip company. elsewhere, shanghai xoty is down 2.3%, concerns about oversupply of upcoming ipos coming to haunt the market. the hang seng managing to close up 1.3%. overall, mixed finish in asia. julia, over to you. >> thanks so much, christine.

let's take a look at how u.s. futures are trading ahead of the market open. of course, yesterday, the dow and s&p did finish down. the nasdaq did make gains. now out looks like we're pointing towards a higher open. the dow is about 65 points above fair value. the nasdaq and the s&p pointing to a higher open. in the bond markets, we're going to see a $43 billion auction of two-year notes today. right now, the ten-year note is trading up 2.13 at 3.49%. investors await the outcome of the fed meeting. joining us now to discuss the economy is michael taylor. michael, thanks for joining us. >> good morning. >> so michael, the question is, you know, we don't expect to see any movement in terms of interest rates from the fed. there will be a lot of attention on what the fed is going to say about where the economy is headed and what we're talking about right now.

>> i think it's a story of the economy is recovering. there are key leading indicators pointing to a better prospect for the u.s. economy through the second half of the year. the housing market is stabilizing. but i guess there will be the underlying words about very high degree of uncertainty, that there are still significant downside risks and i think the clear message will be that for now monetary policy will be highly acome dafb and there will be no drawback from the very loose monetary policy stands. >> now, michael, of course, there's a lot of attention on the g-20 meeting later this week. what do you think the g-20 meeting will yield? do you think it could move the market at all? well, very unlikely. these meetings very rarely come out with anything that shocks the market or which the market is not already aware of. clearly, the focus is on a lot of bank regulation, how do we reform the banking system post

the crisis? these are sort of longer term issues which are very important. but i don't think they're going to have any short-term market impacts at all, as long as there are no obvious signs of tension and disagreement within the g-20, which i'm sure there will strive to avoid. i don't think it's going to be much of a marked event, to be honest. >> michael, this is christine over here in asia. the asian bank raiding its growth for to 09 and 2010. do you believe in the asia dekumg story? increasingly, there are signs that several of the asian economies are being able to drive their domestic demand growth forward, not relying on exporting to the u.s. and uk consumers, for example, and china is clearly the biggest example of that. it's had a massive fiscal stimulus and has driven its domestic demand forward.

career also has had very strong growth. i think the question is how sustainable is this decoupling if i can put it like that. i think for now, yes, asia will grow more strongly than the rest of the world. but i guess my concern is that a lot of it is dependent on fiscal stimulus, temporary fiscal measures which cannot be sustained inherently. their tendency not to spend, but to save, will come through again and their growth will peter out a little bit. that is my concern for the global economy over the next year or so. >> and michael, how long do you think the stimulus measures will stay in place? at what point do you think governments will start to rethink withdrawing these stimulus measures? >> well, i think for now, they're in place, a lot of the packages are spread out over two years. so i think clearly into 2010, fiscal stimulus will still be on the agenda. but clearly, for many economies, their budget deficits are now

10%, 12% of gross domestic product. obviously, if you want to carry on with a fiscal stimulus, you have to increase the size of the deficit. it's not just maintaining that deficit. clearly, fairly soon, most economies will come up against the boundary of not being able to carry on. so i think by the middle of next year, there will be significant fiscal retrenchment in place. career is a notable exception to this rule where its position remains healthy. they could carry on with fiscal ease while i think the rest of the global economy will be in a fiscal tightening mode, but monetary tightening will stay foreseeably loose. >> we're looking at one of the governing members from the ecb being quoted this morning according to a report saying low credit growth is still demand driven. while i'm reading this, i'm thinking about one of the opponents that you make in your report indicating that august developments don't make any improvement in monetary conditions and the money supply growth out there.

why is it that we continue to see the money not being filtered on to where it should be filtering on to? >> well, obviously, it is an impaired banking system and as the oecd, i think they commented overnight, the euro zone banking system is still in poor shape. it still needs recapitalizing. >> and the demand is there or demand is coming back. >> demand is coming back a little bit. but i question whether it's significant significantly demand driven. household credit, i think, is very much the slowdown there is very much demand driven. corporate sector is a different matter. but i still think that it's a supply issue from the banking system. the liquidity is there. if the banks could find a profitable way of lending out, then i think they would. i think the demand remains weak. >> what economic factor do you look at at the moment to kind of

take your queues from? >> well, i mean, in the short-term, it's the leading indicators, etcetera. i think the question increasingly now is what's going to happen in 2010? and there, i look at, obviously, very close attention to broad money and credit growth figures and there, you know, we see some encouraging signs in the uk and the u.s. for example less so in the euro zone. that's the key through the course of next year to avoid a deflation situation. >> all right, michael, we'll have to leave it there. thank you very much for your thoughts. good talking to you. michael taylor, senior economist lumbar street research. in asia, policymakers are beginning to worry about a property market bubble. south korea central bank says it may use monetary policy to cool the surging prices. meanwhile in singapore wrb the government curbed measures to cool speculation in the seshther.

