hello. welcome to today's edition of "worldwide exchange." these are the headlines from around the world. markets are rife about the spanish aid deal but the lack of detail has sent peripheral bond yields higher again. limiting atm withdrawals, imposing border checks and cap controls are suggestions that eu officials are exploring their opti options for a worst case scenar scenario. and who knew and when reports say some jpmorgan executives were told about risky

trades at the bank's london office more than two years ago. welcome to today's edition of "worldwide exchange." no kelly today. she's on her way to vienna for the opec meeting. we one hour into the trading session here in europe. just weighted to the down side. a bit less than 6-4, probably around 5-4 decliners out-pacing advancers. this following a turnaround in the session yesterday, when the ftse was up 2 points. right now the ftse is up 8, cac up 10, but the ibex is where the focus is in spain down another 0.4%. we are keeping our eye on the bond market reaction. ten-year yields in spain are

rising once again, 6.62%. yesterday we went back over 66%. italy rising over 6%. 6.13. as far as bond yields are concerned. we are below the ultra low levels of june 1st, 1.1% but contained at 1.34%, near the record lows. eur euro-dollar below 1.25, we are at 1.82. dollar/yen, 79.52. this is where we stand now in europe. let's get an update on what's been going on in asia in the session. >> thank you, ross. asian markets beat a sharp

retreat as investor optimism over spain's bank bailout dipped. volume remained thin ahead of next week's fomc and g-20 meetings. the shanghai composite slipped. the hang seng down by 0.43%. large caps were among the biggest drags. japans nikkei 225 took back half of the gains from monday. that after japanese intervention in the foreign market is understandable. south korean stocks pulled back from their four-week closing high. defensive plays rose. australia bucked the downward trend and qantas helped. its shares surged 11% after the

carrier took steps to defend itself against hostile takeover. india now trading up by 0.2%, this despite worse than expected april industrial output. back to you. ross. on today's show, we will be in athens ahead of elections on sunday. also in 15 minutes, mumbai's reactions, and we will find out how the asian giant's economic prospects compare. and we will speak to allison hong. and india and brazil are showing

the strongest hiring trends. the battle among the tech giants heats up in san francisco as apple maps out its latest software updates. all of that is coming up, first spain and the eu are under increasing pressure to outline the details of the 100 billion euro aide package to recapitalize spanish banks. according to a report, the government will receive a loan with a 3% interest rate and a maturity of 10 years to 15 years. questions remain about the source of the funding and how the deal will impact existing holders of spanish debt. fitch warned spain will miss deficit targets for next year. the agency slashed the credit rating last year allowing it two notches above junk. it has also downgraded the country's two biggest banks.

stephane is down in madrid for us and joins us now. i suppose it was the lack of detail as much as anything surrounding the bank loan that has people worried. any more meat on the bone this morning? >> absolutely not. that's the reason why so far this plan failed to convince investors here at the madrid stock exchange. we don't know how much money the banks here will need. according to the imf, it shouldn't be more than 40 billion euros, but the ecb is asking spain to review its plan about creating bad bank for toxic assets and that would mean perhaps more provisions for the banks and more money necessary. we won't have a better picture until the 21st of june when the two independent auditors are going to publish the conclusions of their work and on that day we will know how much money is necessary for the spanish banking system. until that day, it's still a point in which there is a question mark.

the second question mark is about who will provide the financial support for the spanish banking sector. will the money come from the efsf or will it come from the new european mechanism? that's the question. and what will be the creditkrec rating? we have seen the spreads with germa germany widening again yesterday and this morning. the eu promised the parliament more clarification sharply and european countries to ratify as soon as possible to make sure it will be up and running in july. >> we'll catch you later. and we'll look at reaction in a bit to what stephane is saying. the indian finance minister said they are commit ed ted to fix

regulatory issues to boost investor confidence. first, let's bring in james stratton. give us your views of what may happen with this bank loan to spain. is it more likely at the moment it's from esfn funding versus esn? since esn is not up and running? >> basically what we're talking about here is a situation that can be solved by a man with a pen. so, many of the established ground rules don't matter, because we'll say what is the best way to carry this loan. the loan will be good for a good 10, 15 years. it will have to be part of a mechanism that will be there throughout that period. we have to decide whether the loan ranks, you can see white holders of other spanish bonds

are concerned. because they're likely to get -- >> do you think wherever it comes from, they will get subordinated or not? >> yes. the short answer to that. we saw this the end of last summer when everyone was asked to take a hair cut on greek debt, and it turned out very 1984-like that some were more likely than others. the official institutions are not looking to take anything like the hair cut that's private sector was having to take. the isf loans rank higher than any other form of loans, so they will model themselves along that line. these official interventions are going to be the highest ranking paper out there. which will make the situation worse, won't it? it's bizarre, they need the money, yet by giving the money we make things more likely that the sovereigns will need a bailout. >> the traders knee jerk response was a headline coming up saying 100 euro bailout, they

were looking for something more like 40 billion. then they get excited and then realize it's not a bailout at all. normally a country in charge of its own activities would decide whether they are committed to bailing out their own banks. when you made that decision, you go for it. in europe, you can't even make that decision. you have to go with your begging bowl to the rest of europe asking can we have the money to we can make that decision. once you make that decision, are you going nationalize the banks? are you going to include penalty force holders of bank debt? are you going to include the holders of senior bank debt or not? all these issues have yet to be tried. that's where the market goes hold on this is more complicated than we initially thought. we will give back the gains. maybe we're looking at situation where this decision mean where is less likely to have trouble. if we do have trouble the holders of bonds are less likely to get money back.

so we pushed the situation into a more binary and uncertain state. >> just what we needed. eu officials made plans to prevent a bank run for greece should it leave euro. the euro group officials have talked about limits on cash s w in one week's time. the left party took 6% of the vote in preelections. how do they see things panning out? >> well, you know, he said that everything is wide open, the key point he did make to me. is that if he doesn't see a compromise, then there isn't going to be a coalition.

at least a coalition with the party. he's the kingmaker here, he could go either way. beyond the negotiations on finding a coalition here, there are the discussions that have to happen with euro. i asked him how much flexibility does he believe european leaders have and are willing to give to greece. listen in to what he said. >> translator: i think it is possible for european partners to cope with some provisions of the memorandum in a different way. for example, they talk about a development plan for greece. the country's problem is deeply economical because of deep recession. they even talk about tackling youth unemployment. things are not static and immovable for the europeans. question see the political environment throughout europe is changing. you can detect the difference between alanz policy and

sarkozy's policy. the situation in europe is beginning to acquire general negative characteristics. >> even with this level of negotiation, there is arguably further austerity for greece to come. are the greek people willing to accept that? >> translator: no, we cannot stand more. the austerity measures apart from putting enormous burdens on greek citizen have led to deep recession, industries are being locked down. the markets have been stifled and unemployment in greece is 23%. i'm talking about the official registered unemployment, because the unemployment not recorded is reaching over 28%. therefore austerity measures not only destroy the livelihood of people but at the same time create huge problems with the recession and the market what is interesting is the fact this severe austerity does not provide revenue and incomings to the greek state.

