i'm just arguing against those who say sell all of your treasuries or go short treasuries which some are doing. >> let me get dan back in the conversation. >> investors have been hearing for a couple of years, get out of treasuries, it's dangerous, and yet treasuries have outpaced stocks. could that be the case again, and treasuries will do better than stocks and investors will make >> i think jinl outlined the risk pretty l. >> my point would be that the probability much those risks, given that they've known for a while -- there could be surprises in the middle east, otherwise, we've been dealing with the problems. we at t-rowe price say there's room for treasury exposure. but for corporate bonds or high yield, we would prefer sectors where investors are getting paid to wait and earn something at least above the rate of inflation. the other thing i'd like to point out is that the u.s. economy is growing at a one and a half and two percent rate. maybe that's lower than it should be. at some point, our guess is that treasury 10 years would have a 2 handle and should at least have a 3,

treasury securities. as mr.uffett says, in god we trust may be imprinted on our currency but the hand that activates our government's printing press has been all too human. on bonds like treasuries, the oracle advises right now bonds should come with a warning label. secretary geithner, mr. buffett is advising investors to shy away from investments such as treasury securities and it will be interesting to know whether you agree with his advice. my hope is his recent musings don't become a new rule for investors not to buy treasuries. if investors heed that advice in large numbers, the spikes in interest rates that i worry about will materialize and the low cost financing of our $15.3 trillion debt that the u.s. temporary enjoys will evaporate in a hurry. we need to resist the siren song of cheap financing partly brought on by the federal reserve's massive purchases of treasury securities to help push rates down. unfortunately, the administration remains lulled in by the siren song and takes current low rates as

long-term treasury bonds.t take a look at the ishares barclay's 20 year treasuries etf, also known as the tlt, it's the stock that appreciates when treasury bonds rally in price and interest rates go down, and drops when treasuries decline in price and interest rates go higher. prices and rates trade inversely, sorry i had to give you all that. the tlt was up a staggering 30% last year and gave you closer to a 34% return when you factor in the coupon payments. it's normally a safe place for your money, bonds, but we do not think of them delivering the massive capital appreciation that so many pundits came on these shows and told you were a bad bet. 30% return is not what you expect from a u.s. government backed piece of paper. now it's looking to me, and others, like bonds may have topped. like this terrific move at last is over, at least according to tim collins, my brilliant colleague at thestreet.com which is why tonight we are going off the charts to understand why last year's rally in treasuries might tur

we put the money back to the treasury as well. >> thank you. and switching again, how effective do you think japanese efforts were to stimulate the economy during the 1990s? and i don't think their economy is recovering. we place the emphasis on europe, but i think japan deserves real consideration. >> japan has had a difficult two decades. certainly. there's important differences between japan and the united states. one that i would particularly stress is that japan has had falling prices now for quite a long time. and combined with interest rates that can't go below zero, that creates financial tightness in their economy, which prevents investment in growth. also the japanese are not as quick as the u.s. to recapitalize the banks, as we did in 2009. they didn't have benefit of seeing others deal with it, grapple with it, we learned from them. they continued to provide monetary policy support. i think it's important to note that one other difference is that japanese demographics are different from the u.s. the workforce is beginning to shrink

i hope it's not a new buffett rule for investors to not buy treasuries. if investors see thoat advice ad then shies away from that investment and that will be a problem for the country. we need to -- the federal government's massive purchases of securities to help push rates down, unfortunately the administration remains luled in by the siren song and uses the low rates to finance for debt to advance a bloated european government. i look forward to your opinion to budget, i received it late last year after the deadline that was supposed to be honored submission, but i'm really concerned and ai do not see a resolution to the problems that the country is facing. >> i'm pleased to welcome our witness, secretary tim geithner, as you know, mr. secretary, your statement will be automatically stated in the record, summarize and take your time. >> our economy today is getting stronger gradually but we have a lot of tough work ahead of us. over the last two and a half years, despite the severe cut backs of take over governments, despite the increase in oil prices

