hello. you're watching today's edition of "worldwide exchange." here are the headlines from around the world. 10 billion euros. that's it as the official in dublin says the bailout package will not be increased and the new cypriot manager says they will make the deal work. today investors key in on earnings from jpmorgan, wells fargo before the opening bell.

and speculation amounts over what kind of nuclear arsenal pyongyang may actually have. >> announcer: you're watching "worldwide exchange," bringing you business news from around the globe. okay. welcome to today's program. plenty for us to get through. we'll be over in dublin fairly shortly as the eurozone meeting is getting under way. and the cyprus bailout program will not be increased beyond the 10 billion euros already agreed. this according to the eu finance ministers gathering in dublin. leaving the cypriot government under pressure to find the extra 5.5 billion to secure the deal. jules is at that meeting in dublin, joins us now. they do need another 5.5

billion, don't they, jules? ? >> well, we said this, didn't we? two weeks ago, we recognized the growth forecast was going to move away from them, the lack of confidence and yes, we're looking at a deal of 23 billion euros. we're talking about 75% of gdp. i've been looking at some of the details in this. the growth forecast in 2015 for cyprus is growth of 1.1%. where on earth is that going to come from? it really does feel like, yes, they're going to be thrashing out the details of another bailout deal when already analysts are saying we're going need a number two in the not too distant future. we did manage to catch up with the cypriot manager. listen to what he had to say. >> we look forward to the political endorsement of the program and we are ready to

start work for a -- >> and will we need another deal? are we talking about 5.35 billion here? >> no, no. we have a deal and we shall make it work. >> they'll be thrashing out some of the details this morning. i did manage to speak to the president of the euro group and asked him whether he truly believes this was a viable bailout deal for cyprus. listen in. >> i think this is a viable plan with the 10 million coming from the program and all the other elements are coming from the cypriot government and the private sector in terms of the privatization, bailin of the banks, adding up to a very strong program which will definitely help cyprus. >> where are these additional funds going to come from and the growth strategy? is it a growth strategy for cyprus now? >> first of all, that's ul to the cypriot government. so --

>> and you're confidence of their growth strategy that they'll be growing in two years' time? >> cyprus is going to go through a very hard time, no doubt about that. the restructuring of the program will be a tough bird to carry. the program as a whole, including the 10 billion from the eurozone, and, of course, the other elements will help cyprus to get through that, i'm sure. >> my take away from that is that actually there is no growth plan for cyprus pulling together this bailout deal. we did something like we did with greece where the country has to go back and work out what they're going to do and i'm 45rd pressed to see where that's going to come from. >> growth plan? it's a depression plan. 13% contraction, you know, some people say it could be a lot worse. >> moody's is saying, actually, that we could see a growth

contraction of 20 percentage points. some estimates have seen between 10% and 15% this year. it just doesn't add up together. >> so i'm trying to sound optimistic about a loan extension for ireland. he said the troika posed a similar extension for portugal and they'll both hopefully be granted at today's meeting. are we certain that's going to happen? >> there's a lot of optimism that this seven-year extension is going to be achieved. in portugal's case, he think it will be conting yernt on the court decision arriving on sunday. i think the real important thing is that the reports on portugal suggest they'll likely need further financing because they're not going to be able to borrow enough based on their current rating and the level of rates right now.

i guess you have to assume that they could access the omt. the suggestion of this report is they're going to be looking at bailout for portugal, too. >> and if they do that, are they going to take the gold reserve sthp. >> well, the cypriots have said no. obviously, we would have to ask portugal on that, i guess. >> why not, you know? if clearly the credit of the nation sums up any money, we'll see where we go. jules, thanks for that. >> from the bottom of the barrel. >> exactly. joining us until the studio is francesco. we haven't got a cyprus. i said we've concluded cyprus, but clearly we haven't concluded since we last met. what's your biggest take away? what has cyprus done, bearing in mind it's such a small country. has it changed the nature of your thoughts on the eurozone?

>> no. because it was the month in a negative way. and we were all bearish and quite negative on europe like in the longer run and we think that the euro breakout is a genuine case to be done for a euro break-up in the next few years. if anything, cyprus is a stepping stone in that direction. cyprus was a negligible issue, most expected by the markets ever since the greek psi last year when the greek psi up and it equated to a loss on the other side of banks for 25% of the overall gdp of cyprus. so it was expected that cyprus would be in need of money. cyprus was a tiny issue in the european markets. it counts for less than a half point of the gdp. so cyprus was no place to create a -- and in particular to create a -- for europe as a large. so, yes, there is a consequence for our strategy in the medium term because there have been

systems which are very negative. one, we learned that a cap on insurance deposit was contemplated at some point and that is very bad because a deposit outslope is a serious possibly in europe. in particular, because there are certain countries like italy that go to 9 trillion of depositors for savers and depositors. maybe they should do something about the deposit right now instead of when it's too late. the second president was about capital control. capital control imposed on cyprus so as to avoid going out of the country. and third, they connect between banks and sovereigns has been confirmed loud and clear. whoever wanted to disconnect them through operations. so we took it through any logical behavior. >> the logical political -- i

mean, what we seem to be saying here is that what we've learned is that politics is becoming even more unplausiblunplausible. it's hard to know what the decision will be. >> and i think from now on the political behavior is higher than it was before because we see the complacency on the behalf of the european policymakers from northern europe, completely because they see the market resilience, whatever they decide and whenever they change up their mind, the market is very resilient and the market is able to brush off thetegative news and the most negative president. and they're becoming a little bit aggressive and becoming even more -- of arrogance and certain policy being taken right now. on the other end, there is no political resistance because a number of inconclusive elections has created a stalemate all across south europe. so it is the best time for them

to exercise their power block, but at the same time, it comes with a lot of downside risk. >> good to have you on board. stick around. meanwhile, cyprus's bailout costs balloon, find out why one analyst thinks the island nation could find itself in a bit of a straight jacket at cnbc.com. a little bit of news, as well, concerning japan, which is worth bringing you. there we go. i haven't got the flash. we'll bring it to you in a second. meanwhile, jpmorgan kicks off earnings season for u.s. banks. the company is forecast to earn 1.40 a share on revenue of $25.7 billion. investment banking is expected to drive profits with trading revenue from fixed income and equity seen rising from the fourth quarter. but still lower year over year. and wells fargo reports its first quarted numbers at 8:00 a.m. eastern, it's forecast to

earn 89 cents a share on revenues of $29.6 billion. mortgages remain the story. wells is the top underwriter and is should continue to benefit from refinancing. as far as jpmorgan and wells are concerned, pretty flat in frankfurt. jpmorgan just up 0.75%. cnbc has an exclusive interview with jpmorgan's mariane lake. she'll be on "squawk on the street." and wells fargo's tim fox will be on cnbc at 3:00 p.m. eastern. so for, what, an hour and 11 minutes into the trading day, we're weighted to the downside, as you can see, as we wait for that euro group meeting to get under way. this is where we stand, 8 to 2 decliners outpacing advancers. we have four days of gains.

