brought to you live from n london, singapore, and around the world, this is "worldwide exchange." welcome to the program. the headlines today from around the globe, xstrata and glencore agree on the mining industry's biggest ever deal. they've unveiled their merger. and here in in az wra the rba captures the australian market. the aussie dollar leaps to a record high against the euro. bp raises its dividend on the back of forecast beating fourth quarter figures. we'll hear from the oil giant ceo who says he's vigorously preparing for the gulf of mexico related lawsuits.

toyota lifting its four-year operating profit outlook by $900 million but says it has its eyes firmly on the road as the race with u.s. automakers heats up. and the united states ben bernanke is back on capitol hill today. investors will check to see if the fed chairman changes his tune on the economy after last week's stronger than expected employment report. welcome to today's program. we'll be back in greece as well today as talks are on going and we get the launch of a national strike. julia will joy us later. it is two out of three shows in a row, christine, where we are starting with corporate news and other stuff besides the debt crisis. >> why, ross, are you sick of talking about greece or the

eurozone? >> i wouldn't put it quite like that. i just think it is noticeable when we can start a program without having to talk about it. >> it's nice. it's nice. it's nice for a change. i totally agree. i totally agree. markets here are still waiting for some sort of a greek deal to happen and keeping it very cautious. the shanghai market is down 1.7%. a bit of profit taking going on in this particular market, hopes for a cut in reserve pulling some of the financial stocks lower. the weakness over in china pulling over putting pressure on the hong kong market, finishing to the negleative side down ten points. the nae kay 225 earnings continue to be focused. 0.1% lower. toyota after the bell releasing earnings. a record annual earnings so that seems to be quite a move away from the other automakers shrugging off the strong yen. the kospi up 0.4%. modest gains there. the taiwan weighted index up and now the big story is happening over in australia where the rba

surprised the markets by keeping rates on course. a lot expecting the rates to be cut after weaker retail sales yesterday that saw the aussie dollar spike to a six-month high against the euro. a record high against the euro and this market not liking the news down 0.5%. new zealand 50 pretty much flat. so overall it's a pretty much a mixed picture in asia, ross. >> and after a flat finish yesterday the cac was down, we're flat on the ftse and the dax. we are weighed to the down side as we were this time yesterday. advancers outpaced decliners around 8-2. european indices, show you where we stand now, the ftse 100 down 16 points. a good week last week, up over 3% after the flat close yesterday down two-thirds. we're off a third. the ftse mib is fairly flat at the moment. we talked about the rba decision. come on to that in a second in terms of aussie rate.

euro dollar while we wait for the negotiations in greece to recontinue 1.3123. we moved off the low the last 24 hours of 1.3027. set at 100.65. the aussie dollar 1.2173 after the rba left rates on hold. the aussie dollar against the u.s. dollar, 1.0780 is where we stand. up to 1.0812 earlier. so the aussie dollar getting a boost post the rba because there was no rate cut and as far as bonds are concerned, ten-year bund yields steady. 1.86%. treasuries after the big sell-off we had on friday are pretty steady where we yielded yesterday. ten year gilt on the retail sector not that great overnight. ten-year btp yield 5.633%.

bond purchases last week for peripheral 124 million euros can, substandingsly lower than previous amounts. seamless. move away from the wall as we concentrate on earnings today. let's kick off with bp. it's raised its dividends for the first time since the gulf of mexico oil spill after beating expectations in the fourth quarter. wayne bischoff joins us now. there was a time we didn't get a dividend out of bp, wayne. how much good news is this? >> it's probably the best news out of all of these numbers today, bringing the dividend yield back to 4%. there is a degree of normality of what expected. the market is generally pleased with this. and here it can go along with

bob dudley's phrase turning point as being a good sign there is a return to normalcy for bp. >> they couldn't close a deal in russia. what is the strategy? what does this company offer future shareholders? >> it's trying to move more and more through. they're planning to increase their operations, planning to sort of try and find more. they know that at the end of the day you have to get the stuff out of the ground. you have to find the stuff, find the reserves. think back to how bg has performed, finding those reserves in brazil. that's what they want to do. he is obviously getting rid of the refining, some of the refineries, the low margin stuff, concentrating more on the high octane end of the market and that's, i think, what the market wants to see as well from bp. >> bp or shell, which one if you were choosing? >> on a relative basis i think i prefer bp.

>> would you own either of them -- would you want to own either or prefer services? >> i still have no major. we hold funds but at the end of the day i think they both offer value still. bp is still the best opportunity. those numbers today weren't particularly brilliant underneath it all but they weren't a disaster either and as a relative play against bp and shell, bp has been a success. that's why i think. >> wayne, thanks very much for that, wayne bishop from king and shaxson. steve right now is thee roreticy sitting town to speak to bob dudley. hopefully we'll get that back for you. i was going to say tape. we don't tape anymore. it's all digital tape. anyw anyway, hope to have that back by the end of the show. traffic depending, of course.

arcelormittal after the world's biggest steel maker posted an unexpected net loss of $1 billion in the fourth quarter. the stock is up. it's about the poured looking statements. stephane has the details. hi, at tstephane. >> reporter: hi, ross. it's not only about the forward looking statement, it's also about the reason for the loss in the fourth quarter, 1 billion euros. the original forecast was a small profit of $101 billion. they reported the loss because of some restructuring charges as well as a special tax item issue. exclude all this, if you look only at the operating profit, it was in line with expectations although it was 29% lower in the fourth quarter because of the weakened expected in china. the outlook is not that bright, but a bit better. also they are expecting the demand in china to pick up in the first quarter of 2012. it also believes that the steel shipments in volumes will

increase in the first half of the year to be at the similar level it was in the first half of 2011. europe, which is a source of concern, also has shown recently some signs of improvement in terms of confidence. that's the reason stock is trading higher -- no, clearly higher. this morning if you look at the guidance, the earnings forecast for the company, arcelormittal is expecting a decline in the first half of the year but still that's compared to the first half of last year but still it will be higher than what it was at the end of 2011. so we need to make it short. it's not going well but the situation has improved. back to you. >> stephane, thank you for that. profit in the fourth was half what analysts had expected. carolin is in zurich. >> reporter: ross, you really can't sugar-coat it. net profit was 40% below consensus and, as you said, ubs gave us an extremely cautious

outlook for the first quarter basically because the eurozone debt crisis and the u.s. fiscal crisis and the banking position in europe and says this could hit revenues and net new money flows in the months to come but there are a couple of bright spots here in those numbers. believe it or not, i've been looking through some analyst notes and they point out the capital position looks surprisingly strong with 14.1% also. let me point out ubs has assets much faster than expected. they're down 10% quarter on quarter so this is a big positive for ubs. talk iing about the investment bank, that's more of a mixed bag because, yes, it did record a pretax loss in the investment bank. however, that loss was a bit smaller than expected. revenues were actually up by 41% so clearly ubs is bucking the very negative trend we saw over at deutsche bank last week. fixed income revenues rose by

