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tv   Worldwide Exchange  CNBC  November 5, 2012 4:00am-6:00am EST

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. welcome to "worldwide exchang exchange". frb and mitt rom if i make one mad dash for support. >> meanwhile chinese communist party is reportedly probing allegations that wen's family has amassed a massive fortune. and hsbc reveals it's setting aside $1.5 billion sending shares lower.
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kicking off a big week here. the u.s. allegatielections and redskins lost. >> we will mention the redskins indicator, but it's true whether the u.s., china, greece, eurozone itself would make for a big week, but combine them all together, in fact it's no wonder that markets are a little unnerved. >> coming up today, plenty to get through. we're at singapore where hundyui shares are down. >> and here in london, uk pmi data will be out. the question whether it will follow an upward trend.
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>> and china preparing for the once in a decade political handover. we'll take a lower look at the new leadership. >> when the redskins win or lose, it has predicted the top winner since 1980. there has been a notable expossession of 1984. >> although gore did win the popular vote but not the electoral college. >> in 2000. >> that's right. >> the all-important football -- i should say american football indicator here. it points towards a romney victory. >> besides all that, plenty corporate news.
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hsbcs has set aside an additional $800 million in the third quarter to deal with the u.s. anti-money laundering probe. that brings the total to 1.5 billion. the banks also had to set aside more than $250 million to cover british customer claims. pretax profit of $3.5 billion and will hlower than the same p in 2011. japan's biggest automaker has revved up its profit forecasts to close at $10 billion. toyota is the first and possibly only firm among the top three carmakers to raise its outlook for the current fiscal year. it noted strong sales in north america and asia and toyota posted a better than expected net profit of $3.2 billion in the third quarter. that was more than triple the amount it made in the same period a year earlier. more on that story in just a
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bit. and 12 million customers are still without power in new york, new jersey and connecticut a week after hurricane sandy struck. and a cold snap is setting in to the region and nor'easter is forecast for mid week. more fuel facilities are coming back on on line. hess has restored several terminals. governor christie has imposed an odd/even rule, this is when drivers could get gas to alleviate over the extremely long fuel lines. on the eve of the u.s. elections, the race for the white house couldn't be any teeter. the final "wall street journal" poll of likely voters shows president obama leading mitt rom any by just one percentage point, 48% to 47% margin. polls in many battleground states remain too close to call.
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a running average of all national polls by real clear politics has the two men between 0.2% of each other. at the same time, romney may not get to label china a currency manipulator if he becomes president because the power to do so doesn't lie with the commander in chief, but with the u.s. treasury secretary. analysts warn that provoking beijing could put bilateral trade at risk. joining us for more, chairman of the asian pacific council at the american chambers of down. steven, are you fearful if we had a president romney because of his threats against china? >> no, the rhetoric is more than it should be, but that's what we
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expect in the business community. we generally move forward in terms of our economic and trade relations with china be it a democratic administration or republican administration. the message we would give to a second obama term or a first romney term will be the same when it comes to china which is tip to focus on bilateral and multilateral to address trade issues. >> are you comfortable that's going to happen? sg yes. if you look at all much of the avenues we have to deal with china, there's the jcct, the joint commission on commerce and trade, the strategic and economic dialogue, that was started in the bush administration, continued in the obama administration. you have all the remedies under the wto such as the latest tire case that was taken. so there's a lot of remedies to ensure that there's a level playing field between the u.s. and china when it comes to u.s. business and that's what we urge to continue and we believe would
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continue. >> steve, when it comes to banks, this is one area in particular where u.s. companies are really looking to make inroads. but they hold less than 2% of the total assets. do you push to bond derivatives or just expand more branches into china? >> well, in terms of the overall trade relationship, what we're really focused on now from an asia perspective is the transpacific partnership. that would lead to a free trade area of asia pacific, we would hope be the framework for it. china is not included in those initial negotiations, but that's where we're focused right now. and the focus are not these at the border issues, but across the border and behind the border trade issues. it's market access, it's licensing, an unlevel playing field when it comes to domestic
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companies that u.s. companies have to compete with. so that's where we're really focused. we're hoping that can be a framework and then those issues you mentioned in china we can work on. >> and from the point of view of promoting that initiative, which candidate will lead to better relations, perhaps make that path easier and more open and frankly coming on online quicker for companies interested in pursuing exposure to china? >> what we're trying to do is make sure that either party would do that and in-the u.s. business communities has been successful. i also think we've made progress in taking trade and make it less of a partisan issue and more of a bipartisan issue. if you look at what happened president bush's administration negotiated trade agreement. president obama signed that into law. and that's an example where you have trade becoming an engine for growth in the u.s. and not being a democratic or
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republican. so what we're really trying to do is make the case in economic terms and not in political terms. we've had some success, but as you see with all the rhetoric in this campaign especially when it comes to china, we've got a lot of work to do. >> romney's comments about china being a currency manipulatomani did it promote concern? >> if you look back at every presidential campaign and look at what president clinton said in his campaign in '92 and it was president clinton who had the wto extension agreement reached with china. so we really don't focus what's said in the silly season of politics and campaigns, but we really want to get to what message we want to deliver to the incoming administration, be it a new obama administration because you'll have a lot of new trade people coming in respect possibly new cabinet secretaries, or a whole slew of new officials coming in in a romney administration. so we don't focus on the
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rhetoric because we expect it and we look forward to what we can do after the election. >> steve, thanks very much for your time. it will be a fascinating couple of days for sure. it certainly will be. here we are just over an hour into the trading day. we're weighted on to the down side as you can see. plenty of causing 8:1 advances being outpaced by decliners right now. gains for the european stocks, up about a%. this morning we are down, we'll switch it over, cac and ftse down three quarters. 1.2% lower for the ibex. we have just seen yields in spain nudging up this morning. 5.73%. treasury yields are lower. dollar index up near a two month high. euro-dollar 1.2794. that's down there at a two month low for the euro against the
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yen. aussie dollar pretty steady. sterling-dollar just below 1.6, yet we have services pmi coming out in under 20 minutes. we thought we might get additional qe from the bank of england later this week, maybe we won't, but that number will be key, as well. so that's where we stand in in european session. what's happening in asia today? >> there was lackluster trade kicking off the week. the shanghai composite closed down 0.1%. gold members led the losses but coal miners surged on hopes of rising demand. the hang seng eased half a% dragged lower by commodity major, but fox con international
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surged over 30% after citigroup's upgrade for short covering. prudential's hong kong shares were suspended after a trade of $590 million. in the nikkei, lost half a percent. technology shares lost ground with sharp and panasonic tumbling 7% and 6% respectively. but automakers gained ground ahead of toyota earnings. south korean makers took a beating. hyundai and kia both dropped around 7% after they admitted they overstated fuel economy for some cars sold in the u.s. upbeat retail sales data. miners led support. austral australia's federal court announced a landmark judgment against f and p for misleading ratings during the 2008 financial crisis. sensex still on the move lower by about 0.3% at the moment.
