welcome to "worldwide exchange." i'm ross westgate. >> i'm kelly evans. shares of standard charter are up. we go whale watching. several big name investors, warren buffett, john paulson reveal what they've been simpig selling over the last few months. carlsburg gets hit by bad weather in europe. we'll speak to the ceo in half an hour.

welcome back to today's program. standard charter settlement, interesting one. >> we'll get plenty of discussion on that front. $340 million, a decent chunk of change but that's just a settlement with new york. there may be -- >> which is what they were in negotiations for the last year. no surprise. i worked it out, a tenth of the 1% of the $250 billion -- >> of the payments? >> yeah, the regulator alleged got a bit haywire. turkey fails to reach latest target after the bond sales but one investors that country stands out. facebook investors may get a shock this week. will wall street see millions of shares dumped on the market or not? we'll have a preview. plus the drought of 2012 has

ravaged crops in the u.s. midwest. we'll talk to a stock commodities analyst to find out what the long-term impact may be on prices. standard chartered shares are trading higher after the bank agreed to pay a $340 million settlement with new york regulators for doing work with iran. they had been accused of breaking u.s. sanctions by conducting 60,000 secret transactions with the country. they say standard chartered agreed that the conduct at issue involved transactions of at least $50 million. they will evaluate the money laundering risk controls at new york branch 37 a spokesman said the investigation will continue and they could face further punishment. that begs the question as to

why standard chartered is agreeing to the charges after denying them. >> from standard chartered perspective, paying $340 million fine is quite a pragmatic decision. you know, it amounts to about 0.9% on the share price of $14.40. i would argue making the settlement doesn't represent standard chartered saying they did something wrong, particularly in the context of other banks. >> managing direct for asia-pacific at financial insight. thank you for joining us. we know they settled, continuing discussions with other regulators. standard charitied had a profit of nearly $4 billion this year. should investors now be satisfied this is largely a problem behind them?

>> well, it certainly is behind them. as you correctly stated, there is about two or three other bodies that would deliberate on that. could there be further finds? yes, there would be, albeit, token amount. i don't think it's going to cause much of a dent with standard chartered. also the market quickly realized this was predominantly a u.s. knee-jerk reaction. the business of standard chartered is sound and well. i don't think it's going to take a hammering again. >> what about reputation al -- lasting reputational damage. it's described as a rogue bank, not necessarily substantiated in the settlement. any long-standing reputational damage? >> ing actually paid a lot more and so did others like barclays and everybody else. but i think -- i personally

think that was very harsh. ing and barclays and all of these british banks, including hsbc, have been dealing with iran for the past 70, 80 years. you know, the sanctions came about 1980. are they just going to fold up and leave shop? unlikely. could they have done it and handled it a little better? you bet. again, to classify as a rogue bank, the general public reads the headlines and panics. that's just the general public. but time and tide move on. once they've seen the fundamental of the business is strong, that they're posting fantastic profits, and they'll continue to do so, it's a sound business, look at the shares now and they crept all the way back up. so, i don't think the market and the retail investors will take that too hard. i don't think you're going to see a bank run. i think consumers know what

happened, happened. it could happen again with anybody else. all in all, reputational dent, sure. big calamity, no. >> you're focusing on the share price. there's also just the issue of the kind of behavior standard chartered and many other banks were involved in. this kind of wire-stripping activity. they're clearly trying to hide payments for a period of several years. and i just wonder, again, while this may be relevant, what you'ring a is relevant for perhaps how shares are doing today, yeah, they have a strong business and whatnot, but they were clearly violating u.s. and international sanctions. i just wonder, you know, if the ramifications, if the consequences of that shouldn't be glossed over. >> yeah, it should not be completely negated or moved on with. hypothetically china is getting flack and predominantly u.s. regulators come up and say china is a rogue nation.

hypotheticalal situation. they're flouted international property laws. do you reckon institutions, financial institutions are going to stop doing business? iran produces nearly 2.5 billion sort of barrels of oil. it's a rich nation. banks have lobbied there long and hard to get that -- secure that business. should they have done it the way they did it? no, i completely agree with that. should they have tried to cover up? no. they've been reprimanded but fundamentally would i as a institution flee and say they're not worth looking at? no. >> there's a couple things -- i'm not arguing it doesn't make sense for a large financial institution to do business with ir iran. it's clearly a business opportunity. that's not the point. the point is they're in violation of u.s. and international sanctions. >> true.

true, true. now, we did our research and we asked the bank of international settlements, the one authority that controls all banks and all central banks, you know, i mean, was there even a charter or, you know, something in the books there to say, do not deal with iranian banks or central bank? there isn't anything. everybody follows basil 2 and basil 3 accord. to your point, absolutely right d they break a rule? the answer, clearly, is yes. are they going to get fined? they did. will they get more fines coming their way? yes. here's what i say, will there be other institutions in the united states breaking an anti-money laundering law? you bet, right now it's going on. so, the banks are in the business of collecting and dispersing funds. sometimes the traceability of these funds or the or begins of these fund are masked.

some people do it, some people get caught about that. as of right now everybody's cognizant there are some sanctions in place. the japanese banks, indian banks, turkish banks, they're all going to pull back. >> managing director asia-pacific idc insight. thanks for your time. interest rate cut is under review, quantitative easing is a more powerful. talking about the potential for further interest rate cuts but seeming to emphasize quantitative easing more powerful. much more detail on bank of england and what its next policies may be when we get minutes from the program coming up in a little bit. meanwhile, trading day here, european stocks down. euro stocks up near four-month high at close yesterday. ftse down, zet extra dax, cac

and ibex all down. retail sales are up, from cars to electronics. that boosts us a little yesterday. ten-year bund yields are higher. ten-year spanish yields are lower, yielding 6.7%. as are italian yields. we'll be turning our attention to the uk in the next 20 minutes. we'll get the latest set of minutes out for the bank of england. that meeting they decided to do very little. we get the latest snapshot of employment where we continue to see gains in employment, even as unemployment claims benefits go up. can we square the circle? that's been hard as the economy is still in recession. sterling today is slightly weaker. steady against the dollar. aussie dlaish dollar is back below 1.0 5.

