welcome to the program. the headlines from around the globe, pmi data shows a tale of two economy. german manufacturing slows. china factory contracts for the fourth straight month in february, fueling investors' hopes of further easing with shares in china soaring to a near three-month high. and the dow crossed 13,000 for the first time since may 2008 in yesterday's session, but

a spike in energy crisis put a dampener on things. and dell taking a dive. shares dive sharply as profits are hurt by supply issues due to the thai floods and weakness in demand. welcome to today's program. we'll be joined by jackie a little bit later. pmi for february, 49.4. weaker, 55.4. forecasted down. manufacturing pmi, weaker than the 49.5 forecast. it was 48.8 in january. the output price's index, 48.3 for services, the lowest since july 120u. the output index for manufacturing, 50.4, consistent with january's number. so the composite, that all adds up to the composite figure of

pmi, weaker than the forecast in january and the composite employment index, 49.5, 49.4. joining me now chris williamson who helps, of course, to compile t the pmi. dandd and chris, welcome to you both. we've had the individual numbers out this morning. where's the disappointment. who's dragged the down from what we were expecting? >> i think they've all come down a bit. germany's come down a bit. france has come down a bit. we're left with a situation where germany still looks like it will expanhandlhandle in thet quarter. france, a little bit more uncertain in the first two months of the year when the periphery is still contracting out.

very worrisome signs there. >> is that contraction still getting worse in the likes of italy and spain? >> well it certainly deteriorated at a faster rate in january, but it's not as bad as last year. it looks like october, november, were the worst months. >> dan, i mean it's worth putting it in context with what we've seen in the stock market. dax is up 17% this year. >> yep. >> at what point do -- i know we come off a very low base here, at what point do we get -- if we get weaker pmis, does that feed back to what's pretty strong stuff for investors? i think we're going to see that over the next couple of weeks. the swap with the greece deal, that's going to be the time to see how it works out, if it works out. we need the relief valley to go

on. you realize what's earnings, what's growth, and wa's modest and you can see an appreciation for most of the stock markets. >> if we get some sort of credit event because the idea of activating the cac seems to be a little bit bizarre, does that contract further activity in the periphery, and how does that impact the core of germany and france as we look ahead to the next few months? >> i think this is the big thing. we need to see where growth is going to come from in the periphery. you could very easily have a further upset there if there is sum sort of an upset. we've had this bailout where we're going to see some fitness flow through the likes of greece because banks are more certain that greece will stay in the euro area, but it's hard to see where growth will come from. i think we're going to see a wedge between the likes of

germany and the likes of greece, portugal, spain, for some time to come, as greece is shunned by investors, but germany is a great place to place your money at the moment. >> yeah, yeah. it's really interesting, chris, because the european pmi is very much following the china manufacturing strategy as well. slipping for the fourth straight month in february as falling demand continues to undermine output in the world's second largest economy. but the preliminary hsbc pmi did climb to 49.7 compared to january's final read of 48.8. the data suggests that china is not heading into a hard landing but it's heading offer to form a policy easing. if you add up january and february, what you get, a combined figure of 49.2, it's

still higher than the average for november and december, but still seems to warrant policy easing. do you think that china can still withstand these levels if europe continues to contract? >> i think so, yeah. just looking back even just a month ago, the people we were speaking to, the -- some of the major allies of china were expecting the key one numbers, gdp, to be horrible. they were stronger than that. they said we're going to get payback in the first quarter. those numbers are really going to disappoint. so far the paramount numbers have been higher, the fourth quarter suggesting we're not going to see it happening in the fourth quarter. the manufacturing sector is weak, but when you look at services, this includes services. but the services numbers, they're holding up quite well. the index is running at 52.5 the last three months. so there are signs that they're helping to support growth while

they suffer weak demand from the euro area. >> which is good news from the investors. we sort of fretted about the scale, the slowdown. how does china sort of evolve into global asset management view at the moment? >> sure. i think it clearly is that if it is starting to slow down, which it seems like it is a bit, that the government hasn't scoped to stimulate in a way that the u.s. and new york really doesn't. it can lower the rates, reduce the reserve requirements to goose up a bit the economy, and that's something that's very difficult elsewhere. so think that's why you see much less anxiety, knowing you're going to see a pretty rapid response from the rate you want to see. >> from an investment point of view, if you're a global investor, do you play off china directly? do you play off the companies and the commodity markets, the benefit from chinese demand? >> yeah, absolutely. the growth in the economy hasn't always been reflected by performance of the stock market

for all the reasons of government involvement and, you know, the high waiting of the sector and the volatility and the domestic -- on the part of the domestic investors within china. i think when you see this orientation, we need to look away from the exporters of u.s. and europe and more toward the companies that are producing for domestic chinese consumption, be they within china or elsewhere in asia. i think you want to look perhaps at those companies that really do benefit from than a not just the luxury makers like louboutin and so on. >> very good brand. >> exactly. i think we all know that story. to see the next leg, we're going to see where are they buying their televisions and washing machines. we know it's a potential in china. >> dan, how much is the european story actually affecting china because we continue to see new orders component dropping off

sharply while domestic demand remains steady but quite weak. >> exactly. if you look at the import and export numbers over the past couple of months, it's hard to tell from the recent data. we'll see what it brings in the next couple of months, but in general the imports are more than the exports, not knowing where the exports are going. we think that's going to continue to be the pattern. i think that's probably going to be the pattern at least through the rest of the year as you have to get a better recovery out of europe but hopefully a little more growth in the u.s. >> and, chris, what is the pace of this rebalancing? i mean how fast can they go in terms of stimulating domestic economy over what is still an export model? well, it's surely going to take time. this is a long-term process, but we're already seeing signs of it. we've seen it over the last couple of years where they're shifting their emphasis, and the government has been quite vocal about how they need to move away

from export dependence in the western world, so i think that trend will maybe accelerate as we go through the year, the course of the next couple of years, but it's not going to happen overnight. >> chris, good to have you. chris williamson compiles euro numbers. and dan's sticking around for plenty more. >> thank you so much for that. it was a rather difficult one to flash the pmi numbers because there were good points and negative numbers as well. also at a four-month highs. they also needed to come pie the january and february numbers to get an average and take tout the lunar effect as well. overall the conclusion seems to be if you talk to the hsbc economists who compiled the day tarks it seems that the numbers weren't policy sim is lus, so after much thinking, they're taking it in stride and a lot of these markets ended just about

with it. the shanghai composite closing up at 0.9%. there's a report suggesting that some shanghai home buyer, second home buyers, may get some stimulus. that may trigger something with the developers. ditto for japan as japan and korea as well. overall as we contemplate how china is going to maneuver its policy, think there are some key questions how it's going to boost its fit on the fiscal side, what it needs do on the monetary side. there res already talk that rrrs are the best way to go. that rrr hike only takes into effect this friday and also what's interesting to note is that there are lots and lots of chinese bills actually maturing around the month of march. so quite a bit of questions.

overall markets did end up with small gains but sensex sitting down at over 1%. ross, let's take a look at how the u.s. is fairing. >> 7-3, the decline is just about outpacing the demand. pmis out of the eurozone not really helping us at all. they're weaker than expected. a third of a percent. it was down two-thirds. cac quarante down a third. nearly 10% respecteverybodily already for the year. now, the big excitement yesterday was the dow. one stamg yesterday crept through the 13 mark. it's been a long climb back since 2009 to get back. we'll see if we can sustain it close. the high, of course, was in 2007, toward the end of 2007,

near 14,000. we have a way to go to that, but it's been a decent climb in the last few months. we'll keep an eye on oil prices, brent, 0.18%. as far as euro is concerned, we hit 132.93 yesterday. below that this morning at 132.24. yen still at multimonth lows. euro/yen, hit a low since july 12. now 80.22. the sterling/dollar will be looking at the minutes from the bank of england. will they signal that perhaps we're not going to get a qe in addition to the previous meeting? how intense was the discussion around that?