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ross, back to you. >> beingokay, thank you. >> and now is a credit explosion in asia a ticking time bomb that could spark the next global financial crisis? on report by capital economics positive it posits just that. can the u.s. avoid a repeat? we want to hear your thoughts. you can e-mail or tweet us. >> and also with a day to go before americans head to the poll, all eyes are on the united states. more analysis, what it means foin investors when we come back.
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china communist party reportedly launched a probe in to the wen family. the investigation comes at wen's own request following claims made by the "new york times."
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eunice is in beijing with the latest. >> i just came back from a regular government press briefing and i asked specifically about that report which has cited unnamed sources saying that there could be a possible inquiry into wen's wealth. now, what the government said was of course nothing because they wouldn't comment on something like that just because they are so sensitive about the finances of their top leaders. in fact whenever we start talking about this topic, we've been blacked out. one of the things is that the timing of the report is really quite interesting because it comes just days before the leadership transition. so we could be seeing a possibly the party saying it wants to clean up their affairs. but whether anyone believes that is another story all together.
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government affairs and even this leadership transition have been trouted in mystery. what we know is that most people believe it's going to be ping, currently the vice president. son of a revolutionary leader, he is a man who many say is very well educated and part of the elite. however, he also has suffered quite a bit just like many of his generation because of the cultural revolution. ping has been tuning pianos for 30 years. but he may have been performing on one if not know a painful period. a talented music student during the cultural revolution, jim was september to the countryside like millions of others here and forced to oil on on factory lines rather than pursue his
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dream. the pea iano was a symbol of th west and was for bedden. he says i thought about what high life could have been, but that was not realistic. the next generation of chinese leaders lived through the cultural revolution and just like for jim, that tumultuous timed had an impact on their lives. many here hope that shared experience will influence the new administration and make them more sensitive to the people's needs. ping is the son of a revolutionary leader, she grew up a member of the educated elite, a quiet man who preferred to lead the limelight to his popular folk singer wife. his presumed number two trained as a lawyer before becoming china's youngest vench governgo vice premiere. but both men suffered. >> these new leaders as a
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generation were sent to the countryside, so they're very pragmatic. i would they would be able to communicate with ordinary people. >> ordinary people like jim, though, don't feel in tune with their leaders despite the great economic achievements of the past decade, the country is not a freer place. the leadership is cloaked in see questions city, even as more citizens complain about official corruption and the widening wealth gap on the previously restricted chinese internet. >> we thought ten years ago that tau might be more open and reform more and it turned out that he was quite when it came to politics at least quite conservative. >> little is known about his policy leadings, but his ability to work with various factiofact
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could serve him well. pressure is on to overhaul the political systems or risk social upheaval. like the kind in jim's past. >> thinking back now, i feel regret. >> the question is whether china's new leaders will determine if reforms prevent or maintain harmony. so future generations can fulfill their own creewn dreams. >> contrary to what many believe, it's not a monolithic organization. it has competing camps of liberals and conservatives as well as security apparatus in the military and she has really been able to reach across different lines and be able to mediate the some of these camps. the question is just how successfully he's going to be able to mediate these competing facts in order to push through
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policies over the next ten years. kelly, over to you. >> eunice, thank you for that. sticking with china's economy for a second, we did get mixed news on the strength of its domestic economy. private survey of china's services sector slipped in october to a reading of 53.5, down about a point from the month before. over the weekend, china's special services gauge which includes the construction sector picked up from a two year low in september. analysts say the data shows china's growth slowdown may be bottoming out. over to india now where the picture is more clear. service sector growth slowed down in october to its slowest in six months. europe's recession and america's sluggish economy played a large role in cutting demand for india's services. the sector makes up 60% of the country's economic output. >> ministers and central bankers are meeting in mexico day one of the summit saw a focus in the debt woes and weighing's fiscal cliff. ministers pushed the u.s. to act
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decisively to solve the debt ceiling impasse calling it the biggest short term threat to global growth. also a key week for greece. today the government will present either new austerity package to parliament. yesterday they warned the country would be forced out unless the new spending cuts are passed. >> the european central bank is investigating whether they've broken their own lending rules. the central bank may have accepted t-bills as collateral that was ineligible. that means those banks may have to find a further 16 billion euros to put up as what the rco. and sort of a top a level rating that they may or may not have deserved.
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significant difference. >> they have to come up with another 2 billion will be stretching it. >> although the auctions have been going off better, but if t-bill isn't considered top a collateral, what is? >> good point. still to come, the imf says it would be the fastest growing continent over the next five years. one fund manager says investing now will pay rich returns. >> find out just what we're talking about a little bit later in the show. coming up next, we'll also get the latest read on the uk economy, services data for october. it's due just after the break.
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down to the wire with just one day to go before the election, president obama, mitt romney make one last mad dash to rally supporters. polls show them in a virtual tie. >> china's communist party is reportedly probing allegations that wen's family has amassed a giant fortune after wen himself asked for an investigation. >> and hsbc reveals it's setting aside another $1.5 billion to cover a fine related to money
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laundering sending shares lower. they also had an extra amount set aside for ppi charges, as well. service sector pmis, 50.6. lower than the expected 52. lowest since december 2010. the business expectations pm i-65.3, lowest since june. and the composite pmi output index as a result down. growing at the slowest paces in almost two years and on tptimis waning, as well. so combine that with the manufacturing data last week, basically contrasts with the economic k3 panks in the third quarter and also fairly recent upbeat retail figures, as well.
