i'm christine tan. in asia, india's number two technology beats expectations with its quarterly profit and raises its full year profit forecast. >> i'm ross westgate. in europe, they said they wouldn't, but they did. the g-8 debates the currency question. and i'm scott wapner in the u.s. after 40 days .40 nights, the new general motors will emerge as a leaner company, but under the government's thumb. hello and welcome to cnbc's "worldwide exchange." we'll kick off with where we are in the global equities session right now. the ftse cnbc global 300 is down

11 points. that's a little better than we are in some of the markets in europe right now. we had some slim gains yesterday, but those are being erased at the moment. construction insurance, also oil and gas, health care are all weaker. oil prices are nudging down again today. that's where the weakness is coming through and because the stock market is down slightly. we have the yen that inched up a little bit, hovering below the week's peaks. investors are still as the bulk of the u.s. earnings season will be getting under way. a look at the currency markets? dollar/yen, 92.71. euro/dollar is on the low 1.39. sterling/dollar, 1.6272. euro/sterling, on the day low, .8544. sterling got a big boost yesterday when the bank of england decided not to follow through with extra quantitative easing. they're waiting until august. we're not sure whether it's a pause or whether that's the

final stop. nevertheless, it damaged the guild market and boosted the price or the value of sterling, christine. hey, ross. not a lot of people want to take part in the equity markets given the concerns about corporate earnings and the state of the global recovery. that is keeping markets sidelined. the nikkei 225 is down flat at the moment in time. kospi finishing off 0.1%. the shanghai composite down 0.3%. the hack sang is down 0.5%. the bombay sensex is flat. it's a lack lfter picture here in asia. in terms of oil, it seems to be holding steady, right now falling below the $60 mark, 73 cents lower at $59.68, continuing its downward fall. i stand corrected. brent is now trading down 73 cents, $60.60 a barrel.

scott, good to see you this friday. >> all right, christine. thanks so much. nice to see you, as well. take a look at u.s. futures shaping up. on the back of strength and financials and technology and energy. just a pick up on what christine was talking about. right now, we are about 31 points below fair value on the dow. tech was a standout yesterday and off the infosys, the beat there and the raise of the outlook which we're going to talk about later on the show, the s&p 500 below fair value, as well. from a treasury perspective, or at least bonds, 3.30% yesterday. the 30-year auction here in the united states perhaps didn't go as well as the previous ones. but nonetheless, not too bad and the ten-year now, ross, is at 3.35%. take a look quickly at gold. gold is trading up intere

interest .25%. $910 an ounce. christine, we'll send it to you. >> joining us now for market strategy, we have stephen pope, chief market strategist and we have makia kum a ta. miko, i'm going to start with you first. we have china calling for a reform of the reserve currency system. why are they doing it? they hold so many dollar treasuries. >> they can mention whatever they want, basically, and they are doing it and i think that's largely a political consideration. the large emerging countries led by china are jockeying for more influence in the dominant international forums in our organizations such as the g-7, the g-8, if you like, and the imf. and one way to do it is to raise that issue with respect to the dollar and in specific terms,

for example, they could increase the influence in the imf by becoming creditors, lenders to the imf because it's easier to lend to the imf than change the shareholder structure of the ifm which is still dominated and will remain dominated for a while by the old g-7 countries. having said that, it's a political issue and the result will be that they will have a greater say because specifically these countries have grown in significance over the past 20 or 30 years. >> so they're exercising their muscle, basically. >> yes. they're flexing their muscle and i couldn't put too much into it in terms of near term or long-term currency trends. >> steven within do you agree with what miko was talking about, that we shouldn't put too much into the reform of the currency system? >> sure. they obviously want to get to the table and have a say in terms of how that's developing.

however, at the current time, and there is no shadow currency that has defied the asset market, has the same liquidity that the u.s. dollar brings. so all this talk is very fanciful. it has no asset base of any debt, so i think at the moment we love the dollar and it will stay the principal global currency. >> no real agreement, either, on whether we should have more stimulus or not have more stimulus. those disagreements seem to come before in the debate. how do we view sort of stimulus at the moment from an investor standpoint? >> i think there is a need to have further episodes of stimulus, as long as it's targeted in the right way. they still have some capacity on the first wave of qe money that was available. i personally will have to go back and they probably will have to widen the basket in terms of guild they can by. in terms of the u.s., there has

been some direct programs, there has been infrastructure benefits. but i think if you go for further stimulus, it has to be shown that it's not just government spending for the sake of it, it's actually appropriate. >> one area we've seen very effective stimulus, it's been in china. look at the june car sales up a huge percent, 34%, 44%, something like that. is that where investors should concentrate on effective stim use husband? does that cause any concern for the future, bearing in mind the extra bank lending that's going on there? >> well, yes. in china's case, you know, back half a year ago or so when the stimuluses were still very new news, everybody was praising china because the stimulus there was very much front loaded was the word that was used and they criticized the u.s. stimulus for being somewhat back loaded. so there is a concern in china that as we've done a lot all

right, so going forward, the stimulus effect will be smaller relative to what it was up to now. but on the other hand, you have a so-called back loaded u.s. stimulus program which will probably kick in just in time, just at the right time because so far we've had some self-healing in the financial markets. we've had the monetary policy effect felt in the -- you know, through liquidity and other special lending facilities that the federal reserve has set up. so, you know, we've went through that self-healing and we found a bottom in march and it's going to be maybe an ideal textbook case of the fiscal stimulus coming in just at the right time as the monetary measures have reached perhaps a limit for the time being, at least. so maybe on a local level there are some concerns, but on a global level, it's all balanced. this guy is stimulating while the dollar is taking the back

seat for a while. i'm quite optimistic overall, i would say. >> mikio, isn't it possible that the stimulus here kicks in too late rather than just in time? >> well, of course it's possible, but for the time being, it doesn't look like there is going to be a big gap. from what i understand, recent reports suggest that only a small fraction, about 10% is the number that i recently read of the stimulus has actually been executed so far. and we have still a relatively expansive federal reserve. we have a market that is not really falling. i mean, it's consolidating in a relatively shadow way. consumer confidence is a bit shallow. it is still fragile. but you also have the earnings season coming in with some companies, you know, mentioning some positive stuff for the down road. just look at what alcoa said with regard to free cash flow or even gm, if you look at the news flow there, it's at least less

bad in the sense that they may be soon existing the bankruptcy. so yoj there is a big risk that the stimulus will kick in way too late. >> yeah, stephen, so the china stimulus package is kicking in. ross mentioned a nice pick up in auto sales there. maybe our stimulus package picks up shortly. do you than believe in the decoupling theory that if china continues to go strong, other emerging markets come along, they can help pull other stimulus along? >> i think you can find that the developing world is going to be a good counterweight to the slowdown we've seen in europe. we musnt assume that their gdp weight equals where western europe is currently at. however, it's good that we have this effect and that india had that result in the election and india can focus on its own internal development and reform. that i think is very constructive.

