brought to you live from london, singapore, and around the world, this is "worldwide exchange." welcome to wo"worldwide exchange." the headlines around the globe, china's foreign minister says beijing will continue to invest in the euro economy and believes europe has what it takes to solve its debt problems. the cost of insuring greek debt hits a high over the bond swap and private creditors. the iif has warned the fallout would cost over 1 trillion euros. in the u.s. it's super

tuesday as the republican presidential candidates fight for every vote in what could be a make or break day for the campaigns. and top of the stoxx 600 in europe, scaling down the plan to shed assets for rwe. well, asian markets are looking like this for a tuesday, mostly lower. a couple of things weighing on sentiment. concerns about growth in china, concerns about growth in europe. not to mention tensions over iran and how that's impacting oil prices. that's culminating to investors doing some profit taking here in the region. nikkei 225 is up 0.6%. today china-related shares extending losses because of concerns about growth over in china. the topix up 0.7%. the kospi down 0.8%. in india the sensex down 0.4%.

elsewhere rates on hold today but kept its easing weighing on equities in australia, also not to mention down 1.4% new zealand 50 one of the few bright spots up 0.4%. the hang seng is the biggest loser today, down 2.1% today. we have, of course, chinese financials in hong kong getting dragged down because of fund-raising fears from chinese financials, and that seems to be weighing on sentiment. a stake in aia listed in hong kong. that seems to be the big story there. the shanghai composite down 1.4%. once again concerns about china and growth there not to mention key cpi data later in the week. that's keeping investors on the sidelines. ross, how is the heat map looking? i hope it's better than mine. >> not really. we're one hour into the trading day. more than 9-1 decliners outpacing advancers. this is where we were this time yesterday, down on the session

low. the ftse 100 off half a percent. the cac down 0.7. ftse mib down 0.7. we did finish lower yesterday although we were up from the levels of this time yesterday. helped late in the session by that nonmanufacturing data out of the united states. it will be about growth. as far as the bond markets are concerned today you see the 1.8 marks, yields on ten-year btp is where we were this time yesterday. gilt yield slightly higher. treasury yields today as we go to super tuesday just below that key 2% mark. we talked about the rba. certainly we've seen more pressure on commodity currencies. euro up against the aussie dollar. aussie dollar is down to 1.0617. that falling in commodity currency we suffered more in the last week or so has just helped

the yen a bit. it's also tried to help out the euro against the dollar somewhat. euro/dollar steady. we keep our eyes on the oil prices. we have a discussion coming up off those negotiations between obama and netanyahu. brent below the 124 level. nymex back over 106, nearly to 107, christine. ross, the big story, of course, watching what's happening in china. we have top ministers, advisers there speaking positively will europe on the second day of beijing's annual parliamentary session. to tell us more details, tracey chang has are more. break it down for us. that's right, christine. on the second day of china's annual two-week-long national people's congress, the foreign minister reiterated confidence in their ability to overcome the

current crisis. he also addressed the thorny h issues of iran on its nuclear ambitions. >> translator: we oppose any of the middle east countries including iran to develop nuclear weapons. meanwhile, we also believe that all countries have the right to peacefully use nuclear energy while fulfilling the obligations. >> the foreign minister also gave a somewhat -- gave pointers on relations on the south china sea issue noting the u.s. can play a constructive role in the region. meanwhile, the finance mince it ter says china will work on improving the tax system and lowering structural taxes while keeping fiscal policies proactively active in 2012. back to you, christine. >> thank you very much for that. joining us to talk everything china as well as our guest host for the entire, head of asia

pacific trading. good to have you with us. in hong kong you listen to all these details, what's the first thing that comes to your mind? >> it feels like the market is somewhat overreacting to the news coming out from the npc. yesterday lowered their growth target but every year for the past eight years they've come out and beaten their growth target. it is to the local governments they have to improve the quality of goet that they're going to be generating. it does seem like china is still on track to attract a growth rate between 8% and 8.5%. it seems investors are looking for an excuse to take a profit and this is just being used as one of the reasons. >> what's being seen as positive, of course, when we hear comments about china speaking positively about europe, saying they will

continue to invest in europe. at the same time they say they're not going to invest all their forex reserves in treasuries. what kind of signal is that sending out? >> i think that the chinese governments are going to be very careful about exactly where they're going to be putting their money. they've obviously asked the europeans to take steps to control budget deficits and various other things. some of those other things have is already started to happen. and the chinese, especially after ltro, seeming to be investing again in the eurozone. i don't think there's anything too significant about the fact that they haven't been buying as many treasuries as before. i think these are general asset trades they are doing and when you have italian ten-year bond yields at 5% backed by some sort

of ecb funding and you have u.s. treasuries at 2% then they might see where it is. >> whether china is going to keep to its trading ban, whether they're going to widen it, to what extent. when you hear they will rebalance the economy, what exactly does that mean for foreign forex strategy? >> i think there is a move towards strengthening the renminbi but this has been going on for a long time. i don't think china is going to do anything dramatic or something that is going to take people dramatically by surprise. but it will be a continued process of appreciation of the renminbi and, meanwhile, what they will be doing is trying to stimulate domestic demand. this has been a long stated policy for them and they will just continue exactly down this

path. i don't really think there's anything dramatically new that they're going to embark on in the near future. >> what do we need to see for the rebalancing to occur in a significant way this year over in china? >> i think it's obviously the domestic consumer story is what they're going to be looking at. obviously there's going to be a lot of weight inflation pressure in china this year and the appreciation of the currency is not going to help the manufacturers. the answer to that is to make more things for the domestic market and the improvement of wages should improve that to happen. all the time chinese policymakers will be keeping one eye on the inflationary outlook as well. so far it doesn't seem like there's anything too dramatic be on the inflation front either.

the inflation figures for friday is likely to see a big fall. the market is expecting a print of 3% to 4% that will take chinese inflation below the 4% target set by the chinese government for the first time since september of 2010. so for china everything is pretty steady at the moment and provided that there aren't any external shocks it seems like they will just be slowly easing policy, continued reserve ratio cuts, and then eventually maybe rate cuts further down the line. and, again, provided there aren't any external shocks to derail that picture. let's bring you up to speed on what's going on in greece. we have 1 trillion dollars in euros according to the institute of national finance which led the negotiations with the greek government on behalf of private

creditors. reuters cited documents compiled by the group which says there are some very important and damaging ramifications that would result from a disorderly greek default. it is hard to see how the liabilities would not exceed 1 trillion euros. this is the greek finance min minister's warning not to hold out from participating in the debt swap. v ven he says we're ready to activate the collective action clauses if needed. the iif named some members for taking up the offer. bnp, commerzbank, along with a number of other banks. i suppose the key thing here is as we wait to see what the take-up is, those banks that were announced were, of course, part of the negotiating team anyway. so one would expect them to take that up. when you look at still this story about greece, are you concerned at all or not? is it dealt with?