that's where we trade right now in europe. next in hong kong today, for more on that and asian trade, we're joined out of singapore. >> thanks, ross. asian tracked lower today after recent rallies. investors are looking for more powerful from global central banks. shanghai concept shed 1.1% dragged by financial utilities while a fierce price war between china appliances sent suni appliances up in the afternoon. hang seng gave up -- give back yesterday's gains, down by 1.2%, led by developers and energy. but standard charitied hong kong shares key couped 3.6% after that $340 million settlement for dealing with iran. elsewhere nikkei recovered from early losses to end about flat. weakness in iron and steel makers was countered by gains in

transport companies. the south korean market is out for a national holiday, also indian market. australian market slipped lower by about 0.25% weighed down by material and utilities. >> thank you. china's economic planning agency has trimmed its coal output in three of the top producing regions by 7%, trying to get rid of a supply gut for falling demand on coal because of the slowing economy. there are more signs of the slowdown. for the second time this year mainland posted capital outflows in july. it's a sign of shrinking external demand. china economist at barclays joins us for more on this topic. good morning -- or good afternoon for you. thanks for joining us. the slowing we're seeing in everything from an exdoelgts eviden --

anectdotal evidence -- >> indeed we know global -- european crisis have been persisting for longer than we expected. external financial conditions have not been good and that has certainly affected the domestic activities and the trade financing. >> what about this issue with regard to the weakening demand for commodities. now, for some time there was this sense china was continuing to import partly because it was stockpiling or just trying to hang on to some commodities, or they were being used for trading purposes. this would seem to suggest on all fronts there was a slowdown. >> well, we know that the chinese economy has been slowing rather rapidly in the first half of the year. with growth at 7.8%. investment growth has come down. previously led by infrastructure

investment and also this year led by the continued slowing and property investment. so, that obviously have weighed down on the demand for the commodities. especially those related to steel and cement. >> and you guys have just taken down your china gdp forecast. where does it stand at the moment? is there further downside or upside would you say to where you see the economy at the moment? >> indeed we have revised down our gdp forecast for the first time in the past eight months to 7.9% from previously 8.1%. that still implies a modest and gradual recovery in the second half of the year. ounl, if the global economy, particularly the euro situation is worse and that would mean that there's further downside

risk to growth. domestically we know china has transition which has led to -- as we see, ineffectiveness and insufficient policy support to grow. besides that the government, there may be different views within the government regarding what percentage of growth targeting this year, 7.5% or 8%. so, if we consider these different domestic and external factors and there may be downside risk to even our 7.9% forecast, that being said we think growth should be 7.5%. the worst case would be an l-shaped recovery this year. >> it's ross here. you say that interest rate cuts would be more effective than reserve requirement cuts but actually would fiscal policy be more effective than monetary policy? >> indeed. i think first of all, even

though we continue to forecast the cut in the reserve requirement in second half of the year, but that's mostly to respond to possible capital outflows, like the host mentioned earlier on. if we look at pdos they were cut in may which led to seven-day rate below 3%. that doesn't seem to have really significantly boosted the domestic demand. we know that the interbank is not short of liquidity and it's really weak sentiment and lack of good investment opportunities which have weighed down economic growth in china. together with some structural problems. therefore, interest rate cut would help to at least reduce the firm's financing costs and some would support the demand. also, we know that money policy has its limit in boosting demand and sentiment during the downturn. also given that china continue to face in the medium term, inflation and credit kind of bubble risks.

therefore, a more proactive, i think, fiscal policy or supports from infrastructure should be implemented by government to stabilize growth, especially given external headwins. >> thanks for that. well, walmart target, 7-eleven and others are expected to unveil mobile payment system, according to "the wall street journal." it follows starbucks announcing a partnership with square. that makes us wonder if the payment space is heating up or as veriphone said, is it overhyped or overheated? if you want to join the discussion, join us at @cnbcwex

or contact us ridley. >> we'll talk about it. still to come, the bank of england is due to release minutes. as we've had comments from mr. fisher today saying they're still talking about interest rate cuts.

welcome back to the program. well, greek prime minister will ask his german and french counterparts for two-year extension to complete the country's latest austerity plan. according to "financial times" he'll look to delay until 2016 and will need additional 20 billion euros. joini i greece asking for more time and wiggle room. what do you make of this? >> good idea. i hope they give it to them. if someone says you need to stick to the current policy and decimate your economy, they should be told to shut up. >> why not just drop this whole thing all together? >> because you have to get everybody else in europe to go along with the idea that let's give them help but you have to show austerity. we're not going to get europe to

completely change, but the idea that -- >> by europe do you mean germany or germany plus northern --. >> bull gum elgium -- a bunch o countries say if you don't have conditions for help it will fall apart because people abuse it. it's a reality. but extend it is good. it's way better than thinking killing the economy is right. >> you can't be fooling these nations either. germany, finland, they have to know what's going on. does it matter if they would prefer to see greece stick more to the book here? >> i think you should change the rules and then stick to some easier rules to stick to than just be unrealistic. that's the receial koch myself. they need a real compromise otherwise they'll default, leave. >> until we know whether they're staying or going, i don't see why any investor would put any money into greece. that's a big problem. >> i think that's a much wider debate. until we get political change

that makes this system based on more solid foundations or puts the structure in something that's going to last, nobody is buying spanish debt, greek debt, on and on. >> bank of england, minutes from the august minutes during the next few minutes. policy makers expect them to keep qe program steady following that 50 billion pound extension in july. speaking last week, merven king poured cold water on expectations for any more rate cuts or hikes. >> it would damage some financial institutions and it would, therefore, in all probability have an element of it being counterproductivity which is why we haven't cut the rate. in the minutes of the last meeting we did discuss it, but we conclude at least for the time being we thought it would be more counterproductive than beneficial. which is why i don't think it's something we would contemplate doing immediately. >> and then we have these comments out this morning from paul fisher, quote, in the

belfast telegraph saying, interest rate cuts are still under review but qe is more powerful. where does that leave us? >> we will get more qe before rate cuts and both eventually. the european central bank didn't want to cut rates before they moved the deposit rate down to zero. in the end you push on the string as hard -- >> rate cuts kill the savers and savings banks. that's what marvin king was talking about. you don't want to damage the savings banks further, do you? >> no. you're going to have to put something else in place to ensure they can get funding and get deposits in. but they do need or do want to do something to help the economy. there's no room for fiscal policy. >> why don't they do what posen said basically, mavbin seems to be fixated with qe on top of government bonds. is he right to say they're just hung up on not being able to

apply it to other things and other assets? >> they tried buying corporate bonds. they ran into a problem, there wrept enough and people didn't want to sell them. pension funds who own them because they need duration and some yield to pay my pension, didn't want to sell them. that didn't work. i think they should. i think they should buy retail, commercial loans. something that gets money directly into the economy. philosophically they thought doesn't matter what we buy, if they buy them from an insurer, they sell them to us and then the money gets into the economy. >> that isn't necessarily the case. >> you're saying philosophically they don't have a problem? >> i'm saying people lice adam posner way at that and they will consider it. they will consider all things. this is a central bank that wants to do more to help but everything they consider has a

downside. lower rates don't necessarily help. guil guilds, what does that do? they are just trying everything. >> where does that leave sterling at year end? >> vulnerable relative to the dollar and euro for now because economy -- >> good, that workings for me. thanks for stopping by this morning. >> he's going to stay with us for a little more. still to come, we'll speak first to the ceo of carlsburg after erroring a drop in operating profit.

