welcome to "worldwide exchange." headlines around the globe, asian marketing deliver their best first quarter returns for over 20 years. even as upcoming manufacturing kay take out of chike data out s investors merv us. and street protests against austerity turned violent. >> research in motion, r.i.m., feeling a little bruised day. reporting a fourth quarter loss

and launching a review that could include a sale of the company. >> 800 billion euros should be enough for europe's firewall as a former board member tells cnbc it's not size that matters. >> it is not the size of the firewall. it is more the adjustment the needs in the problem countries, in the crisis countries, that have to adjust. i think this is the key point. >> hello. you're watching "worldwide exchange" with ross westgate in london. happy friday. it's also the last trading day of the quarter. coming up in today's program, we'll be getting the outlook for soft commodity prices as the department of agriculture releases its crop report. blackberry maker r.i.m. says extensive restructuring is under way after earnings plummet, but is the company up for grabs.

plus we'll speak to the former morgan stanley asia chairman stephen roa stephen roach live. isn't lake como where george clooney is? >> i think it is. whether he still has the villa, we're not quite sure. but it is a beautiful spot. i know it fairly well. a little chilly, for me. i like september. it's a slightly better spot. here we are as far as markets are concerned. weighted to the up side. we are as you can see advancers outpacing decliners by 8:2. we'll keep you're eyes on deliberations today as far as the spanish budget is concerned. yesterday ftse 100 down about a third -- up a third of a percent today, so far will year, this quarter, up 3.4%.

xetra dax up 0.8% today. a couple weeks ago, up 21% for the year. so you can see the fall has we've had during the course of the week. dax and mib, 0.4% today. cac up 1% for the session today. take a look at where we are with the debt markets. we keep our eyes really on the peripheral yields out of spain. yields in spain just saw them rise a little bit during yesterday's session. 5.4% today. ten year btps back over the 5% notwithstanding that auction yesterday that was fairly okay. we talk about it on the program, coming out and saying we'd be in recession. that is a view pot shared by the majority of economists in the uk, but there will be a second negative quarter of contraction as far as first quarter gdp is concerned. ten year gilts 2.1 #%. keep your eyes on the currency markets.

euro-dollar being traded very tightly in the ranges. 1.33 handle this morning. earlier this week we had one month highs. couldn't break through technical resistance around 1.3377. the yen has been stronger. euro pretty flat today at 1.09. sterling has risen. dollar index down on about a one month low today. christine, back to you. >> take a look at what asia is doing for the entire quarter. it's a sea of green. nikkei 225 one of the best performers in more than 20 years. for the quarter, this market up 17%. shanghai market modest gains, almost 3% for the quarter. the hang seng 11.51%. now, this particular market is the best quarter in more than

three years. taiwan weighted index up 12%. best performance of course in about two years and the kospi index is up 10.3% as well and over in australia, this particular market, best gain in 2 1/2 years. pricing the possibility of a rate cut coming from the rba to boost its domestic economy. joining us now as our guest host is john woods, chief investment officer at citi private bank. good to have you with us. it's a sea of green behind me. do you think asia can repeat several in the second quarter? >> i hope so. i really do. it's worth pointing out that our gains in the first quarter came very much in the first two months and in fact during march, many of the markets actually

traded off. particularly china. we've had this unusual divergence in asia over the past four to six weeks of stable price depreciation but declining volume. it suggests the retail investor is not buying into this rally and it's very much driven by offshore liquidity seeking growth in earnings and i noticed in the last couple of weeks that has now started to reverse. >> we do face headwinds from high oil prices. china itself continues to be a big concern and we look at earnings coming up from dhi in a. seems to be weighing already on earnings on chinese companies. what does that bode for the second quarter? >> i think it's a search for the catalyst. i think there are a number of straws which you suggest could break the markets back, but i think if the market identifies a

reasonable catalyst, we will have later in the second quarter. just to say i'm actually focusing on perhaps an underappreciated level of growth particularly in industrial production across asia. it looks like growth is rebounding in to the first quarter and that's largely a halo secretary from growth in the united states. which is offsetting weakness in europe. if that can continue, then i do position we will get further assistance on our second quarter earnings. >> this particular market seems to be one of the best performance in more than 20 years. a lot of people are saying the recovery in japan is still very much intact. what's your bet on the japanese equity market in. >> well, i think what's trending

is actually concerns and positive views around deflation or inflation. that's been a constant. so to the september that we see this series coming out of deflation and into inflation, and the associated policy support suggested by the boj is leading a much more positive view towards the market. the government is supporting the market. and we've seen some reasonably robust and really quite interesting retail sales numbers in the last few days from japan. so absolutely it's been the outperformer amongst the major markets. we're overweight and have been so for some time and have a positive view.

>>. >> how much does the quantitative easing have to play in the role? >> very closely particularly when connected with the sx porters. there's a concern slightly in my mind about whether this 1% target is achievable and if it is achievable, what impact that may have on jgb yields and their relative value on a real basis. it seems to me that if we have jg mom natural yeeds at 1%, we have a real yield of zero, and that you willy may encourage further outflows from japan expressed lieu a stronger dollar-yen, but also potentially liquidity in-flows in to other parts of the world, as well. >> okay. stick away. plenty more to come from you. just got some extents coming out from the european commission talking about the sbepgs to propose a bank revolution plan

before the g-20. they'll discuss will this resolution at copenhagen, talking about whether big banks should be required to have living wills. not a new idea. but they're going to propose to see whether we can do that on a new level. this coming out as the spanish government is preparing to unveil one of its toughest budgets later today. protesters brought strans port into a halt this turned in to a riot. finance minister says he's confident the budget will reassure both spain's eurozone peers as well as the financial markets on that last point. let's join stefan who joins us for more from madrid. stefane, what is going to be in this budget that is going to a

degree assuage any fears from financial investors? >> it's going to be the toughest one since the country returned in 1975, the government has announced that it will reduce deficit from 8.5% to 5.3% this year and to reach this target, it will need to cut spendings, in that natural spendings, by at least 35 billion euros. at least because according to some private economists, the country would need as much as 6 4 billion in cuts. they announced 15 billion euros savings, budget for oil minute have is will be reduced. what it is likely to be announced today, that the budget by 15% in all ministries in spain. the budget is expected to have a special tax system for basically