so i don't expect that this would worsen the position of the italian treasury in the market. whereas i do think once this page is turned, the benefit will be considerable for every issue we are and for the markets overall themselves. >> next question over here. nancy. >> nancy -- [ inaudible ] when you responded to fred's question on the future of european integration, you didn't talk about the banking sect or issues. we now have the banking supervisor assessing the results of the stress test and determining what they think is needed. but in terms of getting those outcomes, it's up to the individual states to try to figure out what has to be done. and i wonder in looking at the future what you see is needed in terms of greater harmonization and strength of the central banking structure. >> very important point. and i think many politicians in europe those our friend was too visionary when he was invoking real eu level supervisory structure. events approved he was visionary but highly realistic. and in fact, europe has gradually moved towards that direction with the report and

treasuries trade. and the treasury market has been incredibly strong in price, sending yields to very low levels, the ten-year note well below 2%, that's terrible news for banks. when you put 10-year yield and overlay the chart with b.a.c., most of the time they're very much in tandem. the treasury markets and low yields to me are arguing that the bank run has been incredible, but that it's over. i'm willing to be short here. >> but, steve, what is it telling you? are you short the whole market? based on treasuries? or 10-year? >> i'm not yet. i'm very tempted to. i'm not because of apple. and that's the reason i'm not just index short. so no, i'm choosing my spots, but b.a.c. is one of those spots, one of those weaklings of 2011 that's had an incredible run over the last eight weeks or so. to josh's point. if you owned the stock a year ago, it was near 15. so i think perspective is important. i'm dipping into it the first time this year and being short. >> we've got to run to the next subject. abigail

but he said this about yankees with their treasury of virtue. he said, when one is happy and forgetfulness, facts just get forgotten but that sticks frankly for the whole of the country and the way we've treated civil war memory. what warren was really after in those two slogans, those two metaphors, great alibi, treasury of virtue, is reminding us, as he did in virtually everything he wrote, brilliantly, i think, everything he wrote, on this subject, is that we think with myth. we think in myths. we live in myths. myths are the stories we tell ourselves we're living. mythins are the great narrative we come to believe in. the stories we want to be part of. the narratives that explain particular -- in particular our present in any given present political position or situation. myth works on different levels. it resides in our imaginations. it floats in the air we breathe. it makes folk music of the stories we inherit at home. and for the northerner, the treasury of virtue wrote robert penn warren in phrasing that could equally apply to the great

treasury department is where i get the statistic or the citation for the proposition that the people that would be hit by the so-called millionaire surtax according to your definition, 80% of whom are business owners. is that a correct statement? >> i have to go back and look. again, i want to emphasize the following. it is roughly 2% of tax paying individuals and only a slightly higher portion of tax-paying small businesses. again, if we don't do that, though, who do you ask to bear the burden? >> are these job creators or not? >> another way to look at this is -- >> well, yes or no? >> yes, they will aplay to a small fraction of american businesses. small fraction. >> is it true that the majority of businesses especially out of aa recession are created by a majority of jobs are created by small businesses? >> you're right. the small businesses create a substantial fraction of jobs, but again, we're proposed schangs that effect a tiny fraction of small businesses and look at the record of job creation by small businesses during the period. we have a recent experience of this, which

treasury to take over aig the way they did in our crisis? >> well, my understanding of the precise legal situation and where the fdic and other regulators are in terms of developing the relevant authorities is that you cannot bail out individual companies in the way that aig was bailed out. you cannot put taxpayer money at risk in the same way that was done for aig. however, there is broad authority to deal with any systemtically important financial institution including i presume institutions you didn't think were important until 4:00 on a friday afternoon. you realize they're about to fail, and you need to do something by monday. there are greater powers now to take over and liquidate such institutions, not tlinl, not run a conservatorship. you can liquidate an institution in an orderly manner and buffer the rest of the financial system against the consequences of that liquidation. now, whether those mechanisms are sufficiently detailed and credible, i have my doubts, and on it this system resolution advisory committee i might stand out as

we've seen a minor rally in treasuries, pushing yields lower again. gold settled at a three-month high. >> maybe they managed to find australia on the map. let's see where those markets are standing. we've got about an hour to go in the trading day, of course. dow at 12,943. ooh, and another cheer for something that's going on behind us. the nasdaq is down by about half a percent. the s&p 500 is down .3%. >> the euro down now. bob pisani is back. you ran over to see what the applause is. >> this is what mandy will do for you. two guys sandwiching mandy here. it's the make-a-wish foundation. >> okay. >> a great charity. >> it is. >> absolutely. >> a lot of guys on the floor support the make-a-wish foundation. it's always nice when they come down here. we talked last week about how certain stocks are starting to look topee. it's the same situation. you saw how impressed they were with the greek bailout, because nobody believes they're going to end now. look at the s&p 500. the guys sending out notes about 14 times forward earnings. we're fully subscribe

