hi, everybody. welcome to "the wall street journal" report. i'm maria bart roam ma. what the twist means for you and your money. the state of state. we'll talk to one democratic governor about his business friendly state, pensions and balancing the budget. >> in order to do that there's a harlem in every city in america. >> and my conversation with chef, entrepreneur and author marcus samuelsson about the rebirth of harlem. "the wall street journal" report begins right now. this is america's number one financial news program. "the wall street journal" report. now maria bartiromo. here's a look at what's making news as we head into a new week on wall street. a new blow to major financial

institutions in the united states and around the world. moody's issued a ratings downgrade of 15 major banks including five in the united states. they are morgan stanley, goldman sachs, citigroup and bank of america. the news could have been worse for morgan stanley. theback lobbied against a more severe downgrade. the ratings cuts will be passed on to customers. after a two-day meeting this week the federal reserve announced it is extending so-called operation twist which is a program to buy long term bonds and keep interest rates low. the fed's move disappointed the markets which were hoping for a more decisive move. by thursday the dow jones industrial average plumbed more than 250 points. the markets rebounded friday. crude oil tumbled below $75 a barrel. the slowing global economy and decreased demand is pushing prices lower. that's translating into lower gasoline prices and it will put

more money in consumers' pockets. microsoft trying to take a bite out of apple introducing its own line of tablet computers. the device named surface is a major strategic shift for the giant. is the economic news all doom and gloom or are there any bright spots? joining me is henry mcvai. he's with a global investment firm. henry, it is wonderful to have you on the program. >> nice to be here. >> let me kick it off with the global story. you're back from spain, is that right. >> yes. >> and asia? i want to hear about your trip. china was the engine of growth for the world. that's slowing. >> right. >> what do you think is going on out there. >> why don't i start with china and we'll work towards europe. the message from china is that growth is slower than the consensus. estimates need to come down. i think the big story is that the export economy in china, they've been the manufacturer to the world. that's starting to slow down. they don't have demand from europe. they don't have demand from the

u.s. so i would expect that to start to affect people's perception of china as a growth engine. i still think it will be the single biggest growth vehicle out there but it just won't be if growth was here, it needs to come down. so i think we'll go through an adjustment period. >> what did you see in spain? everybody is worried about spain and the eurozone. >> i think spain, there's reason for caution there. i think you have a new administration that came in. they're trying to get their arms around not only a banking crisis but also a government crisis in terms of overleverage and fiscal deficits. so i would expect spain to continue to be a problem area. unemployment is very high and really they're dealing with some structural issues that i think are going to plague the country for some time. >> so the federal reserve's action this week expanding or extending the so-called operation twist program. more stimulus. >> yeah. i think it was a non-event. i'm glad you brought this up, which is when i travel around the world, whether it's brazil,

turkey, china, i think the central banks are being asked to do more than just dictate monetary policy. they're being stretched in multiple directions, control growth, control loans. it's too much. the governments need to get their houses in order in these countries and help the private sector. kkr and its 80 businesses globally, we want to work with different industries and different managers but we need the governments collectively to do a better job to help out, to create a growth environment. and i think that's a message that you'll hear from anybody that's in the markets or in the economy in terms of running businesses, which is there's a lot of good things the private sector is doing but now is really a time for the governments to step up and create a path of growth so that we can get out of some of this kind of funk that's been plaguing the global economy. >> we can say that about the u.s. as well because the federal reserve has been the one providing stimulus but we have the fiscal cliff at the end of the year. we need governments to start to focus. >> think of the fiscal cliff

which is another example. we don't know whether we'll have a 1% deficit or a 4% deficit in terms of growth. starting the year with a 4% deficit, which if nothing changes that's what you'll have, that's never happened in the history of the united states. think about it. if you're trying to run a business, small business, large business, you want to know what the playing field is. >> right. >> i think from our standpoint we are more cautious on growth next year. one of the reasons is not because we don't see our industries doing well or our companies doing well, we're struggling a little bit with what is the playing field in terms of the growth impediments that will be dictated by government taxes or health care or social security or medicare. those are all things we're very focused on as a firm to make sure we do the best job for investors to understand those issues. >> we need clarity on these issues. >> yes. >> let me ask you about the bank downgrade. moody's investor service late thursday night downgrading the ratings on all of those banks. what does that tell you? i know we were anticipating this. we were expecting it.