to mcthe tax rate for all companies. selective increase of the v.a.t. also could be announced today even if the prime minister rejected a general hype of the v.a.t. in spain because it believes that it would damage it even further. it's very important and likely to be confirm dad that the government has reached an agreement with most of the regions in will spain because in this country, only 20% of the public money which is spent by t the central government rngs it's crucial to reach a deal with all the automatic regions which control education, which control the health care system. it's important that they respect also this will deficit target for this this year. otherwise the government will not make it even if there is an agreement with the regions, companies are concerned that

they might not anable to reach this ambitious target for 2012. if you look at the growth forecast, the government is expecting a 1.7% contraction of the gdp in 2012. that's the official forecast. but they're more bearish about the spanish situation. at citi, at the believe that the spanish economy will spring oig by 2.7% this year and by 1.2% next year which means that the government will need some additional resources to compensate for the shortfall. in other words, it's going to be extremely difficult to return to growth. >> and that's the key point. thank you very much. we'll check with you later. with the launch of the ltro program, global invest ors decided clearly there wasn't going to be a systemic financial break down of the system and that was a reason to sort of get long. they accept ll be very weak growth or no growth in the likes

of spain. what investors will do with the european story now? >> you're rightly highlighting greece. the ltro did to an stepped have a systemic risk to the banking system in europe, but also concern over restructuringses exist. greece is as you point out the market focus now. greeces has moved to the background and spain is in the fore. while i guess you could say the risk of revupgting in spain is as high as it's ever been, never the less, it's not inevitable. if we get the right sort of fiscal and structural reforms, it's quite possible that these targets are achieved alongside support from perhaps a troica type structure which will provide the appropriate financing. but it's in the quite the next shoe to fall, but certainly the market is looking at spain with

an awful lot of concern. >> john, this is christine. with so much uncertainty coming out to the eurozone, to what extent can the global economy count on the u.s. for a recovery this year? >> that's a very good question and the central question is the growth pulse in the u.s. sufficient to offset weakness in europe. i think will are two camps. one camp suggests that growth numbers are rolling over, that there's a seasonal effect at work that could see weaker growth playing through perhaps appearing in the second and third quarter which would clearly be an issue for markets such as ours in asia. the other view is that the growth that we've seen in the labor market in recent months will be enough to keep it essentially decoupleded from

risk in europe. so it's absolutely the main concern. when we're looking at asia, we're seeing an uptick in container sh eer shipments, we' seeing tech led exports from the region which veerly depend on the u.s. continuing and to that extent our position is somewhat of a leveraged play on that part of the world remains in place. >> john, so nice on have you with us. you'll continue to be our guest host. coming up next on "worldwide exchange," over $5 billion in market share gone in one fell swoop. we'll tell you what happened coming up next.

bankers an policymakers gathering for the latest workshop assessing the impact of the debt crisis on the real world. silvia has spoken to roubini and he says the euro needs to head down to around parity to help out the per arriv peripherals.

the issues about austerity and what to do with the it annian and spanish stories in particular and whether to reward them for covering their budgets or whether to get worried about the impact that it has on growth. is that sort of the nub of discussion everybody's having? >> yes, i think that's the tap dance we're doing at the moment or tight rope or whatever picture you want to take. on the one hand you have the german view, but not only the better man vi german view saying if we're too lush, then we take some of the pressure off to actually restructure these countries and then we're going back to the old way of trying to spend your way out of the crisis and no matter what happens tomorrow. but on the other hand, we do need to spur growth again. and so that's why we have copenhagen and everybody sort of scratching their head how much should we put aside for the

combined esfm and euro of former member of course of the ecb also pointed in that direction saying, look, we have to be careful if we're too generous, then we've run into our problems and about about we're not generous enough of course then we have the problems of could i boshi kiboshing the economies in question. we also have the application within the ecb council. remember that bundesbank president wrote a letter that was leaked expressing his concerns about the ltros, three years, about the size and interest rate. and about how to basically beginning to sage an exit scenario. and he said with the way the ecb council works, the dissenting views are not anywhere on record.

so maybe what we need is indeed more transparency about the decision making process of the ecb. this is what he said. >> this will take time. i think there is a need about in particular when it comes to decision of the par reaching and fundamental nature to be more transparent about the majority view and those who have expressed the dissenting view. >> what everybody's been asking of course, and we also know that it's dekt becauifficult because political pressures from hair ho their home countries. you can imagine the bank of italy council voting for a rate hike consecutively for example under the buerlusconi governmen and what pressure he might get. we also talked about not only the euro and the and you are row zone crisis, but the many crisis

pots that we do have on the planet right now and he pointed out that one of the big concerns for the global economy at the moment are the tensions that are building up that keep pushing up the oil price. here's what he said. >> more important is now the rise in oil prices given the middle east and this is significant for all important countries. united states, eurozone, japan, china, end i can't and advanced economies, emerging market. >> i still remember not so long ago we were talking about an oil price of $40 a barrel that would surely cripple the global economy. but, hey, there we are now. >> came out with that new word today, destagflation, which is sort of arising oil prices and recession. i like that. i like it when i get a new praise. >> it's a good one.

>> yeah, destagflation. silvia, we'll check in with you later. we've got stevphen roach coming up later. for more, head to cnbc.com. it's the end of the week and i'm getting a little older, christine. it's taking me a little bit to remember. and of course it's at least an hour away and i can't possibly be expected to think about an hour's time. i have to say in the moment. >> yeah, i know what you mean. it is the end of the week and just focus on that nice big jug of beer at the end of the show waiting for you it at the pub. how is that? >> all right. >> that ought to keep you focused. you but before you get will there, a couple of things we need to cover before market players if it hong kong balked at the territory's property billionaire brothers cuffed

apparently for suspicion of graft. >> shares in major hong kong developer and associated companies plunked on friday after the arrest of co-chairman thomas and raymond qua. the two individuals along with former government chief were hauled in by the apity corruption watch dog, the independent commission against corruption. the icac says the detentions were on suspicion of bribery law violations. none of the men has been charged so far and they have since been released on bail. local media is abuzz with various accounts by unnamed sources regarding the possible offenses range prg the disclosure of connie deny shal land sales information to emproper preferential property rental rates all the way to unsourced allegations of improper lending arrangementses. the detentions are the highest profile arrests in the merely four decade history of the icac

and are sure to fan public discontent at a time of political transition here in the city. the chief executive was selected last week after a scandal heated campaign because of perceived cozy links to big business. >> let's get more reaction. tracey chang has been following the story closely. >> actually more than $5 billion was wiped off the market value after those arrests. the stock of asia's largest real estate company plunged more than 12% today. the biggest single day drop in 14 years. both citigroup and barclays capital down graded their rating after these arrest, but analysts expect a difference between the failing market price and the value of the developers' assets to widen in the near term.

