hello. welcome to the program. i'm ross westgate. >> and i'm kelly evans and these are your headlightlines around the world. the year owe falls below in a wide selloff in equities. >> after reports suggest the ecb isn't willing to help bail out ban kia. >> they dampen speculation of a massive stimulus package saying beijing doesn't need to intervene on the same scale as 2008.

okay. so a warm welcome to the program. you'll see it's pretty hot for equity investors right now. one hour into the trading session, outbeaten by a ratio of 9 to 1. we snap three or four gains. the fears going on with spain right now. on top of that you have the overlay of these comments suggesting china isn't going have any major stimulus policy. ftse down. the contact core rarn down a per cents. the ibex down another 0.8. down over 9% already this month. there will have been none earlier. that is still the case. the weakest utilities. but then basic resources down

1.6%. the dollar index is up at 20-month highs. comments out of china, all of which is adding to a poor outlook as far as quantities are concerned. more indian stanley coming out and saying the super cycle is over for commodity prices. take look at bund yields. currently at 1.347. we've been below 1.34 this morning. ten-year spanish yields at a high. 6.5 6.55%. the spread, 550 yield points. we have a key auction coming out in italy this morning. i talked about the dollar index being up at 20-month highs. across the board, sterling/dollar down to 155.786. we're down to four-month lows. aussie dollars getting back down. the poor sales not helping the aussie statement, also the china

statement. euro dlarks 124.57 is where we assistant at the moment. and just to check in on the commodities as the dollar strengths, nymex below 1.90. that's the price action right now hoar in europe. what about the session in asia today. tracey joins us from europe. >> good morning, ross. they dash hopes for a 2008-type massive-style sim lus. the hang sang index became the worst performer of the day, closing down nearly 2%. over in japan the nikkei snapped a nikkei winning streak. the yen firmed a mounting concerns over spain's banking system and else where the kospi closed down 0.3% as well after

taking a breather. the australian market retreated slightly as well, half a percent lower. and lastly, india's senn senn showing weakness. guys, lots of red on the board while they're anxiously waiting for more policy changes from china. ross, back over to you. >> thanks very much indeed for that. >> spain seems to be the big story. their cbs spreading are at record highs. it's the worries about bankia. it's endless. >> and the china overlay doesn't help. >> no. it would be one thing if the rest of the world is doing fine, so you pile everybody else off of it. okay. the ecb has reportedly rejected plans by the capital government

that the lender could use as collateral to arc says senn real bank funding. according to media reports ecb has told madrid they would breach a bid on funding on governments and a spokesperson said spain did not consult the ecb on any bankia plan. >> they may give more leeway to the spanish government. spanish daily says -- the eu draft document says the commission may grant them an extra year. spain posted a deficit of 8.9% last year. current targets are supposed to see -- reducing that gap to 5.3% this year and to 3% by 2013. a separate report from reuters suggest madrid will present a two-year plan to control spending in the coming months. the commission will also be short of publishing its own kun industry recommendations which

would include a stability prang. while all that is going on, they have reach add deal to buy assets that will cost almost billion dollars of equity in debt. the latest to attract investments from china because of the crisis. so plenty to talk about. joining us for the hour, kevin gardner head of global strat gist at barkley. tharmgs for joining us. it's rare when you get all asset classes moving in the way they are at the moment. normally there's something that's been sort of deadlocked. we're on the move right now. where's this taking snus. >> i think pretty much the same place we've been in for the last few months. it's very hard to see the volatility disappearing. until we have the result, we won't know for sure. markets are going to be nervous about contagions spreading to spain. i'm alittle surprised they

haven't done something sooner or more decisive but it is hard at the moment to see. >> it's not necessarily a lack of willingness much as a lack of ability. at some point you're talking about measures that are being createsed on the spot and raising legal questions or raising questions about how far voters in germany are willing to go to back the eurozone. >> i'm not too surprised that one's difficult to get through. if it was just a matter of giving bonds, they could have been home months and months ago. i'm thinking about the ecb. they do have it within their power to act a little more decently. i'm surprised we're not hearing more about can deposits. >> is that within the e kre b's purview. >> i thank >> i think they have it within

them. >> we have novotny coming up. clearly if we could start the process of having a really -- reinforcing the idea of a eurozone bank system, that would start helping. >> i think that's part of the problem. there are several missing bits of architecture. most obviously we haven't got fiscal integration, but you can separate banking policy and you can't. when there's one money supply effectively, they're really inextricably limited. >> we're getting the data results. the figures are different. that givens you a sense that that's nominal, the most the economy can nominally grow. we're looking at real serious monetary contraction. >> we've seen that in the latest business surveys. they're pointing to further weakness. to be fair, we had, i suppose, a stronger than expected first quarter but for us it looks as

if the second quarter is going to disappoint as you say. >> we'll leave it there. we'll be back with more in just a bit. as mentioned there are other things going on in the backdrop here. china's nooews agency has news. tra tracey has more. >> stimulus measures worth trillions is in the pipeline. influential economics say china needs an appropriate amount of investment but not the year-round aggressive stimulus like the $630 billion package it rolled out three years ago and top researchers and economists reveal the same. this is in order to keep inflation in check. beijing is very unlikely to be sitting i'd the face of a slowdown. credit suisse expects the

stimulus package to be about half of the 2011 levels at around $315 billion and, of course, china has been aggressively unveiling measures to boost domestic consumption. all of this in the name of protecting the chinese economy and slowing external demand. back over to you. >> all right. tracey, thanks for that. more here from kevin. you have stuck by your guns in terms of the strategy, liking oil, bonds, u.s. bangs. given what's gone on the last couple of weeks, do you begin to fundamentally change your view? >> the fact that we think it will continue. we've dampened down our risk exposure so we've taken some investment bet office the table. we're looking at class evaluations and trying to figure out where our convictions are

strongest. it's telling us at the moment that fixed income assets, bonds, very expensive, and we think that stocks are a really good value. if the stocks muddle through as we expect them to, we're going to see. >> u.s. stocks? >> but european stocks as well. it's hard to imagine them stabilizing without clowing in short positions. so when markets do rebound, i bet for a while at least it will be the european markets that lead the way up. the issue is do we have the confidence to call for this this week, next week. >> do you like germany? >> we'd like more sectors. we have liked the german market but we would want exposure to the global economy because we think they're going to hang together. so anybody who can export sellings to the eurozone, we thing would look relatively attractive and valuations are pretty beaten up i could see we could get a potential for a big equity rally

if they're going to hold up but you're going to need some euro action. you're going to need, say, come in with enough money to recapitalize span in banks. >> it comes back to what we were talking about earlier, you need to see the ecb et al circling around blake it clear you can't separate the national banks systems. when that happens, things will stabilize. your guess is as good as mine. >> so you can't -- i can imagine that would cause a massive relief rally, but i'm not sure how you position yourself for that. do you invest and then tame some downside protection rng downside protectionsome. >> i think you have to hope that the rally, when it comes through, won't happen instantaneously forever, but you'll have a couple of days or so at least to position yourself. it's very difficult, of course. >> and you think we're not at that point yet. >> not just yet. >> keying ahead for some of the