21% quarter on quarter, but keep in mind that costs of the investment bank are still a big issue. the big disappointment was to be found in the wealth management unit where results are strong but most importantly the margin was very, very weak and only 91 basis points. this is one of the lowest margins the company has seen in the last five or six quarters and, again, ubs says it's down and based on the outlook that ubs gave us for the first quarter and the coming quarters after that, it's not going to improve a whole lot but we'll be speaking to the cfo of ubs later on 0 today and we'll bring you that interview when we get it later on in the show. back over to you. >> all right. good stuff. thanks for that, carolin. christine? joining us as our guest host for the next hour is the head of lgt bank singapore. do you pay any attention to these earnings out or is the looming picture still what's

happening over the eurozone, what's happening in greece is this. >> it's both. if you look at it in a broader perspective, the earnings are disappointing relative to what we're seeing in the u.s. where the majority of companies are still managinging to beat expectations. we still have a preference not only in overweight market is the u.s. and we think the prospects for the u.s. economy is much better than europe that's undoubtedly going be to be going into recession and even on the corporate bond side again we think the u.s. companies have much stronger balance sheets. they have a lot more cash and reserve. even on the credit side it's not stronger than for europe. it certainly doesn't have all of those down side risks of potential defaults and whatever else we might get from greece and portugal so overall the earnings tie in with what we're seeing. the u.s. is a much stronger investment destination than europe. >> does that mean you're using any sell-off in the u.s. to accumulate stocks? >> yeah, we actually turn more positive in the fourth quarter. we added some more to that early in january and for sure if we do see a pullback market, overbought in the very short term but, yes, a pullback is an

opportunity to buy but still be defensive. we like the companies technology and health care where you can get high dividend. don't get overly aggressive. the u.s. isn't stellar by any means but is doing better than anywhere else and that's a good choice. >> we have bernanke testifying on capitol hill later today. we had the stronger than expected jobs report on friday. is he likely to change his tune, do you think? >> well, he's been acknowledging that the economy is doing a little bit better with but it's slow and it still has a long way to go. what we'll be listening out for in his previous testimony last week he basically made almost no mention of qe-3 and further stimulus and with the way the economy is going with the jobs numbers coming down, it's going to be very difficult for him politically to push that through. that's one of the things the market has been looking for and why we think people are getting overly bear iish about the doll and it's another factor that leads into a good environment. >> speaking of stronger dollar we have the aussie dollar

hitting a peak today because we have the unexpectedly rba not cutting, sounding optimistic about the eurozone saying the financial strains are improving, modest recovery, showing that china is growing strongly. is he rate to make all these assumptions? >> he looks a bit overoptimis c overoptimistic. he's always been a hawk and that's no surprise. when the rest of the world's central banks are easing by sitting still you are effectively tighten iing. we're not sure that's necessary. the aussie is stronger than the rba con seven ses. they have a lot of room to maneuver. in their commentary today they said they still expect inflation to come lower over the next few quarters. they have one of the highest rates in the developed world. there's room to ease. they probably should have done it purely for insurance in our view. now they run the risk the aussie retests above 110. that will add more stress to the good. >> it continue to stay on with us as our guest host.

ross? >> good to have you on today, simon. so we finally got it, the deal announced, agreed between xstrata it and glencore. it's a $90 billion merger. it will be called glencore xstrata. the shareholders are getting a 50% premium to where the shares were wednesday. 2.8 new shares for each xstrata share they hold. xstrata ceo will lead with glencore ceo will be the president and deputy ceo. the chairman holds on to his previous post. in terms of stock price today, we saw reaction last week. glencore international trading higher today up six points to 467. xstrata stock down to 1,229. john foley, the greater china bureau chief at reuters, thanks very much indeed for joining us. i see standard life this

morning. they said they're going to vote against this deal. is there enough for xstrata shareholders, bear in mind mergers have a 20% or 30% premium? >> well, you said there was a 15% premium earlier. it's a bit cheap for can companies to say that because that's comparing glencore's shares today with xstrata's shares last week. if you look at it on a more normal basis it's about an 8% premium. i don't think they can really complain because this deal has been in the making for years. xstrata doesn't have any other options because glencore earns 35% of its stock. unlikely a white knight. this is a good thing for xstrata. it removes competition with glencore, of course, runs mining and makes them a bigger company that can go for bigger targets like anglo-american if they want to, maybe even one day propose a merger with rio tinto which is

now just a whisker bigger than xstrata glencore international is going to be. it's a good deal, i think. >> you raise an interesting point. is it a good deal for glencore minorities? they've lost money since the company floated. they were told to pay a prem number then because they weren't a cyclical business. now they are a fully fledged mining business. >> yes, the shares are traded down and there are reasons for that, the fact that glencore is secretive about its operations but this deal will be good for them. it will reduce glencore's cost of financing. that's one big advantage because it is a much more stable business. xstrata has better mining assets so they'll get access to those two and also xstrata's value will now go through glencore's marketing structure so they'll have more volume to sell to customers in places like china. so actually it's a good deal for

glencore, too, and they get to run the company effective. the ceo will be the deputy ceo of this merged company. a funny clause say that go in two years' time he might have some ability to try and rock the boat using his share holding. so it's not all bad news for glencore either. >> hi, it's simon. you mentioned glencore may have more acquisitions in mind. does that mean the other big players are going to have to look to go out and buy more players and more competitors and does that mean more consolidation in the industry, how much pricing power will they have in future contracts? >> that's the great question. the trend has been consolidation and you end up with one mining company that produces the world's commodities and no one wants that because they'll have tar too much pricing power. diversification and size does help to balance out the risk. the problem is that regulators

don't like it. ngos don't like it. customers don't like it. you saw the fearsome opposition of a merger. they will take a tough line with this merger, too, even though there isn't the sale overlap. everyone will want to buy everything they can get their hands on, there are some severe head winds against that, worries about competition and worries customers will get squeezed too hard. >> speaking of customers getting squeeze squeezed too hard, i assume you mean china. is china going to have the same power when it comes to pricing if all these giants get together? >> well, china is usually the first person you look to when you talk about customers being squeezed. in this case they're probably not so worried because they don't rely so much on xstrata and glencore. they will almost certainly take a look, anything that condenses opposition will attract our attention. they tended to be more relaxed

lately. you can bet that if we talk to them about iron ore, that's a sensitive topic for china. this this case xstrata in iron ore is one of the good things about the deal, less likely to attract vehement opposition from china. >> great stuff. thank you very much for your thoughts. greater china bureau chief of reuters. looking at the aussie dollar after the bank of australia surprises the market and keeps rates on hold. will the central bank ease policy further? we'll bring you analysis up next.

welcome back. let's get you some of the stories we're following from around the world. let's start, of course, with some rba news over in australia. that's big news here in asia. the central bank's position to leave it came as a big shock to the markets. many investors had factored in 25 basis point cut as a local economy backed with a strong currency, a slowdown in china, and with europe debt uncertainties. the rba hinted that it is ready to ease if the economy worsens

but for now on trend. the aussie/dollar surged while equities fell as you can see down 0.5%, ross. >> and the fed chairman, ben bernanke, is back on capitol hill today. he will appear at 10:00 eastern. he's expected to repeat much of his testimony from last week's house budget committee hearing. investors will be listening to any changes to account for that better than expected from friday. the fed, of course, has pledged to keep rates low until 2014. leaving room for a bit more qe. we'll get into that in a second with simon. christine? yum brands jumped on 0 growth. the largest market in improving same store sales. sales grew 20% in china, a sharp rise in food and labor costs. yum has nearly 4,500 restaurants in china, mostly can kfc

outlets. the country contracts for 40% of total revenues. yum rose in after hours in frankfurt. this is how it's doing, 0.34%. simon grose-hodges, a lot of growth from china especially some companies. this it continues to grow at near 9%. what is the greatest risk you see from china? >> we think the risk we've seen already they have been reluctant to ease. people are expecting another reserve cut over the holiday. we didn't get that. the next lending will probably show that lending has been scaled back a little bit. they're slowing down and it's looking like it's getting to the extent they perhaps need a little more stimulus in terms of boosting the domestic economy because, in particular, the export the demand, we know europe is the biggest export market. that will be a problem for them for kuwait a considerable time. we think they need to do a little bit more and the risk to that view and for chinese

equities to go higher is because of the amount of lending done over the last year or so they still hold back a little bit too long and that may leave them behind the curve and need iing do more later. >> what can they do to boost domestic consumption? most of the wealth is tied to the property sector. that market seems to be cooling can down. that will affect a lot of wealth in china. how do you see that playing out? >> we've seen they're selective. the property sector will be the last that's going to enjoy any easing but they can do a lot more in terms of infrastructure and trying to boost domestic demand. we've seen them trying to increase the minimum wage. and that's why we definitely prefer the domestic demand story in consumer related stocks. >> good stuff. simon will continue to stay on with us. simon grose-hodge from singapore. we'll take a short break. any gifts out of the greeks

today? julia is in athens. >> reporter: we're here, ross, playing the waiting game. ahead a reported meeting between coalition leaders later this afternoon and that as crowds gather ready to protest the prospect of further as territory measures. 