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we have a bank of england meeting this week. the judgment on whether we get more qe is finally balanced. alan clark is economist and joins us now. alan, what does this do? how does this will data put into the mix of the qe discussion this week? >> a real disappointment. you thought it would have done a bit better. we'll have a lot of pay back for the strength in q3. i don't think it change it is. people could say we could do more, but what's the point. does it really do us much good. pmi reading sub 50 with qe -- >> is the government going to be outvoted this week? his comments have seen to be pinned more towards more rather than lessor not doing anything. charlie bean came out and said i can't see the point of it.
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>> one thing this economy isn't suffering from is too much growth. so it's not -- the fls is the weapon of choice right now. >> it's a bit of a struggle to figure out what the message is here for the uk economy. you have the employment set of figures which has been stronger than the gdp figure until the gdp figures showed a rebound in the third quarter which now the composite pmi might be fleeting and it points towards weaker growth ahead. >> you have to strip out all of the noise. for my money, we've been growing at about a quarter percent quarter on quarter so not brilliant, but not a disaster
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either. i think they will start to cool off here the post owe him tick layoffs and they should cast down in reality, but i've said that the last four or five months and they continue to power on. >> is there a sense that they should be more aggressive? i know that seems extraordinary because it's been some of the most aggressive, but is all the noise from the sum are olympic, will we say it kept them from being more aggressive at a time when they should have been? >> possibly. but then they were more aggressive after the second quarter gdp data when they shouldn't necessarily have been so. i think they should tweak the fls. it's a good start. tentative signs feeding through the money sly. but they're attacking the wrong thing. they're attack new lending which is a small share of the overall. if they can get existing rates down, they would affect a much bigger group of people and that will get growth going. so give it three, six months,
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it's too early to abandon ship on fls 1, but give it spring to summer next year, that's when i think they should change. >> okay. alan clark joining us this morning to run through the uk pmi figures. >> barely expanding. so that will be a fascinating -- just another thing this week that will be pretty close. >> right. it's elbowed its way in there. >> european stocks are very cautious at the start of the week. on friday we saw weakness into the close despite the strong employment report. >> we're seeing rotation out of the periphery and into the core, not too surprising. as a result, the spanish and italian ten years are rising a bit.
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so italy is hanging below the 5% level. bunds and gilts benefiting. >> dollar strengthening and has continued. dollar index up near a two month high. euro-dollar on a two month low. been at 127.92. and also dollar-yen up at a four month high. >> managing to hang in there this morning. with all eyes on the incredibly close u.s. election, a asset management believes a romney win would pose a major problem citing seven reasons for concern including the fed's independence, decreased taxes, higher bond yields, housing subsidies and full blown trade war with china. so how should investors position themselves ahead of the election some we're joined by anna
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armstrong. would you agree with their call here? >> i don't think the markets will be terribly affected because what concerns markets at the moment is economic growth, fiscal cliff and what happens with monday it taker policy. >> but that's their argument. if you're worried about those things, here's the reasons why we think romney would be bad. >> the major impact would be if we go over the fiscal cliff. and i don't think either candidate will allow that to happen. the sectors which might be affected are the ones that most are linked to the policies such as financials or health care. but at the moment what markets really want to see is that the central bankers are doing everything they can to boast investors' confidence. and i can see it will increase
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over the -- >> if we get through the event risk, i'm wondering if it doesn't matter who wins, we just immediate to see it. >> and deutsche bank among others have said the typical post election rally is in the range of 2% to 3%. >> and the market in general is not really affected by who wins the election. so i do not think we'll see any maim impact, but do i think that the central bankers in europe and u.s. are doing a good job in boosting confidence and that is the key. >> what about rhetoric against fiscal cliff? that's one thing that might derail your confidence. >> looking at all the signs and indicators, i don't think that either candidate will allow for that to happen. and the size of the fiscal cliff, what would it be, something around 13.5% of gdp. and it's most likely that both
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will extend the bush taxes into the next year. >> there is a market consensus that romney is more likely to go over the cliff. then effectively tax rates reset, he has pull to turn around and say if you want me to bring these down, you better work with me. >> it's more of a concern what happens with the monetary easing which is so important for the markets at the moment. romney did state if he wins, that bernanke isn't going to stay after 2014. so that can have an impact. but what is important is that whoever wins the elections will inherit an economy that has 75% debt to gdp and it looks like romney is talking about reducing the deficit. he does talk about spending, but also -- it's a challenging fact. >> would you want romney from that point of view?
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>> no, i would not say that because there are other commitments that we have to see happen. >> absolutely. >> and as we get ready for china's new leaders, we remind you just how much china has progressed over the last decade or so. >> hu jintao took over back in 2002. at that time, china's economy was just one quarter of the size that it is now. in 2005, china dropped its currency peck to the dollar before the u.s. dollar was linked to a basket of currencies befo the following year saw the first reading of the strategic economic dialogue take place in beijing with china committing to increasing the flexibility of its exchange rate mechanism. and so much of 2006 and 2007, it was in a bull run and peaked at
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6100 and right now sitting at the 2,000 range after five years. china pumpd an estimated $580 billion stimulus package to prop up the economy and this is the same year that china became the largest holder of u.s. government debt. br barack obama visited china one year after being elected and during his meeting with hu jintao, currency dominated the talks as beijing had repegged its currency to the dollar during the global financial crisis. and in early 2011, china lost its title as the number two economy of the world. at the national people's congress this year, wen announced that the 2012 growth forecast would be cut to 7.5% and just months ago, they cut
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its benchmark interest rates for the first time since june. and shortly after in july, another rate cut followed. back it to you, ross. >> looking to the asian automaker, hyundai and ki chlt sha a shares were stunned after admitting they misled on their fuel economy.chlt a shares were stunned after admitting they misled on their fuel economy. a shares were stunned after admitting they misled on their fuel economy.a shares were stunned after admitting they misled on their fuel economy. >> automakers seem to be moving quite fast to address the claim, running apology ads and coming out with compensation plans. but we're talking about some 1 million vehicles sold over the past three years and some industry watchers are can asking could this be a game changer. and what could be worse is a
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potential damage to their reputation s reputations. there has been a very long fight to convince its american buyers that its quality has improved and plus fuel efficiency factor has been quite a strong selling point for both of these automakers helping them to hold around 10% of the u.s. market share. back to you. >> in japan, better news has come out from toyota. it profit outlook is up despite on ongoing headaches. this story live from tokyo. >> after the bell, toyota posted a net profit p $2.3 billion ine quarter more than triple the amount in the same quarter last year. domestic sales muof hybrids wer
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solid in the first half. the auto giant lifted its net profit outlook from $9.5 billion based on demand recovery overseas. sales of the mid size sedan are expanding in north america, while demand for low priced cars is growing in southeast asia. what worries toyota is the situation in china. sales there have been sluggish due to the slowing economy and boycotts of japanese products amid a territorial flare up over the islands and even though toyota relies less on on chinese sales than its peer, analysts are still concerned an uncertain as to when we'll see a sales pick up on the main land. back to you. >> for more on the auto sector, want to get thoughts from anna armstrong. from an investment point of view, toyota looks like it's regaining strength, but then you see some of the other headline concerns with the automakers over the weekend. so what's your view on who
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stands to benefit in this sector right now? >> stocks we like are bmw and volkswagen. they have been growing at 20%, they're strongly positioned for sales in the u.s., china and latin america especially brazil. we believe these companies will have the growth margins, bmw trading at nine tames earnings. yield 4%. and volkswagen around six times earnings. japanese car companies are having issues in china. and some of the fwer man manufacturers are very well positioned. >> leveraging consumer growth for em -- >> luxury goods, some of the car companies we believe are very well positioned and clearly over the next ten years that is going
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to continue and china will intend the decade just working on empowering domestic consumer. >> you you added those stocks to your portfolio. apple is now down 1% from its record. certainly bear market territory. you've just added this, you've just bought into apple. >> yes, we bought into equities. some of the large cap, a lot of opportunity for the profit margins, a lot of free cash flow and we believe the whole innovation and growth in the produ product, likely to continue the stock prices. >> and the u.s. potential changes to dividend rates, that doesn't interfere with that thesis at all?
