a very warm welcome to street signs. >> these are your headlines. >> these are your headlines today. yeah, markets in europe opened tentatively to the upside following yesterday's heavy selling. investors turning to frankfurt for any glimmer of fresh policy measures as the ecb meets. >> we always said that quantitative easing would lead indirectly to an improvement by basically weakening the euro and as a consequence of that improving the european

economies. >> deutsche bank fall more than 5% after posting a record 6.7 billion euro loss as litigation and write downs hit the bottom line. >> and the italian prime minister says the government is concerned by banking section tension but the head of investment banking tells cnbc the planning is overdone. >> there's no real understanding a bit of confusion about the situation in italy. the market is not discounting also the level of provisions that the italian banks have put toward it. >> and nissan chief executive dismisses accusations that his company cheated on emissions testing. >> any device considered as a cheating device? the answer is no. >> good morning and welcome to

street lines. let's bring you up to speed. we are seeing green arrows across the board. the xetra dax and even on the other that's trading markets. relatively flat. and the ftse mib up about 0.3%. we have been getting comments out of the italian government trying to reassure investors. concerns about non-performing loans in that sector but the government trying to reassure investors there. well this is the backdrop. we saw the dow jones crossing after the lows on the s&p 500. we did see a bit of a late day rally. markets still closing in negative territory and you have to wonder what these executives are saying on the ground out

there in davos. steve is joining us from there and there was so much hope going on that we could move away from the crisis and talk about industrial revolution and innovation and here it is feeling like deja vu. more banks flagging losses here. what are is the feeling on the ground. >> i'm actually hardened by the fact that the real world brought davos down and got them thinking about real world now issues. i don't think anything in the fourth industrial revolution theme here is wrg. there is a technological change going on. digitalization, ai, robotics, it's all very exciting and very challenging as well for a lot of people and it's definitely something to think about for the medium term. for the longer term. but for the now there's very real world issues but i would take exception with many in the market at the moment. i'm happy to take them on about

why they're selling this market. in the same logic of why they were buying it at record levels in 2014 and early 2015 because there's not a lot that changed. the china data was down beat but not awful. the oil data is overwhelming to the down side of course. iran coming back whether it can produce a half a million barrels that's not new news. people have been trying to sell off on the oil price for 20, 40, 50 bucks as well and in terms of the performance in europe as we have been hearing from a lot of guests they think we're puttering along quite nicely. europe has been an almost disastrous backdrop so things aren't bad in the real world economy as the markets are indicating and we'll continue to do so. a very interesting couple of

guests coming up given the fact that so many are coming out of china and emerging markets. we'll speak to the president of the aiib. that will be a fascinating intersue talking about where they're investing and areas of concern are as well. later on we'll speak to the president of the adb which is the asian development bank. are they rivals? perhaps not the same spaces but interesting to see what investment opportunities there are there as well. we'll get a take on the volatility and reaction to it. >> if the markets are left to their own devices you'll see more down side across the board. a lot of asset classes haven't begun to see the pain you're seeing in commodities and emerging markets and so on.

>> trying to be selective. now it's time to be more selective. it can be cheap and it's time to make a wide investment that they'll be more agile than before. >> seeing also from france we think there is a kind but i don't know how big it is. very confidential because for sure there is a sell coming from these players and in this market it's putting pressure on the price. >> let's get straight out to the asian marks and see how investors there faired in the session. sri joins us from singapore with

the latest. >> yeah, nancy. we started off the day on a stable note. there's a degree of composure and all of that evaporated. we saw a flurry of selling in the north asian markets. we were down by more than 3%. this despite the fact that the pboc injected a big wad of liquidity into the system. so consider that. also consider the disconcerting fact that a lot of these very magnified down side moves are happening in the mature and developed markets as well and most notably the nikkei 225 pushing further and deeper into bear market territory and the nikkei lost around 1,000 points in the course of the past two trading sessions. yes there's a lot of uncertainty over the direction of the yen. the policy makers are not happy