you have very few private investors in the united states buying treasuries. i think going back, what is lacking in this country from a government policy standpoint is a simple program that answers five questions. those questions are, what are you trying to do, how are you going to do it, why is it going to work, how much is it going to cost, and where are you going to get the money? no, congress hasn't answered that question. the administration has not answered that question. the markets are waiting for an answer to that question. it's been the role of expectations in how people in the economy financial markets work. if there was an answer to that question, the markets would immediately take that expectation of future stability and give us stability today. and until we answer those questions, any stability will be short lived. >> thank you. senator johnson is recognized for an equivalent amount of time as i just consumed. >> i will be quick because your line of questioning covered an awful lot of what i wanted to talk about. >> we're obviously talking b about

we have been plagued by a very high interest rates on medium and long-term treasury bonds. the spread between the ten year treasury bonds and the german bonds reached 574 basis points, a moment in which the political scenario change in italy and since has come down to 344, which deserves to -- two remarks. one, coming down of short-term interest rates has been much more remarkable, much bigger and this leads many people to believe there are some political uncertainties that are keeping longer term interest rates, what might happen in italy. i would like to be a bit reassuring. one message goes in the direction many of you have seen, to the financial times last week, supporting more openings than ever before, the current government and committing to this support in the medium term, how everything can change but does provide italy with the perspective of responsibility in that particular political sector where most people were seeing a potential source of instability. at any rate interest rates are coming down more short-term than long term. i believe if this john ridge -- if

he said this about yankees with their treasury of virtue. when one is happy and forgetful, facts get forgotten. but i think that sticks frankly to the whole of the country in a way we've treated civil war memory. what warren was really after in those two slogans, those two metaphors, great alibi, treasury of virtue, is reminding us as he did in virtually everything he wrote, brilliantly i think everything he wrote on this subject is that we think with myths, in myths, we live in myths. myths are the stories we tell ourselves we're living. myths of the great narratives we come to believe in. the stories we want to be part of. the narratives that explain our presence. in any given presence political position or situation. myth works on different levels. i resides in our imagination, it floats in the air we breathe, it makes folk music of the stories we inherited at home. and for northerners, the treasury of virtue and phrasing that could equally apply lies open he said, quote, on a lectern in some arcane recess of his being ready for his devot

my bet, this is very much the same bet as treasuries. i'm hoping jeff is right on treasuries. if yields stay low, i think the yield curve is a serious problem for bank of america. the stock's had an enormous run to the upside. i've been patiently waiting for it to hit eight. it finally did. the risk/reward is tilted toward the short side. if you're willing to risk it to 8.25 or so, i think we have a chance to get back into the low sevens. >> way to follow through on that. what do you think? >> i'm not in the banks at this point. i'm waiting for just an opportunity to get in because they have run despite what i said to cortes about not where they've come from, where they're going to. >> i've been in the regionals and xlf for a while. i sold those all on monday. that was more just because they've had so much of a run. you're going to need another catalyst to say here's the next place these banks can earn some money. >> and you were beating me like a dog last year when i owned jpmorgan. so i'm a little gun shy. i don't want to make the wrong move here. >> how about you, stutland?

but my call, my expectation, is they will at some point, the move in treasuries, rally in treasuriess over. treasuries themselves need to be sold. this vehicle that plays the treasury market from the long side, the tlt, this is a sell. >> i thought bill gross we now learned has 38% of his top fund now in treasuries. >> bill gross, "fast money," who do you choose? >> thank you very much. sue, back to you. >> thank you, gentlemen. coming up next, a ceo double play. ppl out with earnings, profits and revenues and the dividend are all up at the multibillion dollar utility. their ceo will tell you why the power's on at his company. >>> and hasbro's not playing games. a line of touch screen toys and a block buster moving coming soon. their ceo will join us and talk about all of that on the other side of a quick break.  oh! [ baby crying ] ♪ what started as a whisper ♪ every day, millions of people choose to do the right thing. ♪ slowly turned to a scream ♪ there's an insurance company that does that, too. liberty mutual insurance. responsibility. what's your policy? ♪ amen, omen