will these policies be enough? peter churchhouse live from our hong kong studios, good to have you with us. is this surge in property prices in many parts of asia anything to worry about? >> i'm not sure it's anything in particular to worry about just yet. but of course, the potentials for them to perform definitely is there. we have affordability is still very good, employment prospects are looking a little better than perhaps they were a few months ago. so we have seen a pick up in property prices particularly in singapore and hong kong. but really, i'm not sure that we would define that as a bubble just yet, but it's certainly heading in that direction. and given that governments are well aware of the financial disaster we've just been through was property driven, of course, they're going to be very wary and very vigilant about any bubbles popping up in the future. >> could this force central banks and upon lagzs to move

interest rates higher sooner than expected? could this force their hand? >> well, absolutely. markets like hong kong probably cannot do that because of the pegged currency for the u.s. dollar. so hong kong is still a slave to mr. bernanke's policy in the u.s. we think that's probably likely to be on hold for the next 12 months. but markets like singapore and korea, definitely, we could see more independent monetary policy being suppressed there. as we mentioned, last week we saw the singapore government barring warning signals across the bow of the property market there. we've even seen in hong kong that monetary authorities here talking or warning about the possibility of bubbles and so on. so yes -- and even in china, i think very much so, central bankers in china are worried about the prospects of unsustainable pick up in property prices having a damaging effect later down the track. >> peter, this is julia boorstin

here in the united states. looking at some of the fundamental factors driving this trend, what will it take to reverse this? >> well, quite frankly, the authorities in this part of the world have lots of tools in their armory to deal with this. particularly in china. there's all sorts of measures that they can use on taxation, on just pure outright administrative things that they can do to slow down the markets and they can force all sorts of actions on the part of municipal authorities, regional authorities and so on. they have been doing that in the past. singapore has done the same thing in the past. and so has hong kong. so it's a combination of both monetary and outright administrative measures to slow things down. and they -- i'm pretty sure they will not be slow in using these measures this time round if they see bubbles occurring and are

signaling that's exactly what they're looking at. >> peter, it's louisa in london. are they indicating that the measures that have been using are effective and will continue to be effective now if they put them into place quickly and how long is the lag period going to be before things start slowing down, then? >> in the past, administrative measures a couple of years ago were being adopted in china to slow the property markets down. and it took quite a while for those measures to take effect. they would introduce a measure and watch and wait for a month or two, then introduce more measures, and over a period of six or eight months, it actually worked. in singapore, you saw a couple -- or about a month ago, some measures being announced to slow down financing for second homes and so on in singapore. now, we're talking about another round of measures this last week. so again, they can introduce these things piecemeal, ad hoc way to see how each measure

reacts in the marketplace. and it doesn't actually always take a little bit of time for these measures to filter through. often about three to six months. so i expect to see that again here. >> peter, this is christine again. quick one from me. we keep talking about this housing crisis in the u.s. what's the potential of a crisis happening here in asia? >> i think it's much less the case in asia this time around. quite frankly, asia had its major crisis in the late 90s when we had a massive oversupply in housing. that excess got washed out in the early part of this decade. quite frankly, asia hasn't had enough time to get its back into trouble again following the crisis it had in the late 1990s. so i think we're quite happy. we haven't had massive borrowing, we don't have massive consumer credit, we don't have huge amounts of construction going on overthere, massive

supply of real estate, only in one or two places is that occurring. >> peter, thank you very much for that. good talking to you. let's head over to india. reema joins us like for the india business report. >> thanks for that. the indian markets are up about 1%. the nifty is up, volumes, as well, have picked up. right now, we've clocked about 75,000 trades now and it's different stocks from different sectors which are gaining ground, so it's rab backsy, tata motors and the other stock that has been gaining is the board

has approved the ipo of its telecom subsidiary. the company will be filing the dhrb and also they are looking to raise some money while on a qualified institutional basement. on the losing side, stocks are down over 2.5%. sources are telling us that it is towards the last lap of the deal. the board will meet on the 27th of september and sources are indicating that an agreement will be signed post to that. the one hurdle that is present right now is that it will require the nod of the south african competition committee. so that is the one hurdle which is taking place in that counter. but apart from that, it's all set for the deal. so let's see on that counter. with that, it's back to you. >> reema, thank you very much for that. some of the m&a stories to tell you about in china,

singapore commodity firm mobile group for $850 million. noble has agreed to sell 573 million shares to cic at an 8% discount to its last traded price. the deal will give china exposure to a mix of hard assets and global trading leverage and agricultural industrial and energy products. shares of singapore noble trading group have been on hold for the past two weeks or so. >> spain aes biggest bank, santander is looking at a brazil ipo. some analysts are slightly concerned about the high price of the operation, saying that it might deter some investors as the value of the brazilian unit

at higher multiples to earnings than its rivals. julia. larry ellison says sun microsystems are using about $1 million a month as the urman commission determines whether or not it will get to take over. ecb has until january to make its decision. sun's revenue has plunged since the deal was announced in april. in frankfurt, oracle is trading down about 0.81% and sun microsystems is flat. meanwhile, facebook is expected to announce a deal today to share advertising data with niels nielson. facebook will start promoting that on the site. facebook has about a 9% share of the u.s. display ad market

second behind yahoo!. facebook coo cheryl sandberg will outline the partnership at an advertising conference in new york today. but before she does that, she'll sit down with me for an exclusive interview at squawk on the street at 9:00 a.m. new york time. coming up, billions of dollars worth of cdos are being liquidated. we'll have analysis. >> yeah, we will and find out why robust demand for milk is helping to boost the ki kiwi/dollar. come back and we'll talk more about all this.

