welcome to "worldwide exchange." >> these are your headlines from around the world. >> equities selloff following a downgrade from spanish banks and uncertainty about greece's future in it the eurozone. >> spread widens with germany's it willing record lows, but spains banking stocks are bouncing back a bit. >> facebook frenzy reaches fever pitch. the biggest ever internet ipo. >> india central bank facing a tough balancing act as the rupee sinks to an all time low and

nation accelerates in april. we've bounced off the early heavy losses. 8:1 in the dow jones stoxx 600. and that has led the rest of the bourses down, as well. ftse 100 currently down another 1%. cac 40 down 1%, as well this morning. you have to remember down 4% in the last four trading sessions of both teahese two markets started today. spanish only down 0.2%. this is despite a fresh blow to the financial sector. moody's last night downgrading the long time debt and deposit

ratings of 16 spanish banks along with the uk unit. cuts reflect factors such as reduced creditdy worthiness and rapid detearer ragt bank asset quality. despite that, only one bank at the moment that is down. biggest bank up nearly 3% at the moment. just had it further reports out that the nonperforming ratio up from 8% and bad loans over 147 billion euros. what this has done this morning is we saw once again at the open, fresh record low yields for bunds. we hit believe it or not 1.396%. we're back above that at 1.41. spanish yields still actually below the 6.5% and slightly higher from the open, as well, at 6.31%.

we also had fresh gilt yield lows, 1.83% at the moment. we got down to 1.81% on trade. as far as the currency markets are concerned, euro sterling still above 80. we had chinese data out this morning showing april sales, housing sales down 1.2% a year ago. rupee much weaker. euro dollar 1.2673 is where we stand. we did get down to 126.49. one key level to watch out for, we preach that, it would takes us back to a low be haven't seen since august 2010. so that's where we stand. one of the worst weeks in asia for equities since about

september. >> well, what a day to end the trading week. asian are markets are all firmly in negative territory. take a look it at the nikkei, it shed about 3%, a september straight weekly loss. and taking exporters wiped out all the gains we've had this year to date, as well. the kospi also 3.4%. the index hit a five month low as foreigners resumed the cross sector selloff of local stocks. check out the greater china markets. the hang seng index moved lower by about 1.3% breaking the 19,000 resistance level. the shanghai comes positive it give up nearly 1.5%. concerns over greece. and australia smack down, biggest weekly fall in eight months. and the sensex down about 0.3%

at the moment. have a look at the fixed income assets. bond prices have shot up pushing the yield on jgb benchmark ten year to its lowest level in nearly nine years. and take a look at the dollar-yen is trading and auts trailian bond futures are high are with three year bond future contracts soaring to it high he is level since 1992 and the ten year hit a record high, as well. so overall, not a pretty picture to start off the weekend. >> not a great week it there. there's one thing this morning that is good news. the latest greek poll shows that the new democracy party was ahead in the latest polls. pro austerity --

>> potentially. >> just one poll. >> they realize it's either what some have called the equivalent to suicide which is a greek exit. >> the first poll since they know that there's going to be a june 17th election. >> unfortunately, we're not seeing it necessarily in the mood of the market. i was talking to someone who said at least in the fall we had the risk off, risk on trade. lately it seems to be just a risk off. but maybe it will take more talk on qe from someone. but we'll see. coming up today, facebook prices the ipo, but is it really the right time to go public. we'll have analysis coming from new york. >> and the reserve bank of india caught between a rock and a hard place as inflation jumps in asia. >> and we'll be live about this athens with talk ce may have to leave the eurozone. >> plus we'll be out to west hartford, connecticut, where we

it talk about the turn around of the pizza chain. >> bankia will be closely watched again today after rumors of a run of on deposits. stefane joins us from madrid with more. >> of course according to this report from roeuters, bankia wil announce a new restructuring plan. it will be focused on bfa, the parent company, which will be forced to take additional provisions to cover future losses on it real estate portfolio. if it you remember earlier this week, bankia said that it would need 4.7 billion euros to comply with the new banking regulation rules. at the time, the parent company indicated that it would need only 91 million euros. according to this government

source, the numbers were correct for bankia, but below what's really needed for bfa. so that's the announcement we're expecting the next couple days. a new level of new need of provisions for the parent company bfa. bankia has hired goldman sachs to carry out an independent valuation of the banks. all this information of course seen rather positively by the market. yesterday was a terrible day for the bank. shares lost 29% at some point, 14% at the end of the session on a speculation of deposit flight. it's been denied by the government and by the management of bankia. >> stefane, thanks. meanwhile fitch has cut greece's credit rating two notches further into junk state tuesday citing heightened risk the country may leave the euro. so what are the realistic pro r

prospects? are we in it an enormous game of bluff? who flinches first in. >> both sides are starting to harden their stance. greece has nowhere to go. austerity is not acceptable. it's just too hard to be socially acceptable. in reality, greece stopped spending money, but in terms of what they were supposed to do, they had to fire like 150,000 people and i don't know if they fired one. they didn't sell enough assets. so a lot of pain still has to come. >> but if they don't go to that route, if the economy simply can't afford to do that, what they're basically saying it to

the european union is cut off our fund willing, you know what that would mean. >> so i think it they are using that to their advantage at this point and what they want is basically just more of the same that we've had the last ten years. they think that the union cannot afford letting them go. on the other hand, i don't think germany is bluffing. it's pretty stuck on its position. it will be an interesting game. >> and we're down to november prices on the ftse. anything fund managers can do until june 17th? >> at the moment it's how slowly do you want to lose your money really. if you leave it in cash, inflation is in the way. if yyou buy government debt, its

the a news available and doom and gloom everywhere. i was in someone's office yesterday and they said you have to remember what happened after world war one. the frefrn and british insisted they pay back all the money for the war and it they drove the germanss in to complete austerity. and we know what happened next. and now the germans are doen the same. sole it be very hard. you can't say to a nation of tax dodgers that you have to pay taxes tomorrow. it they take an amount of time. so maybe you say to them, ook, if you do kind of elect that,