1.5764. gilt has risen very steadily. treasury is yielding over 2%. btps got down to 1.5. tenure put yields at 1.95%. still to come plenty to talk ab. we'll speak with the ceo that is making biofuels. the key here sit's not fuel nor food. can we now make both.

some news from around the globe, purchase news are high. they're in talks with general motors on a potential joint venture. the stock is up as you can see. ci stephane is in paris is there. how likely is this to work? >> it's likely to work. they have 30% of the company and 48% of the voting rights. they need to make some concessions. so far the peugeot family with trying to find a partner. but they need a partner to expand its business outside of europe.

the company doesn't have the critical size outside europe. so another company which could help peugeot, general motors. the company is talking with general motors not about a corporation but about a broader alliance. for instance, gm could help peugeot begin its business in the u.s. and also in china. so far the company is far beyond schedule. another indication that shows that perhaps the company's very close to an agreement. last week peugeot presented its earnings as a press conference to the cu. they didn't give an outlook for 2012 and for this year. that is a bit surprising. it seems the company could not announce anything at this time because negotiations are not final yet. this morning they had a discussion, they didn't say with who, and say it may not result in an agreement. but, of course, if you look at

the market reaction, it looks like march is really a bit about the outcome and the stock sup 10%. >> thanks, stephane. we'll see how that pans out. nymex is at a nine-month high. we were up to 105.77. brent is still over $121 a barrel. i mean we've got political tensions, high concern. how much higher do you think oil will go in. >> what's the upper limit depending honor how things go? we're kind of seeing a parallel in the middle east. i think the key parallel hopefully that turns out not to be a parallel is how long the price stays at the high level. if it's just a couple of weeks, even if it goes up $10, $15, it shouldn't matter too much economically. if it sustains one month, two months, three months, then you'll see it impact the economy

as we did last year. >> the gasoline prices in california, tipping near $4 a barrel. i know a lot of people have done studies on the impact of high gasoline to sort of the economic impact that feeds through pretty directly. is this one of these other issues where the investors, you're talking about the rally we've had. they wake up, as they traditionally do around march. we have a good run and then they start worrying about things and whether they should take profits. is this another reason why it may happen? >> certainly it's one of the major risks in the market right now, besides greece and the developments on that side, thing this is certainly the other one that's going to do it. american consumers are very sensitive to pump prices. as it continues to go up, you'll see a fall in demand. that's been one of the key components driving gdp growth in the u.s. is that consumer demand has held up. if oil prices and pump prices go up even further, that will start

to weaken. >> in terms of growth because -- in terms of growth versus inflation, so far the focus seems to be more heavily geared twashd growth here in asia, but will high energy price not only derail whatever rally we have but also scale back growth here in asia and elsewhere around the world that in fact set back the markets even further? >> that's always the risk. don't forget china is a big importer of oil. it has a very broad impachlkt if it turned out to be a supply impact, then it's clearly more difficult to adjust. that's one of the unknowns we have ahead of us is how exactly this is going to play out and what the time period is going to be because the impact would not only be on inflation and demand but certainly growth very broadly. >> energy prices at nine-month highs. at what level does it need to get to spike up inflation in a

big way and warrant policy tightening at a time when growth is actually relatively weak, even in the asia-pacific? >> i think you wouldn't see policy tightening because the banks would appreciate that it's going to slow down. they really essentially can affect oil prices. if it goes up another 10% or so and it's sustained at that level for several months then you might see conceivably loosening it. >> how do you invest on this story? can you? >> i think at this point your premise has got to be that the skplangs continue slowly in the u.s. it's going to, at best, stay flat. but do better in emerging markets. i still think that really should be your position and really only see how this evolves. if we're still talking about this in another month, then you might be changing. >> specifically how do you invest on higher oil prices, you know. can you -- is that a -- because of the fact that it's driving,

not just fundamental demand and supply, is it too dangerous to sort of say i'm going to keep putting the services companies or whatever the drift it might be? >> i think you'd have to be pretty aggressive perhaps to do that because knowing that this is really driven by a political situation where things can change so dramatically from day to day as opposed to an underlying fundamental driver,ed you ee have to be pretty name billion to take advantage of it. >> also still to come in today's program, we've got minutes from the bank of england's policy meeting. we'll find out how many members did expand the latest round of qe and twitter is expected to pass the 500 million mark, but will it ever catch up to facebook. and dell missed wall street's forecast. we'll get into the numbers as well as hp due later today.

this is "worldwide exchange." the headlines today from around the globe. contracting in february as companies continue to cut costs to cope with the crisis. and china's factory contracts for the fourth straight month in february, fueling investors' hopes with

news soaring to a three-month high. >> the dow hit 13,000 but a energy spike put a snap on the recession. dell hurt by supply issues due to the thai floods and due to continued weakness and demand. we'll have the bank minutes coming out. we'll bring those to you. first the greek parliament is going to vote tomorrow that could force investors to take a cut. they must complete the bond stock by around march 10. if passed into law, the collective action clauses will force all investors to participate in the swap but only after a two-thirds participation

level has first been reached. dan more is in is still with us. joining us now is eric briton. we spoke yesterday about greece. i want to pick on this collective action clause and get both of your views. we're not going to force you to take this debt swap unless 66% of you already agree. if you suggest that, there is no deal. >> indeed. you've got to get some kind of a consensus, i guess, before you inflict this in a come pos torrey sense. if you have two-thirds of the

people -- >> are they suggesting if we have two-thirds, we can agree to this collective action clause and then there isn't -- you can't say it's a forced default and claim -- is that -- >> think that's part of what they're hoping. i don't think it's necessarily true but i think it's part of what they're thinking. >> how big is the implementation risk, do you think? >> it's massive. i think the chances of the austerity package, the austerity measures that have been put forward, being implemented are close. >> dan, you no longer? he says close to zero. >> given -- part of it is that -- up to now it's been so poorly designed, they haven't met all the stipulations. it isn't, i want to say, really the government's fault. it was always ridiculous from the beginning, so if they fail to do that, well, whose fault is that. i don't expect them to meet all of ichlt i don't know if that's the key thing.