this is "worldwide exchange." the headlines from ashround the globe, xstrata and glencore have unveiled their merger. the rba captures the market off guard saying it is not cutting rates this time. the aussie dollar leaps to a record high against the euro. bp raises its dividend on the back of forecasts beating fourth quarter figures. we hope to hear from the ceo bob dudley who says he is vigorously preparing for the gulf of mexico related lawsuits. toyota lifts its four-year operating profit outlook by $900 million but says it has its eyes firmly on the road as the race with u.s. automakers heats up. meanwhile, of course, greece is still ongoing. the greeks have taken to the streets in a strike as a messy default for a trouble the eurozone country looms closer. talks are scheduled for monday.

despite greg frustration from the eu politicians are still deadlocked over deep down populous structural reforms that are a key requirement for the release of a new rescue package. the stalemate has drawn strong criticism from the german chancell chancellor, angela merkel. >> translator: i would like to tell the greek people portugal is going ahead with some tough reforms. ireland is going ahead with some tough reforms. so is spain and so is monte in italy. everyone is contributing. we want greece to also contribute in solidarity with all the others. >> so i wonder how that message has gone down in athens. julia is there as we wait for the national strike to begin as well. jul jules? >> reporter: yeah, well, the latest here, in fact, is from the newspaper here in athens saying they are in meetings with the finance minister as we speak and have been for the last hour. meanwhile, we're expecting at 12:00 today a draw of the discussions that have been going on and were going on l until the

early hours of this morning to be passed to the coalition leaders. they'll have time to look over those and come to some kind of conclusion by 4:00 p.m. today. we're not expecting any headlines at that point. they will then go into further meetings with the prime minister papademos, so, as you can see, the negotiations continue. we could, though, arguably, finally, see some kind of conclusion to these negotiations as the eu commission said yesterday. the ball is firmly in greece's court. the only deadline we can see from the ground here is this 15th of february when the psi deal needs the final draw of that psi deal needs to be confirmed in order or ahead of that bond redemption on march the 20th. even the euro group are remaining flexible this week about their meeting, all paths lead to greece and negotiations going on here. you mentioned it, we have protests just beginning in

machionastiraki square. i can give you a parallel, despite the rain and thunderstorms last night the leftist and communist parties here rallied in a respectable 7,000 people to protest. so it's an interesting comparison to what we're expecting today given the rally today corresponds to a far greater amount of the population. we're looking ahead later to the coalition's ongoing discussions. ross, back to you. >> thanks for that, julia, the latest from athens. joining us is the head of european rate strategy at rbc c capital markets. peter, there's been the belief amongst investors being, look, this time around greece -- whatever happens, greece gets the money, they don't have a disorderly default, we work out some deal with psi. is there any reason to believe that may not happen? >> first of all, let me say that's 0 our central scenario and that's probably the scenario best for financial markets. as we have learned over the past a lot of things can happen and a

lot of things are unknown as far as political decisions are concerned. on the other hand what we have learned in the past is at the end of the day when it came to decision time a conclusion had been reached which was never really the doomsday scenario so let's keep our fingers crossed at least in market terms it will be the same this time around. >> at the moment we ensure the first will be released before $14.5 billion of debt maturing in late march, so we prevent an imminent, disorderly default. that doesn't mean, of course, some time this year greece still fails to live up to its part of the deal as it has continuously failed to live up to any -- deliver any part of the deal. >> indeed, indeed. first of all, after the psi it's unlikely that the $14.5 billion will be outstanding although it is very well possible and that's, quite frankly, where the

whole discussion is about, say the escrow account comes from. there's a lot of mistrust into the greek authority and they can deliver what they are promising and, hence, the european authorities want to make sure checks and balances are on pace. >> hi, peter. it's simon. as ross mentioned, even if we get the best case scenario of a deal it only brings greek debt down to 120%, way above the 90% level said to be sustainable. we know they're not going to be able to come through with the revenue side and the deficit cuts and spending that they need so it doesn't change a great deal. what do you see the ecb will have to do in terms of its policy to provide extra support to the markets? >> well, i would say the sustainability depends on the cost of paying debt and given that greece at the end of the day will be fine by the europeans and the debt is rievley low, so from that perspective you may not necessarily say 120% is not sustainable. if the budget is complete hadly

out of control, then all bets are off anyway. quite frankly they will have to do a lot more because europe is in a structural readjustment. >> simon, interestingly enough you said to me everybody is pricing in an orderly report coming from greece. what happens if we don't get that and things get into disorderly manner? >> the big problem is the con teenage ion. we've seen it with portugal. it's been an outliar. everyone else's a yields have been coming down. portugal is still going. they're the economy most similar to greece, the ones most at risk, probably needing a bailout. everyone keeps saying greece is a special case. it's different. it's going to be a one off. but how can you possibly fault portugal to take the type of steps they're taking if greece gets a free pass at 30 cents on the dollar? so the big concern with the more d disorderly default is it then spreads into the other economies and the bigger economies and that puts pressure on the entire

region once again and we start to see those sovereign bond yields higher. >> whatever happens in portugal or in greece, the whole eurozone will fall into recession r. you saying you could head into a deeper recession as a result? >> it looks like it could be a prolonged recession. there are no short-term solutions. most of what we're getting is s simply a liquidity provision to make things establishable to provide a safety net but there are no policies aimed towards growth. there are no policies aimed at repairing the revenue side of the equation which they're going to need if they're ever going to get out of this debt spiral we're in. so, yes, the long-term prospects are negative. as peter was saying the ecb will have to do a lot more. that means more money into the economy and that effectively is a form of quantitative easing. we'll see the euro drop quite a lot and that may be a little bit of help as far as the export sector is concerned to keep that part of the economy going while internally they suffer quite deep recessions. >> and, peter, talking about the

ecb there, they bought peripherals. do we believe some of that was portuguese debt? things have turned around a lot since the ltro. what do you think is going to happen with the next charge? does it depend on the collateral conditions? >> i think that's a big, big contribution to the whole thing. one step back and we think in general the whole l it tro exercise and the collateral pool is a tremendous step by the ecb, a tremendous help to the market, seen as a response is part of the success the ecb has still in the market. the take-up in the l it tro is difficult to assess because it depends on a lot of variables but the collateral pool i would say is one of the biggest contributions the ecb has made so far. it prevents banks in europe from keeling over in a short span of time. >> and very briefly, peter, do you expect -- we've seen italian peripheral yields come down. what do you think happens to

core yields? what are you expecting from treasuries and bonds? >> well, it's a bit -- in a way if the ecb and other banks are flooding the system, at the end of the day we think there's still a lot of risk scenario priced into the bunds and if that scenario remains, then they should feel pressure. one of the recommendationses we have out is buying spreads on the bunds which should be good protection. >> peter, good to talk to you. christine? >> ross, asian markets seem to be stumbling as we wait for more news from greece. china down 1.7%. that didn't happen. those hopes faded driving the financials lower, putting the stock market under pressure down 1.7%. the weakness in china filtering over to hong kong ending to the did you know side. ten points lower but still holding on to the key 20,000