you goat austerity root and we give you lots of cheap money. >> i'm wondering whether the next is not a default, but another fudge. >> there's always room for fudge. >> if i was a betting man, i'd say maybe we get easing and other growth plans and we fudge it again for another bit. >> you look at italy, spain, the primary deficit, these countries aren't a million miles away. you have to sign up it for these long term factors and hfr- >> the fudging is confusing the monetary policy. to fudge is to let monetary continue conditions lose even farther, which is the right

thing for italy and spain, but not germany. >> isn't that just the price they have to pay for keeping the euro -- isn't that part of the deal? >> it either goes towards further integration or disintegration. and i think most are betting on further integration. markets seem to be betting that way. >> you have 17 different parliaments that all should go home. it's different cultures. >> it's showing thaws one size doesn't fit all. you get lower interest rates.

>> one size doesn't it fit all in the united states, the point is there's one government. >> is that where we're heading towards one government? >> i can't imagine the french letting themselves be run by somebody else. >> the policy in the u.s. is very different. it's geared toward weakest link and policy this europe is geared toward the strongest link. >> the biggest. >> well have more coming up in it a little bit. >> european equities heading to worse fall in months. here are some thoughts from our previous guests. >> if he were to go long on any of the emerging market currencies, you have to have very deep pockets in order to run help long enough to actually seeefits over the longer term.

>> underlying european story doesn't change all that terribly much. we've had this credit bubble in europe and this ongoing discussion of who will wear the losses. >> what we've seen the last few weeks, it's margin calls which trigger gains which is good. with that we start seeing gold 1%, 2%, it's one signal the market is ready. so united stateses of europe or the end of the european union? join the conversation. let us know what you think. you can contact us by e-mail or via twitter.

cnbc wex. coming up, a bold plan to save the euro. jean claude trichet says a quantum leap of governance could allow europe to take over a troubled states fiscal policy. ♪ ♪ why do you whisper, green grass? ♪ [ all ] shh! ♪ why tell the trees what ain't so? ♪ [ male announcer ] dow solutions use vibration reduction technology to help reduce track noise so trains move quieter through urban areas all over the world. together, the elements of science and the human element can solve anything. [ all ] shh! [ male announcer ] solutionism. the new optimism.

graff will sell 210 to 311 million shares in the hong kong ipo. more details on that coming up. >> do you get those share, do you get discounts on the product? >> you know more about this company than i do. we should maybe even ask andy about it. >> it's interesting to see how a diamond company will cope against facebook in a way. you'd have thought if people are worried about sort of inflation coming in, they'll be better off buying die mopped companies or any came mommodity companies. everyone saying i've got to be

part of facebook especially though general motors is putting off all their advertising, et cetera. the whole money is just following the trend rather than looking at any of the commodity based stocks. >> and the point made you think gold should be rising. >> gold is flat on the year and mining down 50%. >> go figure. >> not good for the ron paul portfolio. u.s. presidential candidate. p anyway, speaking of facebook, that company is inching ever closer to becoming a public company. pricing its ipo at $38 a share last night, at the top of the expected range. raising about $16 billion with that offering. and the option for another $2.4 billion in about a month. that makes it the third biggest u.s. ipo. facebook's market cap is now about $104 billion and only about 21 companies in the s&p 500 are currently bigger. shares will start trading on the nasdaq today at about 11:00 a.m.

eastern. >> and jpmorgan's chief investment officer reporting more than $100 billion if in risky bonds. just what is a risky bond? we'll talk about that. >> anything that's not a german bund at this point. >> jamie dimon's agreed to testify before a senate hearing. no date is set. but it will likely come after the june 6 hearing with regulators. dime monday al timothy geithner has said there is a perception problem. >> those banks and the members of the board play no role in supervision. they have no role in the writing of the rules or the decision the fed makes in how on respond to it a financial crisis. their role is a much more limited role and it's to help perspective on what's happening in the economy as a whole. but i agree perception is a

probl problem. >> shares in frank further down another 2%. and we it talk about trichet has unveiled radical proposes to stabilize the european monday it taker union. he told an audience in washington the eu should have the authority to take over fiscal policy in a state that fails to comply with budget recommendations and where necessary declare it bankrupt. he put forward the idea of federation by exception, but received a luke warm reception from finance ministers. this is the sovereign crisis that will dominate the agenda of the g-8 summit it in camp david. leaders will probably discuss the possibility of a greek exit from the euro, may propose a growth agenda to koccomplement current programs. >> can you you expect how you that meeting are will go now? these kinds of stakes, they know they have investors' attention, whether policy can do anything.

>> can, but it's policy they're not prepared to take. we could solve this crisis tomorrow. we could say we'll have a central bank that is genuinely backed by a unified state and they could say german will give up sovereignty, have one state. if you pool all the debt together, crisis over. >> absolutely. the true response would be a fiscal response, a fiscal union. that is a democratic process it that has to go through hundreds of millions of people. it's a complicated one. >> they didn't ask anybody if they wanted the euro in the fist place. what's the problem with just -- they didn't worry with about it first time around. why worry about it now? >> it's a little trickier going from 17 to one and then one back to 17. i'm very skeptical frankly. tough enough to keep italy

together on the fiscal side. i don't think the northern countries keeping the same person patter patterns. >> it's precisely this skepticism that is why we're seeing the mood dominating the markets. if that won't happen, there's really not a lot else that can be done to keep the panic from spreading. >> all the southern european countries and even the french probably want it on have what germ it any's got. but they don't with a to pay the price. after a month, they go, oh, no -- >> the difference is that they were doing it while the rest of the world was growing. also had the ecb setting policy

for them, which is part of the reason we have the enormous bubbles. >> germans were the first ones to break the 3%. >> fair point. we're talking about what's a risky bond. bunds yields at the moment, what did we hit, 1.39%. two years, 0.28%. if you get any fiscal sharing -- >> the motto is never sell the bund no matter how stupid you look. it's just wrong. but the reality is that it's the only real euro that is out there. so somebody's been buying a lot of euros otherwise it wouldn't make sense for the euro to be

where it is. >> but if you believe the euro holds together, germany will have to pay, right? >> that's a belief that -- >> if germany pays, then bunds will get blown up, aren't they? sgr yeah, but again, that's an assumption that is starting to crack. >> credit default swaps keep going up. one saying it's quite accepts sxif and the other one saying it's safe about. >> germany is a better place to be. germany is in control of its own december itity knit rt titit ii.