i think what they want to see is there's a bit more of after effort than we see now. like we see in portugal, they're trying to meet the conditions in an effective way. >> the way we put it is greece is all in already, so they're coming and saying we want more, we want more, put some bits of hope there. but there's nothing more we've got. >> we've got the bank of eng gland minutes and my system was frozen, which isn't helpful. they voted 9-0. david miles, adam posum voted for $75 billion increase in bond guide. they saw a risk of long period of risk demands. they saw the rate could fall materially below target and saw a considerable capacity.

the majority or the recent data from the uk, it's better than expected. the majority. so the possibility of growth might be stronger in the near term and for the majority of the east, it's the worst outside risks to the eurozone and it would be more persistent. they fed a larger dose might send a message that the economy is weaker than it is. supposing they want it more, the others are saying we didn't want to send out a signal that things are worse than they are. sterling has fallen on the back of that. >> makes sense. >> which makes sense because there are still people pushing for more money than we might have thought. i mean i know you think they're doing the wrong sort of qe anyway, but out of those, who's got the better argument? >> i seriously think there's a serious danger of misplaced precision here. we don't know what 10 billion yont worth of qe does. i don't know what 200 billion

does in all honesty. so the argument about should it be 50rks should bit 75, it's a distraction. nobody knows what the difference between those two concepts is, including the monetary policy. >> dan, at a time when there's so much quantitative easing going on, going back to the cac issue and greece, by taking the step, how much of the moral hazard are they taken out and how much did palestinian are they trying to enforce and ultimately is there a risk being that they may not get that 66% of the vote? >> i think that's exactly the reason you want to see for the most part a reasonable participation. if you see the cic clauses kick in, the biggest question is what is it. ? do they pay out? how do they get around? will the hedge funds be able to win either way?

do they get 100% out or who owns them? i thank's the thing that people need to be most focused on right now is if that comes into place, where does the risk ultimately lie. >> i'm hearing and reading the hedge funds have nothing to lose. how do they go back to the voters and their con state gents and the people in their home countries and explain to them what they've done? how do they undo the political headaches if we get into that situation? >> well, i still think the likelihood is they'll get to it. if you look at who owns it at that point and they're kind of engagement in the process to participate, i think we're likely to get there. but i mean at this point to try to explain why, you know, it's necessary to support greece, why they do need to take the writedown isn't -- you know, it's certainly not pleasant, but when you think about the alternati alternatives, you do have to

take the hit. and if there's support from the banks to make up for that, you know, in the end the people don't have much choice. >> yeah. just back to the bank of england, just to explain, you don't think they should launch more qe of this type. you do thank should be targeting the housing market. >> the housing market. >> why? why is the housing market still so important when we haven't had a housing crash here? we haven't had a lot of foreclosures? >> the recession was like 25%. came back a little bit. london's a bit different. london's a special case. but our judgment for the economy as a whole is house prices are still topping, that ire still in the 15%, 20% oval you, and that's an asset sitting on the books. and partly nationalized in the u.s. this full expectations massively important. expected for the value of that asset. that's why in our view they're not lending.

they've got to -- they're taking risks off their books. they're not key to putting more risks on books. that potentially bad asset is sitting there. so our proposed solution is to get to the bottom of that that causes house prices to bottom out, to reach fair value, to do that by taking the bad assets off of it. it's a bit like the u.s. that kind of policy that creates it back to where all of those bad assets live. >> is that a risk on taxpayer -- >> well, the taxpayers are buying that essentially, that asset but buying it at fair value, so an expectation. they may be fluctuated down the line, but five, ten years down the line, you should expect to mack a positive return, but the banks have to realize a loss in the meantime and that's difficult and that's why it's unpopular. but for us, as long as we've got this bad asset out there that's toxic and been the banking

sector, there's no reaction. >> we'll be playing that out later today and tomorrow as well. so plenty more to come from david miles, a posen committee member who, just to remind you, has voted at $75 billion. and of course john gieve will be joining us in 25 minutes for the rest of the show. for now, thank you, erik, nice to see you. erik britton. else where, they've launched a new product that's cost competitive. joining us is the c o'of

novozymes. explain to us where the breakthrough is. >> the break through is that for the first time it's possible to use enzymatic high drwal sis to break down the waste. you can use it competitively with a corn-based fuel and gasoline. the first factory that can use our technology, our enzymes, will start operating in august in italy. another factory will start operating in the u.s. later this year as well. one will start in china. next year, a couple of more factories will start. and the way we see it, that will be the first way where be advanced biofuels from agriculture waste will be

rolling out over the globe. snoop it's been a debeat. you either grow down for food or you grow corn, for example, for biofuels. are we now moving beyond that debate? you now don't have to choose? >> exactly. it no longer will be food or fuel. it will be food and fuel. >> for example, in the u.s., a lot of the decisions around this depend on farmers and a lot of subsidies that impact what's produced and not produced. how might that or your success de pend on the legislative landscape in the u.s.? >> of course, it's very important for us to make a clear political statement that this is what the u.s. or other parts of the world want. and the way do that in the united states is to keep the so-called renewed fuel, which is

mandate for how the second generation on advanced biofuels should be consumed in the united states. that should help us get over the hump and then in a couple of years once we're up and running, there will be no need for further subsidies. >> what is the cost difference? >> sorry? >> quickly, what is the cost difference between how you're doing it and the conventional method? >> there is no conventional method. there is a conventional with the corn base. in the corn base where we have ten years to improve our act, corn-based is now cheaper than gasoline. ten years after we started, given us another five years and we'll be every time cheaper than

gasoline. >> and steen, they say it's based from corn crop residue, which is -- >> correct. >> how different is what they're doing to what you're doing? >> i think the difference is that they're two years late. >> okay. because you're going into production in 2012. >> exactly. >> that's a year late. that's a year late sneer well, let's see. >> all right. steen, thanks very much in deed for joining us. steen riisguard of novozymes. >> thanks very much. kevin rudd announcing his resignation as australia's foreign minister a few hours ago. they're calling for a leadership vote. let's find out more from matthew taylor. matt, certainly an interesting development and this political development has seemed to take

the wind out of the australian dollar, not smog that even the chinese pmi numbers did earlier this number. take us through there. >> yeah rk, you're right, chloe. the dollar bumped up a little bit as everyone in australia is getting a little bit sick of this back and forward tensions but as you point out, we've seen it since pull out. let's update you on the developments that have been occurring in the last few hours. at a press conference, the foreign minister kevin rudd announced he'll be resigning and moving to the back bench pofs parliament. this coming as cause has been growing to sack kevin rudd as a continued and ongoing relentless speculation amount about to whether north he would challenge her for the leadership. now since moving to the back bench it appears a leadership challenge is on.