the person who doesn't have any money to live, how is he supposed to pay taxes to the greek government. >> do you think the germans will be willing to hear no more austerity from greece? >> translator: i believe so. besides, mrs. merkel's policy has begun to be disputed. i know there are german politicians who understand some things need to be changed in the memorandum. this is my belief. and i think it is correct. >> that was fotis kouvelis, leader of the democratic left party what is clear from that interview is how much compromise is kneaded on all sides. back to you. >> thanks for that. give me your own assessment. i find it extraordinary that they might rip up eu rules and stop people leaving or entering the country. seems extraordinary to me. >> if they're going to restrict

the freed freiedmaeedom of move will certainly restrict the capital. >> unless you're carrying tons of cash. now we want some degree of border control so we can make sure capital controls are being obeyed in a physical and electronic sense. >> what case are you basing for greece? >> a big, sturdy case. >> apart from that one. what's your base case for what happens to greece? >> i don't have a base case for greece. i think the outcome is binary. on the one hand, we either have the true euro files con joeling everybody into sort of going for a closer fiscal university on greece, or some tail players in that, like the greek population, refuse to play ball in this next election my guess, it's just a guess, is that the greeks falter

at the fence and vote for continuing with the euro experiment for a bit longer. at any moment we can have people pulling out. one of the interesting things about this, if, say, the greeks are kept into europe and the price of keeping them into europe, as we all agree now, we have to have fiscal unity, for example a unified tax code, what happens ireland? ireland has taken all this pain that no one else seems to be asked to take. the spanish have been given a loan to bail out banks. on a special sort of interest rate. the irish played the good guys in all this. got hammered in terms of finances, but were allowed to keep corporation tax. if unified tax rates come in, they lose that. if you keep greece, the skost you lose irela cost is you lose ireland. >> talking about other country, cyprus is set to be the fifth

eurozone nation to ask for a bailout. the banks are suffering heavy losses on greek debt losses. 4 billion euros could be asked for. the commission is ready to act if it receives a bailout request. >> of course we have to take into account the recommendations of the european commission on this issue, which are a number of structural issues you have to deal with. i feel confident together with the data i have mentioned and the proposals which we intend to put forward if necessary we'll be alto get a favorable response from europe. coming up, angela merkel says she will campaign for a europe-wide financial transaction tax. the latest from frankfurt.

angela merkel says she will campaign in favor of a financial transaction tax after reports suggest her coalition is not that serious about pushing for eu-wide legislation.

patricia has been looking at the arguments in frankfurt and joins us with more. patricia, where is the truth? >> reporter: always in the middle. especially if you talk about politics. so, i think there's a bit of both. of course i think angela merkel has always been pro-financial transaction tax. it's a touchy issue considering it might put germany at a less competitive position if you don't have it across the board or in as many eu countries as possible. she has until the 23rd of june, which is the date she needs to push through parliament the fiscal pact as well as the latest on the esm decisions. there is a lot of talk between the government. they are saying for us to get your vote and the two-thirds majority for this and what you want on the 23rd of june, we

need an agreement on the financial taxation tax. it is not easy for angela merkel. she vowed she will go out and get more support. there is a couple of important meetings. on the june 22nd, ameringela me will have meetings in italy and rally that exact issue. tomorrow, she will rally to get out of that loggerhead that they are seemingly in now. >> patricia, thanks for that. that story will run out. we have results out of netherlands. 6.5 billion bond were sold, 20-year money, 2.3%. they're doing okay on their fund-raising. india's finance minister says new delhi is taking several steps to kick start the economy.

those comments come after industrial output growth missed expectations. the data called further calls for the central bank to ease policy next week. >> thanks for that. definitely the numbers were disappointing for 2012. they came in at 0.1%, a contraction of around 3.2%, which took place in the previous month. they were the same indicators which were prominent in the previous month. we had capital goods which saw a contraction of 16% this time around, a 20% contraction in the previous month. the weakness was across the board, such as manufacturing down 0.1%, electricity down 4.6%, and mining which fell around 3.1%. however there was a complete converse reaction with regards to the equity markets and bond markets, they rallied in hope that's rbi will get more aggressive come monday and they

are going to possibly prevent growth slowdown and cut rates by around 25 basis points at least. that's what the market is factoring in. do remember on thursday we have the inflation data coming out for the month of may. expectations are that they could be between 7% and 7.5%. back to you. >> thank you very much for that. investors are anxious about india's prospect. in early trading, the pain was felt from the s&p warning yesterday. they said india is becoming the first nation to lose investment-grade status, but analysts says investors may have overreacted to the news. >> india has seen a deterioration in fundamentals. policy has not coped with what happened in policy the last decade or so and changes need to be made. i don't think a downgrade is forward looking, it tells us

what we already know. >> all right. james, how do you view what's going on in india in comparison to china? >> the india and china comparison is an interesting one. in the end we will know which one gave us a truer indications only when we look backwards. if you look at the two countries on a nominal gdp basis, growth rates have been similar. really it's all about how do we measure inflation and whether we are accurately measuring inflation. india's specific problems now are that, you know, the deficits and the fact it's basically -- it would appear corruption is far too prominent in india. it may well be that corruption is rife in china as well, we will only find that out later. at the moment, the visibility in india is clear that things are not running smoothly. therefore the government's latest suggestions that me might ramp up capital spending are not really working because everyone is saying how much of that will have a proper impact?