new these are the headlines. shares in standard chartered are up after they reached a settlement with u.s., agreeing to pay a fine of $340 million. whale watching. big name investors, george sore rose, warren buffett, paulson reveal what they've been buying and sellinging. carlsberg gets hit by bad weather conditions in europe. we'll be joined by the ceo shortly.

before we get to the ceo of carlsberg we'll get to the bank of owning land after they left policy unchanged. forecast remain steady. >> first unemployment figures. >> do you to want kick off with this? >> let's take a look at the -- uk unemployment has been a source of strength recently but it appears that strength has continued. you can see sterling appreciating again the dollar amid reporters the uk employment level is at its highest since the summer period of 2008. the jobless claimant count fell by 6,000. that contrasted expectations for a gain. unemployment fell by 46,000 in three months from june with the rate at 8% as a result. average earning up about 1.8%.

>> employment level highest from may to july period 2008. they decisioned whether to expand or continue guild purchase for july, for members it was relatively straightforward to agree to continue the purchase. for some members it was better to expand guild purchases at august meeting. they may have more benefit than assumed in the august forecast. qe boost, growth likely to pick up after that. minutes did not show any discussion of a cut to the bank rate, which is, i presume, kit, the reason sterling is a little firmer on the session. >> yes. the market wasn't expecting anything very much from the mpc or from the unemployment data but sufficiently gloomy and negative for uk. this is a potential threat to the currency removed for today.

>> before we had these minutes, yesterday we got inflation data, surprise rise. how does this muddy the waters? >> i think it's temporary. i hope there's no reaction. higher inflation equals less disposable income. we need spending power to get the economy moving. inflation is just as bad. >> we still have this big difference. the employment level is highest since may july 2008. for once, those claiming benefits fell as opposed to rising. fell nearly 6,000, they were supposed to rise by 7,000. unemployment down another 46,000 in the three months to june. how do we square this employment picture with three-quarter of

negative growth? >> if you put them on a chart, they're going if opposite directions. i think it's easy to count employment rather than employment. i think economy is doing better than official statistics show and i would like to be long-term optimistic for what that mean for the shape of the economy. the reality is uk economy is going along --. >> you talked about the dollar. what does the sterling/euro do? >> can potentially range a little higher but not dramatic movement. euro/sterling is down a little bit. >> thank you for joining us, kit. moving on now, carlsberg has posted a drop in second quart operating profit that fell shy of forecasts as the brewing giant faced ongoing headwind in europe. joining us first on cnbc is

jorgen rasmussen, ceo of carlsberg. good morning and thanks for being with us. seems higher volumes in russia weren't enough to offset weakness in europe. >> it's true our western european business was impacted across the northern and central part of europe. the markets in western europe were down by 5% in quarter two. of course, impact our business. sat the same time i'm pleased to see in every region he we are gaining market share across most of our markets, so investments we make in our brands, local brands, international brands and also investment in european championship in football seems to be paying off. then russia, as you said, the market had slight growth in the first half of the year and also again we added share in q2 as well as q1 and asia strong

growth continues out there. >> whether it's the poor weather or concerns about european demand going forward, does this highlight the importance of diversify or are you looking although asian markets. >> we do believe it's important to be diversified. that's why we're focused on western europe, eastern europe, russia, kazakhstan, ukraine, and also focusing on asia. we have diversity in item of geographical mix. of course, when you do see in many of the key markets very bad weather, and i think we all experienced that in april, may, june across europe, it does impact beer consumption and impacts our performance in that key region. yes we are doing well in asia. if it's about further growth, accelerating growth, i'm sure a lot would come from out there. >> okay, that's three time you mentioned asia. how soon before we hear news on expanding your business in item

of acquisitions? in that region. >> first of all, let me emphasize we already have a very good footprint in asia, being present in a lot of markets, very strong performance organically. as i've said many times, yes, we are looking at what we can do from an acquisition point, particularly in asia. as soon as i have specific news, i'm sure i'll talk to you about it. >> do you have a time scale by which you would like to have significantly expanded your -- are you thinking, look, by this time next year, or in 18 minuon, i'll be upset if we haven't got additional capacity? >> as i'm sure we expect, i cannot be specific on timing. what i can promise you is we are always monitoring, looking at what could be opportunities and options. when i have specific news, i will come back to you.

>> just curious if carlsberg beer drinkers should expect to pay more for their beverage over the next 6 to 12 months? >> we have in most of our markets in the first half, we have increased prices to cover some of the increasing input costs we are faced with in our many markets. also in some markets, like russia, where we had increase in january, also we had to pass that through to the consumer, but the consumer in the second half of the year shouldn't expect any significant price increases. we have to see what happens to input costs in item of what would happen to prying going forward. >> what's your -- what are you planning for in item -- terms of input costs? >> it's too early to think about. this year we have full visibility and we know our input costs and i'm saying don't expect any increase in term of

the second half. in terms of what could be expected as input costs for next year, it's too early to talk about. we need to get through the whole harvest season and then we will be prepared to talk about it late this year, early next year. i can say internally we have pretty good visibility on what is likely to happen to some of our corn ingredients. >> if you're not planning to raise price, what will you do to protect margins, in terms of your head count or operations globally? >> i'm still talking about the second half of this year. don't expect big price increases. next year that's a different discussion depending on what will happen to core ingredients, in item of cost development. as a group we'ral working on being more efficient the way we work in our business model, the way we are set up. we have a lot going on in western europe. one of the very big ones is centralizing supply chain out of

switzerland. it's a big project going on right now. and should help us to be more efficient in term of business model. but still deliver the same if not better service to our customer. efficiency is always on the agenda at carlsberg. >> ceo of carlsberg, thank you for join canning us this morning. we'll keep an eye on what those beer prices do at the bar early next year. in the meantime, news from tencent coming in, and revenue 10.5 billion. that will see -- let me make sure -- we're correcting this report on the wire. second quarter net profit of 3.1 billion. so, ignore that 6 billion figure. 3.1 billion is profit. revenue side is 10.5 billion. let's get back to beer, though. why not? singapore listed thai beverages,

on same day the firm's billionaire owner became the biggest shareholder of fnm, tiring beer maker asia-pacific beer. which has been the target of heineken takeover in asia. may have spurred recent share gains of some biggest players, taos beer has managed to keep stock price up despite narrowing margins. protection volume is due out with latest earning results later this week. joining us for more is research analyst at morning star. you might have heard the interview with the ceo of carlsberg where he was talking about higher input prices but were able to offset it with higher price of beer we sell at. is that story similar for asian beer producers?