>> it's obviously a concern because the market seems to be concerned about it, but i think one of the things about the european situation, obviously i'm not in europe so i'm not an expert on europe, is that you never get into a situation that you don't normally know the outcome of. that's a very good rule for dealing with politics. i think the ecb and the greek government must know what the likely outcome is going to be but still the markets are still a little bit nervous about this. for the first half of this week it is a fairly light macro calendar we have. so there's plenty of room to just sit around and get very jittery about a range of potential threats including greece, including the oil prices, including other things as well. >> you say there's no

inflationary pressures in asia. this is an interesting point. oil is at 124 and mainly up on a lot of liquidity and political risk but we have a weak eurozone economy, not the strongest u.s. we've got your stimulus being put in in asia. look where oil is. if it stays at these levels, how damaging does it become. >> my view is that it's not just the level of oil but the path that it takes to get there. if you get a sudden spike up, it makes it a lot more damaging to the economy. but one thing we have to remember is that oil -- i was just looking at brent crude prices before i left the office and they were actually something like 2.5% higher than where we are right now in april of last year. so the actual inflationary impact at the moment doesn't seem to be so significant, at least not from oil, and if you

look at the oil futures contracts out to december 2014, you tilely find that although spot oil is quite high, there is for oil futures are actually lower than where we are right now. now, of course, the higher the oil price goes, the more uncomfortable it becomes for the economy. but at this moment, it doesn't seem like it's going to result in a dramatic growth shot. we were here before in the first and second quarter of 2011 and the economy was impacted by it but it wasn't a dramatic cut. now of course we have to watch very closely what goes on in the middle east and that will obviously remain a concern and i'm sure investors are already positioning to take advantage of that. but at the moment it appears still to be a tail risk rather

than the core picture. >> okay, mohammed, stick around. still to come on 0 the program, we've seen commodities weaken for the second day in a row after australia left the door open, kept rates on hold for a second straight month. where are rates going to go and when?

european stocks are down but outperformers rw shares are up for the seven month high. they announced they're selling $7 billion worth of assets, $4 billion less than planned. patricia has more on the company and its profits and outlook. patricia? >> reporter: yes. absolutely. the numbers were below expectations. however, they're cutting the disposable plan to $7 billion from $11 billion previously, saving 1 billion euros. all in all the market is definitely happy with the outlook. 2012 and '13 is supposed to stay stable despite the diluted effect of upcoming disposableses and that was taken as a positive. of course it was a total change in their strategy because of the nuclear energy decided on a political level in germany. that really cost the company last year about 1.3 billion euros. we knew the numbers would be

bad. we knew that there had to be a huge impact on the numbers and also going forward, of course, investments needed to be looked at over and over again. but interesting to see what the ceo said just a couple of minutes ago in terms of the asset sales, what are they going to sell, what they're not going to sell. they are looking at assets that have huge development costs, so a little bit less profitable so that means that the upstream and the downstream of the oil gas unit is something that is not up for sale, and then as a strategy away from nuclear they are going to go more and more into the oil and gas production business, trying to double that over the next couple of years, ross. >> okay. thanks for that. meanwhile, in the auto sector, pegeot. stephane has more from paris. hi, stephane. >> reporter: the french carmaker peugeot 1 billion euros with 42% on yesterday's closing price

67 6789. the new partner agreed to buy 31% of the new shares. for gm the deal will be 304 million euros for a 7% stake in peu peugeot. it is negative given the significant discount but we are far, of course, from the 42% discount. the stock now is down on the french market, 6.5%. ross, we had late yesterday indications of the partnership between peugeot and at least by 2016 two cars. general motors indicated the partnership was set up for ten years but could end earlier if one of its competitors would buy at least a 10% or if the peugeot would lower the stake below 15%. two weeks ago gm and peugeot said they were targeting $2

billion in annual cost savings, but it will take some time, at least five years to reach this target. with that, ross, i send it back to you. >> okay, stephane. thanks for that. to the 82nd annual motor show, cnbc has been provided a mixed outlook. >> the reason we left our industry forecast such a wide range, we said between 14 million and 15 million before we got into 2012 and what's happened is january was around 14. haven't seen the final february numbers but they look around 13.5. so clearly operating it at the lower end of that forecast. >> these are excellent numbers and they go back to our strong brand, our strong product, and to a very motivated sales organization. on that basis we are very confident that we will continue to grow. >> we want to stay in the very exclusively. we are not intending to go into

a five digit number and our customers love it when rolls-royce is rare and you don't want to see a rolls-royce at every single street corner. >> within our overall strategy that we want to uplift the brand, luxury cars, premium, not only in china, also in our home markets here in europe and in the united states as well. >> we are very successful in china and our friends do very with well in china. so while our chinese customers convertible especially in the sector offer a new opportunity and, yes, maybe take and be accepted a little bit longer but it's a convincing concept. we're quite sure it will make its way. well, australia sevcentral k has kept interest rates on hold for the second consecutive month. the treasurer reflects strong

fundamentals in the face of, quote, continued global uncertainty. the aussie dollar has slipped to a two-week low against the greenback after the rba hinted there may be room for rate cuts. joining us now to talk everything australia, forex strategist asia pacific at barclays capital. do you think they did the right thing but keeping rates on hold? are they keeping the ammunition? >> what we saw this morning as many of us expected including barclays capital the market was positioned for the rba to be on 0 hold and it was the decision they delivered. i think what we saw this morning was the central bank that's in a comfortable space. they see inflation somewhere around the midpoint of the 2% to 3% target band and they say see growth around trend as well. i don't think there was a need for them to move at this juncture. the global backdrop was improving. they will continue to monitor the australian economy. >> what needs to happen in the

australian economy for them to cut rates? what's the possibility? what are the chances is this. >> i think the one thing we saw in the statement today which i had mentioned before, the continued softness in the household sector and in retail spending as well. so to that effect we still believe there's room for the rba and so does the market. we have 50 basis points of further easing expected from them over q2 of this year. >> with the aussie dollar falling and with growth concerns over in china, a big question mark. is this going to cap gains for the aussie? are you still bullish? >> i think it was interesting what happened today. the decision came at a time where the u.s. dollar was broadly strengthening as well and perhaps some people positioned for a more upbeat statement. looking further if we don't think gains are kept and we see further gains over the next 12 months. >> what sort of gains? what sort of target? >> we are forecasting 12 months' time and probably three reasons we think the aussie dollar can get there. the first is we think commodity

prices will be well supported. commodity analysts expect middle prices to increase 20%. the growth for australia is looking like it will be reasonably robust. asia, which takes around 50% of australia's exports, the growth there in our opinion looks like it will be okay. particularly in china we're forecasting more than 8% growth this year. and, finally, australia, even if we do see further easing from the rba will continue to maintain its yield advantage over other developed economies particularly g-10 economies. >> ross? jump on in. >> two days in a row currencies weaker in the chinese growth rate so that's briefly supported, the yen. will that continue or do you think the yen down 7% against the dollar since january, what happens to that currency? >> yeah, we think some of the yen weakness that we've seen already does have a little further to run. however, i think the reasons for that weakness are well known by

the market. the problems around the trade surplus with the rest of the world. there are issues around the risk of a southern rating downgrade for japan as well. so i think these are well-known factors, dollar yen to reach 83 in 12 months' time. so perhaps some room for further weakness in the new year. >> the boj and contrast that to the renminbi. the boj pumping a lot of money, liquidity into the system. is the rb still ahead of the cut? >> i think they are and that's what we've seen from them today. a lot of the things they mention in their statement were merely reiterations of what we heard in february. i take that as an indication they're comfortable where they are. they have policy where they want it and they're ready to be able to respond to any deterioration that they might be in the australian economy. >> thank you very much for being with us today. that was pepper out of asia

pacific barclays capital. and coming up next on "worldwide exchange," well, reforms, of course. we're talking in asia's third largest economy, india may have to wait. we'll discuss why after the bre break. plus, there are plenty of profits on the table in europe in equities. this is according to our next guest. we'll find out why he thinks there's head room left for valuations. wanna know the difference between a trader and an elite trader?