>> correct, although to be specific, our treasury and finance -- treasury and finance area would have represented that because that is their first line of business. >> but you would know in your position? >> i was -- i understood but ultimately is responsible for liquidity. >> the negative assessment of mf global's risk management. it's betting the house, so to speak, in the current approach to risk management. both you -- do you agree with this assessment and was mr. cornize betting the house with european debt, rtm portfolio? >> as i mentioned before, through the genesis of the nine months that i was there, first three or four months, i would have to say the idea of betting the house was inaccurate or not a depiction that i would represent and that as the risk profiles changed in the mark can ket place, that the same transparency and assessment and analysis and informed business judgments were made at that senior management level and let's not forget about a sophisticated board being, you know, the balance between jon and these decisions. >> i mean, i would certainly suggest that th

as i said, we're moments away from the treasury secretary. there's a very lengthy opening statement, pretty much dissecting all aspects of the problem. then obviously a q & a session to follow. >> hampton, i've got a quick question for you. the volcker rule supposed to be imme nentd in july, as i remember. but the comment period has been pushed out. so it's bottom line, is it going to be implemented in july or not? >> we don't get that from the treasury secretary's statement on the volcker rule, and other more controversial regulations. treasury secretary saying as he's said in the past, the important thing is to take the time to get the regulation right. no specific timetable on when we're going to get the implementation of the volcker rule. >> hampton, thank you so much. we'll bring you live koench of geithner's speech as soon as it begins. meanwhile, let's look at the day on wall street. the numbers, pretty close to where we ended. once again, you saw money move significantly into technology. nasdaq, down about 11 points. i'm sorry, the do

treasuries because they are attractive. i think it's important for me to say that if congress is being lulled, they shouldn't be lulled. i think we agree that the attention needs to be paid to these issues as the case of some of the countries that you're referring to, like greece and portugal suggest, if investors lieu confidence, the rates will go up. obviously it's important for congress to address these problems. i've spoken out about it quite consistently as you know. >> i think we agree that sustainable long-run economic growth derives from savings and investment, therefore increased productivity instead of borrowing and consumption. i know you well enough to know that we more or less agree with that. but do you measure the effects that these policies have on savers, on people living on fixed income, living on cds? are you concerned at all about the very, very low interest payments that these savers are getting from these kinds of fixed income assets which are hitting our savings and investment side of the economy in e

for example, the rating agencies that we were holding treasuries, we were holding treasuries, agency notes and what have you. they were very short date in nature or after mr. corzine joined, the composition of the leverage changed. that's the important point in if you were there in august 2008. he came the spring of 2010. as you say, that started to change. did this window dressing issue begin to arise as well? >> i would say when we speak in terms of window dressing, it is pretty common practice across the street to bring the leverage down at the reporting periods. i would also -- >> this is 34% higher. >> i'm sorry? it did come down. i'm aware of that. the point you need to beware of that as welcome if you can bring the leverage down, it reflects the liquidity of the position. so if you can quickly bring them down that means they're not going to pose a threat to the balance sheet, percy. it's the leverage you can't bring them which is the more concerning risk, which be consistent begin with what happened with subprime crisis, as well as again with some of these other positions that

treasury bonds. armed robbers have taken dozens of ancient artifacts from their museum in olympia, that was the birthplace of the olympic games. the highest appears to have taken advantage of cuts which have been imposed on the museum service by the greek government. >> one of greece's most treasured sites reduced to a crime scene. ancient olympia with the first to live again took place, its museum the subject of a violent armed robbery. two men led the highest. this ancient site is more used to tourists than police has been cordoned off as the investigation goes on. a senior member of staff warned the government that budget cuts have reduced the personnel to a point at which the security of the museum with a longer be insured. the mayor says there is a direct link between what happened today and greece's financial crisis. the significant cut have an impact, he says. we don't have enough staff to guard of the museum. what we have here belongs to the whole world. it is also the responsibility of the i

