the for is doing lots of important -- when we don't engage with europe and we say, look, europe's got this, they're a large economy, they can take care of it. we'll return there but at a greater cost. i don't want that to happen. i want us to be involved in this profound crisis and that's exactly what it is, whether europe tends to think it's our crisis, our issue. i don't want this to be a race to the bottom for our economies. i want it to be a race to the top. we can we can't blame each other. we've got to find a solution. >> can i comment on that. heather made a very good point. we suffer from the same problem that europe suffers from, which is we are failing to make decisions. our budget is stuck now until january and then we'll see what we do. europe is also failing to make decisions on its debt crisis. and the longer it tries to shave it and push it off, the bigger the problems mount. i would just want to tweak what heather said about our being willing to contribute. i don't think it's politically salable to offer to contribute to europe because in the present serks, it's just -

extreme slowdown in europe. looks like the recovery is slipping a bet here i bit heree united states. commodities weakening. despite massive fiscal and monetary stimulus. i'm worried. >> here is the thing, almost every company that reports these days says but europe is more than just a red flag. it is an anchor and hurting the stock market and hurting america. >> not just tiffany, bridgestone and staples and best buy and even cisco. it is just like the retailers and weather that. so companies are going to be blaming europe and "worries about europe" for a sales pullback when it iser that own execution problems. i'm worried but as ben pointed out you got to throw in other regions of the world. particularly trouble in china if you want to start talking about recession there or here. >> if it you told me 7 or 8 months ago that america would be in the best shape of everyone out there i would be surprised. not necessarily with europe falling apart. >> we are the tallest midget in the room right now. that is how they

their say on european budgets democracy finally had its so what did this weekend's elections across europe mean for the one percent trickle down austerity agenda and the future of the global economy also as austerity gets the boot in europe republicans of the united states doubled down on their own version of soon republicans really trying to protect this time around as they shred the social safety net in america and later mitt romney caved into the religious far right in his party parting ways with his openly gay campaign spokesman and now that same religious far right is opening a new line of attack against romney talk about this new attack later that our political panel. needs you know this in votes across europe this weekend working people sent a very clear message to the technocrats and banks toure's choking them with trickle down austerity that message was no more in france socialist candidate francois hollande who campaigned against austerity defeated conservative president nicolas sarkozy in elections on sunday in his victory speech along told the french people that quote austerity

look at this map of europe. the countries highlighted in yellow are all back in recession, including spain, greece and the united kingdom, notably france isn't there. 12 european countries all together are in recession and that is raising concerns that our sluggish recovery could fizzle out. europe taken as a whole is -- as large an economy as the united states. so all eyes are on jobs. people losing jobs don't spend money. they don't buy american made goods or services. christine roman has come armed with numbers about the comparison in unemployment. christine in. >> unemployment here in the u.s. currently 8.1% as you know. situation in most of europe is far worse. look at the 17 countries where they constitute the eurozone and use the euro as the currency. unemployment is at the highest level overall since 1999. and spain's jobless rate is above 24%. italy is at a 12-year high, almost 10%. greece, portugal, ireland, all above the 14% mark. greece, almost 22%. the three largest economies in the eu are faring a

yellow for europe. white is china. some say that could be evidence europe's problems are climbing the great wall of china and creeping into their economy. >> the chinese economy is feeling the drag from europe. exports to the eu are down four months in a row. foreign direct investment fell in the january to april period. chinese investment bank cicc says china may need a 600 billion yen stimulus package to shore up growth. otherwise china's gdp may fall to 6.4%, a 22-year low. >> 6.4%. would sound great for us, low for china. and chinese growth helped drive oil up in the last few years. will europe help make it fall? as the u.s. and european markets dropped in the last month, oil also lost 12%. sharon epperson's live at the nymex with why the drop isn't translating into help for europe. sharon. >> michelle, it surely isn't. it's really a one-two punch for european consumers at a time when their economies are in turmoil, fuel costs are actually at all-time highs. they're actually near levels we saw back during the finan

in europe. wow and you say you do believe greece will exit the euro zone but you don't have a timeline is there anything that you would pinpoint that you think would be a turning point or are we seeing a now. let's see if i have a timeline of when greece leaves the euro i wouldn't be talking to you local book because pretty wide body you know you could never predict what these things are going to be. will be a place to boom it was obvious that the bully would fold but who could tell which tell you what happened this eurozone project is a total. disaster it is coming to what i know it's coming to and i was on my own about it this probably four or five years ago i said he was there are so many people laughing at me though and you know i do want to get to the rising support you've seen within the u.k. too but first you mentioned the berlin wall earlier you talked about german elections in one nine hundred thirty two you compare these greek elections to those now of course in german elections in one

