well on to worldwide exchange. these are your headlines from around the world. shares in the uk retailer tank dragging the sector lower after it warns that full year profits gets hit by multiple downgrades. and it will go ahead with its ruling on the rescue fund tomorrow despite last minute complaints. deutsche bank gets ready to you been veil a strategic overhaul as the new men at the helm seek to cut costs. and the debt crisis isn't ov over, and they address the other big worry, the country's slowdown.

ross is taking a break after spending his days on the shores. i enjoy seeing the images from it that shot. although it would have been nice to be down there. but maybe we can bring the show to lake como next year. >> you have to earn that. >> exactly. coming up, we'll head to frankfurt where we take a look at the future of deutsche bank as banks around the world continue to seek to deleverage. and then it's on to the world economic forum, sometimes calmed the summer. and the prime minister spoke

about the possibility of a fully fledged bailout. we'll also head to washington where the u.s. go. no longer a majority stake holder in aig. a sign the country may be emerging from the shadow of 2008. burberry shares trading lower. down 18.5% after the company warped full year profits will be at the lower end of market forecasts. in a statement the luxury goods maker blamed slowing store sales on the challenging external environment. burberry is expected to pose pretax profits. remarkable. we have seen competent it tors similarly cautioning about slowing trends lately, but as you can see, across the sector, down will in the range of 3%, 4%

after burberry warns and are more cutting the outlook for the company. >> and it does seem like a big move to the down side for what's not a very dramatic statement. i mean, they were saying that their store based sales are going to be the bottom end of market expectations. they said chinese stores showed a slowdown, anytime they talk about the chinese business slowing down, it does have a big imapact on the stock. this appears to have happened in the first quarter and it's a concern that this is happening in a more determined way through to the second quarter, projection longer term. >> how many times have we seen companies with single digit sales growth or sales declines i don't have set by double digit figures out of asia and china.

it really indicates a pre-pricing of values for a lot of these companies. so we'll keep an and i on those shares. and also as we move towards the u.s. session, coach and tiffany. but meantime cost cuts, bonus changes and bolstering the balance sheet are all part of deutsche bank's new strategy to be outlined by the co-heads of germany's largest lender later today. patricia has that detail coming up with one of the co-ceos from the company. patricia, give us a sense right now of what we might hear from deutsche bank. what's at stake for this company? >> well, there has been quite a bit at stake for deutsche bank, but for the entire banking sector, of course. so something needs to be done. and today is a hugely important day for deutsche bank fch some

speculate this could be the biggest rebound since 2004. so the focus will be how to reduce costs by 3 billion euros until 2014. we can hear speculation that it may not be enough, that more needs to be let go of. most of it in the investment banking part. so there are a couple of issues. assuming when it comes to basel iii capital requirements, it is the least capitalized. we are standing at core tier one. forward looking analysts say this capital base could be

reduced to about 7.2%, which would be again a bit low. >> how much pressure are these co-ceos under? what do you expect to hear or what questions will you put to jamie when he sit down with him later? >> i think they're under quite a bit of pressure. 100 days in the job, shareholders really want to know how do you create shareholder value for us, look at the share price. trading at about one-third of the about $119 shares back in 2007. we've kind of doubled since the low seen in 2009 trading around $31, $32 euros a share, but what i really want to know is basically whether this long term change in deutsche bank's banking model will ever really bring us this kind of profitability we've seen of 25%, more than 25% in the pretax return on equity. so that is one of the issues.

and of course i would like to know a little bit more on the entire integrity and the reputation part of the deutsche bank, what about trust in banks and whether they have planned on the eurozone debt level, at the ecb, also on the eurozone debt crisis, what they do in order to really help to re-establish trust in the sector itself. so watch out for that interview. i'll be interviewing andrew jane here first here on cnbc. >> thanks so much for following all of this for us this morning. >> interesting to see how it translates on to the sector as a whole. it doesn't feel like the banking sector globally has changed enough to reflect the seismic changes that have gone on in in the financial community. you may have expected to come back if you've been away for the past five years and see a very different banking sector.

but it doesn't feel like that's the case. maybe we'll start to get some kind of indication with changes like this, how they see the long term horizon. >> and let's bring into the discussion, reporter for the "wall street journal," and with us for the hour, chief economist at the bank of singapore. david, first to you, welcome. what two they say to invest tours? >> i don't think anything will persuade them that this is a completely different investing case. they're under enormous amount of pressure to raise capital. i don't think we'll see a major ground swell there. there's a lot of pressure to talk about culture and compensation and things like that, but the reality is all of this is just lip service until you actually see years from how what's really changed. this is stuff that happened several years ago that are now still grappling with today. but not a whole lot that will

convince people that deutsche bank gets it. >> there's a accepts there needs to be more of a seismic change or seismic shift, but what's really going to be the catalyst for that. >> i think there are an yi nor mus amount of regulatory pressures and it's perceived they're undercapitalized. all the indications we're getting is that there is not-winot - not ---they don't see the case for raci raising cap externally. >> i'd like to pose that question to the guests.

it seems on one side we're trying to reduce risky assets, but the definition of what is risky has been placed on if you have enough capital in your bank, you can be as risky as you want. and that would not necessarily change the fundamental setup of how banks operate, would it. >> i think one of the main ways that the banks have been trying to improve their capital ratios is by tinkering with the definition of how they calculate assets that's widely perceived as arbitrary means of improving financial cushions. and that's something that's not just a deutsche bank problem. it's a problem across the european banking sector as a whole. >> richard, how deep do problems run in the banking sector and what kind of change if any is required at this point?

>> i think we saw the previous ten years financial sector just grew to really unrealistic levels. you're mean reverting on the return of equity that you can easily expect. you must be doing something out there which is just way detached from regular prudent banking business. and i think those days are long gone because they'll be imposing much tighter risk controls. the whole industry is right sizing. >> i have a question with regards to the european and banking supervision about it that is laid upon the ecb going forward, will it ever change really the possibility that we will ever have to face again cases like libor fixing, or huge trading losses such as ubs?