lauren if i if i take a million dollars worth of treasury bonds from you which is this an obligation or a liability of the united states government in the value of one trillion and i give you one trillion in cash yeah your net worth has in shea's you haven't suddenly received a million new of dollars or nine new net financial knowledge my guess is they'll hold up for just one second i'm not interrupting you i literally have to go to break we will be right back with more with you that in just a minute i was back with mike norman he is chief economist at john thomas financial . and still ahead a new report about ron paul says he may be building that clout to move reining in that more into the republican agenda class mike norman if he thinks we could see a more comprehensive audit of the fed but first your closing market numbers. well. technology innovation all the developments around russia is going to the future are covered. welcome back ok i want to continue this conversation with mike norman we were talking about money printing he says it's not money printing i want to bring up this

so you've got that safe haven bid that's going on in treasuries. and a little bit of greece has been resolved. germany voted, things look a bit more calm as you might say for the time being. but you still have that safe haven. you've got other things going on domestically. you've got treasury with a buyback this week. so you're buying up the supply. you have no new coupon supply coming out from the treasury via any auctions this week. so you've got reduced supply there also keeping the bidding. you've got chairman bernanke's testimony later in the week and also quite a few fed speakers this week all on the dovish camp to neutral at best. so all of those are keeping a bid in the market and i think we could continue to see lower yields here. >> holly, thanks very much. i've given up talking about greece for lent. thanks very much, holly liss. >>> all right. stocks turning a little bit higher this afternoon after those early losses. but how long will this latest surge last? and can we close above the 13,000 mark? is this rally in fatigue, or is the bu

treasury group as a bubble now. doesn't this enable the deficits we're running here because they're funded at interest rates? so these tr the concerns that i have from this policy. >> let me first say that single mandate central banks like the bank of england la which is policies similar to the fed, i don't think it would be erratically different things at this point of time we're kuwait aware of the costs and risks. it's one of the reasons for the overall discussion. it's true they reduce what savers get on their saving. they also hold corporate stocks and a variety of other opportunities. and those dependent on the strength of the economy. so we're helping to improve the returns to savers. part of the reason for the policy to move them from positions slightly more into riskier positions to help promote strengthening the economy. we don't want to go too far. we are going to watch out for problems and to try to address them. and i've been in many conversations with investment companies, insurance companies, so on. w

should switch roles i mean the treasury should be the one who credits bank accounts like the fed does now and the faith should be the one that is shoes debt to control the interest rate will set the interest rate where it wants i mean if we have the treasury in the bed or if they consolidated both under the treasury i think we'd have a much better system that's a really interesting idea i'm mad to bring you want to get it you'll come to talk about that mark is that i also love to talk about zero percent money now you can resell excited we're out of time for now that thanks so much for being on the show that was mike norman chief economist at john thomas financial. ok before we go dimitri is sick so wish him well we can banter back and forth today where shannon and the team but this gives me the opportunity to respond to some feedback which is great because on friday i tweeted one of my concerns about the job numbers that kind of started this firestorm so this is what i said about the jobs numbers i said anyone sharing the jobs numbers please tell me why i should be excited that over f

treasury prices are on the rise. over concerns that the spiking oil prices could hurt economic growth. rick santelli is in chicago with more. hey, ricky. >> hi, mandy. you're correct. this morning we had a university of michigan sentiment number. that was the highest level since february last year. that's a one-year high. what has the market done? we see it didn't pay as much attention as it normally did. why? because realtime confidence is getting affected in realtime by higher gasoline prices. if you put a chart up going back to the last time we had $4 gas, there's no doubt there's a pretty darn good correlation between equity performance and the price of oil. if you look at interest rates that were in fact looking at a two-day chart, rates down. open it up to the week and here we are two basis points down on the day and two basis points down on the week and it could be the lowest weekly close since february 3rd which happened to be the first friday of february. if you look further at other issues, i think one of t

treasury secretary, as well.ments or questions about anything you saw in the interview? email us at squawk@cnbc.com. and follow us at twitte twitter, @squawk is our handle. and the nasdaq is higher by 20 points this morning. a couple of sports headlines this morning. detroit red wings fans have not seen their team lose in more than three months, the hockey club has 21 consecutive wins on home ice. last night he they defeated the dallas stars 3-1. their next two games will be in detroit. and the linsanity continues. the point guard phenom scoring the last six points against the raptors, including a game-winner three-pointer with five seconds left. the final, another knicks win, 90-8 7, jeremy lin finishing with 27 points and 11 assists, more news and a check on the markets when "squawk box" continues. >>> still to come, comcast triple play, earnings, innovation and the consumer. ceo brian roberts joins us first on cnbc to discuss quarterly results and more. "squawk box" is coming right back. hey. did you guys hear