hello, everyone. welcome back. the market has failed to capitalize on yesterday's gains. a withdrawal with of stimulus is likely to reduce the flow of dollars into the economy and some investor res worried about a potential currency crisis. >> currency and interest rates. currency is the largest mark in the world by far. so those are the two that could cause problems. >> well, let's talk more about this. adam boss ross is the director

of trading at foremost currency. he is with us in studio. do you think we're looking at a currency crisis? >> yeah, i think so. i think we've got a huge global imbalance now and this is probably going to be one of the topics to be discussed at the g-20. you have a strong yen and for country that ex ports so much, of course, that's pretty kajing to them. you've got a pound which is fundamentally weak, bank of england releasing comments saying it will remain weak for the medium to long-term. for us, a country that doesn't finance a great deal, not helpful to us, either. this needs to be discussed at the g-20 to try and bring something back into line. >> adam, this is christine. size of a recovery and daily ex ports are pushing the kiwi/dollar to a 13-month high. how bulis are the on the kiwi? >> extremely.

i think all these commodity currencies have to be one of the strain at the moment. commodities, of course, being a huge winner as the market learns to return to risk in either way. >> adam, julia boorstin here in the united states. what's next for the dollar? we've been talking about is the dollar the new yen. what will you see the dollar playing in the new global economy? >> the dollar is looking to replace the yen in the point of a carry trade perhaps for the future. we've seen dollar strength as people return to the safe haven. oil dropped off a lot bit, gold dropping off a little bit. as the market does return to those riskier assets, the dollar will be the loser out of these things. really, we're looking for it to hit the 170 where we did see it to hit, of course. now we're waiting for the fomc,

about g-20, are we looking for an exit strategy that we're all awaiting, of course? >> do you think we're entering a policy where the u.s. cannot carry global growth any longer, it doesn't wish to carry global growth any longer and is slowly start to go change its wording to community that change to the rest of us? >> realistically, the dollar is more comfortable around the 1.70, 1.80 marker. certainly next year, something is in the 1.80 on euro is good, as well. so i think, yeah, moving the dollar back down is probably the move. >> and adam, what do you expect to hear from the results of the fomc meeting, what kind of tone in terms of the dollar? i think obviously rates stay on hold. are we starting to put things in

place to move down the line, which is probably the point. we're not quite ready to implement an exit strategy yet. there is still a huge amount of fiscal stimulus in place that needs to to be unwound. >> adam, thank you very much for that. time for a quick break. coming up in the next hour of "worldwide exchange," we will bring you up to speed with all the top stories making headlines across the globe. plus, tired of the government bailing out banks? officials may soon ask banks to bail out the fdic. we'll have the details later in "worldwide exchange." um bill--

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i'm christine tan. in asia, the asian development bank revises up its forecast saying asia is resilient to the crisis. >> hello, everyone. i'm louisa bojesen. onwards and upwards in europe. shares are fueled by a lift in energy stock peps. and i'm julia boorstin in the u.s. the fdic may ask banks for a hand in shoring up the depleted deposit funds.

>> if user just joining us on "worldwide exchange," welcome to the start of your global day in the u.s., asia and europe. the dow is trading about 60 points above fair value. the nasdaq and the s&p also pointing to a higher open. let's take a look at some bond yields. the ten-year bund yield is up to 3.4 %. and ahead of an auction of $43 billion worth of two-year notes, we have the ten-year note up 0.004 at 3.48%. louisa, how is it looking in europe? >> well, we started on a higher note this morning, up around 1% for the broad based index. 0.8% 23u79 to be more exact. and we're seeing buying into a lot of the basic resource stocks. some of the oil companies out there seeing buying, in fact. there are just two companies that were in slightly negative territory out of the dow jones

50. broad based buying, we've had furthercations of australia lifting most of its metal export to china, which is giving them more of a reason to see some buying this morning, too. let's briefing show you the currencies. here we're seeing the dollar weaker against the yen. same goes for the dollar story against the yen. we're going to talk about sterling, also, in particular here within the next hour or so. so do stay tuned for that. hi, christine. >> hey, louisa, volume is a little light, but in erms the of action, this is what the picture is looking like for kospi and south korea. a lot of foreign buying helping to lift this particular market to a 15-month closing high. the shanghai economic down 2.3%. that is helping to put pressure on chinese stocks. the airline stocks in particular were doing well after their brief drop in oil prices.

we saw the aussie market down moderately, 0.3%. this is how the oil picture is looking for nymex light sweet crude after that brief stop we saw yes. up 67 cents, $70.38 a barrel. and brent, as well, resuming its climb upwards. putting on gains at 6 cents, $69.32 a barrel. louisa. >> thank you, christine. today's guest host, that means a person who is here for the next hour is stephen gallo. do get your questions through to stephen. in particular about the currency markets. that's his especially and that's worldwide at krn.com. stephen, we have -- good morning. >> good morning. >> i'm all excited to get into this. we've got indications that the market fundamentals have been improving for some time now. we've had understand occasions that we're starting to see unwinding on some of the underlying bad assets of the

banks. what is your overall mood in comparison to the market now? >> my overall mood towards the market is generally one of, you know, in absent a financial crisis, i would be saying in a weak economy, in a weak economic environment where fundamentals are still very weak or in some cases deteriorating, i would say, what's the next sort of bump in the road? this time i'm asking myself, what is the next crater in the road? and i think the market is starting to come to that view, as well. xkly, fundamentally, there are clearly reasons for the pop in the second half gdp in most parts of the developed world. there are clearly reasons, there are clearly things to do with restocking and how that's influenced equity price hes and the general level of risk appetite. but further out, the market is clearly starting to worry about some of the longer term em mications like quantitative easing and fiscal policies on the part of many developed

