brought to you live from london, singapore, and around the world this is wore are wore. welcome to today's program. greece gets 83.5% of private bondholders. it's unclear if cds payouts will be triggered. a lunch time decision will be a key step. and consumer inflation in china falls to an unexpect ed 20-month low. prices give beijing more room to push pro-growth policies. and it's another jobs

report, the february one, expected to show solid but unexpected hiring in the united states. welcome to today's program. with 83.5%, that's the figure of all private bondholders who have agreed to take part in greece's debt swap. 85.8% of bondholders, regulators under greek law have participated. 89% regulated by the foreign legislation have agreed. the greek finance minister will now hold talks with the euro group to decide on the activation of the collective action clauses which would take the participation rate to around 95.7%. and for those international bondholders there's an extension of that time line. the bank lobby group that will negotiate creditors is described reduction in the value of bonds

as unprecedented adding the outcome of the swap will capitalize support for the greek reform program. julia is in athens and still a number of key meetings to go through here this morning, but what's happening in athens? what's the reaction? >> reporter: you know, there's two mainstream newspapers that have been covering this here in athens and talking about the psi the last couple of days. from a general perfespective in the population here it's not been on the radar. it doesn't affect their day-to-day lives at least for now. they're focusing on dealing with what we already heard about the further austerity measures. certainly on the ground it's not really that big an issue. as you said, what the focus now is, of course, the meetings we have going on later today and just whether the clauses will be implemented. as you said, if they are, then the participation rate jumps to over 95%. the first look or the initial take on that, 83% overall on the

psi debt will not be enough so it does make the cac implementation highly likely. we know that the imf have looked at the participation rate or estimated participation rate of 95% in order to do their debt sustainability access. credit suisse had a good analysis, a 5% drop in the participation rate. adds a 2% increase to that key debt to gdp metric in 2020. so let's say for argument sake an 85% participation rate right now, that translates to a debt-to-gdp number of 126%. too high arguably are for the imf in this deal so weigh wait. more details interest venizelos. the question over how likely that is and something the french minister hinted at. ross, back to you. >> well, of course we spent

months trying to get this deal together so we don't get into position where we trigger cds so maybe we'll see what happens as far as that is concerned, julia. the key point is it doesn't really do anything about the long-term stainability. there are still those who think we'll be back with a third restructuring at some point. at that point it will be public holders of debt that will have to be involved. >> reporter: yeah, absolutely. after this debt down if this goes ahead then the split is more 50/50 of the official holders of this debt, and that is the key question and what we've seen in the psi deal is that the people like the ecb and of course the national central bank appear to be senior to those bondholders that currently hold the private sector bondholders and that's going to be a key question not just for greece but other periphery on what happens going forward given that bondholders in the debt market know now thats

subordinated to the ecb. stocks up over 1% for european markets and today as we go through you can see pretty flat really. so they've all decided this has happened. we'll wait to see whether we get cds triggered and the employment report as well. very important coming out state side. as far as peripheral debt is concern concerned, again, on the open of that bond ten-year yield at the moment, 1.8% pretty flat. the spanish and eye titalian yi off slightly. spain back below 5%. a big tear in italian debt yesterday. and now i also need to apologize because apparently we were showing the wrong pictures while julia was talking. apologies for that. they weren't of greece but of italy. joining us now for more is kit jukes at socgeneral. thank you for joining us.

reaction, first of all to this, do you think they'll activate effective action clause and if they do that will isda say, yes, finally there should be an insurance payout? >> i think it would be amazing if there wasn't a cds event. we're standing around, embers of our house that has burned down and the fire department says this isn't a fire it's a restructuring of your house into ashes and we're not going to pay out t. doesn't seem right. markets work on a clear understanding of how capital structure works. you buy cds for a reason. it should pay out. >> we need collective action clause, though, do we, kit? do you think? >> in the sense we don't get -- we don't hit the target for reducing greece's debt levels that are necessary for getting the next bailout. get us on the road to the next set of issues so we don't keep

on moving down the track. they do or don't trigger cds but i tend to agree it's not good for the health of the cds market. >> so what happens if we do do that, chris? because we've spent months trying to avoid, a year trying to avoid cds payouts, european officials have. are we now in a position where we think we're okay to with stad that? >> well, they must have taken a judgment on whether they can or cannot pay out the cds and we'll lurn about that later today and whether if they pay it out then they've taken the view that the european banking system can cope and if they don't then they've taken another view and another way to protect the banking system which has been their entire end throughout this process. it's very clear. so we're going to find out at 1:00 whether we had a fire or didn't have a fire. >> when people mark cds contracts to market, it's a market with a price. so those people who have written

this insurance had a loss last year, that's when the loss would have been felt. so maybe if i'd written that insurance, i'm thinking if this thing isn't triggered, i'm going to make a windfall gain in are march 2012 that will look nice on my profits in a year's time. there is no excuse for not having done so. >> and of course if either of those contracts had gone through the roof, you could have traded them and made quite a nice amount of money. what's going to be more important here for traders whether we trigger cds or the employment report? >> i think probably the employment report will be more important. >> we already moved on. >> i think we've moved on. i think the answer is we've been given a road map of how they're going to work on greece and how they might work in portugal and spain and they basically said we can change the rules on you guys so this is a new game. >> julia raises the point, we

now have seniority in debt holders. what does this mean for portugal because we had angela merkel worried about portugal. we have highly elevated yields. we will have to get restructuring. what does this deal mean if we have to restructure other countries' debt? >> well, i think they've gone down the route of saying this is a one-off, guys, we're not going to do this again. portugal is going to want a 70% write-off on the debt and the cds not being triggered. they're all going to want it. they're pretending, telling us this is a one-off event that will not happen again but our gut is telling us we have to be vigilant because it might happen again and again and again. >> not this particular restructuring but most people think the situation is unsustainable even after this. >> everything is unsustainable in greece and portugal and ireland still if we don't get the economic growth back. so 120% of g it dp debt level

which is your most optimistic judgment of where we get greece to. if they're still in recession which they're not now, if they are in 24 months that number is going up quickly. the secret to all of this is, great, i'm glad you've stabilized the situation. can we have a growth plan, please, really fast. >> and they're not easy to come up with or instigate. thanks, kit. you're sticking around. good to see you today. joining us this morning from clement advisers. greek finance minister venizelos is expected to address the parliament shortly. also, we'll be speaking with the head of the group representing greece's private debt holders, charles dallara. that's at 16:30 ct this afternoon. meanwhile, christine, what kind of last trading day of the week have you had over there? well, for a friday all eyes on greece. asian markets are higher on signs a greek restructuring deal is almost a done deal and a messy default can be avoided.

it is sparking a pickup in risk appetite across the region as you can see the nikkei 225 is up 1.7% inching closer to the key 10,000 level. we had the softer yen which fell to a 4.5, 9 month low. topix is up 1.5% with one eye on greece, the other eye was, of cour course, what's happening in china. we had cpi coming in softer than expected. cpi for the month of february slow to 3%. 2010 giving more scope for the pboc to do more easing. that is lifting this particular market higher. 0.8%. that cpi number also giving a lift to financials over in hong kong. 0.9% on hopes that banks will be given more easing. elsewhere, south korea up 0.9%. expectations of more easing coming giving a lift in this particular market.

