hello welcome to "worldwide exchange." i'm ross westgate. paris wakes up to a domestic and international fallout after the french finance minister rescheduled a meeting with u.s. counterpart jack lew and deals with questions of who knew what about the former budget minister's swiss bank account. run fof your lives, pyongyang's over the top warning

to flee south korea garners more scorn from its neighbors. meet the old boss, same as the old boss, jcpenney replaces the ceo who took over from the former chief, mike uhlman. >> announcer: you're watching "worldwide exchange," bringing you business news from around the globe. as world leaders continue to pay tribute to margaret thatcher, we'll assess the legacy of the iron lady with a former special assistant to ronald reagan. today, we'll also be joined by the author of the international best seller, traders, guns and money, live from sydney. he says germany is set to become the ultimate victim of the euro crisis. find out why in this hour. we'll also be in beijing as the bird flu health crisis

spreads, china vowing to prevent another outbreak of the virus. and we'll be in around 10:45 cet. julie will be at that presser. plus, we'll be in the fresh camp ahead of the meeting later today after the french finance minister's cancellation and rescheduling. what is the story? kelly, this information has been a little bit hard to come by. all right. meanwhile, just over an hour and two minutes into the trading day. certainly waiting to the upside. decliners being outpaced by advancers nearly eight to two on the dow jones stoxx 600. we had the u.s. markets closing

at the best levels of the session after a volatile session. the dow was in a 1116 point swing. 6.6% to the nasdaq and the s&p. right now, the ftse 100 is up 0.75%, xetra dax up 0.5%. let's get more from asia. sixuan has more for us out of singapore. >> indeed, thank you, ross. it's a largely positive day here boosted by the innation data from china. the country's cpi eased in march amid contraction of producer prices further deep. this may urge beijing to boost confidence sentiment. investors look out for the next batch of key data due out later this week including trade numbers and q1 gdp. financials made us rebound today

and developers gained after property giants bankuh reported first quarter sales numbers. the hang seng had its first gain in four days. mean tile, bel international jumped 4.4% today bolstered by its fastest quarterly sales growth in more than four years. moving on to japan, the nikkei took a breather after recent gains boosted by the boj's easing steps ending on a flat note. miners rallied, but property developers gained nearly 20% over the past two sessions with reflationary policy. emphasis where, south korea's kospi masked its six day losing streak, but only ended marginally higher. down under, firmer commodity prices and positive china data boosted all trail ya shares higher by 1.45%. and india's sensex is now on

the move, trading higher by a modest 0.2%. that's a look at the asian markets. back to you. >> sixuan, thank you for nap. in china, a new strain of bird flu continues and thousands of birds culled. 24 people there have contracted the h7n9 virus. china says it can contain the outbreak as world health officials appeal for calm. for more, we're joined by eunice yoon. eunice, how serious is this outbreak? how believable are the government's plans? how comforted are people by the government's plans to contain it? >> people are -- aren't necessarily so comfortable. obviously, the chinese officials have been making a lot of assurances to try to get people to stay calm. they've been saying all the things that you would expect them to say, which is that they've taken action at the

markets. they've stopped all the live bird trading. they've shut down markets. they've culled tens of thousands of chickens. they've also said time .again that they wanted to make sure people now there was no evidence of human to human transmission, which, of course, is very important in these types of situations. just because in the history of what people have seen in the past -- and i'm talking specifically about ten years ago in 2003 durs the sars outbreak and the fact that the authorities here at that time had moved very slowly in trying to contain this and in being forthcoming with information, people still remember that here. and so there is a lack of credit nlt on some level in terms of people when it comes to public health issues. then, of course, there have been a lot of reminders of public health issues that still remain out there just because as we've been discussing over the past couple of weeks, thousands of business have been found floating in a river in shanghai. there have been plenty of other food safety issues that have

been coming to the fore. there's been a lot of discussion on the international and among the chinese public about, you know, what's really going to come next. >> we also had benign inflation data today out of china. we've got mining stocks doing very well, not only that, but in alcoa figures, as well. what about the implication of that for policy? >> well, most people here are thinking that means policymakers have some room to continue to support the economy here. there's been some discussion as to exactly how sustainable is the economy, is the growth going to continue or is it going to falter later in the year? so people see this as a way for policymakers to continue to have some looser monetary policy to keep the growth going. however, it doesn't mean that inflation is just going to go away for the rest of the year. a lot of people have been expecting us to see a slump in the inflation figures for march just because they had been so

strong in january to february because of distortion and a lun honor new year holiday when everybody goes gun shopping and they end up buying all this stuff and that pushes up prices. but later in the career, people are still, you know, a little bit concerned mainly about property prices. property prices are still very, very strong despite the fact that the government is throwing out all of these measures to try to contain the sector. >> all right, eunice, good to see you. thanks for that. we'll catch you a little later. for more, we're joined by fred long and the author of guns and money, knowns and unknowns. freya, let's kick off with you first of all. there's two ways of looking at inflation data. one is that economy isn't doing as well as we thought. the other is that policymakers will keep the taps open a little longer. how do you view it? >> yes. what we've seen is we had this worry over inflation picking up

in february. we weren't sure how much it would bring for the lunar new year. now that we have in data, we can see that there isn't the overheating concern that we might have seen and that is a result of the fact that we haven't had growth for long enough after this fiscalal hard landing we saw at the beginning of last year to really push that forward. does it give them room to ease? i think maybe if we pair back to a deeper question even what is the stance at the moment, so they have been easing, they have been trying to stimulate particularly in q3 of last year. but now what they have is a situation where the real exchange rate in effective terms is actually very high. when you have that against the back drop of weakening growth in the u.s. and of japanese monetary policy undercutting, then that is actually quite restrictive monetary stance we have at the moment, even though the monetary growth has been adequate.

so the question now is we've heard over the beginning over this year are they going to be moving to tightening, particularly with worries in the property market overheating. the question is, are they -- is that over now? we're now going to move into more of a loosening stance and with that, what would that mean for inflation? >> yeah. what would your best view be on that? >> i'm sorry? >> what would your best view, guess, be on that? >> so we think in any case because of this high real exchange rate at the moment, what the authorities have very little scope to actually do anything other than just try to inject more liquidity into the system. and even in that circumstance, we might have, really, a situation whereby the end of the year we're anywhere facing

growth of back below an annualized rate of 5%. >> thank you. let's bring you in. the chinese premiership was making comments yesterday suggesting the data, the super charge growth rates we've seen are pretty much over. so what is the trajectory now for china and its influence on the rest of the world? >> i think you've got to come back a stage. when you look at figures of 8% or 9%, you have to look at what argues that. i've been arguing for years that the 8% to 9% is misleading. you need to pump in 30% to 40% of china's gdp. and the chinese banking authorities are quite open, saying some of those loans aren't going to come back because they're bad loans. that may be 10%, maybe morp if you take 10% of that, shouldn't you be deducting it from the growth figures in the first place? and if you do that, they're never growing at 8%, anyway.