headlines off spain, we've got on the the point that we're talking an a fundamentally different authentic than when you talk about greece. if we're really talking about spain leaving the euro or people just trying to factor in that outcome, how much more downside could there be from here? >> i think for spain to leave, that would obviouslien trow deuce a new dimension of near-term risk. i would personally be very, very surprised if spain were to consider or the partners were to consider leaving the area. its balance sheet is different to greece's. giets a meaningful supply site. it's one of largest car manufacturers in the world. it's got an international presence. so i would think this is more a market sentiment thing rather than anything indik tick of fundamentals. >> more with kevin in just a little bit, but first let's take a look at what else is coming up

on today's show. we'll speak to a strategist who's bullish on financial and consumer stocks. find out why in just a couple of minutes. plus, we'll be live in athens where we'll hear from a member of the radical left party after a poll shows the conservative party is now in the lead. >> also in focus, central banks got on rally later today. we'll speak to an expert who's expecting another 50 basis point card in the overnight lending rate. we'll also hear exclusively from the governor of the bank of thailand. he say s thailand needs to bite the bullet. plus we'll get a report on the u.s. property market. >> if you want to join the conversation here on "worldwide exchange." get in contact with us. you can contact us at worldwide@cnbc.com or twitter if you thing a greks or a speks it

is likely. we like it because it reads. you can reach us directly too. >> speck sa is the end of the euro, isn't it? we're speaking to spencer dale, member of the bank of england's policy committee. he'll be joining us exclusively to discuss all things about uk monetary policy. [ 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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we're just getting numbers. mahindra and mahindra reporting a profit for the march quarter of 8.7 billion rupees. they're less than they were a few months ago. we'll continue to get the results in here. that appears to be well above forecast which were for a profit of about 6.2 billion rupees. its medium/long-term outlook on the indian economy is positive. positive talk from mahind mahindra & mahindra. this is after hitting a record low against the dollar there.

european concerns say the rue pea is under pressure about the economic challenges. that's prompted global banks including goldman sachs and b of a merrill lynch. india's fourth quarter gdp out tomorrow is expected to show its worst growth rate in three years but the situation doesn't look as dire on the corporate front as we saw from mahindra's numbers and our next guest says it's precisely why he's become less bearish. talk about why you see stability for corporate earnings in india. >> i'm sorry. i can't hear you. >> would you like to react from the numbers from mahindra and talk about corporate stability in india. >> you know, india itself is kwiets a diversified economy and

has a large number of sectors unlike other emerging markets. there india does tend to do well more or less in every situation. it does higher or lower because of its macroization. that's an astounding number for its to be flag the market where the aggregate growth rates are so high. >> samir, india has emerged from this strong global growth. going forward the country appears to have made several missteps, is not necessarily a running policy in a way that's encouraging foreign investments, so who's to say that 15% growth rate is going to continue. >> that is true, and actually

over the last one or two years the story has been spoiled a little bit because of government ina and lack of governance and therefore it's not that we're overly bullish but there are many, many sectors where the laws of the government are quite limited. as of today, they're avoiding sectors like infrastructure and oil and gas or any other sector where government, policy and government decision-making has a big role to play. but in the other sectors like auto, like consumer, like i.t. and a few other infrastructure sector companies where they have assets in place, and they don't need day-to-day government approvals the growth rates are very, very high because the demographics and all will city play out. clearly the story has been weakened a little bit by lack of governance and leadership. >> samir, i wonder if i can take

you up on that. we're pretty optimistic and we think it's got fantastic potential, but we have been very disappointed near term at the failure of the government which had such a terrific mandate a couple of years ago. the failure of the government to move on and make the structural reforms that are needed for india to grow most effectively, particularly in the consumer sector. last year for example, we saw some stories to the effect that the food distribution sector may be revamped. that was stopped by the government. any thoughts about that? >> but clearly the government is disappointed. there's no question on the day to day, sort of came back to the power. the market was up 20%. actually since then the market is down from day to day. today the reason they say i'm really deliver billish is this has become sorts of the common thesis that the government has done nothing, which is true.

but the stock markets normally look beyond what is happening today and secondly india has one big advantage. so what is it that we need from this government? what we need from this government are effective steps to bring down fiscal deficit. but india has one unique advantage, that some of these things can happen, only that they're not normal or a slowing of the world because the biggest factor in our sort of fiscal deficit is oil price, and if oil were to be by 13% in the last three months, if it were to weaken a another 8 to 10%, in some sense government's role and decision-making would be even less important. at least on a cyclical basis. but strauktially india has had many self goals and there's no going away from that, that we have spoiled o your own story. >> so samir, let's pick up, final question. you like financials, consumers, tech. and the two stocks that you've about highlighted are hdfc bank

and emphasis. why those stocks in particular? well, hd of c bank i've owned in my two jobs since 1995. it's had 50 consecutive quarters of 13% growth of year-on-year basis. the story is sim pal that some of the banks are taking the market share from some. so just an example. on a base of 2,000 branches, hdfc bank added 500 branches. the bank of india on the base of some 13,500 branches, added a similar run. so the score for penetration and growth of this private sector companies or private sector banks which are clearly much better in service and in, you know, risk control and not having political influence, not having to worry about, you know,

catering to every sector and not having to open branches and unattractive locations is a big advantage so this is a very big long-term story. i've held the stock for more than 15 years. >> samir, good to talk with you. >> the emphasis of the -- >> very briefly, female sis. >> it's totally slipped, but just to look at year to date, the performance difference between the forces and other technology companies within india is more than 40%, 50%. the forces is down 15%, 18%, but it has a very good history. it is a dollar earner so it is held by appreciation, although the markets don't reward earnings from rupee. it's a good company with very good track record. >> samir thanks very much from a

arora. just a minute. the court has decided to hold juli julian assange. he can be extra dieted to sweden. this just out. >> 5-2 the judges voted on that. just three weeks until the greek election. the party would take just over 23% of the vote. the same survey shows some 80% of those questioning want greece to stay in the euro but the same amount also thinks the country should renegotiate the terms of its bailout. the contra diggses should continue to some degree. jules is still in athens with more. jules, with that sort of vote, 23%, i mean there's not much margin for error. what's happening with the other parties because they need to form a pro bailout coalition. >> yeah.

absolutely. and this is the key point. all these numbers that we're seeing for the main parties, they're not able to allow any of these parties to form a government on their own, so we're still looking at the individual parties and just how they can pull this together. the population here wants a broad coalition. that's the message i've been gimp. it's just whether that's consistent with whether they have a staebl government. we'll have to wait for june. the two key points, you pulled them out, one, not new, 80% want to remain within the euro and i spoke to the greek finance minister and i said to him is the currency union as it currently stands in the best interest of the greek people. listen to what he had so say. >> i have absolutely no doubt about that, despite the difficulties, despite the in fact greece should have undertaken reforms long ago to be a viable member of a currency union. i have no question that a choice a choice of getting out at the

moment or even being allowed to be pushed out. inflation would sky rocket up to 30%, 40% again. unemployment would go up. it would be a disas fehr for greece. >> so all the parties seem to be consistent in their desire to keep greece within the euro zone and using their currency. listen to what she said about the bailout deal. >> it's actually a death sentence for the greek society. there's no greek who would go for enforcing greeks are suffering, and all of them want to change it or rip it off grief.