new zealand 50 up 0.6% and the sensex in india up almost 2%. a lot of trade vals goivolumes going on 0 today. what does your heat map say? >> fairly flat markets 2-1 advancer outpacing decliners. feel we priced in this result yesterday. the dax up two and a half. right now ftse 100 is pretty flat. the lon done stock exchange is a notable outperformer taking over the majority control of lch clear net. xetra dax up a quarter of a percent. the cac is up. the ftse mib down about a third. key reactions, of course, we've been monitoring as far as european banks are concerned, mostly they are weighted to the upside. we've got 1.2%, socgenerale up. and as far as bond markets we saw a really big push down in italian bond yields. right now trying to hold on to those gains.

italian btp 4.7%. spanish debt 0.5%, back below 5% as you can see. bunds nudged up to very low levels at 1.8. the real foe can cuss is now we'll hand the baton over to the u.s. jobs number. a lot about that today and the key really will be the unemployment rate. te ten-year treasury yield just above 2% as we head into that. as far as the euro 0 was concerned, sold off a little bit on confirmation of the participation rate in the greek debt swap. right now euro dollar 1.3222 the interday low after we got the final day confirmation. euro/yen is down. dollar/yen steady 81.71. sterling, some data out of the u uk industrial and manufacturing outlook coming up in 20 minutes. sterling/dollar below that 1.58 mark. nymex just below the 107 level. christine?

up next on "worldwide exchange," plenty of things to get into. china's inflation is one thing. dropping to its lowest level since june 2010. our next guest says if you're expecting big easing moves you need to think again.

welcome back to "worldwide exchange." chinese consumers are seeing prices rise the way they used to, easing to 3.2%, down from 4.5% in january and the lowest since june 2010. to tell us more, tracey chang has more. tracey? of course we got a mother lode of chinese data today, actually, the most telling one the cpi figure for february since it's free of any pricing outliars by the lunar chinese new year. bringing inflation seemingly under control gives the central bank actually more wiggle room to further tweak its fiscal policies. the war on inflation was a top priority last year and a combination of interest rate and rrr hikes did bring price levels down after a peak in july. a couple of traders i spoke to today, they think rrr cut could be on the horizon now since the

pace of slowing growth has slowed down and the other data we got certainly reflects that as well. producer prices were flat in february. industrial output and retail sales in the first two months of the year grew at a slower pace and while under expectations as well. fixed asset beat expectations and the pboc has reason to be cautious on inflation. remember, beijing is especially concerned with the politically sensitive food prices ahead of leadership change in october. back to you, christine. >> tracey, thank you very much for that. tracey chang. for more we're joined by the director. good to have you with us, phillip. is inflation finally coming off in china? >> yeah, it is slowing down. as expected they've been trying to slow inflation down for the last few months. they have an official target of 4% this year. i think they'll probably be able

to keep within that but they will keep -- they'll probably keep the policies on hold for the time being. >> why do you think that's the case, phillip? why can do you think that's the case to put it on hold? >> well, because the thing is we've only seen this slowdown. although we've seen the slowdown in the last couple of months, however, i think they want -- i think the government wants to see it on more longer-term trend meaning the next two or three months and get past the reporting season as well. i think there's not going to be any major moves on liquidity in the near term although we do expect cuts. >> under what conditions, philip, would the pboc consider another easing? >> well, i think if the slowdown

or something which was unexpected -- i mean, if if the slowdown was sharper than they expected, then maybe they would think about it. but at the moment i think it's really going according to how they want it sort of like an engineer to slow down. it's slow. it's obviously a little bit impatient to investors in the sense that they want to see faster moves by the policymak s policymakers. i don't think you should expect anything very soon. >> philip, do you think there's a chance they revisit their policy and slow or stop the appreciation of the renminbi with smaller trade surplus and less inflation? >> i'm sorry, i didn't hear the first part the of that. >> the first part was do you think that we're going to get a change in foreign exchange policy to have a slower appreciation of the renminbi or even no appreciation in the

coming months? >> no, no, no, i don't think there will be any change. i think overall the consensus seems to be an appreciation of something like 3% to 4% this year. i think that's about right. we're looking ourselves for 3% appreciation this year. it's, again, going to be slow -- slow moves. >> with the appreciation of the yuan, keeping to that particular subject, philip, there is the headwind of rising oil prices. do you think that's enough cause for the pboc, for officials in china, to keep the yuan strong? >> for the time being, yes, because basically if we do have sustained oil prices, which seems to be -- it's not the consensus yet but we could be veering towards that. that's going to have some

negative connotations on markets because -- and maybe even keep markets volatile so it's just another unknown factor which creates more volatility in markets. so, yeah. >> philip, thank you very much for your time. good talking to you. philip chan. the other story we're watching, u.s. treasury secretary saying china attempts to encourage wider use of the yuan in foreign trade poses little threat to the greenback. >> what you're seeing china do is gradually dismantle what were a xcomprehensive set of control on the ability of kcountries to use their currency, so they're just trying to become more modern, more 0 open to catch up to things that almost all of emerging market economies have done. >> kit, your reaction to that? >> i think that's right. i think the chinese -- the

chinese have slow ly increased use of their currency and that's a good thing. i think it raises issues in the united states in the sense of one of the biggest holders of u.s. treasuries has a falling surplus, is shifting its focus away and the nice, kocozy deal where americans run large deficits and keeps interest rates low on the yield curve with the help of the chinese, that relationship is going to change gradually over the next decade. >> what is changing, kit, is china's ability to help other nations, of course, offering to invest more in the yor 0 ozone. seems like this internationalization of the yuan seems to be in some sort of progress. how would you assess the sort of measures that china has in place to internationalize currency more? >> well, it's slow. it's a very conservative and cautious approach in terms of doing it so, you know, if if you woke up and knew nothing about

our industry and said the chinese are now willing to have people borrow money in their currency who aren't in china, don't we all do that already? we have a euro bond market and have had for years and so on. so this is catch-up. but china is becoming a bigger player in the political stage, the economic stage, the world stage and everywhere you like it and so are all the emerging market economies and this is reflected. but it does change the global balance of payments architect e architecture, the jigsaw puzzle that gives us all the prices of everything we have and that's very interesting. we shouldn't overplay what it does from day-to-day. this is just catch-up. >> when do you see the chinese renminbi being fully convertible? >> oh, within the next five years is a guess, but not this year, let's put it that way. i know that's a prophetic response but i never -- i wouldn't want to expect the chinese to be moving too fast. >> five years seems kind of

earlier than other people. that takes us to 2017 so maybe actually -- i've forgotten where we are, how quickly time has passed. i was thinking five years isn't is long but then it's 2017. we've got the jobs report out today due at 8:30 a.m. eastern. economists expect another month of solid hiring. the dow jones forecast calls for nonfarm payrolls to increase by 213,000. it was 243,000 in january. employees have added about a million jobs since august. the unemployment rate expected to hold steady at 8.3%. it's dropped 0.8% since august, average hourly earnings have been seen rising 0.2%. kit, is it about the unemployment rate, because that seems to be what they have honed in on. >> well, certainly we've got zero interest rates until the unemployment rate is a lot lower than it is. if it continues to fall faster than ben bernanke had expected, maybe that's the first thing that will make him rethink being the most accommodative central

banker that we've ever seen. we do want to watch that. it is falling faster than you thought although, bear in mind, i don't think the fed will raise interest rates in 2012 or 2013. >> they told us they're not. it takes two or three members. >> ben bernanke has control. when someone says i'm not going to raise rates until 2014, i view that as i'm not going to change rates until something changes. we're getting a slight shift. we're going to get in the first quarter an employment growth rate of more than gdp growth. >> all right. kit, thanks for that. venizelos is speaking in

parliament. we'll bring you the results of what he says. also some industrial manufacturing data out of the uk.