another record close for u.s. markets last night, as well. the ftse 100 up around 0.4% yesterday, currently wiped out those losses this morning, down around 0.5%. xetra dax down around about 1%. the ftse mib is off 1%, as well. now, no big focus news to look at, but we take a look at telecom italian up 3 the.8% this morning. so is swiss re down 7.9%, as well. as far as the telecom italian shares, this is up on merger talks, the swiss re stock moving down because they've announced a special dividend. on bond markets, you might see a bit of a bid turn. bid yields slightly lower, 1.7%. a tick lower for spain and italy, not by much. ten-year treasury yield, 1.27%. dollar/yen got a smidgenon away

from 100 today. we did get to 99.95 in overnight trade. most people now saying we will break through 100, 103 being raised up. we're up about 7% on the dollar versus the yen since theback of japan announced those fresh measures. euro/dollar, 1.30611. let's recap the asian session for once. the foik wasn't among the gainers. sixuan joins us for more. >> thank you, ross. a strong week ending with a lot of red arrows in asia and the nikkei's rally took a breather after jumping over 5% on the week as exporters saw some profit taking. takata lost nearly 2% after mrupging 9% yesterday on the recall of japanese cars and car niece automakers reversed gears

today. in china, the shanghai deposit turned negative. investor turned cautious ahead of china's gdp and other data on monday. shares paired down early gains to end just a touch weaker. lenovo was the market lagger today, slipping another 6% after a six-person tumble yesterday, this on xwerns sluggish global pc sales. and also a weak session here in singapore with a straight times down about 0.4%. the monetary authority stuck to its tight stance despite a surprised 1.4% contraction in the country's q1 gdp. meanwhile, in india, the sensex now slipping 1.6%, emphasis of what the other tech giant aside from lenovo leading today the number two i.t. from india raising almost one-fifth of its

market cap after its revenue guidance fell short of expectations. and south korea's kospi deeply in the red, this in part due to tensions with the north, but weighed down by concerns on domestic earnings. australia's asx 200 bucked the trend ending magically higher with oil majors lending support. that's a look at asian markets. back to you. >> okay, sixuan, catch you a little bit later. on today's show, we'll continue live coverage from dublin. finance ministers will try and tackle a range of issues including the banking union. john kerry is kicking off his asian tour in south korea. we'll be in seoul in just a few moments. we'll be in mumbai for a look at india's earnings season. shares plunging there. and we'll be out in augusta, georgia. first round of the masters has got under way. tiger woods faces competition from a 14-year-old chinese

rising star. plenty more to come at 111:45 cet. don't miss out.

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

the u.s. secretary of state has arrived in seoul after speculation that pyongyang likely has nuclear missile capability. the north korea rhetoric claims to have striking means, but officials deny they would launch a nuclear warhead with any accuracy. jim meseda joins us once again with the very latest. hello, jim. >> hi, ross. as you say, john kerry has arrived here in seoul. he's going to try and kick start a diplomatic strategy that's been pretty much dead in the water for about five years or so before he then heads to bay jipg tomorrow. and there has been a ratcheting up of tension, but this time it's not from pyongyang, it's from washington where an intelligence assessment by the did i a, that's the defense intelligent agency, concluded

overnight that north korea probably has the ability now to arm ballistic missiles with a nuclear warhead. now, the dia headed that a nuclear weapon would be highly unreliable if they did have one and that they couldn't reach the united states at this time. meanwhile, the u.s. and south korea as well as the allies in the region are standing by, waiting to see what north korea's leader kim jong un will do with up to perhaps five medium range missiles. the missile res now prepped for test firing. and since wednesday have awaited the proverbial finger on the button with u.s. and south korean air, land and sea assets now standing by just ready to track those missile fess they ever are launched. meanwhile, president obama weighed in saying that no one really wants the conflict in korea. now is the time for korea, he said north korea, to end this

belligerent rhetoric and to lower the temperature. but, ross, so far, kim jong unonly seems to be lisping to his own generals. back to you. >> jim, thanks very much, indeed, for that. we'll catch you again later. that's the latest for cnbc's jim maceda in seoul. meanwhile, north korea is celebrating a one-year anniversary since coming into power. more scenes like these can be expecting. the international community is wary that the anniversary of the north korean founder could be a potential date for a missile launch. just the latest forecast for italian gdp ratios, italian gdp seen down 1.6% in 2013, up 0.8% in 2014. this is the think tank ref, therefore, the debt to gdp ratio

seen at 2.2% in 2013 and 2.8% in 2014. francesco, we still clearly don't have a government in italy. it doesn't seem to be worrying anybody buying italian debt at the moment. yields again lower at auction yesterday on the three-year. how long can that remain the case? >> we otherwise are quite negative in the long-term, but in the short-term, we are actually quite positive overall, because we think ultimately a compromise between political parties should be reached and that there could be a fray out of it. >> we've had a relief rally, as far as yields are concerned, we've been having a relief rally for a while. >> absolutely. the market is very, very lien rightly so. at the end of the day, the ecb can do down one of four avenues very quickly. they can cut interest rates, offer dates, they can do omts,

they can do some funding for lending like the uk has done. and the market is right to think that the european -- should be taken seriously. so in the short-term, the debt should be clear for the market. the balance sheet was the only one around the world to shrink over the first quarter of the year, which means the ecb could keep its gunpowder dry and be ready to intervene in the markets. >> okay. the resilience stays. don't forget a bid coin is continuing its downward trajectory following a 12-hour suspension on the world's biggest currency exchange. the price fell $25 before shooting up to $102 and then back up to see 95, this all back up to 8:00 a.m. cet. it has emerged that the winkelbot twin appears to be the biggest portfolio of the online currency. and despite recent difficulties

with trading of bitcoins, the "new york times" were told that the virtual currency is here to stay. what we're asking you today is do you agree with them? just another bubble. tell us. e-mail us, worldwide@cnbc.com, tweet us, @cnbcwex or directly to me, @rosswestgate. it's a big day to come. find out what analysts will be watching for aus the u.s. banking season will be kicking off. and concern hackers can take control of air space with only basic mobile phone technology. it's all on cnbc.com. follow more at cnbcwex. still to come, we'll head out to paris and find out why one fresh lawmaker is threatening to go to the eu over the apps store. sounds strange, but it's true. "worldwide exchange" continues in just a few minutes.