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this is "worldwide exchange." the headlines from around the globe, the cost of insuring greek debt. the fallout from the disorderly default is said to cost over 1 trillion euros. china's foreign minister says beijing will continue to invest in the europe economy and says they have what it takes to solve the debt problems. >> to the top of the stoxx 600, scaling down the plan to shed assets. and in the u.s. it's super tuesday. republican candidates fight for every vote in what could be a make or break day for the campaigns. we're into the second half hour of worldwide exchange. the european stocks down to a

low. the stoxx 600 weighted to the down side, well over 9-1 decliners outpace decliners at the moment. ftse 100 down 40 points off 1.5% for the xetra dax. keep bund prices up and yields down. bunds hitting 1.79%. futures this week, hit fresh record highs. italian btps below the 5% mark. gilt down 2.16%. ten year treasuries 1.97. we saw stronger nonmanufacturing numbers yesterday which did help out after the session. as far as currency markets are concerned, we were just talking about the rba keeping rates on hold, an easing buy. that weakened currencies.

go down to about 1.0604. the yen stronger as a result. dollar down to 81.08. christine? ross, here in asia it's mostly a down session. a lot of concerns about growth in china. the growth in the eurozone and how tensions in eiran will impat oil prices. that's weighing on sentiment across the region prompting investors to take some profit from the table. nikkei 225 is up. the topix is down 0.7%. china related shares extending losses for the second day in a row because of what's happening. in china the kospi is down 0.8%. the sensex up 1.2%. still trading in this particular market. ross mentioned the rba kept rates on hold but signaled easing buy that weakened the aussie dollar. the australian market down, also because we had wider than expected deficit thatghed on sentiment as well. new zealand one of the few

markets to trade. and in greater china hang seng and china we have a chinese financials dragging these two particular markets lower today because of fund-raising concerns. the hang seng one of the big losers. the shanghai composite down 1.4%. of course they're watching for clues as to the ongoing comments coming out from the npc meeting. ross? >> our next guest says the equity rally has substance and there is profit to be taken in european stocks. the head of global investment and mohammed is with us. we sort of hit big rallies at the beginning of the year and now we've sort of decided to move sideways. so what happens now? >> i guess we have a consolidation period. the key thing is i don't think anybody can confidently be able to call the next few trading days for that matter. we have the psi in it greece to see finalized. consolidation would be our guest

guess but the key point we're making for our clients people look at the rally and not just this year but since october stocks are up by a fifth. people think this is just fluff and without substance. they have actually been some fairly positive developments and a large chunk of this rally so as we go through this consolidation phase at the moment our advice to clients is to view this as an opportunity to move into some of these markets on a long-term basis rather than to run away from them. >> okay. so buy on weakness. what is it you're supposed to be buying? >> a corporate sector on both sides of the atlantic whose valuations in terms of multiples relative to the profitability and balance sheets you are looking at look to us to be still on the low side. and you are also buying into a news flow which is probably a bit less grim than people were fearing. remember, it's only a few months back that people were taking it for granted almost that the u.s. economy would be experiencing a double dip by now and that the european banking system would be on its knees.

the neither of those things are coming to pass. >> do you favor the u.s.? i mean, people favor the u.s. over europe up to now. would you go along with that or not? >> well, so far and for the time being we still have the u.s. ahead by a nose. it's getting a lot closer because instinctively if people feel they've overdone the bad news, we muddle through again and it feels as if the greek trauma is slowly being ring fenced, if people feel they've overdone the bad news, they're going to find the large liquid markets down by most and of course that includes the eurozone. so the fact the eurozone's economic outlook is not tremendously bright and isn't anywhere near as bright as could be the case in the u.s., it could actually be the european markets that start to nose ahead. >> kevin, high, this is christine in europe. the npc meeting with comments from china saying they still support europe. they're willing to invest more in europe and they say they

should not keep oil forex reserves. what do you make of those comments? are they trying to diversify away from the u.s.? >> well, of course they are. a very slow, long-term gradual basis definitely. i certainly wouldn't seize on those comments and use those as a reason for being bullish. europe has to muddle through the crisis largely on its own two feet but i do agree that on the very long-term view china is diversifying its foreign exchange assets. >> hello, kevin. it's mohammed from hong kong. given they have run up so much already, how much further do you think that they can go? and within that picture do you think that is now the time to rotate from some of the markets hike the u.s. which are now at fresh highs into more growth markets like asia which are still well below the level that they were in july of 2011? >> that's a very good question.

in terms of how much more head room there is, it's tremendously more difficult to say. many of the valuations we used to use years back based on things like dividend discount methods, those sorts of things are not going to come back anytime soon. and the point being that if you were to use any sort of stock market valuation that incorporates interest interest rates, stocks still have materially higher. just looking at straightforward pes on their own, we guess that of the order of 15% or thereabouts over the next year or two is the broad order of magnitude of the upside that would take the developed market back towards some sort of trend. right at the outset we don't think market are going up in a straight line. we're not at all surprised to see them consolidating. that's the head room we have in mind. i think that's a great point but i'm not sure it's going to be the straightforward rotation you have in mind. i talked early on about how

europe has the potential and i do think it's going to be something in the developed world that's going to take over leadership. a great long-term story but in this particular investment cycle we've talked a lot about that and i'm braced for a little bit of a rerun in the early 1990s when it was the developed world in the growth stocks in the developed world that actually took over leadership away from the emerging market. it doesn't mean the emerging market isn't a great long-term story. it is. about but it may not be as fresh as it was. >> kevin, thank you very much for your thoughts today. always great talking to you. kevin gardiner at barclays wealth. well, india's congress appears to be facing defeat. of course in a country's state elections. to tell us more we have the details live from mumbai. >> reporter: thanks for that.

it's a big, big day for the indian markets. gandy's election results have come out in terms of the election results what we have learned or what it seemed like is that the congress is going to be pretty much in a morose mood after these results. why so? the one security where the congress has managed to maintain with a majority at this point in time as opposed to anything going up. for example, we have in terms of coming into power. the big state we've been talking about and remember the party has come into power as opposed to what expectations of the congress alliance. now we learn that they have enough of a majority to go into the state and form a government on their own. that means that the center might see less strength in terms of

the congress alliance and policy reform which might not be as much as expected. remember that the alliance would mean the head of the congress might not -- might still have that amount of power and remember that he has been quite difficult for us in order to push policy reforms through. the markets read all this and is currently down to the low point. all in all it seems like it's not a good day for the congress. repercussions could be felt into the 2014 national elections as well. back to you. >> ekta, thank you very much for that. well, japan's struggles to figure out what to do with 25 million tons of debris left behind by the earthquake and tsunami. this report on whether japan will be able to finish the job

by the march 2014 deadline. >> reporter: reminders of life before the disaster are still everywhere. the village of industry, homes of the dead, all piled on top of each other for months now. an eight-year revival plan worth $100 billion yen is being decided here in a town hall leaking with sleet. it's a far cry from an old bestseller that bears its name. but, like the novel, they dream of being self-sufficient. he spent the first few months after the disaster salvaging wood from broken homes and giving it to shelters for firewood. he has since turned to the cedar forests. the village's fishermen own most of it. logging would provide a secondary income when the seas are high. he envisions paying them in the

new fix ed currency that can be used only in town. >> translator: there's no point if the money flows out. it needs to circulate here. my dream is to create our own currency system. >> reporter: but the mayor has other immediate plans. he pictures bridges, roads, and a 14 1/2 meter high sea wall in the bay. >> translator: it would be better to give the money directly to the locals. some may leave but some may want to start up new businesses. as it stands the approach is we won't give you money but we'll give you a lot of buildings for free. >> reporter: what's more, shops that have reopened say it's hard to find employees. they say many are waiting for an anticipated surge in construction jobs that will pay more. others are choosing to stick to unemployment benefits, the first of which will soon expire.

