today's edition of worldwide exchange." . i'm ross westgate. >> i'm kelly evans. these are your headlines from around the world. . >> spain returns to the markets after summer lull. short bonds, disagreements about policy efforts in europe. >> commodities trader glencore ceo saying merger with xstrata is not a must do deal. >> china profits are down. offshore oil producer cut dividends to help pay the nixon deal. >> apple break egg another record. becoming the most valuable

company topping the record of microsoft at the height of the '90s dot-com boom. okay. welcome to today's edition of "worldwide exchange". first thing, r.i.p., tim scott. >> yes, that was such assad story. >> very sad story. they were working on top gun ii. it's an i film. >> we were at the olympics watching beach volleyball and a bunch of guys dressed as top gun characters. >> so, a great loss. plenty to come on today's program, of course, on "worldwide exchange". we're going to be getting into -- the bank do they like these plans. food price inflation is soaring

in india as drought cuts supplies. we'll be in mumbai with all the details of. >> lonmin say strikers are starting to return. we'll head to zambia. >> spain plans to auction off 12 and 18 bonds. how much will investors demand. >> plus we're joined first on cnbc by the ceo of nasdaq listed globe specialty metals and that's coming up at 5:30 a.m. so in about 90 minutes time. >> spain looking to sell off 4 1/2 billion bonds in short term debt. results are due in around 40 minutes. same bonds were sold with average yields of 3.9 and 4.2% at previous auctions. this sale comes after madrid called on more forceful action from the ecb to buy sovereign debt. we've seen declines in spanish

yields over the last week or so. today, yields averaging 6.3%. two year eelz at 3.6. and five year government bond at 5.47% at the moment. spain is waiting to turn its bad bank into an investment fund. madrid will present the idea on friday, it unveils an overhaul of its banking sector. it would not be subject to national accounting principles. >> interesting. a decision has not been taken on the eurozone bond buying plan and it's misleading to report otherwise. that's the warning from the european central bank reacting to a weekend report. that report said the central bank was considering a bond yield cap for the region's troubled economies at which point it would step in and buy unlimited bonds.

our next guest thinks europe is stuck in a no growth trap, partially because of all the uncertainty surrounding policy action. joining us now is senior economist at morgan stanley. thank you for joining us this morning. let's start with this back and forth from the european central bank. in your view what's really going on here? >> what's really going on the ecb is currently discussing openings on how to put the bond buying plan into practice. this success discussed amongst the national central banks, in committees, but the real decisions will only be taken at the september 6th council meeting. >> it sound like there's is going to have to be, you know, requests from spain, maybe italy to put their countries into some sort of program before any dispersement could go forth. do you think september 6th we may get concrete details? >> we'll get some concrete details on september 6th but we'll have to wait until spain

and possibly also italy apply for a program. i think that's unlikely before mid-september in the case of spain. as soon as that happens, i would expect the ecb to act and to put its action where its mouth is. this was the announcement by drag draghi. >> how much of a game changer is we have comments effectively backing this idea. he's merkel's man. is germany going to be on board here despite what other members of the bank may think? >> it's quite clear that the bank itself is not on board and i don't think they will give up their resistance. the bank has only one vote on the council. i think the german government and angela merkel has said that is backing the draghi plan. i think it will be put into practice and there will be broad political support.

>> your own view that the house of morgan stanley has been taken down in terms of global growth. you've come out, because of the "twilight" zone that we're now entering what differentiates this periods? >> 2012 entered into twilight zone. mainly because of policy uncertainty. so in the developed world, particularly in the u.s. and europe we have major uncertainties about policy. in europe about whether we will do the right kind of institution reforms. in the u.s. it's about the fiscal cliff. in emerging markets we're seeing broken growth models almost every where and we need policy action. we need policy action almost every where to keep the global economy in twilight zone or to get a sustainable expansion. without policy action we'll see a renewed recession. >> please stay with us.

okay, kelly. here we are. we are advances outpaces decliners, a little more 8-2. slim loss yesterday. the dax down .1%. cac down .2%. spain here is up .9%. trying to hold on to the gains we've seen over the last four weeks. there's now this expectation from the ecb, will start bond buying program provided spain works out the agreement on its rescue-package or its request for aid. ten year spanish yield, currently at 6.3%. uk public bond figures coming you want in half hour at 1.6%. currency markets are concerned, fairly steady. aussie/dollar back over 1.05.

looking more at china in just a second. dollar/yen, 79.42. euro dollar over the 1.24. back towards the highs of recent ranges. what about asia? we have more out of singapore. >> asian markets finished mixed. investors cautiously positioned themselves ahead of key economic data. shanghai gained by half of a percent. wine makers surged on possible anti-dumping investigations into imported european wines. the hang seng trimmed losses in late trade to finish flat supported by telecom and materials. the earnings parade is firmly in focus more on that shortly from our guest. elsewhere the nikkei pulled back from its three month high but gained be financials and

mountainal products kept losses in machineryes. kospi off .10%. ship builders that depend on european credit lines lost grounds. australian market climbed. india's sensex now higher by half of a percent. the country's july cpi eased marginally. >> thanks for that. meanwhile india's consumer price index pushed downward. let's get more details. >> reporter: hi, thanks for that. consumer price index for the month of july has come in at 9.86% on a month to month basis

as compared to 9.3% in what they did in june. basically it actually comes at a four month low. we haven't seen a figure like this for cpi since march. to put things into perspective, the economists are not too optimistic with regards to the data point. there's a high fee effect which comes into play. hence there's still suffering and should have come in at the lowest part according to economists as it was easing. also just to give you a couple of key data points food inflation is in double digits. fuel decelerated to 7.4% on the

year-on-year basis. all in all the trajectory seems to be a concern because there's a presentation that they are suffering from a risk of a monsoon and affect food prices going forward. back to you. >> we just heard about inflation issues and the challenges facing the indian economy as well. what do you make of how emerging markets will be impacted? if we get ecb supportive action in europe and it stems the crisis a little bit after spain has got a bailout what will that do for trade and confidence for the emerging markets? >> well, i think it could help confidence if we get more decisive action from the ecb and potentially also from the fed but the big issue is that emerging markets themselves have to put in place a lot of structure reforms to move on to a new growth model. as i said earlier their old