so so far the stock is going to plunge more according to analysts. also collateral damage in the real estate sector. most peers suffered losses near 3% or even more, but some analysts are cautioning this is a very company specific event and shouldn't affect industry as a whole. some traders seeing a buying opportunity as funds will likely be poured in. back to you. >> interesting. thank you very much for that. >> coming up next on "worldwide exchange," a setback to japan's recovery and manufacturing drops off in february for the first time in three months. but is there still reason to be optimistic?

headlines from around the globe, spanish finance minister says his budget will convince brusselss in the markets after street protests against austerity turn violent. >> asian markets deliver their best quarter in over 20 years everyone as upcoming

manufacturing data out of china keep investors nervous about growth. >> germany's finance minister insists 800 billion euros should be enough for europe's firewall as a former board member says it's not size that matters. >> it is not the size of the firewall, it is more the adjustment needs in the problem countries, in the crisis countries, that have to adjust. i think this is the key point. >> r.i.m. feeling a little bruised today. the blackberry maker reports a fourth quarter loss and is launching a review that could include a sale of the company. >> ceo speaking they plan to

accelerate spanish property sales today and they say the spanish government bank overall plan is painful, but fairly vital and it would create fewer stronger banks. they say the span, government is tackling the deficit in a determined way. finance minister says there's no need for more than 800 billion euros. speaking in copenhagen, he says 800 billion euros will be enough to help troubled economies and spending more money will only lead to more speculation. the numbers we're you willy talking about here and the three options on the table, first of all, 500 pill i don't know, that's the amount that we have

in the year, the new fund. the question is what do you do with the esps, which is supposed to run out in 2013. that's already spent 200 billion. that will keep running those programs, so you could say if you took that 200 billion, added on to the 500 billion that we've already used, that's around 700 billion. but you could suggest, well, hang on, we have another 240 potentially in drawdown for that. so what happens if we take that and add it into it, we could have the used esfs, plus the 500, hence we get to the 940 billion. this unused portion of the esfs, that would only apply to 2013 and gasoline potentially only for those countries that are already in the program, not for fresh programs from the likes of spain or italy about they ever needed it. but to be reused say greece

needed a third program, not ruling it out, or here's the thing, you could just at that time unused portion of the esfs and just add it straight into the esm and create a 740 billion euro fund that could be used indefinitely at any time in the future. so those are the three options. it still gets you to that 940 billion, but ffd insteading 203 out, could you use it indefinitely. carolyn is in copenhagen. it's as clear as mud in some ways about what we do. does any of it actually matter? did the temporary esfs stop greece from restructuring its debt? no. is the bailout if you said going to be big must have to actually sooth the market, is it big now wow the markets some i don't

think that 8 billion pig will get us anywhere. so i think the market reaction today will be very muted. i should also point out from a he can cal point of view, if indeed italy and spap do ask for that rescue, about about they do ask for a bailout, the 800 billion is nowhere going to be big enough to cover the refinancing needs of those two countries because they amount to 21.2 trillion euros. but the bigger issue is also spain. the spanish finance minister was quite confident. he said the budget will show the government's commitment to its fiscal plans and to growth plans and he says the budget will convince the markets and fellow finance ministers. obviously this time around he's really got to dwins his colleagues here because we really don't want to see a repeat of the last year when we had this big fallout over spain not meeting its deficit targets.

so this is one of the most important points in the agenda, how is spain fairing and is it actually committed to meeting the fiscal targets which by the way are very, very ambitious. 3% in 2013. a lot of people here on the grou ground actually don't believe that spain will meet that target next year. >> it's interesting to compare the approaches here from mario monti and the new spanish government. some say the problem with spain at the last meeting wasn't that they said we have to readjust the target, it was the way they went about telling their colleagues. and that they should have country what monti does which is have a lot of discussions behind closed doors, he's obviously a very experienced european diplomat and politician, as opposed to literally just coming out and saying this is what's going to happen, deal with it. so do you think they've learned a lesson?

>> i think they probably have. what raised a lot of eyebrows the last time around is when the spanish prime minister when he unveiled the deficit gdp for 2012 was going to be 1.4% larger than expected, when he told the world, he actually said during a press conference. so the means of communication, that was very difficult point here and this is definitely what angered the fellow finance ministers. so this time around, yes, he will have to undo a lot of damage which happened at the last euro group meeting. >> all right. carolyn, thanks for that. that's the late breast copenhagen. how is thissing for to play out in german parliament some whatever is agreed, patricia, has to be rat pid. so the key issue what actually do the german opposition parties want to happen? >> earlier on you asked does it

matter the size. and i venture to say, yes, it does matter for a couple of reasons. a, the size matters simply because it will show you the chances each individual government will be able to get that number ratified. eventually really put into place. so 800 billion it seems to be something that the german government can perhaps justify in front of the opposition parties. they have been pressing a lot lately saying austerity is not enough in order to answer these questions with regards to the crisis, but you need to look at growth eventually, as well. and if you don't, then we just might pull our votes. angela merkel can only get it with the opposition and they've been very vocal as of late saying you need us, so why don't

you listen to us. you just can't go austerity, austerity. and we cannot spend our way out of the crisis like the americans. we need to be a bit more balanced. the other reason why i think the size matters here, i expect that the bigger this firewall, the bigger that insurance is, the quicker perhaps the small talk is starting to happen with regards the exit strategy can be actually realized. because the bigger you have a possibility where individual countries can paul back on in whatever kind of action may be taken with that money, also helping perhaps yields, the ecb can pelg baull back the lid liq they've been pumping into the the market. he's going some of the steps taken by drag xwi and thi and t

the firer wall cannot go up into the sky. >> so mr. stark says size doesn't matter. and you say it does. patric patricia, i think i'm going to believe you more than the european stark. patricia, thanks very much indeed. john woods is still with us, chief investment office at citi private bank. john, all this talk about bailouts, i've been following the story for so long, it sort of bores me. i wonder if the investors are bored by the bailout fund, 740, 9 oorks 1 trillion, does it mary ann awful lot? ? >> we've been following this story now a couple of years and skepticism is growing. to be fair, it's a mix of size