and i think fundamentally, the problem the chinese have is this whole rebalancing issue. but they can't do that because domestically it's too hard. but now they have the added problem of essentially the global quantitative easing with japan, the united states, the sterling block and probably ultimately the european union will do that. so they're caught between a rock and a hard place. so i actually think they're going to keep flooding liquidity along with the reflect of the world. they've been that's all they're going to do. remember, we have a new flip leadership in charge in beijing and they don't want growth to collapse on their watch. so they'll fiddle the figures. i'm quite amused by all this discussion about the inflation figures. i think i take every statistic which comes out of china with a grain of salt. basically, it's one data point. i don't think it's that interesting. but i think we're going to see china continue to bump that. >> i'm interested in your view.

you don't think they can rebalance? if they can't rebalance, where does it lead them? >> it basically leaves them in the scenario that essentially japan finds itself. there's huge parallels between japan and china. they both had large debt field investment booms which developly run out. and to rebalance, they have to build their entire social welfare structure. it might be too much. it certainly isn't possible over a three-year time horizon. >> freya? >> i would definitely echo that. there are serious reforms, one might even mention supply side reforms with the parting of baroness thatcher. and these are difficult reforms which are painful to make and leaders don't like making them. this is why thatcher had such a name because she was one of the few people that did go ahead and make them when you look at these

guy dwantic state-owned enterprises. what you're basically asking is for investment which has been driving the economy over the past decade or more to step back from -- and asking the private consumer to step up on when most of the income is still flowing towards the state-owned enterprises and the corporate state. so you're asking something, a huge shift in the chinese economy against the backdrop of not particularly buoyant global demand, to say the least. >> and in the uk, it drove unemployment up to 3 million and i'm sure the chinese leadership isn't prepared to see higher unemployment levels, which leaves -- the other issue is, as well, private nter price isn't going to pick up, is it? in china, they're going to keep saving unless they feel secure there is a social safety net. >> actually, the -- >> most of the -- >> yes, actually, go ahead,

fraya, and this will be the final point. >> sure, sure. most of the savings, in fact, coming from the corporate state itself so household savings is only a small fraction of overall saving. and that is, again, going back to what i was saying in the first place, is that income is being channeled towards this big corporate state and the private enterprises and is private house holds just don't have the firepower to move the economy forward. >> i think one of the funniest things about all of this is i remember a chinese friend of mine said there's a misunderstanding about the chinese psyche. he said they like to make money and they gather it and they like to look at it. they just don't like spending it. >> there we go. we'll leave it there. freya, thank you very much. we'll let you go. meanwhile, still to come, treasury secretary lew will now

head to paris after some back and forth over whether he would meet with his french counterpart. he also wrapped up talks in berlin. welcnew york state, where cutting taxes for families and businesses is our business. we've reduced taxes and lowered costs to save businesses more than two billion dollars to grow jobs, cut middle class income taxes to the lowest rate in sixty years, and we're creating tax free zones for business startups. the new new york is working creating tens of thousands of new businesses, and we're just getting started. to grow or start your business visit thenewny.com

eads shares are trading lower after the french conglom rate rat said it sold shares in the empire. they plan to revamp its shareholder structure. and s&p says it expects portugal to address its budget shortfall in the next few weeks after a court overturned key austerity measure peps the agencies said the decision had no immediate effect on its sovereign rating and it expects lisbon international lenders will extend the maturity of its loans as long as it sticks to its bailout commitment. earlier yesterday, fitch warned it could push portugal's debt rating deemer into junk territory if it interrupts the nation's fiscal repair plans.

news out of slovenia. they need more than $11 billion to shore up their banks possibly. and u.s. treasury secretary jack lew is completing the final leg of his tour today. he's currently meeting the german finance counterpart in berlin and then he will be flying to paris to meet with his french counterpart pierre moscovici this after the french finance ministry canceled that meeting yesterday. right. the dynamic duo is following mr. lew around europe. we've got jules over there and kelly is in paris. we'll get to you in a sec, kel. >> it's going to center around the idea of rebalancing and

growth, given that's very high on jack lew's agenda. they're going to talk about the banking union and perhaps its trade between the eu and the u.s. the big question mark is what good is it going to do to germany? they've made that position very clear. last month, they preannounced their budget, added additional austerity and said they were going to balance the books a year early. so perhaps any discussion of slowing the pace of fiscal consolidation in germany is likely to fall on deaf ears, i have to say. and that message is not different. perhaps you could contrast what we've going to have in the discussion today relative to what we've seen in the last two years. this time, of course, it's not being done at a time of market volatili volatility. perhaps, at least we aren't going to turn around at the end of this and have comments or anger from the european officials that they're being told what to do by a country quite frankly that's going to look towards their own fiscal and debt positions at home. ultimately, what are we expecting? a benign statement later on.

yes, i think one thing that they can both agree on is this idea of need for further structural reforms, yes for programs on the banking secretarier, but ultimately if you're looking for them to perhaps do something about growth in the eurozone, five months ahead of a german election, you can once on, ross. >> yes. i also wondered, jules, how much frustration there might be in the states. current account surplus in germany was 7% gdp. not much rebalancing going on. >> absolutely not. i think arguably pointing at them more than the chinese at the moment. of course i think the u.s. are frustrated. when i was last in brussels around the cypriot bailout deal, the suggestion there is that u.s. officials were talking to the imf and telling them not to push so hard on the details on the bailout because the last thing they wanted was to have a flare up in the debt crisis.

yes, i'm sure they're very frustrated, but ultimately, do they have the ability to make germany do anything different? no, they don't. >> kelly, let's bring you in from paris where we know the french economy is struggling a little bit. what happened yesterday with the moscovici? do we know? >> no, ross. how extraordinary. if you take a step back and consider that here is jack lew making his second trip to europe, people were talking about the fact that he had made a point of going to china first and then europe, and then among the places he's going, he started yesterday in brussels, met with european leaders. then it was to frankfurt to meet with draghi last night. he was supposed to wrap things up with moscovici. that trip canceled, then we heard they were trying to find a better time because there was a scheduling conflict.

