the troika of the eu, -- the truck are the eu, the imf, and the european central bank -- the troika are the eu, the imf, and the european central bank. the german government is getting impatient. >> there are two elements, which we consider essential. first, we are certain that debt of around 6 billion euros is sustainable. second, we want the banks to be restructured. >> the third condition laid down by the german chancellor and her coalition is that a rescue fund has to spare the socially week. angela merkel says nationalizing pension funds in cyprus is not an acceptable way of plugging the holes in the country's finances. >> checking in on the markets, european shares traded flat or slightly to the downside friday as investors waited for clarity on cyprus, and germany's business confidence suffered an unexpected drop. our correspondent sent us this summary from frankfurt. >> still no solution in cyprus. traders had to finish this trading week and this uncertainty leading almost to a standstill at the stock market. traders did not know leader to bet on a happy ending or bankruptcy in

this is the subject of concern at the arab league summit and also for the u.s. and eu, who had pinned their hopes on a unifying figure in the syrian opposition. >> joining us now in the studio for some analysis is a representative from the institute of international and security affairs. what is behind the surprise announcement? and will we see arms flowing into syria? >> we already see arms flowing into syria. i think this is a move to legitimize dot these movements, especially on the part of the qataris and saudis. >> there is not an abstract painter, but we already see a regional escalation. the government in lebanon, just to give you an example, broke down last week. hezbollah is hardening its stance towards its opponents in the country, so we already see a regional escalation. we also see it in iraq. >> we have not talked about iran in terms of this escalation yet. how do we expect syria's key regional ally, iran, to react to this development? >> i was told that they would do their utmost to keep the assad regime in power. we will now see if that was serious or no

this is the subject of concern at the arab league summit and also for the u.s. and eu, who had pinned their hopes on a unifying figure in the syrian opposition. >> joining us now in the studio for some analysis is a representative from the institute of international and security affairs. what is behind the surprise announcement? and will we see arms flowing into syria? >> we already see arms flowing into syria. i think this is a move to legitimize dot these movements, especially on the part of the qataris and saudis. >> there is not an abstract painter, but we already see a regional escalation. the government in lebanon, just to give you an example, broke down last week. hezbollah is hardening its stance towards its opponents in the country, so we already see a regional escalation. we also see it in iraq. >> we have not talked about iran in terms of this escalation yet. how do we expect syria's key regional ally, iran, to react to this development? >> i was told that they would do their utmost to keep the assad regime in power. we will now see if that was serious or no

. >> representatives of the troika of -- the eu, imf, and ecb -- were in cyprus for emergency talks, but they failed to find a solution to the island nation's problems. the cypriot finance minister was in moscow asking for help from his russian counterpart. that was not forthcoming. for the time being at least. >> there were no offers. nothing concrete. we are continuing discussions. we are happy with the beginning, and we look for to continuing the discussions. >> cypress has long been a tax haven for russian companies who have billions of euros in separate banks, but many russians who live on the island are outraged at the proposed levy on their savings. >> this country has cheated us and stolen our money. yes, stolen. it was not their money. we brought it here. we did not earn it here. >> for now, a separate account holders are relieved that parliament shot down the proposal. >> it was time to take a stand. they are sure to find a solution. the separate people are strong. we can take a lot. we have proven that before through many tough times. >> the cypriot government is still sear

dimitry medvedev says the eu is behaving like a bull in a china shop. chinese factories posted a rebound in march activity after a slump during the lunar new year, giving hope that at least there a gradual recovery is on track. sdwra you're watching "worldwide exchange," bringing you business news from around the globe. >> and a bit of good news out of britain, briefly, markets were waiting on this figure. sterling is jumping because uk has reported a rebound in february retail sales after a disappointing january. we're seeing car production jumping about 26% year on year. and all this doing a lot to help calm some of the concern that we had seen in earlier figures showing some significant weakness for the uk economy. also getting into the public sector finance data, we can bring you that in just seconds to the message basically being public finances improved in february. again, you can see the sterling reaction there. 0.6%. we'll talk more about the uk public sector finances in just a second. and in the wake of the budget with shadow chancellor ed balls