about too strong a yen and there's a lot of uncertainty about what the boj is going to do on the 29th. are they going to come to the party? but what these markets seem to want is a positive catalyst. is it going to come from the central banks? are they going to deliver it in the form of more easing, more dovish statements and the boj next week. it's going to be an interesting one, steve. >> oh, sri, it's the same old disease. let's rely on the central banks to get us out of this mess. whether it's the fed or ecb or prehaps from china as well. thanks. nice to speak to you. chinese market volatility continues to dominate many investor concerns and the discussion is about is there a new normal in china? how are we getting to the new normal. talking about the soft landing. let's listen in. >> the stock markets in china are not really reflective of

overall macro economic performance. they do not have the full breath so it's understandable why chinese officials wish to intervene in this because they feel it is an unjust reflection on their otherwise still quite enviable performance in the overall economy. >> people have been predicting a hard landing in china for a long time and we're of the view that a growth rate of 6%, maybe a little more. maybe a little less, it's the world's second largest economy. there's plenty of room for growth if you're in the infrastructure business and you take a long cycle view, you have to bet on china. >> a lot of the problem in china is corporate governance so we still find it very difficult to find companies to invest in for the long-term and a lot of the money coming into the market and going out is short-term money at the moment and they find it quite painful to try to keep the market up when in reality you

should just let it find it's level and people will come back in. so let it come down quickly and take the pain. >> i think the tone from a lot of those gentlemen was mildly positive despite the oscillation in the markets. amid all that, the asian infrastructure investment bank which of course was a chinese lead initiative is open for business they launched last weekend in a sign of beijing's financial influence. the bank expects to lend 10 to $15 billion for the first five or six years. financing of $1 billion worth of projects. i'm delighted to welcome to the program the president of the aiib. thank you for joining us if i may start off on the concerns we're seeing out of china and the broader asian region.

do you think the markets are getting a little bit overdone? >> i think it's quite often that the market would overreact to any volatility so i think the decision makers, investors and all of those that are very much close to this should stay calm and indeed, the chinese fundamentals are very good but of course this economic growth is down for a good reason because we need to aim at quality rather than quantity. after fast growth it's only natural for the economy to stay and move forward on a more solid basis and to achieve better quality, high yield level growth and in return for better environmental protection. >> you mentioned a key point that the regulators and authorities should remain calm. do you think they have remained calm or there's been a knee jerk reaction. >> in the times of volatility some people would be worried but

if you look at the chinese regulators and the government they managed to do a very good job you see the outcome pretty good but compared to a couple of weeks ago the chinese market is more stable. >> and i guess the point would be if the chinese stock market is not a bar rometer of the slo declining growth but a more steady long-term level that we're seeing why is there such a whole series of reactions about the market if they're not so worried about the broader economy? >> the chinese stock market is still in it's early stage of development. the correlation between the virtual economy is not that close as compared to the relationship between stock market and the united states or western countries so i don't think it is right to make judgment on the real sector economy purely by the volatility

of the stock market and also you see we have a group of investors in the stock market that are not very much mature and who want to make quick bucks and some times they overreact but i think for any country they're moving on a learning curve. i'm proud to say the chinese regulators are pretty fast on the learning curve. >> it's not just chinese investors on the swift learning curve. i think this provides a very interesting opportunity and perhaps more pressure on you to make the right investments. am i right? the aib is initiated by china but it's owned by 57 member countries. so it's a bank of all of the farming members and we have more than 30 countries on the waiting list eager to join so we manage

this bank by the international highest possible standard and the mandate is sustained economic development in asia. this should be good news for the nonasian countries also a more developed asia would be good business opportunities for companies in europe, north america. that's why so many nonregional members are very keen on joining with asian countries. interesting that russia is at the front wanting a loan given the fact that this is an oil rich country which has such key links with china and the region. >> we focus on connectivity. connectivity by sea road and on the land by road are all very

much important so we don't look at the benefit for a particular community, particular country we look at the connectivity of the entire region. >> and final question. but for those that say it's a competitor to the world bank. it's a competitor to the asian development bank. i'm sure you have a well rehearsed answer for them. >> contrary to the expectations of the people worried whether this could be a rival to world bank adb, this is not true. we are very close partners. when 70 years ago the world bank was created the economy was small. 50 years ago when adb was created the economy was bigger and now half a century later we're dealing with a much, much bigger asian economy growth but what's the worry. >> thank you indeed for joining us. it's been a real pleasure.