sotd point being, it's a embarrassment for france, frankly. they've turned around, they've been able to salvage the meeting. they'll be meeting a little before 4:00 p.m. local time today. we know the theme of jack lew's visit has been telling the europeans, the germans in particular that they need to do more to spur demand across the eurozone. this comes after we're learning how weak the eurozone unemployment is. there are 19 million people unemployment. just yesterday, moscovici had to downgrade his target. at a time when the french message frankly has been more consistent with what the u.s. is saying is that they're pushing for growth, they're worried about austerity. that message at the moment is un-gulfed by the police crisis. >> what do you make of the

eurozone policy response to the crisis so far? >> well, i think if you have a debt crisis like this, there's four ways you can get out of it. one, if you punish the borrower, which we're doing in the case of cyprus. secondly, the lenders, which in this case means the european bankers take a hit. third, if you find a rich sugar daddy, which in this case means germany to pay for it and fourth you fudge and hope something is going to turn you up. europe has tried all four and it's failed. essentially, the germans will refuse to inflate their economy. angela merkel has said they're an export driven know. they're not going to inflate. they're just going to grind lower and lower and implode eventually into a long period of stagnati stagnation. there's no way out of it now. >> and the trouble is muddle through has become the default

policy option here. while it's true the germans aren't going to allow inflation to happen, they are talking about wage rebalancing. you hear this sometimes. you see what the public and private unions are getting when it comes to wage bargaining. increases in the range of 5%, 6%, .% in some cases. the german real estate market is doing extremely well. so there are signs that there is some of this strengthening happen. i argue the biggest risk right now, if you want to look at the point of view in frarchb, by far the biggest risk is that the german economy isn't doing well enough. >> i think it's interesting that you should say that. the first thing is the ig mittal increase in wages is the first since 1992 of this magnitude. the most important thing is, the germans will say it's not our wages, it's the italian and spanish workers that are overpaid and they have to come

down. the second thing you're talking about in terms of restructuring is major structural reforms, which germany did, they want want other people to react. other people are looking at each other and ultimately this will end in tears of large proportions all around. ultimately, germany is going to be the big loser in all of this. >> hang on. how big a tear? what's going to happen, briefly? >> well, germany is basically, i think, going to be losing somewhere between, i don't know, 750,000 trillion euros which is roughly about a third of their total savings pool. they will eventually get wiped out. the question is does it get wiped out in one go or do we drag it out over 10 or 15 years? germany is taking all these debts on to their balance sheet either directly or indirectly via the bailout funds or the target system. unless they leave, they'll developly end up owning all of

the debt. >> all right. yeah. i think it will happen slowly. thanks for that. stick around. kelly, we'll catch you later, as well the. still to come on the show, tributes continue to pour in for prime minister margaret thatcher. we'll take a look at her impact on the british economy.

chinese inflation slows dramatically in march. a wake up to international fallout after the french finance minister reschedules a meeting with counterpart jack lew and it raises questions about who knew what about the former bank governor's bank accounts. run for your lives. pyongyang's warning for people to leave south korea only garners more scorn from its neighbor pes sdmroop manufacturing output down -- sorry, up 0.8% on month. down 1.4% on the year. a little better than the forecast february move of plus 0.5%, down 1.3%.

february industrial production up 1% on the month. it was forecast to be up 0.5% on the year. that's slightly better than expected. we also have some trade data, as well. wider than expected. the global goods trade deficit at 9.4 billion. the february machine in the floebl goods trade number in january is unrevised. the february global goods balance is forecast a deficit of 8.8%, as well. i've already done the industrial production. sterling/dollar rallying on the back of stronger industrial figures. 1.5286 is where we stand on cable. we also have bad loans in italy's banks rising to 18.6% from 17.5% in january. this according to the bank of italy, private sector deposits held at these banks up at 7.8

from 7.7% in january. but it's the bad loans ratio that is still getting worse. meanwhile, european stocks are firmer. near the best levels of the day. ftse 100 up 0.6%. the xet ra dax up 0.7%. the cac 40 up 0.87% and the ftse mib up 1.2%. treasury yields, 1.75. and italian yields are still very well contained. on the currency markets, the focus is still on the yen. the yen is hitting 47-month lows against the dollar. we got to 99.67. 1100 we're moving to. we have moved to bring that boo sights very rapidly, indeed. the euro has been at the highest since january 2010. sterling/dollar we just looked at. euro/dollar steady at 11.30.

now, the longest serving of the british prime minister margaret thatcher has died at age 87. she greatly reduced the role of government and celebrated free market capitalism. thatcher's rejection of consensus politics made her a controversial figure, both inside her own party and on the street. just worth looking at some of the reaction this morning, as well, as far as the papers are concerned. most of them having pictures of margaret thatcher on this morning. in fact, the telegraph literally just going with margaret thatcher and her date, as well. she was a decisive political figure, "the daily mirror" came up with the caption the women who divide add nation. summing that story up, as you can see, as well. "the guardian" her title was she

became harder than hard. she was nick named, of course, "the iron lady" by the russians. here is a younger margaret thatcher, 2013. the times in the uk just coming out with a souvenir edition, a wrapper on the front page with just a picture of margaret thatcher and inside, they simply just call her the first lady. the independent, the woman who changed britain, which is i think generally been the sentiment that's been evoked most is that whatever -- whether you agreed or not with her policy, she decisively changed politics and parts of the world, as well. and finally, "the sun," taking a rather different view on it, maggie dead in bed at ritz. there you go. that's what the papers are done

with margaret thatcher. satje he t, what do you think is margaret thatcher's legacy, particularly right now as we're still combatting some of the issues she had to face? >> without her, i suspect the big banks wouldn't have occurred. but i think you have to look at margaret thatcher as part of a group of people, including ronald reagan, who at the forefront of deregulating financial services, whole parts of the economy. so i think she was very important. and it was a transition from the mixed economy with much more government intervention that she and ronald reagan and all of those people at that time oversaw. now, of course, the legacy of that is probably more than it was five or six years ago.

i think i'd leave it to historians to come and say whether it was all for the good or all for the bad. but i agree with the sentiment that she was indeed her own woman and she certainly divided opinion. but some of the stuff written with her today about reducing the size of the government, reducing x, y and z is probably wrong because that probably didn't occur. but she was the most dominating figure in english politics since probably the 1960s. . >> yeah. the interesting thing is, the deregulation, some people blame the financial crisis on the deregulation that started this. is that too simplistic? >> i think it's much too simplistic. you have to put that into context. what actually happened is in the 1970s when the global economy was sag nated, people experimented. this was part of that experimentation to try to get the economy going.

the most amusing thing is people find the bond, i doubt whether ronald reagan ever read hyack. i'm not sure margaret thatcher read hyack because she didn't follow what he said. >> keith joseph, she followed more keith joseph, as well. one analyst told cnbc that her free market policy paved the way for the eurozone. find out why on cnbc.com. and we've been taking a closer look at some of her greatest moments. you can see plenty more on the iron lady's life in pictures. what do you think her legacy will be inspect join us here on "worldwide exchange."

e-mail us or tweet us. still to come, u.s. treasury secretary jack lew is set to deliver statements alongside the german finance minister in the next couple of minutes. also, north korea is again ramping up its rhetoric against the south warning foreigners to leave in case of a war. we'll have more analysis from seoul right after this.

now, the yen has sunk to near four-year lows against the dollars. >> the yen dropped to the lowest level in nearly four years ago approaching its 100 yen threshold, but it retreated just below that as traders took profits from recent rallies. the yen lost against the dollar since the start of the year. the moves came after the bank of japan unveiled its aggressive easing measures under the new leadership. as many analysts expect the yen's down trend to continue, countries such as south korea

showed concern about japan's monetary policy. the finance minister rejected the claim. instead, the yen's excessive strength is now being corrected. he also made sure to point out that the central bank's access is strictly aimed at fighting the country's long lasting deflation. although some analyst predict that the yen could drop further to 105 yen levels this month. others say it will take some time to reach the is 100 yen mark. japanese exporters may seek to sell off their foreign currency soon. back to you, ross. >> thanks for that. at the same time, asian development bank warned propertymakers it should be closely monitorying asset levels. it pointed out that japan's loose monetary policy saying a loan is no guarantee of an economic recovery. with the yen now as we've heard slightly towards the level of the u.s. dollar, such weakness could hurt south korea and taiwan. satjei is still with us.