level. earnings continue to be focussed in japan. the nikkei 225 is up. reporting after the bell stronger than expected. the kospi up 0.4%, one of the few markets, taiwan weighted index up marginally. the big story today, of course, coming from australia. the markets were disappointed the rate cut didn't come. a little more optimistic about the global economy and that put stock markets under pressure down 0.5 and sending the aussie dollar higher. sensex over in india down 0.5% so overall it's a mixed picture. waiting for news coming up from the eurozone. ross? >> more than 72 decline ers outpacing decliners. the stoxx 600 a flat close last night. the cac down 0.6%. weaker here this morning but not by a lot and the focus very much on earnings news and, of course, that merger between xstrata and glencore we spoke about earlier

in the program. down 18 points and the xetra dax down. the ftse mib is flat as you can see at the moment. it is worth pointing out the that we have seen a euro/aussie today ahead of fresh all-time low, christine, for the story you are about to reason. yeah, exactly. front and center here, the central bank has kept rates unchanged at 4.25% despite widespread market expectations for a 25 basis point cut. the decision has pushed the aussie dollar to a record high against the euro and to a six-month high against the dollar. but australian stocks tumbled. they wondered if the bank's decision to hold was a smart call. let's ask our next guest whether it was a wise decision. joining us, senior strategist. still with us simon grose-hodge. do you think the rb should have gone ahead and done the cut? >> we think they should have today.

we think the positives glenn stevens noted about the economy will be true. we think the domestic economy in australia outside the mining sector is under quite a bit of pressure at the moment. manufacturing exports suffering a lot in the weak global environment but also with an aussie dollar at fresh record highs. we think financial conditions are quite tight and now back to long-run average levels and with bank funding costs rising we think it would have been blue dent to move policy into that expansionary territory to ward off the risk of the slower economic risk we are likely to face the first half of the year. >> to me they have been seen to be ahead of the curve. now it's putting things on hold. does that mean the next meeting things get worse they may have to go for bigger than expected rate cut? >> well, i think the rba in not going today is keeping an eye on the future in the sense is that they want to keep some bullets

left in the gun for potential problems later on in 2012. they recognize the u.s. was doing better and the european situation had calmed down somewhat but they don't want to get policy right into their expansionary zone or very easy policy settings and then see europe fall you over or the u.s. recessionary setting. so we see a strong chance they still go by 25 basis points in march. to see a 50 basis point move i think you need to see some type of venting in europe whether it's a greek -- a hard greek default or something along those lines which is very difficult to forecast at this stage. >> simon, the rb is keeping its ammunition for now. do you think so is this. >> yeah, but i would agree with jonathan that there's no need for them to do so. as we mentioned earlier, every other central bank in the world is easing, even india has cut rates and they have a severe inflation problem. simply by standing pat and by the aussie strengthening, they are effectively tightening, going in the opposite direction by standing still and it may well be that if they hold off

too long similar to what we were talking about with china is if if we do get one of those scenarios we talked about and there's certainly quite a high risk of that, then they may be force forced to do more and that's going to have much more of an effect on the economy. this would have been an insurance cut welcomed by the markets and it probably would have been a smarter move. >> jonathan, do you you a gre what's happening will happen for the rba in the future? >> well, i think so. there's no economy more linked into the china story than what australia is. i guess we've generally seen evidence over the past month that chinese growth is probably avoiding the hard landing scenario but it also looks as if chinese inflation is probably going to be at a much higher level than the market participants expected. so that's probably going to limit the down side to which chinese authorities will be able to respond to further crises and

weaker conditions and that, in turn, will have a significant slow for australia as well so i agree with simon. i think the smarter move today would have been to cut rates. but, yeah, we don't make the calls. >> the aussie dollar, do you think the gains are limited for now? >> very much so. we think it's getting up to vary overextend levels and from a valuation perspective. we see fair value much closer to the parity level particularly given a slower china growth story in the first half of the year. weaker commodity prices. the terms of trade have already rolled over and 60% of the australian export story is that export base. we don't see the aussie dollar able to be sustained at these levels. >> thank you very much for coming in today. jonathan cavanagh and simon grose-hodge is our guest host. the gulf of oil mexico spill after beating expectations in the fourth quarter, net profit up 14% in the last three months

partly due to higher oil prices. speaking moments ago the ceo bob dudley had this to say about the hike in the can company's dividend. >> well, today we announced a 14% increase in the dividend. that's good progress. we have momentum going into 2012. the improved circumstances of the company. it is our intension to build up a progressive dividend policy step-by-step. it depends on oil prices and other things but this is a good start today. >> all right. a final thought from our guest host. simon, before you leave us, give us some parting advice. what should we do with our money these days? where do we put it? >> as you said, a single overweight is for the u.s. and that goes across the board. we like u.s. equities. we like u.s. high yield. we think the spreads have gone out to attractive levels and think the bearishness in the dollar on the talk of qe-3 is somewhat exaggerated so we don't think it will strengthen massively but the outlook is a lot better for the u.s. dollar than it has been.

qe in general used to be a unilateral fed policy. it's now being done by everybody so it's not nearly as negative for the dollar as previous rounds and we therefore think it has a more constructive environment for u.s. investments in general. >> yeah, what's interesting is we've learned the qe doesn't create inflation, one of the reasons we saw gold falling earlier in the year. what's your key investment strategy right now? >> well, you really have to look -- while we're increasing in the u.s. we're defensive. we think the dividend yield is important and, again, in terms of high yield u.s. bonds, that credit spread is very attractive. we still want to be with the strongest companies, companies with very good balance sheets, with a strong global growth outlook. although we have increased exposure we're doing it on a defensively level. we like technology and still like health care done very well.

it's more constructive but not a great story. you need to be cautious. look to get yield and quality companies. >> speaking of yield, we have the ceo saying he's going to hike the company's dividend. is energy something you would get into these days? >> the energy sector has been a laggard. we would rather have the yield where you can get it. again, we'd rather be in technology and health care than energy. >> simon, thank you very much for your thoughts. simon grose-hodge out of singapore. well, we're going to look at japanese equities right now. the market slipping from three-month highs. disappointing earnings results weighed on sentiments. today we had all eyes, of course, on toyota releasing earnings after the bell. makiko utsuda has all the details. >> reporter: hi, christine. toyota is hopeful that the worst is finally over. japan's top automaker has lifted its operating profit forecast by

$900 million to about $3.5 billion. the outlook is still significantly below analyst expectations. operating profit for the nine months through december slipped 72% from the previous year. the auto giant blamed supply chains from the devastated floods. sales overseas appear to be recovering. the sales forecast for 2012 in the north american market. however, the automaker said that competition there is getting tougher. meantime, domestic sales have jumped nearly 40% during the last quarter helped by the japanese government subsidies for eco-friendly cars. t toyota is seeking to recapture the top spot in the global market setting an ambitious sales target of nearly 9.6 million units for this year and that's all from the nikkei business report. back to you, christine. >> thank you very much from the

nikkei. thanks for that. still to come on the program. the saudi prince expects oil prices to remain higher. find out what he's told. dr nbc's maria bartiromo when we come back.

well over an hour to go in today's "worldwide exchange" but it's time to bring courtney in from the u.s. look, still blooming from that giants win. it was sunday. >> i know, it was sunday but the parade is today. >> oh, really? >> we still have this youaura o victory. >> do they still do ticker tape? >> yes. >> okay. >> that's what happens today. >> is that green? is that environmentally friendly? >> i don't know. i want to say yes but i'm actually guessing so that may not be true. but besides victory, we did have a lot of things happening here in the united states, and maria bartiromo talked to prince alwaleed. he was here at the stock exchange and had an interesting thought. he thinks as many have suggested there's an element of fear playing into the price of oil despite those fund aamentals.