this is "worldwide exchange." greece gets 83.5% of private

bondholders to agree to its debt swap but it's still unclear if cds payouts will be triggered. a lunch time decision on the collective action clause will be a key step. and consumer inflation in china falls to an unexpected 20-month low in february easing prices gave beijing more room to push pro-growth policy. and in the states investors are waiting for the february jobs report, expected to show another month of solid if unspectacular hiring. and we have some data out of the uk. manufacturing output up 1% on the month, weaker than the forecast up 0.3% on the year, pretty much in line. december manufacturing 0.1% on the month. industrial production has contracted 0.4% on the month. not a great number.

that was forecast, the biggest since november of 2009. it was forecast to rise 0.2% and december's industrial production was revised as well. so, as a result, sterling -- that's euro sterling, sterling is weakening post that number so, yeah, the industrial production number is the one we're focusing in on, kit, as far as that is concerned. sterling is weakening as you might expect. we don't know whether we're going to get more qe. we've been pricing out the chance of getting an extra bout when this one in may finishes. if the data gets weaker again, then, you know, i suppose it's as simple as that, isn't it? >> the bias of the npc even more now that inflation is coming lower is to remain very dovish. the hawks have gone. and so they will if they need

to. i think the question most people are asking is does more qe really help? if it messes up the yield market, we have gilt yields low. we've taken the equity market up. housing market up for the wealthy has played itself out. unless they come back and buy commercial real estate or something, i'm not sure what it achieves. they're either doing more or nothing. they're not going the other way. >> and that's what investors will swing around on, right? simple as that. >> euro/sterling is trading in a pretty narrow range. these are three kcountries that are all happy to print lots of money and have weak currencies and all have a little bit of growth but very little and it's pick and choose but against any country where interest rates might go up or where there's growth, the euro and the dollar and the pound all look pretty poor. >> greek finance minister venizelos is still addressing the greek parliament.

we'll keep across that. this is the swedish finance minister also. i'm not sure what he's been speaking about because i've been concentrating on the uk breaking news data. swedish finance minister says agreement of psi and the greek bailout is very positive. that's good to know that he thinks that. now let's just remind you 83.5% of all private bondholders have taken part in the greece debt swap that includes both the international bonds and the greek law bonds focusing on the greek side of that, the figure is 85.8, all regulated under greek law. finance ministry will hold talks now with the euro group to decide on whether to activate the collective action clause. that meeting starts at 1:00 gmt, 2:00. if they activate that it would take participation rate up to 95.7% and at that point they are guaranteed to get the eu/imf

bailout money. at the same time isda is going to meet to decide if a credit event has taken place in greece. the committee received another question in relation to the greek debt swap. it's meeting at 14:00 cet. if if it is decided, it is worth over $3 billion should be triggered. joining us now is alberta gallow, head of rbs. kit is still with us. the interesting thing, what i should explain about this question is they received it before they've known whether collective action triggers. they're not yet going to -- they haven't yet been asked post collection. that seems to be the key point. >> yes. we really want the isda verdict after collective action clauses have been confirmed. and any questions that anybody answers before then, we might as

well ignore. >> we're miking alberta up so he's ready to go. any question until we know whether we get collective action clauses of isda is irrelevant? >> i think the cacs will be triggered at 1:00 p.m. tonight. it is clear they don't have enough money to pay the remainder that have not participated. i don't think it's a very big negative for the market. 3 billion in the amount of greek get is a small number and cds have been unwound from five plus billion to three billion this year. banks have marked it down. i don't think it's a problem for systemic risk if the cds triggers. >> how complex with all the intermediaries in between? if you net it out, it's not a big figure. i suppose it's working its way back through the system. >> the gross including all the ramifications is bigger, over

$60 billion. but it's a very expected event and it's been marked down. so i don't think there is the potential for an unexpected followthrough in terms of counterpart to risk. >> so, alberto, you think today if we get an announcement of action clauses at 1:00, do you think isda at 1:00 will then opine and say, okay, now these have been triggered. now we can trigger the cds event. is that how the time line plays out in your head today? >> that's what we're expecting, expecting a hard default with the cds trigger because the cacs are likely to be triggered on the greek clause bonds is the decision today. this is our view. the participation rate has been lower. >> they have extended the timetable for accept aps of the deal so they're not going to activate anything on that until that time line is past, right?

>> march 23. and it's 69%. >> christine? >> equity markets here in asia today are rallying because they think it's a done deal and we managed to avoid a messy default from greece. what kind of result do we need to see from greece whether it's cds or the -- what actually do we need to see for equity markets to continue their rally next week? >> first of all, i think the participation rate we achieved which is close to 85% is a positive. it's much higher than expectations. ours were around 70% from a client survey we did a week ago. so this is a positive, a vote of confidence. if you look at the premarket prices for the new greek bonds they traded double digit yields so the market is still worried about the periphery, about greece and portugal. what's reduced here is the contagion risk which is also one

of the positives of the ltro. there are some isolated cases of insolvency and that bondholders will feel some of the pain there but overall the banking system is a little bit more resilient. so i think the ltro will continue to make spreads either at this stage. we've been constructive on credit since january on credit spreads, on corporate bonds, but now we think we wouldn't risk this stage because the rally has played a lot in the markets. we are bit more conservative after months of rally. >> alberto, how much of a precedence does greece for other governments who are also facing sovereign issues? >> yes, i mean, the man conduit is portugal. portugal is a spread and bank spreads have not been tightening. they've been excluded from the rally elsewhere in the market. and i think that investors are

concerned about whether the us a it territory reforms will be successful in portugal and potentially our economy expects portugal to renegotiate the package from the imf later on this year or early next year so it's not an imminent 2012 problem but there are kcountrie with austerity where growth will not be there. >> i have to go to markets. we spent a long time trying to avoid a cds payout. we spent nearly most of last year trying to avoid a cds payout and now a deal that will trigger one. what were we worried about most of last year? will someone explain that to me? >> the first piece is you're in a new year. people have marked their cds exposure so the market's net loss is smaller today than it was then. and time was bought last year. that said,s i'm not quite sure why we wanted to avoid a cds event in the sense that why kill off a perfectly good market just for the sake of this? but the outcome with everyone having taken their loss and a

lot of it being water under the bridge and the c it ds market still functioning would be a good outcome for the market. >> okay. all right. and so let's just see how we're reacting elsewhere. stephane has the update for us in paris. how has it washed through? we seemed to have had our reaction in yesterday's trade. >> reporter: absolutely. and if you look at today's session, french banks are trading a bit higher. no excess but they are in green territory. french banks are one of the most exposed to greece in europe and that's the reason the outcome was very much focused in france and also it was very much anticipated by the french bank. if you'll remember all of them, most of them, have taken a 75% provision on their greek bond. for bnp the cost was $2 billion euro. for soc generale, 890 million euros including 160 in the

fourth quarter and for credit agricole not only the bank and exporter to the greek bond market but also has a full unit in greece and then the total cast was 2.4 billion euros so far. of course what has been announced this morning is positive announcement for the french banks and as you can see they're all trading higher. up 1.2%, ross. >> thanks for that, stephane. patricia has the reaction in frankfurt. >> reporter: absolutely, it was a little bit priced in. the markets did nicely especially the financials. commerzbank is among the top five up about 0.85%. we knew the majority of the german lenders would participate in the psi program of greece but we didn't know, though, the bad banks involvement and there we had at least one confirmation. we heard from the fms management company which is a bad bank, they would participate with 8.5 billion euros.

