, everybody. welcome to the "wall street journal" report. i'm maria a bartiromo coming to you from davos, switzerland, i site of the economic forum. where to invest around the world. we will talk to a woman who oversees over a trillion dollars in asset management. where she is finding opportunities right now. then my conversation with george soros what he says about europe, freedom and investing today. then the sweet smellll off success from the man that runs estee lauder why profits are in fashion for him right now. the "the wall street journal report with maria bartiromo" begins right now. >> this is america's number one financial news program, "the wall strtreet journal report wi maria a bartiromo."

now maria bartimo. >> the u.s.s. economy grew at t fastest pace since the second quarter of 2010. the commerce deparent releasing the fourth quarter gross domestic product on friday. it showed an annual increase of 2.8%, a sharp acceleration from ththe previous quarter but belo expected by economists it is the broadest measure of the strength and size off the u.s. economy. the federal reserve finished a meeting this week and said it would keep interest rates low until 2014. the fesd cmittee said the economy is expanding moderately and it sees slow global growth. that helped to push the markets up on wednesday. the dow reached an eight-month high and the nasdaq nearing six month peak as well. a huge week for earng in technology. apple blasted expectations, surpassing estimates by 30%. netflix beat as well. yahoo was in line with estimates. among industrials, boeing beat

expectations. caterpillar crushed estimate and 3m3m beat as well. joininme more on the markets and investing around the world is jes staley and mary callahan erdoes. good to see you both. thank you for joining us. >> hi, maria. >> i feel like walking around davos, meeting people in panels all i hear about is e european debt crisis. this is the wild card in terms of investment community. are you worried? >> you have to have a good degree of concern. the structural challenge of the unified monetary system with a nonunified has create aed problems for europe. the political capital to help the eurozone is enormous a and shouldn't under estimate it. the european central bk as everne has been talking about

in december took a bold move and moved out a nnon to give liquidity to financial markets across europe to buy the politicians time to address the structural challenges. so are we concerned? s. are we worried? much less than people were a couple of months ago. >> looking at the market activity in 2011, a lot of neousness, whether it is europe, the u.n even china the engine of growth for the world has slowed down. what are you hearing from toward? >> it is funny when you come to davos, you can get depressed with all of thehings you hear about. but this year has more optimistic tone than in years past. it is remararkable it is oy january 27th a we alreadyhave over 12 mandates that are over $1$100 million in global emergi markets n credit, commodities. people are moving from defense to offense. >> what's the worse-case scenario if we don't see a deal

for greece ce march? their a huge bond payment due march 22nd. isis the date is d-day. will we see a dislocation in the market if greece defaults your view? >> i you look at how greek paper is price right now, default, voluntary or nonvoluntary is very much priced in to t market. the resources tha are available to the ropean union to germany, to france are pretty significant. there's not like a drop-dead date in march. they could push this down the road for a number of months and quarters beyond that. it gets messy but i think people expe a pretty rough conclusion to what is going on in greece right now sglets move to the u.s. mary, we had data out on friday, the end of the week, america's fourth qrter gdp up 2.8%. thfed committing this last week to keeeeping interest rate low for an additional year through 2014. when i heard the fed say we are going to keep rates low until

2014, i thought when do you hear the fed give a specific year they are going to keep rates. maybe things are worse than i thought in the u united states. what are you seeing in the u.s.? >> that's one thout. but thehe reality is that providing a lot of liquidity as are the european banking system to provide for opportunities for the markets to make money. so you look at the earnings of the companies that are doing quite well ande have a chance of p.e.e. multiplesto expand. we are seeing people put mor in the equity markets and energy, technology. there's money going in to china, private equity. money in to u.s. real estate. i think k people are being selective about where they can find opportunities and they are looking forward to a better 2012. >> i think it is fair to say between the european central bank and the move byy the federl reserve, the world's two largest central bks have thrown down a challenge. they are adopting policies that

are going to drive for growth. they are expanding their balanae sheets to histori levels to try to get there. on one level you start to ask the question you a ask them wha are they seeing that makesthem nervous that the broader market is not eing. there's clearly commitment t to growth. they don't see inflatio on t horizon so ty are committed to push the economies forward. >> in terms of the risks for the year, you have to anticipate whatever it is out this. what keeps yo up at night? what do you wor about in terms of the potential risks for the year? >> you worry about the banking crisis that happens in thehe eurozone. everyone's working very hard to make sure that's not the case. what you worry about is what yo don't know. >> right. >> wespend hours stress testing our balance sheet as well as our clnts' balance sheet and think we have assessed the risk but you don't know wha is outt this and you do your best to do that and people want to get out there