>> when wi get that policy announcement on friday, how are they going to come up with a now bailout deal consistent with keeping greece in eurozone. that's the question of tauping party. back to you. >> thanks for that. we got comments out. we'll have more on that. plus, thailand has a message for europe, bear the pain now and gain later. an exclusive interview with the bank of thailand's governor. >> they know something about financial crisis. mcallen, texas. in here, heavy rental equipment in the middle of nowhere, is always headed somewhere. to give it a sense of direction, at&t created a mobile asset solution to protect and track everything. so every piece of equipment knows where it is, how it's doing or where it goes next.

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okay. this is "worldwide exchange," the headlines from around the globe. bund yields at an all-time high. euro/dollars low amid a wide selloff in stocks. >> that right. this as fierce about spain intensify as they will tap markets after reports suggest the ecb isn't willing to bail out bankia. >> china says beijing doesn't need to intervene on the same scale as 2008.

>> data out of the uk consumer lending up $1.4 billion in april. it was stronger in march. and mortgage approvals. 51,823. it was 51,000 in march. m4 down year on year. yet the highest since the first quarter of 2009. and residents gilt sales, i can't tell. the european stocks, again, selling off this morning as concerns about spain are overlaid. of course with china suggesting it's not going to come out with a massive stimulus program. they're down 1.4%. the ibex, i can tell you, down 28% this year and down on

nine-year lows. >> and despite all that it seems as though bond markets are the real story this morning. take a look at what's happening with the spanish tenure in tissue. italy, its ten-year back above 6%. 6.06% is currently the level. spain at about 2.5%. >> 6 billion on five and ten-years. that's going to be. the dollar index is up at 20-month highs this morning. the aussie dollar is also weaker as you can see, getting back to a six-month low, not helped by the chinese statements. >> we also got comments from the bank of spain's governor ordonoz. he eek talking about they may

need it. talk about something that's not going to leave people feeling very settled. h mentioned that spain's biggest problem is falling confidence although i can think of a few others. >> tatar gets already looking less and less achievable. >> we're going to get three years which is getting tougher bety day. remember, there's two pieces of that. there's the deficit and there's gdp when the economy is shrinking like it appears to be now, it's increasingly difficult. ordonez is supposed to be stepping down. >> two days early. it's bag headline and he's going early, but it's two days early. >> what is the reason for that? >> i don't know. i saw two days, we're going to

talk about brazil. they're going to talk about the interest rates. they're expected to cut a half a percentage point. they've been easing policy bringing the so-called selloff rate down by 3.5 points after they slowed down sharply last year. capital economics, one of the only three men in the world who called the rate cut right last time, neil, which is a have basis point. 50 basis points today? where are we going in the -- in this cycle of rate cuts? >> well, it's going to be a very close call tonight, think, between 75 basis points cut or 50 basis point-cut. we go with 50 basis-point cut but it could be 75. >> it could be 75. >> we wouldn't be surprised. i think the key point is the gdp data we get on friday may be a surprise.

the big point, though, is the latest data in particular from april seemed to have softened once again. and brazil still has this two-speed economy. still has consumer demand, domestic demand and the production side of the economy. there's an increased danger, i think. it leaked into imports. they're really in a bind, and, osks, when you've just come off the back of a huge bum boom in the credit, cut interesting rates is less likely. >> we're cutting interest rates and we've had a consumer boom. if we cut it more, are we going to create bubbles anymore? >> i think we're in bubble territory particularly in the market. >> this is going to sustain it. potentially suck it in some more. >> there is a risk if the banks are willing to lend and there's always the possibility that the government will lend on the banks -- lean on the banks to

lend, but i think more generally, the banks are becoming more reluctant to lend, that there are signs that even though the bank -- the central banks are cutting, they're becoming increasingly reluctant to lend and rightly so. >> brazil is the "b" in bricks. aside from russia which has its problems, too, as oil prices are falling, all of those economies were supposed to be kind of the backbone for everyone else plagued by debt issues. we're supposed to be holding in okay. is your sort of longer term forecast that brazil has structural change at this point that we may not be able to rely on it for the first half of the year for growth? >> i think context is important here. i mean clearly the problems in brazil and the problems in chi in and india are nowhere near as deep a europe. thing we could be in for some really nasty surprises there,

but particularly in brazil and india and china, the problems aren't perhaps as deep and as structural as they are elsewhere and perhaps they're easier to overcome, but that doesn't necessarily mean we're going to get growth of 7 1/2% in chi narks 7% in india, 3% in brazil, which is disappointed. >> we would like those problems, wouldn't we? >> absolutely. may i could ask you something about the brazilian troubles in plafrmt when they started moving, it was one of the drivers behind the "b" was that they would sell commodities to the rest of the world. does that fit in the with longer term story? i thing this is the point we've been making for about the last 18 months is the big difference between brazil now and brazil 2007 and 8 going into the global pry sis. the . not huge but bear in mind its terms of trade have never been

stronger. it's earned all this money from commodity exports and it spent more than that. the big risk now, of course, is the commodity prices dropped back. we're going to see this big squeeze on domestic demand and i think the consumer growth story we've seen over the past three years starts to unravel. really, i think the instructive point is brazil needs to be more like china and china needs to be a bit more like brazil. >> how would you from an investment standpoint would you play brazil? are you -- >> we like the idea of an emerging market growth but it's become a little bit overplayed in the last few years. we have been thinking that developed markets may be where they are simply because they overlooked them. for us, it's the asian bricks that are most attractive.