>> they have shot themselves in the mouths with legislation that seems to deter foreign investors. there's a lot of stuff they sort of messed up themselves. >> the good and bad things about india, most of their problems are their own making. obviously their soluble. the problem is they've been soluble for a long time and they don't seem to be getting better. >> for an investor, though, take all that away, for the investor in western companies exposed to this, the basic story has been the development of a consumer-driven middle class. what happens in the politics does that story stay intact? if you're looking at the unilevors, whoever the consumer products companies in the west who get in that area? >> it does. whenever you're playing a longer term strategic theme, the near-term cycle will always predominate in the near-term. the near-term cycle in india is

heading south. though you have that nice underlying story, we have a real waste issue. the infrastructure that should have been put in place has been frittered away in fraudulent ways instead, so the infrastructure is not there to build the economic development. so really india needs to pull its finger out th. this could be the wake-up call they require. still to come, how chinese infrastructure spending could effect the outlook for precious metals. our next guest has some thoughts.

these are the headlines from around the world. markets are rife with rumors about the spanish aid deal, but lack of detail weighs on sentiment. limiting atm withdrawals, imposing border checks and launching capital controls, all those options are being explored for a greek exit potential.

and who knew and when? reports say some jpmorgan officials were told about risky trading at the london office more than two years ago. manufacturing output data is out. it was forecast up at 1% on the month, and it is worse, down 0.7% on the year, 0.3 on the year. the oil and gas extraction, a hit by the sea platform shut down, that's where some disrp disruption came from. three-month manufacturing

outpit, minus 0.6%. sterling is weakening on the back of that off from the session high against the dollar, down to the session low, 1.5458. we were just below 1.55 20 minutes ago. european stock markets have been weight to the down side but holding above the flat line. the xetra dax is up 0.51%. ibex down 0.31%. italian yields are over 6%. the bund up 0.016%. as far as metals are concerned today we have seen weaker metals prices across the board. platinum off a percent. spot silver down to 28.42, spot

gold 15.88. our next guest says chinese growth concerns are the key factor in determining outlook for some of those commodities and says mining stock also underperform over the next six to 12 months. joining us is andrew dales, head of mining and metals asia. what is your best case then for what happens with china? there are those who say if china comes out with the right stimulus measures that will give a boost to the commodity market markets. >> yeah. look, clearly china is probably the most integral part of the commodity plan right now. it's important to realize when you look at the first half of this year, china has been in good shape. demand has been reasonable. we saw some inventory overstocking in the first quarter. as we go into the second half, we are expecting some increases

really year on year growth will be strong. but the key thing to focus on is second half on the first half. we should see improvements in property and infrastructure. at this stage i'm not as confident that we see a big increase in commodity prices. i think we certainly have our downside covered off. when it comes to the equities we do need to see material percentage increases to offset what is high cost coming through to most companies we look at in the market. >> what's your forecast then for infrastructure spending bearing in mind that's the swing factor? >> look, the infrastructure spending, the interesting thing to note is the government in china has bullish numbers for the full year '12 spending, but delivery so far has been small. so really the focus is not so much on the total spending amount for 2012, but what's left to spend now. now, when you look at

infrastructure infrastructure, it accounts for about 20% steel production. there is no doubt you will see strong infrastructure numbers. the question are on other parts of the economy and probably property a key part of the economy that people are focused on and still does need to deliver in order to see that really strong growth in commodities. >> james furgeson with us, you have been looking at infrastructure in china. >> looking at infrastructure spending in china and around the world. around world, roads get the cost levels about right and usage about right, they're not ever accurate, but accurate on the overside of the mean. railway infrastructure has a terrible track record. overtime, projects come in about

50% higher than budget. and the usage is about 50% lower than expectations. you look at the uk's hs2, that has a benefit to cost ratio of 1.4 that plummets to 0.3 if we use historical numbers. so 50% of china's economy is based on this sort of a metric. >> you say it's based on growth but it's not wealth creating. >> the reason why infrastructure and why politicians love it, every pound you spend goes straight to the bottom line of the gdp. so it boosts the economy. if you spend all that money building a two-mile high block of concrete in your back garden, every pound you spend would be adding to gdp, however there is no help to others.

>> meanwhile, andrew, for the mining companies themselves, whatever happens on sort of the spending levels and demand f y commodities, how are they dealing with the cost increases? >> i would like to add on that point just raised, it's a good point. if you look at infrastructure spending in china, given that the economy is growing at a faster rate than more developed countries, dollars amounts spent now has a lesser effect on the economy. now we're spending 2.2 trillion compared to 1.8 trillion to 2 trillion in 2008, however the economy has grown more. when you look at the companies, the key thing to focus on here is we're at end of a 10, 12--year bull cycle. we have capital costs coming

through, operating costs it doesn't matter what the underlying commodities are doing, we are dealing with companies having cycle through the higher costs. you've seen eps compression occurring throughout most of this year and equities in the mining space are down on an 18-month view. this issue does not subside until perhaps as we go into next year or we need to see commodity prices themselves jack up. and that may help to offset 10% 15% unit cost increases. >> andrew dale, thank you. the imf is lending a sympathetic ear, they say the yen is overvalued, and if market forces would slip, some yen intervention would be understandable. he is urging the bank of japan

for more monetary policy easing. james, up until the first quarter, japan was the stand-out stock market this year along with germany what does it offer investors now? >> japan is at a level on a long-term basis which is eye-wateringly cheap. it's sucking in all the value and investors can't bear to stay away. the opportunity cost of being in other markets is not so bad. we had a very powerful pump up in japanese stocks in the first quarter because of this very sudden and sharp drop in the value of the yen. the yen has now sort of come back. so the market has come back as well. the markets are back down at 23 or something-year low the other day. but profits in the economy are actually up, but not at all-time high levels, but they're not that far off all-time high levels. arguably japan is as cheap now to underlying profits as it was expensive in 1990, the peak of the bubble market.

what we need in japan is a capitalist, either a domestic catalyst, which means defeating deflation by encouraging banks to lend again. bank loan in japan is terrible. most of that is probably going abroad. or we need a weakening of the yen. it's gone up an average of 30% every decade. >> hard to see that happening wh with the rest of the world now. >> if the boj says you have deleted your currency, we can delete ours. >> let's remind you what the agenda is for asia. export driving japan comes out for machinery orders for may. india's external affairs minister is in washington to hold strategic talks with hillary clinton. so that's it. i think there's only two

things -- i always expect a third thing on the agenda. hiring activity across the globe suspected to slow as employers use a more intermittent approach to higher. the manpower report saw german firms reporting the weakest net employment outlook in almost three years as eurozone debt woes weighed on confidence. do david, nice to see you once again. i feel it was just couple weeks ago. >> it was only last week. >> nice to see you. let's kick off with germany this has been the strong man of the european employment scene. if they're now seeing weakness what does it mean for everybody else? >> not good in europe. germany is not immune to what's happening in the global economy as you've been talking. the germans will revert to what they did two years ago. they'll do job sharing, part-time work, keep people in