the stocks traded down ahead of it. >> right. >> and tried to rebound. >> yeah. i think you have to look at the forest and not the trees. the trees analogy would tell you this isn't as bad as we thought. think about the idea that a financial institution is near junk status. that's a bold statement. what's happening is it we're having a reshaping of the financial services industry and they're being deleafered, they're being asked to change their business models and that's creating issues with the rating agencies. unfortunately i think that's a structural issue not a cyclical issue. my take is i think it's more reflective of the environment we're in and just the financial services industry that we knew during the 1990s and during the 2000s will go under significant change and reform. >> so what do you do then as an investor in this environment? a lot of head winds out there. >> i think there are a lot of opportunities to make money. i would focus on three themes. one is yield, two is growth and

three is thinking about inflation hedge. when you think about the macro landscape, corporations are actually in great shape. and we want to be exposed to corporations either through some of their corporate bonds. i think those are opportunities there. i think some of the deleveraging we're seeing in europe is creating wonderful opportunities for a special situations group and you also want be to have some type of real asset, something whether it's real estate, energy infrastructure, something that can work in an inflationary environment but also can provide you dividend income along the way. >> we'll leave it there. great to talk with you. henry mcveigh from kkr joining us. next up on "the wall street journal" report, i'll talk with the chief executive of america's corporate capitol, delaware. the chef born in africa, raised in europe and found a home in harlem. the legendary new york neighborhood one dish at a time.

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more than 60% of u.s. publicly traded companies and more than 60% of the fortune 500 are incorporate the in delaware, a state of 900,000 people. how's business in the first state and how does it impact the other 49. governor markel is with me today. >> thanks for having me. >> good to see you. tell me about the environments for business that your state provides and how it's helping the bottom line there. things are going well in delaware. >> they're going well. we want to keep making things go better. the bottom line is we are very, very business friendly. to the extent that anybody who is watching this show is thinking about where to expand, come talk to us in delaware. >> can you be too accommodating

to business? there's this whole debate main street, wall street. tell me about, you know, the corporate tax rate. you have an 8% corporate tax rate but there's a perception that companies that may incorporate there, that diminishes revenue opportunities in other states. >> the companies that choose to incorporate in delaware do so because they really understand our law. we've got the best business court in the country. we have a terrific division of corporations which is very efficient. businesses want to locate in our state because we've got a great work force. >> and there are jobs. when you look at the unemployment rate, lower than the national average. >> lower than the national averages. we don't allow ourselves any time for self-congratulations on that. the fact is there are still people in our state who would like to be working and who are not. my job very simply is to put myself in the shoes of the people who create the jobs, focus in on the things that they care most about, and then execute. >> how do you do that? i know you're visiting lots of companies all the time. tell me how you create jobs. >> the main thing is to

recognize government doesn't create the jobs. we have to create the nurturing environment that businesses want to be in. and so we listen very carefully to what they're telling us and it's across industries, whether it's the old dupont which used to be chemical, now moving toward biologically based materials and w.l. gore, astro seneca. all terrific. amazon just broke ground on a major distribution center. we are just as excited about the smaller businesses in our state. our job is to make sure that businesses, entrepreneurs, business leaders across a range of industries find delaware to be attractive. >> this is so important because we're having this debate on a national level right now. how do you create growth. you know, one idea is to, you know, raise taxes for business. the other idea is to make it what you're doing, encourage business to create jobs. let me ask you about this whole debate that we're having on a national level about fiscal responsibility. you know, spending, obligations like social security, medicare.