and quality. yes, size is important, but the reality is if the infrastructure and reforms are not effectively put in place, then it doesn't matter how big the firewall is. it's not going to have much effect. and that's really what investors particularly here in asia looking outside in-to europe are focused on, how viable, how determined and meaningful are reforms being put in place in greece. of course, though in, pain, to resolve the underlying issue. and until that is meaningfully addressed, i think risks of restructuring certainly in greece have to be on the table. and for as long as that overhang layses, that overhang is there, you know, we can't have any meaningful progression in risk appetite. >> the issue is the eurozone is a political construct using economics and the solutions are political. and investors have a difficult time when you have a very

politicized story particularly when there are 17 different countries involved in the political decision making. so we just have to either take the decision the pog tisliticia will do what is needed and you believe their commitment are or you don't. the bottom line, you either have to believe the politicians or you don't. >> ands's a run willing sword because you have a community that will and a community that won't and we lack a clear resolution. markets like to deal or not to deal and to that extent, we have a somewhat ambiguous pattern of everyone ve inve-menvestment processes and not good either way. them, let let's take a look asian bourses. last trading day of the quarter.

nikkei 225 up. best performance in 24 years, industrial output falling a little more than expected. overseas demand slows down. shanghai market, eeking out positive gains in the last trading near the quarter, up 0.5%. banks were higher in upbeat earnings. hang seng best quarter in three year, down 0.3%. taiwan weighted index 0.6%. maybe the government trying to reintroduce a capital gains tax, that hurt the market today bunsing back. kospi pretty much flat. for the quarter, nice gains, but

for the day, the session chart is showing a mixed session on the last trading day of the quarter. >> thanks for that, christine. the ftse 100, we've had three days of losses for the ftse and the dax -- can we change it back, guys? thank you very much. ftse 100 up. dax down some 3%, but earlier two weeks ago up nearly 21% for the year. christine, back to you. >> it is the last trading day of the quarter, so boards kind of work sometimes and sometimes not in that japanese manufacturers are still feeling the pinch from the strong yen and of course slow demand coming from overseas. the country posting a surprise 1.2% fall inville output in

february. its first drop in three months. let's go live to tokyo. >> the trade mip have i says production took a breather haver it having been in high gear for several months to make up for the sharp cut back following the floods in thailand. auto production fell while mobile phones slipped nearly 9%. however the minute have i kept its assessment unchanged saying the economy continues to show signs of recovery. output is forecast to grow in the coming months as demand for cars and electronic devices are expected to increase. meanwhile consume are prices gained for the first time in five months mostly due to higher oil prices and the unemployment race fell 0.1% as it was likely given a boost by post quake rebuilding. on the political front, the japanese government approved a controversial bill to double the consumption tax to 10% by 2015 today.

focuses now parliamentary discussions expected to start late next month. prime minister faces an uphill battle as opposition lingers among party members. and that's all from the nikkei business report. back to you. >> thank you very much for that and you have a good weekend. over in south korea, industrial activity ramped up to double digit growth rate in february. >> figures were stronger than forecast. rising demand for korean manufactured goods. exports of autos nearly surged 35%. q4 revised gdp was out soft at

3.3% on year. in fact the slowest growth in about two years. in 2011 as a whole, real gdp grew at 3.6% missing the government's initial target of 4 aboutment 5% and was almost half the rate of 2010. but despite weak domestic consumption and construction spending, exports were the shining light. looking ahead, the bok says first quarter growth will slightly approve more government spending. >> thanks very much for that. joining us to talk industrial output, director of economic corporate network at the economy group dan slater. looking at how industrial output fell unexpected in february, how much of the fall is due to slowing overseas demand and how much because of the strong currency? >> it's a very good question and certainly many will be look at

this topic very carefully. the currency is waegenning absolutely around 82 to the dollar. so the census here in tokyo is that this was more of a blip and that be laing forward into the next few months in to the rest of the year japanese manufacturers should be getting some considerable relief from the weakening yen. >> you have good feelers on the ground where you are. you can tell us from your sense is the recovery in japan still intact? >> no, i don't position so. the weaker yen could be getting japan off the hook. when the yen was strong and a lot of j companies were complaining about it, to a certain extent it wasn't as strong as they were making out. but in any case from a macroeconomic point of view, it was interesting to see how japan was reacting to that and it was encouraging to see that japanese manufacturers were finally doing what they should there been

doing all along. which is to really accelerate the offshoring to overseas country. my concern is with the weakening of the yefrn and some very soft money comments by the badge of japan, that that momentum will be reversed. >> to we expect more easing from the boj and will that help, do you think? >> that's a good question. it seems the boj is split on the issue, so not only do you have a boj which is split from the government, the government wants the b ochl j to ease as much as possible. but the boy is getting conflicting signals. so while it increased its asset purchase program quite considerably and amazingly a major buyer of wheat and exchange traded funds, so march 24th, the government of the bank of japan actually said that he was concerned that the perennial low interest rates were having a

deleterous effect on manufacturing. if your hurdle rate is determined by interest rates, and interest rates only just about zero percent, it doesn't take much to get above that hurdle rate. so i would say ambiguous starts from the boj. >> this is john in hong kong. how are you? >> very well. >> so my question is concerning the consumption tax and the potential impact it may have on jgb yields and even ratings, seems that if there is a set back for consumption tax, we could see a short term sfik in yields with the overlay that you've discussed in terms of the boj inflation target. what sort of impact do you think that might have on appetite for jgbs and if we see outflows on

dollar-yen? >> the concern with the consumption tax is more macroeconomic. it's almost become a received which is did tomorrow that consumption tax has to go up. when you look at the in-cox tax situation, it that come down pretty considerably over the last 10, 15 years. if you look at what happened when the consumption tax was raised in 1987, it did not have -- it had a dire economic impact. if you combine that with the fact that the the government of japan is determined to cut down its budget deficit and you'll be seeing a lot of money being taken out of the economy, which is not encouraging. >> dan, thank you accept for your insights today. john woods will continue to stay on with us for a bit who are.

