i believe that the permanent crisis management system, esm, which we will put in place soon will be there as an ordinary instrument for crisis management. the eu was not contracted to manage crisis, and it was a big deficiency. this crisis forced us to update the machinery. i believe that we will see a shift in the competency, functions relative to the member states with some areas moving up. for example, there is slow process, which in my view will accelerate concerning tax cooperation, a sensitive topic but is going ahead. so tax policy will be slightly more centralized. but on the other hand some policies, which have been running for decades as if it were in an incubator are now ready to be delivered in the network, governance through network system. this the case of competition policies, which in 2004, which was largely outsourced to the national competition authorities although keeping coordination. i would imagine a europe not necessarily more cumbersome but focusing on its core business. the core business of europe will evolve over time, but the ability to respond to crisis lucky e

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that means more money for the esm.ner has now directly inserted himself into all of this political warfare that's going on between lagarde and germany. the reason this is important is in the past, the u.s. has been very reluctant to have anything to do with this, increase the money. absolutely not. now there's a little more sense that the u.s. might go along with this. i think that's very important. i got immediately comments from traders about the importance of doing that. now this weekend, the chinese will probably go along with more money. if the u.s. does. brazil will probably go along with more money. the southern european countries are. it's germany against -- >> although we'll point out geithner said only if. it's not as though -- he doesn't see them needing the imf money. at least the way he -- >> the point is, he opened the door to the concept that the u.s. would be an ally with many other countries in going along with additional contributions to the imf. i think that was a very important stance for him to tak

so-called esm. and also, we have to trust each other and trust that the other is going to make a big effort for better competitivety, so there's going to be national responsibility and european responsibility that goes together hand in hand. if we do that, we will go in the right direction. and i will quote also courage in adversity. that's what schiller said, and, of course, you know, it's the words of the european anthem. courage in the middle of adversity. and europe has had worse problems in the past than the ones we are going through today. so all this for freedom and solidarity. in the old days, we had economic crisis. economic crisis led to lack of trust, to distrust, to isolation and unfortunately very often to war. today, fortunately, it's no longer like this. we europeans are much closer together than we ever were. and now the basis of all that is trust again. germany knows the importance of such a trust. the western allies after world war ii saw to it that germany would be a democratic co

david, first of all, we really do need to boost this esm, this bailout fund, don't we? how much would be your guess? >> it's a little bit of a finger in the air. it's one of those things where maybe now the other countries around the world are taking a much more cautious and conservative view and saying we need to make sure there's more money in the coffers just in case there's monday down the line. just the greek situation has mushroomed. it always seems to be a few steps ahead of the politicians. it's maybe not too surprising that other countries are saying we need to increase the buffer. also, not too surprising clearly that the germans are saying, no, we don't want to commit any more funds to this at the moment. >> they're more or less advocating the same argument we saw when lehman brothers went down in 2008, this issue of moral hazard. if you put more on on the table, it's a disincentive for other countries to reform their economy. do you buy that theory or are things too acute at the moment and they need to put more money aside to calm people's fears? >> i'd prob

progress, and on this, by the way, we are almost there to achieve the definitive progress, because the esm, the european stability mechanism, has now been agreed in march. there will be a review of whether firewalls are appropriate. so we are approaching a satisfactory state concerning that. >> which leads me to what's happening right now in the eurozone. i want to get your take on what the european central bank did at the end of 2011. and the ltr facility seems to have stabilized much for the european banks. but, you know, a lot of people are looking at this, and saying, is this only short-term. because clearly the yields of marginal debt in italy, ireland, spain, portugal, have in fact come down. but the action has caused banks to take on this sovereign debt. so over the short term we're seeing real stability. but longer term, do you worry that in fact this actually is creating even more risk, because the banks have taken on the sovereign debt? >> no, i believe, first of all, this move by the ecb was a smart move. and it was perfectly inside the mandate of the ecb. secondly, i believe th