but you'll see the numbers turning around in the u.s. as it goes in western europe. generally speaking, i think we are well balanced and the world is recovering. >> bearing that in mind, what is your investment strategy from that point? >> i'm using these retreats in equities to start building up applications again because equities will be higher. >> what about you, mikio, what is your investment strategy? >> on june 17th, we issued a report advising we were more defense i now. right at the moment as we go into the earnings season, we're looking for that right moment to get into a more aggressive strategy again, you know, more into the cyclical things. but we are not really in a hurry to security that. just wait and see, concentrate, focus on the figures and hopefully time it right.

stephen, you say you're buying on the dips. what are you buying? >> i think we can start to loot a moving away from some of the defensive. i'm looking at the steel companies, the mining companies. i think that's the way to go. banks are making a generally good recovery, so i'm looking at financials, as well. >> stephen, good to see you. have a good weekend, stephen pope global market strategist at cantor fitzgerald and mikio, thank you, mikio kumada from lgt capital management. we're going to move on and talk about ubs today, depending on whether we've got the story on ubs. we know ubs is likely to settle its dispute. the chairman of the swiss national bank said he's confident they'll be able to come to an agreement over the

release of names of u.s. clients. the recent capital yaltal hike shows a light at the end of the tunnel for the bank. at the world newspaper, there are allegations that the tabloid was hacking into phones of thousands of celebrities, government ministers and royals. the news of the world is alleged to have been using private investigators to tap the phones. they paid out around $1.6 million equivalent to settle three cases out of court. the police have decided not to investigate, but the director of the prosecution of parliamentary commit and the press complaints commission have all indicated they are opening inquiries. a class action by a number of celebrity sess a possibility. >> if the guardian is right and thousands of people have their

privacy attacked for no good reason by the news of the world and the sun, then you could get what you would call in america a class action lawsuit where they all get together and they have massive lawsuit against newspaper company. here in asia, we have more information on the detainees, including stern hu, allegedly bribed chinese steelmakers during the iron ore negotiations this year. meanwhile, the australian government will have a consulate with hu and error back tomorrow. kevin rud says his country is treading carefully on this matter. >> i just make the point let's not get engaged of political grand standing on the home front. let's get on with the practical circumstances of supporting australia in this issue. >> let's get more on the final

day of the g-8 conference in italy. claudia is on the ground for us. hi there. good to see you. what have we got today? >> reporter: hello, ross. today is a big day for africa, for food security, and details are coming out about expectations in terms of commitment. obama expects to enlist major powers with farmers with up to $15 billion. that number has increased from what the forecasts were. that, of course, is to not donate money with you but help them by lending and hem them to grow their own support. so he thinks it's to render them autonomous. that is a big issue with price increases in food. has become a very serious issue. that is one of the big issues on the table right now. there are plenty others, and this morning we have a guest that i'd like to welcome on the show here this morning.

and it is the prime minister of the netherlands. thank you for being with us. >> good morning. let's start by asking him what's going on this g-8. many statements have come out. what do you think is the biggest achievement? >> it's very important. we are talking about issue of climate change and there is really a worldwide necessity to find a solution. copenhagen is next. we've been talking so lot and we have to finalize it and today we will talk about a very important issue with security. we have a very good meeting because we have to be very -- the people have all have serious difficulties. they must count on people out here because we have to take the right decisions. >> now, this has been a g-8 that has been enlarged and including the developing countries. on the climate issue, they have

been strong and intervening and talking about their lack of possibility to commit to those commitments that the g-8 has brought up. i talked earlier to another prime minister and he was talking about the finalzation of a new post kyoto. but your view of the chinese and other developing countries that are concerned about being able to reach these objectives? >> china is a very important economy. i'm really convinced that china will be a very important economic player. and when you are confronted with an economy that has huge possibilities, at the moment, we have to say we need sustainable economic growth. it's so important when we talk about renegotiations, when we talk about copenhagen, that a country like china is engaged to reach these climate change goals. otherwise, it will fail. another point is, if you want to

make success, all countries must participate in it. >> as far as africa is kerned, you mentioned that, as well. japan and europe are expected to take the bulk of this $15 billion. other countries, what else can they do to help render these countries autonomous? >> also my country is playing an important part, $2 billion euros for the next several years. but it's only a matter of money. you say not issues around transfer of knowledge. they have contacted counter parts in africa and e two have social responsibility. we have small and medium ender prize in the netherlands.

and it has to do with how can we increase productivity. how can we generate growth? we have a very good university. they work in many countries. so if you're talking about the issue of food security, of urse, we need the money. it's almost a matter of transfer of knowledge and the investment to private sector. >> thank you. thank you so much for being with us, the prime minister of neglecter legions. we thank you for joining our show. ross, back to you for the time being. >> claudia, we'll get more from you in a bit. still to come, as well, chinese prices rise for the first time in seven months. is it time to talk of an asset bubble? plus, china's call for the overall of the reserve system at the g-8. what implications will there be there?

we're back here in l'aquila as the g-8 wraps up their summit. let's start immediately with the main topic from today.

it is aid to afca. >> yes. and i hope today we are going to launch this initiative on food security. i will pledge $4.3 billion in european has been committed to this approach. last year in the g-8 summit in japan, i'v announced new, additional, 1 billion euros to start with for food security and it's a change from traditional emergency food aid. it is food security in the sense that it is helping farme in developing countries to feed themselves and to give a contribution the to feed the world. i very much hope this strong message comes out today with important support for development. >> what is your regard on what was said yesterday on the currency of the u.s. dollar? >> we believe it's good to have

stability in the currencies. in fact, through has been a very important anchor of stability in the european union. we are now the second currency of the world, the euro in such a short-term. what i think is more of a positive relation within the main currencies in the world, a and, of course, we are had we have, we are increased the dialogue. china can be, in fact, a positive actor in this macroeconomic stability. >> many things have been said here. some major commitments have been made. is your overall view of these three days positive? >> positive, but look, this is my fifth g-8 summit. i've been in the last five. and this for me in terms of the quality of debate is the best in terms of informality, in terms of engagement. i welcome the commitment to the

degree celsius. >> thank you so much, mr. barroso for being with us. this is all from l'aquila from the g-8 summit. >> thanks very much, clawdy ya, for that. chloe cho is in singapore. choey. >> good morning, ross. we didn't have that much direction as far as the equity market was concerned, of course. more deflationary worries because of the wholesale numbers we got out there. the nikkei is ending about 4 points lower, the kospi just a tad lower by 3 points or so. but the central bank there did say it was raising the growth expectation for that country but the markets didn't really react. the real story coming out of greater china was about these ipos coming on board. first of all, take a look at what happens what happened to this power company over in china ma, amber energy.