>> i don't think any amount of regulatory change will prevent us from having major scandals in the future. there have been a million different regulatory changes. it turns out that having giant financial institutions racing against each other to makes a much money as possible is a recipe for having scandals. >> i think we'll leave it at that. thanks very much for coming by and patricia, thanks for braving the rain. we'll see you throughout the day. and richard of course will stay with us for the rest of the hour. just a few headlines we want to share with you. from the finish prime minister speaking in spain, he is saying that spain deserves lower interest rates considering the measures that have been taken by that country and that no party in the finish parliament wants to leave the euro, but also says

he would like to avoid further bailouts. this comes as there is a rejection of a new legal challenge and decided not to postpone it verdict on the esm. the vote on the a 5 00 euro bailout scheme will now go ahead tomorrow as scheduled. meanwhile angela merkel has gained support on for her stunt amid allegations the scheme could be illegal. european decision makers will request reasonable conditions. that's according to spanish prime minister rajoy. let's go to stefan in madrid. >> no additional conditions is

what rajoy is expecting from european leaders. unfortunately the interview yesterday brought nothing new to the bailout question. rajoy didn't say clearly spain was requesting to request a bail skrout. he explained he would like first to assess the conditionality, but not only, listen to what he said in the television interview. >> translator: going to evaluate whether it's convenient at this moment to ask for a bailout following the ecb's announcement, going to look at whether it's really necessary to ask for aid and under which conditions. only after that will we make a decision. it's not something that we're going to take lightly. >> rajoy said for instance that it would not like to be told where to cut public spending. he doesn't want to reduce the level of pension that was a promise from his electoral campaign and that would be

embarrassing for his political party if he would cancel that promise because they're facing election very soon in the north of spain and also in terms of time frame, rajoy saying the decision will be before the new ecofin meeting at the he end of this week. over to the purple ladies. >> and i think the tie there that you're wearing matches us, as well. i don't know what it is in the water. but takit is a purple day. stefa stefane, thanks. i want to get a shout frthought richard. it seems that we're engaged in a game of brinkmanship between the spanish leadership and pretty much the rest of the world at this point as we a wait the ecb to move forward perhaps on its activation of this program. will spain need to request a bailout in do you think markets will push yields back higher if they don't appear to be doing

so? >> it's a vicious circle or a virtuous one. if you have the great confidence that it's not necessary that the event cb, backdrop yields come down, but as soon as they show some signs of backing off, then the whole thing gets worse again. you ask what is the cost of spain agreeing to this. they've already have in play many of the things that the ecb and esm would be looking for. so anything incremental is probably fairly low cost. and in greece, they probably don't have to fall through on it anyway, so i think they could sign up quite happily and probably benefit from lowering borrowing costs if they did that. >> politics seems like it will get in the way. >> yeah, it's a bit embarrassing to go outside the country cap in hand and try to get some support unless it really is necessary. they have another three years or so before there's another election. so if you are going to take

these measures, take your medicine and try to clear things up before the next election. so i think they're fairly well placed to try to structure some sort of agreement. >> stay with us. want to just briefly mention this rather interesting flash that we're getting from germany's finance minister who is saying there is great uncertainty about how the united states will deal with its high debt levels. that may be the case. perhaps deflecting some attention there back to the u.s. certainly it's getting its fair share of attention in the u.s. during campaign season, but nevertheless an interesting comment from the finance minister this morning. let's check in on the equity markets. we've mentioned some of the big decliners in the luxury goods place after burberry came out with a statement talking about slowing growth in the most recent quarter. overall markets are down by just about half of 1%. that's the stoxx 600, so it gives you a pretty good view of the region as a whole. specifically the ftse 100 moving

lower by 0.35%. the ibex is suffering to the tune of about 1.25%. in fact we put it in twice just to make sure you pay attention. in the bond markets, the ten year germany bund at 1.53%. yields in spap ain are still of course elevated, and italy 5.23%. and in the uk, the ten year lower 1.75. and on the legality of the esm, we also do have the election in the netherlands, as well. we're currently at the level of 127.86, euro just up by 0.2%

against the dollar. dollar-yen at 78.21. aussie drar bringing back some ground today after falling yesterday. in the asian markets,doll small gains coming through. but let's check in with more detail across the region in singapore. >> quite a bit of a selldown here in asia, although we did see pockets of resistance as you highlighted. and also just a short time ago, we actually got data coming out from china. in fact just about a day earlier, coming in slightly below expectations, plus 13.5%. expectation was plus 14%.

yuan lending slightly higher than expected. these figures are quite interesting because remember we had august bank lend figures that boomed way past expectations. the figure in dollar terms coming in somewhere around $111 billion. so i think that the fact money supply growth came in slightly below expectations, probably puts beijing somewhere in the middle ground in temps of easing. take a look at the market activity. the hang seng did manage a reverse only in the late session. and china also raised diesel and gasoline prices by about 6%. if you also include what they did this august, that means that deis diesel and gasoline have shot up about 10%. yes, we've talked about the weird pricing mechanism and how the power new england companies are never in the business to make money, but ultimately if you have a 10% hike inin the

past couple of months, that does help some of the power and energy companies. so that's actually why the reverse here. shanghai composite down about two-thirds of a percent. some of the infrastructure plays have not fared well and part of the reason is several brokerages in greater china are casting a little bit of doubt as to whether there will be follow-through action as far as that $150 billion infrastructure plan is concerned. a lot of expectations. remember the bank of korea meets on thursday. already a lot of people are pricing in 25 basis point rate cut which will bring rates down to 2.75%. the nikkei down 0.7. india pretty much flat lining. so hanging on to a small green. and australia it not really reacting to the record jump in iron ore prices. so it looks like the market is falling more on the down side befo. back to you.