the eu has demanded that they stop abusing the asylum system. so the government has made asylum of use a punishable crime -- asylum abuse. 80% of those affected are roma. these drastic measures are to ensure other citizens can travel freely. the eu has threatened to suspend the said-free travel. these are hard times for the roma. elvira is 34 and has three children. she married her husband when she was 14. she lived in germany before as a child until she was 7. now the family of five lives in two rooms with her in-laws -- 12 square meters to eat, sleep, and do homework. the entryway serves as a kitchen. >> they would love to have another room so each would have their own bed, but that is impossible. >> they could use the suspended 50 euros a month welfare benefit. neither elvira nor her husband has worked. occasional day jobs earn them up 15 euros. fights are common at school. >> two or three times a week, not just fistfights, but with knives, brass knuckles, even guns. >> they venture out, but they are cautious. with more than 20,000 roma, it i

they receive a lot of development funds from the eu. last but not least, as a last resort, they could strip hungary of the right to vote in the european council. all that takes a long time. possibly, the eu could be working on a way to reform itself so they could interfere before something actually happens. at the moment, they can only interfere not when a member state is in the process of threatening a fundamental doubt you violations. >> hundred is facing their fair share values on the economic front. there currency had already been struggling and it now has plunged to a nine-month low in response to the vote. >> they're worried about control over the central bank and is growing anti business rhetoric. it fell by 1 percent against the euro and on friday, two members of the central bank were fired under pressure of the government. the armistice guaranteeing peace between north and south korea for nearly 60 years is now history. south koreans have been reacting to threats of nuclear war from the north. >> anti-north korean sentiment has

the eu is divided over the issue, so they pass the buck to the foreign ministers? >> well, yes and no. it think about it, the normal procedure is that the foreign ministers discuss these topics, so a vast majority of countries in brussels were surprised when they heard britain's cozy and france's push because it was not on the agenda. it was also something that you need more time to discuss, and that is why it has now been made a very vital topic on the agenda of the foreign ministers meeting next week. but there is very strong opposition still. people are reluctant to go through with france and britain 's push. the question was why they even put it on the agenda. is that not also some kind of sign that national policies are becoming more important again in his current state of crisis that the european union itself is in. >> thanks very much for that first update. we will be coming back shortly to talk about another explosive issue. >> we will be going back to our correspondent shortly. the issue i'm talking about is cyprus, but as we have seen already today, peopl

and will it stay in the eu? ports from moscow and cyprus, coming up next, please stay with us. >> situation in cyprus getting worse today, banks will not open until next week at the he earliest. good evening michelle. >> larry, another day, another attempt to try to come up with a rescue plan for cyprus, today cyprus suggested that they would try to raid a pension fund, and promise to pay the workers down the road. but that idea was not liked. additionally they are trying get money from trussia. there's a deep and close relationship with russia, they are trying to come up with a deal or a bailout. so far they are empty handed. in the meantime the banks are closed. the european central bank is flying in cash so the ats have money, they can only do it for so long. they can not under insolvent banks. and two of the banks are clearly insolvent. so they have a choice of shutting down a couple of banks or leaving the euro. >> as michelle said, the big part of the story is russia. will russia rescue cyrus and their own

with britain and france pushing for dropping in eu weapons embargo, there is little indication that the german government will budge. >> even if there were no eu sanctions, this is a conflict zone. it is an ongoing conflict. we cannot supply weapons to a conflict his own. >> while germany is staying for money arms embargo, it is pumping money into refugee camps. >> i think the solution is for the german government to put an end to the arms embargo. the government need not send arms directly, but it could facilitate others doing so. opposition activists say the syrians have endured too much hardship in recent years. now they are saying that berlin needs to change its tactics. >> our message to the german government is that the international community must adopt a clear position on syria. >> he also wants a germans to take a closer look at what is happening in his country and he hopes that the eu will then act. >> what exactly is behind germany's position on syria? earlier we put that question to our correspondent, peter craven. >> i think you really have to see germany's position on this

with britain and france pushing for dropping in eu weapons embargo, there is little indication that the german government will budge. >> even if there were no eu sanctions, this is a conflict zone. it is an ongoing conflict. we cannot supply weapons to a conflict his own. >> while germany is staying for money arms embargo, it is pumping money into refugee camps. >> i think the solution is for the german government to put an end to the arms embargo. the government need not send arms directly, but it could facilitate others doing so. opposition activists say the syrians have endured too much hardship in recent years. now they are saying that berlin needs to change its tactics. >> our message to the german government is that the international community must adopt a clear position on syria. >> he also wants a germans to take a closer look at what is happening in his country and he hopes that the eu will then act. >> what exactly is behind germany's position on syria? earlier we put that question to our correspondent, peter craven. >> i think you really have to see germany's position on this