that was important. we still don't know about the institution and they have an apparent exposure of 1.1 billion euros to the greek debt, sovereign debt holders. all in all i think what we hear from the german side of the financials, they did support the deal. they want to move ahead and also all the men tear from ackman this morning saying that this was a very important step towards resolving the greek issue and also from deutsche bank they think it's an absolute thumbs up. however they say at the same time greece needs to do their homework something, by the way, some of the commentators are now pointing to italy as well as spain. ross? >> italian btp is firmly under 5% today. 4.7% and holding steady. this as well to remind you what the ecb said yesterday, rates at 1%, amid warnings from the bank that inflation is on the rise. president mario draghi implied that two ltros have now done

enough to stabilize financial markets. >> all in all we see that great progress has been achieved and if you compare, i don't need to 0 spend much more time on this, simply compare what the situation was in november last year and what it is today. now let me also add that this is not only the effect of the ltro but also serious reforms effort that has been undertaken by several governments in your area and by the improved governance of the wloel euro area. >> let's just talk about that market reaction he talked about. two-year btp, 1.79% and you have to remember in november last year we were up over 8%. so a sharp reduction across the board. that's been the success, i guess, of the l it tro that he's talking about. will we at some stage need another one? what we've done is loaded up the

weakest banks in europe with the weakest sovereign debt. how do we extricate ourselves from that? >> the trader view is that short-term risk has been reduced so investors are buying into this. longer term as shown by the yields in portugal and greece on the new bonds, the risk is still there. so there is the situation later on if things go wrong if growth doesn't increase, like you said, banks have been buying more and more sovereign risk, more correlated, the ecb and other institutions are not taking the same loss as private creditors. so there are still weaker fundamentals ahead. but the traders view in the near term is to buy risk and technicals are very strong if you have liquidity and better growth data in the u.s. the knee jerk reaction is to buy into the rally. at this stage we're not recommending risk in january and throughout the month of february.

at this stage we are trying to have long positions because we don't see a fundamental improvement later on in the year. the rally is based on liquidity and could last a few more weeks, perhaps months. >> you mentioned growth. u.s. growth, are we going to 0 get any growth -- how key is growth in spain and italy to what you do with spanish and italian banks and debt? >> it's very key because the banks there hold between 5% and 15% of assets in their own sovereign and these have been increasing in january and december. however, as long as the risk of psi is not in 2012, again the market rae action would be to get long. you can see from government yield curves that are very steep, they're low risk in the near term but higher in the three, four, five year points of the curve. i think the market would focus on portugal in 2012.

>> coming up in portugal this year do you think? portuguese reconstruction? >> it's been discussed. the leader of the opposition mentioned they would need to renegotiate so it could be discussed later on this year. that's our view at rbs. >> it's more a restructuring of the bailout package that they have than a restructuring that have debt which is -- they have no need to go to the public markets for a while yet. so we're several stages back. >> alberto, good to see you. alberto gallo. kit sticks around. it's not a grande, it's the catchy name of starbucks new single serve coffee machine. what's brewing in the coffee business. should george clooney be worried?

watch makers unveiled the most expensive watch ever, a price tag of $5 million. carolin has been there. a bargain for you. >> reporter: it is a bargain. this is believed to be the most expensive watch ever made, made by swiss watch maker hublot.

let me tell you up close this watch is absolutely dazzling. it's got 1,292 diamonds. there are some interested buyers out there and maybe one of those buyers is from the far east because that's where dehand for those kind of timepieces is insatiable. take a look. they say that the chinese are coming and here at basel world, the biggest watch and jewelry fair, they're right on time. over the next week some 1,900 exhibitors from all over the world will be showcasing their latest jewelry and watch creations to some 100,000 visitors and many of these are ex inspected to come from the far east because that's where demand for luxury shows no signs of slowing at least not yet. >> for the time being things

look pretty robust. greater china region still seems to be growing strongly. the biggest positive surprise has been the u.s. and japan which i've already perked up over the last few months. >> reporter: but it's not all glamour for the industry. the world's biggest diamond company recently warned that global demand for diamonds will be lower in 2012 because of the weak economic climate. here in basel, though, the chiefs of the world's host exclusive brands strike a more optimistic tone. >> last year fs the biggest turnover of the watch industry and when i talk with other people we all expect that this year will even be better. >> we are very excited about the new development coming from china and the unique luxury brand, stands to close to 40% of the diamond demand. see china for mass luxury.

we see china as the most sophisticated market. >> reporter: it is all about that boring demand coming from china and emerging markets. swiss watch exports to china rose by a staggering 50% in 2011 making it its biggest export market in the world. but the question is, can the industry continue to clock the growth rates in china in 2012? >> china can grow for quite some time. if you see how little china is developed, i'm not talking china or beijing, but generally china can go for many more years. >> reporter: but one swiss watch maker actually warns of overestimating chinese growth. >> i have learned for many years i should never put all the eggs in the same basket. the chinese can maybe close their frontier so this could be a disaster for the whole industry. >> reporter: and for others growth can only go up from here. >> we see already in the chinese

culture, the ultimate refinement and level of appreciation for the authentic luxury we offer and this is what the chinese want today. it's difficult to talk about trends. we are embarking in this exciting vision of china and it's looking very good. >> reporter: so, ross, it looks like it's going to be another record here for the swiss watch industry. not just because of china but also the rebound in the u.s. and japan. also check out our slide show of the ten most exclusive timepieces and pieces of jewelry at baselworld on cnbc.com later in the day. anything you liked there? >> i was talking about this with kit, they should just make a watch -- forget adding the jewelry and the diamonds -- just make the world's best technical watch and then flaunt that for $5 million and say this is what you want. don't put any of the jewelry on.

sell me a watch. >> reporter: i'm not sure it would fetch that price. >> there is somebody 0 out there, if you make it the most expensive, i guarantee you someone is going to want to have it and it's someone's best. that's my thought on it. thank you very much. let's get a final thought from kit as we head towards the employment number today. you heard alberto saying we're derisking. after that big start in january and february, are a lot of asset managers thinking about derisking? >> i think a lot -- the big problem is a lot missed it. you see the big rally from last november upwards. a tiny correction. an enormous amount of people wanted a correction to get in. i think we'll provide the derisk today or looking for a bigger

correction. if we get good data there's a lot of frustrated ex-bears. >> people may wonder how long rates will stay low. >> the next quarter 3%, 1%, u.s. economy has not got the legs to generate growth above 2%. >> right. okay. kit, good to see you. as always, thanks for that. christine? ross, it's a friday. we have to say good-bye to our asian viewers but it time to bring in, of course, jackie. have you had your cup of coffee yet? >> i haven't had my coffee yet but it's not strange to be thinking about it. so move over keuri g. starbucks wants in on their turf. they plan to start selling their own single serve coffee machine. the move could threaten green mountain coffee roaster which makes the keurig brewer and the k-cups used in them. green mountain shares fell over