>> there is an element of what may happen with iran and closing the hormuz strait. both the consumers and producers outside that price and went public by saying we will not let the price of oil go more than $100, which means we can use our leverage, our excess capacity to be sure to have -- while they are getting out of the recession slowly but surely hopefully. >> i'm just wondering how long this element of fear will overhang the fundamentals, the basics around the world isn't supply and demand it should determine the price. >> it's oil. it's oil. when we take politics out of oil, that means we no longer need it. >> it's true. it's very political device. that is what the commodity is all about here, of course, in the united states and what goes

on with our relationship in the middle east. >> talking about oil, funny enough, we heard from bob dudley today, and i want to say they've announced some disposals this morning, the global and businesses up for sale. he's had some more things to say about their disposal program. >> we've announced more than $21 billion in the program that will go to $38 billion by the end of 2013. so i think it is on track. we have a target now of $38 billion. we have not large, big, single asset sales coming up but a variety of things across the portfolio we think will be more to foe can cuss more. we have announced the sale to refineries. this will be 50% of north american refining capacity. i believe by the end of the year we'll be able to announce some progress as well. >> we'll talk about this in the second half but, i mean, they're finally starting to look more

like a normal business again. >> we'll have to see. i think there's a lot to be talked about there. i think there are some interesting things to say. we get to jump back in and discuss that. let's take a quick check on the u.s. futures and where the markets are likely to open. things have slowly improved if the dow were to open now 0, they would open lower by 11 points. the s&p 500 down by about a fraction in the nasdaq as well lower by just a fraction. we did have is a break in that rally yesterday. the dow closed off by with about 17 points. that could continue here today and there is just one economic report on the calendar today. december consumer credit out at 3:00 p.m. eastern time. coca-cola reports their earnings before the opening bell. a large chunk of its profits overseas could be hurt by the stronger dollar. after the close we'll hear from disney, hartford financial and western union. well, stay with us on worldwide exchange. after the break a mega earnings roundup from arcelormittal to bp

and ubs. we add up the numbers we have so far and factor in the big u.s. earnings and we'll be getting those later plus taking stock of oil after getting bp's numbers. we focus on oil equities and get you some strategy in 20 minutes' time. and, as always, keep those e-mails and tweets coming in and we'll put your questions to our great lineup of guests coming up in the next hour. what makes the sleep number store different? you walk into a conventional mattress store, it's really not about you. they say, "well, if you want a firm bed you can lie on one of those, if you want a soft bed you can lie on one of those." we provide the exact individualization that your body needs. welcome to the ultimate sleep number event. not just ordinary beds on sale, but the bed that can change your life on sale. the sleep number bed.

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welcome to the show. the headlines that we're following from around the globe today. in the u.s. ben bernanke is back on top of the hill today and investors will check to see if if the fed chairman changes his tune on the economy after last week's very strong jobs report. bp has raised its dividend by 14%. bob dudley tells us that the company is building momentum. >> last october our production was up 5% from the third quarter up to the fourth quarter. that's 170,000 barrels a day and we just completed the best year the company has ever had so we built our momentum now.

>> the rba catches the australian market off guard saying it is not cutting rates this time. the aussie dollar leaps to a record high against the euro. you are watching "worldwide exchange" with christine tan, ross westgate and i'm courtney reagan. wherever you might be joining us, we can take a quick look at the u.s. futures to see how the markets are poised to open at this point. the dow is down about eight points but getting stronger as the moments wear on here on "worldwide exchange" today. the nasdaq up just a fraction. the s&p down 1 1/2 points if the markets were to open right now. this is about where we would be trading. we took a brief pause in the rally yesterday with the dow and the nasdaq, the s&p 500 all a tad bit lower. we'll see if things can turn around today once ben bernanke does start speaking or potentially even before with the markets 30 minutes to trade ahead of that speech.

ross? european stocks after being pretty flat yesterday are down marginally this morning ahead of the u.s. open as we see just up slightly. the focus has been corporate news and amongst those, chief amongst those, their mining merger between xstrata and glencore. they have agreed to combine businesses in a transaction valued at $90 billion, the biggest ever deal in the industry. glencore set to issue 2.8 new shares for each xstrata share and a ratio that represents a premium on xstrata's price. the xstrata ceo will be executive. glencore's will be the deputy ceo. worth pointing out standard life has said they will come out and vote against the merger. they're the fourth biggest xstrata minority shareholder.

christine? >> interesting how that plays out. the decision to leave its cash rate on hold at 4.25% came as a big shock to the market. many investors had factored in 25 basis point cut as a local economy battled with its strong currency, a slowdown in kleine and with european debt uncertainty. the rba hinted it is ready to ease if the economy worsens but for now growth is, quote, on trend. the aussie dollar surge to go a record high against the euro. equities fell 0.5%. ross? >> yes. joining us for more is chris wattling. rbo saying growth is on track. we have a big commodity merger being planned at the moment and, of course, one of the hopes for consumers this year in the west have been sort of inflation would ease substantially. that's what the bank of england is betting on. one wonders now with oil at $100 a barrel, whether those hopes

will be dashed, whether it's energy, food, basic materials, is going to be higher than we might have thought. >> yeah, i mean, i think that's a real risk. inflation is much stickier than the central banks would like to admit and so we're going to get some easing in inflation but it looks as though we'll see it not ease as much as they want. it is a real concern and all the liquidity putting into the system is pushing up commodity praises so, as you say, you're batting against yourself, if you like. >> does that mean that pressure in the west remains where wages -- we have this big suppression on wages of course for the us a it territory program, in the uk inflation is ahead of any wage agreements. is that the squeeze? >> i think it does. there's no sign of obvious acceleration in wage inflation in the west at all. and, yeah, i think the inflation

will come back later this year and we'll see real income squeezed. it's all part of the wringing out the excess from the system. it's a long process. it's a long process. as we said, seven years of fat followed by seven years of green. >> where are we then? what year are we in the deleveraging? >> it's difficult to judge but it looks as though in the states we're probably in year two or three of seven or eight. in the uk probably in year two or three of eight or nine. there's a long way to go. we're not done yet. >> chris, it's courtney here in the united states. i'm looking at your latest note and you suggest that we should dial back the risk in january and february and, of course, we're just in the very beginning of february. can you explain why you think this is a favorable tame to do this right now when we're still in the midst of this stealth rally? >> yeah, i mean, our view is this rally is probably overstretched itself. it's gone too far too fast. equities were attractive back in the beginning of october when we initially moved overweight and i

think everyone is bullish now. everyone is positive. everyone believes the european crisis is fixed at least in the immediate future in terms of that liquidity provision. so our models are flagging a warning for risk aversion. this it happens rarely, once or twice a year we get these warnings and we just got one last week which makes me very nervous. we see risk appetite measured very high. there's little down side protection in portfolio. and a lot of the fundamentals underlying the market are deteriorating as well so we're seeing profit warnings -- stocks with profit warnings getting heavily punished which is always a sign that we have a narrowing advance and that concerns us and i suspect we'll get a pullback which is a buying opportunity. >> you talk about the eurozone, taken to the streets in a