it's not the first time one of the debtor countries in the eu has complained. point of view they've tried to pull back exposure dating back to december and january because putin does not want some of this olegart money in-- he's to exempt cyprus from the central as he would say or shore campaign and to have cyprus move to netherlands and western europe where you get more protection for your money. so, russia has already been focusing on this at least in the last. charles: you know, don, putin came out really strong on this, you know. i don't know, i wouldn't say necessarily veiled threat, but he talked about how, quote, unquote, how dangerous this whole thing is. does this also speak to how closely intertwined the russian mob is with the russian government? many people say you can't separate the two. >> it's unclear always whether gazprom is an arm of the russian government or the reeerse is true or that the russian government is an arm of gazprom and this is one of the areas where you see the close intimate relationship between power and money in russia on full

that is when the eu winds down its last subsidies. now, facing trial on charges of theft for stealing coal. >> does not matter what they do to me. i will have to keep stealing. >> discontent is growing in the valley of tears, but in romania's capital, bucharest, no one hears the calls for help from romania's most troubled region. >> i wish i were a chicken -- it may be hard to believe, but a song by that name really did make it to the top of the german charts. the lyrics are all about how much fun the chicken's light must be. -- a chicken's life must be. you can spend all day lazing in the grass. reality paints a different picture. laying hens are usually cramped in different cages. one british woman wants conditions to change. she has founded the british and welfare trust -- british hen welfare trust. >> this is how it heidi -- this is heidi. the family has 20 hens and three roosters. other 14-year-old girls wish for a dog or a hamster, but just wanted chickens. >> they are completely different. they are really sweet. >> heard chicken

how do they get into the eu? they got into the eu in the first place was politics. it wasn't economics. it wasn't about the financial system. pit was politics. the statement reason greece got in. at the time there was a political will to have these countries in the euro area. and therefore in some way or another you decided to overlook some details. >> you said to some extent this is delaware and a bit of miami. what do you mean? >> what i mean by that is we have to remember cyprus is not just a sort of money laundering destination. it relies overwhelmingly on its very low tax rate. cyprus has a tax rate of 10%. it means it is tax optimization structures from russian businesses. they may or may not be money laundering but there is certainly tax opt mization. if you look at how delaware and parts of miami operate, kind of the same thing. >> there were fears we would see bank runs in italy and spain because people would wake up there and say, wow, if i'm in a weak bank and below the insurance threshold it is meaning

anhave been very happy from irish perspective to see the high level report produced between the eu and the u.s. in terms of potential. i spoke to the president after his reelection. he addressed the matter in his state of the union address and last week, the european council gave a very positive endorsement to giving this presidency to thesure -- trigger negotiations, which can hopefully take place. there is a 90-day process to go through from the u.s. administration point of view. the relationship has enormous potential. currently, 15 million jobs depend on the the trade. think of the potential for all the millions of people on either side of the atlantic in terms of the potential for job creation if this were to become a reality, which i expect it will. long-term evidence would show the flow of trade and investment helps spread new ideas, new innovation, new technology, the best research, leading to improvements. as we look at the global situation with a population globally rising at an enormous longerith people living because of advances in medicine, the fact of the matter is we are

>> if the eu allows cyprus to go bankrupt. remember, there are some major oil finds in the area there. nobel energy is currently and has developed drilling wells there as well as a second tranche. the you start to defy the underlying credibility of the country and allow it to go bankrupt, who knows what aspect this will have on the american economy. if you look at it, europe has been lagging behind the u.s. and we've been very very proactive as a government in our money sectors, europe has not. doing what they're doing now, unprecedented, contrary to all aspects of the law, is going to create, i think, a dislocation that no one can predict. >> well, we're all connected. that's the bottom line. peter, good to have you on the program. >> thanks very much for your time. >> thanks very much for joining us. >>> it is about time. samsung tossing its hat into the smart watch ring, to keep up with rival apple. regardless of who gets to the market first, will consumers latch on to a smartphone watch? and later, what do professional foot