>> neil, where's the flaw that's expected? >> 8%. i wouldn't be surprised to see it go 7.5%. i think the key point is rates are going to stay a lot lower than people expect. >> happens to real. i wouldn't be surprised to see it go deeper. the remarkable thing about the real is they have been concerned about the strength of the real. now they're in the swap markets to spreenlt the currency from falling. >> it's extraordinary. after all the angst and they talk about currency wars. >> as you wrote from currency wars to currency route. >> it remienlsd yourself the speed at which things are changing. neil, good to see you.

that interest rate is -- >> it will come out this evening, midnight uk sometime. >> i know i'm staying up for it. >> 7:00 eastern. >> much more reasonable. neil, thanks. a couple of flashes we want to bring you real quick. if it of all the business association is saying earthquakes hit the region, yesterday being the latest but recently a few others. they will, quote, have a negative impact on an already difficult situation. perhaps not a big surprise but that is an area where a lot of big italian production takes place. ferrari may be affected, for example. we'll keep an eye on that. not helping italy's situation. >> thiel do whatever is necessary. >> spend. >> we're getting some reports from dow jones, spain is going to recapitalize the bank with cash via sales. it's ruled out giving

securities. >> that's even more pressure on there. a little. it will get around the ecb's main objective, but it's short term. >> we were trying not to have more state funding, right? that's the issue. now, in japan, attempts to break through a longstanding political deadlock over hikes and consumption tax fail. >> he failed to get his support for failure to double the sales attac attacks. he refused to agree to its debts tax. they needed to deliver on "i" promise to cut wastele spending. he said he wasn't against raising the steals tax and that it's only an issue of timing. it was the first since noda took

off last september. it was crucial since ozawa has threatened to kill the bill. the failed talks will likely prolong a stalemate over the tax issue, further eroding confidence in japan's fiscal policy. back to you, ross. >> nozamu kitadai, thank you. >> they had to carry out their own huge economic reforms. of course, its currency loss is half its value, that being the problem here for if eurozone. martin spoke about the parallels between asia's crisis 15 years ago and europe's crisis today. he started by asking about europe's direct impact on thailand. >> thailand, direct impact probably is not very big. their shares in terms of the banking sector, you know, the

banking sector, is not really big. our banks are not invest as lot so the securities are quite small. it will have some impact on it. but 10% with them. but, again, there could be american to our trade partners, china, asean. >> there beans some talk that ecb should introduce capital controls if there is a disorderly greek exit from the eurozone do. you think that's a good idea? >> well, that would be a disaster to the world.

r you roar as a currency is wreck newsed as a reserve currency. it's free throws and so on. if you violate, that it's just not dealing with the eurozone economics. you are dealing with the economies out of that. that would be tough. >> when you see the situation over in europe now and what governments are doing, there's a lot of political intran ja jens. they don't seem to be doing what needs to be done to right their vo vote. after seeing thailand's experience, what do you think now? >> i think we look at the policies and evidence of hue mill it. they're very good people. but one thing we like to point out is the level of reality,

recognition of reality. there was a time, if you can recall, back in '97 when were were realistic,stice asked for example of thailand, we changed the exchange rate regime, reoriented our macropolicy into a more flexible movement. we recreated the currency. we went into a number of reforms into the banking sectors, in real sectors, confidence and so on came into play. we were helpless at that time by more conducive economy. >> it was much stronger. >> much stronger. and realistic exchange rate. we could fade out of falling debt and help us recovery.

>> all right. let's release a report on thailand. coming up, italy's north following a massive earthquake that's already killed 16 people and called billions in damages will be in milan for the latest.

all right. we're getting interesting i'ms from you regarding the eurozone debt crisis. rob writes in we're apparently in the age of swan. he doesn't mean black swans. he means swans that appear to be gliding along peacefully into a storm. he says the trouble is even those poor old swans have to say osodit. i don't know if they can say it. they need to return and stay safe. far too many people are willing to jump into it. our paraphrasing may not have captured the essence of this metaphor. if you agree or does agree or want to comp with your own, join us on "worldwide exchange." you can contact us via i'm or

twitter. you can reach us directly @kelly underscore and @r@roswestgate. . the global >> the global up 7.4%. up 3% in the year. elsewhere the italian business association has warned that the earthquakes that have hit northern italy will have a negative impact on an already difficult economic situation. we're joined from milan with more. claud claudia. >> yes, ross. it was the second one in two days. the death toll was 16 but the impact is going to be quite sick can't also on the economy as you

were mentioning. 15,000 employees will not be working in the next days. hundreds of small businesses have shut down. the impact in terms of numbers could be over 1 billion euros. this area contributing about 1% of gdp. that's 16 euros per year. the industries that have been hit are the biomedical and -- food in particular. parmesan cheese. 10% has been affected. also dialysis machines and cardiology machinery that is produced in this area that contributes to the biomedical sector, also the impact there will be significant. another sector that's important to note is the luxury car sector. in that area, somewhere between 10 and 19 miles of the epicenter are low katsd lamb bore guydy, maserati, and ferrari. 800 lamborghini employees were evacuated. they're still not works. 650 maserati and 3,000 ferrari employees did go to work.

on the three, that's the only ones operating today. lamborghini, 12 cars a day, maserati, 28 car as day while ferrari produces 30 cars a dare. ferrari when i spoke to them said they're back to work because they did not sustain damages. this is true because offal three. it's because of the impact on all the families and the issues surrounding them but fur rarry has reopened and they're helped nearby suppliers by allowing them to work thart plant and the final impact on this sector and the others is yet to be seen. government troops have been sent to the affect area and an emergency cabinet meeting will held in just a few minutes so we'll know how the government will be working to help them. back over to you. >> you know, only claudia can get away with saying ferrari. >> she does it very well. >> if the earthquake wasn't very bad for them, it comes on top p of a tax crackdown who have been

tracking people who have been avoiding tax who own these expensive cars. if you only paid a few thousand in taxes, how could you buy. they stopped buying them because the tax man was following them. >> kevin gardiner, let's get his final thought here. kevin. what's going to be the key? what do you do with commodities right now? the dollar index is up at 20-month highs. we're not getting big measures out of china. >> we think the big moves are behind us. we're actually still quite positive about commodities longer term. but in balanced portfolio we're sitting strongly on fence. we thing a gnaw tral position is the best place. >> we still feel there's something to go in terms of oil, longer term. nearer term, we thing in the precious metals, we thing it can be horribly voe a tile in both

directions. >> we've been hearing platinum may be the new gold snopa laid yum we like more than gold. >> do you want to be exposed to it. >> it may not feel like it at the moment. we still think the global economy is inches ahead. the u.s. is making sure that the development moves in the right direction. it's not collapsing. so, yeah, we think there is some industrial demand out there. there is some out there. >> you said gold is too volatile. why is gold, not in your opinion, exhibiting a risk averse -- if it were risk averse, you'd think the gold would be much better. >> i think if you go back in history. gold hasn't always performed as the safe haven asset that people thought it can be. it's precisely when lots of people think it is a safe haven

asset. from our viewpoint again, it's silly to have a strong view. >> spain more important than grease? >> much more important. too big to fail and that's why we think europe is going to muddle through, but it's a bumpy ride. >> kevin, good to see you. head of global strategies at barkley still to come. >> we'll head out to new york next where our guest things the pay master of germany will likely lose its aaa credit rating. stay with us. a living, breathing intelligence teaching data how to do more for business. [ beeping ] in here, data knows what to do. because the network finds it and tailors it across all the right points, automating all the right actions, to bring all the right results. [ whirring and beeping ]

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welcome to "worldwide exchange" i'm kelly evans. >> i'm ross westgate. >> the euro is below $1.25. madrid says it will tap markets to fund its banks and has designed its banking capita to the ecb. >> speculation of massive stimulus package saying they don't need to intervene on the same scale as 2008.