>>. >> can you say that again? >> we heard from carlsberg ceo they have higher input costs but they were able to offset that with higher beer prices. is that the same story for asian beer producers? >> for most domestic chinese players they work on the lower end and it's hard to increase retail price. input costs decrease a little, by 20% to 30% for the first quarter due to the lower imported barley price from australia. >> what's going to happen with beer consumption in china? what are the trend? >> chingdao will not release

second quarter earnings until tomorrow. judging from the first quarter, we -- i would say consumption volume growth is slowing down. chingdao posted top line growth of about 6.8%, and bottom line growth of about 14.5%. that's a really -- i think that's largely in line with our expectations. one thing at this point, as the very low growth of its main brand, chengdu grew by 1%, weakest number for the past three years. as for other close competitors like china resource and price, yenjiang brewery posted 0%. i think the slowing down economy

and weakening of consumption power play a role in the weaker numbers. >> there are also signs of falling margins for tsingtao. i wonder if it isn't just the m&a activity across the sector that's supporting its price right now. >> yeah. >> chengdu grew by 9%, mainly driven by activities from the last year. and i also noticed chengdu lower, dividend payout for this year -- for these few years, piling up cash, mainly waiting for better opportunity for acquisition or opportunities. concentration ratio for top four players increased from 14.6% to 58% for the past five years, so

i think the consolidation is still going on. the pace is slowing down. >> another reason is there are very few -- few sizeable targets left in the market. >> great point. thanks for your time today. in japan more trouble for sharp corporation. we have this story live from tokyo. >> sharp shares plunged to three decade lows a day after deutsche securities showed to share. japanese electronic maker's stock fell more than 12%, lowest level since 1980. selloff is partly due to a nikkei report about electronic manufacturers downgrading their fiscal 2012 sales projections. sharp is now bracing for lcd television sales to decline 35% on the year, while sony is

projecting 21% drop. continuing sales slump in europe and china, plus weaker than expected domestic demand are pushing prices lower. but with sharp and sony predicted weaker tv sales at the beginning of the current fiscal year in april. what worries analysts is that the firms are revising their bearish estimates lower so soon. back over to you. >> thanks for that, the latest out of the nikkei. germany's top court says it will rule on legality of the bailout last month despite a complaint. we'll speak to the man leading that complaint.

while global slowdown has had an impact on the country. many business leaders have been quick to point fingering at government for not acting. we caught up with deputy chairman of india's planning commission for his response. >> i think there's some truth in that. internally, we ours have been saying that we can't just assume we have all the time in the

world. my view is, i think the prime minister has said this himself, that in the next few months, we need to demonstrate that identifiable problems are taken care of within some time. it's very easy for me to say that, but i guess the real test is going to be if three or four months down the road one looks at this period of five months or six months, can one say a lot of things waiting, being delayed, can actually be done? i think they will be. >> are you still going to be able to do that, despite the monsoon season. it's tough to raise prices in this environment. >> it's very clear to the government that the present system is not sustainable in the medium term. a lot depends also on what else we can do to combat the drought.

to some extent, even the extent of the drought at the moment is not all that well known. only half the monsoon season is over. . in some of the parts of country where you have deficient rains there's a lot of ground water to offset is. it's too early -- what monsoon rains demonstrate is this is not going to be a good agricultural year. whether it's a very bad one or just sort of -- >> hopefully you'll get some rain. >> too early to say. >> do you think the sense of gloom surrounding india has been overdone? >> grotesquely so. i think -- i think the enthusiasm amongst many people when india was growing at 9% was a bit overstated. it's true, that when problems come, that's when the government should get into action. i think that's what we're trying to do. but i think the gloom is hopelessly overdone. i mean, there's a lot of strength in this economy.

which people are not factoring in. we do have problems. we're going to tackle those problems. but there's no reason to think we can't tackle them. >> so what are these areas, these areas of strength people haven't factored in? >> well, i think in the ten years or so, last ten years, there's been tremendous growth in the domestic saving and investment capacity. huge increase in entrepreneurial infrastructure, increased ability of people to demonstrate that innovation is possible. i don't think we would have grown at 9% for six years if these underlying strengths weren't there. >> make the case for us. when do you think people who watch for a turn-around in india's policy in government, when do you think you're going to be able to deliver evidence to them, that, yes, india has turned a corner and things are turning around?

>> in the area of project implementation, they should be able to say, you know, things are getting unstuck. compared to what they were six or eight months ago. getting unstuck. doesn't mean all the problems are resolved. remember, when these problems are handled and tackled, the mood can change simply because people recognize the government is making a difference. you have a lot of projects that are stuck. if you manage to clear one of these projects using some special mechanisms, those mechanisms get sachlt ntified and applied to other projects. >> you can check out cnbc.com for more of our special coverage of india. they are looking at whether inresters are expecting a bollywood ending. germany says it sees no reason to rule on permanent

bailout fund. earlier this week a group of german academics said it was trying to delay ruling on esm and pact but the accord it will not affect the current september 12th date for the ruling. joining us now is the man leading the group who have issued the lawsuit against esm ruling. paul markus, technology university of berlin. thank you for your time this morning. you said you can't move forward in germany until you know what's going to happen with the eu ruling over in ireland. explain that. if we don't have a ruling until october 23rd, what does that mean for decision's decision? >> our intention was not to delay ruling on september 12th, because the ruling is only concerning -- will only concern

a temporary injunction. nothing about that. but due to the importance of the matter, everybody expects a ruling to go beyond that. our intention was to make it drastically plain to the court and european public that there is a case pending against the government of ireland where a preliminary ruling is expected. and has to be given by the european court of justice. and that the european court of justice has a natural monopoly on giving a ruling for -- to give an answer to a very simple question. if member states, not only ireland s a member state of the european union entitled to ratify the european stability mechanism? if the european court of justice will say yes, then this is clearance. if no, then the object of the litigation pending in the

european -- in the german court is, so to speak, no longer a matter of jurisdiction. that's why we drew -- or decided to draw attention for many other reasons as well of the constitutional court to that procedure. and i'm hopeful the german constitutional court will once at least decide to serve the issue. as you know the fiscal compact is an international treaty which ch changes the european treaty, which is a totally illegal procedure. those european court of justice is entitled to give a ruling on that. and i hope that the judges will pay tribute to that. >> at the moment there's not going to be any delay, according to the constitutional court.