earlier, of course, kevin rudd making this shocking announcement in washington, d.c. saying he couldn't work with the prime minister, that he didn't have confidence or she didn't have confidence in him. take a listen to what he had to say. >> the simple truth is that i cannot continue to serve as foreign minister if i do not have prime minister gillard's support. i therefore believe the only honorable thing and the only honorable cause of action is for me to resign. and i do so with a genuinely heavy heart and after much personal reflection. >> kevin rudd is heading back to australia now from the united states or will be heading back in a few hours' time. he says he'll arrive back on friday morning and he'll make an anunsment on what he's going do, whether or not he'll challenge, he'll resign from parliament fully or stay on the back benches before parliament

resumes on monday. we're in a one-week recess right now. we're waiting to hear from prime minister julia gillard as well. she'd made a statement today by way of e-mail statement saying kevin rudd has made his resignation. he was a strong advocate over seas. he strongly pursued australia's interests in the world. she's disappointed that mr. rudd has publicly expressed what he did this evening and never personally raised these issues with herself. the prime minister will also be making an announcement tomorrow. clohloe chloe. >> yeah, interesting these developments are happening a few days after there was some speculative reports suggesting there could be another mutiny of course. in case there is a leadership vote, does kevin rudd have enough votes. >> well, that's the million-dollar question. at this moment it appears he might be short of votes. the next few days are going to

be critical when it comes to determining this point. he and his supporters are going to be rallying around to try and drum up support for him, of course, the prime minister julia gillard is going to be doing the same thing. as you point out, they're going to get reports. she'll announce tomorrow ta at her press conference, could announce tomorrow at her press conference there could be a leadership balance. this coming two years or so or less than that after she rolled out kevin rudd for a job in another leadership role. back over to you. >> also sticking criticisms coming from him that we've been flashing to you. thank you so much for that. let's bring you up to date. once again, the top story, china's manufacturing slipping for the fourth straight month in japan as they continue to undermine output in the economy.

but the preliminary hsbc pmi did climb to 49.7 compared to january's read of 48.8. it does suggest that they're not heading to a hard landing but is indeed slowing off to further ease policy easing. let's get more from the founder and chairman of andrew yum international consultants. thanks for giving us our time. what i'm curious about is it looks like the policy consensus is that china needs policy easing in terms of the needs. in the past few weeks, why have they been drank funds from the markets? >> because china doesn't want the economy to grow too strongly. mine that's why china's s rejecting its economic mortal. on the other hand china can't afford for the growth rate to

fall. you can see china is trying to carefully calibrate the company by, for example, easing on the requirements. and looking at the situation there, the inflation rate has come down and so this gives china more elbow room. but i think that this is still a worrying thing, but the -- the positive side is that the consumption, domestic consumption is growing quite rapidly, and you can see that both the high end and at the low end, high end for example, the world luxury, latest reports suggests that china's luxury market is going to be the largest in the world. then, for example, the kfc, kentucky fried chicken, opened 500 stores every year. so this sustained china's economy to that extent. >> yeah. but we also hear about a lot of

difficulties, especially among the smps. that will become effective this friday, freeing up about $60 billion of liquidity into the system. how much of it will actually end up in the hands of small and medium enterprises? >> well, there's been a directive to allow to banks to increase the kielkd of lending to help others' needs, and i thench a lot of funds are going into that direction. now, the danger is that some of this excess liquidity could end up in pushing the property bubble, but then the property prices are going down across the board, so there is very little danger of a total collapse. but i think there is no doubt there's going to be more funding, more liquidity and more funding generally for the

economy. but the situation's being watched very carefully by the central government. >> so when should the next easing move happen since the foreseeable one happens this friday given that the first one gets front loaded in the first couple of months and it hasn't happened so far this year. >> i think the further easing of the banks are still in the cards but i think the situation continues to be watched. but looking at the slight improvement, i'm just saying, 49.7%, slight improvement over last month, even though below the 50% mark is not a big deal at the moment. but i wouldn't put it past the possibility that the further easing of the banks would be on the cards.

>> andrew, if we're looking to the dough mess tech economy to pick up the slack for the export sector, where do the citizens, the households get their income if you have the exports slowing where their jobs or wages aren't slowing or growing and you have the others that are not getting money from selling houses? how does that factor into the income where they have less and may not be able to spend more? >> well, there's no doubt that some jobs have been lost in the exports sector, but on the other hand, the service sector and the consumption sector is creating a lot of jobs. and a lot of the workers -- and if you go in for any city in china, you can see the inform nal economy, you can see a lot of very small entrepreneurs. they're all doing the business. and then selling to the local population with the kind of

rising wages across the board. it's going be quite an attractive position to a lot of people. so all it takes is the economy booming. in fact, the direction china is trying to go, rather than, you know, sort of focusing too much on exports. >> thanks so much for that. appreciate taking to you. andrew leung, chairman of andrew leung international consultants there. and moving right along, while athens might be able to breathe a temporary sigh of relief, investors over in japan still have reason to worry about it and to tell us more we're joined from the nikkei in tokyo. makiko. >> hi, chloe. the nominated bonds also known as samurai bonds issued by greece may fall under the debt reduction deal.

the bonds were bought by private investors as well as institutional invefrtss and if the bomds are subject to the latest bailout band they'll be asked to absorb a loss on the investments. these samurai bonds were not mentioned in the statement released on tuesday and so far japan has not received any information from athens. so far no problems have been reported. and that's all from nikkei business rofrt. back to you, chloe. >> thank you so much for that. have a great evening. ross. still a little more about japan. we'll get dan's thoughts. and twitter set to surpass the 500 million mark this afternoon, but can that social website monetize that growth? we'll be back in a few moments. 

we've heard the bank of england wants to have a quantitative easing. the bank of japan issued more quantitative easing last week.

dan, what are investors supported to do? how much is liquidity going to help or hinder here. >> at this point, it can't hurt. i don't think we have to worry about growth being too high. we don't have to worry about inflation at this point, and if you've about got so many governments pursuing and outside the u.s. cutting back, you do need stimulus to make up for it. >> will we get some in the u.s.? >> i don't think so. if the u.s. keeps up at 2% or so, there's not much need to be, to be honest. there is a risk. i think for the fed to decide will we make it a little boost of growth but are we going to create problems later on? i think for them it's not going to be attractive. >> you've made the point, of course, effectively equities are up. 20% dax this year, 20% in this run. so the risk for equity holders of more volatility. so you prefer debt -- when you talk about debt securities, what do you mean exactly? >> i mean at this point given the run of equities we've had so

far, what are we likely to get between now and the end of the year, 10% would be nice. but at this point when you've got 2%, another 10% price, maybe, maybe not, when you compare it to high yield debt, you geeshet that level in the coupon loan and you're much more certain of giving that. so we like risk assets overall, but now with a bit more of a high yielding debt. >> dan, thanks so much for joining us. it's that time of the day as well when jackie joins us from the united states. another half hour of programming to come. twitter, 500 million users. >> that's exactly right. how many users do you have or followers do you have, ross? >> follows are different, right? a follower is different. if you're a follower, you're automatically a user. >> 2,750. >> there we go. i'm working on it.