nations. so what is the next sort of crater going to be that we come across? and risk appetite can stay firm even though these are concerns that are building. >> you see, you talk about that and yet an e-mailer has written in, jt, and he says -- excuse me, he or she says that things would vastly improve the movement stimulus is removed. the reason is that people would feel freed over their troubles. that's one way of looking at it, as well, that we've recovered so much that stimulus isn't needed any more. >> i suppose you could look at the psychological aspect of it. i've always talked down about physical policies that are being practiced in the united states. if i were in ben bernanke's shoes, i would already be lifting interest rates. >> would you really? >> interest rate hikes don't start, to me, until we get well past the 1% mark. what i would be doing is i would be trying to wean the economy off, adjusting to a low interest

rate environment. it's much easier to normalize interest rates from 1.5% to 2% than it is from 0.5%. i'd be taking care of the savers in the united states, not the consumers and not the debtors. i have a very, very negative outlook regarding this stimulus and quantitative easing, which is why i've hated the dollar and sterling for so long. so i would already be concentrating on removing stimulus without throwing the economy down even further. >> so tooeven, this is julia boorstin here in the united states. we will hear the results of the two-day fomc meeting tomorrow and it seems unlikely that we'll see any change to interest rates. what do you expect to hear from the fed? >> the doves and the fomc have the upper hand. i think they'll be cautious

regarding the economic outlook going forward. the fed are bent on this idea of spare capacity in the united states. just like policymakers in the uk, in the mpc are unyielding that spare capacity will remain a dominant force in place for the next one to two years. that may well be true, but i think the risk is they're going to put too much emphasis on the compare capacity for the next now years. but to answer your question, i think they're going to be cautious regarding the economic outlook. there is some talk now that maybe the hawks will get more say in the statement. i don't think the hawks will be allowed to have the upper hand on this stage. i think they're very, very far away from withdrawing stimulus. stephen, there will be quite a bit of attention on quarterly earnings. the third quarter is wrapping up in a couple of weeks. what do you expect to see in terms of corporate earnings? do you think we'll see signs of strength? >> no, absolutely not, certainly

not in the united states. it is very clear that one of the key drivers of the market, improvement market sentiment which louisa was just referring to was quarterly earnings. but quarterly earnings from a bottom line cost cutting perspective, and i've long been of the view that the u.s. consumer is dead, the era of export led growth, that's now behind us so we have to come up with a new model of economic growth, a new sustainable pass. so i don't see how top line revenues can grow in an environment where you have people losing their jobs, income growth is falling. i just don't see how that can happen. >> stephen, what will that new economic bottle be? this is christine here, by the way. >> hi, christine. well, let's hope, for example, over the next five to ten years that developing economies see an improvement in their domestic spending. let's hope that they're no longer working for consumers in

the united states $3 or $5 a day. i expect over the course of the next five to ten years, of course, this is very, very far out, sort of a model view that i have, but i expect over the course of the next five to ten years, there will be more larger players in terms of global demand, in terms of global consumption. there will be regional players, key regional players. there will be regional currencies. going forward, i think the dollar is -- and i hope this gets brought up at the g-20 meeting coming up, the dollar is largely responsible for the crisis that we're in. we cannot have an overreliance in futures years and decades to come. >> stephen, we're going to leave it there, but you'll be sticking around for the rest of the hour. still to come on "worldwide exchange," we'll discuss how the black gold lost so much value so quickly.

september 22nd, 2008, saw the price of crude oil spike to a day high of $130 a barrel. by the end of the day, nymex has seen its highest one-day gain

ever of $16.37. >> the incredible jump came just a month after oil had seen historic highs of near $150 a barrel. the quick spike was just a bump along a steady downward path that saw crude oil plummet even faster than it had risen. by december, we were at lows of less than $35. so what happens now, then? this summer has seen prices hovering around $70 per barrel with a finite supply and a weak dollar. could we see demand and oil prices subdued? we're joined now by caroline bain. welcome. very good to have you with us. let's start out with the recovery that we're seeing in the equity markets at the moment, whether we are talking about a v-shaped recovery or a w-shaped recovery, does a recovery in the equity markets necessarily translate into a recovery in, for example, the petroleum prices?

it can because commodity markets do take a lead from what's happening in equity markets. from that point of view, the market might take a lead from the equity markets. but from -- we would hope that in the longer term, the oil market is going to reflect the market fundamentals, not what's happening in the equity markets. and at the moment, the market fundamentals suggests that there should not be much momentum behind oil prices. >> no. and we're, what, 2, 2 1/2 months prosecute being back in the winter season. what's the baseline scenario telling you about that? >> well, stocks are at all-time highs everywhere. so domestic demand in china isn't as strong as one would expect. yes, there will away seasonal

upturn, but we're all ready for that. it happens every year. and unless there's five months of snow in the western world, i can't see what would lead to a further spike in oil prices. >> steven, what do you think? do you agree with caroline? >> largely. i think fundamentals globally are still very weak. so i mean, i would agree generally with the picture that she has presented. but as a currency strategist, i look at the relationship between the dollar and other commodities. what i see now -- well, let me first start with this notion with cftc are trying to do in the united states. actually, on both sides of the pond by limiting the amount that speculators could potentially be involved with in terms of bidding up the price of oil. speculators also now want to push the dollar lower. so it's no surprise to me that this investigation on the part of the ftic is coming at a time when the dollar wants to weaken.