it is in northern europe. and the northern europeans have to be convinced that there is a solution in the south that is politically viable, that they will not be asked forever and ever to subsidize greece and italy. >> but they are between a rock and a hard place. if they do not -- >> unfortunately, the solutions are long-term solutions that are very slow. things like angela merkel was talking about that would provide some structural reform are going to take a long time, like changing hiring policies and firing policies. that is going to take a long time. >> michael, you have been very patient. how do you see these two different camps approaching the election, one saying the deficit is too large, that is the largest problem we have, the other saying that the actual payment on the debt is about 1.5%. we are borrowing very cheaply at the moment. as we go into this election, are we willing to convince americans, when we are seeing school teachers, firemen and policemen laid off, huge cuts in the states, that this

and is the idea of waging our lives in europe rather than having nations affect the people of europe? thank you. >> mr. lombardi? >> yeah, this is really about financial globalization. right now, you know, the caller was reminding us these financial flows do provide opportunities, but clearly sometimes also pose issues. european banks, you know, may well have stakes in u.s. banks, but it is also true the contrary that the u.s. banks clearly are very -- have a very international reach and therefore also, you know, u.s. banks do have stakes in a european and other banks elsewhere. that said, you know, regardless of whether it's a european bank having a stake here in the u.s. bank, the u.s. bank is still subject to u.s. laws and still subject to u.s. regulatory authorities. and in exchange for that, access the financing facilities by the u.s. federal reserve. of course, the same, you know, is true in europe for european bank banks that have u.s. banks. >> what did french voters vote against this weekend? what message were they trying to send to their government? >> i think the biggest fr

so it's pretty clear that whatever you would have to do to greece stays in europe where it does then you're where victims are thirty where doesn't it in your thirty in need to do something to restructure and bring back to life its banking system but it doesn't have the money to do up and no one in the rest of europe is willing to give it a money to do that and all over europe there's a growing popular opposition to the political and economic union how of european bureaucrats failed to convince the people that the european union as a whole and the euro particularly are a good idea. i'll turn a question around you'd have to say it's the most it's an it's the crowning achievement of brussels it's managed to take a largely pro european continent and turn it so wholesale you against europe and the euro we're talking in britain where if you look at the popular press and even sections our political party system there are a whole variety people who would see brussels being on some kind of conspiracy plot to turn all banal as straight and this is always been part of the british public discour

or europe sums up your day sums up what a complete build since this whole thing is. new are entitled to elections and calling your mine why i obviously. didn't catch it when i called it and nonalcoholic beverage i obviously meant an alcoholic when as now i don't care i'd much more eloquently explain why that was fair i he's leader of the u.k. independent party. all right let's wrap up with loose change dimitri and shannon let's talk about executive compensation at banks because what's going on well bank of america had their shareholder meeting ninety two percent of shareholders approved the executive pay package it's interesting because this went on amidst protests both inside and outside the shareholders conference meanwhile you may recall that last month citi voted down their executive pay package the shareholders did on the say and pay vote only want one it was nonbinding it's not binding according to dog craig meanwhile and consequently there was no big city bank group over contraire though possibly in the u.k. where shareholders are actually revolting against ex

it was all about europe today in u.s. financial markets. the dow tumbled 76 points, although it was down almost 200 earlier in the day. the nasdaq lost 11, the s&p fell nearly six. as suzanne pratt reports, the selling may be more than one-day indigestion. >> reporter: wall street's big reaction to europe's elections came a day later than expected. perhaps it's the time change, or more likely worries heating up about greece. in particular, u.s. investors wondered today exactly who's in charge in greece. europe's instability is a serious threat to america's fragile economy and corporate profits. some market pros say today's sell-off could be the start of a small correction. >> i don't think there's a tremendous risk in the market. we actually know all the potential negatives. we know what can go wrong. but i think the quicker it happens, the less far it has to fall. >> reporter: the upside of europe's troubles for investors is a renewed flight to quality, straight into u.s. bonds. it continued today as treasury prices rose, pushing yields to

but she also says austerity because europe so what you've got. very clearly not just in greece but across the euro zone now you've got electorates and governments collapsing because they cannot impose austerity on their on their voters so even in neverland government government collapses because economy posen sterrett belgium hasn't had a government for the best part of the year. if the if the european equal just thirty and if the year if european unique was the euro and if the year equal then vote is then what is thirty so what does that mean about the rest of the rest of the european union i think you've got to come up with a better story for europe is for than simply it's about the euro what about potential exit for greece politicians are now really for the first time talking about an actual situation where greece might access and they're talking about an orderly or a disorderly exit what do those terms mean and what real difference do you think it would make really really odd thing when people to well orderly or disorderly is all you disorder