it was overskriebd by 1,200%. can you believe that? for the closing of scores, we are double the price. on the shenzhen market, guilin sanjin is a pharmaceutical company and wanma cable is a cable company. aside from the ipos, we didn't have that much activity over here. but then again, you were talking about china and the currency debate. the strength of the yen is pressure from the milk. also, growth concerned are pressing that on the nikkei, as well. christine, as i send it back to you, we're going to need to get more earnings numbers to ferg out where this dip is going. >> the debate is going on, trust me, chloe. thanks for that. coming up next on "worldwide exchange," billionaire investor

warren buffett tells krn he would welcome other cash injection. is ts enough to fix the economy?

[ quacks ] i'm christine tan. in asia, india's number two i.t. services company's emphasize beats expectations and raise is its full year profit forecast. >> i'm ross westgate in europe.

in the end, the g-8 has debated the currency question after france supported china's call for change. >> yeah. they couldn't resist. after 40 days and 40 nights, the new general motors will emerge from bankruptcy today as a leaner company, but under the government's thumb. >> right. welcome to the program. we just got some data out of the uk. we've got producer prices, june, nsa output prices, minus .2% on the month. the consensus was for it to full minus .8%. sorry, that is weaker than the consensus from minus .8. that is the weakest since dose 2001. the core output prices minus .8% on the month. that is weaker than expected. that's the lowest annual rate since june 2004.

and the nsa output prices, down 11% on the year. the consensus was for that to be mean was 12.2% on the year, so slightly better than expected, and the weakest rate since april 20201. james shugg is with us. what do you make of that? >> it's not real surprising. the sector is not going to be generating inflationary pressure for a long, long, long time to come and the ppi data is entire consistent with that. there's so much spare capacity in uk manufacturing and indeed in global manufacturing at the moment that the bank of england will give these numbers a cursory grand and move on to bigger issues. >> yeah. well, the big issue for the bank

is they decided not to continue for the moment with quantitative easing. they said it has been sort of a pause. what happens next? it takes us to sort of the august forecast and people don't know whether this is a pause or a stop. >> well, they've spent $112 billion of their -- to spend during the month of july. then you get to the motorcycles meeting when they'll rework there growth and inflation forecast and they'll make a decision then, i expect, to go on with the 35 million they can do. they may also decide when they rework there progress that the qe spending needs to be extended beyond this so we may get an announcement that perhaps they're looking at putting in place another 50 billion or so which would take them up to the november meeting.

i expect they wouldn't want to go beyond that at this stage. but i think it's fairly likely that they would complete the 1.50 billion. would they not do that, rises would raise even further than the bank of england will be comfortable with that. >> stick around. we'll get more from you in a few moments' time. the ftse cnbc global 300 is just off 8 points. the xetra dax is now glass, ftse 100 down .25%. oil stocks are weaker, construction b resource stocks. on the currency markets, pretty much as you were. the yen has been firmer, dollar/yen, 97.31.

sterl got a boost yesterday from the fact that the boe didn't really announce that this time. hey, ross. here in asia, it was a mixed session so far. not a lot of incentive for investors to put money to work in the markets. nikkei 225 down to 9,287. kospi down .1%. shanghai composite down 037%. hang seng indid he des down .5%. it's a lackluster trading day this friday. scott. >> let's take a look at where futures are shaping up here five hours before the open. we are anxious to see where the market is going to go today. right now, it looks as though that open is going to be do the down side.

we had to get to one point on the plus side in the dow. you're looking at about 31 or so. nasdaq and the s&p lagging just a bit here in the early morning hours. take a look at the ten-year yield, as well. much focus on treasuries, of course, in the wake of all the auctions we had yesterday. the 30 year went fairly well. but the long end of the curve, the yield did move at least off their seven-week lows. and let's bring back james shugg, senior economist at westpac bank. james, let's focus our attention on the united states. yesterday, dismal retail sales news. what's your outlook for the u.s. right now? >> look, our sense, i'm afraid, is that the uk economy -- or the u.s. economy, although there's a lot of talk about so-called green shoots, we're not seeing them anywhere, other than maybe in the housing sector. but even then, the increase in housing sales that we're seeing is really just the stressed sale of foreclosed properties at real

knockout prices. but whether you're looking at the factory sector, autos, employment, all we're seeing is evidence that the u.s. economy is shrinking at a slower pace. there's no evidence yet that we're in a recovery mode. our view is that the economy slank at probably a 3% annualized pace in the second quarter. in the current quarter, we're looking at another shrinkage. maybe only about 1%. but we're not expecting to see a return to positive growth and it will be meek, mild growth of maybe 1% annualized until the fourth quarter of this year. >> what you're telling me is that the u.s. needs another stimulus package? >> no. i am absolutely not saying that. the u.s. economy needs a recession and it's getting one. what the government has been doing is mitigating the depth of the recession and the extent to which unemployment will rise,

and that's appropriate. but the u.s. balances in the economy have to be worked through. that is what this recession will ultimately do. my sense that the current settings are still appropriate to deliver a milder recession than would have been the case. it's still going to be very deep. but i wouldn't be arguing with more fiscal stimulus at this stage. >> james, it's christine here. we had wholesale prices falling to a record 6. 6/2% in june. can japan get out of this deflationary spiral anytime soon? >> our sense is that we may see a positive blip in the jap necessary sales numbers over the next course or two.

