buying mortgage bonds and treasury until there's sufficient evidence that the u.s. economy is on the mend. >> okay. welcome to today's program. we'll get on the olympics a little bit later. you know, there was one bank, right, that was left with its reputation in tact. >> the safe-haven bank is coming out of it this morning. >> standard chartered, shares in hong kong and london has been under pressure after the financial watchdog alleged the bank concealed transactions with iran. the city's department of financial services could revoke the group's banking license. it started a rogue institution that schemed to hide over 60,000 transactions. one of the bank's top

spokesperson said they are standing by the group. >> it's strong. geographically it's been fairly insulated. and had and still has unless we're pre-judginging a very clean reputation, one of the world's leading banks and certainly do we recognize the rogue bank that they are accused of being, no we don't. >> and standard chartered itself has issued a statement rejecting the allegations. they come out fighting about the numbers as well. >> that's right. earlier cnbc spoke to a banking analyst who believe standard chartered complied with regulations and maintains the stock is a buy. >> i spoke with the bank at length. they put out a detailed statement. i fear having looked at the picture of the young attorney who is running this in the newspaper we have another eliot

spitzer who is looking for fame and glory. the bank went to five regulators in 2010, they discussed it with them between '01 and '07 and believed they complied totally on doing dollar trades with iran. >> the cio of commodities management also voiced some cynicism earlier over the investigation. >> why is it a british bank or a german or swiss bank who are doing these evil things manipulating libor and money laundering and financing terrorists. never an american bank involved because they are in the pocket of the american bank lobby. so many sins in the world which any commentator including the american bank will tell you sit at home. the american authorities don't go after an american bank. >> the company said that well over 99.9% of the transactions

related to u turns complied with the regulation and the value which did not follow the u turn under $14 million compared to the 250 billion alleged. for more we join our panel of experts. welcome to you both. let's just explain, maybe peter you can, what are u turn transactions before we get into anything else. >> as i understand, a bit of a crash course in this, but as i under it, essentially, what this is about is about iranian banks that were not able to deal directly in the u.s., but still needed to process u.s. dollar transactions and, therefore, basically getting other banks to handle those transactions for them and because the u.s. was --

because of sanctions and because of worries about terrorist financing and money laundering and other things the u.s. had set up a protocol saying basically these transactions need to be reported and what the dispute between standard chartered and the regulators come down to, the regulators say all of these transactions were potentially not subject to the right approach. standard chartered seems to be saying actually the vast majority of the ones that the transactions we're talking about were legal under the u.s. definition and this a very small number $14 million which may have been problematic. >> penelope, it's extraordinary to have such an enormous gap. 250 billion and 14 million. square that one for us.

>> well, i agree this is a huge gap, which means -- sorry. hopefully standard chartered has had enough time and is probably working very hard to gather all the documentation to show that all these allegations apart from the 14 million are totally wrong. >> okay. what happens now? penelope? >> well, they need to prepare for the hearing and show that all these transactions were, in fact, in line with regulations and that there was a misunderstanding or that the new york state department was missing some information. >> peter, i want to talk a little bit about the significance of the bank losing its new york banking license, if that were to happen.

it sound like one of the biggest risks, at least flagged by jpmorgan it's one of the biggest clearers of u.s. dollars and that would significantly threaten that business. how likely is this talk about a new york banking license being revoked. how significant would it be for the bank? >> extremely significant. any global wholesale bank of any size has to have a big u.s. operation, has to have a lot of dollars going through new york. and if you can't operate in the state of new york, then you can really be a global wholesale bank. so that would be a massive blow for standard chartered if it were to lose its license. how likely is that, i think partly because it's such a significant thing to do. i think it's unlikely that it would happen. but on the other hand this regulator has put this question on the table and then the current febrile, kind of

anti-banker atmosphere coming on top of other reports and allegations we've seen you can't entirely rule it out why the standard chartered share price has fall enthis morning. >> penelope, what kind of pressure does this put on other regulators in other parts of the world to respond? >> they are also probably looking into their own banks and their own sanction, making sure they are complying that all the banks are complying with the u.n. sanction list. >> peter, standard chartered had been one of the few banks that came out of the financial crisis reputation enhanced, if anything. reputational risk how damaging is this and how long, even if they get along to getting some agreement with u.s. authorities come out with this in the best possible scenario, what permanent damage might have been done? >> i think there's a couple of things.

first of all that sense this is the safe-haven bank, one bank that hasn't stubbed it toe on any of these issues. that's under threat and possibly gone. i think the other issue is even if they are able to square off the new york regulator and even the standard chartered's version of events is closer than what the new york regulator is saying, if you read that order there's still kind of a sense that comes across about a bank that's a bit cavalier about complying with u.s. regulations and sort of trying to do things but hide them from the u.s. authorities or sort of say well don't send this to the u.s. or water down this report. that's a bit worrying because basically the standard chartered is a very stable management team over many years and so a lot of the people who were running the bank or around the bank when these alleged things were going on are still there and so that then raises the question which is there a cultural arrogance

about standard chartered that may cause a rproblem. given the current atmosphere the presumption is always on the banks. people tend to presume the worse. standard chartered will have to work extra hard to persuade people that this sort of portrayal of its culture is not accurate. >> it comes at a time when banking culture in general, banking culture in london has been under scrutiny. hsbc, $700 million for their money laundering issues and if you double that which is one banking analyst is doing for standard chartered that gets you in the range of $1.5 billion. a significant sum. it comes at a time when we've been busy calculating what libor's exposure will be for other banks. this seems to just be adding up. >> the expectation is standard chartered would pay some kind of

fine to iranian money laundering. other banks will pay these fines as well. so that in itself i think is probably not -- that's a bit of a flesh wound for a bank like standard chartered if it came down to a fine. i think you're right. the reputation of london has taken another knock and we've seen in the past couple of months three of the biggest banks all facing allegations of one form or another and it also plays into this narrative you get from the regulators in the u.s. that there's something rotten in the state of london banking and that, therefore, the regulators in the u.s. need to take more control of what's happening in the states and what banks operate in the states and doing elsewhere. >> just a final word from you, penelope. what do you now looking for? how does this develop? what's going to be key for you? >> we are going to look at how

the banks here are going to respond and the regulators in singapore because they are probably giving a close watch to all this and making sure they wouldn't be caught in that net for the reputation of the country and the market here, the banks here in asia. which is also one of the biggest markets of standard chartered bank. >> absolutely. penelope, thanks for that. peter, always good to talk to you. thank you for that. >> can't resist, can you? >> still to come italy set to release the first estimate of