many of these towns were trapped even before the disaster. infrastructure projects had dried up. the population was aging and industries were in demise. for the next next generation, a repeat of that cycle might be detrimental. well, reconstruction efforts aside, japan is also trying to find ways to secure stable energy supplies. makiko utsuda has the story for us. utsuda san. >> reporter: hi, christine. new power used to supply 30% of the energy consumes but since the fukushima accident, nearly all facilities have been shut down. economists say a power crunch could cut industrial output by as much as 2.5% in summer while demand peaks. so finding alternative power has become an urgent task. last year businesses were

ordered to cut back on power to avoid a massive blackout, but so far the trade minister says he wants to avoid such an edict this year. liquefied natural gas may be one answer. imports have soared nearly 20% from the previous year contribute to go japan's first annual trade deficit in 31 years. and power costs are rising. tokyo electric power says it will hike electricity rates 17% for businesses leading some companies to generate their own power. one toyota group factory in northeastern japan has set up a new power generation system that covers about 90% of the factory's needs. toyota is also considering buying a large solar plant. steal, food and chemical makers are also looking to generate their own power. and that's all from gentlemjapa year on. back to you, christine. >> thank you very much for that. despite all those alte alternatives we talked about,

japan still has no choice but to import more crude to make up for nuclear energy shortfall. it's also cooperating with washington on a deal to trim iranian crude imports. joining us now is the vp energy and power systems asia pacific at frost and sullivan. good to have you with us. how quickly is japan making its transition away from nuclear power? bear in mind we are approaching summer. the power demand is going to surge. >> i think what's happened only three or four function at this point. they had power surges last summer. i don't think it will go away this summer. that will take a lot of time. >> of course they're importing crude and that seems to be going up at a time like this. iran is an issue. they agreed to stop imports. how are orders being factored into the country into the a good scenario? >> they're probably going to import more coal and natural gas like we saw in the report. so for 2012 a 7% increase as

imports compare to 2011 and 2011 we're going to see a huge increase in natural gas and this will blow the fuel bill. >> who will end up paying for that bill? >> i think industry. >> ross? >> yeah, that's going to have a big impact on gdp, isn't it, ravi is this it's an interesting dichotomy. on the one hand they want a weaker yen but on the other side, presumably, a stronger yen helps reduce their energy bill if they're going to import everything. >> i think what we're seeing is if there's going to be a scenario for nuclear, that might potenti potentially have a huge impact on the gdp and it could probably grow by about 0.1%. that is head of new capacity. gdp by 1.9% so a huge swing. >> hello, ravi. mohammed here from hong kong. now isn't all of this what we're

hearing a 17% rise in higher fuel prices, oil prices, a weaker yen, isn't that all playing into the hands of the bank of gentlemjapan with their inflation target? is it not necessarily such a bad thing for japan to have to pay for higher costs if it means that they can get some of that money kick started and circulating around their economy? >> i think they are able to keep up. >> ravi, it's interesting because we're seeing a shift away to alternive energy, green energy. how quickly can japan make the transition into green alternative energy? will it take several years? how soon can it become a real itty? >> look iing at the scale of co and gas. a lot of land in france and also

these to be transported back to the main grid and japan -- not that easy for scaling it up the way we are looking at. japan has one person being supplied. if if we exclude hydro, so to scale up to 20, 30 person, it's going to be a huge up. >> sounds like it's going to be a challenging road ahead for japan. ravi, good to talk to you, vp from energy and power systems at frost. mohammed apabhai will stay on with us for more. the u.s. senate has pass add bill preserving the commerce department's ability to impose tariffs from china and other nonmarket economies in december. and an appeals court struck it down impacting duties on dozens of goods from china and vietnam worth billions of dollars in trade. the house is expected to take up the measures today. >> we'll follow that.

still to come on the program, do you dunk yours or do you twist and separate? yes, we're talking about oreos. the iconic american cookie turns 100.

some news out from the eu's olli rehn, says the euro area is in a mild recession although there are signs of improvement. the risk of the credit crunch because of the long-term liquidity offer of the ecb but he does support combining the remaining resources to make a sturdy european -- something they would like to see. euro dollar is on the session low 1.3169. this as uk authorities have drastic changes to libor, the interbank offered rate. the ft suggested they have discussed possible changes along with the introduction of rules governing its oversight. it has been prompted by recent allegations of manipulation by traders who subsequently have been fined or suspended. christine? let's get final thoughts from our guest host mohammed

apabhai. before you go, leave us with some of your investment strategies. what do we look out for and what do we avoid? >> well, i think the thing is this. one contributed very significantly to the rally that we saw from the start of the year. l it tro 2 of 529 billion euros seems to have been such a dance for the time being. what we've seen is program trading flows that were supposed to come into the region into asia going instead into placement instead. we're facing a bit of an indigestion here but remain constructive on the market, a lot of the easy money has been made but it's too early to take the money off the table yet and premature to turn bearish on the market at least until probably the middle of april. we think investors are very

underweight and they're probably likely to come in in the next two or three weeks to try to cover those underweight positions and, finally, what i would say is the option markets are continuing to support the equity prices. the street is short so what that means is every single dip is being brought into very difficult into this market at the moment. we still think it's a buy on dip market. we think the marketses have almost completely normalized. they were 95% normalized and this is the time when asia is going to probably ib crease the pace of our performance against the other developed markets. >> and speaking of outperformance, someone said that some of the ltro money, the liquidity money will find its way into the resources, the commodity market. is this a sector you are bullish on? >> yes. i think we are fairly constructive on the cyclical

second is tors. things which are interest rate sensitive so some of the financi financials in markets like korea. we are positive on the resources as well as on the energy sector. and then for fun we throw in things like sensitive to ipad 3 and its launch on wednesday and also throw in some names as well. so quite a range of things that are still looking quite interesting out there in the markets. a lot of good names that are still trading at fairly decent valuation levels and liquidity remains abundant. >> mohammed, thank you very much for your time. good having you on as our guest host. mohammed apabhai live from hong kong. ross, why do i suddenly feel like i need a cookie? >> maybe something to do with the fact that jackie is here

from the u.s. and for the next hour, and we have a birthday to celebrate. >> that's right. it's a special day here in the states, ross, christine. good morning to you. we're saying happy birthday to oreos. the top selling cookie was created in new york city and was reportedly first sold to a grocery store in hoboken, new jersey, march 6, 1912. kraft says 25 billion oreos are eaten each year, that's about 70 million a day. and to celebrate a limited edition birthday cake oreo with sprinkles and a cream filling and an interesting fact, are guys. oreos initially didn't sell is well in china because people thought had he were too sweet so kraft crafted a new cookie for chinese tastes and it's the best-selling cookie in china. whatever kind of oreo you are eating, are you a dunker? are you a twister? what's your method? >> hmm, i don't know. that's a tricky one. that's a tricky one. i think i'm a twister, kind

of -- i like to separate the cream from the cookie. i'm a complicated eater. what about you, ross? >> i'm more of a custard cream man or british biscuits. particularly with english tea. >> i think the oreo, as for me, i like to jump into it and eat the cookie, just bite into it just the way it is. coming up on the show, we're going to break eu gdp data. a warning that a default could cause a trillion damage.