>> chloe cho for us in singapore following all of that market action in asia. meanwhile facebook ceo mark zuckerberg will give his much anticipated first interview post the company's may ipo today. he'll be speaking at 5:00 eastern at the tech crunch disrupter's conference. zuckerberg is expected to touch on the expansion of mobile and growth into new growth areas. but take a look at shares. something in the range of 50% down from that listing price. what we want to know is what do investors want to hear from zuckerberg, what can he say to help turn the company's prospects around in terms of the share price. let us know, respond to that or anything else you've heard on the program. worldwide@cnbc.com. of course you can also tweet us @cnbcwex or reach us directly, kelly underscore evans or @beccymeehan.

don't give up on the euro says the imf. but will investors heed the fund's call? we'll discuss.

schaeuble isn't one to mince words and he's out talking about the future of the euro and the united states. some of the news flashes include him saying that the cooling of the german economy is partly a normalization, the central bank independence has to be respected, that a significant rise in german unemployment is unlikely. and he makes a couple comments about the u.s. saying there's great uncertainty about how the u.s. will deal with the high debt levels that it putting pressure on the world economy. also of interest is that he's saying the source of the eurozone crisis is bad policies and member states. there are people who feel perhaps a little differently, think germany has played more of a role in imbalances.

if there's anything else, we'll bring it to you. and the region needs to keep it faith in a single currency, this according to the deputy managing director. he told a world economic forum meeting that the euro was safe and says the if you said strongly supports the ecb new bond buying program, adding it's vital for the world to be confident on the world's ability to get its economy back on track. the world economic forum sixth annual meeting kicked off in the northern port city came t. today. bernie low has all the highlights in this reporter sent us. >> china really took a lot of the attention.

concerns about a wlum bettering united states economy and who know what is will happen in europe and you can understand why there's several hot spots of concern. one of the leading industrials was the head of nissan worried about china and to a certain extent, but not so much for economic reasons, but because of sovereignty claims between japan and the prc. >> it's a worrying situation. anything which is taking place between two countries which have everything to complement each other and to work together, everything that could become a threat into distorting the relationship is worrying obviously for a major economy. i still think that hopefully wisdom will try to resolve the issues, but you never know. >> and setting asided china, what about the u.s. economy. people there tonight have enough household savings. how could they possibly support a company like nissan.

surprisingly, he says america not a problem. it's the other side of the atlantic. >> our worry is not the u.s. market. u.s. market is going fine. today our worry of most companies in europe, this is where most trouble are coming because just to give you a summary, first accept months, global market for car was up 7%, while in europe, down 7%. so we're watching growth everywhere in the world except for europe. >> and that will do it for day one of the world economic forum. i'm bernie lo. coming up on "worldwide exchange" tomorrow, we'll catch up with a former leading adviser to the people's bank of china, the central bank of the country and now a renowned economist. >> all the more reason to tune in tomorrow.

and just a quick programming note. well also be following chinese premiere wen's speech at 11:10 central european time. still to come, european internal markets commissioner gives cnbc his take on the basel iii rules. we'll have full details. ñw bob... oh, hey alex. just picking up some, brochures, posters copies of my acceptance speech. great! it's always good to have a backup plan, in case i get hit by a meteor. wow, your hair looks great. didn't realize they did photoshop here. hey, good call on those mugs. can't let 'em see what you're drinking. you know, i'm glad we're both running a nice, clean race. no need to get nasty. here's your "honk if you had an affair with taylor" yard sign. looks good. [ male announcer ] fedex office. now save 50% on banners.

shares in burberry drag the sector lower and multiple down glads fr grades from the street. and the constitutional court will go ahead on its vote on the rescue tomorrow. and the new man at the helm seek to cut costs and shore up capital. >> a bit of breaking news for you. the trade deficit figures are out for july showing it actually narrowed more than expected. oil and diamond trade also helping. the figure coming in at 7.149 billion pounds.

more narrow than anticipated. sterling already up, but trading a little higher, 160.22. so sterling pushing up against the dollar by gist over 0.2%. let's look around the rest of the european markets, as well, starting with a look at the equity markets. the ftse down by 1.4%, dax down by 0.3%. ibex down by just shy of 1.6%. >> spain moving back up toward the 7% level. italy moving higher, as well. we're seeing a little bit of move there after the sharp rally. ten year gilts, lower. investors kind of rotating back

into quality this morning. >> money supply in china rose 13.5% in august, below estimates for 14% gain. the m2 measure also comes in below last month's pre-debt. >> and could i sneeze bank lending ramped up sharply in august. it opens the new credit will give the economy a much needed lift. analysts cited new infrastructure spending and reels say ttate development for rise, but pointed out corporate loans remain weak. let's get back out to the richard. doed fuss z take eed the figure sting out is this. >> no i think they expect more stimulus, but there are some signs p. you're getting a gradual impact

from the measures earlier in the year. they've cut reserve requirements and you're seeing a slow pick up in lending. there's alsos the suggestion that this lending may be associated with some of the investment projects that they've been trying to accelerate in the last two or three months of getting to come on stream. >> when should we expect to see corporate lending pick up? because that is the crucial test. >> i think that's right. you need to see signs that it's not just the government out there, standard fiscal stimulus propping things up. realistically the corporate sector come behind the government related money. so maybe in the fourth quarter, maybe first quarter of next year. i think that's a huge problem. the growing signs that the policymakers care about this and they're doing something about it is a bit of a reassurance because the economic data has been probably softer than we'd

have hoped in the past lee to six months. >> we'll take a look at what else is happening in asia in a couple minutes after some japan figures out this morning. in the meantime, european internal markets commissioner has backed basel iii banking rules as the most effective way of preventing a future banking crisis. ross asked him if it was important for all financial institutions whatever their size to be regulated the same way. >> translator: we look at the situation and current problems, it is the systemic banks that pose the problems. therefore for a single supervision to be effective and credible, it must have the right to look at each of these situations at each bank, but it should not occupy itself with the daily running of the banks. so there will be a common framework which i will call guidelines unique to the supervision which will concern

the 27 countries from having extremely strict integration in the eurozone. don't get coffin fused between supervision and regulation. and in this framework of guidelines, national supervision will have a great responsibility. a huge role. and there are a number of things that wouldn't go up the chain to frankfurt. >> certainly german circles, they don't want to have necessarily the ecb in charge of their savings banks. >> translator: germany have supported this proposition for sole supervision, concern that it must be credible and effective and in order to be credible and effective, i think the supervisory authority has to have the right to look at the situation of all of the banks that it this is necessary. but of course within this framework and this is what we're saying, the national supervisor in germany as in other cups will

retain a very significant responsibility. >> interesting continuing to get comments about the possibility of the banking unit feels like more like dragging ourselves kicking and screaming to the kind of union required to make the euro work. a long wlag g lag in these move. we don't have the cover anymore. >> talking about the implications for democracy. but nevertheless, they'll have to catch up. so in that way, if you take a long term view, you can see how the crisis has been a catalyst for more activity. and just for those wondering why all the focus on this banking union issue, jpmorgan future well. they're saying banking union is being scenes as stage one and