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headlines from around the globe, research in motion is feeling a bit bruised today. the blackberry maker reports fourth quarter loss and is launching a review that could include the sale of the company. and spanish finance minister says his budget will convince brussels of the market after street protests turn violent. >> asian markets deliver their best first quarter returns for over 20 years even as upcoming manufacturing data out of china quiche i keep investors nervous about

growth. >> you're watching "worldwide exchange." welcome back. great to have you with us this morning. let's take a look at the u.s. futures. it is it look like the futures are pointing higher. if the markets were it open now, the dow would be higher by 45, nasdaq by nearly 11. >> cac 40 up 0.9%. but they've been down around nearly 3% in those last three year trading sessions. so we'll keep our eyes on that. jackie. >> mean time research in motion posts a fourth quarter loose as blackberry shipments came in at the low end of its previous forecast. r.i.m. will no longer provide guidance. it also said that devices on its new blackberry 7 platform aren't

sellings as well as hoped. r.i.m. will refocus on its core business and its customers. and launching a major strategic review which could include selling the company although that's not the main objective. hines took over as ceo two years ago. coo and technology officer are leaving the company. we saw r.i.m. falling 2.4% in the after hours yesterday. the stock down 76% in the past year. joining us to talk more about it and also our guest host for the next hour is deputy editor at business insider. joe, great to have you with us. >> thank you. >> let's talk about the r.i.m. results and some of the new initiatives that it seems they're putting out on the table and start for the potential for a sale. do you think that that is likely? >> my gut is that that's probably the best hope for r.i.m. shareholders, that they find some alternative. they still have a lot of sales,

they still make money, there's still a lot of really addicted blackberry users. but the crazy thing about r.i.m., no matter how bad it gets for the company, it gets worse. the exact opposite of apple. the story just keeps getting worse. >> who could some of the potential suitors be? >> microsoft has been talked about a possibility because people think they have to make a bold move they could certainly afford it. and it would be the kind of big move that would get them would be immediate market share. but the problem ises it is r.i.m. and it's pot clear that that would help a turnaround. maybe a private equity possibly just because the stock is so cheap.

get out of the consumer they think and just milk it for as long as you said. >> a lot of users still on the blackberry plat fourm. we'll get back to this topic and a lot more with you as we continue the show. and the question really is the black perry maker on the market and who would be a in fit for it. full analysis in the next hour. >> i've talked to a lot more people who just started to use their iphones instead because matches up with their ipads, they use them for corporates and macs in office, so apple has gone corporate and as a result, hers just not going to use the blackberries. so interesting move. let's talk about spain. government came prepare to go unveil one of its toughest

budgets ever amid deep public discontent. protesters brought transport to a halt with a strike that's turned in to riots. finance minister is confident the budget will reassure both spain's eurozone peers and the financial market. stefa stefane, what is going to be in this budget that will do that? >> it's going to be the toughest budget for the country since 1975. we are expecting massive cuts. at least 35 billion euros to reach the new targets. lowered from 8.5% of xwchlt dp to 5.3% in 2012. it's an ambitious target.

if you remember december last year, the government already announced 15 billion euros in savings said budget for all ministries would be reduced by 12.5%. now, what we are expecting today is an increase of that to 15% for all spanish ministries. we're expecting significant changes for the tax system especially for the large companies which makes significant part of their profit outside of this country and we are also expecting some adjustment in the vip rate for some specific product because so far the prime minister has rejected the idea of a general hike of the rate in spain. of course the main problem for the company is the growth. we're expecting 1.7% contraction of the gchlt dp, that's the broadcast from the government. private companies are more bearish, they're expecting 2.7%

contraction this year. it means that if the economy is slowing faster than expected, the go will need to find some additional cost savings. but the finance minister is confident this will convince the european partners and also repeated this morning that despite all the demonstrations we've seen across the country yesterday, the government will stick to its austerity plan and will stick to its labor reform. we'll start in the united states and see how we're setting up for trade on wall street. it does rook leak we're looking a little higher right now on this last day of the quarter. dow would be higher by 45, nasdaq by nearly 11, and the s&p 500 just under five.

the stocks did finish mixed on thursday with the dow managing to eek out a slim fwan we did see decliners outnumbering advancers by 3:2. s . >> here we have about 4:1 on the stoxx 600. three days of losses. that's come to a halt this morning. so european bourses up between a third and nearly 1%. ftse 100 so far this quarter up about 3.4%. today up a third of a percent. xetra dax up 0.8%. so far this year, just up 17.5%, but you have to remember at the end of last week or the week before, it was up 21% for the quarter and for the year to date. as far as the italian market is concerned today a little firmer.

french market up nearly 8% for the quarter. and the cac up 0.8%. 5 pmt 4% italian btps, spending quite a bit of time below 5% on the yield. up just back above it. euro-dollar, we hit the high. 1.3340. the yen's had a pretty good week temperature today euro and dollar both weaker again the yen. dollar index has been at a one month low. yen up a three week high at 81.83. sterling-dollar just nudging higher again getting torts that 1.60 level. take will help me out when my credit card bill comes through from the united states, chris

team. >> here we're seeing asian markets posting their best gains. nikkei 225 up 7.5% for the january to march quarter. but on the data front, industrial output falling a little bit unexpectedly in february. first time in three months as overseas nand flows. a lot of people saying the recovery is intact. sharng high composite up marginal gains. almost 3 percent for the entire quarter. we of course had banks leading the way higher today on upbeat earnings. the hang seng is up 11.5% for the january to march quarter. best quarter in more than three years. taiwan weighted index 12.2%. australian market up 6.9% for the quarter. we have markets here pricing the

possibility of a rate cut. so overall a nice quarter. that's it for me. i'll be back on monday with more news making headlines in asia. china data out sunday. and business survey for q1. so it will be a very busy week next week. we'll discuss that on monday. i'll see you then. >> sounds great, christine. have a great weekend. sty still to come, we're live in copenhagen. is the firewall a magic bullet?

eu finance ministers are discussing firewalls. schaeuble says there's no need to boost the size to more than # 800 billion euros. he says 800 billion euros would be enough to help troubled quis and that spending more money would only lead to more speculation. a bit of a misnomer.

a bit like saying there's a trillion euro firewall. fwrs we have the permanent bail i don't know fund that will have 800 and then we have the european financial stability fund due to run out in 2013. of which they've already spend 200 billion bailing out ireland, greece and portugal. if you com pine those two, you get 700 billion. but actually the available money would still be 500 billion. what you could do is take the used amount of the, combine that into the esm, that gets you to 90, but this unused portion would only be available potentially for more bailouts for degrees, ireland and portugal and would still run out by the end of 2013.