what are the implications strictly of japanese policy on the rest of asia? how is this liquidity going to flood out? >> firstly, it's going on to change what is top of the pop in terms of play lists. the song we'll be singing is the weather girl, it's raining yep, hallelujah. japan is trying to export its problem in more ways than one. firstly, i don't think the actual flow of money out of gentleman an, we have seen anything like that ever before. it's going to basically set up asset bubbles and low bond yields all to asia .other markets. we're always going to see that. that's number one. number two, the competition from japanese exporters which is what worries people like south korea and china will destabilize these economies, as well. overall, this policy is bigger thy neighbor on a scale which is unparalleled. so i think this is to some

extent like the come casszys, the devine within, it's the last throw of the dice for the japanese. if this doesn't work, given the level of debt they have, given the other problems they have, i don't think what else they're going to do. and i wait with bated breath for structural reform the japanese government is going to unveil. there was a taste of that when the elderly were urged to die to help solve the problem. >> it was a pleasure. come and join us again. traders, guns and money, knowns and unknowns in the dazzling world of derivatives. >> meanwhile, pyongyang has warned foreigners to evacuate

the south in case a war breaks out. its news agency cited the spokesperson of north korea saying they do not wish to harm foreigners in the south in the event of a war. this as south korea's president said no country will invest in north korea if they continue this on the joint industrial zone. nbc's richard angle has the latest. defenses across asia are at the ready. japan says it will shoot down any north korean missile that threatens its territory. the u.s., with two american warships and a land-based missile intercepter now in the region would be able to track a missile seconds after launch. a shootdown would likely not happen if the missile heads out to sea. from north korea, more mrij

rans. a prop xwan da video shows attack dogs let lose on an efigy of south korea's minister. >> right now we're at the start of the next conflict and that's something that the whole world should be aware of. >> south koreans remain calm, but are increasingly asking what if. >> this city is just a few miles from the north korean border. now city officials are telling resident toes be prepared for a nuclear, chemical or biological attack, stockpiling food and medicine and knowing how to quickly reach shelter underground. workers distribute thousands of pamphlets, wa to do if you see a mushroom cloud or if all the birdes and fish suddenly die or if radioactive fallout rains from the sky. the notices are going up in every apartment building. >> this is a map of the shelters? yeah. >> north korea may be bluffing,

but pyongyang may not know how far it had push without going of the edge. >> we'll talk about this in just a second. meanwhile, these are the pictures here from berlin where the press conference from wolfgang schobler and jack lew will take place. let's talk more about korea, north and shouth. jasper kim, thanks for joining us. just how grave is the situation at the moment? >> i think on a scale of zero to ten, we're probably at nine or so. and it os ka lates every minute of every day depending on what the north mans to do. if we had to tilt the scale one way or the other, it would definitely be more towards a possible miscalculation that could lead to korean conflict. >> yeah. just complain that more, an

accidental miscalculation? what sort of thing might be a trigger for people to make mistakes? >> yeah, exactly. no country will make the move to create the first war. but what i mean is the next inner korean conflict. the real risk here is a financial tail risk and financial circles, is that there can be a very small likelihood of miscalculation that can really turn to huge negative consequences. no one wants war, but the what if there's a miscalculation where cooler heads can prevail? that's really the risk that i'm talking about. >> within this, what are the implications of the keystone industrial complexion being closed? >> yeah. i think that's a major consideration, but, you know, in the grant scheme of thing, there's more bigger fish to fry. because seoul is a major

financial is center.. right next so seoul is beijing. if anything happens militarily, then the financial markets will simply go into a panic. the likelihood of all this is a result, albeit, but still a chance exists. >> what is the way out? >> well, that is the million-dollar question. i think everyone knows cooler heads have to prevail, but how to get there, that's the real question. diplomacy is usually the first way to go. but the u.s. hasn't really ramped things down. if anything, it's ramped things up a little bit, which is different than in the past. also, you have new political figures and paces all over east asia. you have a new president, a new japanese prime minister and a new female president in south korea and a 20 something, maybe

30-something new figure in north korea who has been in power for maybe a year. >> what influence at the moment is china able to wield or not? >> well, i mean, china is kind of viewed as the one country that has sway over north korea just because of its similar political philosophy and economic trade between the two countries. but, you know, with xi jinping's statement which is a slap across north korea's face, that signals maybe time to take a look back and see and think about whether it wants to do that, align itself with an outliar or become a super power and become allies with the other great powers. >> you say here in terms of the best way forward, maybe, is to liberate north korea through information is what you say in your notes.

what do you mean snl. >> well, i think the great way to liberate north korea is simply to have free information flow to the north korean people. and in this way, i mean things like what anonymous is trying to do is very interesting. they want basically what a lot of other countries in the free world want, and that's basically freedom for the north korean people. but how to get about doing it is quite interesting. it kwb effective in terms of taking north korea's internet and making it accessible to the average everyday person in north korea. that will have huge effects and if that does happen, it will be more of an impact than any diplomate can have. >> thanks very much for that, jasper kim, founder and ceo of asia pacific globalrch group joining us from seoul. we have corporate news out of europe. telefonica, it's unclear whether telefonica wants to sell out of telecom italia.

talks are at an embryonic stage. i'm sure it will work out which was. that it is from reuters and it's unclear whether they would buy shares from the italian shareholders, possibly other owners, as well. anyway, there's a bit of a discussion going around about that. we are still waiting for this press conference in berlin with wolfgang schoble and the u.s. treasury secretary jack lew, as well.

the s&p said it expects lisbon's international lenders would extend the maturity of its loans as well as it stick toes its commitment. standard & poors says m&a activity will remain slow. the ratings agency forecast the frequency of deals would continue to lag compared with the u.s. but know that some cash rich companies and north american firms are willing to repatriot earnings could be tempted back in. telecoms, pharmaceuticals and consumer products cited as the sectors most likely to see activity. national zag of two of greece's biggest banks looks more likely as competitors and smaller banks say they're unlikely to tap the private sector for cash. national bank bought just over

84% of euro bank in february with the financial stability funds supplying most of the capital for a recapitalization process. but the plan great with greece's international lenders meant that private inest havers needed to buy at least 10% of their share offerings for the bank to stay private. ben bernanke says launching the tests in 20309 was a critical turning point in the financial crisis. >> today the economy is significantly stronger than it was four years ago, although conditions are far from where we would all like them to be. because bank credit for households and business sess critical to continued economic expansion. it is a positive for the recovery that banks are notably stronger than they were a few years ago.