ultimately in terms of the next integrated phase of the european union. that said, they're concerned the time frame that people expect this to be in place by which is basically january 1 is far too aggressive and politics could get in the way. >> and various institutions with the integration project, you have the democratic testify sit between them and then you get more discontent on various parts of the electorate. we keep buying time. so maybe it all works out in the end. investors bracing for a triple rally tomorrow with the german constitutional court ruling on the esm. ahead of that vote, the latest polls reveal a neck and neck race. the leader of the pro austerity liberal party and the opposition labor party would each win 35 seats in the 150 seat parliament

according to the latest poll published over the weekend. both parties considered pro ire pea an, though. >> i hope everybody in the netherlands realize what is at stake. our future. and especially the role the netherlands want to play in europe and how we can come out of the crisis in europe. and of course can debt also. >> one of just the many things going on probably that has been overlooked a little bit as people focus so much on the european central bank's activities on the fed and meetings. . >> it's interesting because it's really symptomatic about discontent about austerity, but from a country that's not really struggling will economically. so it's not just a knee jerk reaction to trouble at home.

it underlines discontent that people have with the way european project is shaping up. >> and i want to mention, too, earlier when we were talking to richard, commented about how confidence in japan had weakened unexpectedly. it wasn't japan. japan showing signs of optimism, so to clarify that before we get into this discussion. >> let's figure out what's going on in the rest of the world. a fresh government survey says larger firms expect better economic conditions in the months ahead. the survey didn't give reasons for the months ahead, but it did calm fears about the impact of the crisis. the end of the mining boom is raising business confidence. national australia bank's official confidence index in august took back most of its

gains from july falling five points. the drop in commodity prices was a key factor. business conditions show improvement thanks in part to high profits and better job conditions. >> so richard, help will us make sense of all of this. you have weakening sentiment in australia, a pick up in japan. what to you is the most significant piece of news this morning is this. >> probably there are real worries in japan that the whole thing is sliding down into oblivion again. politics is a total mess. the yen is very uncompetitive 37 china struggling, then what has been a big export market for them is going to be tough. so moderate improvement is a good sign because there are plenty of indicators that suggest that they should be less optimistic rather than more optimistic. >> people often kind of look at

the internal domestic dynamics, but export growth still incredibly important. >> yeah, if you look at the internal dynamics, basically there aren't any. so all of the dynamics for the growth of the system has to be coming from the export cycle. either the exchange rate shoots in the wrong direction or if the big markets begin to struggle 37 and obviously you can't expect very much out of the u.s. or europe if you're a japanese exporter. if china is struggling, as well, and the data we had yesterday suggesting that imports really quite weak, then you have a tremendous problem because you don't though where the growth will be coming from. >> is there anything from that point of view given australia is demonstrating some of the same symptom, though, perhaps has stronger internal fundamentals would you argue or make the case for an australia over a japan given japan is so overly reliant on exports or are they both

vulnerable here? >> i think both are rather overvalued exchange rates. but i think you can justify it a little more easily in australia in that it is still very hard after multiyear commodity driven boom. looks vulnerable in a trade sense if china slows down a lot of commodity prices weaken from here. coming in from a relatively speaking position of strength. financial system seems to this be fairly good condition, as well. >> okay, richard, thanks for your thoughts. stay with us. we'll have a bit more after this. still to come on the show, well tell you why india and china are serious about hiking fuel prices.

mark zuckerberg will give his enter interview after the may ipo. he's speaking at 5:00 p.m. at the tech crunch disrupters conference. he's expected to touch on growth

into new revenue area. shares are town in the range of 50% since the company went public. joe has tweeted saying zuckerberg needs to give actual day take and future plans for mobile. chris says the fact you asked for comments on twitter or facebook kind of says it all. nevertheless, we can it ask on twitter and that itself is quite telling. the largest entrepreneur festival kicks off next week and we're showing some of the up and comers attending this year. ross caught up with will king who founded king of shade almost 20 years ago.

how the uk can create environment which fosters on a entrepreneurship despite risks. >> with are a tore failure thorks problem at all. only successful people fail and they need to have a context of what success looks like. secondly, there's a lot of money and wealth in silicon valley and surprisingly a lot of hot businesses come out of there and i think what the uk government needs to look at is the whole environment for entrepreneurial start up people with regard to even dealing with the v.a.t. and tax and the employment regulation and the red tape when all they want to get on and do is built the next angry birds app that may turn into a movie and license and comic book series or whatever it may be and not worry about all of the stuff that slows you down when h

momentum is so critical. >> we're trying to do this this sort of old street area in lon can ton. does it make sense? >> i think it could work, but it needs to be done on a sub tap difference basis. i find it strange when it's described as slick and roundabout. i mean, it just doesn't resonate silicon valley. roundabouts just go around and around sadly. >> i guess what is key -- people starting out get a lot of help. >> i think it's critical. a wing man's wing man.

and he's trying to take his brand into a consumer facing lifestyle performance, technology position. and his vision is to be the next virgin. clearly he's 25, he's out of the yifrt a k university a couple years, just launched his range of clothing, super fly by wing man. who knows where that brand can go into and what product set. of course he naeds a bit of help and experience and guidance. maybe will get it right, but probably will get it wrong again, but most times will get it right. and that's imperative starting out. of course you need the guidance of somebody who has seen it and been there and done it and can stop you making really mission critical mistakes that fly your plane into the ground.