second quarter gdp but how much did the economy contract in the april to june period. we'll be in milan with the numbers. and we'll talk about the impact of the olympics on britain's economy yet to be seen. what can rio learn from london. >> we focus in on california and bring you the latest on the fire at a chevron refinery which has been contained. plus we speak first on cnbc to the chairman of muncheon as it raises it out look. >> 30 minutes into european trade. just weighted to the upside on the dow jones stoxx 600. so slim moves higher right now for european stocks. ftse 100 where that listing is

pretty flat. xetra dax up .60%. bond markets are concerned take a look at where we stand at peripheral yields. and we've moved on. relative for euro sterling. aussie/dollar higher. said it was comfortable about chinese growth. no reason to cut rates any further. dollar yen 78.34. euro/dollar 1.2415. that's where we stand right now. we go to singapore for more on the asian session today. >> we're seeing asian markets in the green thanks to those on

going hopes that ecb won't step up its policy support. investors are looking ahead to key economic data from china on thursday. mainland market is higher by .1%. resource companies gained on news that higher barriers will be imposed on the rare earth industry. property sub index climbed after a report overnight. but insurers were under pressure after lower interest return. standard chartered hong kong shares plunged especially in late trading after those money laundering allegations out of the u.s. closing down nearly 15%. over in japan that temporary trading halt of bond futures due to the glitch didn't have much of an impact. the nikkei climbed .9%. electric and gas companies led

gains. we saw a rise in the aussie/dollar. kept its cash rates unchanged. india sensex is higher by more than 1%. back to you. thanks for that. speaking of asia, australia is not a happy nation due to their performance in the olympics so far. a report by the "financial times" even puts the blame on the prime minister's government perhaps for not funding sport. this as the uk celebrates what could be a record gold medal winning year. so how important are sports for countries psyche? how good are you feeling if you're australian or otherwise. e-mail us at "word on the street". tweet us at cnbcwex.com. reach us directly at @kelly_evans or @rosswestgate >> still to come australia central bank plans to use all the time it needs before it

makes its next policy move. we'll talk about that when we come back. [ male announcer ] this is the at&t network.

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okay. it's day 11. gb squaring off the french in the men's sprint.

kenny claimed another gold. apparently if they were a country they would be 10th in the medal's league. >> not too shabby. the women's pole vault ended with a final between u.s.'s jennifer suhr. suhr claimed the gold medal. >> and china is still hanging on to the top spot in the olympic. the lead has been cut to two gold medals. gb in third place with a total of 18. >> tight race. a lot of potential track and field. >> a lot still to come. that should i think would favor the usa. the key events to keep an eye on is the semi-finals of the men's football competition and more athletics or track and field from the olympic stadium with the finals of the men's 1500

meters and the women's hurdle. >> 3-3. usa football versus canada. how did that finish? >> i don't tragically. do a google search. >> i saw that it was 3-3 going into extra time and i didn't find out how it finished. >> boston fed president now shift gears entirely is in favor of expanding the fed's portfolio of mortgage bonds and u.s. treasuries. in interviews, he said the asset purchases should be open ended until the fed is satisfied with the help of the economy. he says for the last seven months we've been treading water that's different from what we expected at the beginning the year. i think it's time to swim to shore. he is an fmoc voter will speak with steve liesman on "squawk box" at 8:30 a.m. eastern. no big surprises from usa's central bank. the rba kept its main cash rate unchanged for the second

straight month. investors say the bank has no your again need to ease australia's recent upbeat economic data. the aussie rose to a fresh four month high. they are trading at 1.06. and joining us now is managing director and head of investment strategy asia, hsbc private bank. do you still think the rba is staying ahead of the curve by staying on hold? >> well, definitely ahead of the curve. in fact, they ad mamitted as mu in the statement that came out which basically said that the economy was showing some signs of revival, particularly the domestic sector, business lending was up as well as in the housing sector. you saw some firming in house prices, et cetera. that was the excuse for them not to cut more aggressively. having said that i think going

into the fourth quarter the year they've given themselves enough space to cut perhaps once more if the global economy were to weaken significantly ahead of the concerns of the fiscal cliff, et cetera. >> is the global economy going weaken significantly further from here? >> well, i think this issue of the fiscal cliff in the u.s. is definitely inhibiting business investment in the united states from the ism numbers and all these other indicators we look at. that else seems to be case. if you look at consumer spending over in the u.s. it doesn't seem to be growing. it's sort of flat lining right now. if that were to get worse in the fall which i expect it could, then, you know, you could probably see lots of central banks rallying to the rescue. >> i wonder if it isn't time to talk about this strategy that doesn't happen. so if we see perhaps a holding steady of activity globally speaking from here what position the rpa would then be left in?

>> well, that would be a very nice sort of situation where the rba would remain flat for the rest the year. you can't write that off. the problem is, with all this uncertainty in europe now spilling over into the u.s., this, i think, means there's a potential for a second shoe to drop, so to speak and you can see this in, for instance, the korean export numbers, korea is one of the earliest countries in asia to report its exports and those have been fairly lackluster. you've seen taiwanese economic growth weakening as a consequence of weakening exports, et cetera. clearly the slow down in exports to europe is affecting asian economies. the next shoe to be with u.s. you saw consumer demand there really weakening as a consequence of people expecting higher taxes to be paid next year. that's what people are worried about. the problem is we have a situation where you could have a

sort of self-fulfilling prophecy, people expecting bad consumption, already starting to pare down their consumption. >> as an investor what are you supposed to do? you could take the view that things aren't is going to get worse in china and maybe we'll bump along the bottom or the view that things there's a big risk things get worse. what do you do as an investment? >> well, the broad strategy going forward would be, obviously, to be quite defensive in the investment portfolio. bonds are still very much in demand because interest rates are certainly not going to rise for many, many months to come, and in the equity space you want to look for yield. dividend yield as the main driver. having said that i think in the short term you could have a few blips up. we're still in a risk on environment since early july. the spanish stock market is up