it they have the cards and i think it is the safest place to be right now. >> all right. thank you so much for joining us this morning. we'll have more coming up. >> yeah, meanwhile european stocks getting slightly better from the open. only down it three quarters of a percent. up in the ibex by nearly 1%. we'll be in mumbai as well as the reserve bank of i saof indig stuff decisions. more when we come back.

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european equities come back from session lows but still fragile. >> spanish banking stocks are fwounsing a bit. >> and facebook pricing shares at the top end of its expected range. it will become the biggest ever ipo. >> india central bank faces a you have balancing act as the rupee sinks to a fresh all time low while inflation accelerates

in april. a moderate earthquake in tokyo, about a 4.8. no tsunami warning issued for the the area, but of course as we get more information in, we'll keep you up-to-date. >> and european stocks today are off the lows that we started first thing this morning. xetra dax off 0.4%, ibex, this is the key one, is up 1%. >> seeing gilts at 1.84. italy is below the 6% mark,

5.93. spain meanwhile is at 6.3. so we're off some of the worst points we've been in the session so far. >> keep your eyes on the 126.24 as the key level. that would it take us back to the lows of august 2010. euro sterling still above 80. worth reminding you chinese data out this morning, april home sales todown 1.2% year on year. >> more concerns about what's happening in china, whether there's a slowdown. it's a if they were going gang busters, people might have something to point to, but rising price are continuing to cause headaches. and we have more from mumbai. >> hi. the cpi consumer price index

which came out for india for the month of april didn't really look too a good. it was about 10% for the month of april. vis-a-vis a rise of around 9.4% in the previous month. majority did come due to the food price inflation. whole say price index had seen food inflation come in over 10% versus 5%. a steep rise in the food inflation figures. core inflation coming in at 5%. reserve bank of india going forward in terms of cutting rates, inflation continues to be a concern and like you mentioned

earlier, the rupee has been at an all-time low against the dollar and has been on a depreciating trend. it's not new that we've been seeing record lows for the rupee itself. so it's expected oil prices will increase going forward. with that, it's back to you. >> we want to get over to singapore, chief economist at deutsche bank. tamer, you just heard that report. how concerned are you about conditions on the ground in india? >> there are a host of things to be concerned about, but the latest number its are very worrisome. no room for the central bank to cut interest rates in the near term or next few months for that matter. i think the only thing that you can pray for now is a big correction in oil prices which

then alleviates some pressure on the current account. but that's down the road. not right now. >> did they jump the gun in cutting rates? >> given the data the rbi had, i think there was a case to be made for some signal toward monetary easing. at take point it looked like pressures were easing somewhat. now everything has changed pretty dramatically in the last couple months and the rupee depreciation doesn't help eit r either. >> does it show we're getting less investment flows? >> we have both from the exchange rate side as well as the oil side. mind you over the last year,

there hasn't been a fuel price adjust himself down in india. so just to bring demand in line with global realities, india needs higher prices and related is the energy sector. you touched on the question of investment. that's a whole other hornet's nest. we've seen issues related to investment regulations and laws, but that's subject for another day perhaps. >> one thing people might overlook about greece is that while a devaluation, new currency would make it cheaper, it they would have a real problem with import bills because they don't have a lot of natural resourceses. remind us why it can't be

overlooked. p. >> we have good test cases. look at the '97 crisis when all the major currency depreciated greeks have to think with all that before they raise a new regime

regime. >> china has been a growing part for china. and as and the way out of the global mess is growth, and nobody knows where the growth is coming from. there's no it necessary tick demand. >> we've been used to having china to help those industrialized indebted nations grow. and now losing that important prop is perhaps making more of a difference there than even in china. >> but in terms of greece and what happens if inflation picks up, i think what you might see about greece goes the way of devaluation, people in greece talking about getting out of the eurozone and more towards the middle east.

greece could look elsewhere in europe for the next source of funds. >> all right. thanks. stick around. >> and we talk about the weakness of the yen and dollar-yen as you can see trading at 79.31. >> there is fresh evidence that the real estate sector is cooling and tracey chang has more on that for us. >>. >> fell 1.2% in april from a year earlier for him first yearly drop in two years. and as you can see, shares of chinese property developers certainly felt the effect today.

home prices still have room to fall even further since the inventory level remains high. a reuters poll shows economists expect residential property prices to slip the rest of 2012. market watchers think it will be hard to reverse unless they provide policy support. the finance ministry 2340u7b8sed a 3 bpt $4 billion package back over to you. >> want to take a quick check now on spanish banks. bankia after sippinging 20 25% yesterday has now rebounded and if you had gotten in just on this one day alone, you would be up 29%. that's not too shabby. of course the bank still trading below two euros there.

