. welcome to "worldwide exchange." >> these are your headlines. >> a fight erupts, publicly disagreeing over fiscal targets as finance minister begin their official summit in brussels. >> greek treasury seeks to sell short term bills within the hour in an effort to refinance $5 billion euros in debt by the end of the week. and the countdown to fiscal cliff begins. congress continues to work where skr just seven weeks to reach a deal. >> and vodaphone shares fall after it takes a mitt in its spanish and italian businesses.

lot of breaking newses including the iea report following the big report yesterday. >> overtaking saudi arabia is getting a buzz. >> but a monthly basis, global oil demand cut by -- to 90.1 million barrels a day. impact of hurricane sandy in the u.s., reduced, as well. crude oil supply dipped to a nine month low.

so the demand being cut, patrick armstrong is where us, managing partner at investment managers. but that's clearly because of global weakness -- well, economic weakness in europe and hurricane impact. >> definitely. year over year, oil demand is up. we've had very weak economy in europe. not much growth in the united states. but i think that's the trend we'll be playing out for the next few years. >> oil 110 at the moment. is that a fair price? >> there's premium built in because of geopolitical risks. i think premium is probably justifiable. you look at wti at $23 discount to where breptd is. that's not sustainable in the

long time, but given inventory levels, that will stay. >> do you keep your trade on oil? >> we have neutral position, but we're short the front month. respe respect. we make money by rolling the contracts the other way around. we're long oil in the 12 months forward rolling in to the 13th month and we end up with little more oil with that strategy. so more of a curve play. >> all right. patrick, you're with us for the first half hour. also we'll be out to new york for a check of the retail sector in the wake of super storm sandy. some department stores are getting ready to report third quarter numbers. >> we're also live in italy ahead of the three biggest banks reporting earnings. >> and we find out how diwali indian festival of lights is affecting appetite for gold. >> and congress is back in session and with seven weeks to

go, the fiscal cliff deadline looms. what's expected out of washington. we'll take a look. >> meanwhile greece will have to wait another week for a crucial loan amid a spate over athens debt prediction time table. christine lagarde has been open in her disagreement. >> from you'our perspective, th sustainability of greece has to be measured in 2020, and our target is 120%. >> against this backdrop, greece planning to auction as a part of refinancing 5 billion euros of debt that has to be paid on friday. it is the 16th on friday.

>> i believe so. >> so joining us now in london is justin knight, head of european rate strategy. patrick stays around, as well. justin, thanks for joining us. first of all, this little spat on the two year extension, how much >> of course they're politicians and in jean claude's own words, different circumstances. they have to get reelected. christine lagarde is head of the imf and the imf needs to get the problem sorted out as quickly as

possible regardless of political concerns. so you can see which way they're coming from here. as i say, the mnumber 120% is plucked out of the air. there already appears differences over what the current 2020 is, some are saying 14 #%. but reporting that some of the troy came members are saying this, others saying between 140 and 150. of course they do rely on quite a lot of assumptions about gross tax receipts and spending cuts. >> with a matters isn't the 2020 versus 2022 language. what they're implying is whether the official sector has to take. yesterday we heard smaghi say he thinks a maturity extension will happen. so is that going to extend to the official sector and does it

have to in your view? >> made sclurity extension is the first step and what also needs to be done is to finance the extra two years on top of the greek aid program. and that can come through of course through lower interest rates, through debt buy backs even. but we didn't think that debt buy backs in the private sector will make much difference. so in the end, yes, there has to be some form of official sector involvement, some write-downs by the official sector at the very least. but we don't expect those in the near term, indeed we have the german elections in september, as to we don so we didn't see that happening ahead of that. >> did did you get restructured on on your greek debt? >> we had the august 2011 which we got paid in full and we had the march 2011 restructured. so small little bits of

restructured debt. >> are we going to have an accidental key paul? >> germ any if you look what they were saying earlier in the summer, the eurozone is fine, greece can leave. and i think they've changed their term worrying about the implications for the eurozone. so that makes me feel more confident about they'll get together. they'll get to greece the money they need. it's press department setting i suppose the issue the germans will have with it. so i think greece you don't have as to worry about for the next few years. >> do you agree, justin. >> >> yes, and i certainly agree with the point being worried about a default. we certainly saw a change in attitude when there was a lot of

political upheaval in greece. the potential contagion from that gave a big shot to the political class and they want to avoid a hard default in greece. it's a long time until 2022 and certainly all of the numbers we've had so far will prove to be wrong. >> and it will reiterate the ubs call to look at the northern part of the eurozone in terms of investment and probably increase southern flight. justin knight, thanks very much for joining us. ross, over to you. just over an hour and ten minutes in to the trading day. stocks around 8:1, decliners outpacing advancers. very flat session for the dax and ftse yesterday. cac 40 down 0.3%.

you can see we're down 0.7%. three quarters for the cac 40 and about half a percent, as well. two standout stocks today in focus, eon down 8.7% coming out with a profit worning. and vodaphone hit by the eurozone crisis. taking impairment charges of 5.9 billion pounds in the first half because of its struggling spanish and italian businesses. so a pre-tax loss. bund oyields lower. ten year italian just over 5%. we have inflation data coming out of the uk in 15 minutes. italian curve, auction tomorrow. t-bill auction today coming up. so we'll take a look at the reception that that gets. going to be fairly important.

as far as currency markets are concerned, the dollar index is up to a two month high. pretty much just above it at the moment. dollar-yen slightly weaker. aussie dollar still on the 1.04 mark. we'll see how the inflation numbers go today of course we've now paused on qe, inflation will be fairly important next week. meanwhile, let's find out what's happened in asia today. deidre has the details. >> a pretty ugly session out here. it started with concerns over the u.s. fiscal cliff as well as greece's debt problems and it was all downhill from there. many indexes closed at their session lows. shanghai composite down 1.5%, hang seng down 1.1%. and property plays dragging down the mainland market and also

sinopec was a major lagger on speculation that beijing may cut gas prices as early as bomb. so on watch for that. and of course china's leadership position. we're watching to see whether it's more reform minded leaders or conservative minded leaders and that will determine the pace of reforms in the mainland. the nikkei 225 continuing its slump from yesterday. actually this is the seventh day of losses for this index, down 0.2%. a lot of disappointing economic data as well as concerns there could be an reaction by the end of the year. another market that's ignoring some better than expected chinese economic data and choosing to focus more on the u.s. fiscal swords. and i know we spoke yesterday

about htc, it was limit up today, limit down just a day after it announced that it reached a settlement over patents with apple. today they're looking into unusual share movement ahead of that announcement. head of the microsoft windows business is leaving less than three weeks after the launch of windows 8. reports say his departure may raise concerns about the success of windows 8 and his relationship with steve balmer. microsoft's gaining business has scored another hit, halo 4 racked up $220 million on launch day last tuesday. activision's call of duty black ops 2 goes on on sale today. i know i'll be first in line for that one. this of course as sky fall the latest installment of the james bond franchise just had the best

opening weekend of any bond movie ever. so it appears a good weekend for bond still pails in comparison to cinema. so e-mail us your thoughts. worldwide@cnbc.com. @cnbcwex. is it call of duty or sky fall? ross, i have a feeling i i know which one you'll be in line for. >> i like all of those. still to come, italy's three biggest banks due to report later today with debt costs lower than earlier in the year. finally a collapse to focus on profitability. we'll get answers from milan after the break. i'm freaking out man.