>> china trying to dama. the dow jones will be opening lower by about roughly 80 points. nasdaq pointed down about 20. s&p 500 around 106789 take a look what's happening across global markets. we're down now about 0.6% on the day and that really has intensified over the last couple of hours given a lot of headlines coming out in particular about spain and that's sending not just stocks lower but, ross, importantly bond yields as well where we're continuing see a raft of headlines. >> we are. down low, 1.7%. and it's not really stocks. stocks are down. this is what we had to know. ftse down. we were up 1% yesterday. we snapped a full session winning streak.

this market down over 28% for this year. it's the world's second worst performing index two behind sri lanka's concerns. also talk out of china there is no repeat of the 2008 fiscal stimulus, so commodities are weak across the board. basic resources down along with banks. fresh record lohse for bund yields. 1.3%. spain yields going high. 6 president 2%. the spread between the two widening out to nearly 530 basis points. a fresh recordwide between spain and german bunds. italy back over 6%ful we're going to get the results from it will i in the next 10, 15 minutes or so. 5 and 10-year key auctions looking to raise. how high the yields will be, we'll find out. we're fresh on 10-year gilts.

as far as currency marks are considered, the dollar index is up fresh 20-year hero highs -- 20-month highs. aussie dollar get back toward six-month lows. expect retail sales down. euro dollar, fresh two-year lows right now. below 124. 124.34 below the 125 mark and we talked about no stimulus out of china. that's also hurting commodities, besides the dollar getting weaker as well. nymex below 90. brent brks e low 105, 105.46 and spot gold don 15.46 as we speak. kelly. >> ross, thanks am quick look at the agenda. sales are out. they're expected to be unchanged from march. around 1:20 p.m. richard fisher weighs in on the economy. he may weigh in on his favorite topic too big to fail and take a

look at earnings from booze allen hamilton, lions gate and tivo. came in roughly on expectations of a negative 19.3. >> it's a fresh two f h year low this morning. we broke through essentially 1.25 this morning so narth looks wide open. we're waiting to find out what's going on with spain. it's worth pointing out we've got snaps as well out of spain suggesting they're now going to issue debt to recapitalize a bank here after the ecb reported ly caught water on their initial plans. >> a couple of different surveys to circle back, while the consumer confidence report was roughly in line with expectations it appears the

sentiment indicator for industrial activity was weaker than expected. >> yeah, business climate minus .77, myment 5.1 in april. >> exactly. even in the last couple of years, we're seeing their lows of 1.33%. it's amazing. germany is borrowing for 30 years when italy is going to have a rough time borrowing for a couple months' time. >> keep your eyes on how much they pay for the five-year. >> all right. spain meanwhile is denying reports that it's suspending plans to the european central bank. the finance ministry says it has yet to put forth any plan for the ailing lender despite headlines for the contrary. the bank denies reports to reject bid bids. nevertheless we're seeing other

ways they their using their own ways to capitalize on bankia. >> if they can't fund themselves, how can they fund the banks at the same time. spanish daily says they may grant spain an extra year to reach a deficit goal of 3% gdp. spain posted 9.3g dp. it was reduced to 5.3% this year and then they agreed to get to 3% in 2013. reuters says that madrid is now going to present a two-year plan to control spending when it unveils a draft budget to the parliament in the next few months and they're sure to pull up their recommendations which would include spain's stability program. >> we're joining now from new york by our guest host for the next hour lance robert, ceo and economist. lance, what immediately caught

my eye in your notes is you say don't rule out more trouble in the u.s. as the eurozone crisis worsens. why? >> well, just simply because a 20% of our exports and basically profits come from the eurozone, so, you know, as we already are running at a very subpar growth rate in the united states, any real slowdown coming out of the eurozone is going to impact us as well. >> we have pretty much a replay of what we saw last summer which is a debt ceiling debate coming up, a eurozone crisis, an earthquake that has basically pulled back auto production as of this morning so you're looking at pretty mump the same playout we had last summer and more importantly you have operation twists coming to an end which will extract liquidity from the markets.

so having late built more cash, reducing risk in portfolios, it plays out well for the summer. >> people are saying nefrms we can expect policy makers especially in the u.s. to come here and do wlaes needed to support growth or prop up the market. >> sure. >> why do you think that's not going be the case? >> no, no. i do thing that's going be the case. i think it ooh going be later on in the summer. look, now, don't forget we're in an election cycle, and quantitative easing does not play well across the american public in general because as a function it raises commodity prices, food costs, energy costs which impacts the voter. so what the fed is going to need here is basically permission to come in. it's going to require a weaker economy. look at economic growth rate to 1.5% by mid-summer, lower stock market nothi

market. the fed's got room to move. >> you expect fed action. >> oh, yeah. absolutely. we're going to be at qe3, qe4, qe10. it's a function of the fact that support from the lick idquiddit marxes. until we come to the realization that those programs aren't gaining the organic growth, we're going to continue down the same path. >> your comments contrast with larry summers who says the worst is over for the u.s. economy, growth is much better than we expected two to three years ago when we thought we'd be this the mid of the of a second depression and calls on the eu. interesting contrast there. if things play out the way you're talking about, do you expect gold to benefit? >> oh, yeah. absolutely. look. as long as we continue do these

printing programs, increasing liquidity options, itst rah. don't forget, gold as a function is not a safe haven. it's not the place where you go to hide. it is simply a function of a fear trade. people in the u.s. in general view quantitative easing program, liquidity injections, excessive debts, rising deficits as an issue that may powe ten zhally lead to hyperinflation. this needs going to happen any time soon. it's the perception of the fear trade that drives gold. precious metals, et cetera, as a safe harchlt i would expect after eight months of a consolidation that we're going see another run in gold probably later on this year, early next year. >> so it's not a safe trade, but it is a fair trade but you've got to work out what fear it is. >> exactly. >> that's right. >> gold does not rally on the sum of all fears. it's a particular fear. is that what you're saying? >> it's more of a fear --

generally, yes. what people are worried about is the value of their purchasing power. today i'm worried about hyperinflation. the general attitude is that the world in general is on the brink of economic collapse. just read the headlines. and that fear runs into the basic heart of the average american that's out there trying to make ends meet. let's not forget when we talk about high levels of economies and markets, that's one thing. the average american that's working for a live, that's a totally different environment for them, they're scared. look at consumer sentiment surveys. they still run at recessionary levels three years after. that tells you a lot how consumers really feel about things. so as a function they want a place that they think is going to be a safe place to be if the economy goes completely in the toilet. and that is gold. >> and we've got plenty more time this hour to talk about where people should hide their cash. stick around, lance, and we'll be back with you in just a little bit. first we'd like to check in on

the top stories of the day. they're warning that a critical computer virus could interfere. sneem are wondering whether the israelis might have put this in to help disman ter some of iran's nuclear facilities as well. it hasn't been denied. >> interesting stuff. >> brazil banks at a record low. it could be 75 basis points. >> exactly. and yet you look at 8.5%. >> six months ago they were worried about strong kur senn i. things change around pretty quickly. >> that's right. china's buying brazilian electricity assets owned by spain's acs. it's another chance of them coming in. this happens to be located brazil which we were just talking about. >> that's the smart way. don't go in and help them out with the debt.