>> the market is betting on the fact that the stock market regular rate tore will reinstate its balance short selling on financial stocks. it was lifted in february. according to the newspaper, the banks in spain have made this request to the stock market regulator to reinstate on on short selling. so that would be the main reason why the banks are trading higher this morning. it's been heavily sold since the bank was nationalize the by the government. yesterday there were rumors on the deposit flight, it's been denied by the bank. so that's also perhaps a reason why the stock is bouncing back today. but the main information is that they could reinstate on short selling. but no information on this back to now. >> a ban on short selling always

steams to come when crises are flaring up. >> i don't think it's a short selling issue. people are getting out. the stock markets since the euro started, italy, spain, down likelike 80%. at least two-thirds or more. and this is not speculation. this is just taking a grasp of reality on the ground and the economies are -- people are just getting out. >> hit 2003 levels this week p. but the prospect would explain -- >> there are some financial stocks in it italy trading at 1985 levels. it could bounce 5%. >> let's give and you quick look at what's on the agenda. graff holds its ipo road show on monday. on wednesday, the bank of japan gives us it latest policy decision. we'll see if anything left it can buy.

economists expect monetary policy to be put on hold more or less. and on thursday, we'll get the early signal of china's factory growth. hsbc will reveal its flash cpi. >> and facebook has talked its ipo, but is this the right time to list? analysis from new york. ♪ i can do anything ♪ i can do anything today ♪ i can go anywhere ♪ i can go anywhere today ♪ la la la la la la la [ male announcer ] dow solutions help millions of people by helping to make gluten free bread that doesn't taste gluten free. together, the elements of science

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let's keep the conversation going. nathaniel tweets, you are r sar, i've been begging for a euro bond for a year how. and he was not paid by ross to say pa. if you disagree, e-mail us. facebook valued at $104 billion when it begins trading on the nasdaq. it will make facebook the most

valuable in internet history. ross loves this story, right? >> imagine if they were floating in a bull market. >> would it be better in a bull market or worse sf because then they wouldn't seem so extraordinary. >> either way, it is extraordinary. whatever happens, it is extraordinary. and by the way, how do you know i don't pay people to give comments on twitter? this is the average facebook user time, just more details about this company, the average facebook user spends 441 minute ins a month on facebook if it they're on smart phone and if they're on the computer, 391 minutes. but as we know, over 56% of facebook users say they've never clicked on an ad even though they spent all this time on

facebook. only 26% say they've occasionally clicked on an ad. and that's why it has some people worried about the potential of the ad revenues. mark zuckerberg's stake is worth $1 billion. the question is what is the pop at the open. some have even it talked about as much as 50%. these are the base salaries. these are the salaries being paid. jon fortt has more on what we might expect. >> if you were to go long, you have to very very deep mock ke s

pockets in order to run them long must have to see the bep it fi f benefits over the longer it term. >> facebook -- >> first of all, that was clearly not jon fortt. just worth saying that was not jon fortt. >> things will get a little crazy in here this morning. we'll blame it on the markets. but anyway, facebook, it's a good example of how technology can add to an economy. meanwhile a report by sass and the center for economics and business research shows big data can contribute 216 billion pounds to the uk economy and that 15,000 jobs by 2017. joining us is the chief executive. jim, welcome. so data can save britain from recession or at least from further deepening, worsening of recession? >> there's certainly a lot of up

side to being able to analyze large amounts of data that companies are obtaining. if you think about all the tweets going around the world, we analyze the tweets. facebook is a great advertising platform strategy. and the goal is -- they choose which ads to put on what pages. since they have a tremendous amount of demographic it information about the people that are on facebook, they can use that information to do very

selective ad placements. and those placements, they can get premium dollars. so i think the -- >> even if half the people don't click on the ads? >> i guess it they hope to change that. i don't click on half the ads i see. >> that's the point, isn't it. where facebook is unbelievably valuable is that you can test responses to products or ideas. now, how much will come companies prepared to pay to do market esearch to see what a reaction might be.

>> how are you guys helping them to manage that and how do we maximize that without getting in to privacy issues? because if you ask most people do you want your data to be given to third parties, they would say no. >> what we do is to talk about using big data to be able to do things in this minutes that used to take hours and hours. >> such as? >> well, arriving computations for the banks, that takes about 18 to 20 hours. if we spread it over 1,000 processors, we can do it that job in about 12 to 15 minutes. so they can compute risk much more often, actually before they make some of the trades they make. >> so maybe should you have visited jpmorgan.

>> we're actually talking to them right now. they're suddenly interested. >> and what difference would it have many if they were talking to you before, do you think? just give hch-how much can you change the way the company assesses risk? >> well, if it's a brand new derivative, apparently this was some kind of really strange derivative, if we don't have market data on to be able to estimate price muflts, then there's not much we can do. >> because it depends on what you put in. >> right. >> it's not computing power. this is trash in, trash out. all about the assumptions you make. things that are not observable. >> just a hedge. >> trash in, trash out, is that fair? >> certainly. but so much has been made over the chase situation.

$2 billion is what percentage of hair portfolio? must be half a percent. what's the big deal? >> 350 billion of balance sheet. the market is scared of what's not known >> good to talk to you and it good luck with your jpmorgan discussions, as well. i think we'd all like that to kind of work out in the right way. brings us actually to the point in terms of positions in the market on what's going on with europe. and how many people are exposed at the moment. or is everybody kind of out of -- >> what has happened the last --

thanks to i think -- it's become exceptionally international markets. investors have left. whoever is staying is just adjusting portfolios. no new money coming this. so all issuance needs to be taken out by domestic -- >> how big are the lopss in spain and italy bearing in mind what they bought at the -- >> on the recent money, i think right now probably breaking even. started in december. the problem is not just the level, it's the leverage. essentially bank of italy and ecb is promoting is that take

all this money and put it in government bonds. don't worry about it. and you have some banks in italy with 200 million of capital and 5 billion btps. it's not one for one, but it's leveraged. that's what's scary. every one point is really five points in losses. >> so basically the ltro made spanish and italian banks a leverage willed play on the underlying debt. >> absolutely. >> italian bank has been very solid. it's a sayry -- >> you describe it as a much larger scale mf global. >> this is the mother of all

carry trades. that's exactly what m if f global did five, six months ago. these bonds are moving points in a day. the volatility is just too high for the amount of equity. the problem in the banking system is the apt of capitalization is not enough. >> between to see you. thanks for that. head of european rate sales and trading group. plenty more still to come. >> take a quick look at how markets are trading in the red. in the red. 