>> ben bernanke says he's worried that revealing the models would let banks simply adopt them as their own making it easier to pass the stress tests. and just to recap, italian bank lending contracted in february for the seventh consecutive month despite lower borrowing costs for businesses. this is according to the bank of italy. banks holding the highest amount of government debt since 1998. private sector lending down 1.3% in february 2012 with loans to households dropping only 7%. the other key point, as well, we mentioned earlier was the ratio of bad loans. it's seen rising, as well. now, just before we get into the second hour of "worldwide exchange," let's remind you where we stand here on european equity markets. up by 0.5%. the cac 40 up 0.6%. the ftse mib outperforming 1% as

well as a volatile session in the u.s. yesterday. but we ended up at the best levels of the day for u.s. stocks. as far as bond yields are concerned, pretty much higher across the board today. ten- year u.s. treasury yields, 1.75%, as well. and on the currency markets, the yen down near four-year lows, you can see at the moment dollar/yen 98.95. it's worth pointing out that we've been substantially higher. we got up to about 99.60 earlier on. it's about a 47-month low for the yen against the dollar. we'll take a short break. still to come, we wait for the press conference for treasury secretary lew and the german finance minister. more in the next hour of "worldwide exchange." ♪ ♪ ♪ ♪

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sglooe th . this is "worldwide exchange" and i'm ross westgate. jack lew and german schaeuble are expected to have a press conference any minute. run for your lives, pyongyang's warning for foreigners to flee south korea

guarders more scorn from its neighbors. and jp penny fires ron johnson, replacing him with the man he took over from, former chief mike uhlman. you're watching "worldwide exchange," bringing you business news from around the globe. all right. we're into the second half of "worldwide exchange." welcome to the start of your global trading day. u.s. futures after an interesting session yesterday are pointing a little bit higher at the moment as we wait for this press conference in berlin, as well. that's where the pictures are on the left. right now, the dow is currently, what, 19 1/2 points above fair value. it was up 0.3% yesterday. the nasdaq is currently up about 8 points above fair value and the s&p 500 at the moment is currently up, what, 3.6 points above fair value. worth pointing out, a volatile

session yesterday. we did finish up near the best levels of the day. this is how it compares right now with the european stocks. and you can see we are firmer. we've just come off the best levels. the ftse 100 up 0.4%. ibex in shape up 0.78%. bond yields by and large have been higher across the board today. ten-year treasury yields, 1.74%. gilt 1.73%, a little higher, as well. we had better than expected industrial production data out of the uk and italian yields are contained ate 4.63%. on the currency markets, the focus has been on the yen, hitting fresh 47-month lows again the greenback earlier on. currently, we are above that at 98.90. euro/yen has hit levels we haven't seen since january 2010, euro/dollar, pretty steady at

1.30, as well. it's worth keeping your eyes on xhotdty prices, too. and copper, seeing a substantial fall this year down 0.8%. nymex and brent firmer. not by many. brent is at 104.96. spot gold is a tad firmer right now, 1,574.23, as well. we are just waiting for the press conference this morning post the meeting between the german finance minister wolfgang scheubler and u.s. treasury secretary jack lew. it's worth pointing out that after a cancellation yesterday for meeting with pierre moscovici. so when mr. lew has finished in pa germany, he will fly to paris. they are just beginning that press conference.

if we can get some sound or perhaps allow them to start. it is worth pointing out that germany had 7% of gdp account surplus yesterday. one wonders whether mr. lew might have pressed the german toes reflat their economy rightly more. let's listen in. >> the german finance minister scheubler, you know the rule. we will have two statements of the ministeres and then there will be time around about for questions. i would then like to really ask you to stay seated so that the delegation can leave this room. after that, of course, you're more than welcome to leave this room, as well. i give the floor to minister scheubler. >> swob ladies and gentlemen, i've had the great pleasure to be able to welcome any american colleague, to receive him here in berlin today. we've already spoken a few times on the phone. and we've only seen each other

from a distance so far at summit meetings at the g-20. we saw each other from a distance at these meetings in our current functions. but today, we've had the opportunity to meet and talk intensively about all the questions regarding our areas, areas which concern of treasury secretary and finance minister. i've tried to explain a few things about the complicated structures in europe because, after all, in europe, we are on the right track but we have difficult structures in terms of our decision making. with the ecb yesterday in frankfurt and with the commission in brussels, we had a series of talks already. it's clear that the situation in

europe and in the eurozone is of great interest for all players and here we have an exchange, part of which my colleague explained the situation in the united states. it's very important to talk openly with each other to understand each other. we did not have the intention to produce joint results, but rather to have an intensive exchange of opinions. and, of course, we also spoke about what we are going to be doing together at the spring meeting of the imf, wa we're going to be preparing for this, how we're going to be approaching the matters, all the points on the agenda were discussed in friendly and

intensive manner and i am very much looking forward to the continuation of our intensive and friendly relations with one another. >> thank you, in insister scheuble. i am pleased to be here for my first official visit. the minister and i had an excellent discussion. he and his team have been working very hard to address europe's financial challenges and to make europe more resilient. i know he has appear abiden commitment to europe's success. in t in the united states, our economic recovery is gathering strength. american consumers and businesses have demonstrated their own resilience in consumption and investment are continuing to grow. as government support for the economy recedes. the u.s. economy has expanded for 14 consecutive months -- quarters. and although the pace of job creation is not as fast as we would like, the private sector has added jobs for 37 straight

months. our deficit of the share of gdp this fiscal year has projected to decline to roughly half the share in 2009 in line with our prior g-20 commitment. as we continue to address many of our long-term challenges, our economy's strength remains sensitive to events beyond our shores. in particular, we have an immense stake in a strong and prosperous euro. with that in mind, minister schaieble and i discussed advancing the agenda for international regulatory reform and creating additional opportunities for increased trade, investment and job creation. we also discussed europe's plans to move forward on a banking union, which is critical to ensuring the long-term stability of the euro area. we had an sxlept exchange on these issues and i look forward to many more in the months ahead and look forward to welcoming the minister and his move to washington in just a few weeks.

>> translator: thank you very much, indeed. >> hi. thank you for taking my question. my name is anna from reuters. and i was wondering if you could talk a little bit about some of the differences between the u.s. ask germany in terms of how to grow the economy. mr. lew, you can the eurozone can't grow unless the strongest economies such as germany do more to generate demand. and mr. schaeuble, you think austerity should be the priority right now. so i was wondering, if you could describe, both of you, whether you have this differing pb in focus. thank you. >> i would emphasize where we agree as a starting point. i think we share a commitment to growth and we share a commitment to fiscal discipline. you know, we in the context of the u.s. economy have seen the

need to balance growth and finish discipline in a way to keep our recovery strong. and that meant some mid course corrections and extending the period of physical consolidation. you know, i have in all of my conversations on this trip, as i did when i visited beijing just two weeks ago, made clear our concern is that global demand needs to grow and policies within a country to grow demand are good domestically and it's good for the world economy. and that's the conversation that we had this morning. >> if i could maybe add one point to this, because i often have the impression that there is some misconception. nobody in europe sees this contradiction between financial