what is the biggest challenge to you in terms of keeping your balanced budget for the state? >> well, of course at the state level it's different because 49 of the 50 states including delaware, we are required to balance budgets. and so it has meant during some really difficult times we've had to make some tough decisions. a few years ago painful, but we had to cut the pay of our state employees. you know, our view all along has been to take a balanced approach, and businesses get that. the folks who are creating jobs get that. and what they care most about, i know there's a big, big focus on some other issues, but work force is what it's all about. the ceo of gallop recently wrote a book. there are 3 billion people in the world looking for jobs. 1.2 billion jobs available. we are in a global war for jobs. it is that simple. >> that's really a good way to put it actually. so what does that pro-business environment in delaware, what does that teach you about educating the next generation of workers ensuring that u.s.

workers have what they need, the skill sets that they need to thrive in this uncertainty? >> we spend a lot of time making sure what we're teaching in our schools, community college, career and technical schools, that there's a linkage between what we're teaching and the skills that are actually valued in the marketplace. there's a lot of interaction with local businesses who can tell us, what are the skills they need. sometimes we actually ask for their help in writing the curriculum, particularly at the community college level. the skills, linkage is critically important. >> what do you make of the president's relationship with the business community? he's perceived as anti-business. >> i'm asking business leaders to take a hard look because, i mean, in my experience, he's done a couple of really important things. just recently he signed the jobs act which makes it easier for smaller companies to go public. critically important because there's a lot of research that says a lot of job creation takes place right after an ipo. this is something he signed not too long ago. he's had a big focus on export promotion. a focus on foreign direct investment.

and of course he made some really tough decisions that proved to be the right thing with regard to saving the automobile industry. so those are tough decisions and i think he's absolutely -- people ought to be taking a hard look at that. >> do you think the two sides will come together in terms of, you know, addressing this fiscal cliff? we know at the end of the year the tax cuts expire. spending programs expire. companies will be forced to cut workers when they're not going to get that federal money and those spending programs expire. are they going to address this fiscal cliff? >> you know, i certainly hope so. for those of us in the states, we realize how dependent with what goes on at a national level, we are certainly expecting them to have the same kind of functional relationships that we have. >> governor, it's great to have you on the program. >> thank you. >> governor jack markell. up next on "the wall street journal" report, i take a walk through harlem. feeding the needs of a changing neighborhood. >> i g

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harlem has 19% unemployment. u.s. has, what, 8.2. it's very important in this place. in here we're hired from the community. >> meatball. can we pick up one more please. >> you've described the menu as comfort food seen through the eyes of an immigrant. >> yes. absolutely. >> how does this represent who you are? >> everything i do is really a reflection of my personality, my journey. >> marcus samuelsson's journey has led to red rooster, the restaurant he opened in 2010. where the ooet yoep an born chef adopted by a swedish family with his older sister at age 3 pays tribute to a global appetite. >> who taught you first how to cook? >> my swedish grandmother. my grandmother helga. my mom was not a good cook but my grandmother was an amazing cook. i remember as a kid having mom's food but biking over to my grandmother's house and really

eating. in america we throw away 33% of our food. not in helga's house. everything can be used. chicken one day, chicken soup the next day, chicken dumplings the next day. >> the food that turned an african orphan into the most recognized black chef in the u.s. >> africa, it will always be in my heart. so much of my energy and drive i think i got from africa. i'm really lucky to be connected to so many things, whether it's adoption, whether it's ethiopia or being an american. >> let me ask you about harlem because people watching hear the word harlem and they have a specific idea in their head about what harlem is. >> yes. >> what does harlem mean for you? >> it's my favorite neighborhood in new york city. it spoke to me. i lived here five years before i opened my business and i walked every community, every neighborhood here within harlem, every street. >> walking streets made famous