the esm and esfs. they want to try to figure out a way to increase that. and if they can do that behind that, christine lagarde wants to come out with essentially her own bailout fund and backstop the whole thing, in effect. whatever you want to call it, there's a chess game going on. the germans have said they don't need to have any more money put into the bailout fund, either one of them. that's what the battle is going to be this weekend. >> isn't it germany? >> germany for the moment. they may be able to crumble with -- let's put it this way, the problem is, the germans are next week going to vote on the greek bailout deal. the german parliament is going to give them an earful about, look, now we want more money for the imf, and more money to increase the bailout fund, when is this going to end. i think you're going to hear a lot of german politics next week. meantime, i just want to point out, i know we're down today a bit. but the s&p at a 3 1/2-year high. just hit it earlier today. i talked about things being a little toppy, tech set a new high, ene

decisive elements has to be decided and that's the firewall, the efsc, the temporary rescue fund and the esmrmanent rescue fund, that should come into action in the middle of this year. how much fire power will they ultimately havep. the fire power of the respective funs will probably not be increased but what we could see as a nifty little trick running both funds side by side for a while, which wasn't the original plan, that would essentially double the fire power. that will determine how much the imf involvement will be. christine lagarde, the head of the imf, said there would be a substantial contribution, yet to be decided. >> thanks so very much. appreciate it this morning. >>> from greece to an economy in flux in the u.s., the perfect guest for the next hour, shashg her thoughts sallie krawcheck, she formerly ran the bank of america u.s. trust and merrill lynch wealth management businesses. thank you for being with us. >> thank you for having me. >> i want to talk about greece, about the banks. but because we haven't had you on in a while, i want to talk about you for a second. you st

i personally thing the more sensible approach would have been to have a larger bailout fund, larger esm. that appears not to be going to happen or it's certainly not going to happen until the fiscal union treaty has got the ink dry on it. but i think the emphasis has been too much on austerity which doesn't mean it won't work in the long run. but it's going to take a long time to work. >> good speech today. thanking for joining us. lord nor man la montd, former uk chancellor. iran is going to issue a fourth generation of domestic centrifuges. wekeep our eye on that as brent oil trades around 118. it's also time to bring in jackie, which means we're getting closer to the second hour. >> we're watching warren buffett very carefully. he's increased his bets on u.s. blue chips, intel and ibm. according to berkshire hathaway's latest regulatory finding. he's added a new position in libya media and made a near 1 million dollar investment in directv. it pick up shares of general dynamics and took new stake in dialysis. they added provisions in coca-cola and care marek and reduced stakes in kra

i believe that the permanent crisis management system, the esm, which we will put in place to both be there as an ordinary instrument for crisis management. the e.u. is not construct it to manage crisis and it was a fixation see in this crisis for site to update machinery. i believe that we will see if a shift in the competencies, a shift in the functions or perhaps that is relative to the member states assigned areas moving out. for example, they are a slow process, which in my view will accelerate concerning the very sensitive subject, and so, tax policy will be slightly more centralized. but on the other hand, some policies which i've been ranting drafts for decades were in an incubator are now ready to be delivered in the government's third network system. this is the case of competition policy, which in 2004, which was largely outsourced of authorities of keeping brussels coordination. so i would imagine any europe, which would be not necessarily more kinder some, but focusing on its core business, the court dismissed the business will evolve over time, but the ability to respond

think they will aapprove the greek bailout and they will approve expanding or combining the esf and the esm auction, the three-year auction for the ecb. that's the next important point. what's going on happen here, and i'll tell you the important thing. let's clear this away here. besides the italians, we get the auction on wednesday. what you see here is a whole bunch of questions about what are they doing exactly with their money? some people are out covering the existing financing needs. that's the primary thing they need to do. the other thing that's very important that's owl there is they're going to neat to play the carry trade. they buy european bonds or euro zone bonds and how much are they going to buy? the italian two years at new lows, that carried trade for them to borrow at 1% and buy european bonds is less compelling than it was just a few months ago. they can also go out and lend money as well. there's the other thing that's happening. here's that italian two-year. we've seen a top-out in the european markets ever since we got that greece deal about a week ago. look at the ge