or the third office is say take the unused portion of the and put it into the esm, that creates fresh financing that can be used at anytime in the future. the big question, though, is whether any of that actually matters in terms of what it does for investors. carolyn has her own view. >> i think the market pretty much agrees that a firewall, no matter what size, is never going to be as effective as the ecb's ltro. that's why some market participates are calling for a third round. secondly, i just want to reiterate the comments that buns december bank said that the firewall will really just buy us time and it doesn't really address the roots of the causes, the growth problems. so this is what the countries this have to be working on. and thirdly, i don't think that

a firewall worth 800 billion, i don't think that this is actually going to wow the market to the extent that we expected the 1 trillion to wow the market. and from a technical point of view, i do want to mention that even interest spain and thely italy were to ask for a rescue, it this wouldn't be big enough to cover financing needs. but still i think they will go with 800 billion because the irish finance minister when he arrived here, he actually said that any combined bailout fund of the size of 800 billion euros is about the right ballpark. so, yes, schaeuble probably gaining a lot of traction here and why would it not. because remember germany is the pay master. it's contribution to the esm

will be a 27%, it will be the biggest contributor to it fund. so pretty much what germany wants, i think this will become reality. >> stark says size doesn't matter. patricia says size does matter. and you seem to be saying it's the confidence that you can engender with whatever you have. that's the latest from copenhagen. jackie, back to you. >> meantime a u.s. health care stocks surged in yesterday's trade, the move reversing steeps losses recorded earlier in the week when obama care was being debated in the supreme court. so what's behind the move? joe is still with us. he has answers on that. we were talking about this during the break. is it a little bit too early to start reading in to the comments and trading the health care stocks on these moves? we won't get a final decision until june. >> people will always try to read the tea leaves of whatever little question seems to suggest that whichever justice will vote

which way. no one knows how ultimately they're going to rule. i think on tuesday, the stocks really got hit when it looked like obamacare really had a bad day, specifically the individual mandate. and the great thing about the individual mandate for insurers, it's a lot more healthy customers in particular the young people who don't typically buy insurance. i think after wednesday's session, looked like perhaps that if the supreme court is going to throw out the mandate, it might throw out a bunch of other stuff, maybe the whole thing, including the requirement that insurers take on people with pre-existing conditions. the nightmare scenario for insurers would be that the mandate goes away, but they still have the obligation to take anyone who is sick. if that doesn't happen, that's a big relief. >> one of the comments out from the justices was the reform bill is a 2700 page document. we can't be expected to go in

there and make all of these amendments. that is the job of congress. so at it point with the supreme court making very, very important decisions about the existing reform, if they don't strike it down all together, could we even see potentially more pieces of it dwindle down a little bit? >> that is the problem. if the justices have to go through a 2700 page bill and go line by line figuring out what's constitutional and what's not, they're basically writing a new law which is not their job. it's congress' job. so it does seem more likely now than before the case started that if they throw it out, they he might just toss the whole thing. and that wouldn't be ideal, but it would be better than just tossing the mandate part. and that's probably why the snap back yesterday. >> certainly something to consider. of course you'll stay with us. we'll get more insight from joe as we continue throughout the program. and still to come, corn planting is expected to hit its highest level in many decades as the usda releases two key reports

later today. so is now the time to buy or sell agricultural commodities? >

corn an wheat are both lower as investors wait for the u.s.

departmentoffing a gli culagri culture reports. joining us more to talk about it is lee chandler. thank you so much for being on the program. you are expecting grain seeds to move lower. what's the thought behind that? >> i think we've seen significant pre-positioning for these reports today. we've seen corn down around 11% over the last ten days. so just in the last few trading sessions, we've seen almost 60,000 contracts being withdrawn from that commodity. we have seen throughout the first quarter of this year soybeans really being the star performer of the agre complex rallies hard on the back of poor conditions in south america.

but obviously these high prices are encouraging greater plantings in places like the u.s. and as you said, we're expecting the highest corn plantings to be released later today and also so i phone soybeans unchanged. we're expecting a down move for the corn plantings and also seeing increases based on the strongest prices in places like north dakota, which were really battered last year because of poor conditions. so i guess corn is really the one that we're looking for today to show significant increases year on year. >> and then on the flip side, some of the soft commodities that you're looking at, sugar, coffee, cocoa, expecting those prices to continue to rise, correct? >> well, i think they're probably not the focus of the market today, but certainly we actually have some bearish forecasts for a number of those

commodities. sugar is looking like having its biggest net surplus on the world sort of supply and demand for this year. so that's likely to weigh on prices. but then as i said, sort of for today he's focus in the grains complex, we actually see some up side for prices in the deferred contracts say for corn, which is really factoring in quite a bearish new crop supply situation. people expecting bigger yields again this year. we actually see -- our forecast for yields are actually down rely i have to market consensus paced on more marginal areas being planted and result, we don't expect yield to outperform. and we still see a very strong demand. we've just seen in the last couple of days china announcing more imports of u.s. corn. and ethanol more begins are back positive again. we actually see the corn supply

and demand balance sheet remaining tighter at what markets are factoring in. >> luke, next generation of biofuels means that won't have too choose between using corn either for food or for fuel because they'll use waste. how long before that next generation of biofuel sort of starts impact market prices? >> i think that's probably some way off. obviously that is as you say the next generation and a lot of the investment is being put into that technology. at the moment corn and sugar contain are really the only two commercially viable options on a large scale. and we see 40% of the u.s. corn crop going into make corn ethanol at the moment. and expecting that to remain steady year on year this year even though the u.s. government has withdrawn credit and import

tariff. so as i said before, the economics of making corn ethanol at the moment with crude prices being so strong are still quite positive. so we expect that consumption to remain pretty strong. in terms of when next generation gets factored in to prices, i think that's well out beyond the curve at the moment, probably some five years away i'd expect at least. >> soybeans in terms of price movement today, that's where you would have made the most money in the agri complex this year. do you still think that's going to be apoutoutperformer and why? >> yeah, in our 2012 outlook that we released in december, soybeans was the top pick and that's really played out in this first quarter. we see we were really factoring in the limiting of weather conditions and downward prouks for south american production and that's certainly come to fruition. we still expect to see further town grades there from the usda

and some of the governments in terms of their expectations for production. as a result, that will place more of the demand back to the u.s., more reliance on the u.s. farmer to plant more soybeans. as a result, we're seeing soybeans rallying very hard versus corn to try to capture as much acreage as they can for this season's crop because otherwise we're going to see a very tight global embalance sheet for 2012 and '13. >> luke, thanks for that. good to talk to you. coming up, we're live on the banks of lake cuomo where silvia has been speaking to the likes of roubini. find out what he has to say next. and it's shaping up to be the next first quarter for the u.s. markets in 14 years. but what started out like a lion is going out like a lamb. we'll head to the bond pits in chicago for analysis next.