growth model is broken in many cases and to get to new models they need institutional reform, structural reform. india has largely had growth driven by strong government consumption that led to wide deficit, so that needs to change. china has been driven by exports and investment. it moves to consumer led growth and to do that they need social security reform. brazil and russia largely driven by commodity driven growth and they need to diversify their economies. so that's a lot of heavy-lifting they have to do themselves. >> that's true. also one of the same reasons why people can be bullish on some of these economies particularly china saying yes the transition is never neat but it's still happening. that's why we like the story longer term. is there a reason to doubt that these transitions will happen at all or risky longer term damage to some of these economies? >> the most likely outcome is that they will implement the

reforms but at the moment there are some obstacles. in china you have a low pressure transition. that has to be completed before we can expect deeper social security reforms. question of timing. same is true for many of the other economies. in brazil the government has just announced major infrastructure investment initiative. that's the right course of action but still needs to be implemented. >> we know the shanghai composite has been weak and perfor divergently from other markets. is that because of china specific investing issues or is that telling us something more fundamental about the weakness in that country? >> i think it goes back to what i said earlier. it goes back to policy uncertainty which is weighing down on investment dess and weighing down on spending decisions. that's true for china. it's a phase of heightened uncertainty because we don't know exactly yet what the new low pressure will look like and what they are going to do.

as lons that's not solved you'll see continued uncertainty and volatility. >> how long is that going to last? >> i think we'll have a better idea towards the end of this year. so i think november-december. then we may see some policy action at the beginning of next year. >> just real quick because a lot of emerging asia is where investors are focused where they like the longer term story. are there any particular economies that you think can outperform? >> the one economy and it's a very large economy that we think will do well is indonesia, which is a big infrastructure story. it's one of those emerging markets that is in the second line and becoming more and more prominent. i think within asia that's the economy to focus on at the moment. >> good to see you. thanks so much for joining us. now apple is the world's most valuable company.

it passed microsoft's market set during the dot-com boom in 1990. if you adjust for inflation microsoft still had highest valuation. the ipad is nexted next month. apple had a market cap of 623.5 billion dollars. so question is what can you buy with one share of apple? a black saint croix black mock turtleneck. i suppose can you get all of that? do you get all of that? yes for your -- >> you can just buy an ipad. a lot of people at this point would prefer that versus a share of apple. we want to know what you think

about apple shares. is this actually the top. are we going to look back as we did to microsoft in late '90s as more than a peak. what will the share price be six months to a year from now. join the conversation. respond to this or anything else you've heard on the program this morning by e-mail, worldwide@cnbc.com. tweet us at cnbcwex.com. or of course reach us directly @kelly_evans or @rosswestgate. >> take the money and go out for at that really good male. chinese equities are trading relatively cheaply. is the timing right for investors to step into the market. we'll talk about that when we come back.

welcome back to the program. shares of china's oil producer cnoc. cnoc is cutting their dividend of 40% to 15 cents a share. set aside for more capital of acquisition the canadian oil firm. shares down 2.95%. >> it's the worse performing index in asia this year down 4%

since the beginning the year. now down at 3.5 year loss. concerned about slow down. it's hurt stock performance. it does make it one of the cheapest markets in asia. philip, the question is, is it cheap enough to start buying or is there still plenty more down side risk? >> no, i don't think there's very much down side risk. it is looking cheap. i think some of the measures which has been announced recently by opening wider the schemes into china, chinese equities. this is sort of -- this will help sort of the sentiment at least from institutional investors and the medium to long term. however, having said that, the

scheme is not a very big portion of the whole market so that's why you may not have a huge effect right now. but the thing is these all positive incremental states which the chinese government is doing. >> is it better enough to off set what you cite as weakness going forward for the chinese market? >> no. i don't know whether that will offset that but the thing is expectations are being kept down for chinese earnings anyway. i think even though maybe the official estimate -- sorry. official sort of like earnings forecast may pull by bloomberg or the other sort of agencies, they probably not been moved down as fast as they should, but analysts will be cutting back their earnings forecast for the coming half anyway. so i think that will largely be

factored in. >> should we keep in mind this down side risk that you're talking about? do you expect to hear more cautionary commentary coming from these companies? >> yeah. yeah. i think so. you know, i mean the cnoc case they signaled that partially very shortly before the results. they were going to cut the dividend and the results were going to be disappointing. these companies are going to be sort of producing to maybe disappointing earnings results but that's this year. that will be the bottom we see in the short term. >> are there any sectors -- >> as >> philip, sorry about that. are there any sectors you like that might perform better despite what we're talking about?

>> sure. i mean based on the fact that liquidity is beginning to come back into the market, so we know we're looking at the banks and insurance companies and the health care utilities, power utilities. the more aggressive investors who want to trade better can look at construction machinery, materials which are still going to announce disappointing figures. but it's been factored in. >> philip, there's talk about what this analyst liked in china. >> we are buying. we continue to buy chinese stocks particularly consumer oriented stocks so we continue to do that. now settlement changes, as you know, markets go down because people think europe is in trouble or u.s. has got a

problem or china is slowing so that you have changes in prices from day-to-day but the reality is over long term these economies will do very well. >> we'll hear more on that full interview later. he continues to buy consumer related stocks in china. good idea? >> yeah. consumption is obviously the way forward for china and, i mean, i would probably agree with what he's saying. we don't see that there's very much sort of like positive capitalists in the short term for like discretionary consumption. consumer staples maybe. the valuations are so low for these stocks vis-a-vis the rest of the market and historically there's very little down side from here so you got to be building your portfolio for the long term. >> good to see you there.

philip chen. >> ceo of glencore says the proposed merger with xstrata is not a must do deal. he can't understand qatar's request for an improvement of terms to the deal which he describes as very attractive. qatar holds an 11% stake in xstrata. those comments were followed by release of glencore's first quarter results. shares down about .6% there. staying in the mining sector lonmin said workers are starting to return to its troubled platinum mine. will strike action spill over to other mine in south africa. we'll head out to zambia for more in 30 minutes time. lonmin saying now 33% of workers are back at the mine. meanwhile george soros has been revealed as a shareholder. has a 2% stake in manchester

united. man shares continued to slide since it went public. it closed down at 13 bucks a share. >> i was surprised. soros buying man u. >> we'll see. >> still to come on the program europe's aaa club has been shrinking the agency's move. netherlands, is it the next country to go? we'll discuss that coming up. era laundry detergent once stomped a stain

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okay. these are the these are your headlines from around the world. . explains returns to the market after a summer lull. 4 billion euros in short term bonds. disagreement about policy in europe. >> glencore, ceo saying its merger with xstrata is not a must do deal. >> investors punish china cnook. they are cutting its dividend to help pay the nixon deal.c.