maybe the esm will get more money.and agree to put more money in. these are the kind of things floating around helping things. nonetheless, the numbers in europe today, the ism numbers, fair, not great. >> sure. >> asian numbers were better overall. i guess there's good cause for being optimistic. i'll tell you what i think is good cause. maybe we are moving independently, much more from europe in the last few weeks and again today p. i think that's encouraging. fundamentals are mattering. earnings are mattering. what's the sector that matters most? technology. 90% of the s&p 500. that's what's moving things forward. this is, carl, an 11-year high, essentially, within a couple points of an 11-year high in the technology index. there's our leadership group. before you get too excited, it's half what it was. remember the height in 2000? you were around then. but 11-year high is still nothing to sneeze at. look at some of the big names. disk drives are all big. seagate at a four-year high. other names like juniper and bro

premier wen speak to go angela merkel, suggested they would be interested in putting some money into the esmthe efs so the euro/dollar a spike up. we heard the talk before. whether it follows through is still a big question mark. back to you guys. >> all right, ross. we appreciate that. >> i still don't have an answer to punxsutawney phil. they claim it's the only one. obviously it's not. >> you should visit, ross, sometime during ground hog day season. >> they get crowds as many as 30,000 people that have come. the pennsylvania governor ed rendell attended the ceremony making him the first sitting governor ever to do so. he appeared on "the oprah winfrey show" in 1995. in 1981 phil wore a yellow ribbon in honor of the hostages in iran. and during prohibition threatened to impose 60 weeks of winter on the community if he wasn't allowed a drink. >> during prohibition. goes back that far. >> 126 years. >> we're going to do a lot of this today and i think we have a lot of outtakes from the movie "ground hog day" as we build up to our pebble beach show. >> what time? >> it's going to be 5:45. ca

the future european stability mechanism is going to see to that so-called esm. also, we have to trust each other and trust that the other is also going to make a big effort for better competitive ness and there's european responsibility that goes together hand-in-hand, and if we do that, we'll go in the right direction, and i will quote also courage in adversity, that's what schiller said, and it's, of course, as you know, the words the european anthem, courage in the middle of adversity, and europe has had worse problems in the past than the ones we're going through today. all of this for freedom and solidarity. in the old days, we had economic crisis, economic crisis led to lack of trust, to distrust, to isolation, and unfortunately, very often to war. today, fortunately, it's no long to like this. we, european, are much closer together than we ever were. now the basis of all of that is trust again. germany knows the importance of such a trust. the western allies after world war ii saw to it that germany would be a democratic country. we owe their trusts to wh

or you can think instead of the esm to do the same thing with these bonds paribas -- to do these bonds. the central bank is equipped to provide liquidity because it has no limit on what it can do. when it comes a solvency issue in the sense you're not sure what you and you will get back, it is not sure -- it is should be the case that it is absorbed by someone else. there are structures that could absorb losses but in practice, one has to be pragmatic and be able to build fire walls. maybe not exactly as some would hope at this stage, we're just trying to predict altogether. they just add it up and hope it is enough. the implications of the collapse of the eurozone situation? >> [unintelligible] i will take your second question which is much easier to answer, on nominal gdp. you should care about inflation and activity. if people understood exactly what the central bank does, there are be no reason to go further. it allows you if you do it in terms of level targeting and nominal gdp, it allows for more inflation for some time to get back to the level target and has a number of advantag

ram esm are the same. we brought some more torpedoes. the bottom line is, across the board and weapons, trying to maintain the pace we have to be, and we need to buy the weapons we need to have. in this case the only other big change is jag. the small diameter, is crucial to the navy and marine corps and joint strike air force. in terms of affordability, one need to be retained and one would be terminated and a small amount in the army to maintain some r&b. corrine core procurement -- the marines goal is to modernize command and control equipment to keep up with a joint force. some highlights in here, radar systems. you can see in the middle of the slide, a jump to $128 million. as well as refurbishing an edm model so they can get going on that. some of the tactical and energy investments, need for fuel to be transported forward. they are going into safety improvement on the ldsr. pretty much flat, a slight decrease, but 1112 or also buoyed up preconceived from the dropping almost $200 million as a transfer to production. the bottom line