jobs until they get the export demand up again which should regenerate the hiring situation in germany. >> is the german jobs miracle as it is called based on a lot of very low wages, temporary jobs? some people say there's a slight myth to the way it's presented. >> the people who say that don't know what they're talking about that's not the german market in terms of employment. what they managed to do is balance very well the supply and demand of technical jobs from low-level trades, if you'd like, all the way through top-end engineering. when they get an economic hit like they are getting right now, they manage to keep people in jobs by just being sensible and maintaining employment, even if it's only part-time employment. that's good. in this jobs report there is some pretty good news. 33 countries -- >> i was going come on to that now. >> are positive out of 42. and 26 are down from same time

last year but still positive. we were just talking about india a moment ago with james and the problems they have with the economy. in this report india the strongest hiring plans globally. >> in our survey. >> which is extraordinary bearing in mind what's going on with the economy. why the disconnect? >> certain things happen in the jobs market. it's not right across the indian jobs market. retail sector is strong. consumer economy is going better and they're hiring big time. >> the other problem with this is job growth tends to be a lagging indicator what we're seeing are the jobs that came from the fact that 6 or 9 months ago, let's say, things were generally looking better than they are now. now things are looking worse, which suggests that by the end of the year the manpower survey may have taken a turn for the worst. would you expect that? >> we don't expect india to turn down. >> i was talking globally. >> globally.

we think it will stay flat to mildly positive. the u.s. that shown its best numbers since 2008 in this forward survey for the third quarter. that's looking positive. 24 months of consistent growth, even though it's small growth. >> i was going to say what's the history of this survey then relating back into the jobs numbers. if you took it just for the u.s., how -- what is the history of this going into jobs numbers? >> i understand the view that, you know, you will be hit by economic weakness and that will effect the job market, but employers build that into their opinion of what they should do the next quarter, so we think this is a leading indicator of what's happening out there. you were talking about china. we see positive signs in china, but in unusual ways. >> where? >> big hiring inland. manufacturing is moving from the

coast inland now where they can find more skills or more people to train with the right skills and the government is giving incentives to move inland. >> what's happening from what you see with the development of a service sector and a consumer orie orientate orientated economy in china. >> we see consistent growth, and that's spreading. on average, the signs from this survey are stable to mildly positive would be our view. >> david, always good to talk to you. thank you very much. james sticks around. still to come, some stock picks. what our next guest says is worth shopping for.

europe's retail space offers interesting investment opportunities according to the next guest who has a buy on carrefour and king fisher. joining us is scott evans. james ferguson is still with us.

scott, you had three years of sell recommendations of carrefour. they had numerous ceos. now you changed your mind. is that a conversion? what's happening? >> we never say never. let's put things in perspective. picking stocks in this environment is tough. if i'm looking for anything on the buy side, it's taking a longer-term view. they have to be deep value or defensive qualities. carrefour is becoming a deep value stock. had has the third ceo in, he has a monumental tass, in front of him given how the french retail market is operating with the private operators, continuing to erode margins, being aggressive on market share from a valuation point of view, if you add up the latin american business and the asian business, you are almost getting the french business for free. it's not loss making, not making much profit, but it gets to a

point in time where you say enough is enough, now is the time to buy. >> 50% is was off in the last two years, james what do you think? >> i think scott is right. there is no such thing as a toxic company. there's a toxic price. if you are getting good, deep value, as scott says, basically getting the main portion of the business for free and that business is not losing you money, you have to look at these things and that i sats the sort of level where i make good money. the old days of finding a good, quality stock, buying it, going off to play golf are over. now you have to be price sensitive. you say you have to take a view in terms of time what time view do you have to take with this? >> it's certainly not for short-term trading. this is about whether it's reached the bottom. whether it's done -- it can do enough for now in order to turn mar gypp gins around to stabili

them. there is a lot of self-help to be done within carrefour. it's been week on buying and loyalty schemes. managers have admitted to thais and not done anything about it. let's say 12 months. >> talk me through kingfisher. >> are we basically saying that we take a short-term view on it and it becomes a long-term hold? short-term trading is wrong, suddenly it becomes 12-month. >> you can always give a forecast, don't give a hor rhor. >> and kingfisher? >> how about erosion has online retail taken into buying tiles and paint and lawn products and products for doing the house?

very little. it is one of the more defensive sectors within retail that you can find in europe. there's other thing going on. the ability to buy across the same products and sell them across the retail side of kingfisher, i think, is an important element in the longer-term growth strategy. >> you do -- if you go online, you go to their online sites, rather than anybody else's to buy. >> there's a lot they can do in terms of their own brand. there is no own brand in terms of kingfisher and the rest of them. >> okay. scott, interesting. thanks for joining us. scott evans from espirito santo. we have not spoke about apple for a day. shares in navigation device maker tomtom jumped. the dutch company, the leader in in-car navigation markets said

it signed a global agreement with apple for maps and other related information. tomtom stock up 12% today. we have to remember back in, what, 1999 it was trading at 55 euros. apple says the new map service will replace the google maps application currently used on devices that was one of a raft of announcements made at the firm's developer's conference. this report was sent in from california. on monday in san francisco, apple's worldwide developer conference kicked off. one piece of hardware got introduced this new macbook pro. the hardware, this is $2,200, not cheap. but it shows off engineering we are likely to see throughout the apple line it has a retina display. that's a term we hear from the iphone and ipad. it has a lot of dense pixels. you can't tell you're looking at a scene. this is apple's attempt to not

by windows pcs but buy theirs it has a great way of handling thermals. that's what happapple says. so it won't get too hot. it is about four pounds, and it's about the same thickness as the thickest point of the macbook air. the real news here was in software and services. in the mac os, they unveiled mountain lion, the ninth version of the mac os. that brings over notification and messages that we have seen in ios, now they are on the mac as well. for ios6, that's coming to the iphone and ipad, they unveiled a number of things including facebook integration. now you can tie facebook into your contacts, calendars. you can like apps. that's big news for facebook as well as apple which integrated twitter a year ago. ios6 has a new mapping program that is apple's from back to front.

google is out as the provider of the back end of maps. apple has its own mapping technology, satellite technology and 3-d technology which allows a feature called flyover. you can feel like you're zooming through a city looking at different landmarks. quite impressive. i got a chance to play with it up front. they announced things like chinese language support and support for chinese services which will be important from a financial perspective because china is the biggest fast-growing market that apple has. a number of big announcements that may not have impressed investors at first but could turn out to be a big deal in the long-run. >> that was john fort there. let's get a final thought with james ferguson. you have done a lot with banks here. if we do recapitalize, quite a few banks have come out saying we don't need it. if we do recapitalize spanish banks does that help or hinder the spanish economy? >> it's worth bearing in mind,

if you recapitalize a bank, you are giving it capital because it has a shortage of capital compared to loans. if you give a bank extra capital, they can shrink their loan book which usually leads to losses. they can't do it until they've been given the extra capital. we saw this in '08 in the u.s. and uk and japan in '98, if you recapitalize banks, stand back, because bank lending will collapse and will you need qe. the ecb says it's clearly not -- they have a mandate, don't they, for pricibility that goes both ways. why have they ignored m1 m2 data? it's been flashing red signals for six or ten months. >> though we were getting

contractions in the periphery area, the flows were just going north. within europe as a whole, we were not seeing a contraction of bank lending, but that's changed. bank lending now is contracting or is around zero even in the northern countries, and it is deeply negative in the peripheral companies. does th almost the first thing drage said was his mandate was to protect powers in both directions. he knows he will have to do stimulatetory actions and i thi think he will. coming up, what investors need to do to get off the sidelines. .