>> i'm delighted to say he'll be joining us and he's the president of the asian development bank as well. plenty of need for money from all of these sources i'm sure but we'll get to that interview in a few moments time. >> looking forward to it. we'll be back with you in a few minutes but after the break a closer look at deutsche bank whose shares are off 7.5% after a full year loss. we'll tell you more about that coming up in a few minutes. the flu virus hits big. with aches, chills, and fever, there's no such thing as a little flu.

and it needs a big solution: an antiviral. so when the flu hits, call your doctor right away and up the ante with antiviral tamiflu. prescription tamiflu is an antiviral that attacks the flu virus at its source and helps stop it from spreading in the body. tamiflu is fda approved to treat the flu in people two weeks of age and older whose flu symptoms started within the last two days. before taking tamiflu, tell your doctor if you're pregnant, nursing, have serious health conditions, or take other medicines. if you develop an allergic reaction, a severe rash, or signs of unusual behavior, stop taking tamiflu and call your doctor immediately. children and adolescents in particular may be at an increased risk of seizures, confusion, or abnormal behavior. the most common side effects are mild to moderate nausea and vomiting. anti-flu? go antiviral with tamiflu.

the asian development bank says it will remain optimistic about china's economy. and requires chinese progress on reform. i'm delighted to welcome to the show the president of the asian development bank. sir, thank you very much for joining us. i just heard from your rival the aiib. and he was saying look the real economy in china is very different from what is being mirrored by the stock markets?

>> i think they are at this moment and they have been slowed down for reasons adjustment from high year growth even after financial crisis and it's based on more consumption and based on more service invest of investment and they can manage to do it and loco comments, physical reforms, labor market reform and so on. i still believe that they can manage to do this. they never got market. >> what you're asking the chinese to do is you're asking him to become a nation of spenders or consumption rather than a nation that saves 25 or 30% of their income. they don't have the same social safety nets that the west has

for instance but how are they expected to change that mind set as well? it's all very well giving them the tours but to change that mind set, that's a very difficult thing to do, isn't it? >> they have already made it clear that they are targeting more market based economy. at the end of 2013. they announced it clearly stated that they'll target all the things you just mentioned and i think that they try to change mind set with people but for such a reform. >> in the meantime, the adb is trying to sure up confidence in it's own way. investing in infrastructure and elsewhere. where is your focus to try to calm the nerves of people and put your investment in the best place? >> we moved $16.6 billion.

more than 20 plus increase in previous years. there's many opportunities in asia. we're talking a lot about china but there's growing countries like india and india's growth rate is now picking up. bangladesh is modern growth and myanmar and those countries can be adjusted upward. so and we should invest in them. >> these have high consumption of product and high consumption of oil benefitting them extraordinarily. you mention the high wages in china comparatively. so when my viewers who are investors globally are looking at emerging markets in china they need to look at individual

economies because there's real winners and importers, there's some adjustment for physical revenues. there is some difficulties but overall of course those countries are benefitting and they're benefitting from growing young population and also i've seen countries have opportunities. >> and yet so if the giant countries of the region, china slowing down and japan as well and i know that you're a former vice finance minister of japan but until they chose a form on the growth front and until china stabilizes it's difficult to get excited about the smaller regional players when the bigger players are struggling to get inflation. >> they have the challenging of getting out of inflation.

headline consumption cpi. still they're making it and starting to have a little bit more solid growth and i think it will happen but depends on that. >> first about the yen and now the yuan. do you feel there's a potential competitive devaluations going on and imported and exported deflation is going to become a real risk to the growth story of the region? >> i don't think so. it was depreciated because there's weakness of the economy and also some outflow. so they didn't try to devalue you wait it but they stopped intervening the market to support it as much as before. they're losing foreign reserve this is market force.