24-hour general strike as a message of default for the countries still looms. talks scheduled for monday today despite frustration from the eu. the politicians are still deadlocked over deeply unpopular structural reforms that are a key requirement for the rece lease of a new rescue package. it has drawn strong criticism from angela merkel. >> translator: i would like to tell the greek people portugal is going ahead with tough reforms. ireland is going ahead with tough reforms. so is spain and so is mario monte in italy. everybody is contributing, so we want gress ece to also contribu in solidarity with the others. >> the latest idea you set up this escrow account, any money greece gets there's a certain portion of it stuck in a separate account you know is there to pay the people lending them the money and the debtors so they can't default even if they choose not to pay their own salaries for the public wage

wo workers. the assumption still is that greece gets the money and we roll on to some future date. is there any risk that assumption is wrong or how big is the risk that assumption is wrong? >> there's always a risk. i mean, it's very difficult how big the risk is. it seaems quite small. there's cheerily some dissatisfaction within some of the opposition and coalition partners about some of these measures, so who is to say? i'm always asking for the trigger for a sell-off. you never know, of course. but perhaps it's something to do with greece. i don't know. >> chris, this is christine. the earlier guest, simon grose-hodge, said even though we do focus on what's happening in greece there is no way out of this. there are no growth measures, no way to fix revenues. when are we going to see an end

of this? when are we going to see growth creeping back into the eurozone? >> i'm afraid it's going to take a long time. mario monte has done some deregulatory measures in italy which can help. when east germany joined west nerm any it took me ten years to overcome the problems and that's a normal time frame. the thing that worries me about greece is even with this enormous debt forgiveness they're on target to get 120 debt to gdp by 2020. it's way too high. a sensible number 60%. and of course portugal looks as though it will get a second bailout. it's hard to believe that won't happen next year and it's a very long, drawnout process. very difficult to deliver growth in austerity particularly when the economies are deleveraging as well. so i say a ten-year process to complete and put the yeurozone back fully on a fixed track, if you like. >> which leads us to the open of

what happens in politics. we saw what happened to the politics in one year last year and you have ten years of adjustment. the risk is substanding. >> all sorts of things. plenty more to come from you. we'll be out in athens. julia is there in and amongst the protesters taking to the streets. more when we come back. and also still to come, the world's biggest steel maker, arcelormittal, is forecasting a rebound in global demand. more on that plus julia coming up you next.

welcome back. you're watching "worldwide exchange." it's now time for your global markets report. let's take a quick look at u.s. futures and see how they are likely to open more than four hours from now. the s&p 500 off by two and the nasdaq down just a hair which is about where we ended up closing yesterday. not bad after hitting 3 1/2 year highs on the dow on friday. the dow, in fact, up 20% since october. remember that was when the fed announced operation twist. we'll hear again from ben bernanke today on capitol hill. see if he has any more tricks up his sleeve. we did hear from him last week and the week before. so we'll see. we'll listen closely but i'm not

sure we'll hear any new details. what's happening with equities? >> slightly more green. just less than 7-3. the xetra dax and the ftse 100, slim losses. just down nine points on the ftse 100. the xetra dax and the ftse mib actu actually up 28 points as you can see. the focus has been on individual stock stories and the merger news with bp. 0.75%. but it was down to tax reasons. arcelormittal up 2.41% in paris. they talked about a better first half coming up so the forward looking statement good there. ubs a big disappointment this morning, their earnings they

missed in the fourth quarter by more than 40%. they're also talking about a poor first quarter as well. we'll take a short break. still to come in a few moments, the full interview with the bp ceo bob dudley before that break, of course, let's show you where we are with euro rates. euro/dollar down 1.3150 is where we stand at the moment. the aussie dollar an all-time low after the rba kept rates on hold. we're currently trading down to 1.2124. the aussie dollar had a high against the u.s. dollar. currently trading 1.0799. christine, what kind of day have you had in asia? >> asian markets stumbling as we await more news from greece and the eurozone. this is how the picture is looking, pretty mixed. over in china we had hopes of a cut in reserves and that dragged

it lower. the weakness over in china dragging down the hang seng as well. it started off on a good footing in positive territory. lower ten points but still holding on to the key 20% psychological level. the nikkei 225 earnings continue to be in focus. toyota releasing solid earnings after the bell. the kospi to the upside 0.4%. the taiwan weighted index up. us australian market is where the big story is today and markets were very disappointed that they did not cut rates as widely expected. they were fact touring in a rate cut but instead sounded more optimistic about the global economy and said there were head winds in the eurozone. so that seems to be pulling this market lower. a fresh record as well. new zealand 50 closing to the upside but still flat and over in india down 0.5% so overall a bit after struggle. that's it for me. i'll be back tomorrow. see you guys.

thanks, christine. the we will see you again tomorrow. still to come, as we mentioned earlier bp says its multibillion dollar disposal program is on track. we hear from ceo bob dudley up next.

bp has raised dividends for the first time since the oil spill after beating expectations for the fourth quarter. bob dudley has been speaking to steve this morning. he talked about that hike in the dividend. >> well, today we announced a 14% increase in the dividend. that's good progress. we had momentum in 2012. flexed the improved circumstances in the company. it is our intention to build up a progressive dividend policy step-by-step. we'll see. debends on oil prices and other things but this is a good start today. >> tom bergen is the oil and gas person from reuters. he's author of the book "spills and spin: the inside story of bp." he joins us now along with chris who is still with us. tom, okay, we have a bit of dividend back. how closer is bp to getting back to some kind of normality?

>> good morning, ross. on 0 the dividend front bob mentioned about getting progressively increasing the difficu dividend. unfortunately it would take us quite a few years to get back to where we were before the oil spill. before that bp was paying out 14 cents a share per quarter. and now we've gone from 7 up to 8 cents. it's progress but, unfortunately, it's pretty muted progress. >> and they had better than expected fourth quarter but isn't that because they paid a lower tax rate? that's not going to be maintained, is it? >> absolutely. 30% tax in the quarter. guiding for 33% to 36% for this year and so the underlying increase including that tax rate is 14%. it's not that great in the context of oil prices being up around 30%. so really quarter on quarter. i think bp is pointing to having

turned the corner. it says at the end of last year to turn that corner, however, it's very difficult to see anything really material and these results to point to that. >> tom, it's courtney in the u.s. i want to sidestep the financials just a bit. we all know the shareholders are the ones that own these companies and bp had a lot of making up to do to the public. where do you think their public image is right now when it comes to their shareholders, when it comes to turning to the public and looking for that continued investment? >> hi, courtney. yes, bp's name, of course, has become sin on nous with bad public relations and corporate behavior before and during after the spill. in terms of the investors they were slow to come back to bp and about the summer of last year we certainly saw really just a great apathy to the company and people didn't get the business

model. i think now the investors we talked to and analysts do feel that bp has a strategy at least. so with the investors it's probably coming back somewhat in investors' estimation but, of course, the delivery has to be smooth. i think that's a much longer debate and, of course, it will be set back by the litigation which is due to start at the end of this month in new orleans. so probably a long road to go. >> tom, hi, it's chris in london. back to the financial is a big part of the earnings growth and dividend growth is linked to where they see the oil price going. i wonder if they've seen some flavor on that and what your take on their outlook would be. >> hi, chris, yes. the oil company's reality is lar

largely tied to the oil price and we can talk about, you know, tax rates and other issues, production numbers. the main variable is the oil price. bp seems to have a more bullish oil price outlook than its rivals. now i say that in the context that if you ever ask the squout look for the oil prices they generally refuse to tell you, they don't make projections but where those of us follow the companies closely we tend to look at what kind of price assumptions or price test levels the companies use when they're making investments. shell said to us last week they were looking at a $50 to $90 range whereas bp has indicated its proper range is in and around $100. so this $100 figure seems to come up in bp discussions a lot more. so i think that the figure they seem to be targeting perhaps when they look at dividend and investments is around that $100 level or approaching it.

so i'm -- at the $100 level, it should certainly generate very good profits for the companies. >> the same price prince alwaleed was talk iing about la night. seems to be a consensus. good to see you. thank you very much for joining us. author of "spills and spin: the inside story of bp" and what a story it's been for this company the last couple of years. courtney? >> that $100 always the magic number. ben bernanke offers up his latest thoughts on the economy later today. but will he and the fed make any changes to the playbook on rates or more easing amid more recent signs of a stronger recovery? we'll discuss that and more up next.