20%. energy prices are up 20%. all that means is that there's still this residual optimism that things may pan out for the better and i would ride that wave which i think could continue for another month two. at the same time still build up my defensive posture for the longer to medium term. >> thank you. xstrata reported a smaller than expected profits. the miner announced plans to cut spending for the rest the year and as for the highly-anticipated merger with glen corp company expects the deal to close in fourth quarter. shares were up 2.2% after the report >> china's hanlong cut their offer with sundance. iron prices dropped to their

lowest level. >> and talking about that, western australia, gold producers are hoping to cash in on solid gold prices. >> plus italy is due to release second quarter gdp figures. our next guest says economic contraction there is likely to have picked up from the first quarter. we'll get a preview next. these are the business

headlines from around the globe. shares of standard chartered slumped in london and hong kong after the bank is accused of illegal transactions with iran. >> the bank comes out fighting saying it strongly rejects the allegations but reactions from the street are mixed with analysts disagreeing on whether this is a buying opportunity. australia's central bank holds rates steady. it pushed the aussie/dollar further up. >> and one voice says the central bank should keep on buying mortgage bonds and treasuries until there's sufficient evidence that the u.s. economy is on the mend. okay. we got sharp manufacturing

outlook. manufacturing output down minus 2.9% month on month but the forecast is for a drop of minus 4.1. down 4.3% year-on-year. industrial output down 2.5. forecast to be down 3.4%. effectively what's happening is the extra public holiday to celebrate the queen's 60 years on the throne lowering output but declines less than many had initially estimated, pointing perhaps to a revision of second quarter gross domestic product and manufacturing output down 2.9%. that forecast was up for 4.1%. never know. we might get a bit of a revision to second quarter gdp. we'll be swinging an awful lot on the impact of the olympics which we'll be talking about a little bitater as well.

sterling dollar just up on the high sessions of 1.56. european stocks after solid gains again yesterday up around .75%. ftse and dax, ftse flat. xetra dax up .50%. good rally for spain since the middle of july. >> take at that look at bonds because let's see what's happening across the ten year, various issuers there. spain is lower this morning, 6.75% but it's shorter yielding that's a little bit higher this morning. italy just below that 6% level, 5.99. gilt still holding there at 1.5% and 1.41% is yield on bunds this morning. >> lots much folk in italy second quarter gdp due in under 30 minutes. "the economist"s expect a c

contracti contraction. the head of italy's central bank revised down the estimates, contraction of 2%. thanks for joining us, daniel. mario monti warned if we don't get to grips with eurozone debt crisis and turn growth numbers around in italy we'll see the rise politically of even more anti-euro parties. is this the biggest threat that emanates from a still deteriorating picture. >> it's one threat. contagion in italy is the political channel. italian policies generally have been good with the government even though the reform momentum now is slowing. with this extra round of austerity measures, it's slowing in the core of the eurozone

which is italy's main trading partner. discontent might rise. this may result in uncertainty in the runoff of the next election which might in turn also result in less willingness or perhaps ability to convince market italy is on a sound reform path. it's certainly a risk. >> just how bad is performance in italy going to get, economic performance that is? because while we've seen gdp shrinking, you have to wonder just what the magnitude of that shrinkage is going to be. >> yes i expect italy to have stayed firmly into deep recession in the second quarter. i see a pace of economic contraction approximately similar to what we have southeastern in the previous quarter, forecasted for 0.9%. obstructing from the number itself, i think that it's worthwhile to have a mind that the chances are that italy will

continue to shrink, perhaps at a lesser pace towards the end the year but nevertheless continue to contract. we see gdp shrinking by 2.5% for the whole of 2012 and expect a recession also in 2013 where we see the economy contracting by 1%. >> wow. >> looking at italy from asia, quite interested on what the effects of the weaker euro will have on the italian exporters. how large are these exports to non-europe, the rest of the world particularly emerging markets and any hope for a weaker euro from those two sectors. >> it's one of the positive factors that we've seen recently. surely also reflects the ongoing euro crisis. but further down the line it might help to boost italian

exports. exports represent about one-third of gdp, so it is a sector compared to the size of the economy but not given as big as one in germany or in other more open eurozone countries. but it is one positive factor that makes us think that unless there are extra round of austerity, the economy will continue to shrink next year but at a lesser pace than in 2012. >> we have seen yields on italian debt fall back in recent weeks. it's kind of on hopes, actually, that they will sort of take part in a rescue plan, the esff, is it less likely for them to take out bailout funds. >> italy doesn't need to issue long term for most of the demands of others but, of course, when it's to come back to the market in september, of

course this issue will represent itself. the sheer size of government that's a near term risk as is italy low growth prospects. here we're basically in sort of psychology of contagion. when a country is dealt with, perhaps through some sort of partial support, for example, spain, then investors would look for the others in the eurozone and one as italy. so market attention might focus on italy as well further down the line. >> just real quick because we have seen this pretty significant move on the short end of the yield curves on both italy and spain this morning up in the range of 20, 30 basis points. what is driving that? >> i think it is expectation of ecb intervention even though draghi didn't give many details he has a signal in the latest press conference that should countries ask for support from the european rescue funds then the ecb might intervene and

might intervene at maturities that are closer to those than can be forced by monetary policy. >> after we've seen that relief move why do you think this morning those appear now to be climbing back up? >> well, i think after this move of the markets, so my sense is others will see a lot of this volatility because of the lesser liquidity that's noticed. >> thank you so much for your time. this morning coming up we'll give you those italian gdp figures. they are due just about 11:00 central european time, in about half an hour's time. >> meanwhile as the eurozone worries, gold prices have been fairly resilient. gold price haven't performed that well. we caught up with a gold miner in australia. here's the report. >> reporter: they have been hit by the recent share market slide

most our resource companies have endured with gold prices remaining near record highs some analysts say gold miners will really start to shine again. one miner hoping to capitalize on the recent strength of bouillon prices is junior miner star resource. it operates the pulse gold mine in western australia. >> this is a mine that we bought just two years ago, we had our anniversary a couple of days ago. we're an aggressive little small company that just started off. the gold mine is a very high grade high margin gold. >> reporter: they embarked on an aggressive plan to upgrade its facilities and aims to boost production significantly. the expansion of their operations will see annual gold output jump from the current level of about 80,000 ounces to about 115,000 ounces by the end of 2013. the company estimates at a cash cost of between 610 to 690

dollars an ounce. despite the optimistic forecast, analysts believe the targets achievable. >> i think the management to date have demonstrated their ability to hit those ambitious targets. and i'm pretty confident that in the future they will at least achieve it if not outperform what they said they will do. >> reporter: analysts have a buy recommendation on the stock. there may be challenges particularly when it comes to fining high grade ore reserves. but they are confident they can come out shining. >> the number one threat is not getting the prices upgrade in time for the start of next year. not a big upgrade. for us it's quite a low risk. >> reporter: northern star's share price has outperformed others in the gold space over the last year but analysts say the entire sector looks attractive as valuations remain

low and gold price elevated. >> almost every gold stock is trading at a significant discount. you can pick up all sorts of things really quite cheaply at the moment. >> reporter: with gold stocks still lagging the moves in the bouillon price significantly market watchers say a turn arou could be coming and hope their prospecting doesn't undercover fool's gold. matthew taylor, cnbc. >> let's get a look on what's on the agenda in asia tomorrow. asia reports earnings reports continue with mining giant rio tinto out with figures. hong kong's cathay pacific sends outs second quarter earnings and inday mahindra turns out their results. >> over five years back of the financial crisis. today concentrating on the

banking sector. northern rock bailout was really the first sign the uk of course of a crisis. northern rock just a household mortgage lender getting into problems. we ran through to the dexia bailout in 2008. the big rbs, lloyd's, hbos bailout. anglo irish nationalized bank had to be bailout. then the first stress test in 2010. lloyd's ceo resigns at the end the year. 2011 stress test two. we had dax failing. ltr onks one came in towards the end the year. not an immediate impact from the ecb as we saw yields climbing sharply in spain and italy.