buy the full selling assets. right? >> it remines me of carlos doing that dutch value. >> the a long commodity boom is coming to an end. this is fascinating. kevin gardner says he didn't believe that. this is base odden the fact we've had the infrastructure boom and the likes of china and now they've got to move to kochb super. you just don't use -- once you set up services companies app retail, you should not use the same number of commodities, right? >> we've had people coming out and saying it's the end of the cycle. morgan stanley says we usually get two decades of run. but a lot of people like excludeing oil from that view. they like to say i believe that except oil. oil could still be going high sneer that may make sense. head to the website to find out more on that particular story or yu copick it up on my twitter hand @rosswestgate and join the conversation as well. >> that's right. the u.s. housing market will get

the home sales out in a bit. ian tweeted the other day now's the time to buy. act while you can. do you agree. get us in touch with with us. you can i'm us at woror tweet u. [ male announcer ] this is the at&t network... a living breathing intelligence bringing people together to bring new ideas to life. look. it's so simple. [ male announcer ] in here, the right minds from inside and outside the company come together to work on an idea. adding to it from the road, improving it in the cloud all in real time. good idea. ♪ it's the at&t network -- providing new ways to work together, so business works better. ♪

okay. we've got auction results out of italy. the 2017 bte cut to ratio 1.35. the yield, 5.66%. that's sharply higher than the end of april. 5.66%. the ten-year auction yield, 6.03%. that's the highest since january. i think the five-year. they sold in total 5.73 billion. the maximum they're looking for was 6:25. so they didn't quite hit the total. a bit to cover on the 2017, not exactly very strong. >> no, ross. you have to wonder how it would have looked if they auctioned this off a couple of days ago, if they might have gotten a better demand. this morn, a tough day for them. >> it's quite a bit higher yield for a five-year. that's not terribly sustainable,

right? 5.6%? >> no. look. and if they're auctions the ten-year over 6%, that's not sustainable either. certainly more for people to be a little concerned about this morning because in contract to the spanish auctions that we even seen, again, it's higher. they're usually going for the high end of their range, italy by contrast having a tougher time of it. >> they sold 5.7 out of 6.25 toward the upper end. i would -- it's just we're getting big jumps on the yield. >> and in fairness, they're selling 5 and 10-year debt where spain has been funding itself a lot more short term. >> yeah. exactly. we'll measure the reaction. i want to see what we've gone on the ten-year at the moment. we'll keep yoour eyes -- ten-ye bund yield d. >> the two-year german yield is low. >> the result of that auction seems to be pus bund yields

lower. >> let's take a quick check of headlines now as we keep an eye on what's happening. the record high. and, again, the credit spread with german bunds as they say they'll attempt to fund the banks recordwide. the euro is sharply below 1.5. >> speculation offi a massive stimulus package. ♪ [ engine turns over ] [ male announcer ] we began with the rx. [ tires squeal ] then we turned the page, creating the rx hybrid. ♪ now we've turned the page again with the all-new rx f sport. ♪ this is the next chapter for the rx and the next chapter for lexus.

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welcome back to the prachlt let's check how futures are reacting thafr somewhat disappointing italian bond auction just a few minutes ago. s&p would open lower. dow, 90, nasdaq would be down, ross, about 23. >> it's pushed bond yields up on the peripherals in italy and spain and it's causing a fresh record low in bund and gilt yields go. we're down in session lows. we're heading for another 2% loss at the moment. ibex down now about nearly 30% for the year. let's take a look at bond markets. >> if we can show that up there in a second and then we can look at having mentioned what's

happening now across the board with that ten-year bund now at fresh record lows. 1.33%. just extraordinary in that spread between that and what's happening in spain where the ten-year 6.66 continues. italy has really moved higher. 6.08% on the heels of the bond auction which they didn't auction off to the degree they hope and gilts from the uk, 1.71%. >> and on the currency market, a fresh two-month low at 124.40. aussie dollars was down at six-month lows, kelly. >> all right. it's another day and another sea of red arrows for facebook. the stock was down almost 10% on tuesday and down quarter from the ipo with its market cap falling from $104 billion to $79 billion as of yesterday and that

action could be due to the launch of facebook's options which nearly 365,000 contracts changing hands yesterday. the federal trade commission has made a second request for information about facebook's $1 billion purchase of instagram signals u.s. antitrust regulators will give the deal a long review and meanwhiler er. in motion will record a first quarter loss. r.i.m. wouldn't be more specific about the size of the loss. they're exploring all of their options including its overall business model and black berry platform. ross, it's down nearly 90% from its 2008 high of $140. >> how the mighty have fall snoon i mean you could almost match it up with the greek stock market. >> yeah. and salesforce.com has added a budget to the team. the company's buying buddy media

for more than $800 million, bidding higher than google they manage ads, apps, and pages in front of their customers' eyes. down a third of a percent. in other words, it's outperforming this true. >> this summer looks to be turbulent. is it time to raise cash? that's according to our guest hoeftd lance roberts, ceo and chief economist of streettalk advisers. >> what you're looking for here is the markets to get oversold. remember, we had a really big run in january, february, and march. and that run got markets to an extreme overbought level. so, you know, it's going to take some time. they don't go in one direction. they don't go straight up. it's important to understand that there's a time to take some profits off the table and that's

what we've been talking about really since early april and looking for an opportunity where the markets get oversold and news gets out and running through the cycles right now and get the markets in position where the people are bearish on the marjt remember, we want to buy things when people don't want them. we want them when they're cheap, not expensive. sometime later this summer and again this is going back to earlier potential qe3. when we talk than we're going to get close to an opportunity to talk about putting money back into risk assets. >> there are people who say we have reached the point of fear on the street, blood in the water. we're not quite there yet, that's what you're saying? >> not yet. really if you look at most of the headlines coming out, people are still very bullish. we see analysts with 1,400 price tartds and the s&p 500 by the end of the year. earnings expectations are still very high. they haven't come down much. no, we haven't gotten people to the point of fear at this moment. remember what we saw last summer

we ha add 20% decline last summer and people were pretty much convinced we were in a recession by the oechld summer. that's the type of fear we're looking for. very quickly, don't dismiss what's going on in spain right now. this is very important. remember what happened in greece recently. the banks actually froze investors being able to get money out of the banks to limit it to 50 euros a day. when you see them rising in spain, don't be too sure this won't lead to some potential opportunity for a run on the bank there as well as people have seen what's happening in greece and they don't want it to happen to them as well. that's an issue. >> what do do you especially with all the dividend holdings at the moment? a lot of people have held them. >> yeah. you know, it's okay. and, again, you know, you want to be careful here just to manage the risk and the portfolio. we're not recommending -- by the way, we're not representing 100% in cash, stick it in a coffee

can under the bed. wear not saying that as well. take a look at your portfolio. move out of riskier assets and move into something better dur about turbulent times. there's still good money to be made in fixed nick and you have a very important fugs which is the return of your capital, which is a lot of the times better than trying to get a return on your capital. >> okay. thanks, lance. good to see you. lance roberts, chief economist and c of streettalk advisors. >> we'll speak with the ceo steve berke it was next. 