policy consolidation and growth. we have a growth friendly process of consolidation and we have sustainable growth, however you want to word it. we haven't been talking about differences which don't exist. we have been working to discuss the different situations we've faced, the economic situations and the real structures of the united states on the one hand and all of europe on the other hand. so these are the issues we've been discussing to understand our systems better, to find out how we can find joint answers to different situations. so the next question to mr. harding. >> translator: there is a problem of an international tax

erosion and tax structures. there is the initiative of the oecd and from the european perspective, there is the problem that the u.s. government introduced a tax holiday, amazon, google, big companies such as these were able to deposit their profits tax free in the caribbean. will the u.s. government be rescinding this tax holiday at any point? >> well, of course, i can't provide the answers to the american government, but we've been talking about this issue. there is a joint initiative. this is the -- the first time that i talked about this issue was at the g-20 level with the then secretary timothy geithner on the fringes on the lost -- of summit. we met with our british and french colleagues to initiate

this process, to take this initiative yes, this will be a very important issue after the imf meeting next week. >> the developments of globalization, the unbelievable interrelation modern communications technology happened only just meant that illegal tax evasion, and also the legal tax evasion structures are being utilized. this has created the need for that initiative, that is base erosion and profit shifting, shifting profits that should be liable to tax to jurisdictions which have provided the possibility to eva tax in a

legal manner and this is the area that we'll be taking the joint approach on with the ebp and the oece level. >> i think we have a shared interest in making sure that our tax laws are obeyed and that we have the kind of transparency to permit tax authorities, both in the united states and in other countries to see that it is properly subject to tax and that's important both for tax enforcement and it's also important to make sure we don't see inappropriate flows of funds for wrong activities. with regard to the big portion, we're working together with the oecb and the g-20 to make progress in this area. i think we have a shared concern that we have a level playing field where there's not

incentives for moves to take advantage of tax havens and i look forward to continuing the conversation when we meet in washington. >> mr. harding. >> robin harding. >> translator: robin harding from the financial times. >> on this trip, you've talked about economies in europe doing more to generate demand. could you tell us specifically what measures germany could take that would be helpful to growth in the u.s.? and minister schaiubler, the u.s. has fiscal consolidation. would that be helpful to the eurozone? >> i think that the point i made earlier is really the fundamental point, which is that we need to balance policies of growth and investment in the future with policies of fiscal consolidation. the targets for different countries in terms of what are potential gdp are are not all

the same, but i think it's fair to say that zero is not a good target for anyone and negative is very bad. you know, the driver for economic growth will be consumer demand and policies that would help to encourage consumer demand in countries that have the capacity would be helpful. and i think that the conversation was a good one and we look forward to continuing it. >> translator: we have confidence in the american government and have confidence that they know better what the answer in the united states is. we have a common understanding

of the position and targets, but we're not there to issue reprimands or get proposals. we always have to work together, especially in europe, to understand that we understand each other. why is the situation, for example, completely different in the united states than it is in europe? we in europe have enough ourselves to explain why europe is as it is. and in doing this, we don't have time to provide the u.s. with any advice. the last question. >> translator: hello. with regard to tax havens and tax evasion, we've been able to read today that you, mr. schaeuble, have obviously -- >> right. okay. they're on the last question, talking about tax havens again. let's bring in mary jo over there in houston. mary, the first time they've had

a formal press conference together, secretary lew saying, you know, they have an immense stake in a strong europe, banking union is key for ensuring long-term stability for the eurozone. i wonder how much frustration you think there is with the u.s. administration with the lack of sort of problem solving in europe and the lack of growth. >> well, i think that, you know, it's apples and pears. that the united states, of course, is a single economy with single -- more or less single macroeconomic policies. europe is a collection of different countries with different approaches and without the central power that the united states government and the federal reserve of the united states have. so it's a very difficult comparisons. i think the key words to listen to is balancing growth versus -- well, jack lew didn't call it austerity, but it's austerity, and how you get from where they

are to where they need to be. i think it's a slight bit rich for the united states to be lecturing europe about economic policy given that our economy, although growing, is not growing at a very strong rate and it looks like based on job numbers last week that we may be not only slowing down, but reversing a bit. so intensive talk sess new diplomatic language that i haven't heard in a while. >> wa do you mean by that? >> frank and open usually means it's not going really well and candid means it's not going well at all, so i'm not sure what the definition of intensive in diplomatic terms means. but it's interesting that scaeuble used intensive but jack lew didn't. i think you have a different perspective there. >> i mean, germany in a sense is

now saving more than china, i guess, in that percentage. would the u.s. be putting pressure on germans to say you've got to replate your economy more? >> i think it sounds that way. i think there is a difference in approach with respect to how much austerity is good, how much austerity is necessary to help bring europe out of its current situation. germany, of course, is a strong person of europe and leading the way. but given that about a third of the eurozone is in recession and other parts of it are slumping into it, the leverage that germany has is limited. and the freedom that it has to influence policy across the continent is not as much as i'm sure the united states would like germany to have and probably germany would like germany to have. >> all right. mary jo, stay there. get a cup of coffee in houston. i know it's early. plenty more to come from you.

u.s. treasury secretary lew wrapping up talk necessary berlin, throwing his support behind an eu banking union before heading off to a meeting in paris. jcpenney bids farewell to ron johnon and bring in its own chief to struggle and make a turn around. just inflation that's 234 focus in china. efforts to cape a new strain of bird flu continues as poultry markets in major cities close and thousands of birds culled. 24 people there have now contracted the h7n9 virus including seven deaths. china says it will contain the outbreak as well as health officials appeal for calm. for more, we're joined by cnbc's senior correspondent in beijing. union jis yoon. thanks for joining us. 40u67 calm is there around this

story? >> i would say it's generally calm, but at the same time, people are skeptical about what the authorities have to say. the authorities have been making assurances since the outbreak. and basically now they're saying that the chicken is safe. they've done plenty, like you said, checked out markets, stopped trading of live birds, they've culled tens of thousands of chickens and they also have said over and over that there still is no evidence that there's human to human transmission. now, despite the fact that the chinese authorities have been making these efforts, there is still plenty of people who are not entirely convinced that the authorities have the situation under control. and that's because the authorities here have had a bit of credibility issue because of what people here have seen in the past with the 2003 sars outbreak. all right, eunice, thanks for that. that's the latest out of

beijing. still to come on the program, china's economic engine keeps shugging along. find out why shippers could be running themselves out of business in a rate to attract orders. we'll tell you more after this. zap technology.