but if we had a repeat scenario, the federal reserve and the secretary of treasury would not have the ability to do what they did with aig. they have a new authority which allows them to liquidate a systemically risky enterprise. second question, if god forbid we had a second crisis, would the federal reserve operating with the treasury have the ability to guarantee money market funds as they did in 2008? to stop a run? >> that's a good. the first part of your description around liquidating -- the options for aig and the liquidation of systemically risky failing enterprises, i believe that was absolutely correct. on the guaranteed money market, the use of the federal reserve is money powers are now much more constrained. and the view that i get from talking to officials -- i'm not, they can speak for themselves obviously, but this is my impression, is that they would feel much more constrained on the use of those powers relative to fall of 2008, but they do say, both former officials and current officials will say when needed, we will come in and save the day, which i think would incl

we heard it with our treasury secretary.ere's a headline in the paper that main street reads over the weekend that the imf wants the u.s. to contribute more to bail out europe, what do you think the response is going to be? >> i think we both know what the response is going to be. >> why do they even bring it up. it seems a little bit crazy. >> and in an election year. response to that kind of headline would be visceral. let's bring in mary thompson who has details on european companies coming to the u.s. >> the health of the ugs hi.s. market, year to date companies account for 18% of the roughly $45 billion of high-yield bonds sold here in the u.s. a level well above those seen in the last three years and above what strategists say is typically 15% of the market. why are european companies coming here to issue their high-yield debt? some say loans are tougher to come by at european banks. but more important, it's the death and the improving health of the u.s. debt market. now yield hungry investors are back scooping up high

and that treasury and finance area really drove the assessment. so yes, i am --ly n li have not the final. >> but you're aware that a document is being prepared where they're getting in the bunker. and you agree with mr. corzine's statement on october 24th that everything is fine? having knowledge that senior management is working on a plan to go to the fox hole? >> yes, to the best of my knowledge, the break the glass scenario is really a contingency plan that would have been an intelligent thing to do under a number of different cases, in particular for a company that was just above investment grade. so i think that those, as i said, the break the glass scenario is something that was an intelligent contingency plan to be looking at. >> what prompted them to do that? it wasn't hey, it's october, why don't we put together a break the glass strategy. there had to be something that caused them to think that, wouldn't you think? that they needed to develop a plan like that? >> best of my recollection, it was a board request. again, i think, to find o

so we've got these renewed concerns out of greece, helping treasury prices rally today. let's get to cnbc's rick santelli in chicago with the latest there. >> you know, it's been actually a fairly range-bound week when you consider where we're at today. it didn't feel like it when you were riding the roller coaster to get to friday's close. look at a one-week chart of ten-year. we're up several basis points. even that move didn't take you beyond what the top of the range is since november. somewhere just shy of a yield of 210. the two-year, a bit of a different picture. keep in mind for a variety of ropes, the longest maturity, the twist, a lot of reasons, it is virtually unchanged on the week. if we switch gears and think corporate bonds, let's look at the investment grade egf that reflects price. year-to-date you can certainly see it has had a little bit of a bump today. since the beginning of the year, it's a tear. if you look at the spread relationship to treasuries, as expressed in this barclays investment grade index, you can see as well that we are now under 200.

held illegal, all the bureau's actions, including those that have recently been taken under this treasury secretary's department will be imbalanced. what previously had been clear power to exercise some of the bureau's all right authority has been replaced by significant uncertainty with respect to all the bureau's authority. to take an example on the remittance's rule that is going to go into effect on february 7th and that the bureau just issued could be challenged on this basis even though it could have been issued under the treasury secretary's authority. the same is true of the mortgage underwriting rule that is now being finalized by the bureau. you have a situation where actions that would have been lawful, at least couldn't have been challenged on the authority basis before january 4th, are now going to have a significant cloud over them and we believe there's a very strong chance the courts will find them unconstitutional. find the recess appointment on constitutional. if that happens, what is the legal effect? the answer is clear, all the bureau's elections will be invalidated.