20% in after hours trading on the news. starbucks says it will sell its brand to green mountain. and still to come, of course, a lot in the next hour of "worldwide exchange." we're going to be live in athens with the latest on the greek debt swap offer. plus, we're going to get some insight on the u.s. jobs report from a former top official at the labor department. and it's a three-year anniversary of the bear market low. one man, our own mark haines, he called it first. i'm going to step out on a limb here. >> this is the big -- hold on. we've been waiting. >> i think we're at the bottom. i do. i think we're going to have a rally. >> there we go. the man unafraid to make a call. mark, let me tell you this -- >> in other words, i think today, this is for real. >> and how about that. mark haines calling the bottom right there. he is very much missed at cnbc but that was a historic moment and the question now is where do we go from here? will the bulls take and lead the way through 2012? what are your thoughts? >> i think we've had a big rally

and i think people -- you heard kit saying we want people looking for a place to get in and they'll be caught out a little bit. i think we're going to do that, up and down, up and down in a broad range. >> yeah, we're going to get a lot of overhang coming from europe. ear in asia people are still watching what's happening. until we get that out of the way, markets will turn sideways, i think. >> there we go. >> absolutely, guys. viewers, tell us what you think. tweet me and we'll get your questions to our next guests.

if you've joust joined us, welcome to the program. greece gets 83.5% of private bondholders to agree to its debt swap. it's unclear if cds payouts will be triggered. a lunch time decision will be a key step. investors await february jobs reports which is expected to show another month of solid but unspectacular hiring. and consumer inflation in china falls to an unexpected 20-month low in february easing prices give beijing more room to

push pro-growth policy. good morning. you're watching "worldwide exchange" with christine tan, ross westgate, i'm jackie deangelis. great to have you with us on this friday morning. let's start here in the united states. take a look at the futures and see how we're shaping up for trade on wall street. it does look like a mixed open if the markets were to open now the dow would be higher by ten. the nasdaq lower by two points and the s&p 500 just above the flat line. this after u.s. equities finished higher on the back of that global rally. a couple of reasons for that, some optimism on the greek debt swap deal. also that "wall street journal" article about further quantitative easing still having an impact and the smaller contraction in japan's q4 gdp number helping the markets as well. ross, how is it bearing in china right now? >> seasonally unadjusted fourth quarter 2011 is gdp contracted

7.5% and that's worse, worse, than the flash estimate of 7%. so the greek economy contracting in the fourth quarter by 7.5% which has been the point here on the day that we're going to get a psi agreement for the next bailout money. the point is with growth like that, with the contraction, we don't even mention the word growth but contraction like that what hope is there to fulfill the terms of that bailout in meeting future deficit targets? and i think that's the point. yes, we have gotten this agreement today. yes, that is quite good for risk but it seems almost impossible greece is going to meet any part of its future bailout so let's remind you euro/dollar 1.3220. a case of the prices are price ed in. today european stocks on the whole slightly higher but a little bit flat.

so let's just put european bourses up as well. as far as greece is concerned 83.5% of all private bondholders have taken part in the greek debt swap. regulated under greek law participated. 69% of creditors regulated by the foreign legislation took part. the ministry will hold talks to decide now on the activation. that's happening at 2:00 cet, 1:00 gmt. if it happens, they activate their clause it would take the participation rate to 95.7%. to that point isda maybe will be asked whether a credit event has, indeed, taken place. they are already due to meet today as well at the same time because they've already been asked the question about what is taking place. have to be asked again knowing whether a collective action clause has taken place to pay

out cds contracts worth over $3 billion. so we are supposed to be going out to julia in athens but we don't appear to have her. let's bring in julia who is with you. >> absolutely, ross. all eyes are on greece to see how some of the unknowns work themselves out. joining us to talk more about greece and the economic situation as our guest host for the next hour is julia coronado, chief economist for north america at bnp paribas. we got the number from ross that we saw more after contraction than thought. given what we've seen in terms of the restructuring deal, we do know there's going to be a deal but some still unknown. i think some investors will be looking at the bigger picture. seems like there's still a lot of hurdles for greece to get through. >> absolutely. keep in mind ross is exactly right. this is a tough, tough road for greece and it's not going to be over today. but, remember, the issue is not really about greece. it's about buying time for italy

and spain to make the reforms they need to make so that they become decouple from greece essential isly. >> right. and that's the bigger picture, the story people are looking at, the surround iing countries and europe as a whole. talking to someone last night said, look, the ecb has done exactly what they've needed to do, lowered interest rates, pumped liquidity into the system. the rest of europe should be fine. do you agree with that? >> well, it's not an easy road, but, yes, eliminated the tail wind. that liquidity that does buy us a tremendous amount of time, italy and spain are making progress but they're going to have extremely difficult years in their own economies so it's not an easy solution to this issue but we are making progress and that's the important thing. buying a little bit of time so that these countries can make progress. >> all right. let's -- let's get over to jeula first of all as well in athens. this is a recap of what's happened this morning. the greek finance minister has been speaking. i wonder what his reaction -- we

don't know what his reaction will be to the greek gdp number, 7.5% contraction. if they didn't get any growth, all the bailouts are fairly pointless, aren't they? >> reporter: absolutely. there's a lot of uncertainty surrounding greece and analysts have been skeptical about the bailout itself in general just how well greece can stick to the reforms that they needed whether they have the ability on an economic basibasis. we have this election coming up, too, anticipated in early may time. that's going to be decisive for the implementation of these reforms going forward and ultimately what this psi will do, it will allow them to shift the burden of debt onto the official sector. we should at least give them some breathing space but, as you say -- what the details of this deal are going to be, whether we do see those collective action

clauses invoked on the bond, the greek bond law bonds. it looks likely that will be decided at this euro group conference call coming up later on today. there is an alternative to implementing the cacs and boosting that participation up. they could decide to leave it. leave it around 83% participation and get the cash from somewhere else. who knows how likely that is? it's something the french finance ministers hinted at early this morning. either way they were looking for a decision on whether these cacs are going to be invoked. once we have a decision, then we turn to isda, the body that decides whether a credit event has occurred and then they can make their decision once they have that information. we could get an announcement then as early as the close today. this is a situation obviously key details still to come. venizelos is set to do his press conference at 12:30 local time and then euro group and isda. lots of information to come. ross, back to you. >> you raised issue, julia.

michael, head of credit strategy at citi. you are touted as a guru so thank you for joining us. first of all, is there any way that they can keep this deal voluntary? it's hardly voluntary anyway. but is there any way they won't enact the collective action clause? >> i think it's likely they will have to go down the cac route and the reason is saturation for donor countries they don't want to give any more money and will have to get every last penny and will have 0 to go the cac wrought. >> is it certain isda will trigger a payout? >> it's a fundamental payout of the way it works. if if you have an involuntary action and you force people into something, that is a fundamental trigger so we think it's likely cds will be triggered. >> right. and then -- bear in mind we've come to this route, we've spent

a year trying to avoid a cds payout. and we're now going to trigger it. what is the implication of that? has everybody written everything down? is it going to be a nonevent having been worried about it for months? is it now going to be a nonevent triggering cds or not? >> i think we've gone so far it's now more important that we do trigger cds. and the reason for that is that we have lots of people hedging, who have hedges, and if we find somehow that cds don't trigger then it's not very good hedge. >> you want it to work. >> i think with the type of deal we've ended up with, with debt getting reduced to 30%, it's important that for the whole market we trigger it at this point. >> julia, this is christine. as we watch things unfold over in greece, are you concerned we're not seeing enough growth measures in place for greece to get through this? >> well, yes. there's always the question can

these measures add up? can you put in fiscal austerity and return to growth? so it's a huge issue particular ly for greece. greece is not a competitive economy, and they don't have a very broad base of in their economy. it's very, very difficult and one of the big issues for the funders and for greece is that they just don't have a solid tax base to collect. there is tremendous difficulty in collecting tax revenues so how can they even meet the targets that are set out for them? it's a tremendously difficult road for greece all around. >> and growth in greece is going to be a collective effort. it's not just the government saying, look, we need to grow. it's the people getting onboard and contributing as well. and so that's going to come down to the austerity. if we see the usausterity measus implemented and all of a sudden you see riots in athens it's going to be very, very difficult to move forward. so at that point what could the government possibly do? >> well, and that's the big question with greece and what

differentiates it even portugal and ireland which have been pushing forward with austerity measures in a relatively orderly way. greece is different. their economy just operates differently. there isn't the rule of law and a system in place the way we know it in most other european countries. it makes negotiating with greece very difficult. >> and i want to come back to this bailout money. fulfilling the terms will be difficult. when we trigger the cds, is that going to be a comfortable experience? who will end up paying? who is holding the 3 billion, 4 billion? >> it's about 3.6 billion of exposure and it's mainly between banks. there are a few sort of nonbanks participating but it's largely banks looking to hedge exposure.