which cause the berlusconi government to fall. ltro 2 first quarter of this year the bank here request aid, reform bank and now dealing with the spanish bank bailout. that's how it's unfolded over the last five years. how did those view the crisis and were they right in their analysis and/or begin and potential solutions? >> banking system was on the brink of collapse and as a result of experiod die show us action by governments around the world the banking system was saved. >> we need to keep global financial industry, we need the different players to play by the same rules in different countries and different financial centers. >> while we have economic recovery it's not at all yet clear how strong it will be and how sustainable it will be.

>> we should stop the bank bashing and blame game because at the end everyone who is intelligent observer of this knows that not one group has caused the crisis and not one group can stop the crisis. >> personally think there's overall too much fear compared with the situation. overall i think, you know, the large banks in europe have cleaned their balance sheets, have strengthened their financial structure, added profits. >> we believe the ltro is a very important measure to stabilize the banking system in some southern european countries, for germany speak being i must say it's good because it stabilizes the overall european banking sector. >> five years and counting. so where are we in the crisis? let's get a view from our guest? a third of the way, three quarters of the way, how far through are we?

>> well, i mean it's -- that's a tough question to answer but i would say this. there's lots of issues that have cropped up in the aftermath of the crisis. the primary one, in my opinion, is the fact that we've nationalized a lot of bad private debt and that nationalization has led to the next stage of the crisis which is these huge debts that governments have assumed in the wake of the first crisis, and however you reduce the debt burden for the big governments in europe and the united states is, i think, really the question that's going to determine how long this thing will last. there are no easy solutions. clearly -- >> it sound like what you're saying is we're not even halfway through? >> i would not like to say that. i mean on air. but definitely the resolution of this problem is very complex. it means raising taxes in one

form or another. then you're going, to you know, impede consumption and that really is i think where the whole problem lies. not going to be easy to resolve this. >> all right. thanks for that. just remind you shares in hong kong and london standard chartered under pressure, severe pressure down 15% in hong kong, down over 18% in london. this after new york's financial world alleges the bank concealed over $15 million transactions with iran. it could revoke the group's banking license. standard chartered a rogue institution, hid over 60,000 transactions. the top four shareholders said it's standing by the group. elsewhere standard chartered issued a statement and strongly rejected the portrayal of the facts made by the new york state department. it says it already disclosed transactions relating to iran to the authorities and assured

almost all of those complied with regulations. total value of transactions which may need further investigation it says is under $14 million. >> a number of analysts have downgraded standard chartered. nomura cut its rating on new -- neutral to buy. >> there are others worth pointing out, coming out repeating they are buying the stock. >> they are calling it unexpected and ferocious. some strongly-worded language from them. still to come on the program, london 2012. yes it's in full swing. we talk to a guest who is in charge of investment in rio de janeiro ahead of the games in 2016. that's coming up.

resilient. now london 2012 may be in full swing but those in charge in brazil are looking forward to rio 2016. since 2010 rio has driven nearly $3 billion of capital into the city.

joining us for more, the director of rio business. the english translation. we saw in the run up to london similar organizations trying to drive investment and flows into london for these games. how are you finding the attraction of selling rio separate from selling investment into brazil? >> well, let's see. brazil is a very hot spot right now in the last years. what i'm thinking clearly is since brazil is hot,rio is the quietway. we've been driving by at least two major forces. number one, since the economy the energycovediscoveries. but also all the technologies around, certainly around this

topic. second one is about the great events, the great events also will drive a lot of infrastructure. >> it's interesting you mentioned infrastructure because in fact one of the weaker areas of brazil has been infrastructure and investment. so are you working with the government or just kind of hoping in general that maybe the games helps spur more of that activity? >> for sure. this is one of the most important legacies. the transportation, education in the country, that's very basic infrastructure. let me say all kids basic in school in rio will have english as a second language in full term, in the full period at the school. that's very important. the second is about transportation. and all this network of new expressways and new traffic lanes will be a key differentiation for rio.

also let me say about the hotels, hospitality business in the rio state is growing lost. >> will foreign investors be able to partake in these investments? >> what do you mean? >> okay. you talked about motorways, hotels. is there going to be any major roll out for transportation? >> all these motorways will be expressways with express lanes dedicated particularly for buses. it's the way most cities around the world choose a very inexpensive way to replace subways. >> instead of railways or subways. >> buses. and these buses will be with the green technology. so there will be less -- they will contaminate much less than

the others. >> i'm based in singapore and we hear lots of how china is importing so much from your country, iron ore and all sorts of raw material, soybean and in singapore we're exporting big oil rigs to brazil. don't you think you spend more time in asia promoting rio rather than going to london? >> i'll say this as follows. at least one fourth of all brazilian investments came from europe and at least one-third of this amount came from england. so definitely england is a hot spot and we say here those big companies which also are involved in the energy business are already there. so considering europe as a gateway for a source of new investment that's a place to stay. >> how much have the london games been an example four on

securing investment and business? >> that's another very interesting question because one of the major legacies that rio got from the olympics and it's immediately legacy, was a recovery of their security, the urban security in the city. that was absolutely great spot and great moment which also drives and potentialize new investment and security is a basic asset for the city. >> terrific. thanks for coming on set. enjoy the rest of your time here at the games. we're already seeing rio 2016 all over the park. we'll keep a look out for that. for more on cross border investment look at our trade links series here on "worldwide exchange," every monday 10:50 central european time. we take a look at global trade and it's impact. more information is on trade

lin links.cnbc.com. >> still right for investors to take a fairly defensive line. can you pick out any particular countries, though in your part of the world that aren't defensive? >> okay. well, there's one spot of activity in asia which is southeast asia, the southeast asian nations indonesia, thailand, vietnam, philippines, you name it, all these countries are growing very rapidly for a couple of reasons. one is that some of them are oil producers so obviously i'm prices rising 22% in the last month or so has helped them out a lot. also you fine agricultural prices has helped these countries a lot, particularly palm oil and rice prices, especially rising have meant the countries have seen much stronger purchasing power and

you can see that from the performance of corporate profits, stock markets in this region are going ahead. i expect that to continue. so i would buy growth in southeast asia for the next couple of years just driven on the fact that they have these very interesting natural resources and doing quite well. >> good to see you always. thanks. >> still to come on the schork we'll continue to update you on the standard chartered story. >> stock down very heavily. italy's economy expected to contract in the second quarter but by how much? the data next.