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a slowdown in chinese inflation last month brings hope against the back drop of setting up shippers for competition. the industry's key players are slashing rice necessary a bid to win more business and that'sdri bottom. joining us is rick coss, managing partner at perigre finance group in new york. thanks very much, indeed, for joining us. just how vicious is the battle amongst shipping companies in asia? >> in shipping companies in asia, i would say -- well, everything is very competitive today. we're talking about a global drive fleet that's increased by over 1600 vessels since 2010 and we're looking at overpass right now in the dry side of about 64%

in terms of dead weight. >> so you say on the supply side, things are getting better. less new vessels coming on board? >> yes. there is an improvement. we're looking at roughly -- there's roughly in terms of the order book, there's another 1500 or 1600 dry bolt vessels of all sizes coming for delivery between now and 2016. about 60% or 70% of those deliveries will be done this year. so we're looking at getting back some equilibrium. we also see some bright spots in the vessels of lesser size in terms of the handy size and handy max investment ins and the metrics seem to support a

greater recovery among those vessels than at the larger size. the problem with the vessels, 80,000 dead weight and above is the majority of the fleet, 75%, 80% of the vessels are under scrapping age, under ten years, under 10 or 15 years of age so that there's no relief or no reduction in the supply of those vessels that can be accomplished in scrapping. and you have to rely strictly on global demand, which at the moment is not very strong. >> what about financing? you say in your latest note that european banks have greatly scaled back lending to the sector. what impact is that having? >> well, it has a great effect. it's taken a lot of liquidity out of the system in terms of the actual ship owners and their abilities to meet their banking requirements. the banks have basically gone along for a very long time since

the collapse in 2008. but looking for a recovery in the charter markets. not really forcing a value maintenance to them issues and so forth with the ship owners. however, there's been a lot of fostering in the sectors that's caused them to pull back towards the ship owners. right now you're looking at some banks or a great deal of the european banks have literally pulled out of the business. so in terms of alternatives to financing, the banks have scaled back in terms of their advances on ship financing. so it's vary difficult time for ship owners. demand is weak. there's still continues a very big oversupply in dry bulk and

the banks are now in are a very difficult position in terms of their own capital structures and, therefore, money is very tight. >> thanks for that, rick. still to come on the program, as london pays tribute to margaret thatcher, we'll take a closer look at "the iron lady's" special relationship with the united states.

♪ ♪ the new blackberry z10 with time shift and blackberry balance. built to keep you moving. see it in action at blackberry.com/z10

this is "worldwide exchange" and i'm ross westgate. jcpenney fires ceo ron johnson replacing him with the man he took over from, former chief mike uhlman. alcoa kicks off earnings season on a mixed note. revenues sag. the aluminous giant issues an uncertain outlook. and germany and the u.s. put on a united front on the treasury secretary's first trip to europe. jack lew says the american

recovery relies on the continent's procesperitprosperi. you're watching "worldwide exchange," bringing you business news from around the globe. a very good morning to you. the dow ended up nearly the best levels of the day. right now, we are called higher. the dow is -- yes, we're currently 27 points above fair value. the nasdaq at the moment is currently some 10 points above fair value and the s&p 500 at the moment is around 4 opponents above fair value. european stocks have been firmer for most of the day. not quite at the session's best. there we go. the cac 40 in paris up 0.6%, the ibex in space up 0.8%, xetra dax up 0.3% and the ftse 100 up

0.5%. a few minutes ago, jack lew finished his press conference with the german finance minister in berlin. he'll now be flying tout paris to meet his french kourpt part after the french ministry cancel today meeting earlier yesterday only for it to be reinstated. lew says he and his german counterpart were coming together to find solutions to similar problems, including tax evasion. >> we have a shared interest in making sure that our tax law res obeyed and that we have a kind of transparency to permit tax authorities both in the iesdz and other countries to see where there's income that needs to be properly taxed. that's important for tax enforcement and it's important to make sure we don't see inappropriate flows of funds for wrong activities.

>> he also threw his support behind a single european banking supervisor. >> we also discussed europe's plan toes move forward in a banking union, which is critical to assure the long-term stability of the euro area. for more, julia is in berlin. kelly is in paris where jack lew will be going shortly. jules, let's come to you first of all. talks are intensive. mary jo described wolfgang scaueble described the talks as intensive. i wonder what that means under the surface. >> intense and friendly was the phrase he used, an excellent discussion from the treasury secretary. i think it was all pretty benign, wasn't it? we didn't get anything particularly explosive. yes, they reiterated they wanted some level of rebalancing, but they failed to come up with any perhaps any measures perhaps that germany could use. germany, i thought it was very interesting when the two were asked what the u.s. could do and

is what they think, the finance minister said, well, you know, i think the u.s. knows exactly what to do about the u.s. policy and we've got enough of our own without getting involved in those, perhaps a subliminal message to back off where germany and the eurozone are concerned. i think lew made the biggest point by suggesting that where growth is concerned in the u.s., 14 months of consecutive growth, they've managed to add private sector jobs. those are figures that the eurozone can only dream about. the question is are we going to get any policy from this? absolutely not. and they stated that. the first point of the discussion is they weren't intending to come up with any solutions here. a friendly and intense discussion, that's going to continue. is it going to make germany back off on their consolidation? absolutely not. >> no. as he wrapped up that meeting, of course, jack lew is then going to be on his way to paris.

it's a meeting that we didn't think was going to happen, kelly, but it is. why all the moving around? >> if i had to guess, i would say because of the message it was sending to cancel this trip. what's so interesting is the message jack lew is carrying or sending to europe is consistent with what the french position is which is frankly we're skeptical or worried about the impact of austerity. we would like to see more growth. i'd say, look, it was almost two hours that elapsed between the time when the meetings were supposed to begin and we saw them emerge to give that statement. that's a long time for the two of them to be in intensive discussions as it was described. and i'm sure that it had a lot to do with jack lew trying and trying and trying to reiterate this message which he then said

in the press conference, policies that help encourage consumer demand in countries that have the capacity would be helpful. that's about as explicit as it gets in diplomatic talk in terms of what the u.s. would like to see germany do. and schaeuble was to talk about the structural differences and not really acknowledge that germany is trying to do that. whether he's doing that to protect himself politically or because of the germ xwran field, i'm not sure we can say much progress has been made. >> jules, we'll let you go. still with us in houston is mary jo jacoby, as well. i want to focus on we've been talking about germany. lew is now going to france where kelly is. the french pmis are pretty awful at the moment. the economies, they have a political crisis, as well. do you think france is going to

be losing -- traditionally, they were the creators of the euro project. are they losing their influence? >> i don't think they're losing their influence. i think because of germany's strength, there is a greater focus on germany ask germany pulling the rest of europe out of the situation. but i think there are certain aspects of economic policy in which president obama and hollande are in tight agreement, and that is taxing the rich. so i think they'll find some very good common ground on that issue if nothing else. >> we're warning about the future of europe when we're talking about the parting of margaret thatcher, who died yesterday at the age of 87. queen elizabeth, mikhail gorbachev among many hailing her

achievements. she provided over the regulation of the city of london, made her a divided figure in the reshaping of britain. her funeral is expected to take place next week at st. paul's cathedral. mary jo, she talks about europe, one of her quote, i'm going to slightly paraphrase it slightly was we didn't roll back the frontiers of the state in the uk to have them reimposed at a european level with a european federal state from the center. how right or wrong was she about europe? is there i think the thing she was right about was she believed firmly in order to get europe right, you have to have a true common market first and other things, monetary europe, political union might ultimately flow from that. and i don't believe she felt that common market was achieved.