you have ultra, ultra high levels of money printing. that is not a good situation to be in. so i'm looking to see whether or not there is a breakdown between the relationship between the dollar and crude oil or is it picks up like it was in the summer of 2008 when oil hit a peak. >> caroline, stephen talks about speculation, but there's also an element of overproduction. how much of this and the friends that we're seeing are a result of opec overproducing? >> well, opec is really overproducing at the moment. they did cut their quotas, their production ceiling at 2.4 billion barrels a day. some opec producers aren't being as compliant as they could be and that certainly compliance is deteriorating and it has been since march of this year. and that's probably a reflection of the rising prices. but what perhaps is slightly more worrying than overproduction is the extent of capacity that's been in the world. opec shut down quite a lot of

its capacity, but there's a lot of new capacity coming on stream. and the potential in opec to increase output, not just with existing capacity, but with potential capacity is -- certainly provides an adequate question in the oil market. >> caroline, thank you very much for joining us, caroline bain, stephen gallo, head of market analysis for snyder foreign exchange, you're sticking around for the rest of the hour. don't forget, you can learn more of our coverage of the crisis, 1 year later at cnbc.com. the fdic may ask billions of banks to shore up its deposits. the move is a more attractive alternative to the fdic tapping a $5 billion credit line with the treasury department. the agent is relukt kwlant to do that because that might be viewed as another government bailout. the times says the fdic may use

a proposal on replenishing the funds next week. meanwhile, bank of america is looking to get out from the government's thumb. the company will pay $425 million under which is government would have shared b of a's losses from barrel lynch. b of a missed a monday deadline to provide details on the merrill deal to the house oversight committee, but the company's chief marketing officers will meet with lawmakers today. separately, the s.e.c. says it could pursue new charges after a judge rejected a settlement last week. in frankfurt, let's see how that's trading.it's up 15 cents to $11.92. >> and staying in germany, pierce steinbrook has says his party is prepared to introduce a stock exchange tax for germany alone.

britain's construction companies have had $200 million of fines handed to them, down from the office of fair trading. they found construction firms had been polluting with each other in order to artificially distort the level of competition. the end result was higher prices for clients. >> louisa, it's said asia is proving to be more resilient than expected. asian economic growth should rebound to 3.9% in 2009 according to adp. it adds as for china, adb's annual gdp will hit 8.2% this year and 8.9% in 2010. however, the bank says the recovery remains fragile and

warned against an early withdrawal of stimulus policies. elsewhere, cic is buying a 14.5% stake in singapore commodity firm noble group for $850 million u.s. dollars. noble has agreed to sell 573 million shares to cic at an 8% discount to its last traded price. the deal would get china exposure to a mix of noble's hard assets and global trading leverage in agricultural, industrial and energy prospects. shares have been on a trading hold for the last week. louisa. >> still to come, another government bailout could be on its way. but it's not what you think. u.s. doishls may soon be asking the bank to bail out the government. stay tuned to "worldwide exchange." thank you so much for all your e-mails. we'll try to get to them as soon as possible.

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hello, everyone. welcome back. on to our global equity market roundup now. we've got a party taking place in the stud crow, would you believe it? there's a party everywhere, but rebecca is joining us to talk about london. we've got stephane to talk about paris, as well. >> i am never coming to a party at your house. >> are you calling stephen gallo

boring? >> no snacks, no party music. but we have a large amount of news, which makes a great party, as everyone knows. let's check out the ftse 100. the markets have been very strong today. we've managed to hang on to those gains. amongst the gainers, we are seeing basic resources stocks looking pretty strong this morning. they are the lion's share of the reason why markets are looking higher here. lonmin, eurasian natural looking higher. plenty of strength coming through from that neck of the woods. carnival has been higher this morning. the company comes out with its earnings a little later on. it certainly is the basic

resources stocks that the the gainers here in london. okay. that's my party piece. let's get across to stephane. >> and it looks like it's party time for the french market. accor announced this morm that it's going to sell its formula one hotels this morning. it will continue to lead the premises. it will use a large part of the cash to reduce its debt level. the stock is the top gainer. we've got a very positive session for the carmakers after citigroup raised its price for the french and german carmakers this morning. citron is going to the low cost of the market. it comes with a hybrid engine, which has not been consumed well. quick look at eads, a bit weaker, underperforming the cac

40. christine lagarde says this morning that the name of the next ceo has not been decided yet and that no announcement will be made before the board meeting left lane take place next week. that's the story in the french market. that trisha, how is the party in frankfurt? >> it's still very positive, up about 1.2%. so nothing has changed from one hour ago, but for sure, volumes are still very low, about 27 million shares have trade. interesting to see lufthansa up almost 4%. this crisis has been more difficult than 9/11, 2001, of course, in terms of kwakt and severity, but how long it would take these companies to sort their problems out. that as far as citi is concerned, the credit ratings there are not looking too healthy, either. never the less, lufthansa is soaring ahead. the car sector is very much in focus this morning.

vw is getting an upgrade, itself. man, the truckmaker, weakness there. k&s unchanged after having had a really heavy day yesterday. what is interesting, of course, is the tech companies outperforming the rest of the tech stocks, up about 1.6%. that's frankfurt. over to adam in singapore. >> thank you very much, patricia. it continues to be a very strong session for the south korean equity market. we saw more buying in this equity market for the 13th straight session as investors were jumping into a lot of the blue chip stocks. take a look at the session across many of the tech stocks, the autos and also the energy plays. these are the top blue chips that constitute a fair amount of waging on the benchmark kospi index. we saw gains across the board, samsung electronics being one of the top stocks.