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good morning and welcome to the show. the headlines from around the globe this morning in the united states it's super tuesday. republican presidential candidates fight for every vote in what could be a make or break day for their xabs. in europe the cost of insuring greek debt hits a record high. bond swap with private kr creditors. the iif has warned that a default could cost over $1 trillion euros. and china's foreign minister says beijing will continue to invest in the euro economy and believes europe has what it

takes to solve its debt problems. and we have the second breakdown of gdp, unrevised for the fourth quarter. minus 3% on the quarter. up 0.7% on the year. the fourth quarter exports fell 0.4%. the first drop since the second quarter of 2009 p. and the entire 2011 growth revised down to 1.4% from 1.5%. in relation to this data the dollar has been coming off the session low at 1.3182. european stocks are down on the session low as well. the ftse mib, more than 1% losses across the board. how do the futures look right now, jackie? yeah, a down picture in terms of our futures here in the states, ross. we are seeing a little pressure

interest the markets in asia and some concern, of course, still lingering about the slowing growth in china potentially. if the markets were to open now, the dow down about 73 points. the nasdaq lower by 14 1/2 and the s&p 500 lower by 8.4 there. stocks finished in the red yesterday but off their worst levels of the day and concerns over greece and that slowing growth in china still fresh urich the markets despite the fact that we saw better than expected ism services number. >> yeah, let's pick up on that. the chief eurozone economist at bnp paribas and michael crofton, president and ceo of the philadelphia trust company. welcome. let's kick off with you first. we have the gdp number out but questioned, of course, more reacting to what the pmis were telling us particularly in spain and italy. is it your sense the eurozone as a whole will be sort of contracting for the first quarter of the year as well? >> i think that's pretty much a

done deal. if you look at the reliable indicators and what's happening in the economy then on the survey side the pmi losing ground just below 50. the indicator is not a bad guide either, consistent with the small falling gdp. the hard data has been quite disappointing. so a small fall looks a reasonable assumption. i think most people probably already have is that in their forecast. that's long discounted by markets. the issue is, can we get back to growth at some point and it's probably reasonable to have growth of some kind in the euro area but probably not very strong. so germany looks like it's going back to the period where the economy is expanding again. that was evident in the pmi yesterday. but elsewhere not just in the periphery, the growth head winds look pretty strong. so the best we can hope for is probably a modest increase in gdp after q1. >> what is that going to do for everyone's fiscal budget targets? >> well, it's going to do more

of the same. it will be harder and harder for the countries particularly in the periphery to deliver. we've seen the spanish government is backing away from its original target for 2012. i mean, we think that's sensible, to be honest, given that the economy is dealing with major problems in the housing market and the banking system. the scale of the fiscal adjustment required in one year is huge and it makes sense to ease back of it given the spanish public sector debt is not as high as it is in other countries but the general point is it's going to be very difficult for countries in the euro area to sustain any dynamic in domestic demand when they're squeezing on the fiscal side so hard. what you would hope is you would have monetary offset to that either through looser ecb policy or through the exchange rate. unfortunately, it looks as if we're going to get neither to any significant is degree and that means that the economies in the periphery will remain in very, very difficult circumstances for the foreseeable future. >> all right, michael. let's bring you in on this as well and get your take on the

numbers we're seeing out of europe, of course, and the potential revision down of gdp growth balanced by the ism numbers. you think the market is poised for a correction? >> i do. i think we'll see at least a 5% correction based on this and a lot of other factors. the domestic economy isn't in as good a shape as last year. many of the earnings estimates have been ratcheted down. we've had about a 25% move off the bottom, the mid-october bottom. and i think the market is tired. needs a rest. europe is in trouble. the trouble is sort of self-imposed. there's austerity. there's a lot of rebuilding going on out there. there's credit contractions. i read this morning in "the wall street journal" that there's about $500 billion in corporate debt coming up for renewal some time in the next 18 months in europe. that's going to be very, very difficult. so europe in a hole particularly with austerity measures on the ecb and the imf. >> and what about higher oil prices? geopolitical risk on the table now. if oil does surge more than is

expected at this point could we see even more of a correction and contraction? >> then contagion coming to this country. if we get oil prices any higher, $5 a gallon, that slows down lots and lots of growth in the united states and percolating along at a 2% annual rate, that could disappear very quickly if we get oil up to 5 buck as gallon. that's possible. i don't think it lasts for long but it's possible in the spring and early summer this year. >> we've already got records on petrol prices. so how are you fact orring that in? >> a pretty difficult environment for consumer spending is getting worse. you have a number of cross winds blowing at the same time, the global environment is more positive now than late last year. we had a stabilization in market conditions in the euro area, some sign of an improvement there. maybe the area that could

deliver positive surprises, you look at the trending claims. you look at the indications that we've seen in the composition of payrolls and things are beginning to improve a bit there. but i guess for markets it's a question of what's discounted and at the end of last week we were thinking quite a lot of good news being priced into the market in terms of equities and also sovereign debt market. it's not difficult to take and find some problems being that the oil price, political risks and so on. my own feeling is still that things are in a better state in terms of the global economic growth outlook for this year than they were late last year but it's going to be a hard grind to deliver any sustainable growth in domestic demand in the western world, in this environment. >> michael, this is christine. we keep talking about head winds. what about china. 7.5% growth this year. that's still pretty strong by global standards. to what extent still leverage on growth coming from china? >> well, china has never met its growth target. they've always beaten it.

i think the fear is maybe this time they'll meet the growth target. 7% is certainly a large number if you look at it this relative terms, but for china it's not a very large number and they're going to focus most of that on the domestic economy and china avoids some of the bubbles that we all have seen well advertised. i think it if china continues to move forward and it continues in their tradition of beating their growth numbers, the euro economy will be fine. however, if they hit that number, it could be a problem because that number is not large enough to sustain the types of growth that we're expecting here in the united states and that the eurozone is expecting from china. so it is problematic even though it is fairly high. >> let me ask you quickly, do you think that would be considered a hard landing for china? >> no. i think a hard landing would be if they miss that number on the down side and i do think that's possible. the chinese are like the americans. they play with the numbers. hard to know what they really are. >> fair enough. we'll leave it there for now. you'll stay with us and given us

more insight in the show. ken, thank you for your comments as well and for joining us this morning. and moving on, of course, yesterday turned out to be the busiest day on the corporate bond market. with at least 17 companies issuing debt to take advantage of low borrowing costs, at least nine firms sold high-grade bonds while another eight issued junk bonds. reports once all deals are priced up to $20 billion worth of bonds could be sold. ross? >> meanwhile, according to deal logic europe face as leverage buyout crisis that could be exacerbated by weakening economic outlook for lenders. in a report that was titled negotiating europe's lbo debt mount dealogic $550 billion worth of loans made to european countries which were acquired by leverage buyouts are due to mature over the next five years. this year $69 billion in leverage buyout loans are due for repayment. michael, the point is i just

wo wonder how people -- if you bought a company on a leverage buyout. bank that gave that you money originally is in no situation or has no desire to relend the money. the junk debt market isn't anywhere near that that it is in the united states. what kind of options? what will happen? >> it's going to have to get redone here or the chinese may step up and begin to participate in the market to a greater extent than they have. i think it will happen. it's just not going to happen in the way everyb would hope. i think the european refinancing of the lbo debt is most likely going to have to happen here in the u.s. and have some asian participation as well. >> the it terms are going to be worse. i imagine this will cut profits for private equity investors. >> i don't know. the terms will be dependent on interest rates and the fed and the ecb and all of the interest rate setting bodies have said we're going to have low interest rates for a long time. that's artificially low. i think that has problems further down the road but that's

not the point. the point is that they should be able to refinance these lbo loans at favorable rates, so i don't think it will have that much of an impact on profitability. i wouldn't want to be a buyer. >> michael, this is christine. it's interesting you mentioned what do the chinese want for that participation? do they want access to europe? >> absolutely. they are all about power. and so this gives them more leverage, more power, and it gives them, again, access to some assets they might not otherwise have an opportunity to buy. >> all right. thank you, michael. we'll leave it there. still to come, it could be a key day in the republican race to the general elections as 11 states go to the polls and the primaries. we call it super tuesday.