he's, he's on my back about providing for his little girl. hey don't worry. e-trade's got a killer investing dashboard. everything is on one page. i'm watching you. oh yeah? well i'm watching you, watching him. [ male announcer ] try the e-trade 360 investing dashboard.

we know at this hour we'll have greek go to market to try to raise enough funds in short term t-bills to stave off an actual default, but we're also seeing a meeting of ecofin for the eurozone meeting in brussels

and we're getting comments from germany and france indicating -- i don't know necessarily whether we're seeing a lot of progress here, but just to recap and then we'll get more with sylvia, but the french finance minister saying they aim to reach a deal by november 20th, and to disperse funds by the end of the month. schaeuble seems to be indicating that he sees a 2020 debt sustainability target as, quote, too ambitious. and he also says we sho focus on solutions other than governments taking a write-down on greek bonds. >> steps could be taken on greek interest rates.on greek bonds. >> steps could be taken on greek interest rates.write-down on gr. >> steps could be taken on greek interest rates.on greek bonds.

>> steps could be taken on greek interest rates. >> there will need to be some write-downs. giving them zero sbr rates will help, but it doesn't quite get you to the 2020 or even 2022. the sooner they come, the easier it is. >> what will the interest rates be? >> just getting it back to -- >> okay. meanwhile, plenty of folks looking closely at the cost cutting efforts and nonperforming loans. andrea, is there safety in numbers? they all want a report at the same time. is that so no one will notice what they're saying? >> reports in a few hours. basically the market looking at three aspects. first profitability, it has

already been mentioned. but interest margins are putting the pressure again on profitability. and so an expectation of interest rate margin down between 1% and 3%. on the other hand, credit quality. this is the impact of of the italian recession 37 is there any sign of increasing quality asset, probably not. nonperforming loans rate will continue to grow. it was 15.6% in august. 15.3% in september. year on year. this is important in terms of provision, how much will the bank need to put away for this. and the declining provision expected by the analyst is in the order of 10%, 12%, the coverage ratio of the three italian banks indicated to be around 42, 43%. and also the cost of risk is expected to be stable around 116 points.

>> people were focusing on the changing composition of the italian bond market. basically we're seeing a move away external towards internal financing which is better news, but certainly not in you think a lot of that debt is being held by italian banks. is that your understanding of what's happening here? >> absolutely. we will probably see some better numbers in terms of the last quarter because we had an increase in the sovereign condition. italian banks, keep in mind they do have in their portfolios 175 million euros in terms of italian government bonds. so this is quite good news in terms of the trading income which is expected to be strong in the quarterly numbers. but there's a fragility especially looking ahead. italy will have a vote next year and it would be a fragile condition according to what we can see the political arena. there is a high risk of fragmentation of the italian

political scene. this could eventually put more pressure on the sovereign side and the banks. you cannot separate the stories. >> all right. for now thanks very much indeed for that. let's get back out to brussels. silvia joins us. what did you make of the latest comments kelly was just talking about? >> well, first of all, interesting that we lad a joint press conference by the german and the french finance minister. that's a first. we'll probably see more of those. it was clearly a show of unity. they pointed out a number of times how important this franco german accord is and that they're seeing eye to eye as we move forward. there was also a debate about greece and how we move forward to there. clearly we haven't quite gotten agreement yet. the agreement seems to be inside the eurozone. we saw that in the press

conference betwe conference. there seems to be a disagreement between the imf and the euro sew as to where we're headed. the europeans clearly favor an extension of the debt rise for greece. the 2022 deadline rather than the 2020 deadline. and at the end of the short brooeing we had, i got a chance to slip a microphone in front of the french finance minister and i asked him how concerned he by this disagreement imf and the eurozone. >> we will find a solution. i know that there are differences in appreciation. but we have one week to work on that. as french minister, i will welcome the fact that we would move in 2020 to 2022. but i also understand that the imf has its own constraints. so we'll discuss them. gr but you're confident that we'll get a solution by next week? >> we have to.

that's our responsibility. >> kind of interesting because in some ways, a few weeks ago, it was the imf saying the fiscal multipliers are much bigger than we thought, the austerity plans are overdoing it and we need to ease up a little bit. and then here we are and it's the europeans saying we're asking for a longer extension than the imf is prepared to give ground on. >> yes. it's all very strange. first of all, five hour meetings and then they step to the press. one should have thought they had debated their little differences before and agreed on the line of defense or on a line of marketing and then they have the spat in front of the press at midnight. wasn't very helpful at all. and totally unexpected. clearly we wouldn't have seen a decision on the disimabout yourselfment of the latest tranche today anyway because if we change the time horizon, we need parliamentary approval. last night it very much looked like as if the german parliament

might vote on it at the beginning of the week and then we would have this special ecofin that is supposedly deciding where we're headed right now. but it looks as though it will be the other way around. we have to have the decision of the ecofin on the table first. when we have the decision of the ecofin, the respective finance ministers will go back to their parliaments. i know that the germans definitely have to. with the others, it's a little more free flow. and after that, hopefully the money can be disimabout yourselfed. theydy say they have to have a solution within a week. so next week should be interesting indeed. >> okay, silvia, talk to you later. with all this going on, what is a solid investor to do? >>. >> i don't have to invest in any of the periphery. i think we will be attracted to spain and italy and portugal at some point, but i think there will be a better entry point than the form of a crisis and i think you'll see yields spike much higher. but they will make good

investments and there won't be defaults in those countries actually. i think you'll see spain, italy managing and probably even portugal assuming you get a road map with common goals and not just posturing of different agendas. i think there's so much value in the euro and it's a political belief that i think everybody does share in the union. >> patrick, thanks very much indeed for joining us. plenty more to come. we have inflation numbers for october. >> that's right. food prices may have edged up last month here. we'll find out what happens and then we'll bring you those numbers just as they cross right when we come back.

a fight erupts between the imf and euro group chief. the two disagreeing over fiscal targets. but we're told ministers will find a solution. looking to sell short term bills in an effort to refinance 5 billion euros of debt by the end of the week. >> in the u.s., the countdown to the fiscal cliff begins. congress returns to work with just seven weeks to reach a new budget deal.