welcome to the show. the headlines we're following today, the u.s. ben bernanke is back on capitol hill today. investors will check to see if the fed chairman changes his tune on the economy after last week's strong jobs report. bp raises dividends by 14%. the ceo bob dudley tells cnbc the company is building momentum. >> last october operation turned the corner, our production is up

5% from the third quarter up to the fourth quarter and that's 170,000 barrels a day, and we just completed the best year the refinding market has had. >> the biggest ever deal unveiling the $98 billion oil share merger. nice to have you joining us. wherever you are sitting around the world, whatever time it may be, a look at the u.s. futures and see how it looks to olympic in just about four hours from now. the dow is down about 17 points, slightly weaker since we last checked in on the program. s&p 500 down just a fraction as well as the nasdaq. we took a brief pause on the rally, about what we're seeing now for all three of the major indices. ben bernanke back on capitol hill. lots of earnings. still a full day ahead. ross, here in new york we have

the giants victory ticker tape parade. >> recycled ticker tape. >> i don't know. i don't know. >> i'm just throwing it out there. european stocks ahead of the u.s. open after a pretty flat close yesterday down slightly this morning. the xetra dax and the ftse mib is fairly flat. the ibex is weaker. we get to listen to mr. bernanke again today, courtney. >> we do. fed chairman ben bernanke back on capitol hill today. we'll see if he changes his tune from what he had said previou y previously. he'll be before the senate budget committee. now bernanke expect ed to repea much of that testimony from last week's house budget committee hearing but investors are listening for any changes in his comments to account for an improving u.s. economy in the wake of friday's better than expected jobs report, that is the one big change that happened between then and now.

so joining us is edward, and, edward, forgive me, i don't know the pro-nuns of your last name. i didn't want to mess that up. if you can start there with bernanke, recently he said he's going to keep interest rates low until at least 2014, what does that mean for the retail investors? >> it means you'd better do something. another two and a half years of no interest income in the banks. so if you're going to get that you have to make a decision what am i going to do to offset the fact my money will be worth less if it's at 2 1/2%, you're going to lose your buying power just letting it sit in the bank doing nothing. and we've seen a little uptick from our end, our small space in the world of the retail investor calling in to us and asking us what they should be doing with the money. over the past four or five months there's been a massive rally in new york tax municipal

bonds. we saw yields at the end of last year for 25 year aa rated bonds around 4.5%. those bonds are gone, sold, and the yields are more in the 3% to 4% range. there was all this money sitting on the sidelines that over the last four or five months decided the tax frees were a good place to be and that caused a huge rally. now we're wondering with still a ton of cash sitting on the sidelines the next two years, where is the next area the money is going to go? we've seen money flow into u.s. equities although volume on the stock exchange has not been very high at all. we're starting to see a little bit over the last couple of weeks. i mentioned the facebook ipo has caused so much traffic, so many phone calls to come into our offices asking us about the deal. can they get the deal which i didn't have the heart to tell people they can't get the deal. >> what else do you offer them then? >> we offer them a strategy. what is it you're looking to do? why can do you want to own

facebook? we had so many phone calls it was great. we were able to find out what people were thinking. and the one thinking was i missed google. that was their main motivation to get into facebook rather than the company itself. but 850 million people are on facebook. it's an army of people that they haven't really even tried to tap from a consumer standpoint to try to earn money. they only earned $1 billion last year. >> only. >> yeah, only, but if it's going to be a $75 billion valuation, that seems a little pricey based on those earnings. nonetheless, the appetite of the public for the stock is exciti g exciting. this is what wall street does best. we raise money for good growing companies, american-based companies. we're going to take that money and build out the company even further, create jobs. this is what wall street is good at. it's exciting to have something

going on that's a positive after we can sit here and create a laundry list of things that have gone wrong that have eroded investor confidence. with chairman bernanke speaking today and talking about how the economy has gotten better, the jobs report was better, still they're going to keep vigilant in keeping interest rates low for an extended period of time, this is causing some action and hopefully it leads to more investors taking their money from the bank and putting it to work in the stock market. >> chris has been listening, he's talk iing about very low, real returns now i guess in bonds. you made this point the benchmark u.s. equity index $100 13 years ago in real terms with $100 today, is that going to change? >> $30 less in nominal terms, y

yes. i think if you stand back from what the fed is trying to do, they are trying to inflate their way out of their indebtedness. so if you think about stocks, i mean, they might do quite well this year but i don't think we're out of the woods because we still have so much leveraging, deleveraging to go on and so forth. i can understand where this is coming from. you have to put it somewhere. i think they make a better alternative. >> in commodities? why? >> because that's where the main chunk, the first burst of liquidity is going and, of course, the emerging markets are the stronger growth story and of course the demand driver as well. >> and what do you think of that? >> you know, i think it's a question of a comfort level, so why would people want to concentrate on equities first and commodities later? i think high quality equities that pay a dividend are a compelling story to the retail investor. at least they offer some type of

yield, some type of money in the mailbox which is a positive for them right away as soon as they make an investment and longer term hope the world economy gets stro stronger. to go from cash to gold or silver or like that i think is a quantum leap for a lot of people. it's a smoother transition from cash into high quality u.s. stocks to pay a dividend. >> and if i could just pick up before we have to move on, we had a really good jobs report on friday but it's one data point. do you think that's enough to really hang our hat on, to be positive about the u.s. labor market, or do we need to pause and look for a trend on that data? >> i think the trend on that data would be the oil and gas. if there is an ongoing oil and gas boom in the united states and also in the americas, in canada and in south america. if that trend is going to continue, which last year was the first year in 62 years that the united states was an

exporter of petroleum products, that's a long time, 62 years. so a lot of those jobs created were in oil and gas and you're getting not only the jobs in oil and gas but all the things around it. the restaurants, the home depots that open, the housing. there was a ton of temporary housing that came out of that report as well. so if there's going to be a real oil and gas boom here in the united states and in canada and brazil and south america, i think that's good and it's good not only in just job creation but also unwinding the real estate bubble. you have a lot of canadian and south american money coming. that's very good. that's a huge problem the banks have on their hands which is also slowing down economic growth. so, yes, it is only one report. if there's really going to be a lot more hiring in the oil and gas sector, it's very good for the economy. >> edward, chris wanted to prove his point as well. >> i mean, edward's point about

buying high dividend stocks, the quality stocks, makes a lot of sense. the i can understand why a retail guy would want that and, of course, you want to diversify portfolio as a retail investor. i think the point still stands that xhcommodities will deliver better turn than a high income not terribly interesting stock. they give good dividends. so i was going to agree with edward's point. >> the harmony is breaking out across the pond. >> good. >> court any? >> both edward and chris get to stick with us, so we'll get back to them. but still to come greek citizens take to the streets to protest against new austerity demands. we are live in athens coming up next. today is gonna be an important day for us. you ready? we wanna be our brother's keeper.