welcome to "worldwide exchange." headlines from around the world, european equities come back from session lows, but sentiment still fragile. >> the spread between spanish and german yields widens with germany hitting record lows, but spain's banking stocks are bouncing back in early trade. >> and the facebook frenzy reaches a fever pitch. the company priced shares at the top end of the expected range. it will become the biggest ever internet ipo.

we've come off the lows, but concer concer concerns about the future dominate. >> and fresh 12 month lows-of 2012 lows xetra dax down

two-thirds. cac 40 down 0.9%. ibex currently down a quarter of a percent. and fresh blow to the financial sector, moody's it downgraded 16 spanish banks along with the uk unit. says the cuts reflect factors such as the reduced credit worthiness. despite that, these are some of the major spanish bank stocks. we're all up you including the biggest up 2.2%. spanish agency suggests there may be a short selling ban reintroduced which would explain why we have the bank bounce going on.

fresh market lows. ten year spanish bond yields have actually rallied this morning. down to 6.23%. it ittalian yields have also rallied. pirmly below the 6%. we did also first thing this morning get fresh record lows on the gilt yields. currency markets, euro sterling still above 08. aussie dollar down at six month lows against the u.s. dollar. just remind you china april home sales down 1.2%. another negative number for the chinese economy. finally the euro-dollar, we did get down to fresh four month lows. just above that at the moment. >> and now let's take a look at what's happening in the u.s. president obama welcomes g-8 leaders to washington. he'll hold a small new conference with holland owing at 116789 chlt 45 eastern. and then depart for camp davis

this evening for weekend talks. not much going on in the day front. earnings out from ann taylor and foot locker. and then people will focus on the g-8 meetings. >> it will this is one thing we need to mention this morning. one bit of good news. the latest poll out of greece. >> yes. you are encouraged the new democracy is now emerged potentially. >> biggest -- this is key because it's the first poll it that we've had since they announced new elections june the 17th. this is opt one poll, but new democracy 26% of the votes. new democracy would have enough seats to form a government that would obviously be in favor of us a it tearity. >> pro euro, pro to some degree austerity government, you have to wonder if that's just

acknowledgement by greek people as to what really would happen if they were to say no to the eurozone. >> so between now and june the 17th, this could go anyway. meanwhile, spanish banks are rebounding following steep losses yesterday. stefane, what do we know about the possible short selling ban? is this an idea that's being discussed? sfwh it's been requested by the banks the shorts selling ban on the financial stocks was lifted by the market regulate it tore in spain in february. and given the fresh banks have asked it for-to-reinstate the ban. it's only a press report, but it seems to have a positive impact on the shares as you can see, all the banks trading higher

despite the downgrade from moody's, despite the increasing level of nonconform forming loans in march 37 definitely not good news for the banking sector. but this ban on short selling could bring at least in the short term a bit of breathing space for investors here at the that grid stock exchange. special focus of course on bankia. the stock up nearly 25% just seconds ago go. it comes after 14% decline yesterday. so if you're long on banks here, you better take it a deep breath because it looks like a roller coaster. latest development is that the bank will present a pre-instructing plan next week which would involve recapitalization of bfa its parent company. earlier this week they said they would need 4.7 billion euros in additional euros to comply with

the new rules. at the time, it said bfa its parent company would need only 91 medical i don't know euros, but apparently it won't be the case and bfa would need cash ib jegs. >> meanwhile fitch has cut greece's credit rating into junk status. it would place all countries on negative watch after the greek elections in june if it thought a greek exit was probable. >> and not just fitch trying to factor in a greek exit. i can't tell you how many notes i've seen in the last couple of days that are pricing the size of a greek exit, what it would mean for the currency, what -- people are now what was unthinkable a year or two ago is coming across our desks

regularly. >> five year credit default swaps for italy up 11 basis points. yields going down. >> we're seeing a little bit of a recovery, but after the week that we've had, the fact that we wouldn't see recovery would be much more worrisome than the knock on effect that we're getting. so i think more of the question is going to be going into the u.s. trading session as we've seen all week when we hand that off, there hasn't been much of a recovery. do you want to be long? i don't know. >> i tell you what it they will be long of -- >> facebook. inching ever closer to becoming a public company. social networking site pricing it ipo at $38 a share, the top

end of the expectth expected range. facebook would raise 16 billion with an option for an additional 2.4 in about a month. market cap at $104 billion. and right now only about 21 companies on the s&p 500 are bigger. shares whether start trading at about 11:00 a.m. eastern. more analysis on the listing coming up. >> plus we'll be in west hartford, connecticut where the low down on the pizza chain's turn around plans. und plans. optionsxpress, where you can trade your favorite products, all in one account. keep watch on the markets.

or use our exclusive tools to help find ideas. it's powerful, easy-to-use technology for trading stocks, options, and futures. keep trading whether you're at home, in the office, or on the go. optionsxpress, the broker smart traders deserve. open an account today at optionsxpress.com. you do a lot of no.aking? look i'm going through the rapids. okay... i'll take it. sync your card with facebook, foursquare and twitter for savings. that's the membership effect of american express.

these are your headlines. european equities are off session lows, but sentiment remains fragile following down grade for spain banks. >> spread between spanish and german yield has widened. germany hitting record lows. >> it facebook frenzy reach as fever pitch.