we do not have the luxury of saying that's europe's problem, europe fixes it or that's your problem, you fix it. we are so in this together. iran is another example. whether that's price of oil instability in the middle east will have a direct impact potentially on the american economy. so where foreign policy intersects with economic issues i think will have real and p application. clearly russia has become a touch point in the election with governor romney noting that russia was the greatest geopolitical soul and i think even people saw secretary powell's interview, lots of head scratching on that one. i think it speaks to again, that is a different of opinion from the bush administration to the

but don't worry, only 6% comes from europe. europe can't take them down.'s expanding more rapidly overseas including in china. and gap's online business, it's booming, up 18% in the last quarter. unlike jcpenney which eliminated its dividend, protected the balance sheet that most people had thought was in good shape, gap is rewarding its shareholders with a dividend increase. no balance sheet worries at gap. while i am terrified of penney's debt mountain. here's the bottom line. memo to ron johnson at jcpenney. if you want to know how to turn around an ailing retailer, just take one look at gap. the company is succeeding because management led by glenn murphy figured out how to get in touches with its customers, give them what they want. and i think the stock's still a buy because this turn has only just begun. i think we should start the questions with tom in michigan. tom. >> caller: hey, jim, big university of michigan boo-yah to you. >> fabulous school boo-yah back at you. >> caller: hey, i'm calling regarding american eagle outfitters, aeo. i've made

deficits in europe. the problem with this prime minister is he can only offer more of the same. all he offers is more austerity, it's not working in britain. it's not working in europe. it's a failed plan from a failing prime minister. >> five minutes and absolutely no plan. nothing positive to say. i thought it was a -- it's a good joke. it is a good joke about sarkozy. we all have our faults. but i'd rather have a reputation for being loyal to my friends than knifing my brother. the honorable gentlemen started with nato. he asked some serious questions. he asked for a clear indication of the draw down. we're going down to 9,000 troops by the end of this year. clearly we need to set out a pathway with between now and the end of 2014. i want it to be based on the conditions on the ground and how well the transition is going in the three provinces we're responsible for. and we'll keep the house updated on how -- we don't want the great cliff edge at the end. he asked what would be left at the end of 2014.

our agenda in europe has not been diminished dunaway. there is what is sometimes called the unfinished business in europe, namely the integration of the countries into euro-dynamic community of democracy. we ask our european partners to address remaining issues across the region. the balkans region will depend on countries pursuing the reforms necessary for their integration in europe. we have said from the start that europe will not be complete until all day balkans are integrated into transatlantic institutions. croatia's succession to the european union sends a strong signal that admittedly difficult reforms bring genuine progress. we are encouraged by the new bosnian government, efforts to meet the u.s. and nato integration requirements, including the passage of laws on census and state, as well as political agreements to solve a defense and state property issue. we look forward to seeing bosnia implement these requirements. we are pleased that cause so and serbia moving closer to europe -- you once again, the united states worked cl

this is your headlines for may ninth two thousand and twelve it's europe day happy europe day at a time when many of the political parties are gaining steam and multiple countries are those who want less euro or want to reject it altogether mostly to euro skeptic a member of european parliament leader of the u.k. independence party nigel fair asure he's making headlines after his party recently saw it the best ever local election result and he told european parliament today the e.u. is done take a listen. to the titanic has now hit the iceberg it is a european unity zero eight get over it. and on that note is greece the poster child for what happens when the price mechanism of democracy which has been suppressed by tech not prissy finally unleashed is itself or will technocrats bureaucrat central bankers and big money succeed in manipulating it on a much lighter note you may have seen celebrity ventures like this. russell simmons successful entrepreneur joel interest he thinks everyone should be financially empowered sure he developed a rush card. a prepaid debit card is this the kind o

equipment in europe. and i think it is in your interest -- it is in the american interest, and it's in our interest that we have -- we find a good balance between good competition, between competition that enhances technology, making sure that there is no protectionism in the arms market, but at the same time, that europe itself also keeps up with the technological developments, and will be able to provide proper equipment, proper european equipment. that, by the way, might be used in the u.s., as well. so i'm not advocating european arms for europe. what i'm advocating is that it is important that the european armaments industry stays part of the alliness armament industry. >> just before i post it on to the remaining members of the panel, may be useful that some of the numbers bandied about, about reductions and the kind of withdrawal -- i know the u.s. military doesn't like to talk about in terms of withdrawal from europe. they talk about in terms of rebalancing of its commitment to europe, and they're