we are returning to our top story in cyprus, the eu bailout. the president addressed the nation a short while ago, a stark message, saying he had a choice between bankruptcy and a potential exit from the euro. >> that's right. the president put all his cards on the table. to mp's otheral parties to make the right decision. when the party meets, when the parliament meets tomorrow afternoon, he appealed to the members of parliament -- he only has 20 of the 56 seats in parliament. he needs to do a bit of orchestrating. this was an appeal, pointing out what the future of cyprus would look like if this bailout deal was rejected. on monday, he said, we've got to decide what causes less pain. we talked about pain. he talked about bankruptcy, the destruction of the whole banking industry, huge loss of jobs, and a devaluation of both the currency and the wealth of the nation. this is pretty stark stuff. cyprus is at a moment or could go really either way. talk to people in the streets. -- where it could go really either way. talked to people in the stree

japanese companies are hoping to increase trade and investment with the eu, and help create jobs if the epa is concluded, but the eu says that it is restricting and that makes it difficult to enter the market. >> i will take stock on the progress made by japan. in implementing the road maps and railway procurements and the conclusion will be that the progress has not been satisfactory, the negotiations will be suspended. >> eurozone finance ministers, and government leaders have reached an agreement to bail out cyprus. they held an emergency meeting in brussels facing an end of day deadline. they agreed to a bailout worth 10 billion euros or $13 billion. >> we've put an end to the uncertainty has that affected cyprus and the euro area over the last few days. >> the ministers agreed to shut down cyprus' second largest bank laiki. holders of deposits of more than 100,000 euros or $130,000 will have to take losses. it's not yet clear how severe those losses will be. so-called good assets will be folded into the country's largest bank, the bank of cyprus. deposits of more than 100,000 euros

it's an issue for cypress and the eu. ry given the stance they made earlier in the week about wanting to be involved. i think their bluff has been called certainly. and what i think was really the key, it was not that the russians had anything to help in a meaningful way but i wanted to be included in debates. as we all know the russian interests in cyprus are absolutely enormous. >> steve, thank you. sounds like a big game of chicken. we'll watch how things play out into monday. by the way, it is friday. it's time to talk the friday trade. oil and currencies. kevin kerr is president of kerr trading financial. and brown brothers hair man. mark, have you been surprised? >> i'm surprised just by the euro's resilience. people were thinking there could be a run on european banks which hasn't taken place. a loss of confidence. but it has been trading in fairly tight trading ranges. it has been resilient this week. italy still without a tpo government. >> how do you position yourself? >> monday is when the ecb said it will cut c

. >>> russia's leaders are backing the eu bail out for cyprus. they say they're ready to renegotiate terms. russia has lent cyprus 2.5 billion euros or $3.2 billion. officials will discuss easing the terms. the eu bail out includes a condition to shut down cypruss second largest bank and it inflicts heavy losses that will affect many russian depositors. prime minister has criticized the plan saying it's tantamount to theft. at the same time russian leaders are keen to avoid further turmoil in the euro zone. worries are still hurting business sentiment despite a cyprus accord. stocks in new york ended lower on monday. the dow jones fell more than .4 of a percent to finish the day at 14,447 and the euro is trading lower against major currencies. to see how this is affecting markets here in japan let's go to ramin who is at the tokyo stock exchange. concerns still seem to be far from over. >> exactly. it does seem to be rearing its head again. that's as the u.s. economy shows signs of vitality. here in japan the japanese government beginning steps to

the eu has intensified the fight for economic power, but it is not easy, especially not when the country'slite is involved. in times of economic crisis, the overall pie is becoming smaller, and those who earn ordinary wages get smaller pieces, but those who continue grabbing pieces for themselves are more likely to be caught up by their neighbors at table. the crisis is shedding light on the growing divide between the rich and poor. in slovenia, people have been taking to the streets regularly in protest. they are angry because the country's top politicians have been stuffing their pockets. then he curses the day he agreed to work on this bridge -- >> he curses the day he agreed to work on this bridge. as a contractor, he was well known and worked for his company on a 20-year contract. to look like a sure-fire thing, and small firms like his cannot afford to be picky -- it looked like a sure-fire thing. >> my people worked on this bridge for three and a half months. i invoiced cpl for more than 30,000 euros, but they only paid 2800. when the bridge opened, the mayor said this was the only