and i think i agree with your underlying sentiment. there is a long, ongoing policy in the japanese economy that policymakers will continue to struggle to address. it's a similar situation, frankly, in germany, as well. the saving economies, the current account surplus economies and the ones that being pummeled the most by the current economic conditions, they have relied on the spending of others and in the u.s. and the uk and other account deficit parts of the world, the spending in this part of the world is very soft at the moment. so it's germany and japan that are suffering at the moment. >> james, is there an argument that it's the strength in the currency that will kill the economy? >> yes, absolutely, that's right. and that's one of the reasons we are going to be skeptical of any evidence in the short-term that there's some sort of growth

starting to show throw in ya pan. the currency is one sector, but it's one of a whole range of factors. probably not even the major ones. >> very good talking to you, as always, james. >> thank you. let's talk a bit more about what's happening in china and the g-8 summit in china. joining us now with some analysis is tomo kimoshita and live out of hong kong. before we get to the currency issue, let me ask you about property prices rising for the first time in seven months. is this price recovery anything to talk about it or is it artificial dow to cheap credit

in china? >> well, out of the various segments of the investment that rio asset sector has shown kind of a slowing for the -- until two months ago. but it is very good to know that this secretary is reviving. it is business elements of speculation, but this is based on the real demand. because of the lower interest rates and the government stimulus package and the government policy to make it more affordable for the residents to push chas property, those middle class consumers are purchasing those housing. so i think this is going to really help the economy in the second half of this year and next year. >> so real demand is really going to happen. what follow through impact will it have on understand industry such as steel and i suppose

spend in china? >> sure. i think that that housing industry is already and certainly these materials sector should be positively affect by the reviving housing skres. >> we've certainly seen the effects of the stimulus from the chinese government with that huge rise, 36% rise in auto sales in june. but with the banks pushing so much money into the system, are we stirring up problems further down the line? how much more debt can the banks issue? >> that's a good question. well, i think there is a concern that this increased loan in june or the previous months will channel into the unproductive or speculative sectors. but well, i think that the chinese authorities should continue to maintain the current boost monetary policy. because on one hand, those

projects, government projects need to be steel refiners. that could raise out in the unfinished products. it could lead to wealth even wor worse. as far as the banking sector is concerned. on the other hand, even though we have seen the signs of recovery in china, china's economy is not growing at 8% or 9% at the moment. so i think they need a boost monetary policy going forward. >> it's scott here in the united states. let's turn our attention to that currency debate, that unexpectedly, i guess, cropped up at the g-8. what is the motive right now from the chinese as it pertains to that reserve currency debate? >> well, i think that there is a

concern that the instability of oouts dollar against the other major currencies. as you know, the u.s. dollar has lost ground against the major currencies for the past few months. this is an understandable frustration. but the fact of the matter is there's no big alternative to the u.s. dollar. look at the euro zone. euro zone economies are more severely hit by the global recession than the united states. so i think that china needs to still have these reserve fund into the u.s. equities and treasuries. >> thank you so much for talking to us about china. from china, let's head over to india. ayesha joins us live from mumbai to the india report. >> relatively quiet day from our markets.

it has picked up from the low points of the day, now conclusively holding above that 4100 mark and the rolly has been led by the i.t. space. it has delivered well and has beaten expectations. let me quickly take you through the nitty-gritties of the first quarter numbers. the company has paired down the full year guidance and it's been trading higher because of the numbers, that is the first quarter numbers have indeed beaten specations after the first time aarp and says they will see a recovery only by 2010. we will be joined just a short while a now on the show, but the stock has been sparring to have the entire i.t. space. 5% uptick is what you are seeing and is having a rub on effect. even the cap ic stocks are holding out in trade. the economy economic data that came out in the afternoon, the

numbers have come in quite positive and this has been the fastest growth pace that we have seen since 2008. all in all, i.t. is the key focus. now we wrap it up and back to you, christine. >> thank you very much for that, ayesha. have a good weekend. three separate inquireses are in effect under the world newspaper including that they were hacking into the phones of government ministers and royals. they were allegedly using private investigators to tap the phones. they paid up to $1.6 million to settle three cases out of court. police have decided not to investigate further, but others have indicated they are starting fresh inquiries. a class action by a number of celebrities and politician sess

also a possibility. mimi, there's lots of actor here, but for the viewers on "worldwide exchange," this goes back to a where where a insurance reporter were jailed for hacking into phone mess aenls of aid two years ago. >> at that time, the news of the world a, wait a minute, we didn't know anything about it. this was far more widespread and many more people's phones were hacked, right? >> yes. it's a very interesting, developing situation. and it's a question about kul pure. there's no question as to whether it's illegal.

it is illegal. the question is how wide ved and if it is entirely, you know, the newspapers were talking about thousands of celebrities, politicians being involved. what does that mean for the companies who knew what? how much did they know and how much would they face in terms of costs? now, the police did come out yesterday to say that they weren't planning on taking any further action relating to narrow case. the question is now will there be pressure to look at a broader situation and the police aren't looking at the current case that the guardian is talking about. but separately, i think there doesn't need to be a further police investigation for there to be a large number of people potentially able to bring breach of privacy claims against the newspaper. >> we were talking about what is called a class action lawsuit from a large number of celebrities, potentially. >> from a large number of angry celebrities and angry

politicians and a large number of people who people that they've been misled. this has been a process since 2007. there could be significant reper kug owes a broad scale. not only they have come into aid, but that they would come in as defensing. so that all make it a very interesting -- >> i'm sure it's a story all around because it's got media and politics. >> it will run. >> it will run. thank you so much for coming in. christine. ross, here in asia, we're watching infosys. the country's number two software services exporter reported a 17% jump in first quarter net profit thanks to robust sales in new markets. earnings rose to $314 prime minister million in the april to june quarter beating market

expectations. we'll break down the numbers later on in the second half of "worldwide exchange" with s.gopalakrishna. >> chris teen, the u.s. will kerv smaller company. ceo fritz henderson and new chairman ed whitacre will hold a press korns at 9:00 a.m. new york time. announcement on gm's board and management shake-up are expected next week. vice chairman bop lutz will be staying on in a had new position. aig is seeking to pay about $2 million more in executive bonuses months after an earlier round of payment set off a public firestorm. i a ig is asking president

obama's new compensation czar to approve the bonuses to heed off any criticism. aig saying these are from employment contracts of 2008, but the board ace aig is not really to move forward kwout that information. >> and coming up, china calls for an overhall of global foreign exchange. >> not much impact on the trading day today. the stock market has been sluggish. [ female announcer ] te cleans so completely