it's not intentional but it's not really good we have a rapid depreciation currency. >> no currency war in 2016 then. >> i don't think sonchts nice to see you. thank you for joining us. the president of the asian development bank. let me go back to concerns a lot closer to home for our european viewers. we're talking about italian banks. i was in milan and rome but we're worried about again and the italian prime minister has been attempting to sure up confidence. banks in italy have been under pressure since they want additional checks on loan quality. he said fears are overblown and an investigation into certain banks is underway now he told cnbc that selling in the italian banking sector is overtun. >> there's no real understanding, a bit of

confusion about the situation the market is not discounting the level of provision put through during the year and the value of collaterals so i can see we have a high level of provisioning. we are at 61%. if we look at loans we are at 53% which is one of the highest and if we discount the value, our level of courage is to 90% so it's panic sellings. >> shares are trading lower after a record full year loss for 2015 that totals 6.7 billion euros. write downs, litigation and restructuring costs all weighed on the earnings. well he described the loss as sobering and said it was the worst full year result for the lender since 2008.

that was the height of the financial crisis. well not good news for deutsche bank. shares off about 9% weighing on the broader german market and some of this was expected when we talk about litigation and restructuring but analysts saying it's the decline in investment banking revenue that did come as a surprise. especially seeing other lenders in the united states particularly keep those quite strong. so a lot of work to be done for the new co-chief executive here. >> yeah. absolutely. do you know what, nancy, i thought i was going to be original but i find myself in complete agreement. i don't care about the litigation. i don't. i knew it would be worked through. these are legacy problems. if they were still misbehaving then i'd have a problem with it but i don't think they are. it's the investment banking and current activity where i have a

problem with and concern with because this is the on going business. not the legacy stuff. not the old stuff it's the current business and i'm afraid to say they continue to trade at a significant discount to many european piers. it trades at a massive discount at the mean of .9 to 1 for european banks. >> that's right. other concerns over the italian lenders. all of this ahead of the big ecb decision later today. we'll be bringing you special coverage of that decision live from davos and london from 1:30 p.m. cet.

welcome back to street signs. the world economic forum in davos. >> and i'm nancy in london. these are your headline. >> to markets in europe trading cautiously following yesterday's heavy selling. investors turning to the ecb meeting in frankfurt for any glimmer of fresh policy measures. >> don't panic. that's my clear message and don't cut at the point of maximum pain. the money in equity tends to be made the days after the really bad days.

>> stairs in deutsche bank fall more than 8% after posting a record 6 billion euro loss as litigation and write downs hit the bottom line. >> meanwhile the italian prime minister says the government is concerned by banking sector tensions but the head of investment bank tells cnbc the selling is overdone. >> it's really panicked selling. there's no real understanding. a bit of confusion about the situation in italy. the market is not really discounting also the level of provisions that the italian banks have put through during the years. >> and reno nissan chief executive dismisses accusations that his company cheated on emissions testing. >> is there any device which is considered as a cheating device, the answer is no.

>> good morning. let's give you a look at how u.s. markets are set to open. the dow crossed more than a thousand points spra day and if you take a look here eight appears as if investors are getting no respite. markets called to open. dow jones off 500 points and the nasdaq off 19. the nasdaq almost managed to close in positive territory but dipped slightly at the end of trade yesterday. let's see how the moves are spilling over into the european trading session. markets are trying to hold on to gains right now. quite modest increases at this stage and higher by 0.4% and of course equities can't fight the volatility in the oil markets. let's give you a check on where oil prices are at the moment. we saw wti crude close yesterday

but that's off almost 1% for the session. a similar move off about 1% at 27.61. let's get back out to steve in davos talking all things macro economic but of course you can't ignore the big oil price swings out there, can you steve? >> absolutely. and the deafening silence i can hear is enormous because vienna ishe home of opec secretariat and my phone has given me the latest opec basket $22.48 and there's still no sign of a meeting. still no sign of accord as well and doesn't look like their price making ability will come back any time soon. they have become a price make taker rather than a maker so that's one dominating many conversations here in davos. a couple of big panels yesterday