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>> partially does, but again, this is emerging consumer story as well as the u.s. and we believe that there is a lot of consumption power. >> do you have any concerns about the chinese handover, does that -- it's going to take a while for us to really look out the whole configuration. how do you measure reaction? >> we're thinking about a chinese slowdown. and the whole worry about chinese hard landing actually did end up in the some of the great opportunities in the cyclical sectors and that's something we're trying to take advantage of temperature but china is well into thehe throws oig of a slowdown and engineering a soft landing. >> good to see you. thank you very much for joining us. >> shares in foxconn were up
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after citigroup upgraded its price target. but speaking of of the strength potentially in tech or some of these emerging market stocks, that is one the example today of what's going on. shares of thailand's capital meanwhile surged to a three week high. the bank is thigh land's fifth biggest lander. bernie lo spoke to them about the deal. >> it was a place where i wanted to grow very significantly. we are in in-dough sneeze yarks hong kong, malaysia, number one in each and thailand with 65 million people, growing gdp, industrial base and growing middle class was one place where our absence was glaringly obvious. we were very small player,
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number 11 in the market, and that's not the place we like to have. >> a lot of people don't realize that your company, the pru, is sully essentially at it core competency. now an asian company. the bulling of your businei bulr business is in asia. and yet you still call london home. there is speculation that you're looking to relocate the global headquarters. but your return metrics are healthier in asia. at the least especially with this acquisition you just made in thailand, you need to split the business lines so people can get clarity on prudential in the growth markets versus lumping it all into one bag. >> london is our birth place. and in a globalized world, we can operate globally. so long done is where we come from, where we're based.
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but of course as you jest said, we have to spend a lot of time in asia and that's what we do. the business here is enormous success. and it's not going to change. it's only going one way. a lot of our thinking was driven by what's called solvency two. the uk is only 12% of our profits. so 88% of our profits are made outside the eu. we're looking at options in asia and that work is on ongoing as we speak. respe
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respect. it was a weekend of furious campaigning for barack obama and mitt romney with just one can day left until the u.s. presidential election. now, the latest nbc "wall street journal" poll suggests obama has a minimal lead, 48% compared with romney's 47%. and here's a look back at key moments from the weekend. >> as long as there is a single american who wants a job and can't find one, our work is not yet done. >> he's going to create jobs, but instead he focused on on obama care which killed jobs. you want more more years like the last four years or do you want real change? >> i know what real change looks like because i fought for it and i have the scars to prove it. >> our fight has to go on.
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>> coming down to the wire. one fund says investors should be putting money into africa, but not the traditional resource sector.
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this week we're focusing on the african economies. i caught up with a fund manager and asked him if it's just a resource based story. >> i think resources certainly are an important part, but people who invest in africa for the resources only are anying the picture. there are great opportunities because an kree merging middle class, increase in education, more transparent government is reading really to a major growth in spending and upperism across the continent. >> is china's involvement in the resource base good news for these economies or bad news?
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>> china's involvement is helpful in some respects, but i think they're not really driving what's happening in africa. some of china's involvement is really counterproductive because it's so tied to the use of chinese resources and lacks a lot of transparency. >> you talk about develops away from resources. what is that on the back of, a young growing population? >> the population in ever came is very young, but more important is becoming better educated. the government is less restrictive. so you're seeing a major increase in consumerism. pile people ne
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people need things like insurance, home services, supermarkets, all the things that any middle class economy needs and they need it in major amounts. >> you're investing with more than 50%. so how much of your portfolio is split between the new opportunities and traditional resource opportunities? >> we have very little development directly in resource companies. our focus really is on the rest of the story in africa, which we think is in the stock market and equity side really the place to be so we're investing in supermarket chains where people delivering service and banking products, to people who historically have been underbanked. one of the people i've found when i go throughout the contine continent, that they are far more advanced in some ways than even the u.s. economy. for example, the use of cell
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phones has sort of leapfrogged beyond land lines. there's major innovation which is allowing it to grow much queker than people realize. and all the stereotypes about africa that people have are really based on the old africa. sure, you can see strive and dictatorial governments, but what you you miss when you focus on that is that many focus on africa, they're focused on growth and freedom and democracy, and that's leading i think to great opportunities in the equity markets for people to invest in africa. >> african is one of the bigger economies, but is there any negative feedback from the mining workers and protests, is that impacting other parts of
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the economy you're looking to invest in? >> i think people are certainly taking a pause. it's tragic to see what's happening, but there's election there is 2014, the anc who has had sort of a stranglehold on south africa is finding in-fighting among the party. many people don't realize that the anc is really a collection of three major groups. you're seeing distractions and i think part of the union organization is tied to some of that. however i think they want to take their rightful place as more of a developed country and i think these things will pass. >> for more, go to
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>> thighs way to start your week. in any case, stick around, because still to come, the world is looking ahead to the u.s. ahead of tomorrow's presidential election. we'll give you the latest polling data and analysis including one expert who says the romney/ryan ticket offers an alternative not just to obama, but also to george w. bush.