good morning. welcome back to the show. it's that time of the morning, time for the global markets report. let's start here state side and take a look at the u.s. futures and how we're poised for the open. looks like a down open at this point. if the markets were to open now the dow would be lower by 48.8. the nasdaq and the s&p 500 down by 10.3. we're seeing that decline steepen a little bit from earlier this morning. of course stocks finishing in

the red off their worst levels we did see concerns over what's going on in greece and concerns over slowing growth in china pressuring the markets but we did have those positive ism services numbers that brought us a little bit back. >> y we're down on the session is lows right now ahead of that u.s. open, jackie. the dow jones stoxx 600, decliners outpacing advancers by 9 1/2 to a half so less than 30 stocks right now out of 600 in positive territory. how that translates after some losses yesterday, the ftse 100 down a percent. the ftse mib down 1.5%. that is helping yields in bunds stay pretty low. 1.78%. bund futures heading back to the record lows of yesterday. ten-btps. ten year yields falling 197 along with gilt as well. euro/dollar slight ly lower as

you can see. 1.3156. we have seen the aussie dollar today after the rba kept rates on hold. the aussie dollar. weaker on the back of chinese growth forecast. dollar yen slightly weaker at 80.84. keim your eye on the oil prices and what's going on in thames of risk. we had this discussion yesterday, that higher oil prices, around 15% of the premium is down to liquidity. brent back below 1.23. nymex on this 106 point. we cap the asian day. here in asia investors mulling slower growth coming from china, coming from europe. of course tensions really run and the impact of higher oil prices weighs on sentiment across the region prompting some profit taking as a result. the nikkei 225 is up 0.6%. topix is down. china related shares once again extending losses. elsewhere the kospi down 0.8%. the sevnsex in india down 1.1%.

a sell-off there. australian market in focus. ross mentioned this. rates kept on hold, kept the easing. equities lower, 1.4%. also because we had a wider than expected current account deficit that weighed on sentiment in the australian market. one of the few markets to trade higher 0.4%. over in greater china the financials were clearly in foe can cuss. fund-raising concerns clearly a big worry in these particular markets driving some of the financial names lower, listed in hong kong as well as china. hang seng one of the big losers down 2.2%. the shanghai market down 1.5%. that's it for me today. i'll be back tomorrow with more news moving markets here in asia. all right, christine. thanks for that. have a great night to you. today here in the states it could be a pivotal moment in the republican race to find out who will take on president obama this fall in the general election. voters in 11 states go to the polls in what's known as super tuesday. some 424 delegates are at stake.

nearly 40% of the total needed to secure the gop nomination. newt gingrich could vault himself back into the race. he's leading in his home state of georgia which has the most delegates, but ohio is seen is as the biggest battleground. mitt romney has been gaping on rick santorum there. romney has been focusing his message heavily on the economy. >> i'll be able to point out virtually everything the president has done has made it harder to this economy to come back. obama care didn't create jobs. dodd frank hasn't created jobs. cap and trade hasn't created jobs. this president's policies have hurt the economy. they have not helped it. >> and a quick programming note, of course, cnbc will have full coverage of super tuesday starting at 8:00 p.m. eastern time this evening so make sure you tune in. still to come on "worldwide exchange," israel has warned that time is running out for diplomacy to prevent iran from developing a nuclear weapon. what an escalation in tensions would mean for the region. [ male announcer ] how can power consumption in china,

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only hertz gives you a carfirmation. hey. this is challenger. i'll be waiting for you in stall 5. it confirms your reservation and the location your car is in, the moment you land. it's just another way you'll be traveling at the speed of hertz. a t-bill auction in greece, sold 830 million of the t-bill, bid to cover. of course due to restructuring. this is the greek debt agency confirming that the march 8 deadline for investors to participate in the bond swap, in other words they have denied there have been any plans to

extend that deadline. the reality is it's so complex the actual deadline in reality would be by the end of the day, jackie. yeah. meantime here israeli prime minister benjamin netanyahu has told barack obama that no decision has yet been made on a potential attack on iran. the u.s. president said he wants more time to see how sanctions will impact the country's nuclear strategy. speaking at the pro-israel, he warned that time is running out for diplomacy to prevent iran from developing a nuclear weapon. >> israel has waited patiently are for the international community to resolve this issue. we've waited for diplomacy to work. we've waited for sanctions to work. none of us can afford to wait much longer. [ applause ] as prime minister of israel, i

will never let my people live in the shadow of annihilation. >> now iran says that it will allow the iaea to visit its military site according to an official statement. this comes after the agency said that it had serious concerns about possible military dimensions to tehran's atomic activities. and joining us now to talk more about it is david hartwell, north africa analyst and still with us is michael crofton as well. good morning to you, david, and thank you for joining us on the program. >> thank you. good morning. let's talk about the scenarios we could potentially see here. if we do see a strike on iran by israel it would have to be before election time. we're talking short term. how likely do you think it is we will see that? >> i personally think it's pretty unlikely. i think a lot of the statements we've heard out of netanyahu in the last few days, indeed israeli officials the last two or three months are building essentially on the same -- in a

way they betray a certain sense of unease about the actual capability to actually attack iran and inflict enough damage on the nuclear program to set the program back enough to make any attack worthwhile because any attack they undertake would be an extreme military. >> and so what happens if they wait? what happens if we don't see something in the short term, we go into the elections? as time passes, does the threat or potential of an attack become less and less? >> i think -- i don't think that's necessarily so. i think as time passes, i think the chances of attack, if anything, become more likely. if we assess the situation in terms of if we assume iran is using the sanctions, the sanctions window to continue to advance its nuclear activities, then if those advances are made, in theory, that would close the window, if you like, tighter for

certainly american military action. my own feeling is, actually, the israeli diplomacy is all targeted towards forcing the americans to take the action for them. i think they know they have real difficulties taking the action on their own and, therefore, their whole strategy and what netanyahu was trying to do this weekend in trying to force obama to issue effectively a guarantee of a reaction is designed to get the americans to do the israelis' job for them. >> if obama is re-elected, david, is that far less likely? >> i think you can certainly see the division between the obama administration's policy and the netanyahu government. i think there really is a desire on the part of the obama to give the sanctions time to work. they don't kick in until july. we have to wait until them and two or three months after that. that's the time frame. obama wants to give that time to work and that doesn't fit in with the israeli government