10 billion euros, that's it, wile the new cypriot finance minister says they will make the deal work. cyprus needs another 6 billion euros to secure its eu/imf aid program. investors key in on earnings of jpmorgan and wells fargo before the opening bell. speculation mounts over what kind of nuclear arsenal pyongyang may actually have. we're an hour and a half into the european trading day. stocks today are down, but we've had four days of gains and we were up, what, 0.4%? the ftse has given that back today, down 1% for the german market, the cac 40 down 0.6% and the ftse mig down 1 is 1.09%.

on the currency markets, our focus has been on dollar/yeb all week. we did hit a smidgenon below 100 on that cross rate. 99.95. you can see at the moment, 99.32. most currency experts now believe it's just a matter of time before we break through 100 and then we might gap quickly higher. euro/dollar steady at 1.3064. sterling/dollar, 1.5360. euro group finance ministers due to continue their debate over a banking union. the eu commissioner said this morning he was expecting constructive talks even though there were divisions between eurozone countries on the issue. jules is in dublin as we know and joins us now. just on this nk baing union proposals, if cyprus had

happened when we had a banking union, who would have bailed them out? >> very good question. right now, we don't have that level of clarity, ross. you'd have to assume there would be some creditor involvement and then the deposits, of course. we hope there would be some kind of pan european deposit insurance that would come into play. but this is the whole point. right now, we don't have any clarity on how this is going to work and the hugely divisive factors at the moment is how much financial contribution is going to be at any point from some of these core countries. i think the key problem we have at the moment is that you've got these peripheral countries that consider this banking union, wa we're organizing right now is going to help them with the currency issues and the legacy debt issues whereas you've got the likes of ecb in germany who want this for the future. this is not about addressing the current issues with the weak bank, with the weak sovereign. ultimately, it is a huge part of the european project and

actually listen to what the finance minister said this morning about the banking union. >> translator: the banking union is key in the european project. this is fundamental. a single supervisor, a single mechanism looking for the recapitalization of banks. this is key. >> so what we're looking at right now is that we're very unlikely to see direct recapitalization from the esm, the bailout funds, and seeing some kind of joint backup for a pan european deposit facility right now looks way off in the future, as well. at the moment, if you'vin' issue, it will be dealt with on a national basis and i think that is what we're looking at right now. the question is, how long is it going to take to get further clarity? >> and we don't know the answer. juls, thanks very much, indeed, on that. friend chess ka, is cyprus being used as a guinea pig here?

>> well, i'm not sure about that. i think that the cyprus is being -- you know, there are a number of reasons why maybe in the mind of german policymakers in particular, cyprus has been picked up as the case and why it could provide the -- but in one of these it could be to send a message to europe in terms of creating a blueprint for future rescue plans, right? in order to avoid that particular issue, oh blej to conditionality before that can take place, i still think it was rational and insane to go down this route and create the best precedent. but that could have been in the mind. i agree, you know, that we view that the status could be the first one to leave the first one to leave the euro area, but i think it will be avoied because it's just too small and one way or another it will be avoided. i think the big elephant in the room is too big to save, too big to -- >> in a long-term strategy, do

you still need to hedge against the euro break-up or not? >> that's a good part of the season, but the hedging is available. >> how? >> it's to look into that and into -- first of all, in asset location, you should be very careful before allocating money into currencies. that is a 60% haircut of the outfit. beyond that, which is an obvious conclusion, you can leverage if the market is offering yourself. we live in a world made of low interest rates, low volatility, but high for correlation. and you can utilize all of them, that they allow you to hedge, utilizing what is available given the fact that the central banks are in the markets. related to a financial compression or huge compression of volatility and it can play in your favor or whatever you want to hedge your own portfolio. >> okay. just got some news out of the bank of italy today. they say the italian government debt has fallen to 2.018

trillion in february. it was 2.023 trillion in january. and they say the contribution to the european bailout scheme, 44 billion so far. we'll move away from europe to india where shares of india's second biggest i.t. services export are taking a bit of a drop. this is after fourth quarter profit rose more than 3% which beat specations. but its revenue guidance is where the problems begin. sonja has more for us from mumbai. hi, sonja. >> what are they saying about their guidance on revenue? >> well, you know, on all accounts, the emphasis has disappointed this time around. in fact, the stock is down 20%. this is the biggest percentage fall that emphasis has seen since way back in april 2003. just to quickly run you through the numbers, the revenue growth has come in at just 1.4% quarter on quarter at $19,038 million

ask that is much less than what the street is was expecting. not too bad. the margin ves dipped quarter on quart, have come in at a historic low at 23.55%. and the fy 14 revenue guidance stands at just 6%. to put it into perspective, the i.t. industry body had guided that the industry itself would grow by 12% to 14%. that means that they will see a huge underperformance compared to the entire industry, not too bad, the company did not give any eps guidance, which is a clear indication that they do not have any clarity on the margin performance going ahead. they got a complete thumbs down from all the brokerages. many are suggesting a switch out of emphasis and into the stocks.

so that entire back is down today. the industrial production numbers for the month of february have come in with a growth of just 0.6%. although tlchz expectation that it could be a degrowth this time around. back to you. >> sonia, thanks for that. we did get mildly positive data from india today. industrial output grew 6% in february, better than the 7% contraction that economists are looking for. inld ya's retail price rose. the slight drop won't be enough to convince double digit breaks. joining us for more, piquay. always good to see you. >> good to be here. >> what is the path of rates right now for india? >> well, i think india will cut

rates, but slowly. i don't think rates will come down at the next meeting because inflation remains ticky. the rbi wants to maintain a positive interest rate and that leaves very little room to cut. they have cut 50 basis points in the first quarter of the calendar year. i think they cut another 50 basis points before the end of the calendar year. there is still more easing to come with the policy rates still at 7.5%. there is room to cut that, but not immediately. not until inflation eases off some more. >> we saw industrial output growing in february. and it was expected to contract. what is your own feeling on the trend of growth? >> pretty dismal. i think this -- the january to march quarter would have seen a

slight pick up in real gdp growth to perhaps just over 5%. from 4.5% the previous quarter. so there's a bit of a mild pick up occurring. the industrial production numbers are a bit of a surprise on the upside, primarily because there was some significant strikes in parts of india that would have disrupted production in the month of february. but the really positive feature there is a capital goods output grew more than 9% year on year. and that's the first sign of a turn around in investment spending, which really is crucial to any recovery in india. i think, really, the only thing that can stabilize and improve the indian economy is an early election and a cleaning out of the tables. there have been significant reforms over the last eight or

nine months, which do prepare the way for india to perform a lot better in the second half of this year .and into next year. but there are also a lot of populous pressures on the government. and so the longer the government's life is prolonged, i think the greater those pressures will be in the run up to the 2014 election. >> piquay, if we've got lots of populist pressures on the government, what's to say that those pressures won't result in a more populous policy? >> there isn't much room for populous policy. the only thing is, the nature of the populism that the party wants to introduce is something called a food security bill, which will blow a huge hole through the fiscal balance if it

is introduced. the bill hasn't yet been introduced. there is a strong likelihood that one of the two parties from the largest state that are propping this government up will pull the plug on the government sometime in the next three to six months. and when that happens, an early election will occur, probably as early as august or september of this year. and then the next government, i think, is likely to be much more focused on growth. because i think the electorate is k expect it. >> delivering is the trick. thanks for that. good to see you. have a great weekend. north korea's threats have now extended to u.s. military bases in japan.