>> will you you stay will the company always or how big can you maim make it in. >> it's an interesting time for us. we're launching a hash tag high performance product next year and i look at the mobile phone, smartphone sector, changed beyond recognition in just five years. it's all about performance, all about high performance. we're one of only three in the space and if we nail an amazing product and we've been working on one for four years now to be launched, the sky's the limit. but it's high risk, high reward, cutting edge business. >> interesting chat there from a well groomed guy as you might expect. no 5:00 shadow. >> ross or will? >> both actually. i think ross wanted to make sure he was also well groomed for the interview. >> i've never seen ross anything

other than perfectly well groomed. i can't imagine him in his jeans on the weekend. >> i do think he had a personal interest in that piece. in any case, we get to give him a hard it time when he's not here. for the second time now in a month, china is hiking fuel prices. we'll get into that discussion here as soon as we get our guest. but in the meantime, let's get back out to richard for a couple of final thoughts as we step back and look at the global economy. we've talked with europe. we just discussed japan and talking about asia more broadly. but emerging economies, is there a sense this time around that the developing world will be able to power ahead even as western economies continue to lose their footing? >> i don't know what you mean this time around. if you look over the past four years, industrial production across asia is up 50% from the lows of 2009, the rest of the world's been struggling. so i think there is the internal

dinae dinah nichl to do this. so i think it's and he bit difficult to put the developing world in one box.ie dinah nichl. so i think it's and he bit difficult to put the developing world in one box.e dinah nichl . so i think it's and he bit difficult to put the developing world in one box.dinah nichl to. so i think it's and he bit difficult to put the developing world in one box. i think people have figured out there's a structural story there. so the equity market looks expensive and the bond market, as well. i think the difficulty vael even when you find a good story, there's so much liquidity in the world chasing any good story, it's really hard to find value. >> in the context as we a wait these kind of critical es theve

this week, are you saying wait until we get these hurdles or can you afford to do that given it's really not just this week, it's frankly going forward that we're going to have over and over again concerns whether europe is moving forward or falling behind with regard to it integration? >> yeah, i don't think you can focus on any single event. you start talking about elections in italy or germany for that matter, the message is you have to engage risk because you you get less than nothing on cash after inflation, so you have to engage risk. but because of all of the big tail risk problems out there, we're trying to encourage people be realistic, look to mid to high single digit return, look for a bit of protection because volatility is cheap. and just don't be too aggressive out there. so i think people are finding it very hard to make a decent return in this sort of world. >> richard, we appreciate your

time this morning. coming up, we'll talk with a guest who says it may be time to cash in on credit depaul swaps. bob... oh, hey alex. just picking up some, brochures, posters copies of my acceptance speech. great! it's always good to have a backup plan, in case i get hit by a meteor. wow, your hair looks great. didn't realize they did photoshop here. hey, good call on those mugs. can't let 'em see what you're drinking. you know, i'm glad we're both running a nice, clean race. no need to get nasty. here's your "honk if you had an affair with taylor" yard sign.

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welcome back to "worldwide exchange." these are your headlines from around the world. burberry in the trefrnls. shares tank dragging the sector lower after it warns that full year profit and multiple downgrades from the street. and they will go ahead with the ruling on the rescue fund tomorrow despite last minute complaint. and deutsche bank's new man at the helm seeks to cut costs and shore up capital. and the imf tells the world forum that the debt crisis isn't over urging faith in the euro as wen gets set to address worry of

his country's slowdown. good morning to the viewers just tuning in. the dow jones industrial average implied to open higher by about 16 points. so not a major move. nasdaq, s&p 500 also looking to add a couple of points. muted gains following a session where we've really rely seen choppy activity. take a look at the cnbc ftse global 300. we've been up, lower. it looks far more volatile than it's felt. burberry weighing on after warning of its outlook. cac 40 down a third of a percent.

retail weighing on the broader performance. even the ibex 35 showing weakness, down 1.2%. >> feels like in the same pattern of yesterday. markets trading a little lower. still waiting for some really crucial events for the week. in the bond markets, we he do see yields in germany moving lower. a bit of a flight to safety, i suppose. the bund at 1.525%. a quick look at the uk bond markets, the gilt ten year debt 1.733%. let's move on and take a look at what's going on in the

information rest space. previous government fell apart around austerity. euro up by 0.# 4% against the dollar. so just pushing above the 128 handle. dollar-yen 78.02. the aussie dollar gaining back a good bit of ground today having dipped yesterday on concerns about chinese growth. today moving up by about half a% or so. and sterling shifting a little higher, too. we have the trade deficit data at narrower than expected, 106.22. so pushing up by 0.2% sending sterling further over that 1.60 level. let's alsos look at what's going on across asia.

let's see what's driving markets across the region with chloe cho in singapore. >> certainly a lot of uneasiness about what the german constitutional court will do and also about the fed action, as well. remember, we he did get more data out of china. i think the take away is that the broadest gauge of liquidity in china, lending looking mixed, dampening hopes that maybe beijing's policy position could be more proactive. remember, this was especially after august lending figures blew past expectations. i don't think more easing will company. remember we talked about the price increases in tee sell and

gasoline. if you kaunt what they did in august, ultimately a 10% price hike. cyclicals weighing the market. and there's a bank of korea rate decision on thursday. iron ore prices a big jump that we saw overnight that didn't help the australian market. india managing to hang on to a small gain. back to you. >> thanks very much. becky has been here in rosss's place as he takes a break. but it's felt a little quiet while you're here. everyone's waiting for september dwell et. a twel et and the mentality is wait and see. >> it seems like for some time now we've been waiting for a big

event to try to get a handle on which direction the eurozone for instance goes in next. and every time we have a big event, we get through it, but not any real clarity. >> only to put information more events on the calendar. >> interesting question will be what the market creation is when we do get through the next couple of events. will we get a big market reaction to the court's ruling on the esm because everyone takes a position and if it's as expected, we can get on with life as normal. i wonder at what point that stops being the pattern. >> i will give it years at this point. it's event driven trade from mere on out i think as we go forward with the european up. u.s. treasury as sold a major chunk of aig. the treasury sold 554 million shares at $32.50 a pop, reaping

$18 billion. reducing it stake to just 22%. that sale means the government has now fully recovered. with treasury stake falling below 50%, aig will be a savings and loan holding company. it does own a small thrift bank in delaware. shares fell to $33.50. investors like the idea potentially of the government's involvement ending. >> jamie dimon gives the key note speech in new york at 12:45 eastern. it's his first public appearance in about two months. he's expected to try to shift attention away from the bank's $6 billion trading loss and convince big shareholders that they're still well served by jpmorgan being the biggest u.s. bank. dimon mayle also roy earnings guidance as the third quarter comes to a close this month. this is how the stock is

looking. this is a six month chart. >> speaking of banking, deutsche bank is outlining its new strategy which will include cost cuts, poe funu bonus changes ans its balance sheet. our next guest says investors should take profits following the ecb liquidity boost. he's senior credit strategist at rbs and he joins us now. good morning. >> good morning. thank you. >> so first of all, just big picture for us. you've liked financials but now turning more cautious? >> that's correct. we've gone a long way over the last three months. long credit, very aggressive high yield and banks since june.