the consensus is to rise cpi, am rate 2.3%. and it is out annual rate 2.7% on the year. so the monthly rise a little bit stronger. and the annual is also a little bit stronger, 2.4% on the dow jones forecast, as well. core krmpt pi 0.7%, rpi up 0 #.6% in the month. stronger than forecast. forecast 2.9. >> 2.7% on on the cpi figure. who do we happen to have but a man who saw perhaps up side potential in this report. so what explains these hotter than expected figures? >> i suspect there are several

things going on here firstly a big increase in university tuition fees which we suspect is probably at a quarter of a percent or so to inflation. you've also grot possibility of higher food prices. this time around. but certainly a year ago food prices fell sharply. so that will have added to inflation, as well. and you have other v.a.t. effects. >> and they do talk about the raise in inflation driven by university tuition fees, food and transport. and also worth looking at on producer prices. >> composition actually matters greatly. what it tells you is whether or not the inflation increases are happening as a result of fiscal pressure or as a result of stronger demand. if you're seeing inflation rise because university fees are going up, transport costs are going up in order to fill a budget gap, not necessarily a sign of demand strength in the

uk economy. >> certainly a sign of british demand growth. but what we are seeing over various periods is signs of global demand growth and we're seeing that very visibly from petrol price and other energy price increases. but to a certain extent as well, the food price increases which we're beginning to see, and likely to see more of reflect changinged food presences, increasing prices for wheat even though spikes in corn and wheat prices that we've seen have been largely due to weather factors. but demands are the pressure, as well. >> for anyone trying to figure out what's going organization how sustainable are the inflation rates and are they not going to fall precipitously as the fee hikes come out. >> there will be, but if you look at the university tuition fees, that will be there for three years. it's not just something that

will disappear in 12 months time. and that's an important point because when the bank of england presents it inflation forecast tomorrow, it will have to count those increases in fee as a medium term inflation pressure. they'll be there throughout the entirety of hair projections this time around. and then that has some effect on the policy making decisions. >> is that is t. for the 375, they're done? >> we suspect it probably is. you can never discount the notion of down side shock to the economy prompting monetary qe. but some momentum leading to -- >> will they try something else? >> yeah, that's the other point. much more emphasis on the funding, which it's looking

fairly hopeful that that will help to deliver more credit flows to the private sector. but it's going to take some time before we can make a judgment on that. >> worth pointing out sterling hit the session high of 159 after that inflation. not surprised about that because they're pricing out qe as philly says. thanks for that. sparse stocks are concerned, ftse 100 down three quarters. xetra dax down a third. ibex down half a percent, as well. flat yesterday. >> and let's take a look across the bond space. 5.94% on the spanish ten year there. which is remarkable. i don't think we've seen this close to 6% in the last couple weeks.

>> dollar index at two month high, euro-dollar at a fresh two month low this morning. currently 1.2680. down 1 at the present time 2666 this morning. so we'll keep our eyes on that. meanwhile, china's week long 18th communist party meeting will wrap up tomorrow. so far there have been plenty of calls for far reaching reforms to the financial system and these are considered key to fixing the country's widening income gap. deidre has been watching that story closely and joins us again with more details. how do you see it? >> well, ross, you're right, there has been calls for reform, but they have been very, very carefully worded because during congress, it's all about unity. so they're usually contained in some pretty bland statements. but the reform minded leaders are basically saying china's

economic star will fade unless pro market reforms are introduced. among those calling for reforms is the deputy governor of the people's bank of china as well as the chief of the securities regulator. they're saying pro market reforms are actually going to help with some social initiatives, social reforms such as protection of the environment as well as narrowing the gap between rich and poor. but as i said, these are very carefully worded. especially this year. no one wants to say something that is too aggressive or too reformist. because of course there is a pretty powerful group that are against pro market reforms. there are some that benefit, some leaders especially that benefit from the status quo like the officials of state owned enterprises which enjoy some advantages in the form of easier access to loan and less competition. >> if i could ask whether it really matters if the way that we read the tea leaves if it's the reformers or the

conservatives here who have more influence in terms of this transition. what he he's the latest view one impact it will have? >> tons of speculation ahead of the roll out on thursday. it's likely going to be a mix of both some reformerses and some conservatives, but you're right in the sense it may not matter in the short term, but long term it will have an impact because some analysts say that the hu jintao administration on the way out did not do enough in terms of market reforms. and this is going to have an impact particularly on the near manear -- we had a board up last week showing the top five companies are all state owned enterprises. and there's a reason they're number one because they do get state backing, easier access to loans, easier access to contracts. so it could have major ramifications particularly for private companies. >> great point. deidre morris joining us with

the latest there. thanks very much. even as china is taking gradual steps, is eurozone falling behind. yesterday several areas noted there bond markets to infrastructure guy innocenfinan need urgent reform. >> the investor community regardless of where they're based, whether asian based, middle east based, north american based, et cetera, has the wherewithal to invest in europe. and help europe go from a collection of countries who are experiencing different macro situations, clearly more complicated political situation, and an increasingly regulated financial situation. they are anxious to get involved, but not yet able to

get involved because the political risk, if you will, is becoming the new economic risk. and that's quite challenging. i think europe as a result without having foreign investment be willing to come in or locally liquidity be willing to come in because of political changes that affect the economic outcome, and also without having the raw backbone of some of the things that we've talked about like tax reform or legal reform, concession reform, things that can allow people to identify what the value is in the capital structures of these various entity, it's difficult to see how it's going to change. so there's a number of things that do need to change. they seem somewhat logical, but they're fraught with difficulties obviously. >> some people have sutggested the silver lining is it will force europe to develop deeper more liquid capital markets. but is that in fact happening right now? >> well, it's not. as i mentioned, i think by

definition there's more liquidity in the system that has in part been centrally bank induced. that liquidity in the absence of finding equities attractive to own and macro backdrop suggests that equities are difficult to value. so fixed income is a better place to go to get yield. people are going down in to the capital structures and going down into the credit space to find new investment opportunities. but again, it's not industrialized. and it's the smoke. so i think that it's beginning to happen, but still you have sir 80% of corporate credits who are financing primarily with banks. 20% are in bond markets. in north america, its eye inverted. 20% banks, 80% bonds. if you look around the world, they're getting closer to the truth, if you will, closer to a balance between bonds and banks.

and for that to happen, it's very large amount of paper. >> should europe in fact follow u.s. model and try to develop more of a muni market? >> the other dynamic we're all facing is that we're supposed to be dealing primarily with liquid tradable observable instruments. so to make a market in a nonliquid, nontraded instrument is more difficult, who are difficult in the new regulatory framework. as a result, project bonds by definition are more of a smoke. they didn't fit that paradigm. and the u.s. has created a paradigm where multiple banks can act as broker dealers, create quite a bit of liquidity and can raise $3 billion to $4 billion a year. >> fascinating interview there and plenty more good stuff from the chatham house conference. over to japan now where industrial and electronics giant hitachi is looks to combine two into aobe.