and get going. >> what can we expect in terms of business in 2012? are you seeing a robust lineup of business? >> the emerged cntries are still doing pretty well from cha, braz, india. there's a lot of, the balance sheets of those countries are in good shape. there's growth there. we are seeing a lot of activity. the dialogue in the sbooits united states is robust. corporatioions have a lot of ca. the economy is beginning to move. we are one of the largest -- actually the largest small busineness lender inn the unite states. our loan book is at 70% over this the time last year. so, the u.s. coconsumer, i thin is doing better. if there is a surprise it is not for the u.s.. economy this year. >> you have been talking about people wanting to look at china and emerging markets to put money to work and credit as we. where are the opportunities for

toward. >> first step is credit. there's tremendous opportunities in credit. >> that's where your get yields, right. >> that's exactly right. it depends where you want to be in the spectrum but there is a lot of opportities and a lot in the public markets as well. many of the portfolios are up in public equity markets, hedge funds up 3, 4% and strong momentum that we hope continues thought the year. >> we will leave it there. great to have you on the program. thank you so much. mary callahan erdoes, jes staley joining us. america's banks were a prime topic of conversation ts week in davos. i spoke to the ceos of three of the biggest most important financial institutions about housing, the economy and their outlook. here they are in their own words. >> the y year started, i would y a littlee firmer. the vironment feels to me like the u.s. is in a little better shape than the markets appreciated and now the markets

are catching up. >> in terms of capital, are you expecting to raising capital this year? >> i don't think we will raise capital. morgan stanley is through the damage zone. we have gained share in our ce institutional businesses and look forward to moving ahead with the smith barney acquisition over time. >> we have a couple of years working through some some propoperties butet's start with what we yo do, modify to help people stay in their homes. we have done it a million time when we can't do that short sale or ultimately the worst outcome is foreclosure. >> those businesses thatre dear to the emerging market consumer or geared toward glal trad or banking, they areoing well. it is almost as if the banking siness as two segments, those ththat are market related and those relatated tohe unlined growth trend. we will have to watch that.

up next on the "the wall street journal report with maria bartiriromo," the european cris and the impact on the continent and around the world. billionaire investor george soros on the changes he sees ahead. later in the progogram, making e most of makeup. theead of the world's second largest c cosmetics company outlook on t booming business down the road. americans believe they should be in charge of t their own futur. how they'll live tomorrow. for more than 116 years, ameriprise financial has wked for their clients' futures. helping millions of americans retire on their terms. when thewant. where they want. doing what they want.

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that's where we are at the moment, at this juncture, the euro parartners have to agree o more. and from the imf point of view, we believe there should be more growth and deeper integration. >> thatt was international monetary fund manageringg didirector christine lagarde on the tough road ahead for the european political and business leaders. europe's financial crisis is a huge topic here in davos this week. i sat down with famed billionaire investor george soros and goant his ideas o on taming the turmoil europe. >> the european union itself actual resembles a financial bubble. you know, it's self-enforcing on the boom side and then self-enforcing on the negative side.. so you ha this period of integration where the leadership was pushing for further

integration. and thenyou had a period o stagnation and after the crash of 2008, you started a period of disintegration. when angela merkel said we will guarantee the financial institutions but e each country has to do it on its own, not europe wide. it has toe country by country. that was the first step in that process. it was the beginning of the euro crisis. things have gotten worse, declining ecomic activity which is now occurring because of the credit crunch. it will reinforce the political disintegration and that would be fatal politically. >> how does the your row look differen who are the players? >> you will have to have more integration. you'u'll either have disintegtion and euro falling apart, whichould have

catastrophic consequences and rely potential meltdown, worsese than you had in 2008, a a real disintegration, or you have more integration. but now,, it's something that i forced upon n the people. it has to be something that actually inspires people. r that, you have to recapture europe as a, what i call a fantastic obje, somethin that is desirable, that is actually beneficial, which is it. what kind of european leadership you u have wilbe much more important. i think it would be possible to have the president of the european commission popularly elected, without changing the statutes because you could have the parliament refuse anydy

else other than a popularly-elected president. >> that would act as a real catalyst. >> that would be the beginning of a true european politics because rit now all the politics are local, right. and the decisions are european. >> we haven't spoken yet about the united states. but you are right about the turmoil happening in the united states, as well. are you seeing improvement, in any way ith, in the u.s.? >> i think the economy is showing considerable signs. i think for instance the glut of cheap natural gas is making a big difference in making america, american manufacturing more competitive. you see strength in manufacturing, which is really a reversal of the trend of the last 20 years. after all, you now have had