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if you're just joining us, i'm kelly evans. and i'm ross westgate. down to the wire with just one day to go, president obama, mitt romney make one last mad dash to rally supporters. polls show them in a virtual tie. >> and a week after sandy hit the u.s. east coast, residents and businesses are finding it a slow road to recovery and another winter storm is bearing down on the region. >> and probing allegations that wen's family has amassed a giant fortune. and hsbc is now setting aside a total of $1.5 billion to cover potential u.s. fine related to money laundering charges sending shares lower.
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let's take a look at u.s. futures. we saw the u.s. sell off into the close on friday, that negative attitude extending to asia and europe around the globe. and this morning futures not staging that much of a's bound. in the red about 34 points. nasdaq is at least the right color looking to shed a few points. hanging on to the 1404 level, but the 1400 one is certainly one to watch. you can see a sharp downturn in the cnbc ftse global 300 in just the last half hour or so. we're red across the region after the uk services data came
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in weaker than expected. composite in contraction in october. 7313 the level there. ibex 35 down by 1.4% today. >> bund yields down below 1 bpt 42%. slightly higher in spain. gilt yields lower, as well. we have a bank of england meeting this week. be a pretty close call as to whether we get additional qe or not. dollar index earlier taoday hita
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two month high. dollar-yen up to 80.20. down on the session, but we hit 80.62 earlier, a four month high. that's are we stand two hours in to the trading day. let's go once again to singapore. >> asian markets kicked off the week on a low note. the shanghai composite closed down 0.1%. gold miners led the losses but coal miners surged on rising demand after the cold weather in northern china. the hang seng eased half a percent krdragged lower by commodity majors. foxconn surged after short covering. prudential's hong kong shares were suspended after the uk insurer agreed to buy china
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chart life for $590 million. over in japan, the nikkei lost half a percent. technology shares lost ground with sharp and panasonic tumbling nearly 7% and 6% respectively. but korean carmakers were in the epicenter of the selloff. hyundai and kia both tanked after they admitted they overstated their fuel economy. meanwhile the and you usustrali bucked the trend. miners and banks led support to the asx 200. and a landmark judgment for misleading ratings during the crisis. ross, back to you. >> that's how we're set up at the start of the global trading day.
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what a big week. >> what's happening in greece is they continue to try to hold the coalition government together even while getting more aid from the eu. and this morning the uk figures come in weaker. commentary as to whether or not it would assume the bailout. >> whichever way you go, every day you need to stay tuned. >> that's right. nearly 2 million customers are still without power in new york, new jersey and connecticut after hurricane sandy. utilities are under pressure as a cold snap is settling in and a nor'easter is forecasting to hit around mid week. more fuel facilities are coming back on line. hess restored partial power to its refinery in new jersey and the colonial pipeline is serving seven termle naturals in northern new jersey. governor chrissy imposed an
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odd/even rule to get gas. people say it has helped relieve tensions. >> and commuters in to new york city face a long haul. three new jersey transit lines, one long island railroad line and the path train remain fully or partially suspended. yo majority of the subway system will be back, but amtrak still has flooding in two of its tunnels under the east river. the eve of the u.s. elections is upon us and the race for the white house couldn't be any tighter. the final nbc "wall street journal" poll shows president obama beating mitt romney by a 48% to 37 hrs m 47% margin.
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the two men are within 0.2% of one another. they'll be crisscrossing the country today in a final push. joining us for more is tim stanley, historian at oxford university and author of a biography of pat buchanan titled the crusader. tim, welcome. this piece is nelgts partisan nor mad to predict a romney victory. mitt still has the x factor. >> i think that's true. there are some people who say it's just impossible now because of obama's lead in ohio 37 but if you look at one or two new polls that have come out, which significantly have been taken by local media outlets rather than national one, they show romney
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and obama even in pennsylvania, romney one point ahead in michigan, romney one point ahead in minnesota. pennsylvania is very important, but so also are minnesota and michigan. we're finding ways of romney still losing ohio but still managing to win the presidency. >> is it feasible? >> everything has to happen for a first time. you know, romney struggled to win this nomination. it wasn't that easy. there are lots of rules there to be broken and what we're talking about is trying to find scenarios. we haven't seen a tight race since 2000. when it's this narrow, then i think it's not unreasonable to talk about different what ifs rather than just the usual win ohio, win the country. >> why are you so convinced romney can win and that he should win? >> because some people are working simply by a poll based a narrative which just take a
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snapshot, see what people are thinking right here, right now. as a historian, i'm convinced there is a historic logic to barack obama losing the white house. not necessarily to romney winning it. and that's based on the unemployment rate. it was 7.8% when barack obama was inaugurated. it's now 7.9% today. so at best, things have got a little bit worse. and if you go back in history, no one since 1936 has been reelected with those levels of unemployment. so on the basis of economic performance, it's difficult to look at the race and say obama is obvious going win. >> you may be right, but this is where it becomes a fairly damning indictment of the republican campaign.