it became a very key topic as well. but listen into the thoughts of business leaders and experts on this topic. >> it really creates pressure on governments and we have to be creative in terms of how we come up with it people expect it to shut in and people say that could take six months or a year. so no one is blinking. >> one of the unintended consequences of something most people didn't forsee was t lower oil price would make the sovereign wealth funds dip into their reserves that he put in for a rainy day and this is a rainy day for a lot of the big oil producing nations.

>> that's a very interesting point as well and it's not the first time i heard it here. they could be dipping into those funds to cover more pressing domestic financial needs as well and that may be one added ingredient to why we're seeing selling on the global markets as well. there is major beneficiaries and we heard it from the aiib earlier on saying there's countries who are consumers that are doing very well. can't be many that are enjoying the lower oil price more than india that had such a huge problem and cost with the subsidy over many years as well and jeff caught up with the rbi governor and began by asking him why he thinks there's such volatility in these markets. >> everybody is looking at everybody else and saying is this the point where they take the money off the table?

so that is part of it. part of it is wondering what is really happening in china. why did it stop moving a little and is there more to come? of course the o price. how far will it go and does it effect some entities. >> do you think the fundamentals justify this decline in asset prices that we're seeing? >> broadly no. it's hard to tell what the either level of prices for us are but is there something that changed dramatically that would say the world economy is heading downward? i don't think so. there's a fair amount of sense that we're moving along more

slowly than we should. >> you talked about the concerns around chinese policy at this point. you peer to peer relationship with the chinese. do you think we should take eight face value their commitment not to devalue. >> the chinese have been saying at every forum that i have participated in that that is not their intent. certainly the targeting a basket now rather than the dollar itself but they are not into a situation of competitive devaluations and they do worry about the effects of their actions on other countries so they made that clear and i have no reason to doubt that. >> how do you feel that you should respond as the fwov nor of the central bank to the nervousness that we see in indian assets specifically. because it's off nearly 3% i think today.

the rupee also having something of a wobble at this stage. >> well, it came back quite a bit in the last few hours of trading but also it's been relatively strong among emerging market currencies. so we're effected by the same kind of jitters but my sense is at this point you focus on the fundamentals and try to get inflation down and current account deficit downment keep your fiscal on target and do the good things. and then people reward you. they take the money off the table in a hurry but then they come back. my sense is after the initial volatility things will stabilize and people will try to look for the good stable emerging markets. india is one of them. our growth is good. >> our next guest is the global head of emerging markets at ubs

and will try to help us find some sense in these markets. >> looking forward to it. let's give you another check on the share price of deutsche bank because they're trading sharply wer now off just over 8% after the bank revealed a record full year loss for 2015 that totalled 6.7 billion euros. all weighing on those earnings. now the ceo described the loss as quote, sobering and said it was the worst full year result for the lender since 2008. the height of the financial crisis. >> renault is planning to recall 15,000 vehicles after revealing some cars break official limits. >> he dismissed accusations that his company cheated on emissions tests. >> there's three questions being asked. the first question is is there

any device which is considered a cheating device. the answer is no. it's not only the company saying no but the government that checked the car saying there's no cheating device and the second question is do we respond to the norms? you have european standards. we're talking about the category that knocks emissions and then the answer is yes all the cars follow the standards and the norm. so there's no question about that. now then you have a huge domain which is left. why the emissions are much higher than the standard. all car makers have that. the question is how far they are from the norm. what you're expecting is the norm. just to make sure that there's no confusion in the mind of the consumer independently of the

performance of every car maker with every diesel engine it's real driving the performance matters let's define what is real driving performance and let's avoid the confusion. there was one particular issue, only one particular issue on one specific car which is being recalled where there was what we call a calibration issue which was recognized and the car is going to be fixed. >> there's going to be no further recalls. >> you usually recall for something outside of the norms. if you are within the norm there is no recall. what is left still but this is for the whole industry is let's define real performance and accepted the rules and make sure that all the cars follow. for the moment there's not. >> for the moment but there is potential for further recalls?