which is netanyahu is facing election himself in the next 18 months. there are election pressures on both sides here. >> what's more likely to happen, david? i know this is a very hard thing to predict so forgive the question. we'll give it a go. an attack before delays the iranian program or before that attack happens carrying out a nuclear test proving that they have the bomb? >> i think the iaea has yet to come up with any evidence that suggests iran is that close to producing a nuclear device. and the announcement even the most optimistic announcements out of iran would indicate that. so i think that's pretty unlikely. i think it would depend, i think, looking a little bit further into the future as if iran achieved some form of nuclear breakout and started enriching uranium to a higher percentage than the 20% it claims it can then that will clearly be certainly a red line

for the israelis whether that would be an alarm bell they would threaten more severe action. >> david, it's mike crofton. i'm going to take the opposite side of your bet there. i think the discussions yesterday were not about the united states coming in and doing israel's job for them. i think the discussions yesterday were about israel going in and doing what the united states would like to see happen in eiran. israel has the military intelligence than we do. i somewhat disagree with you. they have unbelievable military capabilities. they have done it before and the united states is not going to act unilaterally in that part of the world. they are bogged down quite a bit and the military is bogged down quite a bit. the bet is israel goes in and the united states says, oh, we're shocked there's gambling in casablanca type of thing. we're shocked they did this. i'm going to take the opposite bet. i think there will be action this year. i think it will be israel that leads the strike.

>> i disagree, sorry. i think -- >> that's okay. >> i think there are plenty of reasons to suggest that israel simply can't take the action that you are suggesting. and inflict the necessary damage that would be required. a lot of these facilities that israel would be required to strike, at least half a dozen we know, possibly a dozen and probably more that the israelis themselves know about and would like to hit. the israeli air force is by far and away the best in the region, yet israel has massive problems in terms of it still has huge problems in terms of refueling, getting through the iranian air defense system. there are major, major concerns about israel's ability. and i think what you are seeing is the amount of rhetoric that's being escalated by the israelis is an acknowledgement of that fact. there are serious doubts. i think you may be right. they may feel they have to take

some form of action which doesn't rule that out, but whether any action they do take would be able to inflict the necessary damage, i seriously would question. >> all right. thanks for that, david. we are going to have to leave it there. i know this is a hot topic. we could could go on much longer. we have to continue and take a break. david hartwell, senior middle east and north africa analyst joining us. and coming up on the show, u.s. markets are up about 25% since is october lows but our next guest says a small pullback now may be the best thing providing a good buying opportunity for long-term investors. we will get portfolio advice from him straight ahead.

good morning and welcome to the show. the headlines this morning in the united states it's super tuesday as the republican presidential candidates fight for every vote in what could be a make or break day for their campaigns. the cost of insuring greek debt, this as the iif washes the fallout could cost over 1 trillion euros. and gdp figures out of the eurozone, confirming a slump in the last three months of 2011. eu commissioner 0 olli rehn says he sees signs of a tentative recovery in the region.

nice to have you here on wo "worldwide exchange." if you are just tuning in, let's take a look at the u.s. futures and see how we're poised for trade on wall street. it does look like pressure from the markets overseas and it would be a down open if the markets were to open now 0. the dow down by nearly 88 points. the nasdaq lower by 19.3 and the s&p 500 lower by just about 11 points. we are seeing some pressure increasing on the futures as time continues this morning. stocks finishing in the red yesterday but off their worst levels. of course concerns pressuring the markets a little bit. we saw on the dow, though, some of the leaders, ibm, exxon mobil and merck to the upside and apple lost $12 ahead of their key investor event, ross, tomorrow. yeah, just 25 stocks at the moment in europe out of 600 are in positive territory. we're down near the session lows, off over 1% for the ftse 100. heavier losses for the xetra

dax, the cac 40, the ftse mib down nearly 2%. and this week is chalk full of anniversary. three years since the u.s. bear market lows, oreo cookie is turning 100 and today is yet another, three years since the dow hit a multiyear low. the dow dropping to 6,000. ceo rick gardiner and our guest host michael crofton of the philadelphia trust company to discuss strategy a little bit more. good morning to you, rick, and thank you for joining us on the program. we've been talking about the markets. we've been saying for the last few days we're very trade range bound yet we have bulls on the street saying look at the s&p 500 going to 1700, dow 15,000. are you a bull in terms of equities or do you think we're due for a correction? >> well, long term i'm a bull on equiti equities. i think right now you have to be

very careful. back in the early fall when i was on it was a lot easier to call an upward move in the markets just because we had fallen so far. and i think what happened at the beginning of this year investors looked at the landscape and said, gosh, everything is basically the same price it was a year ago. companies are more profitable. this is a good time to buy in. and so that's led to a very significant run-up. however, you have to be careful when you are buying in on all-time highs and really that's with any asset class. but i do think there is a general undercurrent that on the long term we seem to be moving in the right direction, but i would be very careful right now. you want to be buying in on, i would say, a pullback and historically during election years we do see pullbacks that provide opportunities. >> how much of a pullback, rick, do you need to see to make an

attractive entry point? >> now that's a good question. a lot of it, i think, is going to be predicated on the macro events occurring and right now after last year's cascade of negative news this year, as we started off, we're almost looking at a very calm condition relatively speaking so you have to be careful, i think, using just a basic percentage but, you know, i think we could see a 3% to 4% pullback and i think equity selection at this point is very important. i think you need to make sure that you are buying can companies that you feel good about and companies that have good, long-range prospects but, you know, i think generally speaking a 3% to 4% pullback but i would have to look at oil prices. several things could play into

that. >> all right, and, rick, let's talk about the dollar for a moment. it seems like what you are saying, yes, we have global tensions and concerns about global growth but things in the united states seem pretty solid and we do seem to be on track for a recovery. do you expect to see some dollar strength soon? >> well, i would like to. the fed chairman bernanke is basically done some things that i like anyway. it's nice and actually is refreshing to see that we didn't have to do or at least right now they don't feel they'll have to do another quantitative easing. and that, the negative effects that easing has and the potential down side that it can cause on currency, the fact we seem to be moving away from that and we seem to be more focused on growth, i think that is edging us in the right direction. and it was interesting even out of the eu. we seemed to be going less in

crisis mode, although they're still deeper in the water than we are here in the states. i think you're seeing more of the focus on growth and maybe less on crisis control which, like i said, as an investor is refreshing, something we hadn't seen in a long time. >> it's mike crofton from philadelphia trust. last year the market really climbed the wall of worry. there was huge correlation in the market as it went down in the summer and came back 25%. do you think we'll have correlation again and will that magnify itself on the down side? many of the problems you mentioned we worked through last year are still with us. most of them have not been resolved. some of the resolutions are temporary in my opinion. do you think we'll get correlation on the down side? if so, how do you protect against that as a money manager? >> well, hedging is very important.

i think one of the biggest things that i worry about is oil pricing. everything happening in the middle east does create a very tenuous situation. as far as the correlation of asset classes, this is really a phenomena we've seen where our markets seem to go from asset classes moving independently and then a risk on, risk off trade. and that's very frustrating for a lot of investors because they watch all the things they've been told will protect them, diversification and that type of thing. when all the asset classes moved together, diversification just moves right along with them. so i think you want to hedge commodities, oil, hard assets, do make sense there to a degree but, again, i go back to where we were at this beginning of

this rally. they do provide stability when the markets are volatile and i think that is something you need to have consistent in your portfolio. >> and that's a great point. thank you so much, rich and michael, gentlemen, for being on the program with us. we'll get more insight from our guests later in the show. still to come, voters in 11 states will soon start making their choice for who they want to take on president obama this fall. mitt romney has been the perceived republican front-runner for months. but can he break through today and seal the deal? we'll talk super tuesday scenarios next.