we're now at a point where the marketsle h. has discounted a lot of up side. but we still like the market as a whole. we still like credit as an asset class. low rate and low growths, still makes sense i think we could have disappointment from spain after the ecb move which is very badly timed in my view. >> you're saying pair back exposure to some of the indexes. you see bank of ireland up there and unicredit, commerce bank. >> yes, we do take some collective long positions.

for example in italy where we see economy be more solid than in spain and not suffering from what spanish banks are exceeding. today the imf is supporting plan of investment from the esm into irish banks that would lighten up irish debt. there is a combination of bad policies aimeded a repping the regions and banks which are very large problems and structural problems in the economy like very high unemployment. so already a very bad macro situation, on top of that the government is persisting into policy stakes that haven't worked before. >> so selective risks. how about the noneurozone.

banks. >> we've always been very positive because there's a better independent policy, many of these countries are a safe haven from the european crisis. on the other hand, the up side has become lower and lower has safe havens have become more popular. so the bonds from these banks now trade at half the extra spread than bonds in the semicore eurozone countries like france or the periphery. that's why we're still taking some selective risk in the periphery because there's more up side, more yield. >> so give us some names in the core eurozone countries on that basis. >> the names that we're long are french banks like socgen, ing, for example, these are names we like and commerzbank in germany.

in the uk, lloyd. we're generally positive on the scandinavian banks. and the u.s. banks, as well, although as i said, the yield that you can get is much lower because investors have already captured these safe havens. >> all right. stick around. thanks for your thoughts on that. we want to bring you these images of wen delivering the opening address at the world economic forum. let's listen in. >> distinguished heads of state, heads of government, members of government. ladies and gentlemen, dear friends, we are assembled here at a very special moment in global economic history.

it's the deepest crisis we've experienced in generations. after nearly five years, characterized by major appeals, many feel like we are experiencing continued disintegration of the global system and the downward spiral of negative consequences. it's only global solidarity which will allow us to return to a path of harmonious growth. today in our highly interconnected and interdependent world, no country

regardless its size can determine its fate anymore alone. we must bring our global house in order. we call on the international xhun toy deliver on the promises made. particularly rising unemployment levels and. >> addressing the world economic forum just in advance of the address by wen. he's one of the executives of the world economic forum just

introducing the chinese premiere. we'll go for a quick break. when we come back, we'll bring you the main chunk of wen's speech. ♪ ♪ i can do anything ♪ i can do anything today ♪ i can go anywhere ♪ i can go anywhere today ♪ la la la la la la la [ male announcer ] dow solutions help millions of people by helping to make gluten free bread that doesn't taste gluten free. together, the elements of science and the human element can solve anything. solutionism. the new optimism. oh, hey alex. just picking up some, brochures, posters copies of my acceptance speech. great! it's always good to have a backup plan, in case i get hit by a meteor. wow, your hair looks great. didn't realize they did photoshop here. hey, good call on those mugs.

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burberry in the trenches dragging the whole sector lower. >> and germany's constitutional court will go ahead with its ruling on the esm. >> and deutsche bank unveiling a strategic overall. we'll too a look at burberry shares trading sharply lower after the company warned full year problems will be the lower end of market forecasts. they blamed slowing store sales on the challenging external environment. expected to post pre-tax profits for the year to end 2013 of between 407 and 451 million pounds. that statement apparently delivering quite a shock to the market and it's taking shares down across the luxury secretto.

>> chinese premiere is just standing up to deliver the opening address. so let's listen in. >> translator: to all distinguished guests present. in-august rated in china in 2007

has become a global forum with extensive interest. the theme of the forum this year creating the future economy is highly relevant and practical. it reflects your vision on sustainable department and meets the high expectation for a brirt future of the world economy. china has enjoyed fast economic development for over 30 years.b economy. china has enjoyed fast economic development for over 30 years.r economy. china has enjoyed fast economic development for over 30 years.g economy. china has enjoyed fast economic development for over 30 years.t economy. china has enjoyed fast economic development for over 30 years. economy. china has enjoyed fast economic development for over 30 years. during the past decade in particular, we firmly seized the take strategic opportunities for development and have scored new historic achievements in economic and social development development and have scored new historic achievements in economic and social development development and have scored new historic achievements in economic and social development

development and have scored new historic achievements in economic and social development development and have scored new historic achievements in economic and social development. from 2002 to 2011, china's gdp grew at an average annual rate of 10.7% and moved up from the sixth to second place in the world. climbed from the sixth to second place in the world and foreign exchange reserves exceed $3 trillion. china's industrial structure was up grad upgraded and regional development became much more balanced. all around progress was made in social programs and people's livelihoods significantly improved. we are with stood the test of

many disaster, difficulties and risks. in the recent five years in particular, we effectively tackled the huge impact of the international financial crisis and sustained steady and fast economic growth. we owe these achievements to the strengths of reform opening up, the persevering spirit of the chinese nation and our tireless efforts in exploring a path of scientific development and harmonious society. here i wish to share with you what we did and with a we have learned in this koirs of our endeav endeavors. we have macro regulation to promote steady and fast economic growth. >> so let's leave the address. we'll continue to monitor what goes on at the world economic forum.