how the holiday fires up the price of gold. respect

. president obama meets with labor and progressive leaders at 11:30 eastern today to discuss how to avoid the looming fiscal

cliff in january. the group includeses the presidents of the afl-cio and cie unions as well as the heads for center for american progress and the center on budget and policy priorities. president obama will also meet with business and civic leaders later this week before starting budget talks with top lawmakers on friday. congress returns from recess and it has just seven weeks to try to reach a budget deal. republicans say they're confident the two sides can come up with a compromise. >> the can at the time ceiling is the more important date personally than the fiscal cliff issu auscacious time and there's nothing quite as auspicious as the festival of light. indian consumers stock up on the precious metal undeterred by the expensive price tag, made pricier by a weak rupee. but that love affair may be counter productive for the country. >> gold is the best investment because they don't believe in commodities, they don't believe in stock, they don't believe in

properties. they believe gold is cash in 24 hours. >> reporter: analysts say in the long run, the government has to convince them to switch into other investments such as shares or bonds. and there's a lot of money at stake. indians reportedly have a trillion dollars worth of gold in their collective pockets. but they're not alone. china look set to overtake india as the world's top gold consumer this year. meanwhile, china's icbc bank says that within an economy on the mend, rising domestic income and new gold linked investment products in the offing, china's potential as a global gold haven is huge. even the pboc appears to be in on the act. the london bouillon market association says beijing may be mulling options to tack on more gold to its reserves soon. >> joining us now from hong

kong, martin henekyp what is the diwali effect for gold and gold prices? >> demand has been quite reasonable as was mentioned despite the relatively weak indian economy and weak rupee. but you can't blame them if the rupee is very weak, what would you do if you don't have trust in the currency going forward. and we just had actually the indianville production figures out, they were weaker than expected, actually down for september 0.4%. negatively an expectation of 2.8%. and at the same time, the consumer prices rose by 9.75%. so somewhat of a stagflation there, but the economy isn't taking off, but inflation is as the government is stimulating or trying to stimulate the economy. and this kind ever environment is good for gold much as india we expect the same scenario very possibly to be unfolding shortly in the united states and in

europe where the quantitative easing policies aren't really working to stimulate the economy or they're doing really creating inflation. probably what the countries have to do in order to avoid a debt default because most countries have lost control of the debt situation. so the only way to avoid the default in our view would probably be to print to devalue the debt but this real terms, that means inflation. so inflation is very much the main focus of gold for us and that's yes with think it will go a lot higher from here. >> martin, what then is your price target for gold by the end of, say, 2013? >> firstly we don't sell short price targets. we've seen this 2008 that sometimes also what many people should actually see or recognize earlier possibly as a safe haven, sometimes they can also take a hit if you have shorter term deleveraging. so let's say if spain or italy was to default early next year,

then you you might see first reaction of everybody panicking out of stocks and commodities and going again for german government bonds and u.s. treasuries. following on from there will, there will be a lot of money printing if n. knows major countries and as the economy weakens, even the tax revenues in the countries of the united states, france, germany and the uk will be dropping. also betting on the price of their own debt and ultimately people will be putting money back into precious metals. we didn't say it's likely that greece and spaen will be defa t defaulting because probably what they will do is printing just as much money as is necessary to avoid this default and chain reaction. and when that happens there, is no up side limit to gold. 1980s, minimum target. but it might go much higher because the fundamentals are better for gold than they were back then. the u.s. wasn't bankrupt in the

1980s. china number one gold consumer on this planet. and then underground, the mining costs also are rising. so a lot of pressure working in gold's favor over the coming 5 to ten-years. we would suggest it as medium to long term investment, not short term speculation. >> a lot of investors can't afford the negative carry if it takes a significant amount of time to realize the up side potential there. it's almost -- howard marks was telling us that god is like gold. either you're a believer or nonbeliever and one complaint convince the other and i would add that it does seem that the bullish gold calls exist almost in a religious way outside of time. >> firstly i'm just a believer that if you're looking at the fiscal gap of the united states, not the fiscal cliff, that's just a lot of nonsense to distract holders of u.s. not to

pan he cic out immediately. it's thousand about rescuing italy and france. french industrial production has been tanking. so just to keep people as long as possible in the u.s. dollar and euro and there going into gold which we've seen in the ultimate safe haven. so i don't believe religiously that gold is the ultimate solution to everything in the world, but just in order to preserve the purchasing power. and you're right, though, some investors may not be able to sit it out for the longer term if god should correct in the short term and there have the first recommendation i would make to any investors out there is pot to have any leverage in any way, so that if a correction in market should happen, one can sit it out. and if the money is needed short term for funding of education fees or something, then don't invest all your money in gold. just a smaller part and keep some in cash.

but definitely some gold should be held just to protect and not for big speculative gain. >> all right. martin, good to see you. thanks for joining us. now let's take a look at what's on the agenda in asia tomorrow. china's week long communist party congress comes to a close. we'll bring you the highlights. and japanese banks due to report their profit results. and in australia, it will get third quarter wage data. >> european stocks meanwhile today are down. we're weighted to the down side for flat session yesterday. ibex down half a percent. >> spanish ten year has my attention this morning. 5.94% is the -- >> when didn't it have your attention? >> last couple weeks it was quieter. but you now nosing back up. just over 5% to the italian ten year. the gilt up after stronger than expected uk inflation data, but the bund continues its rally.

>> currency markets dollar index down -- sorry, up after a two mnts high. euro-dollar two month low. we got down to around 1.2666 a little bit earlier. dollar also up a two month high against the swiss franc. we'll take a short break. plenty more to come on the show. >> congress back in session today. less than seb weven weeks to so the fiscal cliff. i always wait until the last minute. can i still ship a gift in time for christmas? yeah, sure you can. great. where's your gift? uh... whew. [ male announcer ] break from the holiday stress. ship fedex express by december 22nd for christmas delivery. get on e-trade. set up a real plan.

frank! oh wow, you didn't win? i wanna show you something... it's my shocked face. [ gasps ] [ male announcer ] get a retirement plan that works... at e-trade.

welcome to "worldwide exchange." >> these are your headlines from around the world. in the u.s., the countdown to the fiscal cliff is under way. congress returns to work with just seven weeks to reach a new budget deal. >> a fight erupts between the imf and euro group chief. the two publicly can disagreeing over fiscal targets, but french finance minister says program ministers will find a solution. >> the greek treasury set to sell short term bills in an effort to refinance 5 billion euros of debt by the end of the week. results due any minute will.

greek t-bill auction out shortly. meanwhile the latest snapshot of investor sentiment in germany. minus 15.7. a drop from 11.5 in october. the current conditions 5.4. that was 10 in october. the november z event w economic expectations forecast at minus 10. so we were looking for an improvement and it has come in worse than expected on both measures. zew says the prevailing recessionary developments in the eurozone are likely to be a burden for economic growth in germany for the next six months. so in some ways the zew reflecting of course what we've seen with german pmi numbers. the euro now down at a fresh two month low of 1.2661. it was 1.2681 before the day take against the dollar.