they have already closed out and decided they don't want to play this recovery game. >> and if you bought cds last march, how well have you done? if you're just trading. >> entry point is key. you probably made 30 cents on the dollar if you bought as much. so a reasonable -- you bought protection. >> and the good news is that it will be worth buying protection still now if you're worried about portugal now it's still going to be worth buying it, right? >> the market functions efficiently and what's going to be key in the next couple of weeks is the recovery rate that's established matches the losses people have had on bonds so that it functions as a good hedge and that people feel that they've got the payout they wanted. >> good. okay. thank you for joining us. still to come, jackie, shares in the london stock exchange the biggest gainer. they've bought a majority stake in clearnet.

good morning and welcome back. it is time for your global markets report. let's start here in the united states and take a look at the u.s. futures, see how we're

poised on wall street. it does look like a little bit of a mixed open, hovering around the flat line. the dow jones would be higher by six. the nasdaq lower by 3 1/2 and the s&p 500 just slightly above the flat line. this after a strong day for u.s. equities yesterday. we did finish higher on back of the global rally we saw. the dow added 70 points. some of the top contributors, ibm, caterpillar, 3m. mcdonald's after its sales report and exxon mobil, also intel as well. in terms of the sectors, the leaders raw materials and industrials. we saw the cyclicals o outperforming as well. we are pretty flat in europe as we head to the open and the employment report. we have priced in the results on the participation of the greek deal yesterday. stocks up 1% for the ftse. today we're now cautious ahead of the employment report. ftse 100 is flat just down three points. standout performer is the london stock exchange up some 7%, just

under, they're taking majority control of clearnet. xetra dax is just up 16 points as you can see a quarter percent higher after gains of over 2.5%. the cac is down. the big loser is lagardere. stock down 7.5%. the ftse mib down three-quarters. by and large banks this morning had been ticking up higher. now you can see we're pretty mixed really. fairly flat. we had earlier gains of over 1% for the french banks like bnp paribas. as far as bond markets are concerned, we had a big going on for italian btps. after a big move down wards yesterday and surging prices, steady at 4.72%.

tr treasuries trading over 2% on the yield. bunds just around 1.8%. but we're still below that 300 basis point spread on btps. we hit under that level since yesterday. euro dollar weaker during the session down to 1.3218. we have seen the yen slightly stronger at 108.07. of course christine will come on to this in a second but more data suggests we might get another reserve requirement for sterling dollar. christine, over to you for the asian news. asian bowesian bourses are higher. we will avoid a messy default coming from the country, overall risk appetite, nikkei 225 inching ever closer to the key 10,000 level. the softer yen helping out the export oriented stocks. topix is up 1.5%. one eye on greece, the other on

china. cpi today slowing a little bit more than expected. cpi 3.2% for the month of february. giving way talk this maybe will give a chance to ease policy. those expectations pushed numbers higher 0.9%. elsewhere the kospi ticking higher, australian markets, easing coming from china because china is, of course, australia's largest trading partner. new zealand 50 up 0.6% and the sensex trading to the upside 2.1%. also optimism overseas. i want to talk about malaysia central bank keeping rates unchanged. it is expected at 3% but inflation risk and of course what's happening on the external front and how it will impact the market, we have next weekend an eye on the boj, japanese central

bank meeting. a decision tuesday. that's it for me this friday. i'll be back next week with the news moving markets in asia. thanks for that, christine. have a great night and a great weekend. still to come on the show, as stocks of bond buying continues is the qe3 trade back on the table?

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good morning and welcome back. consumers in the world's second largest economy aren't seeing prices rise the way they used to. c consumer cpi eased in february down from 4.5% in january and the lowest since june 2010. still with us to talk more about it is julia coronado. julia, obviously with what's going on in europe right now some of the attention has been taken away from china but we still obviously need to keep our eyes on it. we are seeing the consumer prices are declining. i think that's a positive sign. yet earlier this week we had premier wen jiabao managing projections for growth. where do you see that economy moving and how does it play into the global picture? >> right. so china is still in a weak path of growth and that's what's taking the steam out of

inflation. what we saw from the policymakers earlier this week they're going to be very cautious about the inflation growth tradeoff. we do look for the numbers to firm as we move through the year. but they're not going to look to stimulate like in 2009. there's going to be a much more cautious easing of policy to keep dwroet on track without igniting inflation so it's a more difficult tradeoff. it will be a constructive factor for the global economy so that lifting in china will help the whole region and global economy see better numbers in the second half of the year but, again, a much more gradual firming than what we saw last time around. >> it sounds like the leaders there are managing it well? >> they're trying very hard to manage it well. recall they're going through a political transition this year. they're going to hand the baton from one group of policymakers to the next in october. this is a huge transition. their key focus is stability right now. it's not just growth at all

costs. it's keeping things stable. that means prices under control and growth right in the sweet spot. >> when we talk about stability and keeping growth on track as well, that brings me to our next topic which is here in the united states. bernanke also trying to do the same thing. now when he it testified to congress he didn't mention anything about qe3 and that put the markets in a tailspin yet we do have "the wall street journal" article saying it could be on the table. someone said the market is like -- he's like a drug dealer and the qe3 is the drug. and so if he sees that the market feels it needs more liquidity and he feels the stimulus is necessary, it might be on the table. >> right. i think "the journal" article is significant ahead of a meeting where they're probably not going to do anything next week. they're not the going to say much. they're not going to do anything. it's a signal that, yes, we're still here, we're still ready to provide an easing role if we think that's needed and he wants to keep the markets running strong. that's how monetary policy is

working right now through the financial markets. certainly has helped the credit market and the stock market. so it really is one key factor supporting the economy. he's going to make sure it keeps playing that constructive role. if growth takes off on its own, for example, we see strong hiring numbers it continuing, they may not need to do anything but right now he's erring on the easy side to keep markets happy. >> julia, what rate -- where does the unemployment rate have to go? what number does it hit before they change their tune? >> well, changing their tune is going to come in a number of steps. first they will signal they will hold their balance sheet constant and then maybe shift their language. i think we're going to have to see considerably more progress on the unemployment rate and keep in mind the unemployment rate has been a little bit difficult to interpret. a lot of it has come through people leaving the labor force and that's not okay for chairman bernanke. he really wants to see the unemployment rate fall. >> what's the key number?