. hello and welcome to today's edition of worldwide exchange." . if you're just tuning in i'm kelly evans. >> i'm ross westgate. these are your headlines from around the world. shares of standard chartered slump in london and hong kong. new york regulator accuses the bank of illegal transactions with iran threatening to withdraw its banking license. >> bank said it strongly rejects the allegation. analysts worn of reputational damage but some call it a buying opportunity. >> one of the fed's more dovish voices says the central bank should keep on buying mortgage bonds and treasuries until there's sufficient evidence that the u.s. economy is on the mend.

if you're just joining us good morning. plenty to come on standard chaertd. first italian gdp numbers. second quarter gdp down minus.7% on the quarter. little bit worse than the consensus forecast. reuters had minus 2.5 on the year. we have it down 2.5%. the consensus there for reuters was down 2.3%. compounding the difficulties for mario monti's democratic government the fall, the fourth consecutive drop for an economy that's been in recession since the middle of last year. a little bit worse than the reuters consensus here on these numbers. how much does that cloud the

picture for mr. monti? >> well, you know, basically this is the worst sign for the italian economy since the end of 2009. basically the worst part of this number is there's no sign of recovery overall in the real economy. basically, we're paying high toll to the sovereign crisis in terms of the effect of the austerity package of the government of mario monti but also of the credit crunch. less money for the private families and also companies and higher costs of borrowing and also there's a connection between the consumer confidence and the spread, now there's a deleverage in the private-sector very fast and it's 2.4 in terms of the contraction of the domestic consumption and as was anticipated in terms of industrial production also the situation is pretty dark in some sectors since the beginning the year down 22% but not just durable goods also in terms of services. we have booking for hotels down

18% here year-on-year. six out of ten italians will not go on holidays in august which is quite unusual for the italian people. so for the government of mario monti clearly a a need for a circuit breaker. he can't squeeze out more money from the real money from the economy in terms of new taxes and we need a break. so the effect of the financial crisis of the high spread on the real economy. basically there will be no pass for the economy in 2012 and the experts say 2013 will be down between 1 and 0.5%. >> thanks for that. let's get a check of how u.s. futures are trading as we head closer to the start of the u.s. session. it's green behind me. the dow jones industrials average implied to open higher by 28 points. nasdaq pointed higher by 16 or

so and the s&p 500 trying to add two or three points as well. european markets can give you a sense of the kind of trading we've seen overnight. the ftse 100 is the underperformer down .22%. xetra dax is up .40%. camelback about the same amount. ibex in spain trying to continue the gains up 1% so far this morning. >> meanwhile, we've seen italian yields -- they recovered a lot in the last few trading sessions. but that data is significant here. back up over the 6% mark. we were about an hour or so ago trading around 5.95%. noticeable jump back up in yields over 6%. no relief, no sign of relief for italian committee moment. it's still getting worse. ten year spanish yields slightly higher from an hour or so ago. also yields in terms of gilt,

production was down heavily in the month of june. but not as bad as analysts had forecast. there's a chance potentially for a revision upwards in the gdp numbers. as far as euro/dollar, 1.2444 one month high we hit on monday. just below that at 1.2408. aussie/dollar we went up to 1.0603. rba came out and said no reason to move rates. they think things won't get any worse in china. 1.0578. hit the high aussie/dollar since march of this year. what about the markets in asia? we have more out of singapore. >> asian markets extended yesterday's gains and ended in the green on hopes that ecb won't step up its policy support. investors are also looking ahead to key economic data from china on thursday. the mainland market is higher by

.1%. resource companies gained that higher barriers will be imposed on rare earth industry. insurers were under pressure on the heels of china's profit warning due to lower investment returns. hang seng added .4%. casino stocks led gains. standard chartered hong kong shares plunged in late trading. closing down nearly 15%. over in japan that temporary trading halt of bond futures due to the system error didn't have much of an impact on equity trading. nikkei will climb .9%. australia equities also registered gains to hit three month high. rba cut its character rates unchanged as widely expected. back to you. thanks for that. focus today very much on

standard chartered. take a look at these stock price, the company listed both in hong kong and london down 15% in hong kong. now down over 21% on the london stock. this after new york's financial watchdogs alleges the bank concealed over $250 billion worth of transactions with iran. they warned it could revoke the group's banking license and branded standard chartered a rogue institution. one of the bank's top shareholders has told cnbc it's standing by the group. >> it's strong bank geographically it's been fairly insulated. it had and still has unless prime minister pre-judging a very clean reputation, one of the world's leading banks and certainly do we recognize the

rogue bank that they are accused of being, no we don't. >> standard chartered strongly rejects the portrayal of the facts made by the new york state department. it says it has already disclosed transactions related to iran though authorities. it assure almost all of the transactions complied with regulations and that the total value of those transactions which may need further investigation is under $14 million which compares rather sharply to $250 billion that's alleged. >> earlier cnbc spoke to chris wheeler who believes standard chartered did comply with regulations and maintains the stock is the still a buy. >> i spoke with the bank at length. they put out a detailed statement. and i fear, having just looked at the picture of the young attorney who is running this in the newspaper that we have another eliot spitzer on our hands who is looking for fame and glory. if you believe what the bank said they went to five regulators including the dfs in

2010, they discussed this about the trading between '01 and '07 and they believe they complied totally on doing dollar trades with iran. >> sean corrigan voiced some cynicism over the investigation as well. >> why it is a german or swiss bank doing these evil things manipulating libor and money laundering and financing terrorists. never an american bank because they are in the pocket of the american banking lobby. all the sin, so many sins in the world which any commentator including the american banking system sits at home. they don't go after an american bank. they bully abroad. >> joining us now for more is chief investment officer at aegis capital. you heard the skepticism. we've seen nomura downgrading standard chartered. what's your view?