>> so you have two kind of recalls. whenever they do not respond to customer satisfaction car maker can make a report whenever he wants and we do it and do it massively. this is one issue and the second issue is do you have a problem with the norms? which means officially accepted norm and in this case you have to recall the cars. >> so investors have overreacted. >> i'm not going to say about overreaction. there is a lot of confusion. there is a lot of confusion out there about cheating devices and following the norms and real driving performance. it's absolutely not the same liability for car makers. >> it's a regulator problem and not a car maker problem? >> everything that's a concern

of the consumer is a problem for the car makers because at the end of the day this is about trust and we put the product on the market and we want it appreciated by the consumer. >> reiterating once again that reno does not have any cheating devices as those that are involved with the volkswagen diesel emissions cheating scandal there but we talked about this many times since the scandal broke that all car makers face this issue when it comes to differences in the tests on emission standards and the real road conditions and what we had there was carlos telling julia we need a new set of norms and it seems that he's putting the pressure on the regulators to try to remove the uncertainty here that continues to plague just global auto makers and not just volkswagen. >> absolutely. they have been working hand in glove to soften the glove.

unfortunately i don't think we had a trens you response or set of rules going forward from the regulators that can give us that as consumers and investors and the car sector is one which you and i and i poured over this many, many times it's a beaten up sector whethert's renault or volkswagen, ferrari -- i'll take that one out but ford, gm, et cetera, they trade at single digit multiples. so why? two reasons. one is the lack of trust as shown at recent events at volkswagen and elsewhere and secondly vast amounts of operational cash for very low margin and it's all very well our viewers in the states getting excited about these record car sales. it's all very well getting excited about a similar set of

numbers but it's a financing option as much as a purchase of a car and that's something to be considered as well when we look at this. but the operational issue, and trust issue, are they glorified financing companies as well. i think there's real questions and justification at why they're at such a low evaluation. >> strong auto sales. another set of strong auto sales out of the u.k. this morning but a lot of expectations that this could be as good as it gets globally so you hit the nail on the head when you talk about the valuations here and additional uncertainty as well. improved performances in africa and europe. it's also saw a 4% boost to volumes. meanwhile shares in pearson jumped after announcing a wide reaching restructuring plan. the company is to cut 4,000 jobs or around 10% of the work force. that's in a bid to reduce costs.

they also issued a profit warning saying suggested earnings for 2015 would be between 69 and 70 per share that comes in below previous guidance. >> they're trading sharply higher after it beat the street with 3rd quarter earnings and raised it's 2016 outlook. the computer accessories manufacturer completed restructuring processes and says it's upswing is, quote, sustainable. it added that it's looking at small acquisitions going forward. >> well, still to come here on street signs, emerging markets recorded $735 billion in capital outflows last year. but some experts are warning that there's still more pain to come. we'll discuss after the short break.

the flu virus hits big. with aches, chills, and fever, there's no such thing as a little flu. and it needs a big solution: an antiviral. so when the flu hits, call your doctor right away and up the ante with antiviral tamiflu. prescription tamiflu is an antiviral that attacks the flu virus at its source and helps stop it from spreading in the body. tamiflu is fda approved to tre the flu in people two weeks of age and older whose flu symptoms started within the last two days. before taking tamiflu, tell your doctor if you're pregnant, nursing, have serious health conditions, or take other medicines. if you develop an allergic reaction, a severe rash, or signs of unusual behavior, stop taking tamiflu and call your doctor immediately. children and adolescents in particular may be at an increased risk of seizures, confusion, or abnormal behavior.

the most common side effects are mild to moderate nausea and vomiting. anti-flu? go antiviral with tamiflu.