r.i.m. reports a fourth quarter loss and is launching a review that could include a sale of the company. >> in spain, the finance

minister says his budget will convince the market. >> and roubini says europe's liquidity operations don't fix anything in the long term and warns investors may need to take a look at this recovery in the u.s. and realize it's not sustainable. >> people are saying we're on the verge of self sustaining high economic growth. it's not the case. >> let's look at the u.s. futures. it does look like we could potentially end this quarter a little bit higher if the markets were to open now, the dow would be higher by 48 points, the nasdaq higher by nearly 12 and the s&p 500 higher by 5.6. but as always, we've seen these pictures turn depending on the course of events. still early to tell.

and i want to ehighlight we finished mixed yesterday. the dow did manage to eek out gains at the end will. how ask it look in europe? >> trying to break three daysoff losses here. we're up near the session high at the moment after three days of losses. dax up just about 17.5% for the year today which means also for the quarter. which sort of puts it in nasdaq comp territory. >> absolutely. as a matter oft, l a look at some of those quarterly numbers and see how we did trade here in terms of our markets for 2012 and the first quarter. despite the fact that we've seen losses over the past few days, we've still seen indices up fairly strong. the dow up about 7.6%. nasdaq up merely 20%.

18.82% is the difference we've seen will. and the s&p 500 tracking really nice gains, as well, 11.6%. so again, while we've seen weakness over the last few days, it has been a strong quarter, but the big question, and i'll pose this to our next guest, jack, the gains we've seen for the first quarter have been nice, but is it time to start that pull back and in fact will we see a drop back in the second quarter? >> i'm expecting something in the 3% to 5% range but that is expected in what has been a phenomenal first quarter run. and one of the sectors that you left out were the small caps. the s&p 600 has quietly made an all-time high. that's something that we didn't expect to see for years in some cases. and i know we have dr. roubini

coming on and he's very bearish. but i'm on the complete opposite track right now. i think that we are looking at what is the beginning of a bull move. a cyclical bear in bonds. we've been talking about it for months. all that money going into the ten year driving the yields down has been like a spring waiting to spring up basically. and that winding spring has started to let loose. that's why we're seeing the giant asset allocations. we've seen a parabolic move in stocks. >> you were on two or three weeks ago and talked about a big move into stocks. since yields have dropped back down and stocks have had a sticky face. what's happened to that call? >> that is well deserved profit taking. let's face it, you have portfolio managers that are right now in church lighting a candle thanking everybody for

the fact that they're able to make money this quarter. these are people that are in jeopardy of losing their jobs because they've been underperforming the market. now they find themselves in a situation where there is a little profit on the table, they're taking it, but let's be very clear. there are still a lot of nonbelievers in the market lays. there's a lot of cash still sitting on the sidelines. and that is what's particularly making me bullish going in to the second half of the year. all of that right now is going to be what i call portfolio managers starting to chase returns. let's see what happens the first week of next quarter, next week will be very, very critical just like the first week of the year was critical if those cash flows come into the market tell us that, sure, indeed people still have conviction, there's still confidence there, then watch out, that second quarter could be a second quarter to remember. it won't be a pay to sell and walk away. it may, a may to maybe buy protection and walk away. >> two things key. earnings that don't disapupon

the and the reason to think that earnings will be a little bit weaker going into it as we get those first quarter reports. the other thing is you need the data to hold up in the united states. because the global stock market rally is predicated on a sustained recovery in the united states. >> remember, ross, you have earnings right in you that are at record lows. the s&p 500 is earning $104 a share. we can see it slip a little bit and the other thing to keep in mind is that the lowering of expectations that we get from these companies happen every quarter. sarbanes/oxley has almost made it a necessity on the part of a ceo. you cannot talk up your company anymore. so i love the fact that everybody right now has their expectations down and low and more than heekly we'll be pleasantly surprised. i think that global growth story is still very much intact.

we talk about china slowing. 7% is sustainable. you don't want to see growth rate over 10% or 11%. so all of that, and i guess what i'm traying to say is when the markets really heat up, those of us that are bullish get concerned. when they slow down a little bit, that actually keeps us bullish and i think that's really why we'll see more traction with this move. >> all right, jack, still around. good to have on. we'll get joe's thoughts, as well. banks and policy maker, economists have all been gathering for the latest workshop. silvia is there for us. i like september, it's a little warmer. but it's rather nice. i suppose the question is sustainability of the u.s. economic model this time

compared to last year you can whether it will hold up. what are the people saying? >> absolutely. we're not talking about crisis. we're talking about crises or challenges around the global economy. we talked about the eurozone and its problem, but that's not the only place where we have trouble spots. we came up always earlier that he pointed out it's not the only place where we have to look is the euro. one of the other big crisis spots he moment is the middle east, the tensions mounting there and the consequences it has on the oil price and probably continues to have on the oil price and the repercussions for the global economies around us. will this is what he said. >> the rise in oil prices given the tension in middle east is significant for eurozone, japan,

united states, advanced economies and emerging markets. >> and that's maybe one of the reasons why indeed we have to put a question mark over whatever else is happening in the global economy. and also what's happening in the uts economy, on how solid ground is the recovery. the fed of course throws a bit of a caution in there how solid the recovery is and mr. roubini likewise says there is a lot to question about it. >> united states on return of self sustaining high economic growth. it's in the case. growth may be barely 2%. deleveraging in the public sector will be ongoing this year and next year. >> of course we said the eurozone and its problems, oil and its problem, the u.s. and it problems. and one could add of course china and japan to the mix with the showdown in china and the

repatriation problems in japan. so enough little crisis spots that make us wonder where we're head willed in terms of some kind of recovery. >> that's the view from roubini. joe, you have two sides of the coin. you have jack very optimistic, roubini pointing out the risks. where do you sit? >> i guess i kind of stand in the middle. one thing that people keep talking about is this sort of deja vu feeling between 2012 and 2011. so many of the market and economic indicators have this feeling lirke, oh, we've been here before, self sustaining recovery is real and then it all sloes down. but as jack pointed out, there is incredibly deep seeded skepticism and that is the kind of environment it seems like where markets could move higher.