>> well, it's just really unfortunate because this erodes confidence even further should the allegations prove to be true but i disagree with the last guest who said the u.s. banks are not looked at. i mean jpmorgan quite prominently was lambasting for their losses recently and we've had our own scandals here, mf global, et cetera. so the scandals are nonborder, they are all over the world. they continue and i think it really calls for regulation and i believe a return to glass seeingle is highly in order. not something many of my colleagues share. it worked for six and a half decades in the greatest history of the world. >> we had the savings-and-loan crisis during that pared.

it's not clear what difference it would have made for allegation that standard chartered was involved in. >> if you separate the banks you have better scrutiny with brankts focused on banking activities and regulators in the securities industry, investment banking focused on those activities. better reporting. less size. little bit better scrutinize, et cetera. but it seems that this is controversy over these charges and standard has taken a very aggressive posture to refute them so, it remains to be seen what the depth of veracity is. >> it's an extraordinary gap. the regulators allegedly talking about sums involved over $250 billion. standard chartered is talking about sums of $14 million. you know, that's an extraordinary gap. >> yes, it is. not only that, standard is

claiming that they fully vetted these transactions in advance and as they were ongoing, so somebody is really inaccurate here and we'll find out who, i guess. >> stanley stays with us. coming up we -- >> china stock off in the london trade nearly 25%. >> was that the -- i think it was the hong kong trade. >> down quite sharply both in london and in hong kong and we've saw it down sing many digits. >> down 20%. we lost a fifth of the value. so 20% down this morning. there is an opportunity here. definitely an opportunity.

we'll talk about that. in other news chevron said the fire is being contained but not out. blaze erupted monday evening at the plant in the san francisco bay area. smoke and flames could be seen billowing into the air and local residents were ordered to stay indoors. chevron said a gas leak was discovered shortly before the fire started. the plant accounts for 10% of refining on the west coast. chevron shares down .60%. >> in australia the country not happy about their performance so far in the olympics. a report suggests blame could fall on the prime minister's government for not funding sports to the degree that it should. this as the uk celebrates what could be a record gold winning games for them and despiteome austerity measures. how do sports affect the country's psyche and economic confidence and how are you

feeling whether you're australian or otherwise. let us know at "worldwide exchange," tweet us at cnbcwex.com, reach us directly at @kelly_evans or @rosswestgate >> still to come boston fed president is speaking up on how he thinks the fed's portfolio of mortgage bonds and treasuries should be managed. we'll have the details when we come back.

you are watching "worldwide exchange". these are your headlines. shares in standard chartered after alleges that it hid billions in trades with iran. >> italy's second quarter gdp stro dropped 0.7% quarter on quarter. >> boston fed president is in favor of expanding the fed's powerful of mortgage bonds and u.s. treasury. in interviews with the "wall street journal" and "new york times" he says the asset purchases should be open ended until the fed is satisfied that the health of the economy. he says for the last seven months we've been treading water and that's different from what

we expected at the begin the year. i think it's time to swim ashore. he's an fmoc voter next year is on with our very own steve liesman this morning on "squawk box" at 8:30 eastern. an exclusive this morning. don't miss out on that. stanley, what do you make of his comments? do you back them? >> no. he's in obviously in the qe3 through 33 camp and i think the fed ends up pushing on a string eventually. interest rates are very low as nominal rates are low. the problem that we have in the real estate market as far as i can tell is that we've gone from one extreme with very lax standards where very few people tend to qualify. if we went back to normal down payments and reasonable credit scores and income we would get a

revival. the fed is really acting in a vacuum, in my view, and the diminishing return of this is over time evident, irving fisher did work on this in the depression era and clearly showed that those returns diminished. the other problem is where are the natural buyers for debt? this transition must occur over time and it will take a number of years, but there has to be a more natural order because, let's face it, we're in a circular situation here at the ecb, there's a circular debt that isn't going to work because it's really a government to government transfer and that's just an exacerbating issue. >> if you agree that the u.s. economy is weak but the fed is perhaps pushing on a string what should to be done? >> massive stimulus. we need a jobs program that

actually hires people. i wrote a blog some time ago called the bridge to somewhere. we built a bridge in 1964. paid for itself 30 times over. it's a public asset. it opened up swaths of development that's in the many trillions of dollars. we have huge infrastructure needs in this country. the bridges are literally crumbling and falling apart. we got the abundance of resources in natural gas. we need a massive conversion to that. that will get us somewhere. >> if we don't get any q earn 3, as the markets price in, how big of a negative reaction do we get? >> i think we'll get a negative reaction anyway because the economy is clearly slowing. the velocity of money has not taken hold despite all the efforts to have the velocity of

money increase. we're talking about a destruction of aggregate demand. income levels are falling. unemployment remains high. we have a lot of headwinds. plus the backdrop against the macro situation in the world economy is difficult and it's really a question of the aftermath of an aggregate multidecade credit bubble and that's a painful multiyear process to unwind but so far central banks and governments aren't allowing the unwinding. >> good to see you today. thanks so much for joining us this morning. stay tune. coming up on the show the olympics has provided great britain with a hall of metals but the games hasn't done much for retailers. find out why streets have been pretty empty next. >

more attention on olympics. jason kenny beat gregory bauge. >> the women's pole vault ended between jennifer suhr and yarisley veil. suhr got the gold. >> china on top of the olympic leaderboard but just two gold medals now over team usa.

team gb is in third place. >> key events includes the finals of the men's football and track and field. >> the olympics was expected to bring a big retail boost to central london but for many shops and restaurants the games have been disappointing. warning about overcrowding and travel problems put off residents and tourists alike. retail sales growth slowed in the move july. blaming a bit of wet weather knowing pre-olympics boost hasn't materialized. numbers show 1% rise. that survey went up to the end of july just as the olympics was getting under way. thanks for joining us. they were talking about empty london streets. tell us from your point ever view since the opening ceremony a week ago, a week and a bit

more ago wt has happened? what's happened with the trade? >> definitely quieter than we anticipated in the first few days. people glued to the tv instead of watching the opening ceremony and a few days after. retailers a different trading pattern for the olympics and we've seen this with sidney, beijing and athens. not as quiet as we thought it would be. london has heeded the advice, stayed off the transport network and staying out of the center of london. in the last couple of days we've seen some good improvements, foreign sales have improved. >> is it just football or actually the sales too that are seeing a lift? >> football definitely up. sales going with that as well. what we're hearing from retailers is a different type of shopper. they are hoping the bounce will come close to gains the usual tourists will come back to london end of august and september. west end huge influx of the

middle east market that comes around post-ramadan. so we hope that will help to recover some of the losses. >> fair to say the olympic tourists have come, have shut out the normal tourists and those olympic tourists haven't been spending in the west end. maybe at westfield or stratford. >> you have a lot of suspect rotator, corporate. different trading pattern. ers retaile not surprise. we looked at other olympics and it's a common trend. >> any major efforts to bring people back to the west end. >> we borrowed some tfl to bring people back to the center. >> we'll see if it is working. >> still to come on "worldwide exchange" we expect to one analyst who say investors should buy the standard charted dip. the stock well off 20% in london

trade. >> when we come back we'll explain that call. 23% now down over the past week. again about 21% today.