>> well, this is only a spokesman who apparently replaces or substitutes the judges who are all on holiday who said most probably there will not be a delay. how can you have a ruling in luxembourg that says yes or no to a member state ratified ems and on the same -- on the same of that you have a ruling of the constitutional court which tries to judge in substance the compatibility of the ems and other things with the german constitution. so, we have an unprecedent the case of competing jurisdiction. and i hope that german constitution court will not -- will be as open-minded as to accept my hint as constructive

indication. >> would you welcome a referendum to change the german constitution? >> i think the problem with the referendum is that people never understand the question, which going to -- decides not only the question given but decides on the government which poses the question. i would expect in the current situation referendum only as initiative by german government to -- to get ems and fiscal conflict through -- >> professor -- >> once all the buildings come tumbling time. we'll be talking about facebook and standard chartered.

welcome back to "worldwide exchange." >> these are your headlines from around the world. >> shares in standard chartered rise after they reach a settlement with knock regulators over transactions linked to iran. bank of england says rate cuts were not discussed but minutes show some policymakers were at which timed by more qe. not so set of frothy earnings from carlsberg as hit by bad weather conditions in europe but the ceo tells this show he's eyeing growth elsewhere. >> i believe asia and also if it's about further growth or accelerating growth, i'm sure a lot will come from out there.

sel big name investors reveal what they've been buying and selling over the last few months. let's get a sense of how futures are positioned. red arrows but moves are not that big. we've started out this week. nevertheless, dow jones industrial average pointed lower by five points this morning. nasdaq and s & p pointed lower. we'll see about that 1400 figure later today. the mood across europe has mostly been one of weakness. ftse down 0.4%.

xet xetra dax down 0.4%. >> euro stocks up near four-month high so in context with that. what we're seeing as far as bond markets, yield slightly higher on bund but lower on key markets of spain and italy. ten-year spanish yields lower, and ten-year italian yields lower at 5.79%. below 6% and 7% respect tyly. we've had minutes after the bank of england, 9-0 they voted not to change their monetary policy stance two weeks ago. some member did say that we were thinking about whether we should have more qe. interestingly enough, no discussion about interest rate cuts but paul fisher has said it's still under consideration. he and the bank appeared to favor more qe ahead of cutting

interest rates. we still have the spread widening between gdp -- recession in the uk -- and employment picture. unemployment by another 6,000 in june, and the number of cla claimants dropped. sterling got a little stronger. aussie dlaish weaker. euro/dollar 1.23. asian lost ground after recent rallies. investors are looking for more policy stimulus from groebl central banks. some companies based in northeastern china bordering north korean up on reports china

and north korea will. hang seng down 1.2% led by developers in energy place, but standard chartered's hong kong shares recouped 3.6% after that $340 million settlement with new york. nikkei rovd from early losses to end about flat. weakness in iron and steel makers was countered by gain in transport companies. sharp shares tumbled to a 37-year low. australian market slipped lower by about a quarter of a percent, weighed down by utilities. the south korean and indian markets are out for national holidays. back to you. >> thanks for that. warren buffett kept plenty business this spring. s.e.c. filing shows berkshire hathaway sold stake in intel in the second quarter. disclosed new holdings in phillips 66 and national oil well. berkshire raised stakes in vie acome, we will fargo and lowered positions in j&j, p&j and ge.

let's take a look at buffett's holding it this morning in frankfurt. red arrows across the board. perhaps consistent with the market action we've seen, but nevertheless i'm sure those holdings have done relatively well, at least better than some of the financials did, this spring. gold back in favor with two big name investors. john paulson and george sorros more more of ged in the second quarter. that's the second time paulson has added to his gold position since 009. take a look at shares of gld, that spider trust there, down 0.5% yesterday. you can look at other holdings as well. what i find interesting, though, is that we know how gold

underperformed during the first half of this year. i think it's only up 2% year to date. the question for a lot of people, even as they've been talking about why the gold trade hasn't worked, are these investors signaling there could be another leg up? >> i think it never really got below 1500, did it? it looks like -- it will tell you it's looked to build a solid base, right? the point is, it doesn't matter if you believe that orren. people trade on -- >> what's interesting, we can look at the spot gold price there but gold has gotten whacked the last couple of trading sessions. there it is, just below 1600 level. it's basically gone nowhere. you have to -- >> that's the other thing, qe/gold thing don't work. clearly there's been no inflationary impact from qe. if that's the reason people buy gold in qe, it doesn't make sense.

>> it's not so much inflation -- >> or money flows out into commodities when you get qe? >> or a barometer of liquidity. we could talk gold all morning. >> i have more with that argument. logon to cnbc.com to see how the whales are making ways with their portfolio changes as we get those filings in. facebook stock could be on the move this week as first lockup on sales expires for early investors. about 271 million shares are eligible for sale thursday. part of the almost 2 billion that may be available in the next nine months. potential sellers include angel investor, venture capital elevation partners. microsoft and goldman sachs. facebook is down nearly half since it's may ipo. joining us on the phone to explain what this may do to share price is victor anthony.

he joins us from san francisco. shares grossly underperformed. now a bunch more potentially coming onto the mark. you still think this company is a buy? >> yeah, i still do. i think, you know, fundamentally i think it's a solid company. i see profitability on the horizon. it's solidly profitable today and i see that continuing. i see potential for revenues to accelerate as they monetize mobile. i think it's a buy. certainly the lockups putting pressure on the stock. the one that's coming up over the next day or so. you're seeing activity in the stock yesterday. it was down about 6%. i think that's almost entirely due to -- partly due to results in groupon and also due to anxiety over the lockups. i think you'll see that the

pressure on this stock over the next several months because of the lockups that expire all the way through december. >> victor, it's ross here. has anything materially changed at the company pre-ipo to post, in terms of their operational targets and what -- the money they're going to make or anything else? >> no, i don't think so at all. like i said, i think fundamental i know the business is solid. i think it's strong. you know, the activity you've seen in the share price began with the botched ipo process. and continued through to when the company came out with second quarter earnings. they provided guidance for an expense but they did not provide guidance for revenues. and i think that, you know, sharply disappointing investors. you saw that -- >> bank minuses fundamentally the same company then before ipo as post-ipo.