so germany getting affected. sentiment declining. no surprise. >> probably going to reinforce the decline that we're seeing across european bourses. but let's first take a look at what's happening with the u.s. futures. and it is red picture behind me. we've moved a couple more points to the down side in the wake of the zew report. the dow jones looking to shed about 55 points at the open, 12 12,714. s&p 500 looking to head about 6, as well. 1369 is the level for the s&p. we saw a decent day yesterday. u.s. bond markets were closed, volatility fell. but let's take a look at the cnbc global 300. we're down about a third of a percent. we started off okay. we've shed some of that throughout the session. european bourses as i mentioned are under pressure bloodily speaking. ftse to dax, all showing red chips this morning. so the three quarters percent of the ftse, we don't usually's

gains quite that large for this index. gains or losses. ex-ta xetra dax down 0.6%. pretty consistent picture across the european bourses today. consistent with the pressure the euro is under. >> and consistent with bond yields in germany going lower. they'll launch sozero coupon. spanish bund yields nudging back to the 6% mark. italy a big btp coming out tomorrow auction. and uk yields also a little bit higher today after inflation numbers come in much stronger than expected. annual cpi 2.7%. now, there are temporary factors like tuition fees, but nevertheless a shock and it means the market's priced out more qe for the moment. euro dollar as we just said it's a fresh two month low. we got down to 1.2661 just a

minute ago go on the back of the zew basically talking about the down turn economy being impacted another six months. dollar index has been up at a fresh two month high today, as well. aussie dollar pretty steady. sterling-dollar rose a little bit on the back of that inflation number. so that's where we stand here in europe. deidre morris is in singapore with the latest. dee. >> you and kelly were talk about consistency. well, consistency over here, as well. consistency ugly. shanghai comes positive it finishing down 1.5%, the hang seng down 1.1%. the major event risk is the leadership transition. we will get the names of the leaders expected to take over on thursday. so some caution ahead of that. i also have sinopec up here because the oil majors in both hong kong and shanghai were the major losers today. shanghai lost the most on

speculation that beijing may cut gas prices out as early as tomorrow. so we'll be watching out for that closely when the markets start back up again. nikkei 225 extending losses. this is the seventh straight session ended in the red. today down 0.2%. a lot going on in the markets. we have the disappointing q3 gdp number and today worries growing that there could be an election before the end of the year and affecting all of these markets is of course the u.s. fiscal cliff and also problems in europe particularly greece. so the s&p axs 200 also down 1.53%. this is a market ignoring the improving data out of china. as all of these markets are. the kospi floated around the 1900 level for much of the day. in the end, losing 0.6%. and htc, i also want to bring your attention here for just a moment because this was limit up yesterday. today it is limit down.

of course some ueuphoria yesterdayed because it settled its patent dispute with apple. today taiwanese echange investigating some usual moves ahead of that. quite a big auction, 6.5 billion euros. and the yield on that has come in 1.762%. bang on to the bid to cover ratio. but the yield on that for basically one rear paper is 1.76%. >> and lower than they paid in october the 10th. >> some progress will consistent with what we've seen in the longer end of the curve. and the bid to cover, 1.76%. as we were earlier discussing with andrea, looking at the italian banker, the question becomes how much of that being taken down by the italian bank

and what does that portend about their future going forward. meanwhile president obama completes with labor and progressive leaders to discuss how to avoid the looming fiscal cliff in january. the group includes the presidents of after the flcio and cie unions and heads no the center for american progress. president obama will also meet with business and sesk leaders later this week before starting budget talks with lawmakers on friday. congress returns there recess today with just seven weeks to reach a budget deal. republicans say they're confident the two sides can reach a compromise. >> the debt ceiling is the more important date personally than the fiscal cliff is because the fiscal cliff is not going to happen. okay? it just simply not going to happen. so to me, the focus ought to be on solvency and if we can deal with that and take a big step out of that, a big step toward solving that, during this december, i agree with you, i

think the markets are going to take off and i think from an outside perspective, things are undervalued if we do that. >> standard & poor's says the u.s. will likely need a grand bargain to stabilize its credit rating. any broad deal should include revenue hikes and spending cuts to ensure it can stand up over the long term. and if the u.s. goes over the fiscal cliff, s&p says it won't necessarily lead to a ratings down graund. currently a aa plus with a negative outlook. tim stanley is back with us from oxford university with a particular interest in u.s. politics. tim welcome. the last time you were here we were talking about whether romney could pull off a win in the election. he quite clearly did not. what now as you sort of look at the aftermath of the election, though, and the prospects for some agreement here. >> do you see as the likelihood that we get an agreement before the end of the year? >> the fact that he lost is important for negotiations because it means the republicans are winded.

they're on the book into the. they held control of the house so they're in a very important bargaining position because bills have to originate there. but there's no denying that the tea party was given a set back with the defeat of people like allen west in the house and with various senate yol candidates. but romney was beaten with a tax plan not dissimilar from the one boehner is currently pushing which is we won't allow taxes to go up, but we will close loopholes and romney lost on that. so there is a sense that obama for the short term has won the argument. >> granted it's a huge issue, but how many people was this election really a verdict on their tax plans? >> well, the argument is that romney often polled very well on competence in the economy, but obama polled much better on understands the needs of people like me. so there's a sense that if it comes down to class and empathy, the democrats have momentum here and the republicans are on the back foot. so in that sense, i think obama

has an advantage. on the other hand republicans do have a good case to make when it comes to taxes because something that's not often discussed is that the costs of obama care will start to kick in in 2013. one example, businesses which hire 50th notice ewill face a fine of $40,000 if they don't take on government approved health care insurance. so republicans can argue that when we approach this fiscal cliff, we have to keep costs and regulations as light as possible and any tax increase could be harmful. so there is some argument on this. >> is it telling us that glenn hubbard is basically saying, yes, we need to close he loopholes and cap deductions, but also we're willing to give when it comes to higher taxes on the wealthy? it seem like it's becoming the end game. >> equally significant to grefer norquist one of the big anti-tax champions said we have to look again at a carbon tax idea. which the congress ional budget

said. i like the cliff you played of senator bob corker very significant saying the fiscal cliff will not happen, but what have to happen what the republicans are pushing for is some new approach to the fiscal situation in america. maybe tax increases will occur, but you have to have reform of social security, you have to have reform of medicaid. >> they won't be able to tie all of that up to just to get agreement on fiscal cliff. so what happens in the -- what's the quid pro quo? >> what's going it happen is obama will push very hard on a short term immediate solution of raise taxes on the rich. republicans are talking about a bridge, saying let's have a very small deal now so that we can discuss solvency in the new year. p significant is the coming debt ceiling and you might end up with a situation in which republicans use that in an effort to leverage and get the

white house to do what they want. >> this is what puts fuss the sequestration in the first place was having to come to an agreement at the last minute to avoid the debt ceiling. >> people who are suffer are business. they need to know what the situation is so they can investment already some stock is being dumped. obama will meet with ge and walmart heads this week. and the sense is that they are pushing for a deal as soon as possible whatever it might be. >> but the odds you give it before year end? >> i really do believe an agreement can be reached. >> the question is this rerun of of the movie, whether in a cinema or online. >> movies or video games, which do you prefer? >> movies definitely. i'm old fashioned. except not 3d. i hate that. gives me a headache. >> tim, good to see you. tim stanley. just remind you what's on the agenda in the united states.