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we had china falling yesterday. it did management to get on the agenda in the g-8. france seemed to switch sides. it hasn't had any major impact on the cross rates. if anything, the equity market is soggy, therefore, the yen is up across the board. dollar/yen, 92.71. euro/dollar, down below 1.39. sterling/dollar, 1.6294. not a huge reaction as producer

prices a while ago came in weaker than expected. dollar/swiss franc has nudged up to 1.0890. we are being moved around by the daily risk appetite. other news we're following, the chairman of the swiss national bank says he's confident that ubs will settle its dispute with the u.s. over the need to release the names of 52,000 clients. those comments came ahead of monday's scheduled hearing in miami in which it could force ubs to release the account data. here in asia, we are more

details of the detainees clulg stern hu, allegedly bribed chinese steelmakers during the iron ore price negotiations this year. meantime, this will be a visit with had you and report back today or tomorrow. india's prime minister says his country is trading happily on this matter. >> i just make the point, let's not get engaged in this business of grand standing on the home front. let's get under the practical circumstances. step by step, the approach. warren buffett says he thinks the u.s. government should come up with a second stimulus package. but he says while stimulus is useful, it's not in the economy. >> stimulus was never designed to act fast. people hoped it would start

trickling in. but in general, and this is no criticism of the administration because i believe in the stimulus and i'd probably believe in another one. but they may be overrated in terms of their ability to end the recession fast. >> buffett says the congress in government has a role in influencing the speed of the economic recovery, but there is no silver bullet. he did offer one interesting solution. >> if you want to end the recession as soon as possible, you do nothing to encourage new housing construction. it's very tough on the home builder webs but that's the prescription for getting supply and demand back into balance. >> mr. buffett says consumer spending at berkshire's retail companies has been soft in recent months. he thinks a strong recover will happen over a period of years and he'll know it when beshlg shire pks up.

coming up, robert zoellick gets. it is expected to widen in may for a third month as higher oil prices boosted the bill for imports. we will brick you analysis later in the program. the world'nnouncer) leading companies

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i'm christine tan. in asia, india's number two i.t. company beats expectations and raises its full year profit forecast. >> and i'm ross westgate. they said they wouldn't be in the end they did, the g-8 debated the currency question after france supported china's request for change. and i'm scott wapner in the u.s. the gm will emerge today as a leaner company, but under the government's thumb. if you're just joining us in the united states, welcome to the start of your global trading day with "worldwide exchange," broadcast live from the u.s., asia and europe. let's take a look at where this trading day is setting up right now with a look at futures. we've been below fair value through much of this early morning. dow futures are down by about 22

points. nasdaq futures are off by 4.75 points and then the s&p 500 is below fair value at this hour. coming off, you know, pretty dismal sales numbers that we got yesterday. bund yield, 3.30%. i don't believe we have any auctions today after a fairly busy week on that. and for the most part, demand has been a rather strong. so that's giving a bit of a lift to treasuries there as you take a look at the ten-year at 3.35%. let's get strategy now with james bevan with ccla management. and james, i sort of set the table for what the united states has been dealing with over the past few trading sessions. are you bullish or bearish about the u.s. right now. >> i look at the u.s. preoccupation with the employment numbers last week and i think they are mesmerized by what happened in the past. if i look forward, both in terms of the current indicators and

more importantly in terms of the lead indicators, i'm reasonably bullish. i think we will see a step up and i'm bullish about the market prospects from here. >> do you think we'll see those come out this earnings season or next quarter? >> no. next quarter. and the reason is we're now going through the pain of reductions in spending across the board, both dorcorporation intentions and consumer payroll. what we are seeing is a material lining. >> at the moment, earnings have been boosted because we had a reduction in costs, sort of an inventory rebuild. it's top line growth which is more important, isn't it, for

sustainable earnings. >> if you would like. it is a v-shaped recovery we're talking about. what we're saying is that central banks and other authorities in the public sector have primed the pump. we have begun to see economic recovery coming through and i think there is now efficient forward-looking demand as evidenced by the indicators to believe there will be positive demand and underlying demand not followed through by countries. so the gearing of that leads to significant increases in profit and profitability. >> james, this is christine. we've been talking about the profit sector. when does this good news start to filter through to the domestic consumer? >> i think we are probably looking at a q-4 number in terms of a pick up in consumer confidence followed by much more reliable evidence in q1 of 2010. if you subscribe to the thesis, at what stage do you support the market and what sort of stock

picks are you looking for? and i think what's interesting is as a result of the recent markdown in prices, there are a large number of cash flow yields, high dividend yields and decent balance sheets and now is the right moment to commit money. >> james, it's scott again in the u.s. what do you like? what sort of allocation are you recommending right now if you take a look between stocks and bonds and commodities, as well, which obviously have gotten a lot of play at late? >> i'm not bullish on commodities. i'm more interested in playing commodities on stocks. that would be my preferred way of playing the cycle. in credit debt, spreads remain too high and i think the prices remain too high and yields remain too low. so i am overweight credit and overweight equities. but overweight equities insofar

as i can identify countries have decent long-term yields. and then i think prices are still a steal. >> james, let me jump in. let me ask you about all this talk about china, it's good that you talk about what's happening in the u.s. and in the developed world. what about china? we did get news of corporate property prices recovering. yesterday we did get news of auto sales improving, as well. what's your sense of whether china can pull the rest of the wool out of the recovery? >> i think the chinese data is rather b difficult. i find the conventions of chinese accounting to be markedly different than that of developing countries. i think that what evidence i have says that there is strong underlying long-term growth, no surprises there, and this is a two decade story rather than a

flash in the pan one year of quick wonder. i think the more interesting story relates to some of the opportunities that now sit with japan. so i would be bullish in companies like tekeda. i would also say that there are interesting opportunities in the bits that asia does best. so strong taiwan he's semi conductor. those are the companies that i think would do very well. the areas where i'm much more concerned is areas where there has been a strong bull view taken, share prices have been pushed up, i would see that in some of the korean shipping aspect companies and some of the securities companies in taiwan. so very much a selective regional story rather than an absolute bull case. >> i just want to rewind. you mentioned xstrata as your play on resources. >> i could name xstrata. >> i would to get your view. obviously, xstrata has been

trying to get involved in angelo. >> it's a very interesting sector. >> how is that m&a feeding into your theory or not? >> if i look at the stock prices relative to the long-term reserve, i still see shares that discount a gloomy outlook. and that is the m&a opportunity, if you like, i would see as the cherry on the cake. >> you wouldn't worry if xstrata were successful? normally the acquiring company gets hit, doesn't it? >> yeah. i think what is important is that xstrata doesn't overpay. i think they have very savvy management and i think they're very capable. i think if they get angelo at a reasonable price, they would have gotten a plum deal. however, i think angelo has reorganized itself and is looking at a much better return for its shareholders.