spreads over 500 basis points after moody's has down graded banks across the region. other financials in spain are under pressure, as well. >> interesting to see whether they do implement the short selling ban. >> and if you look at the disconnect between credit and equity, it's not necessarily that wide, but on a day when we're seeing cds at new level, you expect to see more red. and we're seeing a rebound. and that may have something to do with what stefane has been reporting about spain potentially banning short selling on its financials. but you get echos of 2008 or 2010. >> i mentioned at the top china

april home sales down 1.2% on the year. mark faber thinks the risk is china. he thinks greece is insignificant and far more worried about china connection. >> there was a piece saying what's the growth drive forechina. we've seen huge stimulus programs. is it consumption. wages in china last year continue to be around a record low of gdp. some would i say that ghif gives it them plenty of room to rant. but others would say is it enough right now. >> it's conundrum. >> trichet has unveiled radical proposals. he says the eu should have the

authority to take over fiscal policy and where necessary declare it bankrupt. >> an interesting idea, but he's talking about -- he's not talking about fiscal transfer, he's talking about fiscal control. and i don't think anybody's going for vote for this fiscal control. certainly won't in the uk. i'm not sure they would in fran france. >> the idea that they would go another step seems unlikely. the sovereign crisis in the eurozone is set to dominate the agenda. >> and jpmorgan built up risky

bonds. but that's separate from the credit derivative that spurred the loss last week. >> i'm not sure this this is all that unusual for a bank of jpmorgan's size with its exposures. >> and rising consumer prices in india continuing to create headaches for the country central bank. consumer prices rose double digits underscoring monthly gains since the cpi launch in february. they cut rates of course only a few weeks ago. now down fresh lows against a basket of currencies. >> and great comments earlier in the show from looking at india, as well, which doesn't gets a much attention, but it really should. and we'll also take a look at facebook as it logs on to the first trading day on the nasdaq. how low can it go. here's a reminder of the buzz.

>> is facebook overhyped? >> breaking news. >> facebook ipo baseball caps. >> everybody i know is big with facebook. >> facebook. >> facebook. >> and you'll be hearing about it more than you want to. >> facebook. >> and mark zuckerberg. >> facebook. >> facebook fever going on. >> should i buy facebook. >> i don't know about facebook. >> facebook. >> facebook. >> facebook. >> no, not facebook. >> mr. buffett had some interesting things to say. >> facebook. >> we are talking about facebook here. [ male announcer ] the inspiring story of how a shipping giant can befriend a forest may seem like the stuff of fairy tales. but if you take away the faces on the trees... take away the pixie dust. take away the singing animals, and the storybook narrator... [ man ] you're left with more electric trucks. more recycled shipping materials... and a growing number of lower emissions planes... which still makes for a pretty enchanted tale. ♪ la la la

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[ all ] shh! [ male announcer ] solutionism. the new optimism. facebook priced at $38 is hair. the top end of the expected range. and that particular value mark zuckerberg's stake is worth $19 billion. kayla tausche september us this it report. >> facebook pricing its historic ipo a $38 per share, the high he said of the range.report. >> facebook pricing its historic ipo a $38 per share, the high he said of the range. there is an overallotment option to raise $2.4 billion in 30 days. the tally brings facebook the largest internet ipo ever.

and third largest u.s. offering. they'll address employees at the menlo park headquarters friday. as the deal was getting priced, the nasdaq composite was falling 2% and previous notions to price above the range were abandoned. but $38 still has made quite a debt in the market makers. back it to you. >> the question is what's the pop going to be at the open. some people are saying -- because we had that -- they increased the range from $28 to $35 to the top of the -- >> and it was the $41 dollar mark we were looking it for to make it the biggest ipo ever. that didn't happen. but you have to wonder how big will it go on day one. >> some talking about 50%

increase. >> all right. we'll call you on that in a little bit. >> even though i think it's outrageously overvalued. >> it take a quick look at u.s. futures. we would be opening just slightly lower. we were slightly higher earlier in the trading day. of course spain a source of much concern for the whole week has been in the green largely as banks rebound from sharp losses yesterday. but welcoming now our guest to the show is laterry mcdonough at new edge securities. larry, so much news overnight. moodys with the spanish bank downgrade, things look calmer this morning, but what are you focused on? >> i think overall, kelly, you have to remember 2008, and i talk about this in my book, we'll see a battle between the markets and the politicians and i think you'll see little jabs. in other words, they're doing

the short selling ban today, that's going to do a few things. but until you get the bazooka, i think over the next three, four weeks, the market will have massive short covering rallies so the market will go up on on euphoria and down on impatience until we get closure. >> what's going to be the bazooka? because you a lot of people are looking at the metrics saying we're oversold. what will spur it, what's the bazooka at this point? >> keep in mind i'll never forget sitting in 2008 and even last summer, you never know the bazooka. it they have plans at treasury and the ecb that we don't know about. there's a number of things they can do you'll either see jabs

and maybe a final bazooka as we get forwards the election. >> a fear is feeding itself. >> if you think about it, it's an amazing dynamic because and you have chance to bring your money into euros. the fear of the potential drachma coming which could be a 30% drop is serious. that's feeding on on the huang

bank runs. >> so they have to guarantee everybody everybody deposits. >> it actually empowers socialist party where you're going into negotiations, true negotiations whether start on the 17th of june to the 21 or so. but to stabilize the the system, most likely the ecb will have to do something before that. >> we're getting reports that black rock and others are taking a look at the spanish banks. how will it play out. this could take us into the fall before we get any resolution. >> yes, i've been talking about risk management and my risk indicators and the one thing i

say about spain is that the market wants closure. in ireland, they did one quickly and healed. but the black rock stress test is a big difference between the black rock test and the eba test we need the test done as soon as possible but it might not be for the next three, four months p. >> and talking about stress tests and bazookas, you have a note buy the dip. you're expecting some action that is going to make record low yields we have on bunds and get

gilts -- >> if you think about the political dynamics, politicians move slower than the market. so you're going to see actions where they try fight the crisis over and over again as we saw last summer and in 2008. so you're going to have multiple rips and dips. last summer we had in the s&p and financials, we had like accept different moves in the financials of 7% or more up and down. but until you get the bazooka, you have these moves. you have to trade those moves. >> okay, larry will stick with us. >> nice shot of the background there. >> he's in new york. we'll get to connecticut and be joined by the ceo to find out how he'll turn around the pizza company.