>> welcome back to street signs. i want to bring you an update coming out of a british lead inquiry. we're getting word from the judge lead panel in the u.k. they're suggesting that president vladimir putin in 2006. he died after drinking green tea laced with position. vladimir putin probably knew about and approved this murder and you have to wonder what kind of response we'll be getting out

of moscow as tensions between the u. s. and russia and the west are running high. steve is with us standing by in davos. >> i just have one thing to answer that and we have been hearing a lot from russian leaders here. certainly the banking sector. jeff spoke to him and neither of them really expect much change on the sanctions front as well. so yes, this inquiry has had it's own conclusions but it is very interesting that the russian leaders we have been speaking to at least from the banking sector don't expect much movement anyway regardless of this move from the u.k. judge on sanctions anyway. so perhaps the status quo rather than a tightening of tensions further. let's just turn our attention to a little bit of other news including brazil's central bank which kept interest rates on hold as the country faces it's

worst recession in a century. the monetary policy committee decided to keep the benchmark unchanged at 14.25%. that is the fourth time in a row and we spoke to him and he painted a brighter look. >> i think long-term and medium term it's still a place to have a substantial part of your money. >> in latin america a lot of governments haven't taken the opportunity to do necessary restructuring, govern ance concerns about how governments are operating at this point. plus there is a worry about the level of dollar denominated corporate debt that sits out there now that the fed has started lifting interest rates. these are all valid concerns. >> absolutely and brazil being the prime example in latin

america where we -- where the currency we think has probably reached a floor but it's been painful because of government action or inaction. but against that i sort of point to india which is quitely growing at 5, 6, 7, whatever it is, good companies where we made a lot of money over the last few years and argentina which is now after the election looks as if it could be on the way back into the investment fold. >> again, mildly positive view coming out of another davos leader here. let's get another view. global head of emerging markets and fx rates and credits at ubs. very nice to see you here. let's try to tie all of this together as well. you did a paper coming into the world economic forum. one of the co-authors at least. it's looking at the fourth industrial revolution. now taking a step back and looking at what the markets are going through and the turmoil in the present day rather than the median to longer term.

is there a connection between the two? >> they're linked. the trigger this week is oil two weeks ago is china. different triggers but the question to ask is why are we still jittery? why do we react to every piece of news in a sensitive manner. it's to do with the fact that there's the fourth industrial revolution on going which is several revolutions happening at the same time which leads to open questions. the structural uncertainly in the system right now. in the arena of macroeconomics why do we seem to be in a inflationary period right now? why is it that we seem to be spending on services but not on manufacturing producted and absolutely not on capital expenditures and there are questions of this nature. we also tend to focus a lot on the monetary aspects of things. quantitative easing and the real question is where is growth going to come from and when you talk about prices and valuation

you have earnings to look for. >> let me just pick up on that. so the fourth industrial revolution is adding to deflati deflationary pressures. from a central bank pot of view this is bad news but actually it's a bonus for consumers as is the lower oil price. why aren't we going out there and making hay. >> the propensity to consume has been weak. >> you think? . >> it's important to bear in mind that we're constructive when it comes to the u.s. and europe. this year should post better growth in europe in particular 1.8% growth versus 1.5 last year supported by monetary policy the base case is positive but in a world of such wide uncertainties you can get that and at the moment the risk factors are

clear to us and china is the wildcard. >> we're going to leave it there. we're running up against the half break. nice to see you. thank you for joining us. what is now a sunny camera point. the sun always comes out. thank you for joining us. nancy, just for now let me hand it back to you in the studio. >> thanks for that. we'll be back later for special coverage of the ecb decision. let's give you a look at where u.s. markets are set to open after that incredible volatility yesterday. it's lowest level since april 2014. so far futures pointing to another down day in the u.s. but we'll have to stay tuned later for that market open. meanwhile we'll be back throughout the day at 2:45 p.m. cet. julia joins us speaking to george osborne. that's one you won't want to miss.

china moves to inject $50 billion into the market. the ecb meeting with a policy decision over a few hours. >> media giant viacom slashing compensation for the ceo. this as the company faces increased pressure from shareholders. it's thursday, january 21st, 2016 and worldwide exchange begins right now. ♪