>> james, it's scott in the united states. just in an effort of full disclosure, in terms of engines strata or kiran, do you or your company have position in those stocks? >> as a company, we invest in those stocks. i am a stock rather than a stock picker. that's why i'm permitted to come on here and talk about these and not discuss that. fair enough. we've had a lot of discussion this morning about that debate. that the actually wasn't supposed to happen at the g-8 about the currency. in fact, it did come up. and there are comments now moving from german chancellor angela merkel who said that china's proposal on setting up a global reserve currency has not been an official topic at the summit in any artificial global currency is not a relevant

concept any time soon. that is what the german chancellor is saying. she goes on to say i can't remember that the issue has been addressed here in official parts of the meeting. but nonetheless, that is getting a lot of chatter today about the chinese bringing that issue up and the french chiming in, as well. it's a story we'll continue to follow here on "worldwide exchange." still to come, durptsy debate found its unexpectedly on the g-8 agenda. we'll assess what the leaders have achieved in all of this out in italy. plus, infosys posts a loss in the first quarter but how is the group faring against its getters?

at the g-8, china's call for an overhaul of the currency system as leaders gather for the final day in italy, a chinese state counsel didn't directly name the dollar, but has discussed it. although german chancellor angela merkel says it has not been an official topic. >> translator: raised as an issue interviewsing an artificial currency is not of practical relevance, at least not in the immediate future. >> but france has stressed the importance of hold ago currency debate .made the case for a

multi monetary system. britain expressed more caution. he says replacing the dollar could hamper any global economic recovery. to talk more about that and what else has been going on at the g-8, james bevan at ccla investigate management. aslan, let's start with you. i want to look at the g-8 overall. has this been a useful event or just a big talking shop? >> i think it's been a useful event for mr. berlusconi's domestic purposes. but overall, this is conclusive proof that the g-8 is past its sell by date. upcoming with the the g-20 summit on the 24th and 25th of september in pittsburgh. frankly, i've not seen anything coming out of this so far which i feel is worth the effort that has been put into it.

>> alistair, where do you stand currently on a kurnltsy debate? >> i would say to cnbc second pore just yesterday when i was in singapore is that frankly it's an artificial debate about an artificial currency. reserve currencies change periodically because market forces change them. in order to create an artificial currency, it would have to be an artificial system. i can't imagine why the u.s. or any other country would voluntarily give those advantages up. irng this debate is completely oto at this time. >> james, do you go along with that? >> i think what we have seen in the g-8 debate is a reminder of what occurs in the global currency system. we have china with enormous dollar investment reserves and

has an interest in keeping the dollar where it is. we have europe saying, we like stability, but they have a complicated single currency block. so all we have heard is the rehearsal of the usual arguments. >> alistair, it's pointless to bring up such an issue, why do you think china is bringing this topic up? are they simply trying to flex their muscles on the world stage? >> i think it has a lot more to do with the ongoing discussion between the chinese and the u.s. on the value of the dollar and chinese concerns, not with standing with continued public commitment to a strong dollar policy from the u.s. administration and, of course, from the fed. the truth of the matter is i don't think either the fed or indeed the u.s. trebry would object to some slippage in the value of the dollar relative to its trade value today and perhaps even a little bit of inflation creeping into the u.s. system.

>> alistair, hi. it's james here in london. ooid i'd be interested to ask you, what do you think is china's sensitivity to devalue the foreign currency reserve? >> i think they're very sensitive to that and i think that's why one reason why we're not going to see china make any sudden moves away from a dollar investment bill so i believe that may be up to 75% of their reserves. >> alistair, you dismissed anything from this particular meeting. in pittsburgh, what should we be looking for at the g-20? >> well, there's going to be a lot more focus on pittsburgh nearer the time. unfortunately, it happens to occur just nine days after the an serioniversary by the collap

lehman brothers. i think we'll see a lot from the press on where we've been, where we got to and where we're headed. so my thought is that the read at pattis is foe to be focused on that. >> we may see markets by that time looking for some terms in terms of exit strategy. and there is a clear division of view between u.s. and the u.s. on whether we should be getting into exit strategy planning or not with the u.s. very strongly against and the europeans rather wanting to go down that track. differences of view in pittsburgh could trigger a bit of negative market sentiment. >> i'm shocked to hear that you

think we would be focused on the collapse of lehman brothers. i had a meeting on it yen. thank you so much. general motors, meantime, will remerge from bankruptcy today as a new and smaller company. gm spent 40 days in chapter 11. ceo fritz henderson and new chairman ed whitacre will hold a new preference at 9:00 a.m. gm time. management's board is expected next week. >> the chairman of swiss national bank says he's confidence ubs will settle its dispute with the united states over calls to release the naems ooh 52,000 secret clients. the comments have come to the general newspaper that handles that and they come ahead of a

scheduled court hears in miami on monday. he said his firm's recent capital hike shows there's light at the end of the tunnel of this bank. >> ross, this is christine in asia. according to the chinese securities channel, the detainees, clus including stern hu, allegedly robbed iron oremakers this year. meanwhile, australian officials will soon conduct a consular visit with hu and report back today on owe or tomorrow. australia's prime minister kevin rud says his company is trading happily on this matter. >> i just make a point, let's not get engaged in this business of political grand standing on the home front. let's get into the practical point or supporting australians on this front.

whether it's video he, or blogs, catch us on cnbc.com. and we would love to hear from you. it's a friday. do you think china can pull the rest of the wool out of the session? d#: 1-800-345-25 "i'm rethinking everytng...

tdd#: 1-800-345-50 including who i trust to look after my money." tdd#: 1-800-345-2550 tdd#: 1-800-345-25 "the dust might be settling... d#: 1-800-345-2550 that'sreat, but i'm not." tdd#: 1-800-5-2550 tdd#: 1-800-345-2550 "i gue i'm just done with doinnothing, you know?" tdd#: 1-800-342550 td: 1-800-345-2550 "oh, i'mot thinking about movingy money. d#: 1-800-345-2550 i am moving it

ahead of the u.s. open later, we'll bring you up to speed with where we are on the global markets. chloe has the details in singapore, becky is in london. >> thanks, ross. the ftse 100 is moving lower to finish off the week after a fairly positive session yesterday. today, we are losing a bit of ground, just down about 50 points or so, about .4%. a couple of stories to watch out for this morning. we should not many of the basic resources stocks today. we should point out chinese security officials have accused four rio staff of bribery and negotiations. rio says they're not aware of any charges have been brought yet. in the home building sector, staying in line with other

retailers in the uk this week, they see positive signs coming through in the housing sector. let's cross out now to patricia szarvas in frankfurt for a bit more on the german markets today. >> thanks very much, indeed. ra beck kwab we are still down about 0.3%. only about 19 million shares have traded. so if you see the actual stocks moving upwards, keep that in mind. the moves might be exaggerated. commerzbank outperforming up about 2.3%. getting an upgrade this morning from hold. deutsche bank, basf and s. amt b. at the moment, the main gainers. watch out for infenon. they are capital more than 700 million euros and we're going to

take a stake in infin job at the moment. >> despite some positive end case in front, the average forecast was a done. alcatel-lucent is. 9% of its workforce the job cuts would affect. the company is due to have a meeting today with the staff which it doesn't doesn't want to confirm. also trading lower, renault reporting that 2010 will be as difficult as 2009. carlos is not expecting any charge performance for the fist quarter and even then. let's look a look history.