they are cutting its dividend to help pay the nixon deal. public sector net borrowing forecast to fall to minus 2.5 billion pounds down from 14.7 billion. net buying forecast to minus 2.55. sterling ahead up 1.5762. we have the numbers. the thing is course we've seen borrowing over the loss we had last year because of the recession. july public sector net borrowing, up .6 billion. worse than expected. expected to fall 2.5 billion. public sector net cash requirement is minus 22.9 billion versus 21 billion a year. public sector borrowing 125 billion versus the obr forecast, this is 2011-'12, 126 billion.

but july's number has come in again worse than expected. >> yet not much of a reaction in sterling which remains at near two month highs against the dollar. you expect more of a weakening on those figures. >> let's bring in david reilly who is head of sovereign ratings at fitch ratings. there's plenty of talk that uk has room to increase its investment spending. what do you think on where bonds are going at the moment? >> we think that it's actually limited room for the british government to do some kind of stimulus measures to try to get the economy going. we actually put the uk status back in march because we were concerned about the stagnation of the economy, also the risks coming from the eurozone. which basically means the government would find it

difficult to meet its targets that it set itself. even under those targets it implies uk government debt would be peaking at around 93, 95% of gdp. so, haven't got much fiscal spec. not to say there's not enough room for speculation -- >> here's the point. if it's for growth, if it's investment for growth, and the government uses its balance sheet or uses very cheap borrowing and locks in long term borrowing which would change the funding nature even more, how would that be viewed if we can say it's for big infrastructure, long term infrastructure structure, we increase our borrowing for those kinds of plans, how would the bond markets view it? >> well, actually you're right. at the moment the bond market is saying please borrow from us because we're willing to offer you critically low rates and even negative in the longer term. there's a credibility issue

there, those which is, you know, you made the commitment, infrastructure spend. not clear the uk economy is not growing because of lack of infrastructure spending. it's not growing because it's going through the aftermath of the financial crisis and the whole credit bubble. it's going through a recession because, you know, household sectors are trying to deleverage, the whole economy got over indebted. >> shouldn't the onus be on britain, doesn't face the issues that europe does to stimulate. if i can offer a so what to high debt levels it doesn't mean anything to investors or credibility of a country and if anything have forced countries like britain into accepting these cuts that's damaging their economy. >> i think to some extent you have to be careful because bond yields are low for gilt or for

u.s. treasuries therefore the market doesn't care about fiscal discipline, doesn't care about the amount of government debt. it's a contest of ugly sisters. people are looking for the safe-haven relative to the eurozone in particular than the uk and u.s. safe hey convenience. that doesn't mean they are indifferent to the whole issue about bringing down the debt. >> it would suggest, those that investors are giving them plenty of room here to do the kind of borrowing and perhaps stimulating that would improve their financial position longer term. >> i think if the government chooses to rebalance its fiscal consolidation efforts such as it gives more emphasis on capital spending in particular, i think the housing market which has been -- housing supplies have seen a structural problem in the uk the bond market we would sort of not view that negatively.

but i think instead of throwing out plan a and without a credible plan to bring down what's still a very large deficit that's still rising in the uk at a very rapid level, very rapid rate, does pose some risk. the other aspect, of course, there's a bit of difference between us as a rating agency and what policymakers have to decide what might be the best growth orientated policy response may not be compatible with tuck or other countries retaining their aaa status. it's not the end of the world if they lose their aaa rating. >> i can't believe you admitted that. thanks for that, kelly. just take a look at what david from fitch, got a rating on holland. aaas this week.

outlook stable. moody's has an outlook negative. standard & poor has an outlook negative as well. holland has some strong thoughts really about what's going on with the eurozone crisis. just worth taking a look as well where the dutch market has gone in relation to bond yields as well. ten year dutch yields 1.87%, ten year uk bund yields 1.53. has mirrored them. there have been periods when the spread have widened a little bit. as far as the uk is concerned, interesting comparison. ten year gilt a bit off. we saw a crossover in june dutch yields down a little bit. silvia is in frank further and joins us for more. some discussions, the

discussions in holland just as if not more sort of in depth and in germany about what to go the rest of the peripheral zone. what sort of mood are they in terms of bailout and ecb money printing. >> quite interesting. course we know conservative coalition has crushled and now the socialists are gaining traction. it's a similar picture in france and similar picture from what we're seeing in the political mood in germany. a little bit of deja vu in there. the noises if that's the right word that are coming from the oshlists are similar from what we hear in germany and even more so in france. we have to get stimulus, money back in the economy but by the same token don't bail out countries, we don't quite know whether we can keep everybody in, we can't pour money down a big drain. so it's quite diversified

discussion. we also asked the leader of the dutch socialist what he thinks has to change, what he thinks they have to sort of rewrite in terms of tackling the eurozone crisis and interestingly enough he pointed out that we should have less competition in europe. here's what he had to say. >> translator: the big problem in the past year is european collaboration has translated in to competition. control of certain countries has been given to a technocratic institution. people are expressing their opinion saying it's going too fast and europe is not moving in the direction they want to move in. this has created a gap among europe's population. >> i sympathize with the sentiment and everybody here has been saying the same we have to put more money into the economy, i also have to point out that

nobody i ever talked to exactly where that money should come from except sort of the old recipes like tax the rich and put higher taxes on corporations. that should go down very well and really instill confidence into the economy. you know, i'm a die-hard socialist but i'm not convinced by the socialist recipes i see at the moment because i think they got none. >> thanks for that. joining with us is david reilly. you're stable right now. why are you slightly more optimistic than others? >> netherlands is a core member of the eurozone. it's a creditor. it's pretty competitive. it's up there with germany, one of the most competitive nation within the eurozone. actually has a pretty good track record in terms of fiscal discipline and responsibility

before the crisis, you know, the deficit was less than 3%. budget services, the government debt was declining sponsorship there's a lot of underlying sort of strength. what your correspondent silvia has highlighted is it's been a toxic political mix not just in netherlands but elsewhere rising to the euro skepticism in the core, anti-austerity feelings which are, again, sort of emerging across europe. combined with, you know, an economy which at best is stag night. people are seeing their real wealth declining. pension assets are declining. house prices which, you know, are declining in the netherlands as well. put that all together you have a pretty disgruntled, unhappy populace. then you throw in quite a lot of

diverse set of political things in netherlands. >> if italy were to ask for international help and ecb did unlimited bond buying program what would that mean for their ratings? >> well. the ecb acting as a potential lender of last resort and providing assure skrans that you can have a liquidity crisis, the bank of england is doing for the government. we would view that positive. there's a lot of getting from a to b in your question because we know that the ecb is only willing to come in and do bond purchase. we don't know if that would be unlimited or not. if as a necessary condition they ask for support from the mechanism which will come with conditions which might potentially mean more austerity for those countries, as well as potentially some level sort of