citigroup upgrading their 2009, 2010 chip stocks. the autos saw a pairly decent session, as well. hyundai motor up 5.2% after maura said they're going to post month on month sales gains in the month of september. so the one up cash for clunkers program may not have been a one on board. meanwhile, we had the shanghai composite down. the market breath was up, the dreadful losers up by a ratio of 6.71 on the thought of more ipos coming back to the market. >> thanks so much, adam. it is a fairly quiet day for economic data here in the united states. although the fed does begin its two-day policy meeting with an announcement due wednesday at 2:00 p.m. new york time. there is one report out today, the federal housing financing agency. the regulator for fannie mae and freddie mac releases its index at 10:00 a.m. new york time. that's your global stock watch.

louisa. coming up, we're taking a look at how the fed might be communicating what it has in store for us tomorrow. will they start to cut back on their quantitative easing stimulus? and what do you think, is it too early to scale back? worldwide@cnbc.com is the e-mail address.

it's 30 minutes past the hour. here are the top business stories from around the world. in the u.s., fdic may ask banks for a helping hand in shoring up depleted dmoft funds. >> hello, everybody. i'm louisa bojesen. in europe, on wards and upwards, fueled by a lift in energy stocks. >> and here in asia, shanghai stocks slumped to a two-week closing on worries about fund raise can and more share supply. >> futures pointing to a higher open here in the united states. let's look at how they're doing here.

do down slightly from earlier today. the nasdaq and s&p 500 pointing to a higher open. yesterday, the s&p and dow finished down and the nasdaq finished slightly up. the bond yield is up at 3.48%. we're going to see the auction of $48 billion worth of ten-year noetsd. louisa, what is it looking like in europe sfp. >> let's relax a bit because we're been on wards and upwards for quite some time now. there are those that think we might be getting overheated right now. largely driven by the miners, which, again, having risking the upgrade from a growth forecast upgrade out of australia today. up by 359%, ka zasmy's since the beginning of this year. 35%, if you happen to be invested into this basic

resource stock since the beginning of the year. let's look at the dollar cross rates. here you have the dollar/yen, a little money coming ahead of that ahead of the g-20 this week, ahead of the g-20's position which is published tomorrow. euro/dollar, higher by 0.7 a 4%. 1.4787. hey, christine. >> hey, louisa. volume is a little light. this is how the picture is looking for the whole of asia. right now, the kospi and south korea is up 1.4%. foreign investor appetite strong. the shanghai composite down on worries of oversupply of upcoming ipos. the hang seng, airline stocks in particular are getting a lift in overnightfall in oil stocks and the aussie market is down 0.3%. this is how the picture is looking for nymex light sweet crude after that brief drop we saw in oil prices last night are putting on gains again, 71 cents

higher, $70.42 a barrel. julia. >> thanks, christine. joining us now for market strategy is steve weeple, and still with us is stephen gallo from snyder foreign exchange. steven, let's start with you. we heard comments from obama yesterday saying that unemployment is going to continue to be a problem and now we're waiting for the fed's comments tomorrow after the fomc meeting. what is your outlook? what are you expecting to hear? >> well, we're not expecting to hear anything particularly dramatic, to be honest. i think the market has rates staying low for a while. i don't think the equity markets are doing anything to shift that view. the market is looking for an exit strategy from the fed. what they're going to do in terms of buying back the market and how they're going to gradually ease to the very loose conditions we're in. i think we're at the stage where

we don't think we're going to see anything radical. this is going to be very measured. but the fed wants to signal to the market that we are coming out of a really tough period. bernanke has talked about the recovery taking hold and we're going to see a little rhetoric that take the market further down that path. >> steve, what is your perspective? what kind of recovery do you expect to see? >> i think along with most people we're expecting this to be relatively shallow. we know there's still balances in the economy. we know the consumer is overleveraged. we know unemployment is going to continue to track higher. but that said, we know there's lots of liquidity hitting the sidelines. banks have a lot of balance sheets and securities and short-term assets and there's a lot of dry tinder that can hit the economy in terms love loan growth. as soon as we start to see banks more comfortable with the creditworthiness of borrowers, that we might see quite a lot of liquidity coming into the

economy. we also know that the inventories are low. so we can start to see fairly significant production numbers coming through. so, you know, while we're fairly tempered, we also think the condition to meet the recovery fairly well sustained and fairly well prolonged. >> stephen, we've had a whole flood of e-mails through, especially regarding the currency momentum at the moment. ophelia is asking, having a aussie dollar higher to the pound, would this be the best time to convert to the pound? and do you think the pound will be i wouldn't say used as the funding currency, that's from tony. >> you have to stop looking at sterling and the dollar. they're in bad, bad shape. so what we've been tracking actually is a -- is how sterling and how other currencies have traded where qe is employed against non-qe currencies. of course, the australian dollar is a non-qe currency and sterling is continuing to do

very poorly against this equally weighted basket of non-qe currencies. based on my expectations for the pound along, i would say we're going to see further declines in sterling against the aussie and in the months ahead, yeah. >> sateen, this is christine here. what do you think of the dollar? do you think the dollar can continue to remain strong? >> well, that's a tough one. again, we know there's a lot of supply coming into the dollar market and that's going to push things down and we know it's being used as the carry trade. but that said, we also think that the u.s. recovery does take hold, then there would be a spliet in the dollar assets again, it's likely to be one of the economy that's recovers first and i think that will start the demand for the dollar. they can probably start to move higher as the economy is more than 20%. >> stephen, you seem like you're disagree b and deb is writing in asking whether the short covering of the u.s. dollar in the short-term because it looks a bit oversold.