the eu has intensified the fight for economic power, but it is not easy, especially not when the country'slite is involved. in times of economic crisis, the overall pie is becoming smaller, and those who earn ordinary wages get smaller pieces, but those who continue grabbing pieces for themselves are more likely to be caught up by their neighbors at table. the crisis is shedding light on the growing divide between the rich and poor. in slovenia, people have been taking to the streets regularly in protest. they are angry because the country's top politicians have been stuffing their pockets. then he curses the day he agreed to work on this bridge -- >> he curses the day he agreed to work on this bridge. as a contractor, he was well known and worked for his company on a 20-year contract. to look like a sure-fire thing, and small firms like his cannot afford to be picky -- it looked like a sure-fire thing. >> my people worked on this bridge for three and a half months. i invoiced cpl for more than 30,000 euros, but they only paid 2800. when the bridge opened, the mayor said this was the only

the eu correspondent is not surprised. >> pensioners and public servants are having their incomes cut. it is clear that the economic reforms which were pushed by germany are not doing much. >> when eu officials meet in brussels, germany say it is decisive. berlin sets the course to follow to bail out the eurozone's beleaguered economies, but this austrian journalist says the problem is not as much the policies as the attitude. >> germany is exemplary in economic terms. i would say there is a lack of feeling towards partners. not enough solidarity being shown. germany is coming across as a little bit too cool. >> at the same time, germany is also a magnet for young spaniards and greeks who cannot find a job because of austerity measures. >> obviously, things are going to turn out badly if we do not make some changes, but one day, someone in berlin and brussels will realize we are on the wrong path. >> at least that is what million said he use citizens are hoping. until then, protests against the eu and germany are likely to continue. >> with a wave of anti-german sentiments stinging po

the eu correspondent is not surprised. >> pensioners and public servants are having their incomes cut. it is clear that the economic reforms which were pushed by germany are not doing much. >> when eu officials meet in brussels, germany say it is decisive. berlin sets the course to follow to bail out the eurozone's beleaguered economies, but this austrian journalist says the problem is not as much the policies as the attitude. >> germany is exemplary in economic terms. i would say there is a lack of feeling towards partners. not enough solidarity being shown. germany is coming across as a little bit too cool. >> at the same time, germany is also a magnet for young spaniards and greeks who cannot find a job because of austerity measures. >> obviously, things are going to turn out badly if we do not make some changes, but one day, someone in berlin and brussels will realize we are on the wrong path. >> at least that is what million said he use citizens are hoping. until then, protests against the eu and germany are likely to continue. >> with a wave of anti-german sentiments stinging po

will this derail the rally and will cyprus leave the eu? for more, let's bring in the president and chief investment officer of merck investments. great to speak with you. >> great to be with you. >> we saw a fairly big move in the euro today. i'm wondering what you think is going to unfold next week. >> well, you guys pointed out, bernanke's all that matters. there is somebody on the other side of that trade, the european central bank. the europeans have been mopping up liquidity. the americans, the brits, the japanese, all printing money like crazy. i disagree with the notion that they will always fix it and that's why the market is up. is market is up even if cyprus were to melt down. what people have realized is that cyprus is not contagious. we have treasury auctions in spain last week that went great. if people were pricing in the remote chance of contagion, we wore very different where we are today. clearly, this weekend can do many things. going to be many rocks in this road. but in europe, they're not printing this money. that's why

the mother much for joining us. -- thank you very much for joing us -- joining us. euood deal for the cyprus? what's the best deal for the eurozone is they get the structural position of the various economies and institutional framework on the right track. yes, this is a good deal from that perspective. for cyprus and for the eurozone more broadly, it is the beginning of a very long road. we have seen these eight packages in other countries. agreeing to a deal, while it does not seem easy, actually is the easy part. it is the delivering on that over the months and years ahead which will be testing people's patience and fortitude. >> how is this going to cost, how was it went to hurt the cypriot people? >> look, the cyprus economy is effectively in the middle of an extremely bad recession, potentially depression. that will be exacerbated by the fact that as a share of the economy, the banking sector -- sector has to roughly half over the next five years. that will be extremely painful. the economy will be less dynamic. it will be very difficult. >> how the market's been