fukushido has the story for us from tokyo. >> hi, ross. japan is on high alert and is tipping up capabilities against north korea more than ever before. the government decided to permanently deploy a missile defense system in okinawa today. the defense minister said that the self-defense forces will move missile intercepters to the southern most prefecture as soon as possible. the government wasn't plannin tody employ the system until 2014, but brought a forward on north korea's threats to the u.s. military bases in japan. prime minister shinzo abe will pledge that the government will do all it can do protect people's lives. due to national security reasons, they have not publicly acknowledge that order has been issued. but the government has been dispatching destroyers with missile intercepters to the sea of japan and employing a missile land based system in key

locations around tokyo. back to you, ross. >> toe chicco, thanks for that. we have a flash out from the cypriot president, he says he will ask the eu for extra assistance after we think we have nearly another 6 billion euro hole, which somebody is going to have to fill. it may as well be you. they currently say no. let's give you a look at what's on the agenda on monday in asia. first quarter gtp reading as well as industrial sales for the month of march. everyone will be watching to see how north korea commemorates the birthday of its late founder, kim il sung. the first finance ministry says behavior is affected after it's removed from the store. >> stephane, i'm always

wondering when a minister is willing to get involved, how many millions of apps are there in the world? if you're a minister and you're bothering to intervene because some app has been removed and you can't get in suggests to me you've got problems. >> well, i think you should see the broader picture. she was not trying to -- this application in particular, but she wanted to point out that this huge internet company has perhaps too much power when it comes to the relationship they have with a small start-up company. what happened with this french start-up is perhaps symptomatic of the terms and conditions that apple wants to implement on its apps store. apple decided a few days ago that this application would not be on the app store any more because it was not compliant with the general terms and conditions. the french minister for the industry is blaming apple for being extremely brutal in its decision and is calling the u.s.

giant to reopen negotiations with the french start up company. it's mott the first time, ross, that the french government is trying to challenge this large -- the business practice of this global internet company. over the use of newspaper article and about its privacy policy and recently also the telecom watchdog in france asked the prosecutor to launch an investigation into skype because it was not registered in france as a telecom operator. so globally speaking, yes, the french government is questioning the unfair, the unbalanced relationship between this large companies and the small start ups and the minister even threatened to think about legislation to protect them. just the fact of sitting in and talking about the problem will change, perhaps, the division

that people have, you know, when you buy your -- when you buy an application on the app store, perhaps you will think about it now that some politicians started ouchly about the unfair or unbalanced relationship. i don't know. >> yes. i'm sure if apple was a french company and the start up was an american company, this would be defending the start up just as much. >> perhaps it's because the french people don't have this huge internet giant company. it's also part of the french culture. always be on the side of the weakest ones. robin hood, the french version. >> yes. i'm not sure what -- ever since the nome was labeled a strategic company -- anyway, we'll disagree. >> it's all about protectionism. but you're absolutely right. if apple was a french company, i doubt that the french government

would have the same position. but it's interesting to know that if you are -- if you have an application and you want to develop an application for the iphone, the only way to sell your application is through the apps store. and then if apple decides to remove it from the apps store -- >> no, you don't have to make an app just for apple, though. there are -- you can make apps for other platforms. that's my point. if you've got to talk about this, you can tweet us. still to come on the show, is gold heading for a big drop after 12 consecutive years for a steady rise from the top?

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

talking about bitcoins, related to that, cyprus might be the first country to sell its gold reserves to make its way out of the financial crisis. the government confirmed this

was an option that had been considered to fund the bailout. gold has been pushed even lower this week. raises the question of must everything that goes up come down at some point? tom, thanks for joining us. goldman sachs obviously raised everybody's eyebrows. they said the end of 2013 forecasts 1450, the end of 2014, 1270. where do you stand? >> yes, ross, good morning. we are certainly on the bearish side. we have been for some time. but for the time being, we think this market is grinding its way in another range. we see decent support in the market at 1525. the market capped above at 1600 for now. and we think we're going to drift in that kind of range for probably the next three, four weeks or so. going towards tend of the year, i think a test of that lower level is certainly likely and we'll be seeing numbers around the 1500 area. i wouldn't be surprised.

what would be the basis for the lower price? >> i'm sorry? >> what would the price be going lower? >> price going lower because, really, the investment appetite of gold has diminished, particularly with large institutions. the appeal of gold, even though the economic recovery that we're seeing in the u.s. and elsewhere is grindingly slow, it is a recovery and is we're going in the right direction. and you've seen in the fomc minutes release this week increased discussion about exactly how and when they might start tapering off their current program of quantitative easing. >> there is a thought, though, that gold should track the upon tear base. the u.s. monetary base is still around 3.5 trillion. that would be consistent with the gold price of $2,000 an ounce. >> yes, indeed. there are a number of problems with that analysis, one of which being ta gold prices are going in the opposite direction to the capitals base for about the last

six months. the other issue is not really what central banks have on their balance sheets, it's what that money is doing in the economy. and right now, it's not doing very much. so there's no real inflationary pressure from an increase in the loss of money. we're still seeing institutions and commercial deleveraging. we're still seeing the private sector deleveraging. >> let me bring in francesco with me here in the stud wrote. what do you think? >> i'm a bit more positive about gold. there could be a short correction. i'm a bit more positive because i think it is true that there may be diminishing buyers coming in in the short-term. but at the end of the day, it's more a question of their evaluation of the gold price against dollars and is what is tricky. what could happen is withdraw of the market in the anticipation of money to keep gathering

momentum. i mean, the upon tear basis being extended by staggering amounts, between the u.s., japan and the uk, we are looking at 2.5 trillion. and that is a staggering amount. the household gdp is like a good portion, more than half of the japanese market capitalization so if i had my gold before selling it before fast devaluing dollars, i have to think twice about it. >> tom, what do you think of that? >> it depends on your investment horizon, obviously. but what's interesting when talking about japan is the radical new policy by the boj hasn't, in fact, seen a pick up in gold buying by japanese investors. we've seen the opposite, an increase in selling as the price in yen has hit record highs. and as far as the longer term stability of the u.s. or the dollar goes, i think the credibility of the u.s. federal reserve is key here for gold.

and right now, you know, the markets are giving the fed the benefit of the doubt as far as planning for a withdraw of stimulus goes. >> tom, good to see you. thanks very much, indeed, for that. tom kindle from credit suisse. meanwhile, charles plosser is cast down from the benefits of the central bank's effort purchase program. speaking earlier, plosser told cnbc why bond buying is hurting the real economy. >> monetary policy in the asset purchase program, you have to look at how effective it is and you have to look at what the costs are. my argument has been, and has been for the some time, with the benefits of financial asset purchases has been very meager, at best, on the real economy in terms of unemployment rates. i don't think it's having a very big impact. and it's also -- but it's creating risks and challenges for us in the future. so when i look at the cost and benefits, it's about weighing those two things. right now, i'm still of the mind

that the benefits don't outweigh the costs. >> francesco, you just talked about still this wave of money that's coming through. is that impacting your investment decision or not? >> well, it is a lot and that is why we are that bearish in the long-term. but in the short-term, we are long. and is when we last met two months ago, as everybody says in the nationwide nikkei, we were saying the nikkei could go to 20,000. so we have a very bearish view, but at the same time we are long. it's a matter of how you go long and this is nominal. it's not to do with the real rally. in japan, we are long the equity market and short the yen because we think the equity market will arrive faster than the yen devalues. going forward, we might change that view and purely take a short position on the yen, even the fact that that could gather momentum. in the u.s., we are longer, but in an optional format because like two weeks ago, we were all

feeling correction out of the s&p and because of ta, it was a huge unit and bid to call ratio. we could literally sell 10% of the money and by 12 calls against it, symmetric against this spot, that was a truly good way to go along, not taking too much risk inside and living a true leverage on the outside. we substituted all of our cash longs in senior positioning so that we didn't have the full body risk on the market longs, expecting a correction. but we have the leverage on the asset and that, too, is playing very well. >> good to see you today. thanks very much indeed for joining us, francesco, ceo at fastenara capital. earlier we candidate if bitcoin was another bubble. >> brian wrote in and said i can't think of anything that's so silly and stupid and full of hype and is money.