this is "worldwide exchange." i'm ross westgate. markets are rife about rumors of a spainish aid detail but lack of detail sends peripheral bond yields higher again. limiting atm withdrawals, imposing border checks and launching capital controls, a report suggests eu officials are exploring those options and more. output growth for india's factories slows to a crawl triggering more crawl force an economic boost through rate cuts. and who knew and when? reports say some jpmorgan executives were told about risky trades at the bank's london

office more than two years ago. so if you are just waking up stateside, good morning to you. no kelly today because she is on her way to vienna for the opec meeting but will join us from there tomorrow. u.s. futures at this early hour in the united states, we are pointing to a positive start at the moment. the dow currently trading some 6 points above fair value. the nasdaq up about 15. the s&p 500 trading up just over 6 points above fair value. as far as the ftse, cnbc global 300, it is up. european stocks ended flat yesterday after an initial boost and then spanish bond yields heading higher again. we'll get on to that.

ftse 100 up 2 points. down 2 points yesterday. the dax up 10 points. the xetra dax up 64.10. the crack upac up 25.90. italy above the 6% mark, spain up about 6.6%. we higher this morning up towards 6.7%. has just put some upward pressure on bund yields. still slow at 1.36. euro/dollar, we just reclaimed the 1.25 level. we were below the 1.25 about an hour ago.

dollar/yen steady. sterling/dollar at 1.55. that's where we stand right now here in europe. what about the asian trading day? >> thank you, ross. asian markets beat a sharp retreat as investor optimism over the bank bailout weighed. volume remained thin ahead of next week's fomc and g-20 meetings. the shanghai composite slipped despite better than expected may bank lending data hong kong finished down 0.3%. large caps were among the biggest drags on the index. japan's nikkei 225 took back half of the gains made on monday despite a short lift pop after an imf senior officer said

japanese intervention in foreign markets is understandable. south korean stands pulled back. australia managed to buck the downward trend. qantas helped. its shares surged 11% after the carrier took steps to defend itself against any possible hostile takeover. and india's sensex up about 1%. the country released worst than expected april industrial output which is expected to add for calls for the rbi to cut rates next week. back to you. >> thanks. you might call it a case of what have you done for me lately. u.s. markets did not share the spain rescue plan for long on monday. the dow, nasdaq and s&p 500 all closing down, making it the worst start to any week so far this year. joining us is the president of

macadian assets, kent, nice to see you this morning. you say don't get too sis tracttract distracted here. >> we will see the elections coming up, the united states story is starting to coalesce. we are still continuing to live under all of this uncertainty about the fiscal cliff that ben ber thank bernanke called it at end of the year. we will get clarity there and also some clarity out of europe. we are starting to get a crescendo of aggravation, all of this spain getting money, but is it enough money? now right on the heels of them getting money we're talking about italy. now greece talking about maybe we'll close down borders and you'll need visas. all those things that happen at the last throes of negotiations. remember, once someone writes a check, ie germany or someone accepts the result, ie greece,

the negotiations are over. your most strength is to do it now. you will get a lot of this big headline risk over the next couple of months. i believe we're in the late innings and closing in on some sort of clarity so at least investors can start making the bets they want to make. the number one thing markets do not like is uncertainty. so if he can get clarity, you will see the markets gain footing as people decide where to place bets. >> you really think we will get -- the clarity we're talking about is political clarity. you think we'll get some political clarity, do you? >> i think the united states is absolutely going to get political clarity, whether you like the outcome or not. the lame duck congress will have to figure out what to do for the next two months because it's not likely we will get any resolution of anything prior to the election. unfortunately in the states here, our elected officials, as soon as they get to washington

seem to spend more time running for the next office, the next election. it's only in that brief amount of time after the election is over that they're willing to possibly do things that could hurt their political chances two years out. but with that said, i think we'll get some sort of mandate. it's either going to be for the president and his policies or for the challenger, romney, and his policies. there's a good chance that the lame duck congress punts the issue and just extends everything as is until maybe six months to mid-july, to give the new congress a chance to decide some things. at least we're going to get away from some of this bloviating about every side hating each other and every idea is bad. not every idea is bad. >> hope springs eternal. ken, stick with us. let's get more out of spain. spain and the eu under pressure to outline the details of an aid package. a report suggests that the government will receive a loan with a 3% interest rate and

maturity of 10 to 15 years, but plenty of questions remain about the source of the funding, how the deal will impact existing holders of spanish debt. stephane is in madrid for us. we have seen spanish bond yields again spike higher this morning what questions are people asking in madrid? >> a couple of questions. the first one is how much money will actually be necessary for the spanish banking sector. over the weekend the imf says no more than 40 billion euros would be necessary. but if you watch what the ecb says the other night, it is calling spain to review its plan to create bad bank for toxic assets in the banking sector with perhaps more provisions and in the end perhaps more money necessary for the banking sector. we will not have a clearer picture until the 25th of june. on that day the two independent auditors appointed by the government will publish conclusions and we will know

more precisely how much money is necessary for the spanish banking system. the second question is about who will pay for the bill. who will provide that money to spain? will the money come from the esf or the new esn, the eu commissioner promised yesterday before the european parliament that some clarification will come soon. but we don't know that yet. >> all right. thanks for that. our apologies for the disruption on the last bit of that. ken, you talked about political clarity in the u.s. where is the mrpolitical clarit in europe? >> i think what's happening in europe and continues to happen this is certainly not news, the idea of, you know, every time we get a hole in the dam you take chewing gum and stick it in there as a way to solve the problem is long in the tooth. and you are seeing various

political parties from different countries coles y ies come arou maybe something needs to be done and they're floating ideas out there. necessity is the mother of invention. it's the only way do a unified thing and stop doing this, putting the finger in the dam scenario that we have been getting. markets don't like it. >> guess what we have coming up? we have an eu summit at the end of the month. i bet it will be crucial. another crucial eu summit. >> you know what? every one of them absolutely has been and will continue to be. i think capitulation at some point that we are all in this together. it's been said so many times on this station how, you know, in many ways the eu is a political union but not a fiscal union, now the realities of the fiscal