perhaps the euro was a bit premature. get the fundamentals right and then bring in the more challenging issues. europe has challenges that america as a whole doesn't, as britain or any sovereign nation as a whole don't have, different languages, completely different cultures, and most importantly completely different history. >> you know, it's interesting. i was going back and looking at the coverage of the our row when it launched in 1999. some said, look, we wanted london to be the center, really, of this kind of currency union. and so it's from the get-go, i think, it was britain's decision to opt out, its worries about what the project meant long-term that were a sign perhaps from the get-go that there were issues in the design and

construction that are only now coming to the fore. ross, just to recap the point from paris, as well, this is a project that is part of the european project. and the question is is the european vision still there? with all of the focus today on what we're trying to do to spur growth, on how to keep the monetary union together, on ways in which its tax avoidance that are stolic of these issues, i think it tells you it's that fundamental vision that needs to be in place if this whole thing is going to work, and its leadership the likes of which margaret thatcher had, certainly not any leaders here are able to claim. >> now, it might argue in germany that unemployment in germany is the price you have to pay in southern europe to

implement the the policies they want to see. >> well, i think that that's true and i think that, you know, the eurozone, like the united states, is no one solid mass. in the united states, if you look at growth numbers and if you look at changes in employment, there's a lot of growth, for example, in my state of texas that you're not seeing in states like new york or california. the same thing is true in europe. there are stronger and weaker areas of the zone. but i think if i was advising angela merkel, i'd be telling her to get pretty tired of carrying the weight of the whole eurozone and perhaps margaret thatcher will be proved right. perhaps it was too much too soon, too much change too quickly for the continent to digest, too many small countries coming in who weren't ready, too many fiddling with the convergence criteria in the first place for countries to enter. so -- but i think that she was right to be skeptical and i

think that this is the great test of the euro. and of the unity of the eurozone and how it comes out of this long fight will be a clear indication of the future. >> mary jo jacobi, thank you very much. kelly, when are you back sfp how long are you on the road for? >> i'll be back -- let's see. maybe not quite tomorrow, but the day after. and frankly, look, if i could stay here in paris for a couple more days, i think i'd be all right with that. >> now that you're in paris and in the studio, things are looking up, right sfp. >> exactly. now that the rain has cleared. we're going to try, by the way, to get outside a little later when we have that press conference between mocovici and jack lew. the sun is now out so perhaps it's a symbol. >> good. hopefully the meeting will go ahead. still to come, jcpenney goes back to the future replacing ron

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attention jcpenney shoppers. there's a new man in charge of retail today who may be pretty similar, familiar. the hq in the united states, with more on the turnover at

jcpenney. >> jcpenney has ousted ron johnson after just 17 months on the job as his turn around strategy back fired. the board met monday and made the decision. johnson is being replaced by mike ullman, the man he took over for as ceo in november 2011. ullman was contacted by the board on saturday about returning to his old job. johnson came to penny's from apple. he pie your neared the cheep chic target in the 1990s. johnson brought in new collections of brands for the likes of joe fresh and martha stewart. but penny's mostly priced sensitive and deals obsessed shoppers didn't buy into his strategy lead to go a 25% drop in sales last yeek. bill ackman, the activist investor was key ago bringing

johnson in as ceo, but even he may have been frustrated telling reporters the company's execution was close to a disaster. in an interview with reuters, ullman says his first tet would be to take a close look at j k jcpenney's books before deciding whether to keep the current strategies and team. mike ullman is leading the company right now, but not for the long-term according to some. since johnon took over in november 2011, jcpenney shares have dropped 52%. it didn't farewell during ullman's first go-around following ullman's first extent in 2004-2011. >> jp penny will be in focus

today. still to come, alcoa in focus after its earnings results. profits looking pretty good. revenues looking weaker. we'll break down the numbers when we come back. welcome to the new new york state, where cutting taxes for families and businesses is our business. we've reduced taxes and lowered costs to save businesses more than two billion dollars to grow jobs, cut middle class income taxes to the lowest rate in sixty years, and we're creating tax free zones for business startups. the new new york is working creating tens of thousands of new businesses, and we're just getting started. to grow or start your business visit thenewny.com

alcoa's first quarter profits rose more than expected, helped by strong demand. revenues were down 3%, missing forecasts. companies blame low aloom yumm prices and production at its european primaries metals business. alcoa is sticking with its global demand of 7% growth this year. >> i'm relatively optimistic that 2013 is going to better than 2012. we actually see a recovery in the u.s. on the building and construction side. all of those are markets that we

indica kater to. so for us, we continue to project 7% growth demand in aloom yumm. senior steals, metals and mining analyst, out of mixed numbers, but that forecast was fairly straightforward. so what's your take away? >> hey, good morning. the take away that i have here is that i think dmarntd demand is not the problem for the oo aluminum business. it's the supply side. and we have pretty strong growth in chinese supply, which is causing high inventories around the world and also continuing to grow. so, you know, i don't disagree with the fact that aluminum demand is strong. it's the strongest performing metal in the sector of all the nonferrous and base metals. but the demand is also growing. >> yeah. the downstream is growing. is that best for them because they get less exposed to price?

>> yeah. the downstream is actually a real gem that alcoa has. it's a consumer of meltings like consumers and other metals and it has good margines and good unit growth and good pricing power. so the company is actually doing a very good job of with standing the heat, so to speak, of the weaker aluminum market. our problem with the stock, you know, we have an issue with the valuation. we think as good as it's going in the downstream businesses, the earnings are just not enough to spark in the excitement n shares. then we continue to have this longer item growth that it's going to ultimately cause a reduction in cost and keep pressure on pricing the. >> peemg talked, as well, about pressure on the credit rating. is that an issue or not? >> yeah. it's a little bit of an issue. i think they have a lot of levers they have to pull before

they dleed the rn earnings. they made a strong statement on the call last night that they didn't expect to do knit equity offerings. so i think it's -- you know, if it does happen, it would be quite far down the road, i think. >> all right. good to see you this morning. thanks for getting out and joining us early. just remind you where our futures are trading at the moment. we did close up near the highs at the end of play. we're called slightly higher right now. we're 21 points above fair value for the dow. currently 8 points for the nasdaq, the s&p 500 is currently trading up around about, what, 3 points off fair value, 2 points. let's remind you what's on the agenda in the united states. wholesale trade figures on out at 10:00 eastern. jerry lacker speaks about the issue of too big to fail at 9:30. don't forget, liesman is coming down with jimmy bull artd, as

well, on the "squawk box." for more from us here at "worldwide exchange," we hope you have a profitable day. good-bye for now. this is for real this time. step seven point two one two. verify and lock. command is locked. five seconds. three, two, one. standing by for capture. the most innovative software on the planet... dragon is captured. is connecting today's leading companies to places beyond it. siemens. answers.

good morning. all that's old is new again at jcpenney. the retailer ousts ron johnson at ceo and replaces him with former boss mike ullman. earnings season has arrived as it does four times a year. alcoa's numbers top estimates and an uncertain outlook are raising red flags for investors. louisville defeat ed to win the final. it was in the first half in this case. a win by six points,