and the boor inest arerses will to see if we could maybe see a dumb dip. not that much direct except for the greater china region because some of those banks in hong kong and shenzhen seeing skyrocketing demand. the australian market was one of the outperform hes. and there was a chinese executive from shogong steel who was arrested along with the rio tinto executives. according to the latest services, the employee is under investigation for having leaked iron ore hasn't let me send it over to do happen cot.

and it's happy friday. >> thanks so much. u.s. inesters have been tlad tl anyway. at 8:30 wk june import prices will be released, expecteded to jump by 2.3%. 9:55 a.m., the first measure of consumer sentiment for july will be out with analysts looking for a reading of 70 kb down nearly a point from june. treasury secretary tim geithner will testify before a join hearing of the house agriculture and financial services committee at 10:00 a.m. new york time on the oh ma'am ma. geithner, by the way, will be out next week to talk about regulation of otc. today's data will focus on production and supply and demand

for grain, cotton and oil seeds. that is your global stock watch, ross. still to come, the ceo of infosys wille with us. so, katy kicked off thconference call... but we missed the first ha trying to download the doc which turn out to be the old-new ... rather than the new-new docs en bobialed in from home and his. dog starts barking. so jen jumped in wi her "two cents"... which katy misd because she was buying ses online. and then i hit mut.. to tk timenes with my team. getting lots of dirty looks througthe phone in the process. - overl... - a great call. - eat call. yeah. len more at cisco.com/newwa [ dog barks ]

it is 30 minutes past the hour. here are the top business stories from around the world this morning. in the u.s., after 40 days .40 nights, a new general motors will ee meernlg from bankruptcy today as a leaner company, but under the government's thumb. >> and in europe, they had they wouldn't, but in the end they did. the g-8 did debate the reserve currency question after france supported china's call for change. and here in asia, in india's number two i.t. services company, infosys, beats full year expectations and raises its full year profit forecast. let's take a look at where this final trading day of the week is set up. we eked out a gain in the united states yesterday after dismal retail sales numbers are out. right now, we are below fair value across the board.

we had to get to plus one point on the dow. we're 35 below, so you're looking at 36 or so below the fair value. it's four hours before the open, though. nasdaq and s&p 500 look slightly below fair value, as well. plenty of focus on the treasury market this morning with the auctions we've been seeing and the ten-year yield will begin this day at 3.35%. ro ross. they're peaker today and slightly slurgish for the session. now two-and-a-half hours in now, we're not off the session lows, just off them further for the uk and the french market. the xhi down. slightly sluggish equities means the yen has inched higher and the dollar is firmer against the euro and sterling. dollar/yen, 92.66.

euro dollar, low 1.39. sterling/dollar, 1.6272 and the sterling is weaker than the investors. in the end, the nikkei 225 finished flat. the kospi down 0. %. the shanghai market down 0.3%. ipos are in focus in this particular market. the bombay sensex now trading lower down 0.7%. oil seems to be focused, continuing its decline. and brend is trading lower, as billion. scott. >> christine, joining us now for market strategy is leo tillman, the author of "financial door

wantism." james bevan sticks with us, as well. leo, what's your view right now in the u.s. markets in the wake of what i mentioned? press pret dismal resail sales numbers yesterday. absolutely. things seem to be stabilizing, both with respect to the economy and the market. but the uncertainty continues, both economic and otherwise. so in terms of equity markets, i just cannot see that they fully compensate investors for the risks ahead and the uncertainty ahead, but they certainly wait to deliver alpha inand he sxrr returns in the fixd income markets that tend to be difficult. if we think thien na and some of it is other ee americaing markets are performing better than wr in the united states, do you think it's positive for the

markets to help us? i'm stickily to the theory of decoupling. it turned to be highly coordinated. but i think the emerging markets will start overperforming and opportunities definitely present themselves there. >> go along with that, james. >> well, i'd be quite interested in trying to narrow down the focus on emerging markets. because i look at banks in eastern europe, i look at some of the manufacturer and securities companies in korea and i see valuations which i think look rather more stressed than the u.s. companies despite the fact that the u.s. economic recovery is in global terms very uncertain. what's your view in terms of the detail of the emerging markets? well, identities again region my voif is on how to european

models. so my view is more on risk adjustment returns than on pure valuations. and in that sense, emerging markets do present the opportunities. but for instance, eastern europe is still highly uncertain in terms of how it is going to resolve some of the employment and financial issues. so i would be particularly cautious with respect to some of these eastern european banks and some of the other financial institutions. >> so leo, christine here. so if your role is to advise companies, what are you telling your companies about how to strategize in the second half of the year? >> well, i believe that the growth will continue to be fairly anemic, both in the u.s. and in europe. and the difficulty of this environment is that it's difficult to the scenario and bet your entire portfolio or business on that given how high the uncertainty is.

so instead of focusing on identification of these scenarios and positioning for them, the focus actually across the board is on making companies more dynamic so that you bet on certain scenario realizeling in the near term, but your company is capable of changing course quickly. company being in the investment process or the balance sheet. and that is an entirely different proposition in terms of how companies think and operate than what we've seen in previous market environments. >> and just to get sort of a final thought from you, you mentioned earlier in the program that after a high dividend yield that are worth investing at the moment. what would change your mind about that? >> well, i think that if there was a radical change in global currencies, then we would have to rethink what one would believe to be the real sustainable cash flows. in other words, i see companies

that broadly know what they're doing, broadly have control over their destinies. if you put the currency mix into down, then the xats for these companies to return themselves is troublesome. the other thing is about the reliability of cash flows for pharmaceuticals. any change in the global ek nigz and the intellectual property right becomes a real issue. and i think it's moving in the right direction so that was reversed and genl, those betts are off. >> james, good to have you on today. thank you. >> that was 1y5i78s bevan of ccla investments. joe, you're going to stick around so we'll get back to you a little bit later. china has called for an otherhaul of the reserve currency system as leader have gathered for the final day of the g-8 summit.

the council says they didn't directly address the dollar. angela merkel says china's proposal says this has not been a target at this point. judges what china interviews, perhaps not a leader -- although britain expressed more caution, prime minister gordon brown says replacing the dollar could hamper any global economic recovery. let's get more on that. steve sedgwick is once again on the ground. and steve, there's said to be mixed views of how effective this g-8 has not or hasn't been. >> let's address that first issue first of all that you mentioned about the dollar. according to gordon brown, there was no real debate about the role of the dollar. it simply was not on the agenda this time around. and with hu jintao not here, it was unlikely it was going to

engage more traction. the chinese have $2 trillion worth of reserves and 70% of that is stuck in the dollar, whether they like it or not, for the short-term. this wasn't just a g-8 conference. it was g-el plus g-35 and today, the key development issues has brought in a whole load of countries between the imf, the australian countries. was it successful or not? that remains to be seen. they al pretty much came up with the same saying in terms of -- >> well, no, that we have goot a process. we have pittsburgh in september and we have this neeth, as well. and we have to key the dialogue going on all of these issues.