union need to do that, and you need to have a sort of central bank and a sort of euro bond. it's the only way this will get solved. austerity is not the only way do it. we are seeing austerity is actually hurting countries ability to get healthy again so we will have to lead with fiscal policy a fiscal band dade around the entire euro to allow austerity to take a back seat for a while to allow for growth. once we get growth in, which is what everyone needs, then the austerity are kick in more. that's starting to take hold. you will see this back more and more part of the debate. >> yeah. whether the germans want to write a check is a different matter. let's talk about greece. stay with us, ken. greeks are preparing to go to the polls in five days time. one man hailed is foti fotis kouvelis. he spoke to cnbc earlier and

said the terms imposed on greece may need to change. >> translator: i think it is possible for european partners to cope with some provisions of the memorandum in a different way. for example, they now talk about a development plan for greece. the country's problem is deeply economical because we have deep recessi recession. they often talk about the creation of a program to tackle youth unemployment. things are not static and immovable for the europeans. question see the political environment throughout europe is changing. you can detect the difference between alanz policy and sarkozy's policy. that formed the big franco german axis. >> the average u.s. family has seen net levels drop to numbers not seen since bill clinton was president. what year are we talking about? we'll let you know when we come back.

the the headlines today, markets are rife with rumors about the spanish aid deal but lack of detail weighs on investor sentiment. capital controls may be used in a worst case greek exit

scenario. and a new report says some jpmorgan executives were told about risky trades at the london office more than two years ago. the recession and financial crisis took a toll on u.s. families. the federal reserve says average net worth plunged nearly 40% between 2007 and 2010. $77,000 -- $77,300, the lowest level since 1992 and the biggest decline since the fed started keeping track of net wealth in 1989. ken kamen is still with us. what is the impact of that feeding through into investment and asset prices? >> well, clearly the psychology of people feeling burned. at the end of the day we have a lot less money than we had in 2007. you know, think about not only housing values, but a lot of the

younger workers with money in 401(k)s that were more exposed to equities than an older worker might have been having a fixed income allegation and they're waiting for those to come back. one thing people did when the market contracted, they tried to time the market. they got out of a lot of equities and 401(k)s and personal accounts and ran -- sat out the run back up of the market from the march lows of 2009. so investor psychology is a big thing now. as i said earlier in the show, i think the uncertainty about not only tax policy and regulation policy, but when employment will kick up and all that is playing on peoples minds. in many ways there's an uncertainty tax going on in the united states now that will hopefully get clarity. >> what are people going 401(k)s at the moment, ken? >> i think a lot of them are starting to resign themselves that we're in the "new normal"

and that the shell shock is over. over the long-term you need a well-balanced portfolio. more and more people are starting to come to that idea. maybe not because they want to, but because they realize they're earning nothing on their fixed income asset allocations or if they're holding it in cash they're getting nothing. especially younger investors that won't need this money for a long time are probably starting to put some back to work, but it's hard, it's scary because no one wants to be burned again. i think that as we start seeing, you know, housing maybe start clearing a bit, hopefully employment getting better, though it doesn't look like that's the cycle we're in now, people will gain confidence. i remain optimistic for the long-term of this equity market. we're in the late innings of this uncertainty, once that clears is the image of strong corporate balance sheets, and

there's a lot of unbelievable value. i'll say this one idea, any risk on trade out there around the world is very cheap today. and any risk off trade around the world is expensive today. that's something that will find e equilibrium when people come back to the risks on trades. spain is saying the memorandum is already agreed upon for its banks and they will sign it between june 21st and june 22nd. china is banking on infrastructure building, but there are doubts. more when we come back. [ male announcer ] this is genco services -- 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.

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the plan is to roll out incentives like pactax breaks a procurement contracts. the report did not put a price tag on the blueprint. joining us is the managing director of silk road and ken kamen is still with us. we had the interest rate cuts over the last few days as well. will we get more of those types of moves as well as these other plans? >> it wouldn't be a surprise. china typically likes to ease policy and roll out new reforms. the challenge is over the last few years it's done more easing policy and a lot less reforms. so while growth might be supported over the next few months, the real issue is the next few years. that's where you start to be bearish. >> terms of policy easing, what more do you think we'll get in the short-term? >> i wouldn't be surprised to see another two cuts in the lending rate. steady cuts in the required

reserve ratio. when you roll out fiscal stimulus, the banks result matly lending out that money so you have to give back to the banks. >> how much of the stimulus will come in infrastructure spending? >> likely a large share. as a result, they have built too much too fast over the last few years and the private sector is struggling to catch up. >> at the end of the day we want to rebalance chinese economy, we want it to be more domestic-led. so they have to do short-term stimulus which seems to be out of sync with what the long-term objective might be. >> absolutely. that's the challenge. we have been speaking with ceos and executives and the message is consistent, economic reform has lagged over the last few years. so we're entering this period of

slower growth and the government has not been laying the foundation for robust growing. >> what about this blueprint? >> it's a good start. we need to see real action. the government has been talking about improving credit access for small and medium-sized enterprises for about a decade but very little has been done so far. so talk is a good start but we need action. >> ken? >> yeah. you know, as you mentioned before, infrastructure is where a lot of investment is going. i'm wondering about your thoughts on the consumer there as they potentially slow down and the world goes into a slow mode. their biggest customers are the united states and europe, possib possibly causing their income to come down. talk about matching consumer demand with all this infrastructure built up. >> there is no doubt that the

consumer is playing at more important role. as long as incomes are rising faster than inflation, consumption will remain robust. we can't be naive here. if public spending was to slow, if they were struggling to spend more money on infrastructure, incomes would take a hit. the consumer cannot support the economy through what is a difficult period. >> what is an invest tore do with this analysis? >> i love private equity. this is the challenge. i don't love the public markets at this point in time. there are some real gems out there in the third and fourth tier cities. the challenge is they're not always accessible for the average investor. >> thank you very much for joining us, ben. still to come, saudi arabia's oil minister says he will not ask opec to increase oil production at this year's meeting, at the same time the venezuela oil minister said he

will ask for an increase in oil production. kelly will be joining us from vienna, so tune in. that's why she's not with me today on set. still to come, the latest on the developments in spain. apple's new offerings as well as what is going on with the jpmorgan saga ahead of diamon's testimony before congress tomorrow. [ creaking ] [ male announcer ] trophies and awards lift you up. but they can also hold you back. unless you ask, what's next? [ zapping ] [ clang ] this is the next level of performance. the next level of innovation. the next rx. the all-new f sport. this is the pursuit of perfection.