of course the design in owneres and investors are hyping it up because they want everyone to pile in and raise the price so they can sell it. that view may get some support. still to come on the program, with key u.s. bank earnings on tap, we'll take a look at whether the u.s. market rally has more room to run. then we get, of course, earnings out from both jpmorgan and wells fargo. plenty more to come in the second hour of "worldwide exchange." ♪

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this is "worldwide exchange." shares in europe fall as an extra 5.5 billion euros will secure its eu/imf program. and the u.s. secretary of state john kerry steps into something of a hornet's nest on

the korean peninsula as speculation mounts over wa kind of arsenal pyongyang may actually have. >> announcer: you're watching "worldwide exchange" bringing you business news from around the globe. all right. 23 you've just joined us stateside, good morning. welcome to the start of your global trading day. we've had four days of gains, fresh record closes against the s&p and the dow yesterday, no surprise perhaps to see futures indicating a weaker start. today we asked some, wa, 18 and a bit, 19 points below fair value for the dow, the nasdaq at the moment is some five points below fair value. both these markets up 0.4% yesterday and, sorry, not the nasdaq. the nasdaq was up 0.1%, the s&p was up 0.4% yesterday and right now that is called some 2.7 points below fair value. european markets have four days

of rallies that have come to a halt this morning. the ftse 100 wiping out yesterday's gains, the xetra dax and the ibex down 0.9%, we're up about 1% for the ftse mib, as well. on the currency markets, it's all about the yen. dollar/yen in particular has been in focus. right now, 99.10. we got within a whisker of 11 hunl on dollar/yen. we got to 99.95 early on in overnight trade in asia. sterling/dollar is at seven-week highs at the moment, 1.5 57. euro/dollar, steady at 1.3057. u.s., u.s. equities continue to hit highs. the first quarter has already seen more than 100 negative revisions for companies in the s&p 500.

this according to thompson reuters. profit growth is set to increase by 1.6% compared to 2.6% in the previous quarter. until today, stock markets have been slugging off that outlook. the s&p and nasdaq closing up, as i say, with their best run since november. joining us with more, daniel morris. good to see you. >> good to see you. >> what has been driving the equity moves? clearly, a pause today looks in store at the moment. but, you know, poor week last week and then up again this week. >> he think generally the fundamentals including earnings, valuation, sentiment, liquidity and all that are support i. you'll have volatility depending on particular news events. i think it's important to keep in mind that people know that the year on year earnings for this quarter is not fantastic. they're always looking at how much better or worse companies

due due to expectations. if you look at the earnings growth expectations for the rest of the year, they look quite decent. but for this quarter, it's a bit tough. >> you say we already priced it in. yesterday some people were saying, oh, things are looking better than we might have thought. so it's all about where you thought things were going to be. >> exactly. we know they're going to surprise and probably always surprise to the upside because tease what companies do and that's how they manage the expectations of the analyst and how much they do. certainly we need to keep a focus on that. are margins going to stay steady or increase a bit. we think it's not going to be not a spectacular quarter, but not too disappointing, as well. >> what is the relationship now between job creation and equity prices? >> well, we thought the reaction was too enough when it came out. a couple things you needed to keep in mind, one, even if this last month number was weak, the

previous numbers were quite strong, had been revised up. net/net, you still were on a decent trend. secondari secondarily, the unemployment rate declined because there were fewer people unemployed. that's going to help consumer confidence ask that's going to get us closer to the point where the fed starts to ease back on its stimulus with quantitative easing. >> yeah. as the unemployment rate keeps coming down, they've got, what, 6.5%? >> 6.5%, yes. >> when do people stop pricing that in? and if we get close to that point, what impact does it have on investors? >> i think we're going to see equity markets suffer a bit with the anticipation of the withdraw of the liquidity starts to price in. we saw that with qe1 and qe2. when it ended, the markets sold off a bit but then they recovered and kept moving back up. we just know we have to at some point have the market that's

sustained by fundamentals, fought just by liquidity. it's a necessary adjustment, it has to happen so people should anticipate it and not overreact because we think it will be short-term. >> daniel, more to come from you. stick around. thanks for that. good to have you on the program. now, bitcoin's value immediately dropped this morning when trade resumed following a 12-hour suspension of the world's biggest currency value exchange yesterday. it emerged that the winkelvoss twins after a big legal battle against mark zuckerberg have amassed the biggest jot line currency. what we've asked today is bitcoin just the future of money or is it another bubble? we've had quite a bit of response already. keep them coming in. e-mail us worldwide@cnbc.com or tweet @cnbcwex or direct to m

me@@rosswestgate. and president obama warnings north korea that it's time for them to edge the be ledge rans. zap technology. arrival. with hertz gold plus rewards, you skip the counters, the lines, and the paperwork. zap. it's our fastest and easiest way to get you into your car. it's just another way you'll be traveling at the speed of hertz.

u.s. secretary of state john kerry has arrived in seoul.

he arrives after a critical juncture after it's speculated that pyongyang has nuclear capability. the north's latest rhetoric claims to have powerful striking means. nbc's jim maceda is in seoul. he joins us with the latest. jim, what is the task facing john kerry? >> well, he's got a huge, huge challenge facing him. as you say, he arrived here earlier today in seoul. he's going to try and kick start a diplomatic strategy that has been pretty much dead in the water for the past five or so years. and then he's going to go on to beijing to talk to the critics of chinese in this equation. but as you mentioned, there has been a ratcheting up of tension in just the past 424 hours. this time not from pyongyang, but from washington where an assessment by the dia, the

defense intelligence agency, concluded that, in fact, north korea probably does have the ability to arm a ballistic missile with a nuclear warhead. i mean, if true, that could be a game changer. the dia added, however, that the nuclear weapon would be highly unreliable and couldn't reach the united states at this time. meanwhile, the u.s., south korea and japan are all standing by, waiting to see what the leader of north korea, kim jong un, will be doing with perhaps up to five medium range missiles which could reach u.s. bases in guam. the so-called musadan missile has been prepared for test firing and since wednesday been awaiting the proverbial fik on the button with the u.s. and south korea, air, land and sea assets standing by waiting to track the missile's every move. back to you.

eu officials stand firm in dub lib saying there will be no increase in cyprus 10 billion euro bailout package. and all eyes, as well, on the big u.s. banks today as we await first quarter earnings from jpmorgan and wells fargo. still to come on the program, julia will join us from dubl dublin. they'll be speaking to a number of finance ministers. find out what they've been telling her. 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.