sup supervision, surveillance. >> is this constructive in supporting their ratings or is this fundamentally negative development for those countries? >> i think, again, we would separate out a little bit in terms of spain and italy. spain has got a credibility issue and the spanish government has a credibility issue. the market doesn't, you know, really wants spain to basically seek some level of assistance to maintain its access. i think in the case of italy, actually we affirmed the italian rating because the government there has really been delivering a lot. we don't need more austerity, we need some more reform to boost the growth prospects. if we had those intervention, generally speaking we wouldn't consider those to be negative from a credit rating perspective. >> we have a short term plan. just a lot of little hoops we got to get through to put it on

the table i guess where we're at. thanks for joining us. david riley at fitch. >> europe as woes have had an impact on china and emerging markets investor mark mobius isn't overly worried. first we have the results from the latest auction in spain. >> 12 month t bills, 3.5 billion. they bid to cover 1.9, 2.2. they sold just under a billion, 18 month bills which was pretty similar to the previous auction. >> we have the 12 month yield. 3.207 versus 3.99% about a month ago. that's come down substantially.

>> 12 month, yields have come down on t-bill auctions. we'll see the government debt markets across the curve. >> bigger size for these auctions. >> let's remind you what's happened. ten year yield 6.3%. we hit 6.2. last week or so those yields have come in a little bit. on the ecb and esff, esm hopes. >> 18 month treasury bills the yields has come through. 3.45% down almost a full percentage point from 4.35%. as mentioned, mark mobius at least is one who is not overly worried about the impact that europe has had on china. he spoke with our correspondent and here's what he had to say. or what did he have to say? >> reporter: yeah. kelly a couple of ago if

you remember dr. mobius was on cnbc and he said he doesn't think china landing anywhere because it continues to fly. i would say 7.5% growth. this morning he reaffirmed on china's role saying despite the european crisis trickling down to this part of the economy, china will once again lift all of asia. let's take a listen. >> i just came back from china. what we see in china is a recovery actually. first half the year was slow. partly because, you know, the effects of the chinese government pulling back on the property arena, trying to slow things down, to quiet things down. now they have been pump priming and we're seeing that having an effect for the second half. that will have an effect on the rest of asia because you know now all the countries in asia, their major trading partner is

china not the u.s., not europe. so we see very good situation in asia generally. >> let's talk about emerging markets. i mean you think emerging markets will be supporting chinese exports. we've seen a slow down in markets and that's eating into numbers from chinese markets. are your too optimistic? >> the export slow down is a planned one for the chinese government. the government realized a number of years ago that they cannot depend on an export led program. so they moved from exports towards domestic consumption. and they are increasing the incomes of workers very rapidly. many companies are increasing their wages by 20% or more. that means there is a consumer boom that's looming in china. so that will replace the export

situation. however, you must remember that exports are not disappearing. exports are still very, very big. they are not growing at the pace that they were growing before but they are still very, very big for china. so, i am quite optimistic that china will continue to power ahead. regardless of what number you use, if you're very pessimistic you say 5% growth. 5% growth is five times more than the u.s. already. so they are not landing, they continue to fly. chances are growth will be more like 7%. now the impact on the rest of asia will be positive because china is a big destination for exports from these countries. >> given your positive sentiment on china would you be buying? >> we are. we continue to buy chinese stocks particularly consumer oriented stocks. so we continue to do that. now, sentiment changes from

day-to-day, as you know, the markets go down because people think that europe is in trouble, or u.s. has got a problem. or china is slowing so that you have dramatic changes in prices from day-to-day. but reality is over long term these economies will do very well. >> reporter: that was mark mobius here in seoul this morning. back to you. >> okay. thanks very much for that. great interview. good point. i always like to listen to mark. still to come lonmin says there's still no production at its troubled plant mine despite workers are returning. we'll have the latest from africa in just a few minutes. so, how do you feel about cash back? i would not say i'm into it, but let's see where this goes. [ buzzer ] do you like to travel? i'm all about "free travel," babe. that's what i do.

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now after over a month of shut down and $250 million in output india's largest carmaker restarted production. mid-july there was a lockout. today the plant was back in action but only at a fraction of capacity. we're up and running but how long before we get back to sort of full working order?

>> reporter: i think the jury is still out on that one because they want to take baby steps. remember this is a plant that has been hit by one of the worse cases of industrial violence that india has seen in the recent past. one executive lost his life in that violence. the management is very clear they don't want to compromise on safety and security. even to get partial resumption the local administration deployed 500 security personnel. and they employed 100 security personnel. 300 workers out of 3100 workers have come back to work. so for now they are doing about 150 cars a day. usually their run rate is 1400 to 1500 cars a day. you can imagine how slowly they want to start production there. in fact the actual assembly of cars won't take place at the facility, it will take place at a sister facility that maruti

suzuki operates. only the press and weld shops that will be pragt. protests have started because maruti suzuki discharged 500 workers. these were regular workers. their services hatch been terminated. there's the possibility of them moving but for now we've seen protests in the capital. we've seen protests outside of the facility. workers demand they be reinstated. this is a strange situation because the entire maruti suzuki are behind bars on account of violence that took place. i spoke with the chairman and he said absolutely no compromise on safety can be made. listen in. >> we are trying to determine who was there to our satisfaction because we cannot take the risk and not so much as the manager and supervisors will

not really feel comfortable, may not even go to work if a whole lot of these people were back in the factory. it's more to get rid of these people who indulge in violence. we can put up with all kind of industrial actions and things. >> reporter: that was the maruti suzuki chairman says no compromise as far as safety and security. interestingly, the chairman of maruti suzuki corporation will be in india on the 28th for the maruti suzuki agm. he's expected to visit the facility as well as state of jobs where maruti is looking to set up its new plant. >> lonmin said almost a third of the 2,000 workforce are back at

work. lonmin says despite returning workforce there's still no output from the mine. joining us on the phone from zambia now is the senior africa forecaster and exclusive analyst. thanks so much indeed for joining us. what we've seen here is an eruption of violence that stems out from a clash between two unions as well. i suppose the concern will be for investors is whether this spreads from this one particular mine, what's the danger of that happening? >> yes. good morning. let me give you a quick cup date on the events of yesterday. about one-third of the workforce did return network. we assume most of these are from the larger and established union and not members of the smaller union which are mostly rock drill operators engaged in last week's illegal strike action.