you've got to join, chloe. you've got to ditch your other social media and do twitter. >> yeah. at some point. at some point. trust me. it's going to happen. matter of time. >> quite how you monetize 500 million, no one's told me how they're going do that. we'll wait and see. jackie. >> all right. still to come on the show, dell shares drop after the computer giant misses wall street forecast. we're going to look at those numbers and preview the results from hp due out later. and tweet us @jk >> good morning

welcome to the show. the headlines around the globe, here in the united states the dow cross 13/,000 for the first time since 2008 but a strike in energy prices puts a damper on the session. eurozone has raised a specter of resection. they contracted in february as companies continue to slash costs to cope with the crisis. and dell takes a dive. sales drop sharply as they're hurt by supply issues due to the thai floods and continued weakness in demand. plus sterling hit as

two-month low after england reveals the bank revealed a big lull. at least two members did. stocks are a little bit slow, not helped by pmi data. the flash reading this morning pointing to a recession reading in the last couple of months. down 49.7 in february. it was expected to be over the 50 mark. what we saw, we spoke with someone from the market earlier. sweerch almost no job creation in the month of january between germany and france and quite a contraction on the growth side or a big slip in the growth numbers for those key core countries and the peripheral looks certainly like it's going to be in recession.

we just had factory orders out. this is for december. so in some ways the pmi is sort of ahead of this number. it's growing the fastest pace since the month of december. this is euro stat talking about the december month, the orders rising up 1.9% in the month of december. still contract 1g.7% on the end. of course, we no know in october and november you wouldn't potentially have a strong year on year comparison. euro/dollars are at 132. so it moved away, of course, from yesterday's peak to around 133. what are the futures looking like, jackie? >> not such a great picture in terms of the u.s. futures. let's take a look and see what we've got on market. it looks like it's going be a slightly lower market. the nasdaq would be slightly higher, but the s&p would be down under the flat line as well. of course, this was after a

mixed session yesterday. a bit of uneventful trading. it was a huge milestone. we hit 13,5 spot 04, and that was around noontime. interesting to see today how things shape up. of course, the high energy prices are going to put a bit of a damper on the sessions as well. that could be why we're seeing futures. ross. >> we saw it down a little bit yesterday. you can see we are low this morning off 0.8% and a third percent down. as far as bond markets are concerned, we saw gilt perk up. the gilt potentially on that board. but you can't see bund yields at 1.95%. we've seen a tick up in span is and italian ten-year yields as well. italian ten-year yesterday went

up. they dropped from 2.9%. post that q.e. discussion that we had. sterling/dollar has also fallen down. we were around 158 before those minutes and now you can see we're down on the low, nearly a centchloe. what do you have? >> it was actually pretty good. there was quite a bit of caution. it tack a while to get where we did at the end of the day. you can see quite a few green arrows but india out of the majors, still tracking down about 11.5%. flash marx out of china show they seem to be in a softening mode and probably will warrant some kind of easing. there's a lot of betting how they will do it. a lot of analysts seem to be saying that cutting them, in fact, will be the best way forward. but there are still quite a bit of caution given that a lot of

bills will mature in march and how china is going to trickle that into the system is one thing that investors are looking into. and, number two, even as people are coming in, more cuts down the road, they're only taking effect this friday as well. it could be a bit of a tricky one and bank lending has been quite soft so far, quite contrary to previous years when a lot of front loading happens in the early months of january, february. overall, another report that there could be property easing measures in mainland. it helps the property plays in the greater china region. the hang seng up 31%. the shanghai composite pushing a high of 0.9%. japan's down three. reaching six-month highs. shanghai about three-month highs. ross? >> a full year, 2012. they lost a share of 0.2 cents as share.

that was in the top of reuters. revenue, $30.32 million and the -- they say if first quarter included a net tax benefit. the cancellation rate was 2.6%. toll home building has decreased 1% as well. we'll talk more about it. we're also going to talk about dell as well, missing forecasts, jackie. that's going be key as we look ahead to numbers out from hp. still to come on the program, will a 35-hour workweek a thing of the past or is it here to stay? we're going to get the view from the secretary-general.

good morning and welcome back. you're watching "worldwide exchange" with chloe cho in asia, ross westgate and myself. they'll spell out details to cut the u.s. top corporate tax rate from 35% to 28% and a lower effective rate of 25% for manufacturers. in return companies would have to give up loopholes and subs y

subsidi subsidies. secretary tim geithner will have to discuss the plane which was broadly outlined in the state of the union address. the plan requires congressional action unlikely in an election year. a program note, of course, cnbc's steve liesman has an exclusive interview with timly geithner on friday during "squawk box," so make sure you tune in for that. dell sales have gone down. they're projecting first quarter revenues will decline slightly. dell fell 5% in the after hours. taking a look at dell shares in frankfurt right now, they're down 2.2%. john wheldon is also out. he plans to step down after a decade at the helm. he's being replaced by vice

chairman gorski. it comes after a series of recalls in the past two years including motrin and children's tylenol. last year j & j took a $3 billion recall and last week it pulled a box of infant tylenol as well. let let's take a look at johnson & johnson. and citigroup faces a multi-billion-dollar writedown. "the wall street journal" reports that morgan can start buying citi out of the venture this spring. price could be a big sticking point in terms of the discussions. much more than on morgan's. so if morgan stanley pushes for the lower valuation, the journal does say citi could take after aftertax hit of $1.8 billion. trading under the flat line down half a percent at 25 spot 10.

and it's that time of the morning for your global markets report. let's start in the state and take a look at the futures and see how we're shaping up for trade. looks like the negative sent meant is going here. the nasdaq would be slightly above the flat line and the s&p lower by justin 1 point as well. this, of course, after an uneventful session yesterday, although the key point yesterday in terms of our markets was we did cross the dow 13,000 mark. of course, we didn't clowe there but traders will be watching for that. ross. >> we're not far off it here, jackie. just over two hours into the trading day for european stocks. the decline is by more than 4 to 1 as you can see. so the european stocks were down yesterday. 0.6 for the staks. bank of engrant, minutes a short while ago, half an hour ago, show that two members, david

miles and adam posen want more. they want $75 billion. that's got sterling sold off and gilt with the prospect that maybe there's an argument to have more. certainly disappointing out of not just germany but the eurozone as a whole. there's still a risk not necessarily for jeegermany but certainly for the eurozone as a whole, we keep yoour eyes on what's goinging on as we look at the likes of south sudan and yemen and syria as well and nymex. touch 1g 06, just below that, 105.7. but we're keeping a look at the gasoline preess and how that might feed through. as far as currencies are concerned, the dollar yesterday just below the 133 level. we'll learn this morning 132.27. the yen is down, fresh multi-year lows across the number.