why did everybody get valuation so badly wrong? >> well, you know, i don't think they got the valuations wrong. i think the market is not convinced at the moment, but i think ultimately they will be. you know, after you have two or three quarters of earnings. >> well, they did get it wrong. the stock's down nearly 50%. clearly the float price was too rich for the company. >> well, you know, sometimes, you know, the market, i think -- i think the market is getting the stock wrong. that's one. i've seen this happen over and over again where you see the market is mispricing equities. that happens a lot. until -- fundamentally i think when the company performs you'll see the market wake up and realize its true value -- >> what is performing? is that when they start delivering a mobile? >> well, i think when you have

two or three quarters of consistent revenue performance. when you have several quarters of mobile monetization, and when you see revenue on the top line, when you see those sort of things happen, i think you'll see the price and the stock really begin to rationalize and realize the true value. >> we'll see -- it will be interesting to see what investors like goldman do with their shares. thanks for joining us. just remind you what's on the agenda today stateside, july cpi out at 8:30 eastern. consumer prices are to remain unchanged when you exclude food and energy. 9:15 a.m. we'll get july industrial protection. 10:00 the august is survey from the national association of home builders. on earnings calendar look out for results from deer, target,

abercrombie, stams before the bell. after the bell we'll hear from cisco, applied materials, limited brands, agilent, hot topic, netapp and petsmart. walmart, target and 7-eleven are expected to reveal their plans for a mobile payment system letting consumers pay for goods on their phone, according to "the wall street journal." follows starbucks announcing a partnership with square. what do you think about mobile payments and the idea of a cashless society? importantly, are mobile payment companies overvalued? if you want to join the conversation on "worldwide exchange," e-mail us at worldwide @cnbc.com. or tweet us. do you agree with paulson and sorros that gold is a buy? you can reach us directly. rogs? >> would you want to do more mobile payments? still to come as well as record-breaking droughts reek

havoc across america's heartland, some companies are cashing in on a rare breed of corn.

you're watching "worldwide exchange" this morning. these are your headlines.

shares in standard chartered rises. wall street heavyweights reveal what they've been buying and selling over the last few months. the worst u.s. drought for 50 years may have been disaster yous for farmers but could it be a different story for seed business? jane wells has been out and sent us this report. >> reporter: this is what a lot of farmers have this year. this what some have. the lucky few who paid big for it. >> oh, that is a good ear. >> reporter: that ear came from the first widespread commercially available seed spread specifically for drought called aqumax by pioneer. the drought tolerance comes from native bred into the seed. they only had enough for 2% of all corn. >> we old out. >> reporter: could you have sold more if you had it?

>> yes, would have liked to have more. >> reporter: it costs twice as much as conventional seed but promises better results during drought, considering you get a little rain and your farm sure vives. >> if i can promise him an increase, even though thing are -- >> reporter: there will soon be competition. monsanto is field-testing its own drought-tolerant seed as the seed market is expected to grow from $46 billion this year to $58 billion in four years with a third of soez seeds genetically engineered. jane wells, johnston, iowa. >> there's always -- the ill wind, somebody will do well out of other people's problems. >> not just the seed companies. there are other food packaging companies who may not be hit as much as you'd expect and could benefit through raising prices.

absolutely. someone will always turn a profit in these situations. not the farmers, unfortunately. >> well, the farmers -- >> the right ones. >> we'll bring you more about drought in u.s. and what it's doing to commodities. we'll show a special on drought, across a range of cnbc networks. still to come on the show, standard chartered paid out for doing business with iran but is the settlement another slap on the wrist? we'll speak with phenomenaler fdic undersecretary.

welcome back to the program. let's take a look at markets. it's a cautionary environment coming out of asia this morning. the hang seng had its worst day since late july, closing down 1.2% and that's followed through into futures action. the dow jones is implied to opener by six points and one or two for s&p. not a huge side to the downside but not a supportive risk environment overnight. >> european stocks meanwhile are weaker as well. just down about 0.3%. euro stocks up near four of my month highs. moving on, the old gray

leader has a new leader, "new york times" is turning to former bbc director mark thompson ening an eight-month search. he announced in march he was leaving bbc after the olympics. he'll start at the times in november. new york times in frankfurt up. i have to say, this a fascinating point. by and large -- i mean, the bbc starts have year, knows exactly what its revenue is. their job is to work out where they spend it. "the new york times" -- >> doesn't have that luxury. >> in a tough market business. it's -- it's an interesting choice. >> it's going to be a tough job. in any case, it was interesting to see new york times shares are up almost 24% this year. more american may be dining out a little less. npd says restaurant traffic has been slowing in the last few months and will likely be flat for the next two years. restaurant business were up 1% this spring.

npd says consumers continue to be cost-conscience amid relatively high unemployment and economy. fast food remains strong, accounting for 78% of all traunt strafk. i can tell you that high gas prices make a big difference to how much people visit restaurants. if that price eventually falls, that could lend some -- zhou can't go anywhere in the state unless you drive your car. unless you're in new york, you don't walk out and go -- >> it's not worth the gas money to go to mcdonald's when prices get to a certain level. carlisle group is going to buy out getty images. it's been valued around $3.5 billion. the deal could be announced as early as today. the sale would come more than four years after hellman friedman took getty private for $2.4 billion. not a bad return. getty, you always remember that

fantastic photo of bob beman, a stock image -- >> who's that? >> he set the long jump world record in 1968. >> okay. >> it's -- and he blew long jump record out of the water. there's an iconic shot of him. >> $3.5 billion, that's quite large figure. a good return for them. at the same time a lot of people waiting for double digit sized deals we haven't seen yet, despite supportive conditions in some of these markets. we'll take a short break. still to come, we'll leap into the next part of the program as we bring you on the latest on standard chartered, facebook and the u.s. drought. >

welcome back to "worldwide exchange." if you're just tuning in, i'm kelly evans. >> i'm ross westgate. shares in standard chartered rise after they reach a settlement with new york regulators, agreeing to pay $340 million. bank of england says rate cut were not discussed but minutes show policymakers were tempted to step up with more qe. carlsberg hit by bad weather conditions in europe but the ceo tells this show he's eyeing growth elsewhere. >> we are doing well in asia.