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a lot of business economic journalists have come out for obama because they don't know who is mitt romney, they look at his economic plan and say how do you increase defense spending, decrease taxes. none of it makes sense to them. so therefore de facto, they're left with obama. >> absolutely. the last couple days people have been talking honestly to me and so many people who are natural conservatives say i just don't trust this guy. he does have a good business record which people ought to respect and like. as governor of massachusetts, he introduceded health care reform. problem is he tried to redefine himself and so a lot of people feel they don't know where he stands. that's partly why i think it's so difficult to call because
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when people go into the ballot box, they have to weigh out these two things. on the one hand, i can point to so much evidence this obama's administration, but they have to choose between the devil they know and the devil/an gel they don't know. and that's the why it's so close right now. >> and we should mention it's not just the presidential election, it's the congress, handicapping the figures cal debate and it looks as though democrats have regained some of the momentum. from your point of view, where do we stand, how important is that race? >> that's very important. if obama does get reelected, the democrats in the senate is good for him, but republicans are fairly comfortably going to hold the house. so we'll see divided government for the next four years and that has an impact upon fiscal policy. it was only last year they were struggling to pass a budget and we could see that happen again. the tea party back in 2010 gave
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republicans know rmomentum. but in 2012, they seem to have undermined them. the social conservatism has kept back on to the agenda. a few days ago, indiana was a toss up. now he described rape as god's intention. it's not what he meant, but that whole religious conservative crept out again. >> so your best guess where we stand wednesday morning? >> senate democrat, house republican, i really can't commit on the presidential race. it's far too close to call. >> i woke up this morning saying is it feasible to win without winning ohio. >> yeah. >> a lot of firsts perhaps in this election. tim stanley, thanks for joining us.
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let's take a look at the key corporate earnings. >> hsbc has set aside an additional $800 million in the third quarter to deal with its u.s. antimony plan dering. that brings the total sex aside to $1.5 billion. the bank also set aside another to cover customer claims. pretax profit of $3.5 billion in the period, below analyst expectations. you have to take that number, kelly, and that dwarfs any of the scandals. >> underlying core profit also came in below expectations. as for the auto sector, japan's biggest automaker has revved up its net profit forecast to close do $10 billion despite a year riddled with challenges.
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thanks to strong sales in north america and asia, toy posted a better than expected net profit of $3.2 billion in the third quarter. cha in prepares for their political hand over and so stay with us, we'll be right back. i'm freaking out man.
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these are your headlines. the latest polls show president obama and mitt romney neck and neck with just one day to go before the election. >> nearly 2 million people still without power in new york, new jersey and connecticut as the region braceses for a nor'easter mid week. and shares in hsbc are trading lower after it reveals another charge for alleged money laundering. still to come, gas shortages persist across the east coast. so what does that mean for energy markets? plenty more to come on "worldwide exchange."
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dwa we hatoday we have ism index be look for 55.5. >> and up numbers from humana, ed. and a week after super storm sandy struck the east coast, the
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fuel supply situation is gradually improving. more if a sets are coming back online. hess has restored partial power while the governor christie has imposed an odd/even rule. for more on the impact, neal atkinson. were you surprised at the impact of sandy on the global energy situation? >> the local situation clearly has been catastrophic. but the main problem isn't so much the supply of fuel itself because in the region, the united states atlantic coast, there is plenty of stock sitting there. it's the ability to move it around or more importantly the
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ability to pump it once it reaches the gasoline stayses. either's more of an electricity situation. >> power outage seems to be one of the most dekt aspecifficult . >> without power, you can't pump gas. >> and we've seen the government respond by allowing imports now basically saying bring it in through the ports. >> and given a bit of type and particularly once the power is restored, they will have plenty available. but people have to be patience, which isn't an easy message. >> especially when cars are running out of fuel and you can't get from place to place. >> so when can you expect things to look back to former? >> i would think it would be
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several days, yes. possibly even the end of the week before lines like that vanish. but there's also a degree of panic is a cruel word, but they get to the line, they fill up when they can and then if there's a chance the next day to fill up again, thiey'l will ref. so a degree of hoarding. the impact on the refineries has been pretty bad. you mentioned hess. their main issue has been number one lack of power. they have their own supplies up to a point, but they're still hugely dependent on the grid. so lack of power, you can't process crude, you can't run the refinery adequately without power. and i think it was in the linden, new jersey refinery, there was an element of flooding in part of the installation which he thought of course was
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very difficult to operate normally. >> is that something that will have a lingering impact? >> it's likely to. but that shouldn't be the biggest impact. i looked at the figures for stocks immediately before the hurricane struck and stocks were pretty adequate. they were lower than a year ago levels, but they current catastrophically low. so the stock is sitting there in depots around the region. you don't necessarily have to wait for more crude to be refined. obviously that would be very welcome because stocks need to be replenished. >> with the long lasting impact, what that might be? >> i guess we're talking a week, two week. hard to be pre-says here. >> but from a supply chain point of view, do you expect this to change in which the way northeast accesses fuels? >> i'd be surprised because the underlying system is fairly robust.
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we are dealing with a historically bad storm and i think that applies not just to the oil and gas infrastructure, but obviously to various other public services and buildings. >> and the election tomorrow, there your point of view in terms of u.s. nuof u.s. energy does either candidate make a difference? >> the rev guest made a good point that it's almost certain the house will remain with the republican, senate with the democrats. the presidency is a toss up it would appear. although the blogs that i read over the weekend, if romney doesn't win florida, it's almost impossible he can win the presidency almost by adding in any other combination of states. but there's likely to be gridlock in congress on again for another at least two years, possibly four years. if that's the case, either romney or obama will find their
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ability quite circumscribed. but there are key areas where either administration would follow fairly similar policies and they are related to expiration for oil and gas and production of oil and gas. it's forgotten now that a couple of months before the gulf of mexico disaster, the bp disaster in 2010, obama had opened up substantial areas off the atlantic coast of the u.s. more region ofs of the gulf of mexico and i think the west coast, as well, to exploration efforts. in other words, the obama administration was of the gulf and i think the west coast, as well, to exploration efforts. in other words, the obama administration was committed to increases production to help towards the long term goal of redur reducing energy import independence. that's a sentiment that rochl a
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romney agrees to. he would get in the arctic reserve. so in some respects, there would be broad similarities between the two. but there's a lot of other areas where there would be big differences. >> we'll get into some of those when we get neal atkinson back on on. thank you very much. still to come, as americans are set to head to the poll, the race for the white house as we've been saying couldn't be closer. >> more analysis on the neck and neck numbers next. ♪ ♪ ♪
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welcome back. these are your headlines from around the world. down to the wire with just one day to go before the election, president obama and mitt romney are making a last mad dash to rally supporters as polls show them in a virtual tie. >> a week after sandy hit the u.s. east coast, residents and businesses are finding it a slow road to recovery and another winter storm is bearing down on the region. >> and hsbc reveals it's setting aside a total of $1.5 billion to cover the potential u.s. fine relating to money laundering charges and shares are heading lower.