welcome to "worldwide exchange." if you're just joining us, i'm kelly evans. >> and i'm ross westgate. >> the euro drops as confidence in the eurozone slumps. >> not helping. spain hits an all-time high. they'll tap markets to fund its bank and redesign a cap tagization plan to the ecb. >> that's right. there's still concern about the

impact of them on the community. exclusive results of a new survey from realtor.com straight ahead. alright. a all right. a quick check again of how the u.s. futures are look. it's down. nasdaq would be opening lower by 20. the s&p lower by 8 points this morning. anything about the comments to a kind of weak option of italian debts to worries about spain are weighing on markets. this morning ftse down. cac 40 about 1.26 in paris and the ibex 35, amazingly not the worst performer of the day for once, down 1.3% nevertheless. and finally the quick check of bonds because that's the big story this morning. ten-year bun, this is the one, folks, to watch.

1.33% and, in fact, we've dipped slightly below that during trading this morning. just incredible. the 30-year for germany is below 2% and below it. shooting higher after that weak auction of five and ten-year debt and, of course, another beneficiary of the safety trade is another country. the giltd yield, ten-year gilt yield is now 1.76%. >> the spread is over 30 basis points. the big question is what are you supposed to do as an investor. this is what some of the experts have told us here today on cnbc. >> from a fundamental perspective, it's the most overvalued currency we know. so there are many issues to be cautious with the aussie dollar.

>> we liked more sectors rather than particular countries. we like the german market but we would want exposer to the global economy because we think the global economy is actually going to hang together some of anybody who can export global selling we thing would look relatively attractive. >> the other sector like auto, consumer, i.t. and others where they already have their assets in place and they don't need day-to-day government approvals, their growth assets are very high. >> there are a bunch of thoughts out there. the italian auction we've had out in the last half hour. the five manufacture-year yields-upping from what, 4.8 to 5.6%. ten-year jumping from 5.8 to well over 6%.

italy's been caught back up. >> and, remember, italy, we have been asking why hasn't italy been on top of the headlines. now, this morning, it seems they are expressing those concerns. the bankia is rallying. >> we have to walk people through the time lien of what's happening this morning. first we had spain's finance minister coming out and saying that in order to get around concerns that ecb might have about funding banks that it was going to issue debt directly and have this recapitalization plan. so on the back of that we sabankia shares that had been down double digits only 1% or 2%. then, rogs, as you're saying, we're just now getting word that spain's banks will need this $48 billion in euros and provisi

provisionnprovisionns and meanwhile they're adding to concerns whether the trending funding position over the next year or so will be adequate. >> they said $84 billion, the money for bankia, they're going to raise on the debt markets. look where the yields are. so someone tells me they gooirng to raise money at, you know, 6% plus? >> it's simply not sustainable. >> put it into their bank system. >> and so spain's equities are down one of the least of the day, but, again, what we're seeing across the rest of the space reflects concerns about the country. u.s. investors will get the last snapshot with pending home sales. it's likely a big portion of those will come from foreclosed properties. they account for nearly a quarter of them in 2011. a new vary out from realtor.com shows home buyers are showing a lot of new interest in foreclosures and here now with the exclusive results of this survey, we're joining by steve berkowitz who's in los angeles.

he's the ceo of realtor.com. steve, good morning. what caught my eye is t people with foreclosures. something like 90% of the people you surveyed want to live in them. >> i twhank you're saying today is just a very different mindset of the consumer. they see forecloses now as an opportunity. they don't see it as so much of a distressed home sale as more of an outcome of a situation in which the home itself is a great place to live. >> steve, can you talk lateal bit about the stigma, that going away, why people are more interested, price being a key one. >> price is key when people are looking at homes in the foreclosure market. they're seeing them at 10% to 20% 230% below other homes for sale in the neighborhood, so i think one of the things you're seeing there. and you're also seeing the stigma of the idea that a foreclosed home is something that is bad.

it doesn't exist as much anymore because a lot of the homes are in very, very nice neighborhoods. so we're seeing a lot more interest. >> what's interesting, steve, if you look whats people see in the housing market, this is always of interest, those that are prospective buyers expect a general price appreciation of 5 or 2% a year but it's the youngest cohort that's the most conservative thapd're expecting prices to go up only in the range of 1%. perhaps more realistic. >> yeah. well, i think the younger homeowners realize -- they're starting to move way from the home as being a fundamental home investment rather than an emotional investment. it's very important to their lives as they start to have children, raise children. home is the centerpiece of their lives. they're really looking at it as place to live, not just as an investment. >> on that, what sort of appreciation are people expecting? are they getting a big discount

when they buy foreclosure homes? are they expecting any appreciation? >> i think people who live in the homes for five to seven-plus years are looking at it saying if i can get 2% a year, maybe 3% a year over the next five to seven year, you know, i'm borrowing the money at 3% because mortgages in the u.s. are extremely low. interest rates have never been lower on mortgages, assuming you can qualify. so what you're seeing is homeowners who are moving in, younger homeowners who are seen as first time home buyers seeing it as a great opportunity to start family, to build around the community and to grow. >> and, steve, we're in a presidential election year, of course. is this seen as a political issue? are politicians to blame? is anything to blame in particular on the housing crisis or not? >> yeah. i think consumers look and they blame banks. i think they blame the

government. i think they look at the employment. are the people they look at as blaming for the housing crisis that exists here in the u.s. and think it's going to be a very important election year. you know, realtors here in the united states, the national association of realtors are very supportive of a campaign for homeownership matters and there are 65-plus million home ore eo in the united states. i think it will be an interesting year on how housing affects the elections. >> yeah. and everything else. steve, thanks for that. steve berkowitz of move moveinink.com. >> they kick off a four-day fact-finding mission. first stop, greece. we'll cross live to athens for analysis next. [ male announcer ] this is the at&t network. a living, breathing intelligence helping business, do more business. in here, opportunities are created and protected.