multi-month lows across the currencies. 106.2. dollar yen, we had a seven-month high, the high since july 12th, 2011. and sterling down nearly a cent against the dollar after bank of england minutes carry at 157.04 is where we stand. that did boost gilt yields. gilt's yielding 2.16. you can see the ten-year treasuries. 10-year bdps we hit currently under 5 president 5. so the yield is edging a little higher for gdps and bund yielding a little higher at 1.94%. chloe. >> thanks for that. after quite a bit of caution on what's going to happen for greece and numbers from hsbc, ultimately many of these key markets as you can see managed to dig out a little bit of gains. closing up to three-month highs.

a central report in the local daily that some types of property easing may actually happen in the city of shanghai. that ultimately has triggered a lot of buying into the depressed property captors in shanghai, hong kong as well. australia prut much holding flat. japan and south korea pretty much sitting at around six-month highs. overall, i think investors decided to take what they wanted from the flash pmi numbers given that it was at a four-month high but still at a contraction territory. most everybody seems to be betting that some sort of easing will happen but i think the timing is going to be quite interesting given that the ease, first one for this year, only takes effect this friday. that is going to be it for me and the rest of the theerm in asia. i e-mae am chloe cho and i'm se it back over to you.

we'll see you tomorrow. stephane has been speaking exclusively to the secretary-general of nicholas sar co-guy's ump party. what kind of policy are they going to be looking at. >> he would need to give us something else. the impression is after it hrks will'll be the next victim of the price. if the elections were to be organized in france they would be defeated by the socialite francois, but still it's promising to stick to the roadmap which means son efforts to reduce the level of public deficit and also it's promising more stricter reforms including reform of the labor market. i caught up with jean-francois who's 'head of the ump political party, the party of nichololas sarko

sarkozy. it was to slash the 55-hour working plan. >> even if we started to do that to 35 hours, we are going to speed up on this questiunp beca have decided to reduce the cost of labor and competitiveness. >> jean-francois cope says no austerity measure was planned for now. they hope to bring their bijt to zero by 2016. the plan is just matter of being straight. we're now eight weeks ahead of the french election and according to the latest survey nicolas sarkozy only has 44% of

the votes at the second round. with that i send it back to you and jackie in the united states. >> thanks so much, stephane, and greats to see you this morning. >> still to come as greece prepears to vote on a law. we asked our guest as what this is going to mean for the bond markets. stay with us.

joom we have data out of the eurozone this morning pointing to a potential recession for the coming months. the composite number down in february. this is at the same time the greek parliament is supposed to vote tomorrow that would force all investors to take a 53% hair cut. the prime minister says the country must complete the bond swap by the tenth of march to provide funds ahead of the repayment debt deadline. if passed into law it will force all investors to participate in the swap base. the key point, they need a two-thirds participation level before they can enact that law. so john gieve is former deputy governor of the bank of england and joins us for the rest of the program. he finally made it. thanks for sticking with us, john. here we are, we've got the bailout for greece and everybody is worried about the implea

mon -- implementation of it. what are your views? >> i think it's likely to be the last word on greece and the reason for that. growth is negative. in a few months we're expecting the numbers to be worse even if they've delivered all they've been asked to deliver and that's a tremendously ambitious list. yes, it's sort of a relief for now, but i don't think this story's gone away. >> how does this keep figuring back into the eurozone. they're disappointing. the peripherals certainly looks a bit in recession, but we also saw it as chris womensilliamson it this morning, their growth also weakening. >> well, the -- in my view, the misjudged attempt to get the european banks to raise their

capital ratios over a period has implemented a huge credit squeeze in the euro area as a whole, and i'm expecting there to be very little growth for the next few months. even if the greek debt problem doesn't explode again. >> yeah. and this -- this point about the banks is interesting as well because there are -- although the ltro will undoubtedly prevented a financial system meltdown, there are plenty of people out there saying, actually beyond that it comes upon where it may do more harm than good and the banks are going to keep the cash or the cash that they're taking. nothing's going to happen to it. it's not going to -- they're going to keep cutting back and deleveraging and derisking. >> well, i think the ecb did the right think and i think they're doing a subtle thing here. he removed one major risk of a

complete implosion of funding of banks, and thing he succeeded in that. but nonetheless each of those banks is having to raise their capital ratio and the easiest way to do that is to reduce their assets and that is to lend less. that's what's going on across the euro on top of that. on top of that you've about got the continuing worries about greece. they're going into negotiations on similar lines. and on top of that, we still haven't gotten resolved whether or not europe can agree to expand the rescue plos as think the imf wants. so i see this rumbling on, bumbling on through most of this year, possibly without a complete breakdown or crisis, but very depressing for confidence. >> i mean do you think portugal is going to have to go into a debt restructuring? >> they're not in as bad a position as greece, but they do look to be in a position they

can't sort of work their way out of on their own, so i would expect some restructuring there. >> we've got a symposium mitt coming up in the beginning of march. they're saying they want to focus less on austerity and more on growth. really they starting to pursue a better tract than sort of the fiscal compact that's been led by the germans? >> well, i mean he monti's got very little room for improvement. he's only there for a short time. he's good at getting italian reforms under way, but he can't magic the money from elsewhere. yes, the lack of a growth agenda. i wouldn't look to the euro area for any great initiatives in the coming months. it's all they can do to keep the gilbertly on the road. >> yeah.

meanwhile we have minutes out this morning. two members, mr. posen and another. they wanted more than the 50 billion that was announced. do you have sympathy for that? one of the key phrases was the extent of deeveraging required considering the spending capacity. they're clearly, you know, still worried about the downside risks. >> i actually think majority of the committee are worried about the downside risks. what this is about is how much do you commit today and how much do you decide later on? we've got a fairly settled policy in the uk. we've got fiscal austerity that's putting pressure on our banks to deleverage and counting on that we're koujding on the monetary lever. so long as there's no sign of wages picking up and so long as growth and unemployment is disappointing, i'd expect the

q.e. program to continue. so unless we get some stronger news by may, then miles and posen are likely to get their way. >> okay. thanks very much. plenty more to comen from sir john giev. jackie. coming up on the program, ross, as the dow reaches the 13,000 mark for the first time since may 20068, the unp is it all downhill from here? we're going to discuss it next.