welcome to "worldwide exchange." >> these are the headlines from around the world. volatile session for stocks around the globe especially in asia following a downgrade for spain's banks and uncertainty about greece's future in the eurozone. >> banking stocks bounce back in early trade. they might revive a ban on short

selling of financial firms. >> and facebook prices shares at the top end of their range. welcome to our u.s. viewers. a quick look at how we're looking to open the day in the u.s. the dow jones would be up a little bit, about five points. nasdaq up a couple. s&p 500 as well, we've been floating back and forth between green and red on the chips all morning. it take a look at what's happening across europe. not the worth picture, but still down 0.7% on the day. gradually been giving up ground throughout the morning. still a recovery because asia was a lot weaker overnight, but that again keying off what was going on in the u.s. during trading session yesterday. closer look at what's happening across the european bourses. ftse 100 down 1.4%, cac 40 down

0.9%. and spain in the red down about 0.4%. that's reversing some of the gains we saw this morning. >> we start being down gold down on a daily basis, it's one signal that the market is ready. >> it's not your father it's unilever.

>> if people are worried about inflation coming in, they'll be better buying commodities. >> referring to the graff ipo coming up. >> we'll see if investors agree next week. we'll see if it's just facebook attracting attention or the rest of the ipo market which has been quieter will start to. facebook priced its ipo at $38, the top end of the expected range, that would raise it about $16 billion. some for facebook and some for its shareholders.

right now only about two dozen s&p companies are bigger. shares will start trading at about 11:00 a.m. eastern. neal, you in particular love facebook. you say it took facebook less than accept years to reach the number of users that the telecom industry, that is, telephones, took 114 years to reach. >> i think we haven't started to begin seeing the monetize opportunity. there's three times more people ons facebook than there was on the internet ten years ago. it's a huge opportunity and you have to look as at it as a platform. i use facebook all the time. can i get access to movies from netflix. facebook become as platform. >> do you click on the ads? >> the interesting thing, the

ads themselves iks the more you use, the more the ads get relevant to you. the most important thing you have to remember is relevance. >> so how many do you click on? >> i click on a fair number. >> no one clicks on ads, do they? >> what about sponsor stories? >> whenever i see a sponsored story, i get scared and go the other way. >> you get a sponsored story from a band that you like or you follow, or are you imagine the 14 million people who follow lady gaga for example, but you can reach out for nothing as her publisher and say, hey, follow us, here is an exclusive access to buy. before anyone else gets the chance. >> you mentioned the mobile money machine. mobile is a focal spot for facebook and questions of whether that's a drag on its business model. >> today mobile as an industry

is 0 p.6%, less than 1% of the entire industry. now, already if you think of where google are today, google making $2 billion a year on sales in mobile. no one expected that to happen when they released the android system just 2.5 years ago. if i look going forward, if i think facebook just gets 15% market share of the mobile opportunity in in three years time and the mobile only gets to 2% of the entire market, that's apaddition of $15 billion. >> you were early investors in facebook. >> we were brought into help place the stock when it was $11 a share. >> so it is in your interests to get a big spike this morning. larry, you're sitting there in new york. everybody deserves to have a few on facebook. so what is yours? >> i'm a child of the internet generation. the one thing i would say is it takes a while for the market

hch-for a stock to build in. if you look at amazon, a year and a half after, it was around $5 or even $7 and then as it matured in to its valuation, it reached $240. priceline same thing. mass receive valuation in the '90s. eventually matured to an amazing performance. i think you can expect the same thing for facebook. >> people have been septembskep reminds you of google. >> actually trading 51 times forward earnings. that was the estimates. turned out to only be trading 17 times.

it looked like the stock was trading 1,000 times forward earnings in 2005. actually turned out to be trading 100 times. >> so high valuation not necessarily a warning flag. neal, thank you for joining us. >> plenty more still to come on the show. >> we'll talk to the ceo of a barrea sbarro. it's much more than just pizza. [ donovan ] i hit a wall.

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are you still sleeping? just wanted to check and make sure that we were on schedule.

the first technology of its kind... mom and dad, i have great news. is now providing answers families need. siemens. answers. we love hearing from you you especially viewers who remind us as one did this morning that in greece, you heard ross talking about polls there, polling stops typically about two weeks before the election. so end of the month is the last sentiment we'll get.

>> key point about the polls. >> that's why it's yufl. >> good stuff. thank you very much for that. right now as far as the u.s. open is concerned, we had actually seen futures indicating once again slightly better open despite the fact that stock here in europe as you can see are down. you can see ibex despite the down grades from moody's only down half of 1% and of course reports that the regulator is considering a short selling ban. show you where we stand with the future futures the dow at the moment trading some 15 points above fair value. but i am grg to get the andrew ross sorkin automatically put into that because the old brain take as while to get it. >> ross, thanks. you're watching "worldwide

exchange." these are your headlines this morning. european equities come back from session lows, but sentiment remains fragile following a downgrade it for spain's banks and uncertainty over greece. the spread keeps widening as german bunds hit record lows. facebook frenzy reaches a fever pitch as shares are priced at the top end of the expected range. >> a slight change of tone. sbarro knows all about grabbing a slice of the market. the chain founded in 1996 and expanded to more than 1,000 locations in more than 40 countries mostly in n. shopping malls, airports and college cam you puss. joining us is the ceo. james, thanks very much for joining us. we've had some disappointing data out of the u.s. the global economy or the data everywhere is rather disappointing at the moment. so just give us an case your view of the environment at the moment in which you're having to run the business and turn it

around. >> it is a tricky environment. and we certainly would be happy to see things stabilize, the economy improve worldwide. some markets are stronger than others certainly here in the u.s. it seems things are stabilizing. we'd like to see the unemployment rate come down, but it's a hard thing to turn around a business generally and this makes it a little bit more challenging. but not something that is overly difficult. >> james, at the same time, you're coming at a point in which the restaurant industry in the u.s. at least is no longer really adding units. so if you're not growing top line in that way, what a are you doing to make each store more profitable? >> i think it's important to look at the restaurant business in terms of segments. because in the fast casual segment, quick serve segment where we operate, there is growth in units. it's the casual dining segment

where things are slow so there's actually growth in the segment where we operate and in addition to that the changes that we'll be making will have a big impact on our business. >> ultimately it's about all the ingredients. how can you improve the quality when there's a squeeze? >> it's a pfunny thing. we use some of the finest quality ingredients available. it's the process we use and the process we make to hold and serve it that have been the issue. so we'll tweak our recipes.