yes, there's disappointment that the developing nations didn't sign up to firm commitments on climate. we haven't moved overtly forward with free trade calls or got a consensus on stimulus, as well. the fact remains, what is the alternative for this kind of conference? as one of our guests said, well, they could teleconference. well, you can't do that. you need eyeball to eyeball otherwise nothing will ever get changed. anyways, back to you guys in the studios. >> steve, thanks so much. still to come, infosys is about to release fourth quarter relates results. take a look at where u.s. futures are shaping up on this final trading y of the week.

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this is the official card. of the world's largest airne welcome back to "worldwide exchange." on the earnings front, infosys reported better than expected profit for its fiscal first quarter and raised its full year forecast on hopes of a pick up in outsourcing demand next year. joining us live from bungalor is the ceo of infosys.

i want to tell our viewers to please bear with us because of the slight delay we're having in transmission. mr. gopalakrishna, what are you doing right in this challenging environment? >> you know, you have to manage to hold on to your customers. you have to make sure that you are flexible, you are delivering to the value they expect. it's about retaining your relationships and retaining your customers. and executing flawlessly. >> give us the guidance for the next few quarters. where are you seeing a pick up in business coming most from? >> when we discuss with our clients most of them, we do a survey and most of them are telling us that recovery will be probably sometime beyond march 2010, probably closer to mid 2010. when we look at analyst forecasts, the technology

analysts, they're saying that this year i.t. spending will be probably 6% to 11% down and they are expecting a better year next year. so, you know, we have factored all this in and we said that for the remainder of the year, we are expecting no growth, you know, flat. and then we will look at it next year. >> s.gopalakrishnan, can he tell me some of the units where there must be some opportunity, this is an environment where market share might be the way to achieve growth. so how can you increase your market share? are there other opportunities to buy smaller companies and bulk up a little bit at cheaper prices? >> so we don't want to, you know, use price as a competitive reference. we believe that, you know, our value proposition must be

strong, our relationship must be strong, customers must want to work with a strategic partner. of course, we are flexible on pricing at this point. but having said that, we don't want to compete on price. that is a no-win situation because somebody will always be cheaper than you. >> this is scott wapner in the united states. i'm curious, what are you hearing from your u.s. customers right now? >> u.s. companies have reacted very acutely. they've been aggressive in cutting costs, in renegotiating contracts, they've been aggressive in ownership changes. so when i look at all cross the world, u.s. has reacted faster than anyone else and the rest of

the world is probably going to hag. of course, you know, india and join na are still growing. oois companies reacted much faster. >> it's always if to have his you, christian there are allegations that the world news was hacking into the phones of celebrities and royals. the paper reportedly paid out around 1.6 million to settle cases out of court. the director of public prosecutions, a parliamentary commit and the complaints commission have all indicated they will start new inquiries. a class action by a number of celebrities and politicians is also a possibility. ben fenton is a chief media

correspondent at the financial times. ben, just to remind you, this goes back to a case where a new of the world vrts and investigating would be investigated for tapping. what is your take on this stor.? >> well, it could be a potentially dangerous story for news international. one can question whether the public is that naive whether it thinks investigator journalists always have clean hands when they report stories. but you know, i think the more serious question will surround next week's hearing of the harlmentry, the house of commons on culture, media and ports which is intending to called the previous chairman of the news international and now is president of the dow jones in new york because he gave evidence to the committee at the

initial inquiry into this affair where he said that these were isolated understands involving one reporter and one private investigator. the guardian has made allegations that suggests, as you see, this could be a wider thing. and so possibly we'll have questions on that from the can select committee. i can they're quite unhappy about the way they think things have panned out. >> what is the evacuation at the moment of nuts corp.? what are they taking unofficially, anything? they have said that the confidentiality agreements prevent them from talking about any court cause is that they may be involved with. you know, though they haven't

really saying anything at all that can be using by anybody else to say whether or not whether or not of done the things the gau gaud fan haen mentioned sghp up next, we take a look at the a day instead. .

let's get a look now to the u.s. trading day ahead. leo tillman, the drum beat seems to be getting louder here in the united states for a second stimulus plan. just yesterday, warren buffett said one may be needed. what are your thoughts on whether we need a second stimulus, although the first one has barely kicked in? >> i personally do not believe we need a second wave of stimulus. the first one served as important role. in certain ways, it stabilized

the economy. but now, we cannot substitute long-term growth and long-term innovation in the economy with government spending. it's not going to produce anything other than short-term benefits. >> how much of a concern is, then, inflation in your mind? >> i think it's a significant long-term concern. but today's import prices are not going to anything in this regard. it's up to the fed trough move accommodation as quickly as possible and it's not going to be an easy task given the amount of quantitative easing that is in the system to reign in inflation very quickly once we recover. >> leo, this is christine here. what sort of pricing power do they have in this environment right now? i think it's muted. companies realize that and they're going to try to minimize expenses and change business models, instead.

>> and leo, look, we've got michigan consumer confidence out later. are we getting to the stage where after this big jump in consumer confidence, are you concerned that consumers actually will look at the recovery and consumer confidence will continue to tighten wallets? >> consumer confidence did not necessarily mean spending and growth. consumer confidence is not going to result in significant increases in consumer spending, as we saw from retail sales numbers yesterday. >> leo, we will leave it there, leo tillman. take a quick look at futures

here. we said we are below fair value across the board today after bleak retail sales information was out yesterday, about 45 points on the dow, nas dax and s&p 500. that's it for today's show. i'm cot wapner in the u.s. >> i'm ross westgate in europe. >> i'm christine tan in asia. thank you for your company on "worldwide exchange." 9p

good morning. general motors, start your engines. a new leaner automaker ready to emerge from bankruptcy today. a cloudy business forecast from sun valley. the biggest and brightest names in corporate america gathering in the mountains of idaho. the likes of warren buffett, google's eric schmidt both speaking out to cnbc. and the world according to the g-8 global leaders wrapping up that annual summit today as "squawk box" begins right now. good morning, everybody. welcome to "squawk box" right here on cnbc. i'm becky quick along with joe kernen and carl quintanilla. thne