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welcome to the show. the dow crosses 13,000 for the first time since may of 2008, but a spike in energy prices puts a damper on the session. >> the data rates are expected to serve as activity contracts if february. companies continue to slash costs to cope with the crisis. and dell takes a dive. shares drop sharply as profits are hurt by supply issues due to the thailand floods and continued weakness in demand.

ing. >> nice to have you here on "worldwide exchange" this morning. let's take a look at the u.s. futures and see how markets are shaping up in terms of the trade on wall street. it looks like it would be a mentioned session if it were to open up now. it would be a point above the flat light. the s&p 500 being low, this after we crossed the 13,000 mark yesterday. today, the dow actually briefly flirted with that level on thursday on relief over the bailout and positive earnings from the likes of home depot as well, but stocks pulled back seemingly when nymex crude crossed $600 a barrel. one said it could be a blip on it. jeffrey segal says if retail investors return to the market, dow 15,000 isn't out of the unp. in terms of the basic economy, we're stronger.

that pushes to a new all-time high. >> you're talking about dow, it pushes 17,000. >> yeah, dow 17,000 pushes to an all-time high. >> and joining us now to taught strajgy to talk about strategy and sir john gieve former deputy governor of the bank of england. but i want to start with you. do you agree with that view? >> yeah. it's interesting times right now, and dow 13,000, if it holds, i think it's something that's not as significant as everyone is making it. we'll trade around that area. sfwl's a lot that would trade in

the next few months. >> speaking of the next few months do you worry about the high oil prices and the geopolitical risks? >> yeah, they're a large concern we have because it's such a large portion of the gdp and 70% consumption, so it's something ta's scary. if we're going to get $4, $5 gas prices, it's going to affect purchasin purchasing. we had crazy retail prices and the higher oil prices going high with iran is going to might, you know, something that's scary for the consumer. >> gieve is with us. how much is oil right now? >> oil prices have ticked up, thing, partly because people are a bit more optimistic, but mainly because they're worried about iran and a possible glitch in supply. i mean if there's an attack on iran, yeah, we could see a big spike in our oil prices, which would have a big impact on the

economy, no doubt about it. hoping doesn't happen. i would be surprised if it went very high on the back of demand because i'm expecting a bit of lackluster 2012, both sides of the ledger. >> yeah. what do you make of that. wild-cards are just that. they call them that. it's hard to put them into your calculations of what to do. >> it's causing investors to be a little bit uncertain. we're seeing straight from the market the past cups of months, but with oil prices being such a wild card and this international risk. i mean when iran figures it out we'll have rally with stock prices falling.i mean when iran we'll have rally with stock prices falling.risk. i mean when iran figures it out we'll have rally with stock prices falling. until we see traction made

wrks're in a holding pattern. >> do you see them trading around in these ranges to try to make some profits? >> yeah. i mean the retail investor is going to continue to buy the apples and those kind of technology stock bus the retail investor is going to trade oil. you can trade volatility. you can go long, you know, mechanisms for oil stocks, but, again, it's going to be playing the geopolitical risk. that's what's going to happen for the next, you know, ensuing two months. >> it's pretty clear as well, sir john and jason. we've had liquidity. we've had operate twist. do you think there'll be any case for the fed to -- you talk about the economy as sort of drifting long. will there be any case for the fed to launch the q.e. or not? >> i think there's been a bitz of a pause. there's enough not bad data for them to pause on qe3.

but fundamentally the fed and other fundamental banks are look at unemployment subject to the constraints. so if we get bad news, then i think we'll see q.e. roll on. >> thank you. jackie? yeah. switching gears for a second, dell's fourth quarter profits fell 18% hurt by supply issues for disk supplies due to the flooding in thailand. their pcs fell 2% for the quarter. the company is projecting that the first quarter revenue will fall slightly as well. they fell 5% in afterhours and now in frankfurt we're seeing it down 6%. and still with us, of course, is jason, and i want to bring you in and look at dell. when people look at dell, think they see it as a bellwether and if we're seeing troubled signs, what does that tell you about the rest of the tech base?

>> we're also approaching 3,000 on the nasdaq. with dell, the one positive was that the enterprise sales were up 5%. but i mean if anything, we see everyone carry these apples around, these ipads, so we think it's maybe not as global an issue but other companies are taking share away. we look around and see people with apple computers everywhere. so, dell, yes, it had a hiccup in earnings but i also think other companies are coming in and producing innovative technology. you have the droid tablets, so it's harder for dell to compete when they're relying on an operating system from a third party company. >> sure. let's talk about apple for a second. at the current price level do you still think apple is a buy at this point sth. >> it's hard to go against apple. it's hard to go against them with the new products coming

out, ipad three. stock has run really quick. if you own it, trade options for protection, but i still think apple has some more room to run because the growth is just enormous. >> really quick, we're going to hear from hp today. thoughts there? >> meg whitman is coming out. let's see if she's turned this around. hp has struggled in the past but you may see more support in the enterprise. it may be an interesting quarter. you may thing, hey, i'm doing this. i thinking the street will be frisching with hp. >> okay, great. we're gongs to have leave it there in terms of a discussion in terms of tech now. jason raznick, thanks so much for your insight there. the housing market is in focus as well as the national association of realtors releases its latest data at 10:00 a.m. eastern time. sales have risen about 0.9% in january. we're going to talk about that more, so stay with us on "worldwide exchange."

i just got some -- this says it does not regard the latest greek deficit figures as negative. i forgot what those greek figures were.

did we bring those up? the money minister is having doubts about the measures, and the dutch finance minister says the u.s. should more clearly call on them. they'll have to play a larger role in the greek paper as well. remember, we didn't get much -- an awful lot of detail on the exact imf contribution, did we? when will we hear what the imf is going to be doing? they seem to be playing their cards close to their chest. >> the suggestion is they're still waiting for the euro area to upthe pop by combining the fsf with them and make it a 7 million part before they agree to put money in. i agree with the dutch. the thing that the imf might be able to do and the europeans could help them is invest in a bit of a european structure and get a bit of the economy.

this is a very unbalanced package from a dwreek point of view. >> that's part of the problem. jackie, back to the u.s. >> yeah. we're watching the housing market very closely here as an indicating of the economy. it's in focus today as the national association of realtors releases its latest data on existing home sales. that's at 10:00 a.m. eastern time. it's risen 0.9%. joining us now is tania markio, investor of team investments. a signal that our economy is getting ready to rebound but there are still a lot of signals that in fact things are difficult and it's going to be a rough road ahead and foreclosures are one of those. we're not out of the foreclosure, you know, mess just yet. >> mess. >> yes, exactly as you put it there. where do we go from here? >> existing home sales are going to be interesting it's going to be a positive sign.

anywhere between 4.4 and 4.9 million homes. at the most positive point of our market we were at 7.1. we're nowhere close to being out of this mess, we're going to see more. it's a hot market for investors. so this is the time to get in and make money with a positive asset in this housing market. >> i like that idea. it certainly sounds attractive to me. the one thing i say to you i'm hearing all the time is it's impossible to get mortgages. if you're an investor coming into the market, you're looking to take on an investment, how do you do it if you can't get a mortgage? >> it gets creative like everything else. there's a lot of hard money out there and there is a lot of money in this market. a lot of people are paying cash and that's why they're getting these kind of dealings and people are using their i.r.a. money.