meanwhile lonmin has pushed back the ultimatum for workers to return network today. clear indication the company wishes to avoid further violence by dismissing any more workers. we understand from the ground most of the 28,000 workers that wish to return network but in fact they fear for their security following last week's violence and unclear how many miners are back to work today. both unions have lost control of the situation. so, for the repercussions for the widening minor sector, it's an escalation of an embedded unrest. this despite government efforts today to set up a bargaining counsel. >> what is the deep embedded problem for the south african mining sector that you talk about? >> we have warned our clients of contagion risks to other

platinum mines. the union has already recruited at these mines and there's a rising probability violence will erupt there too which will result in further work stoppages and collateral damage to these mines. the key escalation for contagion is dependent on whether the union can accelerate its recruitment within other sectors. >> sorry, robert. we're out of time. thanks for your analysis. more to come in clugd prevuvuzelas facebook. >> that's coming up next.

hello and welcome to today's edition of worldwide exchange." if you're just joining us i'm kelly evans. >> i'm ross westgate. these are your headlines from around the world. . confidence returning spain enjoys a sharp drop in its debt. investors demand less for their money. >> fighting talk from the world's largest commodity trader glencore. ceo says its merger with xstrata is not a must do deal. >> investors punished cnooc. >> apple breaks another record becoming the world's most valuable company topping the number set by microsoft at the head of the '90s dot-com boom.

let's take a look at how u.s. futures are trading a w approach the start of the trading day in the u.s.. dow jones industrials average implied to open higher by 11 points. nasdaq and s&p 500 are pointed a little bit higher as well. this comes after a monday which snapped a three day winning streak and added to this stretch of down days on mondays. the end of the last 12 at this point. cnbc ftse global 300 gives you a sense of what's happening. up over a third of a percent. european bourses same story, ftse 100 is up half of a percent. xetra dax is same. cac adding three quarters of a percent. ibex 35 up .44%.

>> quite a play in spain. and bond yields have come down as well in spain. helped by a t-bill auction, low yields that we saw the last time around. we did hit 6.2% just as we went on air. they are lower. yields in the uk, 1.68%. we saw a deficit for the july public borrowing figures. normally get a lot of tax receipts coming in in july. can't read too much in one month's data. there's a trend developing here about potentially missing the forecast which might be of a concern. sterling, 1.5657 still stronger bens the dollar. aussie/dollar is up against the dollar. euro/dollar back over the 1.24

level. we have more on the asian situation. >> it's a mixed picture for asian bourses. investors cautiously position themselves ahead of key economic data. the shanghai composite gained a half of a%. the hang seng finished flat, materials and telecoms rallied. shares of the oil and gas giant cnooc tushled. nikkei pulled back from its three month high on ecb uncertainties but gains on financials and metal producers capped losses. ship builders that heavily

depend on europeans lost ground. interest rates will remain at 3.5% in the near term. india scene sense higher by .6%. the country's july cpi eased marginally to just before 10%. back to you. >> thanks very much for that. just a quick word here on a tropical depression, the ninth of the season which has formed one, two, three inning. tropical storm warning issued for dominica, moving slowly at this point but just off the antilles, the lesser antilles. just east of the lesser antilles. also here's what you should watch on the agenda today in the u.s.. there's new economic data but atlanta fed president is speaking at 8:00 a.m. eastern. look for results before the open from medtronic, best buy, barnes

and noble. do you have la-z-boy? >> no, i can be a lazy boy. >> they are big comfortable reclining arm chairs. we should get one four. >> no. no. he says no. definitely not. so yes let's do it. spain has sold more than the amount of short term. investors wanted less. here are the details. they sold 4.52 billion worth of 1 and 18 month bills. compared with a range of 3.5 and 4.5 billion. yields down quite a bit since the previous auction last month as well. spain is weighing proposals at the same time to turn its bad bank into an investment fund. madrid will present the idea on friday where it unveils it's banking sector. investment fund would not be

subject to spanish national accounting principles when making valuations of its assets according to this report. >> our next guest thinks despite the drag on the u.s. economy caused by the eurozone crisis it's coming back and heading for a new normal. joining us now is president and ceo of the kroll bond rating agency. james, talk about this new normal you're expecting. >> good morning. you know, i think that after the crisis, before the crisis we saw many markets and structured finance, corporate issues hitting new high levels and i don't think we'll see those levels for some time but i think we're beginning to see in structured finance, and certainly in corporate issuance, a sort of a normal issuance and i think with respect to some of the areas like residential mortgage backed bonds we're going need to see more being

done with the, with the gse, fannie mae and freddie mac before we begin to see those markets come back. but i think for the other markets in the structured companies, we're returning to normal levels of issuance. >> hope by normal i hope you don't mean 2006. with this market is that period in your opinion normal or do you sort of think we'll settle in here to a different kind of issuance pattern going forward? >> i think it will be lower. that issuance was a very high issuance. interest rates were low. there was issuance at a level that was, got ahead of the credit and i think what we're seeing now with respect to a normal issuance, i think it's more credit based valuations and we're seeing a return to really fundamental credit analysis across spectrum.

>> i wonder whether mortgage backed securities or auto backed securities in some cases, where you're seeing the greatest demand and if there's any signs in either of these markets particularly autos of overheating, of conditions becoming too lax. >> we've seen that in the auto area that area came through the crisis really well. i think default levels stayed at a reasonable level. and issuance continued throughout the crisis and we continued to see those auto back securities being issued at a fairly normal rate. and right now we don't see any increase in risk one those securities. i think with respect to -- and in the commercial mortgage backed area where kroll has gotten its most tracktions tion

continue to see growth. there's refinancing coming through the next couple of years and we'll don't see that market growing. in residential mortgage backed bonds i think that we really need to see the gse come up with a plan so there's less uncertainty in the market. we got to see the gse credit lending level come down so that the private-sector can lend more and then i think we'll begin to see that market come back. right now we're seeing very little issuance in the residential mortgage backed market. >> just quickly to touch on the municipal market which has been the subject of so much debate and controversy. we haven't seen the dooms day forecast pan out. what will happen with other bankruptcy such as california going forward what will that market look like over the next 12 months? >> well continue to see these one off bankruptcy in mauler

cities and municipalities, particularly california is at risk. we may see them in other states. i don't think we'll see the wave of bankruptcy that some have predicted. there are, you know, in working on municipal bonds we've seen a number of serious public officials working these problems out across the country. they are faced with enormous difficulties. since the crisis, the 2006/2008 crisis, the public finance officials and elected officials don't see high unemployment levels, record low property valuations, a lot of these municipalities get much of their taxes based on property values, and what we're seeing is in the vast majority of those entities, whether they are at the state level or the city or county