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on the eve of the u.s. elections, the race couldn't be much tighter. the final poll of likely voters shows obama leading mitt romney by just one percentage point. polls in many battleground states remain too close to call and running average of all national polls by real clear politics have the two men within 0.2% of each other. the president will be in wisconsin, iowa and ohio today. romney in ohio, as well and also new hampshire. the president of course, does he use the official -- >> i take the fifth on that. i'm assuming he would. >> joining us from washington, morris reed democratic strategist and managing director of the bgr group. morris, good morning. >> good morning. it's called air force 1. makes everything very easy. >> so he's using that for
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party -- government property for party and political purposes? >> it gets reimbursed by the parties. there's a cool could ykoo calcu you. >> they make a contribution. good. >> morris, we just had tim stanley on the program. he says it's too close to call be he thinks mitt romney may have the the edge. what numbers are you looking at and do you agree romney will still has momentum here on the eve of the election? >> i think that governor romney certainly had a lot of momentum coming out of the first debate. there is an argument to be made that perhaps the momentum stopped with the hurricane situation where the president was allowed to have three days of coverage without romney really having a counter balance. i really think the race is too close to call. what i'm watching are the key states of iowa, wisconsin and ohio. it's canning that the industrial
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midwest is playing such a big role when certainly from an economic standpoint it's not really the leading indicator in america anymore. >> would know ohio has a lower unemployment rate and if you look at it auto industry and perhaps either coal industry, it's a reasonable subset of the country. you also say to watch women. >> women, if you look in other pandering that both candidates have done to women, i think it would be important to see how they can turn into an economic agenda for women and whoever wins on the next election. hispanics are important, but women clearly will sdecide who win this is election. >> how much have both sides spent on the election? >> $2 billion, $6 billion, if you look at what the candidates spend and what the super pac and outside third parties. so somewhere between $2 billion and $6 billion spent this time around. >> is that money worth it?
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i mean, i'm just looking at all the business and economic pressure over here saying they've sided with obama, but only because they can't really trust which romney that might become president. and it's come down to a few swing voters or turnout. and it's a lot of money for potentially not a lot of change. >> well, if you look at market share, let's he's look at it as any other product and service. if you look at bmw, mercedes-benz, toyota, they spend a lot of money on advertise to go get that market change. 1%, 2% from an economic standpoint with a car industry makes a difference. when you see that in politics, that 1%, 2% really makes a difference. so the question is it worth it, i would say it's worth to have a safe democracy, the whole world is watching this election. this is really truly an opportunity for america to get it done right and when you can turn back and say the president is the leader of the free world,
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you look at everyone in the world is watching this election. >> what is the democrat strategy here for obama to get reelected, to look past that to fiscal cliff negotiations, what should we expect the plan to be to avoid that happening if that is the plan? >> from a democratic standpoint it should send a clear message to the republicans that the american people wants him there. he is a two term president. somessage that you need to work with him. we hope that will be the case. with regard to if romney wins, i think it's going to be a real challenge. not just a challenge to work with the senate, but to control the tea party. the tea party is a real power set within the republican party and it's questionable if john boehner will really be able to hold those guys together. >> finally, the redskins lost their last home game.
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does that make you nervous? >> well, frankly, with dan snyder's leadership, they've been losing a lot of home games. so i know they have rg3 who is a terrific quarterback, but i'm going to put my money on president obama, not on dan snyder and his leadership. >> so you'll ignore the redskins rule which -- >> i'm only going to ignore it is because the race is so close in the most important state which is ohio. so if the redskinsef laveland b cincinnati bengals, maybe i would care. but what happens in ohio will truly make a difference. >> he's taking some liberties with the redskins rule. >> well, i'm from ohio. >> the red skin rule 2.0, which has to cover what happens -- >> morris, thanks very much. >> it's not just the u.s. of course where we're getting leadership change. potential potentially the communist party has launched a probe, as well
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into wen. the investigation comes at w event n and he own request following claims made by the "new york times." eunice is in beijing and she has the latest. what came out of the press conference today? >> not a whole lot. i asked specifically about the report that said there could be an inquiry into wen's wealth, however the government spokesperson wouldn't comment and that is because the government is so sensitive about the finances of its top leaders. every time we start talking about it, the network is blacked out in china. what's interesting is the timing of the report. because if indeed it is true, it could be indicating that the communist party is signaling and showcasing to its own people that it's cleaning up its affairs. whether or not the people will
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believe it, though, is another question. >> a fair point. how does this play into the leadership changeover this week, if at all? >> what's really interesting here and i'm sure you're just as excited as i am, this week is fascinating for global politics. in the united states, we're seeing a run for the white house. and here in china, we're seeing the start of the 18th party congress where we're going to see a new party congress, deciding who will be running this country. so you could potentially see just in a maytter of weeks leadership changes in not just one, but two of the world's largest economies. even though these are two leadership transitions potentially, the process to get there is -- couldn't be more different. in the united states, you see the campaign trail being covered
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in ad nauseam detail, where here you get radio silence. all decisions made behind closed doors. >> eunice, thanks for that from beijing. >> i'll point out that bbc news magazine takes it point of view saying is china more legitimate than the west. that discussion will continue. but look at the markets. if take you fair value into account, futures are in the red. we did see selling pressure friday into the close. that looks to continue. dow would shed about 35 points. it is below 13,000 this morning, 12,990 p the s&p trying to hang on over that 1400 level. ftse 300 shows the selling pressure we've seen since about 8:00 local here. down 0.3%. >> european stocks, up about a
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percent for the ftse. we are down ibex 1.4. >> commodities certainly in focus this morning, as well. stick around, because still to come on the program, cleaning up after hurricane sandy. gas shortages did persist across the east coast and we'll bring you an update on all the latest conditions. the name your price tool shows you a range of coverages, and you pick the price that works for you. great. whoa, whoa, jamie. watch where you point that thing. [ mocking ] "watch where you point that thing." you point yours, i point mine. okay, l-let's stay calm. [ all shouting ] put it down! be cool! everybody, just be cool! does it price better on the side? no, it just looks cooler. the name your price tool, only from progressive. call or click today. i got you covered. thank you. oh, you're so welcome.