hello and welcome to today's edition of worldwide exchange." i'm kelly evans. >> i'm ross westgate. these are your headlines from around the world. . shares of standard chartered sluch in london and hong kong as

the new york regulator accuses of them trading with iran. >> the bank comes out fighting saying it strongly rejects the allegation. analysts worn of reputational damage. >> one of the fed's more dovish voices say the fed should keep on buying mortgage bonds and treasuries until the u.s. economy is on the pend. >> italy's economy shrinks .7% marking a second consecutive quarter of contraction. well despite some ugly economic data out of italy u.s. futures ais shrugging it off. take a look what's been happening across nurn markets.

it's an upside picture, green picture behind me. under performer ftse 100 down .3% and hit by the 20% drop in standard chaertd. the xetra dax is up .4%. and the ibex 35 in spain paring its gains markedly, up .10%. all the focus is on standard chartered. the stock down in hong kong, 15% in london, at the moment nearly down 22% after new york's financial watchdog alleged the bank concealed over $250 billion worth of transactions with iran. it warned it could revoke the new york banging license. cnbc was told that one much its top shareholders will stand by.

>> it's strong bank. geographically it's been fairly insulated. and had and still has, unless we're pre-judging a very clean reputation. it's been one of the world's leading banks. and certainly do we recognize the rogue bank that they are accused of being, no, we don't. >> well a number of analysts have downgraded standard chartered. nomura cut its rating on the bank from neutral to buy. bo of a merrill has cut called at it buy. first, you, we just spoke about those analyst downgrades. you seem to disagree. >> i do. i think up until now standard chartered was one of fuse banks

entirely investable. that's clearly changed as of 4:30 yesterday when there's now a, you know, a nonnegligible to clear their deshts. that's unlikely. if you read the court order from the new york state yesterday, they are talking already about monetary fines. seems to be much more likely to go in that direction. standard chartered gets fined $1 or $2 million. there's some loss of future earnings and a large fine but they continue to be able to clear dollar trades. >> in 2000 lloyd's settled with the new york department of justice. in 2010 barclays settled similar charges with u.s. authorities

for 200 million pounds. if you go down this similar route and you think that's what will happen, share prices fall 21% and 8.5% on yesterday would be unjustified. is that where you're coming? >> i agree. i would also point out some of the emails which the new york state order refers to were quite a motive. they are talking about americans, deciding who we can make payments to, seems to be a lot of emotion and the current environment is zero tolerance for any regulatory breaches. you expect there to be some inflation. >> you mentioned if we get the direct fines, reputational, low resignation risk, something in the range of $5.5 billion that comes out to -- basically priced into what we've seen in the move already this morning. >> if you put through some, you know, let's say 1 to 2 billion

of fines, 3 billion for lost reputation in terms of market cap you can justify getting down to 14, 15 pound per share. we saw trade ago round 12 pound. the market is clearly worried the ability to clear trades through new york will be revoked and that's what's pushing the shares down. >> is that a justified concern that the bank could lose its new york banking license? >> you know, i don't know. i don't think so. the dna of these types of situations follows somewhat of a predictable pattern. it's headlines. a lot of hand wringing. eventually you get out your checkbook and write a check and then the settlement is announced on page 5 of the newspaper instead of in big headlines on page 1. we've seen this continuously. look back at the eliot spitzer situation. how much fines he got without bringing anything and ultimately it was found that mostly nothing he thought happened happened. i'm not exxonerating anyone but

these things have a dna, get out your checkbook. if that's the case the stock is very much has that reflected in it at the moment. >> what's extraordinary is the starting positions, and how far apart we are. they are talking about transaction, the figures are $250 billion. standard chartered comes out seriously rejects that, we've been talking about these transactions for a very long time, pre-cleared them all and if there's anything here that's not been pre-cleared it's down to about 14 million. you couldn't have the two sides further apart. >> but you know anyone that's been through an out of hand frat party at college know the cops come in and arrest everyone and sort out the details later. right now let's throw it up again the wall, say everything out there is wrong and then they have plenty of time to sift through it and in many cases get the bank to do the whoerj that

the regulators don't have the funding do. they will do a document request and schedules will be filled out and homework will to be done by the bank instead of the regulators. >> okay. stay with us. we'll come back and explore what these transactions were, these u-turn transactions. sec is reporting paring new rules requiring trading firms -- sec chairman is pushing staffers to write the new regulations in the wake of knight capital software glitch that led to the $400 million bailout of the firm in 2010. the sec required them to put procedures in place. the agency is reviewing whether knight violated those rules. >> chevron says a fire at its refinery in richmond, california has been contain but not out.

the blaze erupted monday evening in the san francisco bay area. local residents were toward stay indoors. chevron says the gas leak was discovered shortly before the fire started. that plant accounts for 10% of refining. shares of chevron this morning pointed lower by .3%. gasoline futures just fractionally lower as well. >> pfizer and jimmie johnson plan to drop an experimental drug. seconding disappointing result for the intravenous drug. the drug filed help patients with their cognitive or physical function. jj will take a 300 to 400 million dollar change the fourth quarter. pfizer, j and j and frankfurt are down and elan is off 11%.

>> still to come, munchener ruck up its target. we'll speak to the chairman first next on cnbc.

welcome back to the program.

well our top story this morning, of course, standard chartered shares down in the range of 20% in london. plenty of you have been getting in your views about the news. sharing them with us here on cnbc. some very unpleased with what they are hearing, others think it's a buying opportunity for the bank and we've been having this discussion on set. if you want to get involved, you know how. e-mail us at worldwide@cnbc.com, or cnbcwex.com or tweet us at @kelly_evans or @rosswestgate. >> today growth numbers out of italy which came in on some estimates below expectations. q1 gdp was unrevised down.8% quarter on quarter today second quarter figures down .7%.