to decide rates will stay on hold, what, do you think, is the target number on unemployment rates? >> one of the things they look at the unemployment rate which is much higher than the regular unemployment rate. they also look at the ratio which has been very steady, meaning that we're only hiring enough to keep pace with population, not anymore. so there's a number -- there's not one key measure that we can say, aha, when it hits "x" they're going to move. they tang a mutake a much more holistic look. >> were you surprised that bernanke was surprised unemployment was falling faster than he expected? >> it's been a moving target for all of us. the speed with which it has come down has been quite a surprise especially the way it's come down. forecasting things like the participation rate right now is difficult. the speech last year is it's not okay to just let people, you

know, leave the labor force or 0 be unemployed forever. we want to bring these people back. we don't want to lose that growth potential. >> and certainly today ahead of these numbers we'll be looking for that. let's leave it there for now. still to come on the show we are going to discuss that, where the jobs are, in fact. we'll break down the payrolls report with a former top official in the labor at the present time.

good morning and welcome to the show. the headlines this morning, in the united states, of course, we're focusing on the february jobs report which is expected to show another month of solid but unspectacular hiring. greece gets 83.5% of private bondholders to agree to debt swap. should they launch collective action clauses, likely to be a trigger for cds payouts. meantime, the greek finance minister is saying that athens isn't worried about by any cds trigger. he claims there are less than 5 billion euros of outstanding contracts. good morning. nice toft you here on "worldwide exchange." it is 5:31 on the u.s. east coast. let's take a look at the u.s. futures and see how we are shaping up for trade.

it does look like it could be a mixed open. if the markets were to open now the dow would be higher by five, the nass tack by three points and then the s&p 500 just above the flat line. this after equities finished higher. what it comes down to today in terms of the u.s. markets is any headlines that come out of greece and, of course, this jobs report as well. >> i think what we're expecting here is basically a collective action clause to be launched in greece that should trying aerocds payout. a meeting at lunch time today. those meetings are at 1:30 gmt. we'll see what happens. we have the employment report as well. stocks ahead of all of that are mixed to flat. we had the rally ahead of greece yesterday. well up over 2.5% for the french and german markets. today we wait for the figures of that employment report, jackie. >> yeah, and speaking of that

report, the february u.s. jobs report is due out 8:30 a.m. eastern time with economists having another month of solid hiring. 243,000 in january. employers have added about a million jobs since august. it is expected to hold steady at 8.3% dropped since august. joining us now to talk more is patrick o'keefe, director of economic research and, of course still with us, our guest host, julia coronado. pat, when we look ahead at the number expected today, it seems expectations looking for the solid growth but nothing that will move that unemployment rate around. do you agree? >> i expect about 200,000 jobs, all of them in the private sector. we look at month to month, the number that's really caught my attention is for the last three months job growth has been averaging 200,000 per month. we also see the adp data a

series that goes back 20 years. there it's been over three months now that we've seen the average over 200,000. similarly in the household survey. so all that have is an indication we have finally probably reached our velocity that will take us beyond nearly marking time and beginning to put the employment rate higher than what it's been. that's very low. >> and what do you expect to see within the next six months or so? we have an election year coming up as well and that will be very important so this rate is going to be really, really botched and monitored. how do you expect it to develop in the short term? >> i think the labor market has finally reached escape develop os ty. we're at the point where not only will we be adding jobs but the momentum going forward should be with an accelerating pace. >> and julia, your thoughts, or do you have a question for pat? >> well, so i would say my expectations are pretty much in

line. we've seen the u.s. economy be so resilient, we've reached that limit of firing. we're operating at such a lean compaapacity that we need to ad workers now to continue to grow. so i think we should continue to see better numbers. there's some question right now as to how much of the recent strength was due to the warmer winter, fewer construction layoffs and so on. but it is broad based and so i think we are going to see some better numbers. the acceleration, i think, is the question mark. do we see -- do we go from the 200 to the 250s and 300s or do we just kind of stay around here? this is pretty good. we'll make progress at 200k. consumers will earn income they'll be able to spend. >> and that's really an interesting point because a lot of the folks we bring on the show we do discuss with them, pat, what the unemployment number really is when you take into account the folks who are out of work right now who are not searching for jobs. it's anticipated we could be looking at a number like 15% or 16%. what happens when we start to

sort of really balance out what we're looking at and those people, do they come back in and start finding jobs and, if so, how are those jobs going to come back into the market? >> well, two things. if we hadn't had a drop in participation, the unemployment rate would still be 9.1%. this isn't because we're adding jobs because of discouragement. i do think that we -- a good news story right now would be to see the unemployment rate go up because of the re-entrance of discouraged workers. we're not seeing that even though the household sector is reporting substantial job growth. as to where we get the jobs, one of the concerns we have to have about jobs growth is how concentrated the private sector jobs recovery has been. when you look at it, temporary help in mining before the recession 3% of all the jobs in the united states, they've accounted for 16% of the jobs gains during the recovery. if we don't start to see a broadening, then our hopes for

increased velocity are going to be dashed. >> so really what you are saying to me, the way i interpresent the comments, this is a much more fragile state of affairs than most people are considering at this point. >> i think because it's a political year people are looking different than economists are. this is a recovery but it's a grudging recovery and even under best case scenario we don't get back to a jobs level we had before the recession until mid-2015 at the earliest. >> how much do you think politics play as role in this is this so if we do see, for example, a change in guard in the white house, do you think that a republican is going to have a better time creating jobs than president obama? >> i think the political debate has demonstrated when it comes to labor market policy both sides of the equation are devoid of any ideas. >> equally incompetent. >> it's a polling of ignorance, if you will. >> that's an interesting point. ross? >> patrick, they may not have the policies. job creation comes down to

individuals at companies having confidence, doesn't it, to invest in their business. i suppose does the political climate impact confidence on investment? >> i think it absolutely does. when we look at the polling, one of the things that is striking is employers appear to be gaining confidence as do the households. but when we factor in the political questions as we saw in the debate last year about raising the debt ceiling, very quickly confidence dissipates because the political establishment just doesn't seem to have a grasp of what the real economy is doing. >> so the follow-up question to that is what is the ideal political climate to encourage that confidence to grow? >> ross, if i knew that, i would be making a lot more money than i am. >> the other side is we've got

oil prices still edging up and getting higher as well, so how does that feed into if we see sustained higher oil prices and we get more political risk premium out of the middle east, what might that do to dent the recovery? >> well, last year we had a similar runup in oil prices from a lower level that then petered 0 out in about april. if we see this steady rise in prices that we've seen over the last three months, four months, then i think an awful lot of consumer spending is going to be diverted to the necessity of driving to and from work and we'll see let impetus in the rest of the economy, job growth, therefore, would slow. >> yeah, already we've seen gas prices affecting the kinds of cars people want to buy. they've been shifting towards more fuel efficient, lower cost vehicles and that's just an

indication, a little sign that gas prices are entering people's cautiousness and affecting decisions so it's a bit of a concern that could lead to some fl flattening out. >> but gas prices have been relatively high for some time right now so even just that little incremental change you feel will have an impact on the con consumer's pocket? >> the change relative to last year is much smaller so it's an open question. is it a psychological $4 a gallon level that really starts to impact consumer spending or is it just the rate of change? it's probably a mix of both which means the hit to the economy this year from rising gas prices doesn't look like it's going to be as severe as last year. it's not going to derail the economy but it could take a little steam out of both spending and hiring if it continues to run. >> absolutely. >> and incomes are flat so the rising gasoline prices are coming as a substitution effect. people are spending that money on gasoline not elsewhere. >> that's a great point. unfortunately, we're going to have to leave it there. we are running out of time.

patrick o'keefe, direct aror of economic research at jh cohen and, of course, our guest host, julia, will stay with us for more insight. ross? good to see you all. speaking the past hour before dwrek parliament, venizelevange venizelos held the debt swap a success. i thought we were going to hear from mr. venizelos. we're waiting for him to come up. so he's supposed to be giving a press conference. that's what he said in had the speech. just remind you why he thinks it's a success, he basically -- remind of what is going on here, sources told the dow jones the eu economics commissioner olli rehn will issue a statement at 12:00 cet and saying the meeting has been brought forward to 12 thi 12:30 cet. so some confusion there not only with the timing but also what we were doing, jackie.

and still to come on the show, greece's finance minister says that the country's debt swap has been extremely succe successf successful.

okay. so we've had a greek agreement this morning.