level, you have serious people working on these issues and trying network them out. in a few instances we are going to see strategic bankruptcy but i don't think we'll see a wave of them. >> we'll have more with james in just a bit. stick around. facebook's early investor, peter thiel has sold most of his stake in the company. a filing on monday shows thiel sold over 20 million shares last week after the ipo lock up period expired. between last week and the sale of the shares prior to facebook's ipo, thiel has made about a billion dollars. facebook shares did quite well yesterday rising 5% closing at just over $20 a share. still down quite a bit over the last couple of months. >> sore judges got some facebook. his investment company had some facebook. he's been revealed as a man

chest engineer united holder. not soros first flirtation with football. he's considered a takeover of the italian cup but decided to mass on that. man u shares continue to slide. i got to tell you didn't have a good start to the season earth. they lost yesterday. they spent 20 million ponds on percy. >> i'm supposed to be following this better now that i'm over here but i guess i have a long season ahead of me. >> having the football season starting a week after the olympics finish. >> soros made a $10 million investment in facebook. maybe his stake will do better. >> no one is infallible. apple is now the world's most valuable company by market cap. it's past microsoft's mark set

during the dominant boom of 1999. if you adjust for inflation microsoft was still a valued company. apple's recent gains are fueled over speculation of the new iphone which is expected next month. the stock closed up at $665.15 on monday. it gives it a market capitalization of over $623.5 billion. which is, no small beer, kelly. >> that will buy you a couple of ipads. we want to know is this the foreign relations am, the sell side community think shares can run. where do you think the price will be in six months or even a year from today? over $1,000 or well back below? join the conversation here on "worldwide exchange" and leat u know what you think by worldwide@cnbc.com or

cnbcwex.com. plenty more coming up after the break.

you are watching "worldwide exchange". these are your headlines. spain enjoying a sharp drop in its debt cost at the latest auction of short term bills.

>> glencore says it's not a must do deal with xstrata. >> apple becomes the most valuable company by market cap. this week at "worldwide exchange" we're to discussion on the credit ratings of sovereigns that's been affect bipartisan the crys is. how much those aaa ratings in the jurz mean -- the eurozone mean to the market. >> spain has seen the yield on its benchmark sovereign debt rise to 6%. earlier we spoke david riley and he explained what he thinks investors are worried about. >> i think spain has a credibility issue and the spanish government has a credibility issue. the market doesn't, you know, really want spain to basically seek some level of assistance to maintain its access. >> all right. james is still with us. there's this sort of basis of a

plan now on the table which is ecb, you know, they are looking at openings about whether they can do unlimited bond buying to spain and italy. it would depend on spain seeking financial assistance and i guess a lot would depend on the conditionality attached to that. what's your view, though, of if that all plays out what sort of buying, what sort of room that buys us? >> i think once the issue with spain -- i mean the issue is really the infection that, you know, anything that happens in spain or even in italy or portugal the effect that it has on international banks and specifically u.s. banks and the effect it would have on the economy. so i think to the extent that the spanish situation, particularly with respect to the

banks becomes clearer and a plan is in place that the market really believes in, i think will begin to see an easing of those concerns with u.s. investors. >> james, it's interesting credit rating firms have taken on an increased role here, more visibility when it comes to rating some of these sovereigns. your own agency has tried to be an alternative to the big three but how are you fining that challenge? >> we're doing well. in the u.s. markets, we have -- we're number three in rating commercial mortgage backed securities as of july. that's behind moody's and fitch. we're beginning to get traction in the municipal market. by the end of or mid next year to the end of next year you'll see us in the corporate market as well as in europe. we don't rate, publicly rate sovereign debt.

i think there's a lot of issues surrounding what goes into rating sovereign debt and i think we believe that it's not clear the role that the rating agencies are playing versus the role that the central banks are playing. it looks in some of these cases as if the rating agencies have stopped becoming referees which is really the role of a rating agency and begun to be players in the market. they are commenting on we think spain should do this. last year with respect to the s&p and u.s. government, s&p came out and said we think they need to cut their, the deficit by $4 trillion. it really paints, puts the rating agency in a corner and makes it very difficult for the rating agency then to be on the sideline and stand back and really be a referee, which is what reading agencies are supposed to do in bond market.

evaluating that role that reading agencies play relative to the sovereigns is an important step. we'll see. it will be interesting to see how regulation, particularly in europe with respect to rating agencies and how they rate sovereign, how that plays out over the next year, year and a half. >> james nadler, thanks for your time. >> china dooms sayers have been waiting for them to slam on the brakes. mark mobius says not so fast. find out why right after this. ñc

let's take a quick look on u.s. futures. just about the same up across the board but not by a ton. dow jones implied to open 12 points higher. that follows another down monday that snapped a three day stretch of gains. >> european stocks also slightly lower yesterday. today are higher ahead of the u.s. opens. gains for the ftse 100. borrowing figures are not great for july. third percent higher for the i

beibex. spanish ten year yields hit 6.2% yesterday on a ten year higher than that today at 6.28. shares of china's oil producer cnooc slid 3%. keys first half net profit fell 19% from a year ear iler hit by operating costs. they are cutting their dividend by 40% to 15 hong kong cents. >> china wealth funds have teamed up to invest in an l and g asset in the u.s. they will invest in a plant. the energy player has been looking for funds to start building its l and g plant. asian companies have been snapping energy assets overseas to support their fast based growth at home.