>> still to come, we'll hear what calderon had to say about the u.s. economy.

chinese premiere still speaking at the meeting, continuing to keep a look at that and we'll bring you any breaking news. >> also mexican president calderon said it's trying to wean away from its dependence on the united states in light of tipped economic problems north of the border. >> whether there is more stimulus or not, my perception is the forecast will be administer or less the same. where he expecting very low growth and recovery in american society and economy. in any sense, we need to be prepared and that is the reason doctor mexico is looking for new

markets. we're trying to reduce our dependency on the united states. >> coming up on worldwide exchange, we speak to the head of a company transforming internet talk into real insight. plus deutsche bank's revamp. >> and before we go, let's tee take a look at u.s. futures. [ male announcer ] how can power consumption in china,

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welcome back to "worldwide exchange." shares of burberry tanked dragging the sector lower. >> germany's constitutional court says it will go ahead with itz ruling on the european rescue fund tomorrow. >> and deutsche bank gets ready to unveil a strategic overhaul as the new men at the helm seek to cut costs and shore up capital. dow joens pointed higher by about 22, nasdaq and s&p also eeking out a couple points in gains. this follows a more cautious mood across asia, across europe.

if we look at what the european bourses, ftse 100 down a third of a percent. ibex 35 down about 1%. >> how to make money in these markets? high's he what some of the experts have been telling us this morning. >> i think we will get revival of upward pressure. i think we will see perhaps quite significant steepening pressure moving into spanish and italian government bond market, moving into the end of this year and beginning of next. >> equities, in terms of how the

world will progress, asia will dramatically slow down. they will need one generation of refinancing. it worked for one generation. now they need to refi thanks. asia will be a negative. >> it will be more about alpha to coin a phrase. i think markets may tend to 3450move more sideways. there will be some form of correction in the market. >> and we have a speech ongoing from the world economic forum where the chinese premiere is currently addressing the room. he's been talking about the global financial crisis and the role played in that.

taking the measures taken by china were appropriate, at least how he describes them. i'm sure a lot of the europeans would favor him doing a bit more. >> meanwhile, sentiment from corporates has been more negative over the past quarter. company poll cat has a way of analyzing real time chatter and it finds positive earnings talk fell in the period from april to august. and that companies see the u.s. as more of a risk than a slowdown in china. joining us for more is the ceo of poll cat. welcome. >> thank you very much. >> so tell us about how you're able to collect this data, what it is that you do that isn't already available out there. >> sure. poll cat is an international leading business intelligence company. and what we do is look at millions of pieces of content every day ranging from onusing,

social media, and turn those analysis into strategic business insights for senior business decision makers. >> and they use the information as they will. >> yes, we to it real time, in all languages. we correlate it with structured data such as financial results, share price, reputation to ensure we're in full correlation where what's going on. >> so is it an us a mated process so you see how many times a company name is mentioned or is it more of a manual process where you see what kind of shine there is around what people are saying about a particular issue? >> principally automated, but there is a human element. you look at key topics coming up, we look atop countries being discussed, top companies, top

industries. principally we also use within pole account cat our financial risk management criteria to look at where there are concerns around financial risk management. >> and you've worked with big oil companies, big banks who want to know what kind of reputational damage is being can done as they're in the headlines. what we asked is if you could take a look at some of the chatter around companies and turn that into an investment strategy. so for the second quarter, that earning seasoning just concluded. so you took a look at some of the chatter around all those names and what have you found? >> the first thing to say is that in terms of the discussion around first quarter compared to second quarter, there's a 20% decline in positive indicators. and that's also correlated with looking at our financial risk management issues, a significant spike in terms of concern around future earnings potential will that so not good news for q3 as we probably now. although somes aspiration from

for q4. >> and available capital, a top concern. >> if you look at the financial risk management issues, available capital is by far and large the biggest one with financial stress coming in close behind it. and we'll be drilling deeper into that and we see macroeconomic effects largely due concerns around the chinese economy and also the euro crisis. but we also see significant concerns around banking availability and around m&a and also specific discussion around asia and china. >> and the u.s. >> if you break it down by country, just looking at the chart you've brought along which shows the u.s. and china are the top cited countries, are they cited in a positive or negative light? >> overall what we say is 20% decline in positive different between q1 and q2 and an increase in financial risk management, as well. not surprise to go see u.s. at the top. we always would expect that.

what is much more surprise to go see china up there in second position. that is a concern. if we look at the chinese kept, we see a lot lot about the failure of the equities market and concerns around earnings potentially in china. >> and just to spin it forward, what you can do i guess is eventually offer investors on a real time analytical tool or enough of a historical data set that they can use the information to take a view going forward. but what sort of jumps out at you when you aggregate the data and try to identify what's going to happen in the third and fourth quarter and beyond? >> obviously it's not an exact science, but we have good indicators. the most obvious issues is that q3 will be very tricky and certainly we see that in terms of the future discussion around earnings potential with the aspiration for improvement in q4. what we think is much more interesting is the impact of the

oil and gas industry on the potential of other sectors on their other earnings. so we're looking now at an energy census to understand that increasing impact of oil and gas industry on other sectors and their earnings potential. >> do you have any evidence that can help us understand how the analysis works? >> yes, i think in the end the beauty of what we do is about monitoring as well as looking in to the future. so the way you can tell whether it works is by seeing whether what you predict is actually what happens. so we have past performance to demonstrate that our future predictions work. >> a reminder for everyone tweet that had you're being watched. >> james, thanks for coming on the show. and still to come on the program, as deutsche bank prepares to outline its overhaul, we'll discuss the outlook for germany's largest lender.

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mark zuckerberg will give an interview later today, speaking at 5:00 eastern at the tech crunch disrupters conference.

he's expected to touch on moebl a mobile and growth into new areas. that prompted us to ask our radioer what is they want to hear and what if anything they can say to turn facebook shares around. joe tweets zuckerberg can give actual data on their new mobile advertising effort as well as future plans for mobile. chris tweets the fact that you asked for comments to twitter instead of facebook kind of says it all. facebook is so 20th century. and becky, it is a 21st century company, but he may have a point. >> and speaking of companies whose shares have been suffer, burberry really suffering today. this is a chart behind me which shows how the stock has performed in the past three months. today alone down by 19 percent and it's a real plunge when you consider the reasonable performance we've had the past three months. it has been a pretty strong

stock in the luxury secretary directory but look at what happened today. it's quite hard to see because it's such a plunge right back down to here for the shares. the reason for this is that we had the statement from burberry earlier this morning which they told us that the full year profit is likely to be at the low end of market expectations. they cite in particular that store based sales have slowed down in recent week. if you cast your minds back to july, speaking about the first quarter, the company said that their chinese growth had slowed, that tooked markets at the time. seems to be some expectations that the chinese growth story slowed down, has continued loult the secretary quarter if you project that for the rest of the period, that does begin to raise alarm bells, as well.

this is the biggest decliner, but many others suffering, as well. >> and we'lls keep an eye on black rock because they were fined for 9.5 million pounds for client money breaches. the fine is for failing to protect client money adequately would by not putting trust letters in place for certain deposits and also failing to take reasonable care to organize and control its affairs responsibly in relation to client money. so a 9.5 million pound fine for black rock there from the fsa this morning. cost cuts, bonus changes and bolstering its balance sheet, all part of deutsche bank's new strategy to be outlined by the co-heads of germany's largest lender today. patricia is follow us this for us.