also, if it's about further growth or accelerating growth, i'm sure a lot of that will come from out there. also we're watching several big name investors today. warren buffett, john sorros, john paulson, we'll see what they've been buying and selling over the last few months. let's check back in with u.s. futures. dow jones poiped lower by a couple points, same with nasdaq, s&p 500. not a ton of movement but a cautious attitude out there, starting in asia. hong kong is down, ftse 100 down by 0.3%, and xetra dax, and cac

down and ibex roughly in the same position this morning. >> big question is what are investors to do in this kind of environment? here's a snapshot of what some experts have already told us on cnbc today. >> i would be looking to sell lloyd's, sell rbs and move it into hsbc -- >> short term? >> medium term trade. in terms of professional investors, we think it's risk off for the next two weeks. so, selling italy, spain, buying bunds is the clearest trade. i think euro/sterling can potentially edge a little higher but we're not going to get dramatic movement. euro/sterling is on a long-term

down trend but it's gone a little too far, a little too fast. standard chartered shares are trading up after the decline when first revealed new york was looking into payment with iran. id trading up 4% 6% but down 3% over the last month or on. not the only bank to be accused to reach settlements involving its payment transactions with iran, with other nations on the sanctions list. this is all over the practice of wire stripping, as it's known. that basically means altering communications within the global swiss payment system so they're not blocked when they have references that should be blocked. standard chartered, $340 million. this is just with new york regulators.

there's potential. let's put this in context with what we've seen u.s. regulate hes reach in terms of other banks. abn amro, $500 million. most were total settlements, on keep that in mind. we move on to lloyds and credit suisse, $350 million, and then barclays, in 2010, almost $300 million. and ing this year, $619 million, this is the figure analysts were watching when trying to figure out what standard chartered's exposure may be. hsbc as a result of a senate investigation still looking to see what the cost will be on that front. ross? >>, yeah thanks. meanwhile in a statement new york's department of financial services led by lloyd benjamin

says standard chartered agreed its actions involved transactions of at least $250 million. a big change from the $14 million they talked about before. the regulator says the british bank will install a monitor for two years. separately, a u.s. treasury spokesman said their investigation would continue and that standard chartered could face further punishment. some industry insiders are rushing to standard chartered's defense. gordon says the settlement is unfortunate outcome aimed at preserving the firm's reputation. >> it's an issue of toiling. we saw unprecedented threat, unwarranted threat against new york license of standard chartered. standard chartered needed to act quickly for rapid resolution to avoid -- >> joining us for more is law professor at university of notre

dame, former u.s. treasury under-secretary for enforcement and author of the book "unfunding terror claish the legal response to financingf global terrorism." thank you for joining us. as we get more information about the settlements standard charitied and other banks have reached, are you concerned we're not perhaps getting the detail that might have come out of a full hearings to their involvement with some these countries on the sanctions list? well, i'm concerned about a number of things. i'm concerned first about the amount of the fine that was imposed against standard chartered bank. as you know, the allegations in the complaint filed by the state, the new york state regulator alleged there were $250 billion of iranian transactions processed through the bank's branch in new york city. they generated hundreds of millions of profits from these transactions. yet the fine was $340 million.

on, it could very well be that the bank continue to make a profit, despite the amount of the fine that was imposed against the bank. >> i -- >> secondly, i'm concerned -- >> is going to say -- >> secondly i'm concerned -- >> i was going to say, i worked out, that fine was 0.1% of the $250 billion. >> that's right. so, it becomes, in effect, the cost of doing business. it appears that the bank still made a profit off its criminal wrongdoing and i think that's inappropriate. further, this is one other instance in the long line -- this is now the seventh bank in the last 3 1/2 years that's engaged in a similar criminal scheme to evade u.s. sanctions involving iran, where no bank official has been held criminally responsible, even charged with a criminal offense. >> just -- how murky was the law

on this? because the u-turn transactions were actually set up by u.s. government, so that was legal. what was illegal was to try to blank out who these transactions were with. i mean, some of these transactions could have been legal if they'd been allowed to have been checked. mine, this seems to be pretty murky legal areas we're talking about. >> well-beingwell, not necessar. the u.s. bank has the responsibility to determine whether or not the incoming wire transfers are legal. the branch of standard charitied bank was prohibited from doing -- from engaging in its legal duty because it did not know that the transactions were emanating from iranian banks and iranian entities. it had no way of determining whether or not the transactions

were lauwful or illegal in the first instance. >> there's been a lot of focus on the aggression of new york regulators here. is that right in this case? can you put that in some context for us or are we paying too much attention to new york coming out

more aggressively than the federal authorities on this? >> well, i think it's significant because it's unprecedented. in the prior case involving lloyd's bank, barclays, credit suisse, in each of those other cases the enforcement action taken was a joint actions by new york regulators. in this case it was the new york regulators acting unilaterally. so, to me, that suggests, among other thing, that perhaps the department of financial services was frustrated with the federal regulators, the amount of time that they were taking, that they were dragging their heels with respect to taking action against the bank. as you know, there was an ongoing investigation. the investigation began as early, i believe, as 2009. so, there was an investigation for three years, but yet federal regulators failed to take any meaningful action against starn standard chartered bank. >> the journal taking a slightly different view. this regularity has been described by others as a rogue regulator. it's worth pointing out here, lawski branded standard chartered a rogue institutional. if you believe all of that, why would you settle for $340 million? >> that's a good question.

i don't know that i would say he's a rogue prosecutor. he's an independent -- he's a rogue investor regulator. he's an independent regulator. he's taken action is now the

seventh bank that has been found to have engaged in a fraud scheme, to evade iranian sanctions. clearly, the fines aren't working. and they're not working because

the penalty is against the bank. it's really hurting the shareholders. it's not a penalty against the wrongdoe wrongdoers. it's not a penalty imposed against bank officials that devised the fraud scheme to evade iranian sanctions. >> you say they're not working but these are all things that stopped in 200 8. it's just taken us time to catch up with us. that's not strictly true, is it? all banks participated in doing the same thing at the same time, as far as we're aware, they haven't -- they haven't done it since 2008. >> no, that's not correct. if you go back and you look at the deferred prosecution agreements against some of these other banks, barclays, lloyds, credit suisse, amro, ing, some of these credit fraud schemes extended beyond 2008.

in some cases the fraud schemes expanded a ten-year period of time, from 2001 to 2010 or '11. so, the fraud scheme extended beyond the 2008 period when the u-turn transaction exemption was repealed or eliminated by the treasury department. >> in standard chartered's case, that's not the case? >> no, i believe -- i believe that the allegations against standard chartered were from 2001 to 2010. so, there were certainly allegations of wrongdoing that extended beyond 2008. >> jimmy, good to talk to you. thanks for joining us, law professor of notre dame. good to have you on earlier. still to come on the program, we'll dig into what some of the biggest investors have been doing with their money. berkshire hathaway among those revealing stock purchases. what's warren been buying and selling and is it time tore buy

or sell gold?