they're coming in and finding ways to buy these homes because it is a positive time and they're making a positive cash flow on these. hopefully you have an appreciation play in the end. >> i think the appraisals were found -- it's hard to get mortgages because the appraisal mortgages are so below water. it seems at least out of michigan, surprisingly, it's stabilizing so people are able to get mortgages at an easier time than a year ago. >> i think you bring up a good point. if you do have the cash to invest this may be an interesting way to go about it. let's talk about the president's mortgage relief program for a second. i know that's a trouble spot as well for a lot of homeowners at the moment. what do you make for the plan and do you thing it will be successful? >> it's two fold. the first part i like because it holds banks responsibility. now it's only $25 million and we're 700 billion -- i'm sorry, $25 billion and we're $700

billion under water. it is not going to scratch the surface. it's great for the one or two people it's going help but it's not going to scratch the surface. the part i like is the banks are going to take the responsibility and it's off the should irs of the tax pair. if we can enlarge that i believe principal reduction will create jobs and it will put money back in the economy but it has to be on the shoulders of the banks, not the taxpayers. we can't afford do that again. >> tanya, what's happening with the rental side? if this is such a great investment, what's hemmed on that side? >> so that's exactly what's going on. we're seeing cap rates at 12%. 12% cap rates we haven't seen in a long time. this is an absolute amazing time to invest in real estate, make long-term -- really long-term holds and really make the appreciation play in the end. >> okay. we're going to have to leave it there. thank you so much, tanya, on

that discussion of marketings. tanya marchiol of team investments and also jason raznick. we're going to talk more taxes as the obama administration plans to discuss the details on pressure to raise the u.s. companies. [ male announcer ] the draw of the past is a powerful thing. but we couldn't simply repeat history. we had to create it. introducing the 2013 lexus gs, with leading-edge safety technology, like available blind spot monitor... [ tires screech ] ...night view... and heads-up display. [ engine revving ] the all-new 2013 lexus gs. there's no going back.

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[ male announcer ] how could a luminous protein in jellyfish, impact life expectancy in the u.s., real estate in hong kong, and the optics industry in germany? at t. rowe price, we understand the connections of a complex, global economy. it's just one reason over 75% of our mutual funds beat their 10-year lipper average. t. rowe price. invest with confidence. request a prospectus or summary prospectus with investment information, risks, fees and expenses to read and consider carefully before investing. good morning and welcome back to the show. the obama administration will spell out details today of plan to cut a top u.s. corporation tax rate from 35% to 28% and a lower effective rate of 25% for manufacturers. in return companies would have to give up loopholes and subsidies and treasury secretary tim geithner will discuss the

plan, which was broadly outlined the the plt's state of the union address. reports are saying it will also set a minimum tax on overseas earnings. it requires action in an election year. in a programming note steve liesman has an exclusive interview with tim geithner on friday during "squawk box." be sure to tune in for that. we have with us jason raznick and still with us, sir john giev. do you thing what the president is doing a little too late here? >> i would never think it's bad to cut taxes. you need to bring some of that business back. it's a little too late. it should have been done two, three years ago. cutting korpts tax rate allows us to higher more people and to

have -- you know a step lags of high taxes is not a way to grow the economy. what we have to do is lay off people and we can't hire. it is too late. it scares me because it's election year and who's going to push it forward. >> that's the unp. a, how are you going to push it forward, and, b, is it a card to throw on the table to get people back into the obama camp in case he's lost any traction? >> who's going to disagree with lowering the corporate tax rate? i wish it would play out because it would help us. we're a start-up and we want to invest in new jobs and employment, so we want the lower tax rates but this is the stuff that should have happened 24 months ago, not at this point. >> jason, would you be happy for all the loopholes to be closed. >> no one ever will agree on the how, you know. >> yeah. look. yeah, of course. loopholes, we need to cut out loopholes so everyone has a fair

shot eight. loopholes are only achieved by companies with huge, huge budgets to figure out loopholes. i would say trimming those but lowering the tax rate is going to resolve it. new start-up, innovations. the bigger the employees are those that start with under five employees. we were five eight months ago. we have 28 now. they have jobs. loopholes hurt us because we don't golg after those. yeah, thing cleaning that out, lowering the tax rate ultimately is going to impact the economy over the next 24, 36 months the most. >> john, if you're a policy maker and you say, look, thank always talk a good game, i would want to know in reality how easy it is to effect any kind of policy that really makes a difference that level of the economy. >> it's very difficult. there are measures to encourage

savings, efficiency in government and loopholes to close tax. they're there every year but we always seem to have bigger problems on all fronts at the end of it. thing in britain we will see some measurements, insurance reductions in this budget and maybe something finally on the so-called credit easing, trying to get some more loans to some more firms. but they're not game-changers. >> yeah. what about with the u.s. election coming up? no policy's going to react to them until we get an election out of the way. when you view sort of what's being floated, what's the key for the u.s. economy and policy making? >> well, i'm -- i don't think we're going see any great initiatives in the u.s. or this year. i mean before the american election we'll see bags of ideas but congress will probably prevent any of them seeing the light of day, and we'll work forward a sort of classy december fix around the tax

reductions should we run out post election. but lots of ideas, absolutely, because they're running production. >> all right. let's hold it there for a second and see what else is on the agenda in terms of wall street today. dollar tree is reporting results as well as mgm, tjx, and toll brothers. we'll also hear from hewlett-packard, express scripts, herts, and limited brands. we talk about high expectations for t.j. maxx out. >> you like to see it continue. home depot. you want to see this. if we can see that trend go, it's really a positive to the consumer. i was actually at a clothing store yesterday, the tie store, and the guy said, you know, he's seen demand in the lasts two

months pick up suck stan chally. these are a positive sign for the consumer and the stock market. >> was that high end or low end? >> that was middle ground. >> middle ground. >> it was middle ground but he carried it all. i was asking basically for the show. he said, yeah, he's seen a 2 x, 3 x in the last 60 days which is impressive to me. >> jason, do you think we're getting -- dow you think investors got ahead of themselves a little bit here when you look at stock price numbers? >> yeah. i mean the stocks have come a long a little bit with the retail stocks but we did have a big fallout about six months ago. i don't know if they got ahead of themselves. numbers are stronger. retailers have gotten smarter. they've trimmed inventory, trimmed products that consumers want. when you go to macy's, you saw a whole different product mixture. i don't know if they're getting ahead of themselves. i think they're going to get behind. you want to get in before you

see these huge runs. these are strong american brand that are going to continue to run. they're not going away. >> i guess a final word with you here. consumers have got to be under the caution knife, as sometimes deleveraging continuing. >> yeah. there are two things. one is the lack of confidence, the sense that we're not out of this. maybe now is not the time to spend. but the second thing is the squeeze on real living standards from high inflation and very low wage rises. over this year we're expecting to see that ease a bit because inflation's going to come right dow unless there's a war in iran or something. so we -- we should see a bit less of a squeeze on household incomes. and so by the end of the year, i'm expecting to see them be a little bit better. >> john, good to have you on today. john giev, former governor of the bank of engrant.

jackie, and i'm ross. "squawk box" kicks off. we hope you have a profitable day. bye for now.

the dow 13,000, the dow hit that for the first time since may of 2008. they couldn't hold that level, closing a bit short. watching, president obama expecting to introduce a taxover haul and crude oil prices pulling back a bit from a nine-month high but geopolitical concerns remaining high. it is wednesday, february 22, 2012, and "squawk box" continues right now.