agree line shows the yield above the basket of treasuries. you can see it is about the average level it has been since the late 1990's, but look at the red line -- the default level is near the lowest levels. on a risk/reward basis, owning high-yield funds are an attractive place to be. equities is something we're very excited out. we have been excited for two or three months. january has been off to a good start, but the profits many people have made in bonds are starting to move to stocks. let me show you the charts. in terms of metrics used to determine whether stocks are cheap or expensive, this is probably the most popular one in terms of the forward p/e ratio, and you can see it is below the long-term average. many stocks are relatively cheap. this looks at the earnings yield and compares it to treasuries. it is at record highs going back 50 years. some people like to compare it against corporates -- record high for the last 30 years. this is my favorite one of all -- the yield you would receive on a stock relative to a 10-year note on

delaware in the in the opposite direction he receives a lot more than you'd sense to the federal treasury so you cannot have a euro zone with with only one power to dictate the terms of the game so clearly one's ones the governments begin to understand it is as you say there is an intellect and the ideological shift if you look at the last polls in greece you will see that the left has been gaining as well as the altar right now this is not a healthy situation and i am sure that you will see the same thing in portugal and you will see alternately the same thing in as you're seeing in france for the socialist actually present there and headed to gain support against mr sarkozy who did it has no idea what a european leader was spectacular leadership is supposed to be ok so clearly you will see it on sometimes formations that would to be taking place interesting frank is close and in london again do what dmitri had to say following on paper is fascinating because what we have is the center the middle dropping out everywhere and we have going to extremes i mean this whole currency crisis and

key question for me there is who's going to be responsible for that are we going to establish a treasury in brussels are we going to give more power to brussels are we going to increase the democracy deficit that we already are in your eyes a new way to many more questions we have time to answer i want to meet all my guests all still awake all of my guests it today in london and in new york and thanks to our viewers for watching us here are going to see you next time and remember cross-talk. it. was. news today violence is once again flared up. these are the images cobol has been seeing from the streets of canada. giant corporations are on the day. athens approves draconian new austerity measures as the city explodes with rage and what protesters say is a sellout of national sovereignty to foreign interests. syria brushes off fresh arab league initiatives targeting the assad regime a washington a story limbering up for military action. equal opportunities to study. his plans for social reform his latest. untainted by association the ethics of london's twenty twelve olympic games or under

treasury bonds now it seems that the l.t.r. o. operations are going on with the c b that are projected to on during the year two thousand and twelve which are expected to be about a trillion euros are going to be in that direction basically stealth wanted as they should and so what we're going to see is a continued deterioration of the euro against the dollar and specially against gold and a propping up any muddling along of the european situation and there is got going to be any austerity insofar as spain italy or france are concerned so this talk of us territory it's just purely cosmetic and just for the headlines it's not real how can these organizations be so professionally and competent i mean if people if you go to a doctor anything i've got a chest pain and he gives you a call and ask a pain you know henri amputate your foot and you would be rightfully upset to him then you wouldn't consider him to be a serious doctor.

treasury bonds now it seems that the l.t.r. oh operations are going on with the c b that are projected to on during the year two thousand and twelve which are expected to be about a trillion euros are going to be in that direction basically stealth wanted to zation and so what we're going to see is a continued to ration of the euro against the dollar as specially against gold and a propping up any muddling along of the european situation.

. >> ten-year money, ten-year treasuries is 2%. >> yeah. >> you're right that's a reflection of a lot of different things. >> if they start going up to normal rates -- >> i'm going to embrace your point. >> sorry to interrupt. >> they're low in part because the concern in europe and because growth is not that strong anywhere. but they're also investors around the world judge those securities, those treasury securities, as a relatively safe bet and they believe that the congress of the united states ultimately will act to restore fiscal responsibility soon enough so we can avoid the risks you and i worry about a lot. which is it if congress does not act that over time the interest rates will rise and hurt growth. there is no risk of that. i don't see any risk of that now. but we would better position to avoid that risk if congress were to agree on a set of deduction officials time. right now, almost any measure can you look at over how people view the assets including treasuries, they judge us as in a very strong position to meet our long-term fiscal clalgs. they have a lot of confiden