bite end of 1949, we have a stalemate in europe. the united states is propping up western europe economically and militarily. the soviet union is propping up eastern europe and both countries are suspicious of each other and both have the atomic bomb. we are an awful lot alike and we don't want to push that much mother with both countries possessing nuclear weapons. so what happens then when we have this stalemate in europe, it mean that is the cold war will spread into a different area and we are headed into asia now. who is this fellow? chairman mao. >> i lived down the street from this and it's a big street in cambodia and i live a block away from it. isn't that cool? >> how many years ago was that? when you lived there. >> december. a year ago. >> really? recent. here's the situation in china. after the war is over, there is a civil war that engulfs china. between the forces, the nationalists and the communists. a civil war. long story short, by the end of 1949, mao and the communists drive the nationalists out over to the islan

western europe to hold back the soviet expansion. congress passes the national security act in 1947. this is an amazing piece of legislation. it's got lots of different facets to it. creates a national security agency. we're going to revamp our military. we're going to coordinate our various branches of the military. but what i wanted to talk about specifically today is it created the cia. what does that stand for? >> central intelligence agency. >> if yes self stalin is bent up on getting free and countries around the world, we need to know that. how do we know that? we need to start sending out secret agents, folks who are going out there to gather intelligence. i'm not talking about james bond, we're talking about we're going to be sending out individuals working for our government, eyes and ears. what's going on in this country. are they susceptible to influence? and, of course, if we think that the soviet union is going to undermine and overthrow free and democratic countries, maybe those guys might have an opportunity to underm

and europe.and she would be addressing you from this lectern had the date of this conference not changed to a time when she was locked into a commitment to be in beijing. but i want to assure you on behalf of brookings and the center on united states and europe that this does not represent a strategic pivot on the part of the institution or the center to east asia. it has been our pleasure, and i hope of some contribution to the policy community, in partnership with the lowell foundation to bring this conference to you on an annual basis. and i think it is particularly appropriate that we should have phil with us today. he is, as you know, in his capacity as assistant secretary of state for european affairs responsible for u.s. policy towards about 50 countries as well as three key -- and i would add to that currently somewhat challenged -- international institutions. the north atlantic treaty organization, the european union and the organization for security and cooperation in europe. phil is ju

most europe means that live in europe are taking pierre and max's view. nouriel who i view as a more of a global traveler is stepping back from the situation saying this thing is going to fracture and break and when it does, okay, it's going to be very damaging to the overall growth of the world. i'm certainly hoping and pray that by air pierre is going to right. >>> much more on today's market action is coming up on the "halftime" show. more from s.a.l.t. live here. talking precious metals and mining from eric sprott. it's also can that da's best known hedge fund manager. he'll reveal his biggs trade for the next decade, as well. >>> welcome back to the "fast money halftime report." we are welcoming inner rick sprott. before we get to your investing strategy, look at what the happening in commodities. take a look at gold today is down below 1600. you've got oil baurely hanging n to 96 bucks. given those concerns about global growth, pete, what do you see in commodity snsz. >> absolutery. i look at the commodity names and see them interesting. in many cas

we'll get the latest out of europe in just a bit. but first the comeback in stocks: the dow cut a 200-point loss to just a six-point closing drop, the nasdaq gained 11 points and the s&p rose two. hewlett packard added to the late day optimism for investors, reporting a stronger than expected quarter. it earned 98 cents a share in the second quarter, better than estimates, and better than the company's own guidance. the stock was up nearly 12% in after-hours trading, as it confirms plans to cut thousands of jobs. erika miller reports. >> reporter: the earnings at hewlett-packard were better than many on wall street expected, but profits are still down over 20% from last year. the company's consumer products are struggling to compete against apple's. it's not just about the device itself, it's about the ecosystem around it. and apple has such an effective ecosystem, whereby if you buy one device you can connect and have interrelated features and functionality. >> reporter: but h.p.'s earnings news was overshadowed by an expected massi

certainly, he did so in europe.we talked yesterday with the secretary-general about the same issue and it continues to be well worth urging. i do think it is a huge problem and the trend has continued for a long time. we understand that europe is under stress right now, but what set of ingredients do you think exists or what do you think we are doing -- we spent last year, little bit over 5% of gdp on defense, and i'm glad that we did. i know it is dropping to the high for's in this next year, and i think that we should make sure we invest appropriately in that regard. as we continue to do what we're doing, we almost become the provider of security services and more and more become this consumer of her security forces. they don't seem to be doing anything that is changing that to dynamic. i know there has been a commitment to afghanistan and on a per capita basis, more countries have done so more casually than us. we honor that. from the standpoint of year in and year out investment and organization and defense forc