>> later on i'll have the interview with one of the co-ceos about the strategy going forward. what about the restructuring costs. some analysts expect that to be about 1.5 billion, some say maybe more. the timing, as well, compensation structure, bonus structure also a big focus. and what about the capital banks. how are they going to close that gap of 6.2 asap to adhere to basel iii capital requirements. at the moment one capital ratio 10.2% looks good, somen analysts say that is fine for long term, however, if you look forward for 2013, that could go town to 7.2%

at the current model. >> a capital tool box. if you're just joining us, reminder today these are your headlines. burberry in the trenches as the luxury group issues a profit warning dragging wholt secrete lower. >> and they will go ahead with the ruling on the esm. so the u.s. treasury has sold a major chunk of aig sending the government's majority ownership of the insurance giant, treasury sold 554 million shares at 32.50 reaping 18 bpd and reducing its stake to about 22%.

the latest also means the governments has fully recovered its $182 billion bailout of aig and then some. about $12 billion extra with the treasury stake falling below 50%, aig will now be regulated by the fed. jamie dimon will speak at 12:45 eastern today and expected to try to shift attention away from the bank's nearly $6 million trading loss and squins b convince big shareholders that they're still well served by the bank.convince big shareholders they're still well served by the bank. shares have recovered this summer. they are down about 1.7% this

morning in frankfurt trade. >> u.s. companies not he had aing workers because the uncertainty of the election. latest manpower survey finds the vast majority of employers seeing no change in their fourth quarter hiring plans. only one of the 13 sectors manpower tracks education and health services had a stronger hiring outlook than in the third quarter. the jailed founder and ceo is apparently looking into the alleged fall that took down the former futures broker. he's working with the court appointed trustee overseeing the firm's liquidation. he has a bail hearing scheduled for this afternoon. he's pleaded not guilty to 31 counts of misleading federal regulators for years. >> and another one to keep an eye on, zynga, the exit dar getting a lot of use. another top executive leaving

the social gaming company, chief marketing officer resigning about a month after zinyngzynga creative executives left. shares are down more than 70% since the december ipo. closed $2.82. well, still on come on the program, we're taking a look at oil prices. they are finding support this week on expectations that the fed will step in with further easing measures to boost the u.s. economy. bob...

oh, hey alex. just picking up some, brochures, posters copies of my acceptance speech. great! it's always good to have a backup plan, in case i get hit by a meteor. wow, your hair looks great. didn't realize they did photoshop here. hey, good call on those mugs. can't let 'em see what you're drinking. you know, i'm glad we're both running a nice, clean race.

no need to get nasty. here's your "honk if you had an affair with taylor" yard sign. looks good. [ male announcer ] fedex office. now save 50% on banners. . . want to bring you back to the speech where the chinese

premiere is addressing the world economic forum. just coming out with more comments now on the global financial crisis and the stance that china is taking. premiere wen says the impact is still with us and the economy he expects to stabilize. he's confident that he can keep the chinese economy on a track of steady and relatively fast growth. we have been talking recently about an economic slowdown in china. also adding that the chinese will make stronger efforts to increase consumer demand, that if light of calls from other countries around the nation that they should have a more balanced economy.

saying they will meet this year's economic growth targets in china, as well. >> boosting consumer demand, perhaps not quick enough for some of the luxury companies we're watching. today in the u.s., mcdonald's reports at 8:00. they posted flat sales in july, it worst showing in nine years. at 8:30, the july trade deficit expected to widen. today marks the 11th anniversary of september 11th attacks that called nearly 3,000. ceremonies of commemoration will be held throughout the u.s. today including moments of silence at the new york stock exchange. as we approach the start of the trade session, we're seeing green arrows across the board. no major moves however and it has been a mixed tone across the rest of the global trading session. also want to equipmently bring

quickly bring you from deutsche, the company reaffirming it commitment. by 2015 it hopes to increase its basel iii core tier one capital ratio to 10% and hoping to reach 8% by the first quarter of 2013. again, we'll follow the share reaction there, deutsche shares up about half a percent as it targets savings of 4.5 billion euros annually by 2015. plenty more headlines and details to come from that. first, though, opec and the u.s. department of energy are both releasing their monthly oil reports later today. crude prices have found new levels of support this week ahead of the fed's meeting on expectatio

expectations. neal atkinson joins us from data monitor. is the fed keeping a bid in the oil market? >> the fed is clearly an influence because people are looking to the fed to add more stimulus to the u.s. economy and that's thought that will stimulate oil demand and therefore prices might rise. but i think that there are more fundamental issues at work here. one of the factors that lay behind the price increase that you described a second ago was the fact that the iranian sanctions have been stepped up, so iran's exports have fall p. we've seen some cut backs in oil production for maintenance reasons and we've seen one or two other bits of uncertainty, as well. and demand is fairly sluggish. but supply is coming back. >> what are people mostly keeping an eye on? >> opec report is sadly subject

to embargo for the next 90 minutes, but were somebody to comment on it, they might find there is little change to the underlying fundamentals. sf there's going to be any change at all, it's more likely that they'll cut demand growth forecasts rather than increase them. supply is coming back and that will put a lid on prices. and as i've said before, oil prices are more likely to slide back in september than go anywhere else about. >> and we'll leave it at that. neal atkinson, thank you so much for stopping by. becky, it's been a pleasure. with the spark cash card from capital one,

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today's top stories, global market relief. first there was a post-ecb bond buying rally, but now we're in a wait and see mode ahead of a key german decision on the permanent eurozone bailout fund. the dow snapped a three day winning streak and apple pulled back after hitting an all-time high ahead of a big -- the big ept this morning about the new phone, the tech guy and expected giant expected to unveil iphone 5. and the nation's third largest school system on strike. every implications could be felt far beyond the windy city. wi