good morning and welcome back. voters in 11 states go to the polls in what's known as super tuesday. newt gingrich could vault himself back into the race. he's lead iing in his home stat of georgia which has the most delegates but ohio is seen as the biggest battleground. most of the latest polls show romney and rick santorum are in a dead heat in the buckeye state. ross? plenty to focus on here. let's just show you where we stand as far as the map is concerned. you pointed 0 out georgia should be a win for gingrich. a key win state. ohio 63 seats, of course, is the

mu must-win state for santorum if he's going to maintain any particular momentum there. it's worth pointing out that no republican has won the presidency without taking ohio. the seventh most populace u.s. state so a really important part. what you're seeing as a bit -- tennessee with 55, a tight three-way race and then oklahoma as well with some 40 as well. they haven't voted democrat in oklahoma since 1964. virginia 46. that should go to romney as well and we also expect to pick up massachusetts, of course, where he was the governor of massachusetts state. that's how we set down over here. wyoming has a complicated session. they are five votes up for grabs there and alaska no one has really visited alaska apart from ron paul.

so how does that lead us ahead of the votes? what's been accumulated? mitt romney secured 119 delegates. he has a good super tuesday it should nail him in. we have newt gingrich with 30 states. 30 seats. south carolina is 31. delegates secured by rick santorum 17. he's won iowa, minnesota, and missouri. ron paul got eight delegates secured and it's worth pointing out, of course, that mitt romney comes into this having won the last five contests, jackie. >> and joining us to talk more is the managing director of hamilton strategies. good morning, tony. thanks for coming on the program. let's talk about what we're going to see today. if you can possibly take out your crystal ball and help us get more clarity here, are we going to see a clear front-runner emerge? >> well, the only person who has a chance to knock out the rest of the field is mitt romney. santorum can't knock out romney.

gingrich can't knock out romney. he has the biggest opportunity ahead of him today. we know ross just went through the math. we know romney will walk out of here with at least four wins today and it's hard to not see him ending the day without a majority of the delegates. we're going to have to see what happens in the battleground states. he's come back very strong in ohio to make it a dead heat. tennessee is another very important state where it's essentially a tie. if romney can manage to win those two states and especially hi ohio because it's such an important battleground state, it becomes very, very difficult for either santorum or gingrich to really challenge him and he can seal the deal. >> we have some interesting timing in terms of the opposition today as well. president obama holding a press conference. the white house saying the timing is coincidental, but do you think that's meant to shift the focus away today? >> i'm really curious about the

timing of the white house press conference. this is super tuesday, a day you would expect the white house to leave it clear for these contests in 10 or 11 states today. so, you know, we're going to be looking to see if the white house has some special news to announce that had to come out today. otherwise it really is poking the eyes of republicans who are trying to get these primary contests under way. it's very, very curious. i'm sure he'll be asked about it at the press conference today and what the timing was all about. >> okay and there is a potential that we do see no clear front-runner emerge. there is potential that could happen f. that does continue to happen and we have the candidates all still vying for that gop nomination, and we still see some infighting, how much does it hurt the republican party? >> we'll have to see whether it's long-term damage. remember the democratic contest

in 2008 went well into the summer. it wasn't decided until really june where even in june and very late in the campaign you had now secretary is clinton and senator clinton winning very large states, so now the difference here is this primary season isn't going as long as that one but to voters it feels like a very, very long campaign because we've been paying attention to it back since the iowa straw poll this summer. so it's been a very, very long time. we've seen 20 televised debates and a lot of money spent on negative campaigning. if it's decided within the next four weeks and romney can make that happen then we're looking at a general election contest and it won't have lasting damage f. it goes well into the summer for a primary season that has already gone on very long, it could have lasting damage for

the republicans. >> and, tony, let's assume, as you say, you can't knock romney out. at the end of this super tuesday will we have a clear idea who may be the romney alternative? is the opposition to romney going to come down to one other candidate, and who is that going to be? >> well, rick santorum would like to be that candidate. right now he has a strong case to be the alternative to mitt romney. the disaster scenario for rick santorum is the fact that newt gingrich is running today in the state of georgia. as you noted, ross, it's the largest delegate haul today. a big win there for gingrich gives him the power, the authority to stay in the race longer. and that really, really hurts santorum in trying to turn this into a straight-up up or down vote either for romney or against romney.

it makes it tough when he wins georgia today. you probably heard him saying that the last couple of days, that if you add his votes together with gingrich's he beats romney but gingrich isn't going anywhere and neither is ron paul and ron paul is blocking a lot of popular delegate support for the challengers to rom mi as well. >> tony, it's mike crofton. let's look at the scenario where s santorum wins ohio today and obviously gingrich will win georgia. what's the possibility of this going through the summer and really wearing everyone out and lead to go a convention where a jeb bush comes through and carries the flag? >> some of us are getting warn out already. we pay attention to this a lot. yeah, look, if santorum can pull of those surprises today, he went into tennessee and ohio today with leads, you know, it really does alter the delegate

count going forward into the summer. now a lot of people if you run on the possibility that you find a candidate from outside the process, that's very, very unlikely. could this go to some kind of negotiated convention, i think that's possible. but it's possible from amongst these four candidates. it would just be very, very difficult to flip delegates who are committed to the candidates who are already in this race to go out and support a candidate who didn't go through this arduous process. i could see it negotiated between the two of them. >> all right. thanks so much for that, tony. we'll have to leave it there. tony fratto of hamilton place strategies and a contributors. thank you to michael as well who will stay with us for more insight on the program. me meantime, cnbc will have full coverage of super tuesday

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good morning and welcome back to the program. let's take a quick look at the pugh tours and see how we're shaping up on wall street. the dow would be down by nearly 87 points. the nasdaq lower by 19 and the s&p 500 lower by ten. this, of course, after a down day yesterday. and i think we're seeing some impact from the pressure we're seeing on the global markets on this future picture right now so it's going to be interesting to see how the day on wall street does shape up. still with us to talk more about that is rick gardner and our guest host michael crofton as

well. not much time left here on the show, guys, but i'm going to pose the same question to both of you. looking ahead to friday's unemployment report, quickly, what's the expectation, rick? >> i think it'll be more of the same. i think we will see it going in the right direction. i think that could have a very positive -- >> looks like we lost rick there. obje obviously unemployment a very important 0 issue in the election here for president obama. some of the signs are pointing to the fact that we should see another down tick. >> another down tick. it's meaningless because of seasonal adjustments. >> okay. >> i just don't think these are fair numbers. the adjustment process is basically out of control. and we're really not getting a very good view of the employment situation given the adjustment process. >> okay. even if we got down to, say, 8.1% or 8% is that enough for president obama to say i've done

something here and made a substantial difference? >> no. i think the numbers above 8% are significant and if if you really include all the people who have stopped looking for work the numbers haven't changed. they're still 14%, 15%. >> michael crofton, thank you for joining us on the program this morning, president and ceo of the philadelphia trust company. and, of course, we have some special coverage on cnbc for super tuesday this evening. that's at 8:00 p.m. eastern time. that wraps it up for "worldwide exchange." i'm jackie deangelis in the united states. >> and i'm ross westgate here in europe. thanks for watching the program. up next, "squawk box" and the countdown to the opening markets state side.

good morning, everyone. welcome to "squawk box" on cnbc. i'm becky quick along with john kernan and andrew ross