relaxation of the eu arms embargo? >> first of all let a us look at what we've achieved and amending the arms embargo when we specifically asked it to be chained to we could give technical support to the opposition. we've achieved that at the french president and i discussed at the european council looking for further changes to the arms embargo that will be discussed by foreign affairs ministers this weekend at and the reason for that is twofold. first of all its and a peculiar message that the arms embargo still applies pretty much equally to this hateful regime and to the opposition who we now recognize as a legitimate representative of the syrian people. and second, the french president is concerned and i'm concerned that we should not be restricted for months and months ahead when we don't know exactly what could happen in syria, including a good warning reports use of chemical weapons. >> trying to i think the prime minister for that answer. everyone is appalled by the actions of the assad regime. but he will know

financial markets fell after the terms of an eu bailout for cyprus caused widespread anger. the deal includes a heavy tax on bank deposits. savers queued for hours to try to get their money out. now the government says all banks will be closed till thursday as it negotiates the terms of this deal. gavin hewitt starts our coverage. >> hurt, anger, outrage -- that was the mood on the streets of the cypriot capital. in exchange for european bailout, small and large savers will have to pay a one-off tax. >> we are sleeping. we all come in the morning, knowing that we were significant -- >> as a nation, it has taken us 40 years to build our economy to the level it is. with done one day -- within one day, we have shot it down. we are very betrayed. >> they can do it anywhere. live in europe, europe has betrayed us. >> at one stage, the crowd was urged to march towards the presidential palace. many people believed their savings had been guaranteed. what is clear is that the bailout deal negotiated in brussels cannot be implemented here except in the face of furious opposition. will

in a much broader narrative, the eu, what the implications are for the eu. so questions there. he end of the day, we were probably, more than anything else, overbought as an equity market, broadly speaking. >> that's an excellent point about being overbought. there were a lot of overbought signals in the last couple of weeks. as brian was saying, maybe this is a good thing. a pause is healthy. >> i'll tell you what, mandy. it is welcomed. you don't often hear that from somebody who works in the markets, but a pullback is healthy and it's welcomed because it gives this market move much more sustainability in terms of a move higher longer term. we needed a pullback. i suspect we get more of a pullback. maybe not today. maybe we've seen the lows for the day. but this shift that we've seen over the last four days has also been accompanied by a rise in the volatility index which tells us that there's some risk off men at that time at work in the market. which should give us an opportunity to settle back in another three, three or four percentage points off the high, force recalibrati

what's the message that the cypriot officials would rather negotiate with russia than the eu? >> look, i mean, it was a position that was taken by the euro group last friday, which i think the whole world understands that it was an unfair decision. it was the first time that the european commission and ecb decided to have a haircut on depositors, which has never been done anywhere else. and basically, our parliament, our president came back with a suggestion by the euro group that we have to do a haircut on depositors in order to save cyprus. the parliament decisioned this is an unfair decision. you don't take money out of insured depositors. we're talking about even insured depositors, because according to the rules of the european union, up to 100,000 euros, they're supposed to be protected by the central banks and by the ecb. and now we're having a haircut on insured depositors. this was a decision taken by the euro group that could not be accepted by our parliament. and yesterday there was a vote at the parliament that decided that we cannot go ahead with this decision. and

the move was necessary to keep cyprus from sharing in the burden of a eu bailout. and uncertainty over the outcome of the vote in nicosia continues to weigh on markets. cyprus said its stock exchange will trading until thursday. cypriot banks have been placed on negative watch. carolin roth is reporting now for us. the latest we're hearing is that the vote may not happen today. what can you tell us? >> absolutely. there are a lot of moving parts still, kelly. this is a very fluid situation. the vote is scheduled to happen at 6:00 p.m. local time. there has been no official cancellation on part of the government. but, again, a government spokesperson at the same time also saying that it's very unlikely at this point that the vote will actually go through. that is, of course, because no single party has a clear majority in parliament, not even the ruling party under president anasatias. the ruling party says it may not want to vote with the proposal and it's coming out with an alternative proposal. we spoke to one of the members on "squawk box" just half an hour ago.