>> despite concerns of a faster than expected slow down in china, mark mobius continues to sound upbeat about growth prospects and investments in the countries. he's explained in a cnbc exclusive interview. >> i just came back from china, i visited four cities in china, the interior. and what we see in china is a recovery, actually. the first half the year was slow. partly because, you know, the effects of the china's government pulling back on the property arena, tried to slow things down, quiet things down. now they have been pump priming, and we're seeing that having an effect for the second half. that, in turn will have an effect on the rest of asia because you know all of the countries in asia, their major trading partner is china not the u.s., not europe. so we see a very good situation

in asia generally. >> now, you may as well have been a bit bemused by the olympic ceremony. national health services is planning on going global under the brand health care uk. it will offer expertise and skills to countries such as india, china, brazil and the states and middle east, profits would be reinvested back into the system in britain. was the olympics the start of a global marketing campaign for nh services overseas? >> do you think danny boyle would have been that complicit in the government's push? >> or was the government saying if it's going to be, we might as well use it as a launch pad. >> nhs being beamed to billions of homes around the world. whether this will draw that much interest. in the u.s. there's joke about british health care system. there's a perception issue that

has to be confronted. >> there are precedents for this. moorefield's hospital has overseas units. certainly university in the middle east, so there's a template actually which is already out there. >> it's not just consulting, they are going to open other branchs and facilities overseas. for the british using this system if you can use it other, so many people travel. >> talking about the yen. can i get treatment in another country? i don't know. >> then that wouldn't necessarily benefit them because the cost -- in any case fascinating issue. we want to know what you think about this whole idea. do you want it in your country. e-mail us worldwide at worldwide@cnbc.com or tweet us your thoughts at cnbcwex.com. >> still to come on the for example this company supplies a key ingredient to a wide range

of industries from autos and computer chips. we'll get a check on the global economy with the ceo of globe specialty metals here next.

welcome back to "worldwide exchange". if you're just joining us i'm kelly evans. . >> i'm ross westgate. these are your headlines from around the world. . >> is confidence returning, spain enjoys a sharp drop in its debt cost at its latest auction

of short term bills as investors demand less for their money. >> apple breaks another record. it's the most valuable company. >> facebook's earliest investor logged off. sec filing shows peter thiel sold most of his stake in the company. still green arrows behind you us as we check on u.s. futures as we approach the start of the trading session there. is 11 points higher for the dow. just below the all time or the we're to date highs, 13279 setback in may for the dow jones industrials average. come over here to the s&p 500 which is expected to add a couple of points. 1417 is the level. 1419 was the high setback on

april 2nd. nasdaq is setting about a percent or so below its year-to-date highs, 2786. positive tone across the global trading session. major bourses in europe are higher. ftse adding a third of a percent. half of a percent to the central dax. even the ibex 35 adding a .35%. >> that's where we stand ahead of the u.s. open. what your supposed to do as an investor. here are some of the tips that experts have been telling us already today on cnbc. >> if you really put a gun to my head i'll say the dollar rather than sterling but it's not a major trade as far as i'm concerned but i do thing dollar versus euro absolutely. the big things you want in those commodity based currencies and anything that people can diversify into.

>> we're still positive on the tractors and potash fertilizer provoos eid providers. >> i think the more aggressive investors who want to trade better can look at construction machinery, materials which are still going to announce disappointing figures but it's been factored in. so, interesting. what's interesting we explain throughout the show despite the fact that the shanghai composite is down to a three year low, others saying this is an opportunity to trading nine times p. e. >> i like the point about indonesia. morgan stanley is cautious on

global growth yet he says look if you put a gun to my head, pick a country in asia, indonesia is one that still looks attractive. >> if we didn't put a gun to his head? i'm interested. can i get a pick without putting a gun to your head? >> certainly. >> all right. moving on globe specialty metals is one of the world's leading of silicon alloys which is used to make a variety of industrial products. the company reported fourth quarter results last night earning 12 cents a share missing analysts estimates. revenues rose 9% and shipments 18%. joining us now is jeff bradley, ceo of globe specialty metals. so, jeff, what accounted for the miss? >> well, i mean -- excuse me. our sales were up, our earnings

were up. i guess at the end. day we probably could have done a little better job with the analysts but our business is very strong, and we're very optimistic about what we're seeing. >> where in particular because silicon a key metal and in high demand but you have other units that are more exposed to some of the trial is cycle weakness we've seen around the world. >> right. so we're the lowest cost producer of silicon metal in the world. silicon end up in hundreds of things we use every day from silicone to aluminum and we're susceptible to the steel industry which has been very good in the u.s. automotive has been good. really all of our markets have been up. >> markets are up own i'm sure there's some concern out there about the demand picture going forward. talk about the regional break

down that you face and where you see stronger signs and where there's concern. >> demand is good. in fact, we've seen some of the customers in the chemical industry in the aluminum industry actually increase their business this quarter and going into the end the year. again, when we break down our businesses, our silicone business which goes into hundreds of products we use every day is good, and the outlook is good. we do a lot with the automotive industry, about 40% of the silicone metal end up in aluminum and most of that end up in auto. auto is one track in the u.s. to build 14 million units. and solar. solar has gotten a bad rap. the outlook for solar is excellent. as we look back over the past two to three quarters, all of the forecasts for solar have been beat. so, you know, we're optimistic about that as well.

>> one reason you're doing well you call yourself the lower cost producer. how do you maintain that edge? how can you lower your costs and protect your margins further? >> right. when you look at our costs, about 75% of our costs are raw materials and power. we're the only 100% vertically integrated silicon company in the world. we own quartz mines. we own specialty coal. we chip our own wood and make our own electrodes. we're fanatical about costs. we're very lean. on the power side of things we have good long term low cost power contracts. when you couple the power c contracts with verticals it's good. >> you guys have operations in alabama and upstate new york so do you still see those parts of

the u.s. and are there any more parts of the u.s. that you would expect to be low cost producers and it's interesting you still have that cost base there instead of less expensive parts of the world. >> no. i mean the cost at every one of our plants is different. a lot has do with transportation. when you look at the process to make silicone metal it takes about six and a half tons of cool and wood chips to make silicone metal. transportation is very important. it's key to be close to the raw materials whan look at the raw materials, our coal is in the central part of the u.s., quartz tends to be in the southern part of the u.s., we're using more and more rail. so at the end of the day, i mean when you aggregate everything, we're lowest cost as a company and certain plants are a little bit less than others. >> jeff, just going back to this point about silicone versus some

of the other industries you're exposed to, is there any plan to focus more and more on kind of the silicone production aspect of the business trying to move away from some of the other industries which may have more cyclical headwinds? >> we have the silicone business. you know, we're now the only producer, only merchant producer in north america. again, when you look at the markets we serve, when you look at the silicones market, silicone grow at a gdp rate. really where you have a lot of growth is in emerging markets. markets like china and india and as the middle class develops and people have more money, they go out and buy more things whether a lady for the first time buying a jar of face cream or a car or an ipad, silicones are every where. aluminum business is very good for us. globally automotive is growing.

u.s. automotive is growing. the content of aluminum is increasing in cars and trucks as well. that's a good business. as i said solar. solar is a very good business for us. outlook for solar in the next three to five years is excellent. >> jeff bradley ceo of globe specialty metals. thanks four time. >> still to come on the program, the dutch belong to an increasingly elite group of aaa rated nations in europe. will the country be shown the door if debt goes persist? that's coming up.