we have a vision to be the preeminent fast casual italian brand worldwide. we're focused on four categories. people, place, product and positioning. product being a key one. we're tweaking the recipes. but ingredients are great. so we don't look to increased ingredient costs. just improving the way we make the product. >> is is it easier to renegotiate the contracts? >> there was a change a few years back 2008 when the rescission hit here in the u.s., there was a change in attitude amongst shopping mall owners. they will realize that there's a limit retailers like us can pay and still stay profitable. and so there's a newfound

attitude. this weekend there's a convention? las vegas which brings together retailers and shopping center owners for the purposes of making deals. >> what is your social network strategy, do you use that medium much to push sales? >> yeah, an interesting question. we have a facebook presence, but it's not one that the company runs. it's one that our franchisees runs. so very shortly, we're going to be changing that. we'll be not only adopting a facebook presence, because twitter presence and starting an e-mail club. >> james, you've covered the wla landscape for us. we have to get ross to try sbarro. >> we'll do it after the break.

we'll zero in on the latest moves on asset classes. futures indicating a slight positive open.

sitive open. you do a lot of no.aking? look i'm going through the rapids. okay... i'll take it. sync your card with facebook, foursquare and twitter for savings. that's the membership effect of american express. ♪ ♪ i can do anything ♪ i can do anything today ♪ i can go anywhere ♪ i can go anywhere today ♪ la la la la la la la [ male announcer ] dow solutions help millions of people by helping to make gluten free bread

that doesn't taste gluten free. together, the elements of science and the human element can solve anything. solutionism. the new optimism. u.s. futures indicating a slight positive uptick right now. the s&p 500 trading about three points above fair value. nasdaq currently trading about 8 above. and dow some 30 points above fair value. this as european stocks are down. ibex up a third of a percent despite the downgrades for spanish banks. fo focusing on the yields.

i apologize, we're not showing the yields. we're showing the prices. >> if only that was italy's yield. >> prices aren't very helpful. >> moody's downgrading 16 banks. a lot of rumors there may be a ban a short selling of spanish banks. bankia up 19% after a big decline yesterday. happening for sovereigns, too. spain at a new high.

we've seen it come it in it a bit, but the trouble is if you walk back and look at the other side here, it's the two, three, four year areas we really want to keep an eye on those levels. when the curve flatten, a sign spain is having trouble funding itself. and want to get back to our guest host. larry, hearing those comments, talking about the funding concerns, how concerned are you having written a book about 2008 that we're going through any similar period? >> well, it's concerning and you have to look for the warning signs. i talk about them in my book and this morning i was speaking to our trading desk and he said it's blowing out and this happened last year.

the international ownership of spanish bonds has gone from about 65% a year ago to about 35%. so you have less international owners of spanish bonds and they're playing a cds. so the cds is widening more so than the cash bonds. >> made spanish and italian a much more domestic play. how much concerned should we be that we've taken the banks and made them an even bigger leverage play post ltro on the sovereign? >> that's a great point and i think that pushes the hand of the ecb to do something more quickly. if you take the purchases in the first and second l it tro in spain by the spanish banks of spanish debt, that means it they're more exposeded to spanish debt and the recent

decline in spanish bond prices is hurting the bank balance sheets there this much more than it was two quarters ago. that forces the hand of the ecb to take action before 7%. and i think as kelly was alluding to, we could get action sooner rather than later. >> larry, thank you so much for your thoughts this morning. he can also be reached on twitter. meanwhile, facebook inching every closer to it becoming a public company. let's get more with a reporter. sam, thanks so much for joining us. what's your view on the pop we might get? >> there's so much hype that i think it's possible we could see 15, 20% by the time trading is over by the end of the day. >> 15% to 20% sounds conservative frankly. you've covered this will space for years. put this feeling, this 2011 into con it text of what the internet

dot com bubbles we used to see. >> part of the issue is that facebook size of the shareholder base is so large that i'm just not sure how much potential up side on a percentage basis there is. some people have speculate that had it could pop 50%. i think that's unlikely. i think something in the 20%, maybe 25% range is more likely. >> out of all the issues in terms of whether they can get people to click on the adds, whether they can get a mobile strategy, what's the one thing that's focused you most? >> i think the fundamental challenge that facebook faces is social networks are places where people come to hang out as opposed to google where people come because they're searching for something. so i think the challenge facebook faces is converting its 900 million years who are

hanging out with their friends in to potential consumers. and that means experimenting with innovative new advertising methods to capture them. >> all right, sam -- >> about if we get that 20% pop, then mark zuckerberg would be worth about 23 billion bay the close today. >> which is a huge difference from $19 billion. >> the extra four he can do a lot with. >> so much red still going on today. >> but that's it for the first sort of slightly new "worldwide exchange" this week. >> it's ben a pleasure. i hope i can come back next week. >> we'll do it again next week. coming up next of course "squawk box."

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today's top story, facebook. the social network pricing its opo at the top of the expected range. $38 a share. meanwhile, there's a world of worry elsewhere. fears about greece and spain again hitting the global markets as g-8 leaders gather in washington for a weekend meeting. and the bulls having shall trouble at home here, too. the dow posting its 11th loss in 12 days. it is friday it at least, may 18th, 2012. "squawk box" begins right now. >> good mornin