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[ crows ] now where's the snooze button? we've had four days of gains stateside. today, we are called a little lower after those gains. the dow currently called down 38 and the fass dak down 7 points. it's still very early in the day and, of course, we have bank earning he to get through. meanwhile, the cypriot finance minister says he is going to ask for additional assistance despite the fact that it's said there will be no more than the 10 billion to put in. the cypriot government is under pressure to find nearly an extra

6 billion to secure the deal. jules is at that meeting in dublin. jules, the numbers just don't add up at the moment. as the economy contracts 13% or more, the numbers won't add up. who is going to come up with the money? who has the spare cash? >> very good question, ross. if i knew that, i'd be a very rich woman. quite frankly, you're right, the numbers don't add up. we have a situation now where cyprus is being asked to put up 13 billion euros and not the original 7.5 billion euros. the growth situation is moving away tr them. and in actual fact, i've looked at some of they details. growth in cyprus, 1.1% positive growth in 2015. they have to be highly ambitious to get those kinds of numbers. listen to what the new finance minister had to say ahead of the meeting. >> we look forward to the political endorsement of the

program and we are ready to start work. >> are we looking for -- >> we have a deal and is we will make it work. >> i also spoke to the head of the euro group and asked him whether this is a viable plan for cyrus. listen in. >> i think this is a cyprus plan, the 10 billion coming from the program and all the other elements are coming from the cypriot government or privatizations, bailin of the banks, adding to a very strong program which will definitely help cyprus. where are these additional funds going to come from and the growth strategy? >> well, of course, that's up to the cypriot government and the european commission has said that they will do everything they can to help, also making available european funds where possible. so i think that's -- >> and you're confidence of that growth strategy, that they'll be growing in two years' time?

cyprus is going to go through a very hard time. there's no doubt about that. the restructuring of the banking sector will be a pretty tough burden to carry. but the program as a whole, including the 10 billion from the eurozone, the other elements adding up to more than 20 billion will help cyprus to get through that, i'm sure. >> it might take away from that, there is no growth strategy built into this ask quite frankly, it's joined by the cypriot. peter, what do you think about this deal? it's not viable, is it? it's not going to work. i'm going to have to end up asking for bailout number two. >> surprise, surprise, the troika has overly optimistic bailout forecast. the greek bailout is that way. we're having problems in the portuguese bailout for that reason. this is exactly what happens elsewhere. they've had to out in much more optimistic growth forecast. we're talking about over 20%

shrinkage in the economy. i think we'll have to revisit those numbers, if not in the next review, certainly down the line in the next through months. >> so you're talking about effectively -- >> that's what happens with greece. whether cyprus needs that, given the size of the shock to the financial system in particular, we'll see. the if not this quarter, it could be the next quarter. i think we'll see in the next year on so that we'll have to revisit these numbers. >> we've seen the market take a dive on the suggestion that cyprus is going to ask for additional assistance. >> we went through this twice already. two separate euro groups where they put the cypriots in a corner and said you're going to get no more. the cypriots said to me this is a bit of a misunderstanding. but even if they come here and ask for more money, it's not going the ha. >> did they stock finding 13 billion ur euros, do you think we'll be in a situation where even today they can't find those

additional euros? >> look, the money is there. it's just how much of that money they're going to need to use. >> they said they're only going to take 10.6 billion euros. do you think they'll take more than that? >> it depends on what -- the euro group said if you want to keep that alive, you find the mope. so it's up to the cypriot government to find that money. if the cypriots are coming to the euro group saying we don't know what the haircut those guys that much. they have said you want the bank of cyprus, you can do it. we won't have anything to do with it. >> also on the agenda is the banking union after the damage by the bail-in procedure. there's a huge gap between the expectations of the periphery and what the ecb and the germenans are willing to do because of timing. what are we going to get from this? >> nothing.

it's more political than substantive. the germans have been delaying. whether it's a genuine policy dispute they're having is a subject of debate in brussels. but look, once they get in banking union in place, they have agreed to set up a common resolution problem, which means german taxpayers will have to finance to help banks elsewhere. the germans don't want to touch that yet. these are all issues the germans want to have on the agenda right now. but what the timetable that the germans set is usually what the germans get. >> thank you so much. back to you, guys. >> thanks for that, julia. that's the latest from dublin. let's just remind you that

daniel martin is still with us, as well. daniel, wa is your own view on, you know, how this ongoing crisis impacts us? clearly we've decided for now, you know, don't think that matters. >> i'm sorry, what doesn't matter? >> the eurozone financial crisis. the first quarter, as far as equity investors are concerned, we've shelved it really. >> there's two parts of it. one is the risk of a eurozone break- break-up. that's what the primary concern was over the last couple of years and that drove markets. between the combination of the ecb's actions and restructuring and trade balances and so on, we think the tail risk is going away and now we're dealing with the fundamentals. so if we look at the fundamentals and the outlook for equity markets particularly in europe, we're in a situation where a lot of the countries are in or near recession. it will be a process for domestic floating equities to

share earnings. looking for opportunities in environment or technologies are important to look at. hover, we think the crisis part of the crisis is a bit behind us. >> is the gdp program going to leak out? is japanese funds as a result going to leak out into -- are they going to take money from japan and invest it elsewhere or not? do people front run that story too much? >> i think perhaps. is it analogous, the reaction of japanese favors? we think it's less likely with the u.s. auto claims such as significant. international role and more liquidity in time for the markets. we think it will at least initially be more contained within japan and not have the worldwide repercussions would you have seen in the u.s. >> because it seems to be a trade. money is going to come out.

they don't buy it by fixed income or it will sort of lower yields in spain or italy. >> exactly. and the other thing to keep in mind is if you compare the magnitude of the programs, the u.s. is much larger than what the japanese so far had proposed. >> not in terms of gdp, though. >> relative to the money supply that was there and the u.s. is bigger. also, remember, japan did this already from 2000, 2005 or so, they increased monetary basis by 1.7 times. there were short-term reactions on the yen, but in the end, it all reversed. >> in the end we have seen a 7% appreciation in the dollar against the yen since they announced that program. and the nikkei is up 50% since last november. it's extraordinary. have we missed it? if you haven't been in it? >> probably. and i think if you did not have qe from the u.s. and the supply

of dollars is going to come from that, there probably would be more potential for further depreciation in the yen and further equity gains. i think the fact that you still have the u.s. fed sticking with its own qe program, i think it's ultimately going to limit it. >> you mentioned the u.s. fed. charles plosser cast doubt on the benefits of the bond purchase program. speaking earlier, he talked about why bond buying is hurting the monetary policy. >> you have to look at how effective it is and you've got to look at what the costs are. my argument has been, and has been for some time, that the benefits of financial asset purchases has been very meager at best on the real economy in terms of unemployment i don't think it's having a very big impact. and it's also creating risks and challenges for us in the future. so when i look at the cost and

benefits, it's about those two things. right now, i'm still of the mind that the benefits don't outweigh the cost. >> we knew his view before that interview, clearly. there wasn't much reaction in the fed minutes. how are we going to be dictated by results early or later withdraw? i think it's going to continue to be something that affects the markets, whether what's wrong with that liquidity to slow down in the asset purchases, how they go about it and so on. over the next year, it will be this debate in asset prices. >> as you say, we have to get to the stage where we have to be self-sustainable. when you look at how much money all the central banks are applying and the ecb may be joining the party again, it looks very hard for us to wean

ourselves off. >> and i guess that's the risk. you become a victim of the success and worry about the the ramifications of withdrawing it and perhaps you let it go on longer than you should. >> daniel, good to see you. daniel morris, asset management. still to cam on the program, jpmorgan itself is going to report first quarter earnings today in around 19 minutes. the numbers come amid analysts that maybe it's the right time to think about breaking up the big combined u.s. banks. are the days of the financial super market over? just part of the decision still to come on "worldwide exchange." here is a reminder of where the futures are. we're currently implied for a down start today.