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okay. lots of let fors coming in. the trouble is that poor old swan gliding peacefully on the surface has to retreat to the river bank until the ranging torrent has resided and it's safe to return. we've gotten another note from

randall from san diego, if it looks like a duck, walks like a duck, and quacks like a duck, it's a duck. it's my nature to be optimistic but i don't see any way for this to end other than badly. they're talking about the european debt crisis. if you have metaphors, your own to add, join us. get in touch us bier worldwide@cnbc.com or contact us directly. this on top of the soggy italian auction. >> soggy, damp -- >> water metaphor. >> the other thing worth talking about, we had the report out of china which suggested we weren't going get any kind of fiscal stimulus that would match what we had in 2008, kelly. if what's going on in spain and the italian auction wasn't enough, it's just another overlay for investors.

that is having an impact. basically resources in europe are the weakest sector, and we are seeing commodities down. the dollar index is down off fresh 20-month highs. nymex down at below 90. brent oil session lows as well. of course, yesterday, there were hopes that we would get some major stimulus policy out of china. now there seems to be a tone coming out from the news agency that they want more of the private sector to get involved because they're worried about stimulating any more policy or seattle bubbles if they wrap up financial stimulus too much. kelly. >> all right, ross. thanks. let's get a quick check now of what is happening with your headlines this morning. record highs for spain's credit default swaps and the spread with german bunds as snaerm says lit tap markets to fund its

banks. jitters about spain's selloff equities and the euro falls be e lo e 1.25. and speculation as ross just mentioned of a mass stimulus package. >> all right. finance share economics commission says they will fall after greek elections in the euro. there are now three weeks to go. they're retaining their lead. the polls suggest that the party would take just over 23% of the vote. the same survey shows some 80% of those questioned want greece to stay in the euro. the same amount thinks the country should renegotiate the terms of its bailout. hopefully we'll get more from julia in just a second. but contra diggses remain. the other things about the polls, of course, kelly is we wait to see whether -- because

night over those figures mean they can form a government. you have to get a coalition anyway. >> exactly. i think people have already started to look at the june 17 date and look beyond it to say where is that going to lead. >> so you have to look at where they are, because the most likely coalition would d b the new dmom. if they could give 50% they could form it. >> exactly. but given the situation in greece and how it's played out, when you start to look at spain and the similarities there showing up across financial markets, you know, you can hardly find anything -- any relief there. and spain's five-year cds spreads, meanwhile are at a fresh record of 583 basis points. this according to market. so this morning we've seen, ross, what started out as a quieter day. then you get the news about china's stimulus coming across. you get all the stuff that's happened with spain this morning and it -- >> they're saying spreads are widening because of greece. one would have to say the metrics in spain are deteriorating. talking of which, let's get out

to julia who's in athens. julia, we receive what the latest polls are telling us. i'm interested in what they're saying about it. even if the new democracy gets the most votes, they're going to need a partner to get the coalition. >> absolutely. this is the point you have to take away from all these polls right now. at no point have we seen any one party no a position to take over one government so we're talking an coal lig. everything we saw in the last election shows that the population here want to see a broad coalition. what we have had is the democratic part say, look, these are the conditions that we'd be happy to join a coalition in. so we have started to see noises from the smaller parties and that is interesting timing given the tilt that we've seen toward new democracy in the polls since the weekend, of course. a big consideration from the poll i want to point out, although we've hat 850% of the population want to remain in the

europe, 80%, too, say they want to renegotiate this program. i think you can take away from that less than a fifth of the population want to rip up the deal which is the message we've been getting from the party and one of them reiterated that message to me today. so ultimately the key takeaway is this election is still wide open and they do think the polls are continually going be watched over the next week or so. back to you. >> julia, thanks for that. if they got afternoon approved bailout election, they would renegotiate it. >> they would have to. >> still to come on the show. >> or market wins are going. the biggest risk for investors. find out what he thinks are the troubles spots on the map coming up. [ 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...

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>> the spanish economics minister says they're going to be financed in a bank fund. they have prebltsed a plan. the plan would be for that bank fund to issue debt. the european commission short assure to -- sure to be publishing its plan. viewers can follow that press conference live from 1:00 p.m. central european time. meanwhile ahead of the u.s. open, european stocks today are down. they snapped a four-day winning streak as far as the ftse 100 is concerned. we've been up a half a percent to a percent. worth pointing out the ibex down 29% so far this year. >> wow. no surprise perhaps that that's key right across the board for u.s. futures as well. we've got the dow pointed down

about 80 points. our next guest says it sunlt just europe you have to worry about. he's david joichlt he joins us now. david, what's at the top of your list of concerns when you look at the map?david, what's at ther list of concerns when you look at the map? think we'll get a clearer picture. beyond that i think the slowdown in china is more problematic from it. about no big stimulus package. i think this has been tell fwratfwrat ed for the most that's lower than the rest of the world i think they anticipates and it means an absence of demand from

what had been the one big growth engine in this recovery. that's a big headwind to this market. >> what are you recommending to clients in that case? >> well, i think one of the things you have to do is really sort of move your money to higher ground is the way i like to refer to it. what i mean by that is i think maybe the best market in all of this right now appears to be the united states. you're seeing a worldwide flight to the relative safety of the dollar. i think that extends to u.s. stocks. i think it also extends to the u.s. treasury market. i haven't liked fitter a long time. now i think we're seeing this global deceleration. i think bond yields are going go lower as much as i hate to say it. so i think that's --? our guest this morning lance roberts thought it was going to 1%. do you agree? >> i think it could. i don't know if it gets down

that far, rk, but i think it co. we'll have to see how growth is this summer. i also agree with lance that quantitative easing is back on the table again. i don't know the timing of it. i think the election makes it prop attic but i expect the fed to be back in here. >> the yus at the moment is the safe hafrp and representatived by the dollar. what about the threat from the u.s. to the fiscal cliff? >> yeah. i think this is going to be something that comes in to increasing focus in the second half of the year once we get beyond the political convention season. i think economic activity is going to grind to a halt in essence as businesses and consumers postpone big decision-making. you know, we're going to find out about housing later on this morning. that's going to be put on hold to some extent in the second half of the year because of this fiscal cliff. what i expect to happen is these

things will all be postponed during the lame duck conference and buy ourselves maybe six months of time on the political calendar to get something done in a more meaningful way. i don't expect that on january 2nd we're going fall off the fiscal cliff but it's out there. we have a little window of opportunity. >> david, real quick. the drop in oil prices, does that make you any more positive about consumer stocks? >> it does. clearly it helps, although we seen some mixed messages. down yesterday from the conference board after the university of michigan was up. so the consumer is helped by this, but there is a real thin veneer of whatever confidence is out there. >> david. thanks for that. that's it. just a program. cnbc world spencer dale will be on exclusively. otherwise, kelly and i -- >> -- will see you tomorrow. ♪

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good morning. european stocks falling. they're following suit trading below fair value after being up yesterday on i guess a little bit more positive feelings about greece staying in. facebook shares falling be e low 29 on the first day of option trading and black berry maker r.i.m. hires bankers to explore its options on this wednesday. welcome for a wednesday. may 30th, 2012. "squawk box" begins right now. >> good morning, everybody. welcome to "squawk box" here on