monthly u.s. federal budget statement will be released at 2:00 p.m. eastern. at 3:30, fed vice chairman yellen is speaking about central bank communication. and on the earnings frbt, we'll get numbers before the open from retailers home depot, michael kors, sax and tjx. marshall's, home goods. after the close, we'll hear from cisco system. staying with tech for the time being, head of microsoft's windows business is leaving he spearheaded the development of that software and windows 7. the gaming business has scored another hit. halo 4 racked up $220 million in sales on its launch day last week. the game will vie for the title of the year's top selling game. and this of course as sky fall had its best opening weekend of any bond movie ever in the u.s., $87 million was the take. which sounds good, but it does

pail in comparison with halo's first data. made us ask whether the age of cinema is over and you've written in with some of your thoughts here. jeff has tweet fld will to say i'm for sky fall. movies will always live on, but bet on more movie games, youtube interaction with the emphasis on you as part of the story. joe disagrees saying the golden age of cinema is over. costly to go. cable satellite operators get new releases sooner. home theater is closed to the cinema experience now. it does seem that after seeing a strong box office in 2010, movies have struggled and perhaps it does have something to do with halo. >> although ska fall has done $500 million in the first two and a bit weeks. so for the right product, people will go and watch it. and when he said you, did he mean you? >> you in the "time" magazine sense of you. >> i thought he meant "u ". you should be in everything.

still, after last night's drama, can we expect a further spat over the bloc's new banking supervisor today? we'll be in brussels. having you ship my gifts couldn't be easier. well, having a ton of locations doesn't hurt. and my daughter loves the santa. oh, ah sir. that is a customer. let's not tell mom. [ male announcer ] break from the holiday stress. fedex office.

can help make you a better investor. our e-trade 360 investing dashboard shows you where your money is, live. e-trade pro is so usable you'll actually use it. and our apps are the ultimate in mobile investing. become a better investor at e-trade.

congress returns to work.

>> french finance minister says solution will be found to the greek debt question. >> and the euro-dollar hits a two month low as economic sentiment in germany temperature bells. after the drama of last night's meeting, there will be a full gathering of european finance ministers where the banking union expected to be top of the agenda, but frankly we're still trying to work out what's going on with the rift between the icht mf and the eurozone giving extensionses to greece. silvia, where will they meet? where is the agreement going to be? >> we're going to have another euro group finance minister's meeting next tuesday. we still don't know whether it will be one of the phone conversatio conferences or whether a physical meeting.

that's next tuesday on the 20th. by that time hopefully during that which might be a long night, they want to reach an agreement. you talked about the rift between the euro group and the imf over a possible extension for the debt horizon for greece. there clearly was a difference of opinion. 2020 or 2022. this is what he had to say about the difference of opinion. >> we will find a solution. i know there are differences in policies of deprerks appreciation, but we have a week to work with that. i would quoel move 2020 to to 202 2022, but i also understand it has its open constraints. but we'll discuss that. >> you're confident we'll get a solution by next week? >> we have to. that's our responsibility. >> this was by the way at an

unprecedented joint press conference between schaeuble and -- not saying we never had a press conference of two german and french finance ministers together, but they wanted to have a show of solidarity, they wanted to find out how the two biggest eurozone economists are pulling from the same string takes were. and it's clearly that the eurozone has the view schaeuble said the same thing that they think greece needs more time and this is what's transpired here yesterday, too. so discussion left to do with the imf. >> we've just seen a bug plunge in german investor sentiment as measured by the zew and a 25% risk of recession again in germany. and it sort of ties in i guess with the pmis we've seen. the german economy keeps weakening, how does that play into german politicians thoughts on the rest of the eurozone?

>> first yorks want to play this down, but the zew as you say sin investor confidence. i'm not saying that other endisease like the e 4 and other indicators aren't also pointing down. but we know that the investors are always a little bit more glum about what's going on in the eurozone crisis and the debt crisis by and large maybe because they're a bit closer to the various cliffs we're about to fall off from. so the zew not always the best indicator for what's going on there. but you're quite right, we have a deterioration also in the core of the eurozone and that's not only because of the euro debt crisis, that's because we have a sort of softening of the economic situation globally. they have to deal with that, but it doesn't change the baseline scenario that they try to keep it together. thanks for that. still to come, chinese ruling communist party will unveil a

new set of leaders. >> we'll talk to meichael petti about the challenges ahead. ♪ ♪ ♪ [ male announcer ] some day, your life will flash before your eyes. ♪

make it worth watching. ♪ the new 2013 lexus ls. an entirely new pursuit.

. there have been plenty of calls for reform to the financial system key to the widening income gap. dee joins us once again. >> you're right, plenty of calls for reform, but very, very carefully worded because policymakers don't want to upset the show of unity so important during the congress. and this year of course is annen credibly important one with potentially a lot of spots up for grabs on the all-powerful standing committee. but the reformers are essentially saying that china's economic start will fade without pro market reforms. reforms like interest rate liberalization, the opening up of the economy and financial markets. and these reform hes say by promoting pro market reforms, this will help social reforms, as well, such as environmental protection and also narrowing the gap between rich and poor. some of those calling for these reforms include the deputy governor of the central bank in china, peoples bank of china as well as the chairman of the

securities regulator. but these are of course deals carefully worded. usually contained in bland statements because there is a powerful group of leaders opposed to these reforms and they usually have interests in state owned enterprises which enjoy near know made. >> joining us, michael, good morning, thanks very much for your time. you're the ideal person to talk about these important transitions. in your reading of things, who here is going to emerge more influential, the reformists or conservatives and what implications is that going to have for the world community? >> well, i think the initial response seems to be that the new leadership understands how urgent the reforms are and not only are they likely to

implement these reforms or try to implement these reforms, but i think in 2012 earlier than i expected, they've already begun doing so. growth rates slowed significantly, real interest rates rose significantly. so i'm optimistic causes issuely that the leadership really understands it. but the problem is the same problem that every country that has had this sort of investment driven growth has had,nd that is the adjustment process will be very difficult. and the biggest impediments to the adjustment is not ignorance or lack of understanding.biggest impediment is that the groups that have benefitted from the distortions in place for the last 10, 20 years have become very, very powerful. and not surprisingly they're not terribly eager to he see the distortions removed. this is why most countries that have had investment driven growth miracles have never managed to go on to the next stage. so the real question in china is

we think the new leadership understands the urgency of the reforms, but will they be able to force the reforms through. the majority is completely out on that. >> what will give you an indication that they can deal with the vested interests, if i can put it like that? >> well, what i would be hoping to see, i expected to see a little bit bump in growth as the new leadership consolidates power. my guess is and it's purely a guess is that the more digt the consolidation process is going to be, the longer we'll see the high levels of growth driven by increased investment. so i would love to see credit contract rapidly and growth rates drop. that would suggest that the new leadership is confident of its ability to force through the