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>> it gives you a sense of why the sovereign yield hasn't come down so much. it's a lot of money. >> i think much will depend on the collateral. it is as easy as that. able to get more. ubs said they didn't partake directly the ltro money and warning about head winds after profiting half what analysts had expected. carolin is outside the group's headquarters running us through the reaction. carolin? >> reporter: ross, i want to clarify that ubs is not suffering because of its massive exposure to peripheral debt. no, in fact, it has minimal exposure to the likes of grease and portugal. no, what ubs is suffering from is the weak trading conditions specifically in the third and fourth quarter as a result of the eurozone dead crisis and it's suffering from the fact it has to reduce its risk. to me tougher regulatory requirements but coming back to

the numbers today they were disappoi disappointing. you have net profit missing by 40%. also you've got a pretax investment banking loss, the second straight quarterly loss for the bank, wealth management margins coming under fresh europe at only 91 basis points for the fourth quarter. at the outlook as you pointed out, the outlook struck me as extremely cautious. ubs is talking of activity and that could hit revenues and profits in the months to come but, ross, i want to point out the devil is always in the detail in those bank earnings and it really wasn't all that for ubs in the past quarter. there were a couple of bright spots. most notably the capital position, better than expected at around 16%. also risk weighted assets were reduced by 10%, a quarter on quarter and, last but not least, there is some good news to report about the investment bank rech nouse in the fourth quarter

rose. i just want to make sure you do tune in for my interview with the cfo later on today. we'll be talking bonuses. ubs is cutting its pool by 40%. ross? >> okay, carolin, thanks for that. bp has raised its dividend for the first time since the gulf of mexico oil spill. steve has been speaking to the ceo and joins us now. >> ross, it's interesting and we put the interview in two parts. one part you already heard, that was about the numbers and sales. with an increase in dividends, the numbers beat expectations and bob dudley coming good on what he said to me in october, i.e., they've reached a turning point in terms of production and pushing forward the general strategy on disposals, on growing high-margin projects and, of course, increasing the pipeline production. the problems lie in perhaps more external factors, legacy factors concerning russia, concerning, of course, what is called c-268. this is a court case in new orleans and it is enormous for

bp. what it is is the court case of hundreds of litigants who want settlements regarding the disaster of 2010. we asked bob dudley about this. we asked him about geo politics and asked him about how this company moves forward interest this. let's first of all hear how he is preparing for that big court case in new orleans at the end of the month. >> we have said all along that we would be 0 open to the settlement if it were reasonable but we are preparing for the trial. >> i'm interested in comments you made regarding the high price of oil and what that means for consumers such as those in the u.s. this brings huge benefits from a production point much of view, from an investment point of view, doesn't it? >> well, it does. here we are almost halfway through the first quarter. we're at $115 a barrel. it is good for investment, good for investors.

but i've said before, i worry the consumer is in various countries in this type of condition will be affected if this moves up much faster. >> how concerned are you about tensions in the middle east and what it could mean for bp's operations there? >> all eyes are on the middle east right now. we have operations in egypt. which have worked continuously without interruption. we have investments that continue to work very well. like everyone, our eyes are on this carefully. our footprint is not so large that it completely dominates our concerns. and i think reason and cooler heads will prevail. >> has the witch-hunt of gone

too far? >> well, the concern has come up with people that have been interested in working with bp. i think in our case, we'll make a decision. our executive program is purely based on performance and targets. we've had a tough number of years. i think great care -- uk is one of the great global centers. >> is it the politicians who have gone too far with their agenda? >> well, i don't know about politicians but i think the rhetoric rises very, very carefully and i think it does require long-term relief. we would love to take that. >> a warning for politicians at the end there, ross, actually saying there are ten cities knocking on the door to try and take london's position for a

whole host of businesses not only in the financial sector but elsewhere. to go back to the new orleans case, let's give you an idea of the scale of how important this is for bp. they put aside the best part of $40 billion to cover costs from this case, but it's a multidistrict litigation as well, civil suits from the u.s. government, gulf states such as alabama, and 100,000 lawsuits from other businesses as well. this is an enormous case and if it does go to court on february the 27th. huge amount to play for. >> $40 billion? less than a quarter of what italian banks took from the ecb in december. >> indeed, yeah. >> everywhere you look the numbers are starting, aren't they? steve, good stuff. thank you very much for that. courtney? >> we will be paying attention to that because we didn't forget it and we haven't yet. in the meantime greeks have taken to the streets for a 24-hour general strike as a messy default for the troubled eurozone country looms ever closer. talks among the ruling coalition partners were postponed to today

despite growing frustration from the eu. joining us now is julia chatterley from athens. what's the latest? >> reporter: the latest is that the waiting continues. and it appears that the tug of war as it's been described to me by people here between the troika and the greek coalition leaders continues. the latest is recorded by local media here is the troika and the finance minister have been in meetings this morning and we're waiting for a further meeting of those coalition leaders at 4:00 p.m. athens time today for the continuation of negotiations. now at the same time, and i don't know whether you can hear the noise behind me, we have a communist rally going on just below our studio. at the same time there have been strikes -- they've been striking since midnight last night. they're keen to point out they're not just protesting against further cuts but they're also protesting about the lack of faith in the government right now and their inability to

address the crisis. now i spoke to an mp and i asked her not just about the parliamentary ability to pass this regulation or this reform once we get an agreement over the next day or two but also how do we boost growth and what policies are in place in order to boost that. >> for the last 18 months we've been focusing far more in the liqu liquidity aspect of the crisis. we do need to increase capacity and we can only increase capacity if we simplify the way of doing business in this country, if we deregulate markets, if we allow less friction in moving in and out of a market. >> our thanks to julie chatterley. coming up next, coca-cola is still one of the world's most

recognizable brands but we'll find out today whether the company has convinced enough of the world. the rest of the trading day ahead on wall street all coming up.

there's just one economic report on the calendar today. december credit out at 3:00 p.m. eastern time. coca-cola reporting earnings before the opening bell. coke, which makes a large chunk of its profits overseas could be hurt by the stronger dollar. after the close we hear from disney, hartford financial, and western union among some other big names as well. still with us is edward deicke and if i could get your thoughts here on coca k-cola, it's a blu chip name. warren buffett loves this name.

what are your thoughts and what do you listen for in an earnings call like a coke? >> coke is obviously going to talk about what went on in europe and how that affects their bottom line. obviously we look at the stock in a much longer term view. we like coca-cola. we don't think it's a stock that doubles or triples overnight. it's a steady performer and does well from global demand which will expand over time. today's earnings report we don't see anything too much to the upside. we think longer term the stock will do well slowly and steadily improve its share price and it's another stock that over time we would like to see improve the dividend. it's a company that does pay a dividend but not a substantial one and we think that's a theme we'd like to see overall. this year the s&p 500 will pay out the most money in dividends it's ever paid out so it's the highest return you could have ever gotten yield wise from the s&p 500 but we want to see that

improve and even a stock to throw out a name like apple that's a $450 stock. if it paid a dividend i wonder what the price would be. i think america is looking for companies that pay dividends and want to see the dividends rise. so i think coke and a lot of big names if they maybe could increase their dividends a little bit, they have a lot of cash on the balance sheet, i think that would be good for the individual investor and the price of the stock. >> i'll do my best to help. >> you certainly get a better deal on coke stock, coke debt than on u.s. treasuries. what is the outlook for treasury yields? obviously they sold off a little bit on friday. >> yeah, if you look at the momentum of the u.s. economy you normally expect u.s. treasury yields be to be picked up by now. that's an interesting anomaly about the markets. in the last four or five months yields have been flat ttenflatt. over the next one to two to three years i think you're going to lose money in the treasuries

because of inflation. inflation will trend above that yield. in real terms you're not going to make much money. i don't think it's attractive at all. >> nominal terms, though, people lost a lot of money last year according to the bull market. >> they did indeed. there's always trading opportunities, sure, but i think in real terms they'll lose money and that's what matters to individuals, what we've been saying to the beginning, what do you do if you put it in the bank at zero. you lose inflation. >> thank you for joining us. edward, thank you. edward deicke. we appreciate that. courtney -- >> thanks very much. thanks for joining us. >> i'm ross westgate here in europe. "squawk box" is up next. we hope you have a profitable day.

good tuesday morning. the clock is ticking. greek lead eers are racing to secure a new international bailout while unions in the country call for a strike today. a $90 billion global deal glencore and xstrata a merging creating a powerhouse. it's the industry's largest tie-up ever. and here at home the fed chairman is on center stage. ben bernanke set to testify before congress on the state of the economy, his first comments since friday's blockbuster jobs number. it is tuesday, february 7, 2012 and "squawk box" begins right now. ♪