three years of adjustments. so it is beginning to settltle wn. >> my thanks to george soro up next on the wall street journey report, how a cosmetic company in new york changes the women think of their faces all over the worl beauty consumers and big payoffs beauty consumers and big payoffs with the ceo ibrarian emily skinner, each day was fueled by thorough preparation for events to come. well somewhere along the way, emily went right on living. but you see, with the help of her raymond james financial advisor, shhad planned for every witheventuality. her ...which meant she continued to have the means to live on... ...even at the ripe old agage of 187. life well planned. see what a raymond james advisor can do for you. what's he looking for? i think he's looking for savings.

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welcome back from davos, switzerlan the business of beauty nearly $400 billion industry around the world. itit's growing, as well, as mor consumers in emerging markets are looking in the mirrors and maybing shopping list s. fabrizio freda is the ceceo of estee lauder. the cocompany owns 28 brands, 1 countries and you saw a 40%

growthn your stock in 2011. tell me what's behind the strength? >> the companyas always been strong. we have 20 great bnds super quality product and fantastic people but in 2011 we were able to put this excellent -- in the winds and they are coming from emerging markets, new channels, from the digital world. we have taken many costs of out of the system and reinvested the money in to morerofitable growth. and the mix of this has been working well for us. >> what does this tell us about womemen around thehe world? >> first of f all, women around the world are beautifully different, one from another. the mpanies that can understand this andd serve this best will continue to win in the future. takeke chinese consumers are patient nate forkin care. in prestige markets, 70%, china market is about skincare. for example, very different from

the u.s. or europe where fragrance is much bigger or different from brazil where -- is a. so women are diffent and we try to serve the differences. >> do standard of what is beautiful differ around the world. in china you are saying they are focused on skin. what about brazil, india? tell me some of the changes. >> in china focused on skin. a chinese woman willo seven steps of skin care in a day if she can afford it. th is because the skin, the face, the face and the skin on the face are symymbol of beautya symbol of social status, of health. there's a lot in t expression of the faces, a lot about the skin. in brazil, as you mentned, for example, people are passionate for makeup, particularly makeup for the eye and lips.

there's huge differences withi the country, in india half of the country will be lips and middle east will be about eye and brazil about everything. so big difference. >> that's really interesting. w do you refine the shopping experience in order to meet these demands? what i'm talking about on-line, aiorts, departmenting stores. do you have to change the way you market and the way you sell in the different venues? recently you started to list product prices at makeup counters, is that right? >> that's right. the big difference is that prestige cosmetics are about great quality proroducts but al a service, servi that makes the product fit the iividual is the ultima one to one marketing. in our service we educate people how to use the product and fit each product for the kind of skin and makeup habits that you ve. what is changing is we are offering a ton of products and serves by country to different consumers.

> what a rich history east e stee hudder has. estee lauder founded the company and built the business and brought products to the stores anand ga makeupup lessons. how do you preserve the legacy of this rich history and innovating in the 21st century. >> it is about crtive, entrepreneurship and values which are about always being the best. great quality. we are preserving this and bringing it to the next level. for example we will bring the best to the rest of the world and we are continuing to do this and taking the best of china, brazil, italy andrance and bringing it to the rest of the world. >> what do women want at you can't market to them, anything? >> you know, women -- really anythi. women are getting wealthier and wealthier oundhe world. it is published that women will have mor available income for dollars nenext year because mor

women are working, more women graduating the university and more brilliant careers in their lives some they are wealthier. when people ask what is your preference on how to spend the money, the answer is fofood, fashion, cosmetic and beauty. we are the third preferred category of a group of people have a trillion dollars more to spend. not a bad position to be. >> my thanks to fabrizio freda, ceo of estee lauder. we will look at the news that will have an impact on your money and as we takekaze a break we will look at how the stock market finished the week.

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for more on our show and our guest, go to wsjr.cnbc.com and hope you follow me on twit and google+ @maria bartiromo is th ndle. we will get fourth quarter earnings reports from dow, xon, pfizer and merck. the latest figures on personal income and spending will be out. on tuesday a look at the housing market with the price index and voters in florida go to the ballllot box for th primary on tuesday. wednesday the first of february we get sales for the month of

january. and the jobs report tells us the unemployment rate and how many jobs the economy lost or gained in the last month. typically a market mover. that will do it fors for today. thank you for joining us this week. next week, a special program. the author of a news-making new book about the first family and life in the white house. each week keep i right here where wall street meets main street the. have a gre weekend, everybody.