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. . this is "worldwide exchange." here are the headlines today from around the globe. markets are rife with rumors about the spanish aid deal but lack of detail has weighed on investor sentiment. limiting atm withdrawals, imposing border checks, some of the reports suggested by eu officials who are exploring options for worst-case greek exit scenario. and reports say some jpmorgan executives were told about risky trades at the bank's london office more than two years ago. so you have just woken up stateside and have tuned in. we are a bit higher for u.s. markets, bearing a slight improvement of stock asset

prices in europe. the s&p 500 currently trading some 4 points above fair value. the nasdaq is 10 points above fair value. and about 61 points above fair value for the dow. as far as european stocks are concerned, we hit the best numbers of the day an hour or so ago. the ibex is up about a half percent. 0.45% for the cac. the ftse 100 up about a third despite weak industrial production data. a lot of opinions have been expressed today on cnbc and what investors are supposed to do here's a recap of some of those thoughts. >> you want to be long on the dollar, long on the yen, short on the aussie, basically long and short on commodity. >> this reasoning does make look bund look rich, however we are

looking for yields to touch new record lows before then the markets will force policy leaders to come up with a more comprehensive solution. i'm looking for anything, especially on the buy side, it's taken a more longer-term view with deep value or defensive qualities. carrefour doesn't have defensive qualities but it's rapidly becoming a deep value stock. talking about spain, the eu is under increasing pressure to outline details of its aid package to recapitalize banks. according to a report, the government will receive a loan with a 3% interest rate and a maturity of 10 years to 15 years. many questions remain about the source of the funding and how the deal will impact existing holders of spanish debt. joining us from madrid is partner and director at dracon

partners. thanks for joining us. give us your own view. yesterday investors decided this actually had not changed the game very much, we saw spanish yields spiking higher again and that's where they are maintained as we go through the session now. are spanish bondholders will be subordinated whatever happens, if the money comes from the esn or the esf? >> exactly. the plan is so big and so confused that investors don't know exactly if they invest in the spanish market or they take profit like suggest yesterday. today we have so much activity in the market, and we must weigh the mechanism that is structured that is working on europe that has more than 200,000 million euros, and more than that the

spanish bank needs. we need to wait for the new structure that they'll be working on next july that will have cash. because the structure hasn't had cash. they only have their ability to have debt. and this debt will need cash to the spanish structure, and from that to the banks. there are so many confusions in the market. we don't know exactly the details. we need to wait until the next week and the election in greece will be a key point. >> the history of bank capitalizations, when you give money to a bank to recapitalize, then they can actually call in their loans. actually what you get is a shrinking in loan books. politicians seem to believe recapitalizing banks means you

will get more lending. the history suggests once you recapitalize banks, that's when they suddenly shrink back lending dramatically. >> yeah. because, in fact, this money is not to lend to their -- to their small companies or to their small -- retail people. no this cash, this money, this is to bring force the balance of the bank. until this time, until the banks have enough to lend money, pass around six or eight months. in this period of time the loan s are not strength. it will not be a quick tool to bring forth the spanish economy. probably in the next month, the next summer, we will be under a credit crunch from the spanish

bank. >> we hear a lot about public sentiment in greece, we spend a lot of time talking about these issues. i would be curious to know what is the sentiment? is this a big topic of conversation all the time? give us an idea of how the average spaniard is really viewing the current scenario. >> really here in spain we don't feel like we are greece. first of all because greece lied to european union. second because we have a new plan, a new government, a new plan, very aligned with german key points, and we never fought european union. we see the rescue like help to our banks because our banks have a lot of problem but our estate, our country has not the same

problem like ireland or greece. here we have been very worried, but we are very worried about the credit. when timely t finally the banks money to the retail people and small and medium companies, but we don't feel that we are greece. we don't feel that we are in so huge problem like greece, po portugal and ireland. >> sarah, thank you very much for that. a couple of things, fitch, first of all, says a disorderly greek exit could lead to wider euro breakup, as a result, they say, the u.s., uk, and french aaa ratings are all under pressure. so fitch saying u.s., uk and french aaa ratings are under

pressure. an auction out of the uk, fi five-year, 0.9275 for uk money, a low yield in auction. the bit to cover was 1.28. some jpmorgan executives and directors may have known about risky practices by traders in london well before the bank announced its $2 billion loss last month. the "wall street journal" says discussions within jpmorgan's chief investment office about curbing some trades started as early as 2010, some executives were told the responsible trader would not be allowed to go overboard. jamie dimon testifies before congress tomorrow. the stock is down 1.4%. ken, what's your view right now

of where jpmorgan goes from here as jamie dimon gets prepared for his testimony. >> will there will be a headlina lot of risk management. i can understand they knew about this for years. a trader's job is to take advantage of inefficiencies in the market to go the other way when things are going one way to try to take the trade on the opposite side. the key to risk management it having the guts to say shut it down, i'll take the loss today and play tomorrow. that's a fees thpiece that was here. >> i suppose we'll have to see. i've taken pause, another note from fitch saying they're looking for u.s. medium term consolidation program in 2013. you talked about the politics earlier. do you think the u.s. politics will be able to deliver a debt

consolidation plan next year? >> i think there's going to be so much pressure on the new congress and the new administration to actually start getting something done. if romney wins, he's going to have to start delivering on promises. if president obama regains the office, i mean, we'll hope that maybe he's going to look at his legacy and say, you know, maybe now is the time. maybe i couldn't do things prior to the election, as he famously said to the russians i'll have more flexibility after the election. maybe he'll have more flexibility with his own party and getting some things done. >> all right, ken, stick around. the battle among the tech giants heats up in san francisco. apple mapped out its latest software updates. we'll have the inside view from silicon valley. with the spark cash card from capital one, olaf's pizza palace gets the most rewards of any small business credit card! pizza!!!!! [ garth ] olaf's small business earns 2% cash back