countries in distress or being able to devalue its own currency lots of problems with staying in europe problems of living on the other hand of the kind of volatility and turbulence which may well may or may well make the general strikes to rights all the rest of it look like walking a pole compared to what happens next so that's from greece's point of view but what about the point of view of the rest of the year is the german chancellor angela merkel and new french president francois hollande says both say that they want greece to stay in the year is saying is greece essential for keeping the euro zone together really it's not but the big question that will come up as soon as any country walks out a door is which i was going to follow after it so greece is a very small economy greece is also it's pretty clear and exceptional case within the euro zone economy because it's had the biggest crisis of the lot it's had the biggest bust of the lot it's got of course you know it's got a whole series of. specific to greece but if it goes because there was thought portugal from going to and talk

so i'm not advocating european arms for europe. what i'm advocating is that it is important that the european armaments industry stays a part of the alliance, armament -- armament industry. >> just before i pass it on to the remaining two members of the panel it may be useful some of the numbers bandied about about reductions and the kind of withdrawal. i know that the u.s. military doesn't like to talk about it in terms of withdrawal from europe. they talk about it in terms of rebalancing its commitment to europe and are looking to make a reduction of i think around 15% in the current troop numbers in europe and are currently 80,000 u.s. troops based in europe. and tln were something like 400,000 during the height of the cold war. so that's an indication. part of that rebalancing is additional commitments they're putting into europe including nuclear defense, for maritime forces and also includes special forces as well, which have been deployed into europe. i think on the -- just another set of figures. i think there is a case to

rallying after europe closes. today we've had the inverse. we had the debt rating cut on europe. so i think the market itself is surprisingly strong. but beauty is in the eye of the beholder. i'm not so posztive on this. i'm not so positive on housing we've seen in the past. i'm skeptical. >> joe, the weekend summits basically brought a lot of headlines, but not as much action. we're going to talk more about this later. give me your headline read on where we stand right now with europe and greece and spain. >> i think there's a lot to digest. as a result of the market going back and forth a little light volume. at the end of the day i think we're taking baby steps in the right direction. but the fundamental problem still remains. it's likely going to lead to increased volatility over the next month or so. >> we'll talk about the worst case scenario and best case scenario with you in a few minutes. are you optimistic overall? >> cautiously optimist ugh. there's an economic problem. when you look at greece the issue is as much political as economical. it's difficult to predict and

no growth in europe. with the overall population declining economic performance, you amass enough wealth to do with all of this? >> pulling back, this is really how western democracies will appeal with the leveraging and pain -- will deal with the o deleveraging and pain. we have not yet begun to do that. but if we really think about in tenement reform, we will be doing that here we will be -- about entitlement reform, we will be doing that. whether we are reducing benefits, make some future investment in r&d and education, this is about how we are the west, japan and others, how we will do this. it is the most difficult issue for democracies. who votes for increases in taxes and who votes for less benefits? we have seen politically -- this is my own reflection looking at the french elections and the ongoing greek elections -- what we have seen is the center, the establishment is unable to hold in this position, whether it is center-left or center-right. we would call that moderates here, but this center

is willing to give it a money to do that and all over europe there's a growing popular opposition to the political and economic union how of the european bureaucrats failed to convince the people that the european union as a whole and the euro particularly are a good idea. i'll turn a question around you have to say it's the most it's it's the crowning achievement of brussels it's managed to take a largely pro european continent and turn it so wholesale you against europe and the euro we're talking in britain where. if you look at the popular press and even sections our political party system there are a whole variety people who would see brussels being on some kind of conspiracy plot to turn all banal as straight and this is always been part of the british public discourse what's been really interesting from this side the channel is actually more and more the content is turning against the euro and turn against europe and i think that's largely goes back to what angela merkel says about if the your affair with europe fails she has made europe about the euro and she's made about maki

we'll begin today's show in europe. voters in france and greece made their anti-austerity feelings known last weekend and stock markets plunged. we'll have a panel on the big picture and what it means for politics in the west. >>> then robert zoelik will step down as head of the world bank. his exit interview here on "gps." >>> next, we go to israel which has anointed a king. what in the world does it mean? >>> and, finally, the curious case of the guy who has come to be known as american french fry brother. a cultural lost in translation all the way from china. you won't want to miss it. >>> first, here's my take. everyone is looking at europe these days as economic and political protests mount across the continent. the downward spiral in europe has produced a great debate over the virtues of austerity. the idea that government with large budget deficits must reduce these deficits mainly by cutting spending. if they don't get their budgets in order, they won't be able to borrow money and will face a fiscal nightmare of