shares in europe take another leg down after reports cypriot officials have asked the eu for more assistance. but officials are quick to clarify they mean technical help. the big u.s. banks are in focus today. investors key in on first quarter werings before the opening bell. and the u.s. secretary of state john kerry is stepping into something of a hornet's nest in the korean peninsula.

speculation is mounting over what kind of arsenal pyongyang may actually have. >> announcer: you're watching "worldwide exchange," bringing you business news from around the global. all right. we've had four days of gains for u.s. markets, best week in a while for the s&p. fresh record closes today, we are called lower. the s&p right now is currently called down, wa, 3 points, 6 points below fair value. the nasdaq at the moment is currently called down about 6.5 points below fair value. the nasdaq at the moment is currently down six points below fair value. fresh record closes, as well, on the nasdaq and the s&p 500, as well. the ftse cnbc global 300 currently down 22 points, 0.4%. as far as european stocks are concerned, the ftse 100 off 0.6%. the cac 40 down about 1%.

we're down 1.25%, as well, on the ibex. that's where we stand right now ahead of thots those reports from jpmorgan and wells fargo. we'll talk about that. what have investors been saying on cnbc? here is is a quick recap. >> at the same time, we need to start looking at the fed and wa their minutes said that they're going to be perhaps slowing the pace of quantitative easing in, say, october/november of this year, which makes the dollar/swiss down side look very attractive to us. and more than anything, i think em remains the rallying cry up to 2013 because we're seeing long-term government debt and em economies in high single digits, 7.%, 8%, and i think that's where the market is going to go. they're going to have to go sooner or later to realign. . >> i think the conversation earlier about silver is very

interesting because i think when things go wrong, it basis a bit like gold. when things go well, it's a bit like industrial metal and we know about 50% of that use is industrial. it's trading around 27. it's at a low level trading down on the back of gold. we think this is an interesting point. >> all right, we just had some more snaps out of cyprus. the cyprus finance officials have been suggesting the president, when he talked this morning about extra assistance, he says that refers to technical and structural aid, not necessarily asking for more money. remember, they're getting a loan of 10 billion euros and we're now being suggested that will not be regoeshlted. cyprus did not ask for fresh money according to sources on reuters, as well. although there is now, as we

understand, about a near 6 billion euro gap between what they're getting and what is now further required. there's still no news on how they're going to close that gap. the u.s. earnings season starts to get under way today. wells fargo ask jpmorgan report results before the opening bell. seema has more for us in the states. >> ross, good morning. the banking sector continues to face head whippeds from slow loan growth to the impact of fiscal sites in washington. you wouldn't know it if you take a look at their stocks. since the market began in 2012, the kbw index is up beating the s&p 500 by about eight percentage points. bank stocks had a good first quarter with many hitting more than a five-year high in early march. jpmorgan is first out of the gate reporting results at 7:00

a.m. eastern. the company is forecast to earn $1.40 a share on revenue of $25.7 billion. investment banking is expected to drive profits with trading revenue from fixed income and equities seen rising from the fourth quarter, but lower year over year. there's expected to be less news surrounding the london whale losses, but jamie dimon said the bank expects more enforcement actions from u.s. regulators in the coming months. jpmorgan is up is 12% year-to-date. wells fargo, forecast to earn 89 cents a share on revenues of $21.6 billion. mortgages remain the story as wells is the top underwriter from home mortgage loans. now, wells fargo stock up nearly 10% year-to-date. cnbc has an exclusive interview with jpmorgan's cfo, marion

lake, at 11:00 a.m. eastern. tim sloan, then, will join us on closing bell for a first on cnbc interview at 3 ook p.m. eastern. ross, i know you will stay up to watch outline those. >> we will, seema. thanks very much, indeed, for that. now, as well, we'll be heading out to augusta national golf club, as well, to take in the sights and sounds of the masters. meanwhile, let's bring in shandi rice and gerard cassidy, as well, to talk about bank earnings. thanks very much indeed for joining us. let's kick it off with you, gerard. the investment banking is expected to bring in the bulk of the profits. what are you looking for in particular? >> what we're anticipating for the investment banking area, the fixed income activity is the area we expect to see strong growth relative to the fourth

quarter. first quarter results for fixed income trading for all the investment banks is expected to be strong. where the weakness will be is in equities opinion equity trading as well as equity underwriting. the fixed income should be the real horse in the first quarter for the investment banks. >> and the stock has done pretty well, right? so i suppose at this point, is it going to be more the concerns of forward guidance to keep it going? >> i think they will be. i know there's a real concern on our part and investors' part about modest loan growth and possibly revenue growth being challenged for the industry for this year. but we have to remember, there are many when it comes to bottom line earnings and the cost picture for the banks is continuing to improve as credit quality improves and, plus, there's enormous capital, which they're giving back to shareholders in the form of share repurchases which is helping the earnings per share

comparisons. >> shandi, we heard there saying it's mortgages, the biggest underwriter in mortgages for wells fargo. where does that now leave them? are they overexposed? >> that's a really big question. i think the big question everybody will be asking is can they keep up this pace? they've come to dominate the u.s. mortgage market so completely, they have about a third of all u.s. mortgages, but already we've seen that share recede from the last quarter. it's gone down a few percentage points, but there are predictions that it could go down even further this quarter and that's obviously not going to be good for wells. but from what i understand, that could be good from some of the other players who have previously seeded their market share to wealth. they may start to recoup it. jpmorgan may be one of those winners. >> okay. it plays out. just explain what in particular, then, do we need to focus on then with that wells fargo

report? >> you want to look at the mortgage origination. the question is, are they continuing? is the pipeline for mortgages continuing to churn? obviously, you have two types of mortgages. you have the refinancing and they've been the beneficiary of that in this large refinancing boom. and then you have new home purchases. and so the split right now in the u.s. is about 75% of the mortgages taking place are for new home purchases -- i'm sorry, are for refinancing and 25% is for new home purchases. wells fargo is a little higher. they have about 35% for new home purchase hes, but you want to see that is going to continue. as the refinancing wanes, there will be enough new purchases to sustain growth. hopefully, the u.s. housing market will be on enough of a recovery that we'll see new purchases. but that boom asset wane webs it's going hit these banks. >> what do you think, gerard?