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let's recap the comments out from fitch, the ratings agency. the u.s., uk and french triple a ratings are under pressure. and one of the factors that will decide with the u.s. particularly is whether they get medium-term consolidation program in place by 2013. and a new ltro for the ecb is an

option, particularly if greece leaves the euro. it is an option for the ecb. in terms of corporate news, texas instruments is narrowing second quarter earnings and revenue guidance but keeping the mid point intact. the chipmaker says demand for its product is holding up despite global uncertainty and worries about decline in i.t. spending. texas says growth is being led by the u.s., followed by asia and europe. shares up more than 1% in after-hours, in frankfurt back down nearly 2%. shares in tomtom have jumped. up 11% after apple announced it would license the firm's content for the new matching service. the dutch company says it has signed a global agreement with apple for maps and other related information. apple says the new map service will replace the google maps application currently used on devices, and it was a one of a

raft announcements made at the firm's developers conference, but investors gave a hohum response. john ford has his own lowdown on what happened. on monday in san francisco, apple's worldwide developer conference kicked off. one piece of hardware got introduced this new macbook pro. the hardware, this is $2,200, not cheap. but it shows off engineering we are likely to see throughout the apple line. first of all, it has a retina display. that's a term we hear from the iphone and ipad. it has a lot of dense pixels. you can't tell you're looking at a screen. the lines are so smooth. this is apple's attempt to not buy windows pcs but to buy theirs. it has a great way of handling thermals. that's what apple says. so it won't get too hot.

it is about four pounds, and it's about the same thickness as the thickest point of the macbook air. the real news here was in software and services. let's break that down quickly. in the mac os, they unveiled mountain lion, the ninth version of the mac os. that brings over notifications and messages that we have seen in ios, now they are on the mac as well. for ios6, that's coming to the iphone and ipad, they unveiled a number of things including facebook integration. now you can tie facebook into your contacts, calendars. a number of different places. you can like apps. that's big news for facebook as well as apple which integrated twitter a year ago. ios6 has a new mapping program that is apple's from back to front. google is out as the provider of the back end of maps. apple has its own mapping technology, its satellite technology and 3-d technology which allows a feature called flyover. you can feel like you're zooming through a city looking at different landmarks. quite impressive.

i got a chance to play with it up front. they announced things like chinese language support and support for chinese services which will be important from a financial perspective because china is the biggest fast-growing market that apple has. a number of big announcements that may not have impressed investors at first but could turn out to be a big deal in the long-run. guys, back to you. apple stock trading at 571. ken, interesting fight between apple and google. would you want to hold apple at 571 or google at 568? >> i have to tell you, steve jobs famously said that people don't know what they want until we show them. apple keeps showing us new things. i wouldn't bet against apple here. that company has not only captured the imagination of a new generation but remain

cutting edge. everyone does play catch up to them. >> you're happy with the price and the forward-looking guidance? >> listen, i wouldn't be short apple here. >> fair enough. >> long-term they're still an innovative shop. >> all right. fair enough. thanks for that, ken. markets are rife with rumors about the spanish aid deal, the lack of detail is weighing on investor sentiment, particularly on the bond markets. fitch warned the aaa meetings of the u.s., uk and france are under pressure. and reports suggest some jpmorgan executives were told about risky trades at the bank's london office more than two years ago.

okay. ahead of the bell stateside today, european stocks are up.

the ibex the most notable on the right, up 0.8%. spanish bond yields are still elevated. as far as the agenda today on the u.s., the national federation of independent business puts out its monthly small business optimism index at 7:30 eastern. an hour later, may import prices. at 2:00 p.m., the june federal budget statement. on the earnings calendar, michael kors reports its first results since going public. and general motors is holding its annual meeting today at 9:30. before he talks to shareholders, dan akerson will be talking to cnbc at 8:30 eastern on "squawk box." the u.s. future now are indicating a more positive start today after the worst start to a

week yesterday this year. joining us for more, and a preview of today's trading, hank smith, chief investment officer at haverford investments and ken kamen is still with us. there's less on the agenda today, maybe less news out of europe today. what are you doing right now? >> look, we're taking advantage of what we consider a generational opportunity that's been available for three years now. every time you have a pullback or a correction, this opportunity represents itself, that is stocks providing more income than bonds. you have to go back to the mid '50s the last time you saw this type of scenario. if investors would only take some of those assets out of money markets, out of fixed income where there is no income, they could take advantage of

plenty of stocks across all sectors where you're getting better than bond yields. >> i've seen your notes, you think drug companies are now worth looking at after years of underperformance? >> well, that's a great example. we think they're being very much overlooked. we're getting near the end of the patent cliff that has effected really all the major drug companies. pipelines are being underestimated and stocks are at the lowest valuations, and you are getting generous dividend yields. >> ken, earlier ywould you be happy to put money into dividend playing like drugs? >> i have been putting clients

into dividend yields for a while. hank, are you hearing that investor sentiment changed and they're getting ready for the spring to pop, if you will? are you having a harder time convincing people about equities? >> ken, no. in fact, here we are three and a half years removed from the bottom of the market, three years removed from the trough of the recession and there's still plenty of fear and a ton of anxiety. a lot of it is driven by these headlines that are just absolutely terrifying every single day. so from a sentiment standpoint we still think sentiment is very sour and that's a great contrary indicator particularly in extremes. >> you said you like the dividend plays. again, back to the clients, are you getting push back from clients about the volatility that comes with owning equities even though they're getting higher yield? >> well, you know, it's an

ongoing conversation that we're having with clients trying to talk them into accepting a little bit more volatility, showing them that many of these high-quality companies have increased their dividends over the past five years substantially through arguably one of the most stressful economic periods we've seen. so they can grow their dividends over the past five years, imagine what they can do in better economic times. it's not just the high current yield, it's the growth of income that's attractive here. >> hank, you could argue we priced in a lot of bad news for equities per se. what event would make you change your mind, particularly if something blows up in europe. >> well, look, our view is it's highly unlikely we'll get a recession in the u.s. given all of the monetary stimulus. absent any external shocks. a blow up in europe, i suppose, would be an external shock. the fact that europe has been in the headlines every day for

three years makes it unlikely that it's got the shock value. we do not anticipate financial contagion or an implosion of the financial system over in europe. obviously if that happens it's a game changer. >> okay. hank, thanks for that. hank smith from haverford investments. ken, good to have you on today as well. just a reminder before we leave you, all eyes will be on vienna over the next two days. in-depth coverage and analysis of the opec meeting taking place. the reason kelly is not with me today is because she's on her way to vienna today. she will join us tomorrow and thursday. tune in for that. coming up next, "squawk box," joe, becky and andrew ready to bring you the countdown to the opening of the markets stateside. that's it for me. thanks for watching. we'll be backs with "worldwide exchange" again tomorrow. whatever happens, have a profitable day.

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good morning. opec ministers meeting in vienna, and in a change of pace they are talking about low oil prices. worries continue to play europe. one day spain, the next day already it's italy. and there's a new name on the stanley cup. i don't think it's been there before. the los angeles kings winning their first nhl championship in franchise history. it's tuesday, june 12, 2012. "squawk box" begins right now. good morning, everybody. welcome to "squawk box" on cnbc. i'm becky quick