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today we're asking whether a credit explosion in asia is a ticking time bomb that can spark the next financial crisis. a new reportposi tcts just that. you can respond to that or anything else you've heard on the program. >> a huge amount of business in asia. hcht hsbc is setting aside another 800 billion which brings up to
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the total $1.5 billion they're now setting aside to county anti- money laundering claims. $1.5 billion in potential fines is not an insignificant amount for anybody. profits a little lower than expected. third quarter pretax profit $3.5 billion, weaker than the consensus this morning, as well. although they're continuing to make good progress in all areas, but stock down 1.3%. a chunk of change, $1.5 billion. >> that's for sure. you're watching worldwide exchange. if you're just tuning in, these are your headlines. the latest polls show president obama and mitt romney neck and neck with just one day to go before the election. nearly 2 million people are still without power in the tri-state area as the region braces for a nor'easter mid week. and shares in hsbc as ross
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mentioned trading lower after revealing another charge related to potential fines for u.s. money laundering. nearly 2 million customers without power in new york, new jersey and connecticut a week after hurricane sandy struck. utilities are under pressure as a cold snap is selgtszing in and a nor'easter is forecast for mid week and more fuel facilities are coming back online. hess has restored pore shal power and colonial pipeline is now serving seven terminals in northern university. governor christie imposed an odd/even rule to get gas. >> and commuters still facing a long haul this morning. service on three new jersey transit line, one long railroad line and the new jersey p.a.t.h. remain fully or partially suspended. more than 367,000 passengers use
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these train lines on a typical workday. the majority of the new york subway system that is back and running, but amtrak still has flooding in two of its tunnels under the east river. >> and neal atkinson mentioned it's the electricity that's really the problem in the fuel distribution system. that's one of the reasons why there's actually fuel sitting there that they just can't get it out. and with the cold snap, and it's freezing here in london, too, but the temperature has really dropped in new york. this as the mayor asked kids do come back to school. they're bundling up, trying to make the best of it. the new york marathon didn't happen, but a lot of the runners were already in the region for the race. >> i suppose their parents have to stay at home. so it's difficult. >> right.
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i'm sure they're coming up with ways to deal with it, but you hope especially for some of the kids who maybe don't have like the heavy winter jackets that they're able to put up with it. >> tough call. and i think i'm certainly surprised at how long it's taking to -- it's a lot worse than we thought. >> and there's a real housing issue. staten island for example also one of the hardest hit regionses that gets very little focus because it has less of the population. but one out of four people that were killed by the storm were in this 1 1/2 mile stretch along staten island. the journal has a great story about that. but a reminder that attention shouldn't just be focused in the midtown area. even though yesterday we did see by the way as we were saying a the lot of people who are in town for the marathon went to staten island because traditionally the starting line and trying to help out. still to come, trading ahead
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of the u.s. elections. lynn investors be waiting it out. >> and we'll head to the bond pits in chicago next. so uh this is my friend frank and his, uh, retirement plan. one golden crown. come on frank how long have we known each other? go to e-trade. they got killer tools man. they'll help you nail a retirement plan that's fierce. two golden crowns. you realize the odds of winning are the same as being mauled
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ahead of the u.s. open, european stocks are in negative territory. as far as u.s. futures are concerned, this is how it feeds in. >> don't be fooled by the green. take fair value into account and we're headed for a lower open. though it is trying to climb back above the 13,000 level this
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morning. certainly the attitude overnight from europe and asia, we haven't yet seen anything to turn that around. as a result, we could see more selling pressure into the open. >> metrics slightly missed forecasts. underwriting profits was less than half what it posted a year ago. the company's reinsurance business may show a significant hit from hurricane sandy in the fourth quarter. shares in frankfurt unmoved. >> a bad trade in aem forced the firm to seek outside help to stay afloat. company wouldn't comment further, but was reportedly in talks for possible capital injection.
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in the u.s., we get the ism services index, analysts looking for a down tick. and we'll get numbers from humana, southern company, cisco tez la, time warner cable and con ed and live nation and zillow. final poll shows president obama leading romney by a hair. polls in many battleground states remain too close to call. the president will be iowa, ohio and wisconsin. romney will also be in ohio and new hampshire here's a look at the key moments from the
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weekend. >> as long as there is a single american who wants a job but can't find one, our work is not done. >> he was going to create jobs, but instead he focused on obama care which killed jobs. >> you want four more year like the last four or do you want real change. >> our fight has to go on. >> the dollar firmly up and that's more on -- interesting whether they think it's part of the election. dollar index up at a two month
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high again the euro. also been up at a four month high against the yen. >> there isn't necessarily consensus among people in the market as to what the market action over the last month or so has signaled about whether they would prn obaefer obama or romn. stocks sold off, bond markets backed up, the dollar strengthened a little bit and the only thing that explains that is if you think about a more hawkish federal reserve. >> most people would imagine that baobama has been a favorite -- in terms of the odds making, he has stayed in the lead. so theoretically, we should have priced in an obama presidency.
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>> and citi says the jobs report comes out friday, it's stronger, that makes it all the more likely obama wins. we saw actually a weaker toned market. on the other hand, you have people saying that points to the fact that people are selling f off -- are you suggesting there are things outside the u.s. going on? >> there's a lot of event risk and what's the first thing people do, they line up -- doesn't matter what they think is going to happen. >> and it's not just the u.s. elections this week, it's china's leadership and what's happening in greece. >> and the economists, the ft coming out and saying we favor obama because we know who he is, we don't know what romney would do.
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and a very successful fund manager over here is following that same tone, as well. and he talks about it's the republican fiscal plans for increased defense spending, decreased taxes, bigger budget deficit. and that's not what you're supposed to be getting, right some. >> he says the seven major risks of romney victory would pose. so doesn't mince its words either on that subject. >> by the way, a couple quick news points to mention. turkey was upgraded to investment grade and sharp coming out saying they have lowered its rating to b plus and is on watch negative. >> and that's it for today. we'll be back tomorrow. coming up next, "squawk box." we hope you have a profitable day.
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the aftermath of sandy. a week later, millions are still without power in the northeast. long gas lines remain, although they are easing. and government leaders are warning of a housing crisis for those displaced by the storm damage. and after months of campaigning, we're now less than 24 hours until election day. barack obama and mitt romney are in a mad dash seeking every vote. as for the markets, u.s. equity futures are pointing to a lower open after the big reversal on friday. both the dow and nasdaq finished last week in the red. it's money, november 5th, 2012. and "squawk box" begins right flou.


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