fourth consecutive quarters of negative growth for italy or four consecutive quarters of contraction. no let up in sight for the italian economy, kelly. >> thanks very much, ross. if you're just tuning in these are your headlines this morning. shares in standard chartered more than 20% in london after new york alleges the bank hid billions in illegal trade with iran. one of the more dovish voice says the fed should buy more bonds. and chevron refinery fire is contained but not yet extinguished. okay. boston fed president will be on and he said he's in favor of the fed expanding buying mortgage bonds and treasuries. he said the asset purchase

should be open ended until the fed is happy with the health of the economy. he said the last several months we've treaded water. he'll be an fmoc voter next year and on with lease this morning on "squawk box," 8:30 eastern. don't miss that. ken, pretty clear what he thinks. are investors going to be starting pointed disappointed? >> it's crack for invesrs. just keep printing money and keep sending it out there and, you know, look my feeling is that we're really so close to the election that anything the fed does now is not really going stimulate the economy in a way until we get some clarity. that's really the big overhanging thing. so i get it. you know they just want to keep it going to show they can do all they can do. not sure that will cause everyone to start, you know, letting money out.

as your prior guest said lending is tough. people that need money aren't getting loans. they might be very bankable. everybody is holding it close to the vest. the uncertainty story, the fiscal cliff story outshines as a super nova whether the fed will keep the crack coming for wall street to fuel some more gains. >> is that really the case? i feel we have these conversations almost year after year at this point about the fiscal cliff. everyone knows they will come to some sort of agreement. not going to be a disaster. there's always uncertainty. are we overemphasizing those elements? >> oh, no. i think there's a huge amount. you hear it in the commercials that the political candidates do. the president is framing it as this is the biggest election because we're either going to go left or go right literally and figuratively. the ramifications for tax and other things will become clearer in a way that has not been. i guess you could say we get a very mixed result from the

election, you know, as far as the house, senate and the executive branch being very different than we think it's going to be, then that could be the case. but, no, you're in a situation where we are going to get the kind of clarity we're looking for. >> still to come u.s. equity markets close on a three month high on monday. next we'll preview the trading day. [ male announcer ] this is the at&t network. a living, breathing intelligence helping business, do more business. in here, opportunities are created and protected. gonna need more wool! demand is instantly recognized and securely acted on across the company. around the world. turning a new trend, into a global phenomenon. it's the at&t network -- securing a world of new opportunities. ♪

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could revoke the bank's banking license. tough language. branded it a rogue institution. standard chartered electronically rejects the portrayal of those facts made by the new york state department of financial service. it says it has already disclosed many transactions related to iran to authorities and assured almost all of those complied with the current regulations, the total value of transactions it says which may need further investigation is just under $14 million. a huge difference between the two. deloitte claims it had no knowledge of any misconduct. >> sean corrigan spoke to cnbc earlier and voiced some cynicism over the investigation.

>> why is it always the british bank or chinese bank or german or swiss bank doing all these evil thing around the world, manipulating libor and money laundering and financing terrorists. never an american bank involved because they are in the pocket of the american banking lobby. all the sin, so many sins which any commentator including the american banking system would tell you sit at home. they never go after an american bank. they bully somebody abroad. >> stanley crouch earlier told us he disagrees. >> jpmorgan quite prominently was lambasted for their losses recently and we had our skeenls here, mf global, et cetera. the scandals are nonborder. they are all over the world. they continue and i think it really calls for regulation and i believe a return to

glass-steagall is highly in order. >> forgetting the glass-steagall issue, to focus on the issue with standard chartered you say the stock could have 10% to 15 upside from here? >> yeah. they don't have their license operating in new york state revoked therefore we're only dealing with a large fine, a $1 to $2 billion and potentially at $3 billion hit because of loss of reputation. >> do you think investors start to shy away from the banking sector. they have to some degree. but looking at each and every player there's more regulator risk that we imagined? >> the other dynamic is that standard charter was seen as the highly investable bank with none of the issues related to libor or some of the misselling scandals that plagued the other banks. everybody that was strongly negative had piled into standard

chartered. now that it's also associated with some wrongdoing i think there's a revulsion trade. that's why we're seeing heavy selling. >> we talked about $250 billion to $14 million. they center around these u-turn transactions. the u-turn transactions that were allegedly breached we're originally permissible. what's a u-turn transaction. >> from what i one it's a cash flow payment which original nte out of iran and goes to another bank and that's permission jill. what i think people are upset about in the case of standard chartered they deliberately formalized their operations these transactions were scrubbed before they touched the new york branch. standard chaertd was deliberately hiding information. >> this is another disagreement. standard chartered said 99.9% of

these u-turn transactions complied with transactions. u.s. in this case is saying you actually deliberately tried to hide them. they have been talking, we've been talking about these transactions for years. >> yeah. exactly. i think the key issue is when we read the order from it the charter was planning to mislead the u.s. regulator. to the extent the standard chartered is doing that investors are thinking where else are we seeing standard chartered potentially misleading individuals. that's where the trust factor comes out. it's hard to quantify what that's worth. >> i also wonder to what extent looking at the emails in the way people within the bank were flagging up the pole the concerns they had about the way officials were carrying on, if that doesn't change your view, i mean just to sort of look at this bank again which investors had assumed was steady and just realized to what extent the internal culture did show signs

of deep problems. >> yeah. that's right. we don't know who the individuals involved actually are and an institution the size of standard chartered a lot of unusual emails moving around. certainly sits uncomfortably. in terms of share price impact we're talking 5% to 10% impact on shares not the 25% to 30% impact rear seeing so far today. >> great to have you on this morning. thanks for coming. and everybody is brushing up on u-turn transactions very quickly. thanks for that. >> let's take a quick look on what's on the agenda today in the u.s. federal reserve chairman ben bernanke will be speaking to a town hall meeting at teachers at 2:30 p.m. eastern. no comment on monetary policy. and reports from cablevision,

cvs and sirius xm. ken cayman is still with us. which of those events are you most focused on today in >> you know, i don't know if any of them is such a big market mover. the psychology seems to be a little bit risk on here and i think we're kind of looking at people looking past some of the aggravation that's out there. standard chartered story is another death by 1,000 cuts to investor confidence and unfortunately we're all starting to get callous as if this is the new operating norm that organizations figure out way to get around rules. it's not a great environment from that point of view but investors seem to be shrugging past it. we watch markets move higher even though on weak job numbers even though people find great joy in them. >> thank you, ken. that's it for today's show.

i'm kelly evans. >> don't miss steve liesman's interview, "squawk box" is up next.

good morning. a massive fire striking a major chevron refinery in california. a prolonged outage could increase gasoline prices. in europe, the shares of standard chartered dropping sharply today, new york's top bank regulator threatening to remove the british lender's state banking license saying the firm hid $250 billion in transactions that were tied to iran. and our news maker of the morning, boston fed president eric rosengren will join us live at 8:30 this morning. it's tuesday, august 7, 2012.