>> there are two things in my mind which could change the tide for the dollar. one is monetary tightening policy, which as we discussed before, i don't think we're going to see. the second is a strong and localized recovery in the united states which i don't see happening. i don't see how markets are going to start the trade the dollar higher on this relative growth differential. dollar outflows are continueling. foreign investor output in the dollar is continuing to decline. i don't see how anyone can be constructive on the greenback. >> you don't have to think we can all lie down and roll over and die just because we're going into a period of lower growth. but another e-mailer writes in, is the u.s. dollar over? i'm worried about the u.s. dollar ten or 20 years from now. china will be more prosperous and modern and stronger than ever before. i think the golden years of the dollar are going and won't come back. >> rebalancing should be allowed to get under way the. and the first thing that will happen is that these emerging economies that have so long

depended on the united states for growth can't do that any more. so immediately, they're going to stop weakening their own currencies and buying dollars to keep currencies weak. that will be the first thing that happens. gradually, there will be a diversification away from the dollar. it's natural to assume that, absolutely. >> steven, i want to bring you back here. what's your perspective on stephen's pessimistic view of the dollar the i think those are clearly long-term issues in terms of who is the reserve currency across the global. there's clearly issues with the recovery part of the u.s. economy. i'm not going to take a strong view of the dollar. he's clearly the expert in this view of the market. but i sound like i'm more constructive on the path of the u.s. economy. i think that could be one of the differing aspects. >> stephen, moving away from foreign exchange and forex, what is your strategy for u.s. equity markets? >> yeah.

we still remain bulis, to be honest. i think what we've seen over the last six months, we've seen the multiple expansion phase of the equity recovery markets. you know, if history's only pretty, there's not a lot to go for in erms of rerating of the market. but i think if we get a stronger view on the economy, we can see those earnings numbers move up fairly significantly, i think that will drive the next leg of the equity rally. >> steve, thank you so much, steve weeple, standard life investment and stephen gallo. both of you will be sticking around. still to come on "worldwide exchang exchange", tired of the government bailing out banks? well, get this. officials may soon be asking banks to bail out the

government. we'll have the details on the story right after this break.

welcome back to cnbc's "worldwide exchange." here are some of the top stories we're watching from around the world. the fdic make ask healthy banks

to lend billions of dollar to help shore up its depleted deposit insurance fund. the move is a more attractive alternative to the fdic tapping a $5 billion credit line with the treasury department. the fdic is reluctant to do ta because that may be viewed at another political bailout. larry ellison says sun microsystems is losing about $100 million a month as european regulators delay a approval of the takeover. it's probing whether or not the oracle takeover will hipder. sun's revenue has plunged since the deal was announced in april. in frankfurt, oracle and sun are both trading down. oracle down 0.81% and sun

microsystems is down 0.16%. facebook will start polling users about display ads it shows on the site. neelsen will package that information for advertisers. cheryl sandberg will announce the deal later today. before she does that, they will sit down with me for an exclusive interview on cnbc's squawk on the secret. representatives from 190 nation less try to work on a deal to fight global warming in preparation of a final meeting in copenhagen, my hometown, in december. ahead of the talks, the head of the u.n. climate change body sounded optimistic. >> i think we can do a deal in

copenhagen. i think you need to be realistic about what that deal can encompass because time is running out. but i have, at the same time, the feeling that the spot loit, including your spotlight, is focused on climate change in a way that has never happened before. so we've got the politicians in the headlamps, and let's make sure that they deliver. >> china has been praised, saying it's leaping ahead of the u.s. with plans for renewable power and close for 30 plants. european leader have voiced frustration with the u.s. the danish adviser says things are looking difficult when referring to relations between brussels and washington. christine. >> the asian development bank has upped its forecast for the region saying asia is proving to be more resilient than expected.

asian economic growth should rebound to 3.9% in 2009. it adds that gdp growth will come in at 6.24%. as for china, with annual gdp will hit 2% this year. however, the manila based multi lateral national bank warnings are recovery remains fragile. it's time for our final thought now from stephen gallo. a ton more questions than time will permit today. but eric writes in and says, do you think we'll be able to avoid hyper inflation, or not 123467 if you do, what's your time frame? >> my gut instinct tells me we will avoid it because policymakers will wake up to the fact that there will be tough decisions that need to be made in terms of v-shaped tightening

systems and quick withdrawals of liquidi liquidity. but that doesn't change my view that the major force to be reckoned with over the next 2, a 5 or 10 years will be tag flagz rather than hyper flagz. >> aaron writes back saying yes, stephen, but aren't emerging markets dependent on economies like the united states for growth? yeah, they will and they were. but gradually, policy in these parts of the world will change. they'll get more bent on trying to secure their own domestic demand, their own economic growth, independent of what's going on in other parts of the world. i don't think that will be the model that we're faced with for the future. a large part of the problem was a weakening of foreign currencies relative to the dollar, an artificial weakening of those currencies and a build up of reserves. that won't continue for the next

ten years, i don't believe it will. great. we have to leave it there, unfortunately. but we can continue talking throughout the entire break, stephen. stephen gallo, head of market analysis from snichneider forev exchange. >> thanks, louisa. up next, will the fed give us any clues on its future rates meeting? i'm robert shapiro. over a million people have discovered how easy it is to use legalzoom for important legal documents. at legalzoom, we'll help you incorporate your business, file a patent, make a will and more. you can complete our online questions in minutes. then we'll prepare your legal documents and deliver them directly to you. so start your business, protect your family, launch your dreams.