83.5% of all bondholders have taken part in greece's debt swap. now when we take up the bondholders regulated under greek law that jumps up 85.8%. 69% of creditors are regulated by foreign legislation took part. there's an extension under foreign law to decide whether that figure will be up. speaking the last hour before greek parliament, evangelos venizelos hailed it a success. we can now hear what he had to say. >> translator: this is the only road to hold this nation together and give it a historic second chance that it needs. the banks are an important asset for the greek nation and we want through this judgment to support them and to return them to a better direction. >> so what happens next? well, a euro group meeting to discuss greece's bond swap later. the report suggests that meeting

had been brought forward to 12:30 cet. what this group will do is decide whether that debt swap met the requirements and consult on whether to launch collective action clauses. most investors are saying they will. and then following that isda is meeting at 14:00 cet and once collective action clauses are launched they'll decide whether a credit event has taken place and everybody we have spoken to this morning said they would have to and then say yes, a credit event has taken place which will trigger cds payments. jew julia, if they don't, julia, if they say we get collective action clauses, it makes entire nonsense of the whole insurance system so one would suggest now that we seem to be comfortable with the payout they should do it. >> absolutely. you do have to somewhat try and maintain the structure of these

markets. if you can have a restructuring like this without a cds event then really what is a cds worth? i think it would actually as one of your earlier guests noted, it could be a positive thing for the cds to get triggered at this point. >> absolutely. thanks for that, are julia. other stories that we're following, bank of america has reportedly struck a side deal with the u.s. government over its mortgage and foreclosure practices. boa was part of the settlement reached with the feds and state attorney general. reports the can company will make deeper cuts in borrower's mortgage balances, helping more than 200,000 homeowners n. return it will avoid as much as $850 million in fines. this deal reportedly adds loans originated by countrywide financial which boa bought in 2008. let's take a look at shares right now trading in frankfurt up about 0.8%. and texas instruments is cutting its first quarter outlook citing weak demand for wireless chips.

ti sees earnings of 15 to 19 cents a share below analyst foreca forecasts. altera warns it could come in at the low end of expectations due to the weakness in wireless and military markets. the moves come as chip makers have been dealing with an inventory correction and let's take a look at stocks as well trading in trang further. we're seeing ti down. we're seeing a little pop in altera up a quarter of a perc t percent. and a side note to today's jobs numbers, the workforce actua rose last year despite fears of big jobs losses. findings came made by new york city's department of labor. wall street companies hired 4,900 people through this january. officials had worried that the securities industry would lose jobs after banks and brokerages announced waves of layoffs. ross? >> yeah, i just confirmed that we are going to get a meeting with the euro group to decide on collection action clauses at 12:30 cet that's now been confirmed to 12 thi:30 cet.

what you are looking at is greek finance minister venizelos holding a press conference. the key meeting is 12 thi:30 ce. they will decide whether to launch collective action clauses. so hopefully we'll know, jackie, what isda will decide after that. >> absolutely. obviously both of those things will have an impact on the futures here on wall street. up next, we're going to head to the bond pits in chicago for a look at how the markets may trade the jobs report today. carfirmation.

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. i'm going to step out on a limb here. >> hold on, everyone.

we've been waiting for this. >> i think we're at the bottom. i really do. i think we're going to have a really. >> there we go. a man unafraid to make a call. mark, let me tell you this -- >> in other words i think today this is for real. >> it was exactly three years ago today that the late mark haines on ""squawk" on the street" that i had ma announcement calling the bottom of the bear market. the s&p 500 and dow have nearly doubled since then, the nasdaq up 130%. and joining us now to talk about the markets and the trading day, ben lichtenstein and still with us julia coronado. ben, let's begin with you. it does seem that the bulls have been certainly out on wall street but in some ways we've been trading a little bit sideways. do you think this bull market run is going to continue or are we due for a correction and it's just a matter of time? >> considering the strong runup in energy and the acceptance of higher levels we've been

establishing to the upside you have to give the benefit of the doubt to the bulls. yes, it has slowed but that's amidst a lot of uncertainty out of the european sector. a lot of uncertainty in terms of crude oil prices. this slowdown we're seeing really in the s&ps for the most part is characteristic of the uptrend that we've been seeing and, again for the most part, i think it's completely understandable consider the strong runup in terms of crude oil and the other energy. crude oil up above $100 and most recently $110 a barrel. yeah, i think that, again, these price levels have been accepted. i think there's a lot of optimism and i think consumer confidence now is certainly on the rise for the most part but, again, an enormous amount out there and the rate that we're seeing it probably would not continue for much longer. >> all right. i want to bring up an interesting stat. the dow is only about 9% away

from its record close that was in october of 2007. and some of the bulls out there are calling for dow 15,000 this year so do you think that is something we could potentially see? >> sure. i think it's a possibility, again, in terms of, you know, weighing the directional type trade that we're seeing, there's no question the trend has been to the upside and in terms of what i look for are these areas of value that are established. the market never goes from point "a" to "b" in one straight line. it actually trades in that direction and then trades sideways for a little bit and looks for acceptance or some confirmation of those levels and those are the areas of values that are established so, again, the market's real job is to help facilitate trade between the buyer and seller and tends to be most efficient in those levels. the inefficiency comes from seeing these highly convictional, highly directional type moves to one side or the

other and again those aren't what you see during the most part of the trade. you see that rotational type transition, trade. again, as these areas are established to the upside those are just, again, communicating that. still the perception on behalf of the buyers that value is higher and value areas will move higher as long as we continue to see that perception that value is higher and it won't be until that perception has changed that the market price is coming up. it seems comfortable. there's talk about 13,000 on the dow. for the most part there's in terms of comparing apples to oranges the comparison that you made in terms of the levels where we are right thousand versus years ago there are different components. it's comparing apples to oranges. go ahead, i'm sorry. >> no, that's okay. julie has a question for you. >> hi, ben, good morning. >> good morning. >> what do you make. the fact that while we're moving

higher on the equity indices we're also really trapped in a range on treasuries so the t ten-year treasury can't seem to move much beyond 2% in either direction and we would typically take that as a signal of risk aversion. how do you reconcile between that and the bond market? >> well, there's a couple different components at play. we've seen this in the bond market. the 30-year futures we're talking about from this 140 handle to 147. very range bound type trade lee. the key component is the dollar. dollar strength, stock market strength here. looking for continuation of that. >> we are running out of time. i am going to thank you now. thank you for joining us. thank you, julia as well. that wraps it up for "worldwide exchange." i'm jackie deangelis in the united states along with ross

westgate in europe.

good morning. jobs in america, topping today's market agenda. a deal in greece, a critical bond swap offer gets the support needed to help athens stave off an imminent default. and a first on cnbc interview. be becky sits down with bank of america ceo brian moynihan. housing, the economy, the fed, and the future of the financial giant. it's friday, march 9, 2012. "squawk box" begins right now. ♪ they say it's all right it's all right have a good time