so there are certainly concerns, but we've been hearing these concerns for years and ultimately it seems like the market keeps powering through them. >> that's a good point. a lot of people saying as you said in the camp we've seen this story before and we don't want to get back into the cycle, yet you have the other bulls like jack who are saying -- >> yeah, there are always problems. you can always trukt -- the u.s. problems haven't really ever gone away since the bottom of the market in 2009. you can always cite risks. always gas prices and everything else you want to name. but markets can defy those things for a long time. so merely identifying them and kritding them is not necessarily a reason to think that the market will finally go down and that this rally is over. >> okay. silvia, thanks very much for

that. joe and jack come back. out of the eurozone, us treehey have agreed the firewall above the 800 billion euro. i don't know where they get the 800 billion in because we have 500, 200 and the 240. so i don't know where they're getting the 800. maybe they've cut the esps up if a slightly different way. anyway, more would be revealed on that. not that we think actually the exact amount matter as whole lot anyway. >> we'll still be watching to see if we get anymore details. but coming up next, research in motion's new ceo is launching a major strategic review saying substantial changes are needed for the company. can the blackberry maker survive on its own or will it sell itself to the highest bidder? >

research in motion posts a fourth quarter loss as blackberry shipments came in at the low he said of its previous forecasts. r.i.m. will no longer provide guidance and says devices on its new blackberry 7 platform aren't selling as well as hoped. a major strategic review could include selling the company, but they say that's not the main

objective. hines took over as ceo two months ago. r.i.m.'s coo and chief technology officer are leaving. joining us now to talk more about r.i.m. is managing director and senior equity research at mkm partners. and joe of course is still with us. let's start talking about r.i.m. you say it's realistic and refreshing what we heard trying to look at the positive side of it. tell me about that. >> three months ago when mr. hines first took the ceo role at r.i.m., i was actually pretty skeptical. i thought really there wouldn't be any changes. he sounded like it would be very much the continuation of the strategy of the previous calendar, but i was impressed with the actions he took last night, cutting out a layer of senior management and saying that they're looking at all the options and real list technically evaluating what r.i.m. strength and weaknesses

are and that was a departure from the former ceos who seemed to be living in a bubble. this guy seems more realistic, focusing on the strengths and advantages that they have in emerging markets low end smart phones. we're still early, but this guy might have a chance to create shareholder value on a stock that's very peten down. and on any med trick, it's actually a pretty cheap stock right now. >> one of the big threats is that apple is beginning to move if to the enterprise spreads. a lot of guys have given up their blackberries completely. so what advantages do they still have in enterprise and how do they leverage that?

>> certainly r.i.m. won't have the market share that they used to have. there's a whole trend of bring your own device where more and more workers are bringing their own apple and an destroyed devices in. but in terms of management ability and security, in terms of the big installed base, 77 million subscribers, they're still the leading enterprise platform out will. they also from a device perspective, while they don't make devices with a good web experience, they do make a very solid e-mail plat form. and for a big base of the enterprise users, that's what they're looking for. and i think if r.i.m. focuses on those markets, taking back some of the lost share there and on developing new products for that segment, they have a chance.

it is into the near take out term story. i don't think someone like microsoft will buy the company, but i do think the chance of licensing has gone up, and when you look at a vendor like samsung they probably want to diversify away from google and an destroyed and do more things with microsoft and potential with rim. i'd expect to see blackberry 10 on other losses as we move into next year. >> okay. we'll have on leave it there. up next, we'll look at the trading day ahead on wall street as investors are awaiting the crop report. and steve liesman sits down for jeffrey lacker in charlotte, north carolina. so stay tuned for that.

people are flocking to gas stations in hopes of getting that winning lot ary et. the chance of winning, 1 in 176 million. we've gotten some of your e-mails regarding what you would do if you won. one viewer said he would in fact buy new tires for his truck. another one says he would hire a driver so that he could drive him to work so forget about the tires for the truck. and my favorite of course, he would buy a flat screen tv, sit back and watch cnbc all day. of course we are love it hear that. meantime u.s. investors will get a trio of economic reports to wrap up the week, month and quarter. february personal income and spending is out at 8:30 a.m.

at 9:55, we get the final report on march consumer sentiment. five minutes later, march chicago pmi is out, as well. still with us, ceo at bull and bear partners. jack, i just want to kick it off with you. it is on the cover of the "wall street journal." we're talking about a rise in high yield corporate debt or essential junk bonds. what's driving this right now? >> a lack of concern on u.s. they need return. they're looking for it anywhere they can find it. and corporate american is leaner, meaner and richer than ever actually a very good investment these days. >> something definitely to watch out for. and joe, just to bring you in as we look ahead to the trading day, some of the data points we're expecting here, we said before, if we want to continue to see the markets rally and to see the u.s. move in the right direction, the data points need to keep hitting the mark. >> yeah, i agree with that.

there is this talk that the q1 rally is all liquidity driven and the fed and ecb, i don't really quite buy that. i think the market does care about the data. and, yeah, it seems hike we've hit kind of a soft patch over the last two weeks. not that the data has been that bad, but analyst estimates have gotten ahead of where the numbers have come in. i'll be eager to see personal income because once again that seems to be a drifting down. >> so we need to take it slow and steady and see what happens. all right. of course we've run out of time, but thank you so much to joe and jack for joining us today. and that wraps it up for "worldwide exchange" and for the week and quarter. i'm jackie deangelis in the united states. >> i'm ross westgate here in europe. we hope you have a profitable day. "squawk box" coming up right now.

husband cleaning at research in motion. blackberry maker getting rid of long time execs and exploring options including a possible sale of the company. china challenges apple and fox con agreeing it make changes to working conditions and their decision could have far reaching implications for other western companies that are operating in china. plus place your final bets. the first quarter is coming to a close. i thought they were talking about the the final four, but i guess stocks. it's friday, march 30th, 2012, "squawk box" begins right now.