reforms. if growth rates stay high, then i would wonder about whether or not they've been able to consolidate power significantly. >> they need to make the shift, but things will get worse in the short term. and if it doesn't pick up not long after that, they'll have some problems. >> yes, but you have to distinguish who it's going to get worse for. rebalancing by definition means growth in household income has to outpace growth in gdp. even if gdp growth rates drop to 3% on average, it doesn't mean it's a disaster for chinese households. if household growth continues at 5%, 6%, that's pretty good and households will be happy. the real burden falls on the

state sector because also by definition, just as household income growth has to exceed gdp growth, the growth in the state sector must be lower than gdp growth. so the real adjustment, the real difficulty adjustment falls on the state sector and on the elites that control the state sector. so it depends on which part of china you're looking at, a rebalancing is not necessarily bad. in fact a rebalancing can be quite good for the household sector. even with much lower gd about p growth rates. the resistance will come from the say ttate sector. >> michael, good to talk to you. thanks for joining us. greece has some money. >> results are out. greece has raised 4.026 billion euros, again below the 5 billion euros that it needs to roll over for debt maturing november 16th. reuters is reporting that greece

sold 4.062 billion euros worth of one and three month t-bills. the yield 3.95 on the one month, 4.2% on the three month. bid to cover ratio came in 1.66%. the euro-dollar is weakening a bit more on the back of these results. the question of course becomes whether now that we're getting the dow jones figures through if there's any discrepancy between the totals. but the way things stand right now, it would seem there's still about a billion euros shy. >> what's a billion. just empty our pockets, we can find a billion fight end of the week. >> that was smaghi's point yesterday. >> we have a german auction coming up. a billion to germany is like, you know -- >> blept more on the results right when we come back from this short break. first, though, these are your headlines. in the u.s., countdown to the fiscal cliff under way. congress returns to work with

just seven weeks to reach a bucket deal. >> and the two publicly disagreeing over fiscal targets. but they tell the program ministers will find a solution. >> and the greek treasury sells t-bills in order to finance 5 billion euros of debt by the end of the week.

. u.s. futures are accelerating to the down side after greece has come to auction and the results a critical auction to avoid a government default show greece raised just over 4 billion euros, shy of the a billion hoping to hit. dow lower by almost 60 points. similar for the nasdaq and s&p. greece ase composite down 1.4%. ftse down 0.8% 7120 is the level on the xetra dax. cac 40 down by about the same amount. ibex 35 shedding 0.6%.

consistent risk off theme here. >> just under a billion shy of what they need. there is the prospect that they could raise more in supplement taker sales. meanwhile the agenda in the u.s., the monthly u.s. federal budget statement will be released at 2:00 p.m. 3:30, janet yellen will speak with central bank communication. and on the earnings front, we get numbers before the open fho depot, michael kors. after the close, cisco systems. >> the u.s. holiday shopping system officially kicks off black friday, the day after thanksgiving. but for consumers in the new york city area, finding that perfect holiday gift may not be the first thing on their minds. they're continuing to clean up after hurricane sandy. before the storm struck, a majority of chains were fairly confident about the holidays expecting sales to be the same

or better than last year. joining us now is executive vice president of the retail council of new york. ted, good morning. we spoke with you last just after the storm. and your sense wasn't clear yet as to what the impact would be. and that ben foit a home dae poe and the other suppliers or would it hurt results for retailers broadly speaking. do you have anymore clarity on the issue today? >> i think going into the holiday season, it's always neb's guess how it will go. this puts such a huge unknown into an already unknowable factor. and i think as you just mentioned as the home improvement stores will probably do a little bit better particularly in the new york city long island new jersey westchester areas, simply because it's a fact of life down there now and that's where people need to spend their money. >> i also wonder when we talk about the strength of the holiday shopping season if

there's been any big impact from the storm. broadly speaking it sounds like some of the gains and losses are offset, but codid you expect an change in mood and sales as a result of the storm? >> so much of holiday shopping is based on emotion. right now in a pretty heavily populated part of the country, you've got people for whom holiday shopping is probably the last thing on their mind. they'll move it a little bit closer to christmas. christmas obviously will be coming for them, as well. but right now, they're not thinking so much about that. and retailers have to be very sensitive to how they respond, how they market the holiday shopping season. how they get people into the mood to shop which is such an important part of us as consumers going out and actually doing our holiday shopping. >> consumers realize perhaps that they can help stimulate the economy by shopping, is there any concern about the supply side of things, about

transportation, getting inventory, produro getting prodo stores? >> know, ovover the past couples as the recovery is start to go take place, the government has done a very good job in new york of making sure that trucks can get over the budgets through the tunnels. tur talking about unprecedented logistical problems. and the retailers have been working with governor cuomo's office to make sure that they can get things over those bridges and to the stores where they need it. so the merchants right now, what they're worried about is getting the materials to the stores that the up kerrs nconsumers need. but the holiday merchandise, there will be people who want that, as well. so we have to really work hard to make sure that those logistics stay in place. and that the roads are open.

that's up to the state, but thif's been good working with us to get things from point a to point b. >> what do you think about foot fall? gets the goods in is one thing. people actually coming to the city and 2k3wgetting out and wag to shop. >> sure. tourism just to bring that up for a moment, tourism has been such a big part of the holiday shopping experience in new york city over the past few years. so we did hope that people still come and they bring their wallets. but as for the residents, actually having the time to get out, that's going to be a challenge. because they've got so many things that they need to do in their homes to clean up and to recover. so the foot traffic driving to the stores, really taking the time that uppers often take,

there's a long stretch between now and christmas day. so i think probably you'll see it will be a very busy just before we get to christmas, but between now and then, there's still a lot of work to be done and people are prioritizing that way. >> ted, good to see you. thanks for joining us this morning. we'll stick with the shopping theme for a moment. if you've started thinking about what gifts to get for the the ones, enter our website for a slide show of the top crazes of all time. >> rubik's cube and mr. pe dota head are on the list. my favorite atari.

e-trade leads the way in wherever, whenever investing. download the ultimate in mobile investing apps, free, at e-trade.

can i still ship a gift in time for christmas? yeah, sure you can. great. where's your gift? uh... whew. [ male announcer ] break from the holiday stress. ship fedex express by december 22nd for christmas delivery. the head of microsoft business is leaving. he spearheaded microsoft 7 and 8. halo 4 is another hit.

the action shooter game will vie for the title of the year's top selling game. this of course as sky fall the latest installment of the james bond franchise had its best opening weeg end, $87 million. that was its u.s. box office take. still, though, pales in comparison to what halo did. so is the age of cinema over? jeff tweeted in to say i'm for sky fall. movies will always live on. joe disagrees. golden age of cinema is over. costly to go, cable satellite operators get new releases sooner and home theater is now pretty close to the cinema experience. that's for sure. gold prices have fallen recently as the euro drops to a two month low against the dollar amid concerns about mr. greece will secure another round of eu aid. still the precious metal could find support and a lot of it.