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this is the pursuit of perfection. so apple has become the world's most valuable company in history by a market cap. they are closing at 665 bucks on the new york trade, up 2.6292. we should put more digits in the percent jags. you can see the change in the last five years, up 544%. you didn't have to get in five years to get this move. if you got in just on january 1. show you this year's start as well up some 60%. year-to-date up 64%. so, done pretty well on the back of apple. question is, is that it, kelly >> it's remarkable run but sparking a lot of debate. we've been asking for your

predictions for where apple will go. the sell side community thinks higher. so does george who tweets in from germany saying apple will hit $1,000 per share by the end the year. nevertheless terry says this is a quality company and the dot-com era was a bunch of companies that had no earnings. yet another viewer says i believe apple's stock will crash when they can't stop all the competition by court means a reference, the apple/samsung trial that's ongoing among others. if you want to weigh in on that join the conversation here on "worldwide exchange," get in couch with us by e-mail at worldwide@cnbc.com or tweet us at cnbcwex.com. actually staying with apple as we mentioned closing arguments are set for today in the trial over the patent dispute between apple and samsung. apple accuses samsung of copy

designs. features of iphone and ipad. samsung said it infringed on its key wireless technology. >> rushling. if you just joined us here's a recap of your headlines. spain then enjoyed a sharp drop in its debt cost. sec filing shows one of facebook's earliest investors peter thiel sold most of his stake in the company. we've just been talking about apple's broken another record becoming the world's most valuable company ever. well all week we're focusing on the credit ratings in the eurozone and how they have been affected by the crisis. today we're looking at the netherlands. silvia wadhwa joins us now from frankfurt where she's been speaking to the leader of the dutch socialist party and how

focused is he on maintaining that aaa status? >> they would like to maintain that aaa status. they may have different ideas how to do that than the previous government because what we see is kind. mood swing that you've seen in many of these european countries. you've seen it within france. we see it with the opposition at least in germany that's getting a bit more traction. this shift away from only austerity and standing side-by-side at least with the idea that growth needs to be stimulated where nobody has an idea is where to get the money from to stimulate growth and i'm afraid the leader of the dutch socialist didn't really tell me where to get the money from either, but he did say we have to get to a point where europeans, the eurozone cooperates more and doesn't set itself against each other. here's what he said. >> translator: the big problem

in the past year is that european collaboration has transformed into competition. control of certain countries has been given to a technocratic stoox which is why people have expressed their opinion saying it's going too fast and europe is not moving in the direction they want noift in. this has graetd gap among europe's population. >> he also said over my dead body when asked whether he would for the dutch budget back into the criteria at the cost of slowing down the economy. he could have put that into perspective later on but we get the drift of it. if they win the elections which it likes at the moment then we do see a shift as we've seen in france and certainly in terms of the focus austerity versus growth. >> thanks for that. may support growth but the question does that throw a wrench into the broader, you

know -- more broadly uniform with the eurozone. still to come on the program, what your small local neighborhood bank thinks about the state of the u.s. economy. we'll discuss the results of a recent survey. that's coming up next.

welcome back to the program. let's take a quick look at what's on the agenda today in the u.s.. no economic data but atlanta fed president is speak at 8:00 a.m. in about an hour or two-time. look for results before the open from medtronic, best buy, barnes and noble. after the close we'll hear from analog devices, dell n-at any time and la-z-boy.

dow jones implied to open higher by 10 pints, 13,255. dow, nasdaq and s&p setting a percent below their 2012 highs. yesterday's declines broke a stretch of gains. >> we have response from citigroup. rejecting calls for big banks to be split up. in an interview, he said citi is already back to the basics of banking. aside from some global market businesses the firm has sold most of the units from 1998 merger of citicorp and travellers. citi is now going to generate most its business from emerging markets. new study from the san francisco fed finds u.s. banks are reluctant lend to people with less than consistentstella

histories. how do small banks feel about the state of the economy. chief economist joins us now. thanks for getting up to join us. it sounds like the small local banks are getting more cautious on the state of the economy. >> absolutely. they are getting more cautious. we scene i want out to community banks and our respondents tend to be bank with asset sizes below 10 billion. truly community banks. we get a response from about 9% of the bank population. last quarter survey one of the things we saw was a drop in sce sentiment. we saw 30-point drop. that's important to community banks because the way they make money is by a spread on long

assets versus short liabilities and so when you have a flat yield curve or low interest rate it's a tough environment. for them when they look out at the horizon and see a tough economic outlook, it means there's going to be, that the profits will be stressed going forward, their margin will be compressed. tough environment for them right now. >> craig, i note in your survey less optimistic about loan growth. is that down to that economic outlook or are there other factors like regulatory changes impacting them? >> well, i think regulatory issues are certainly a challenge for them. i think on the one hand we try provided a market where there's easy credit, where rates are low and where, where consumers or businesses want to access credit. on the other hand we're trying ratchet up our lending guidelines and reduce our credit risk. that's one of the thing that's weighing -- one of the things we get out of the survey and where we like to do it because it's

largely based on what the loan officers are seeing in the branches. community banks that's where the small business lending occurs, a good amount of household lending and we get a good flavor for what's going on the ground on a real-time basis. as it relates to what we're seeing from the loan officers they say their loan pipelines aren't as robust as they would like. >> how does that lay into your investment calls? >> well, you know, it reiterates the fact that we're in a tough economy right now and even -- since the end. recession we've had -- since the recession has ended we had $1 trillion of fiscal stimulus, interest rates at zero and the average rate of growth has been 2.4%. so when you take way those stimulus measures if you can no longer do stimulus and you look at the fed and say perhaps their

monetary policies, their monetary objectives are less efficient now, then where does that leave the economy? and so we look out there and we see that it looks like growth will don't weak going forward. we're calling for 2% type gdp growth in the future and i think the survey reiterates that and makes for a tough environment. so we like fixed income. we continue to say we like fixed income as it relates to other asset classes but, again, it makes for a tough environment going forward. >> craig, chief economic strategist as vining sparks. >> that's where the economy starts is at the ground. that's it for today's "worldwide exchange". coming up next -- >> "squawk box". don't miss it. >> but for us right now,

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good morning, everybody. apple makes history once again. becoming the most valuable stock ever traded. facebook's earliest investor cashing out, unloading 20 million shares right after the first lockup. more are americans are expected to hit the road labor day weekend despite the sluggish economy. it's tuesday, august 21, 2012. "squawk box" begins right now. good morning. welcome to "squawk box" here on cnbc. i'm andrew ross sorkin along with becky quick. joe kernen has the day off today. apple now