by duke ellington and langston hughes. eight decades taffe harlem's renaissance. a food personality and cookbook author, he was cash poor from a dissolved business partnership. he was selected to cook the obama's first state dinner while having no new york restaurant to call his own. >> the financial downturn taught us a lot. it taught me, i have to recorrect different. i have to be in a neighborhood which i love which is harlem. >> how did you get that first round of financing? was it tough convincing people to believe in you as you stuck to your passion of cooking? >> i said it's not so much me. the most important is do you want to be part of something? changing dining in new york city. new york can do that. there's a harlem in every city of america. for me, very clear. a merging new market. we culturally understand and have responsibility to bring the innocence of america much more than we have to brazil, russia,

china. right here. people have the same inspirations. find the connective tissue. hire in those communities. go in. >> some half million people live north of the 125th street thorough thoroughfare. harlem is home to 30 national chains. that includes not one but two apple by's. to samuelsson this means a strong consumer base that are inspired by their friendly neighborhood chef. >> incredible between the people that have a lot of good food options and have none. the day when we can buy fresh apples in harlem as easy as asking for a soda, i think then we've achieved something, right? >> i know you are down the block from silvia's, 50-year-old soul food institution. there's an influx of independently owned caves, restaurants. is this part of your inspiration? >> i'm asking all entrepreneurs,

west african guy on the street, harlem is so incredible. the mystique of harlem to say as a chef, i live in harlem, my restaurant is here, people can come to it. once they see this harlem that's both old harlem and new harlem mixed in one, they'll have a positive feeling about it. jobs, what i love about a restaurant, you can't outsource it. >> this is a real vibrant crowd for lunch? >> every day. people come in from all walks of life. some from harlem, some coming from kansas, some come from upper east side. everybody. everyone. down the corner versus, you know, you have the president. treat them the same. how are you? >> oh, god. >> you doing good? >> i didn't think i'd see you in person. >> thank you very much. >> tell me about 125th street. how much do you walk outside and see sort of old harlem, the

devastation and upset? >> old harlem is not just devastation. we have some of the best writers in the world that came here, james baldwin for example. look at the apollo. look at the brownstone. there's so much here that we have to preserve and then deliver good. yummy, delicious food so people smile when they think about harlem and their eyes get like, you know what, i have to bring you out of town. >> my thanks to marcus sam mull son. up next on the "wall street journal report." you've heard of vacation homes. about vacation islands? the billionaire who bought a piece of paradies. we'll be right back. [ male announcer ] aggressive styling. a more fuel-efficient turbocharged engine. and a completely redesigned interior. ♪ the 2012 c-class with over 2,000 refinements. it's amazing...inside and out. see your authorized mercedes-benz dealer for exceptional offers

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it was in my sister's neighborhood. i told you it was perfect for you guys. literally across the street from her sister. [ banker ] but someone else bought it before they could get their offer together. we really missed a great opportunity -- dodged a bullet there. [ banker ] so we talked to them about the wells fargo priority buyer preapproval. it lets people know that you are a serious buyer because you've been credit-approved. we got everything in order so that we can move on the next place we found. which was clear on the other side of town. [ male announcer ] wells fargo. with you when you're ready to move.

for more on our show and our guests check out the website. i hope you'll follow me on twitter and google plus. look for @maria bartiromo. look at the stories that may move the markets. earnings reports are out from nike and troubled blackberry maker research in motion. monday we'll be watching the supreme court for its ruling on the affordable care act. the high court has indicated that a decision would be released before the end of june. we're hearing it happens next week. realtors will report latest numbers on the new home sales. that is out on monday as well. on tuesday the s&p case shiler index will be released. that tracks prices on 20 housing markets on thursday. thursday we'll get the final readings for first quarter domestic market. finally, talk about location,

location, location. the hawaiian island lanaye has been bought by larry ellison. he purchased 98% of the smallest accessible island. bothing 3,000 residents, 50 miles of coast and no traffic lights. the asking price was close to $600 million. ellison reportedly is paying cash. thank you so much for joining me. next week leader in business and politics will be meeting. keep it right here where wall street meets main street. ♪ ♪ ♪ ♪ [ transforming sounds ]

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