>> i agree with that. what we're going to see is the refinancing activity is certainly going to slow down this quarter. third and fourth quarters last year were remarkably strong, particularly when it comes to the gain on the sale of mortgages. not only do they originate mortgages for their portfolio, but they also sell them into the monetary market. the federal reserve has lord rates with their pure chases of over $40 billion, $50 billion every month. so the gains there have been remarkably strong and those are coming in now. so the new purchase activity is accelerating. it's not going to be enough to upset the slowdown in the refinancing activity. that's really going to be the key for wells fargo, is how much has the refinancing activity slowed down as well as the narrowing on margins. three analysts, one at

jpmorgan, one at wells fargo, interestingly enough saying there may be value in unlocking the banks. the big global event makes it uninvestble, breaking up large universal banks could unlock value for shareholders. is this going et greater play? can you see it happening bearing in mind we've got proposed changes to the regulations? >> i would be very surprised if the big banks in the u.s. break up. we don't see that happening. i'd like to see the large banks, the universal banks in the united states at their full strength. and let's look at the valuation when we take a look at that full strength. we're not there yet. they're still lugging the costs from the '08, '09 debacle. but when we get there, probably at the end of '14, these universal banks will be giving back over 100% of their earnings in forms of higher dividends and

shares per purchases. i know it's a topic of discussion today. we do not expect it to happen. we don't expect the banks to do it on their own. if it's legislatively driven out of the united states congress, that's the way it's going to have to happen and we don't expect that to happen. >> shandi, i'm sure you're going to pursue the story, though. absolutely. but i'd have to agree with gerard. we always hear whispers about it, but nothing too serious. >> maybe just accidental that you get three notes in a few days, all on the same subject. just some -- about it, right? >> i guess what i mean, we don't tend to hear serious consideration from the legislators on this or from the regulators on this. that's what it would really take to break these banks up the. >> okay. the shareholders themselves

thought it would be a good idea. shandy raice, thank you for that and gerard, good to speak to you both. don't forget get into full swing next week besides today's numbers. just to remind you, we get citigroup on monday, goldman sachs on tuesday. bank of america on wednesday. and i hope you tune in. up next, we head out on to the augusta national golf club. there's more than just golf balls flying around. ♪

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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. if you've just joining us this morning, european stokes are downs on fears cyprus will need extra funding. but official clarify they meant to ask for technical help. meanwhile, eu officials stand firm in dublin saying the spy prus $10 billion euro bailout will not be renegotiated. and all eyes are on the big u.s. banks as we await earnings from wells fargo and jpmorgan. other stories today, as well, former kpmg partner scott london has been freed on $150,000 bond after appearing in court on

thursday. he's been charged with conspiracy to commit securities fraud. for allegedly passing inside information on kpmg. er ba rpm holdings and capital. london's lawyer says he intends to plead guilty when he's arraigned next month. he faces five years in prison. prosecutors says sure, with london made around $1 million on the tips and gave london 10% of its cash, tickets and he isn't facing problems now. kpmg says it plans to take ool action against london. eli lilly faces increasing competition from generic drugs. the biggest block burst drug antidepressant sympatcymbalta l

patent protection at the end of the year. eli lilly stock down 0.5% in frankfurt. c we knowny reportedly hired blackstone to advise it on financing. options could include selling a minority stake. the company has already contacted several private equity firms about a possible investment. on sunday, bill akman said they're willing to pup up more. jcpenney in frank first up 2%. now, away from the corporates to the greens, round one of the masters is in the books with the weather cooperating for the players. tiger woods seen here shot an opening round 70 to beat 2 under

par. he's won three times before. 14-year-old jan manwuan, this birdie meant he ended at one over. fred couples is one back from sergio gar seen ya, tied with the lead from scott leishman at six under. right. that's where we stand on the scores. brian now joins us from augusta. it's early dawn there, brian, but they'll cut the greens already if they're not doing that right now. great day one from augusta. what's the buzz around the tournament from a financial perspective this year? the equity market has been doing better. is there a sense there that hak charge more for the merchandise and everything else? >> i would tell you the business of the masters is absolutely booming, ross. it's actually unbelievable, even

ticket call per scalpers are t about they didn't expect this. tiger woods is number one in the world again and this is the unexpected part of it. corporations that are flooded with cash are finally spending without guilt down here. take a look at your screen right now, right now badges just for today on course, $2,500. again, the four-day asking price, $10,000 some are going for. the rel tail price for that, the face value is $250. if you want any deals, i might just want to deal with that. a lot of these ticket resellers sold tickets to other people before they got them. now they're buying those four-day badges for $6,000, $7

to us, they're losing thousands of dollars. there's a lot of disappointed fans down here, as well. the demand was not anticipated and it's absolutely through the roof. the augusta national government club doesn't need to make more money. there are peripheral businesses saying this is close to where we were before the recession. >> what does augusta think about, the reselling of fikts? i mean, they don't nake my money. >> we've talked a lot off calm ra with people around here. you can go in, scan your tiktd. was back in and give it to someone else. so they could do something about it. the only thing you can't do is buy and sell within a short dance from the weather.

>> do you want a hat? do you want a shirt? i'll get it for you. >> anything. anything would be cool as long as you sign it, as well. throw it in a -- >> i'll give you my autograph. >> you sign it. thanks, brian. plenty more to come from augusta throughout the course of the day. meanwhile, the countdown to u.s. banks earnings is under way. what did it mean for the markets? closer look noouz we're 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

european stocks are down fleer the lowest levels of the day. the xetra dax down 1.2%. joining us from chicago, todd horowitz. good to see you again today. fresh record closes last night.

how much of a profit taking are we seeing? >> good morning, ross. you know, right now, the market is in a blowoff phase. nobody knows when it's going to come. but i would eventually look for somewhere between a 6% to 10% correction. right now, the markets are going up and there's no reason to fight them. just let it go. >> we're called down. how were the bank earnings swing sentiment? >> you know, the bank earnings figure to be good. taking a look at the charts, they've all rallied up on these numbers now. the market expectation is also expe expecting them to be good. how can they not be? they borrow money from the fed and give it back to 037%. i expect to see the earnings day to be a good earnings. now, we have been up, you know, five days in a row. we're up 22% since november. so i do expect to see some sort of profit taking here. so this could be the final push up and then maybe we get a little bit of profit here taking this morning. the futures here are reacting to

what's cyprus right now. and they're down minimally. >> one has to look, with as you see, we keep looking for a correction. we need a trigger for it. >> we need a fundamental news bomb that cannot be expected. you would have thought last week's jobs number at 88,000 would have been the trigger and, of course, that's not the trigger. as long as the flow of free money is here, it's hard to get the market to sell off. >> todd, have a good day. thanks for that. todd horwitz. earlier, we were asking is bitcoin the future of money or just another bubble? for plenty of results including slate from alaska saide'd rather by counterfeit money before buying bitcoin virtual money. there you go. that's the range of opinion. that's it for today's show. earnings from jpmorgan and wells fargo will be released during the time on "squawk box."

marianne leak will speak to us, as well.

good morning. today's top stories, a rally continues on wall street, at least yesterday. but european shares are getting spook by comments from top officials in cyprus, much bigger bailout. slovenia, apparently north korea has nukes and two of the neigh's biggest banks roll out quarterly results. it's tri, april 12th, 2013. "squawk box" begins right now. good morning, everybody. welcome to "squawk box" here on cnbc. i'