many investors still concerned about the eu bailout and the cyprus rejection of the eu mandated tax onll depositors. news that the housing sector is stronger than expected helping to overcome some of the markets and today. the dow up about four points. the s&p fell to the sameumber, the nasdaq down almost nine. big board volume today picking up. gold moving higher, up 670, closing at 161130. crude oil dropping a dollar 58 to 9216 per barrel. the bond market and interest rates falling. the ten year treasury just under 2%. federal reserve policymakers beginning their 2-day meeting. my next guest said the fed will has been substantial, don't expect changes anytime soon. that should be music to the ears of most investors. joing us, former federal reserve vice chair princeton economist alan blinder and the author of the book after the music stops. great to have you with us. >> nice to be here. lou: let's start with cypress. this little place, million folks. they're creating quite a mess. $400 billion lt of global markets yesterday. we should blame -- >> multiple of the gdp. i actually think

they urged a formal agreement should be reached with the eu for the bailout soon possible. let's get a check on the markets now. the dow jones industrial average fell on thursday. that's after further concerns with the banking crisis in cyprus. to see how stocks are performing let's go do ramin. we've seen a pull back in european and u.s. markets. are we seeing that down trend continue here? >> yes, we are. the main drag on the market s the reemergence about concerns with the banking scenario surrounding cyprus. that led the euro lower including the yen. let's have a look at the exact opening levels for today, friday, march 22nd. both indexes are trading lower. we're going to see if the nikkei ends in the positive or the negative. we felt the jitters and volatility this week that's for sure. your zone pmi or business activity for march showed a bigger fall with the consensus. the markets here in japan really focusing very much on what the new bank of japan chief will do after he clearly stated at his first news conference on thursday that he's going to pursue bold monetary

purposes.s serves two it makes the eu and look efficient by contrast, and makes the president's job rating look good by comparison. a continuing resolution, a washington speech, -- to fund, government's there will be an agreement on that pit the crunch time will be sometime next august. if there is going to be a grand bargain, whether it is a grand bargain or mini-grand bargain, that is when it is going to take place. run out ofl start to the class and the president is a lame duck and the race to succeed him dominates the political landscape. >> people are getting fed up with this. >> they are getting fed up, but the polls are very fungible. i don't know if the abc poll reflects the charm offensive trade right now looks like a president is really trying to do something. on the other hand, it looks like john boehner is digging in and say, "oh, he's just having dinner stock was i don't know if people like that, either. >> it is completely washington jokesville! . people. >> what happened to the modern middle -- moderate middle of this show? what's happened to evan? >> the charm offensive is

will cyprus and the eu woes kill our economic optimism? we'll debate that next up. the real loser could be crooked russian billionaires whose money-laundering operations in cyprus run the country. that's why vladimir putin is so angry about this bank tax. feel like capitalism may be the best bet to prosperity, but there is not one ounce of free market capitalism in this cyprus story. i'm larry kudlow. we'll be right back. [ female announcer ] what if the next big thing, isn't a thing at all? it's lots of things. all waking up. connecting to the global phenomenon we call the internet of everything. ♪ it's going to be amazing. and exciting. and maybe, most remarkably, not that far away. we're going to wake the world up. and watch, with eyes wide, as it gets to work. cisco. tomorrow starts here. cisco. chances are, you're not made of money, so don't overpay for motorcycle insurance. geico, see how much you could save. >>> so next part >>> so next part of this story. why should a u.s. investor really care about cyprus? a tiny little island. maybe this is an excuse for a

the deadline is monday for them to come up with a plan for the eu will pull the plug on this place.bad news for cyprus, troubling news for the euro zone and maybe our market. >> neil: let's say the banks re-open on tuesday and you can start taking money out, al need limited ways. if you're a cypriot resident, you're going to want to get that money out asaphia as you can because you're nervous, right? how too they avoid a bank run? >> absolutely. if talked to cypriots here and they say exactly that. listen, when these bank doors open we're going to go in there and try to get our money out, and that's what these controls are all about. tried to limit that outflow but again, neil, you're very savvy with this kind of stuff. what people are saying tonight is that if they start doing that with the euro on this island nation, then it changes the whole nature of the euro. it could happen maybe in italy or maybe in spain. just like tapping into the private bank accounts. so, yes, it's a small, tiny nation, but big, big impact, big repercussions possible, neil. >> neil: greg, thank you very m