you're watching "worldwide exchange." shares chartered rise. the bank of england says rate cuts were not discussed at this month's meeting. wall street heavyweights reveal what they've been buying and selling over the past few months.

welcome to the trading day. warren buffett has been busy buying and selling stocks this month. berkshire hathaway has new in phillips 66, and raised stakes in vie acome, wells fargo, j&j, proctor and gamble, u.p.s. and ge. managing $74 billion stock portfolio. i just checked some of those shares as well in trading in frankfurt today, where phillips is u.s. trading down slightly. they're off a little bit. >> tough day for the buffett portfolio. gold back in favor with two big name investors, john paulson and george sorros bought more gld in the skd quarter. that's the second time paulson has added to his gold position since 009. sorros sold stakes in jpm,

citigroup, new positions in walmart and facebook. take a look at gld this morning. they're down -- as of yesterday's trade, down about 0.5%. we know it's been a rough couple of days for gold. the real question is are paulson and sorros identifying a buying opportunity or is this trade just not working? >> we got down to 1520, right, which is -- and since then we formed quite a business. long-term they tell you that's solid -- dmru like the look of that chart. >> i'm not a huge chartist but a lot of people use it. much will depend -- >> quantitative easing, jackson hole, keep that in mind. still to come on the program this morning, record-breaking droughts have left america's farmers high and driveway. is there any end in sight? >

just woken up ahead of u.s. open, european stocks are down slightly. not huge losses. down a third of a quarter of a percent from ftse to ibex but u.s. stocks are up at four-month highs. >> u.s. futures aren't moving too much. still pointed to the downi'd. worst trading session for asia overnight. hang seng having within of its worst segs since late july. what's on agenda in the u.s.? cpi will be out. 9:15, july industrial figures. at 10:00 nahb, which will be interesting as home builders

four-year high. earning, deer, target, abercrombie and staples before the bell. after the bell, cisco, applied materials, limited, agileent, hot topic and netapp and petsmart. cooler weather is expected soon across the plain states of oklahoma and kansas but analysts say that won't be enough to save the majority of the u.s. corn crops. for more we're joined by analyst at robobank. thanks for joining us. we've seen a spike in corn prices lately. is it your view we've reached the top or still more to go? is $10 a bushel in sight? . >> there further upside. last friday we had a report from usda august was the report which confirmed what private analysts were expecting as yield loss. they cut yields to corn to 123

bushels per acre and soybeans, 17%. is so, now weave got the supply side of the story, not completely finished but what behind us as we're getting very close to harvest of those two crops. we're really focused on the demand side of the equation. he we haven't seen much of a pullback in terms of end user consumption of these two commodities. going forward i think prices will be more reliant on how much commodities are being consumed and how fast we're drying down stock. >> talk about soybean. we're looking at futures in u.s. that show good to excellent conditions in a few isolated cases, like louisiana. what implication will that have across the food been? >> on soybean we haven't seen much of a pullback in consumption. although the good to excellent for the crop in the u.s. is now 30%. it's up 1% from the previous

week. this is barely a move on the radar. this crop was plant probably two weeks early so the rainfall coming now and potentially cooled temperature is not going to have the same type of an impact it would in a normal year when planting was done a bit later. limited impact to the yields on soy bony going forward. i would say it's potentially reversing -- not necessarily reversing yield loss but preventing further downgrade. >> what's going right with rice? we see it's one of the few crops that has a decent number -- that's actually doing okay in the u.s. in the last food sprik, it was the aim thing. rice was immune. >> which you look at drought conditions, it's having a more severe impact on feed grain commodities. not necessarily food staples in this case. we in the u.s. is actually

looking quite good in terms of harvest expect takings. we're seeing corn and soybeans, going into feed rations, having a much more severe supply shock in this price rally. >> you mentioned wheat. it's interesting because we've got russian wheat production, going to fall heavily. what happens to wheat prices if you say wheat has escaped quite a lot of what corn has suffered in the u.s., but then the situation in russia? >> we do expect wheat stocks globally will decline, likely due to production drop in the black sea region. we're coming off a year of record high wheat stocks. we are, i would say constructive wheat prices but not looking at the type of supply shock we saw during the 2008 price rally for wheat. we think wheat prices will follow along with what's going on in corn as these two commodities can be substituted in some cases. but going forward, exports of

wheat out of countries where harshests are looking fairly strong, such as u.s., canada and australia, are likely to offset some production downgrades we're seeing in the black sea region. >> any impact on cotton from the drought or was it on peripheral? >> actually, drought conditions in the u.s. this season are impacting more of the midwest corn belt. it's having a better impact -- or conditions for where cotton is grown in the u.s. this season are better than the conditions we saw last year, when the drought was more is he rear in the cotton region. >> all this said, it sounds like prices, even if some cases like corn, maybe could see some relief. for the most part they're still at or near historical highs. what impact is that going to have as it feeds for the shopper in the store, the buyer on the street, into next year? >> certainly. as we mentioned before, soybean crops which are most impacted are really going into the animal

protein. this is going to impact the end users there. it's going to be the hog producers, the poultry industry, the cattle guys. they're looking at much higher feed prices this season. and the end product prices have not increased the same amount. so many of them are looking at very severe, negative margins, contracted margins. we're expecting those animal numbers are going to be reduced so the supply side is going to pull back. we're looking at probably the animal protein or the meat product seeing the biggest impact in terms of price implications. >> erin fitzpatrick walking us through all of those crops. thank you on much. it's tragic. people are slaughtering their livestock because they can't afford basically the production to feed them. absolutely. one investor sees the bright side to the crisis telling cnbc.com, there is an opportunity for investors. head over to our website new as well to tune into our special coverage on drought of 20 12 all

day today on the networks of nbc universal, that's cnbc, msnbc and the weather channel, which has done a really good job of tracking what's going on. while online, keep this in mind for facebook's share price, likely to be on the move as first lockup on sales expires for early investors. 221 million shares eligible for sale thursday, part of 2 billion that may become available over the next nine months. watch angel investors, peter teal, microsoft and goldman, they still stand to benefit from early investment even though facebook shares are down by half. >> they don't like to keep investments for a while. that's it for today's edition of "worldwide exchange." you can track all continuing news stories and development. "squawk box" up next.

good morning. standard chartered shares are on the rise in europe after a settlement with new york regulators. warren buffett, george sorros and others revealing portfolio moves. and paul ryan hits las vegas to visit a high-rolling donor. it's wednesday, august 15, 2012. "squawk box" begins right now. sf sflu . good morning, welcome to "squawk box." i'm andrew ross sorkin along with joe kernen. let's get you caught up on what happened overnight in