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hello. welcome back. yes, there is still "worldwide exchange," but ahead of this program is "squawk box" in the u.s. for viewers in the united states, asia and europe. becky is joining us. >> we'll be talking about health care reform, climate change, financial regulation, fixing the economy. we're keeping it small and focused today. and we've got it all covered with a line yumm of vips, including a live interview with former president bill clinton.

the clinton global initiative is kick off in new york today. we'll be talking about his agenda for this meeting. it's starting at around 7:15 a.m. eastern time today. prosecute clinton's former chief of staff will be our guest host for two hours today. we'll check tout challenge facing the nation and the obama white house. all that plus america's mayor, rudy giuliani and steve forbes, this will be giving us their perspectives from their side of the fence. don't forget, that fed meeting is kicking off today, as well. "squawk box" is coming up at the top of the hour. louisa, we'll be busy today. we have a lot to talk about. we'll see you very soon. >> we're getting poems and all kind of things on this side of the pond to the fed. >> maybe a haiku. i like that. >> i know, i know. but becky, we'll see you in a couple of minutes, and looking

forward to it. >> okay. let's get a look ahead at the u.s. strayeding day and bring back steve weeple. steve, what sectors do you think investors should be looking at right now? where is the opportunity? >> the base sectors are those geared towards their common recovery. we know the consumer hasn't really come back to the retail market yet. sales are still fairly negative. we will see those numbers start to move slightly. we like some industrial factors. we like areas like railroads where the companies are short good pricing power through the downturn and when volumes come back, we think there will be good operating sectors. we're focused on sectors where company management has proven to be in better shape than when we

come out of it. >> steve, this is christine here. do you paver the financials? banks are starting to benefit from liquidation. >> yeah, we still like the banks. the banks have a huge right. we think a lot of that rerating is probably behind us. as we look at the normalized earnings a couple of years out, it's tough in terms of what might happen in terms of the regulation sector. if anything, some of the fears are probably moderating. so we remain positive on the banks, we do. steve, hi. it's louisa in london. quite a fuel e-mailers writing in today wanting to know opinions on whether to invest in some of the oil related companies at the moment. we're seeing quite a bit of

volatility in oil stocks. we were talking to one of our guests about that earlier. what's your opinion? >> oilt is another sector we like. demand has been weak across much of the world. much of the world's oil consuming nations. we think that will recover. we know there are some supply issues. although there's been some big find over the last week or two, we don't see any supply block coming for a long time. we think that is a fair market, and we think oil stocks are pretty underpinned. steve, looking forward, what do all these add up to? do you think we'll see positive sentiment continue? >> we think we probably will. it's fairly fragile, but over the last three months, 7% of

economic numbers are beat expectations. we're clearly in the recovery case. so my guess is that consumer sentiment will keep on ticking up. the housing market is showing signs of recovery. what we're likely to see sa continuation of that trade. i wouldn't be too surprised if we saw the odd data point that was contradictory, but in aggregate, we'll continue to paint a improving picture if not yet a positive one. >> we'll have to leave it there, but steve weeple, thank you so much for joining us today. that's it for today's show. i'm julia boorstin in the u.s. >> and i'm louisa bojesen in europe. >> and i'm christine tan in asia. thanks for your company here on "worldwide exchange."

good morning. u.s. equity futures are trading higher, reversing another one-day decline. debt for sale, the treasury selling $43 billion in two-year notes today. and the central bank at the center of it all, the fed starting a two-day meeting as "squawk box" begins right now. good morning, everybody opinion welcome to "squawk box" right here on cnbc. i'm becky quick along with joe kernen and carl quintanilla. and we have quite a show in store for you today. hardly morning passes around here when we don't start talking about some washington story and the effect it has on wall street. "squawk box" is always at the

intersection of it all. this morning, we're going to talk to some of the foremost leaders in business and politics trying to put it altogether for you today. our next host is former white house chief of staff john poe des ta. this is a man who was linked closely to the clinton administration and to the obama administration. also joining us this morning, mr. podesta's former boss, former president bill clinton to talk about his initiatives. on the other side of the aisle, we'll be talking about former new york city mayor rudy giuliani. well known businessman and former presidential candidate steve forbes himself and i'm sure we will get to the issue of taxes with mr. foeshgs. we've got plenty of things to

talk about with him today. >> how is that guest list working out for you? >> poe defendant ta, if you agree with the liberal side or the progressive side or not, he's an eloquent, thoughtful guy to make the pestation.the liber progressive side or not, he's an eloquent, thoughtful guy to make the pestation. and with the move of the country, sort of the perennial battle between more government or more free market, it's going to be a great show. with bill clinton, the approximately president, there's some interesting profiles. hillary clinton's health care pushed him far left and many are saying that made him one of the most successful presidents ever. you wonder, does it happen this time around or -- >> yeah. >> and the same players, look, rahm was there back then, he's there now.