seema mody explains. >> diwali will be celebrated by indians all over the world. and they celebrate by buying gold. according to the world nold council, demand is generally very strong between october and december as buying gold around in time is considered auspicious and lucky. and it also kicks off wedding season in india. however, with india's sluggish growth rate, high inflation and the rupee depreciating, some are speculating that appetite for gold this holiday season may be less. brian hicks says because of the continue you go rupee weakness, demand ahead of diwali is weaker compared to last year. how far, what might help is two days before the diwali when indians traditionally start their gold buying. this year it fell on a sunday. the director of world gold council in india said a lot of the gold selling channel which was are usually shut on sunday

actually opened to allow their customers to buy gold. this included stock exchanges to sell gold etfs. shares of the spdr gold trust etf has actually moved lower. in the past during the same time frame, it has moved higher ahead of diwali. later this week, the world gold council will be putting out their latest report on the consumption and demand for gold. expect more details then. back to you. >> dollar index may be up at a two month high. not much impact on gold. 1725. a lot more gold demand coming in as they maneuver out of their foreign exchange data. fundamental picture is still going to be fairly strong. but despite the dollar strength, hasn't impacted any weakness in

gold today. >> that's for sure. thanks very much. if you're just joining us, you're watching worldwide exchange and these are your headlines. counting down to the cliff, congress returns to work today. facing a seven week deadline to reach agreement. french finance minister says a solution will be found to the greek debt question. and athens raises 4 bell i don't know billion euros ahead of a debt roll over on thursday. respect . they need 5 billion but raised just over 4 billion in one and three month t-bill auctions. 4.062 is what they've got. so it's left them under a billion shy. there is a thought that they will be able to have some supplement taker papers in

noncompetitive bids which might get them to the 5 billion mark. and still to come, president obama meets with business leaders and we'll assess the task ahead. [ male announcer ] how can power consumption in china, impact wool exports from new zealand, textile production in spain, and the use of medical technology in the u.s.? at t. rowe price, we understand the connections of a complex, global economy. it's just one reason over 75% of our mutual funds beat their 10-year lipper average. t. rowe price. invest with confidence. request a prospectus or summary prospectus with investment information, risks, fees and expenses to read and consider carefully before investing.

and you pick the price that works for you. great. whoa, whoa, jamie. watch where you point that thing. [ mocking ] "watch where you point that thing." you point yours, i point mine. okay, l-let's stay calm. [ all shouting ] put it down! be cool! everybody, just be cool! does it price better on the side? no, it just looks cooler. the name your price tool, only from progressive. call or click today. i got you covered. thank you. oh, you're so welcome.

new york stock exchange suffered a trading glitch. an outage shortly after they opened monday on its matching engine. trading halted for more than 200 stocks. once they determined their official closing price based on an old method of reading the last sale prices, a set of the new auction system used to close stocks. today president obama meets with labor and progressive leaders at 11:30 to discuss how

to avoid the looming fiscal cliff in january. the group includes the presidents of the afl-cio and scie unions. also the center for american progress and center on budget and policy priorities. obama will meet with business and civic leaders later this week before starting budget talks on friday. congress returns from recess today with just seven weeks to reach a budget deal. republicans are confident the two sides can reach a compromise. >> the did you tell ceiling is the more important date personally than the fiscal cliff issue because we're not -- the fiscal cliff is not going to happen. just simply not going to happen. so to me the focus ought to are on solvency and if we can deal with that and take a big step out of that, a big step toward solving that, during this december, i agree with you you, i think the markets are going to take off and i think from an outside perspective, things are undervalued if we do that. >> bob corker making a market call there. joining us is president of per

kadian asset management. ken, would you agree, do you think the market here is vastly underpriced?en, would you agree think the market here is vastly underpriced? >> i think that people that are getting too focused on the shorm term aggravation are missing the big picture that the end game is in sight. one of the things regardless what your inclination was for the election, whether happy or sad about the result, we probably got a result that will lead to the fastest resolution of our fiscal issues. because we returned the incumbents to office and we know exactly where they all stand. we know exactly what foot loyals they're dug into. think if we could have gotten an entire change in washington, we would have spent the next six to eight months litigating what reform should look like. so in some ways there is actually a silver lining to the elect. >> i know you've written a

column about this why falling off the cliff won't happen, but i'm not sure why clarity on the bargaining positions should give us any solace that they can reach an agreement. i guess on in a front, if you want to be encouraged by anything, it would be the glenn hubbard op-ed where he seems to indicate willingness to give i don't understand when it coulds to raising taxes on the wealthy. >> i also think we have to give a nod here to human nature. no one wants to have their hand on the wheel as the cargos over the cliff. these are human beings that have to say that they let it happen. so i think you'll start to see much more of an era of compromise come over washington. spier boehner came so and sang the first version and president obama sang the second verse. they'll find a middle ground because there's a mandate for it and everybody knows what the

issues are. so i actually am very optimistic that we'll have some pain in the short run, maybe three to six months, we'll start moving towards an end game and that's where investors should be positioned for. remember what wayne gretzky said. he was successful because he traded to where the puck was going, now where it is now. >> and a compromise involves higher taxes somewhere, so what does that do for your clients and investments? >> what i love that richard lefrak said is that wealth has been convicted and we're just waiting for the sentencing. that really puts it in context. because the wealthy, whatever that means and whatever they decide wealthy people are, with already knowing that they'll pay more. one of the things that's interesting is once that happens, and i believe that's the beginning rounds, all eyes will be turning to, okay, great, that's done, the villain is out

of the room. >> if anything the attention on the market activity this morning is already back focused on the eu. so this may have removed one down side scenario, but obviously that's another one staring us in the face from across the atlantic. >> fair enough. but think about how we would have exacerbated in this country if we turns out that we go off the fiscal cliff and crash on the rocks. so that removes a huge amount of uncertainty and europe will work through its issues. whether greece or portugal, they're grinding through solution. one of the things we're seeing from the greek situation is that pure austerity is not the way to go. >> and we'll leave it there with ken. thank you for joining us.

>> "squawk box" up next. with the spark cash card from capital one, sven gets great rewards for his small business! how does this thing work? oh, i like it! [ garth ] sven's small business earns 2% cash back on every purchase, every day! woo-hoo!!! so that's ten security gators, right? put them on my spark card! why settle for less? testing hot tar... great businesses deserve great rewards! [ male announcer ] the spark business card from capital one. choose unlimited rewards with 2% cash back or double miles on every purchase, every day! what's in your wallet? here's your invoice.

today's top stories, quarterly results from home depot. remember the retailers usually come after the others. numbers in just a few minutes. also you'euro fears. here at home, docongress returng for a lame did duck session. the looming fiscal cliff among the items on the agenda. it's tuesday, november 13th, 2012. "squawk box" begins right now. good morning. come to "squawk box." i'm becky quick along with joe kernen and andrew ross sorkin and we've been watching the u.s.

equity futures sharply weaker. dow down by about 61