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members. an exit would be harmful for the block. and japan's struggling sharp posts a bigger than expected annual loss. it hopes a new president will help bring it back into profit in the year ahead. >> announcer: you're watching "worldwide exchange," bringing you business news from around the globe. >> we'll kick off with the iea data. the production in north america continues to grow at a record pace and refining capacity is expected to outpace demand in high growth emerging markets. this according to the international energy agency. 3.6 million barrels a day come out of maintenance and new saudi arabian capacity comes online. the oil production -- north american oil production will dominate world supply growth over the next five years, as well. we'll keep your eyes on that. clearly, prices are slipping on the back of that report. nymex down to 95.16. meanwhile, plenty of corporate news. business is not for sale accord to go dan loeb who reportedly wants a spin-off for more value. japan's stock market surges, local hedge funds only share price could see as much as a 60% gain by separating the entertainment business including the music labels. this comes as sony has laid out a turn around plan to investors focusing on high-end medical devices. andrew ross sorkin laid out those plans for "squawk box" just a little earlier. >> the plan, as proposed by dan loeb would be to break up the company in three parts. it could include a break-up of the most famous part of sony, the hollywood entertainment piece that encompasses the music unit as well as the film unit. separately, he is proposing that they spin off what is known as sony financial, which is an insurance unit, that would leave sony core, if you will, as the last remaining piece of sony. and that piece would encampace the electronics business. that includes things like its tv business as well as its placestation gaming unit. >> all right. that was andrew earlier. hopefully he'll be joining us, as well, towards the end of the show. kaori, how is the news of this report gone down? >> as you mentioned, its entertainment operations are not for sale. the people were a little anxious at the press conference ahead of schedule for quite some time, which is scheduled next week on the 22nd of april. this is when the ceo of the company is going to update us on their medium term business strategy a year after he sort of map thad course last year on april 2012. i mean, the possibility of a break-up at sony has been talked about for some time among analysts here, particularly because it's a sprawling conglomerate that is in everything from banking insurance to gaming. the problem then, is that its consumer electronics division, which has beens bread and butter has been struggling because of the onslaught from south korean rivals. i think you also have to point out that when hall turner was at the helm, he had a very, very difficult time in restructuring this operation. i think there was a little bit of hope that under the new leadership that the restructuring process would celebrate. i mean, when you take a look at the earnings, they just came out with their numbers for the fiscal year that just ended, they managed to eek out a profit for the first time in five years. but when you look at the details, it's not because its products are selling so much better, it is because of the yen, as we all know, which has gone from 80 to 100. they sold off with the assets, as well. it's not like the core operations and their products are sulg one, but as you pointed out earlier, the company here in tokyo, the entertainment division is not for sale. >> you focus on getting consumers electronics that they want to buy without distraction. that's what they're going to focus on. how important is it -- i'm guessing this makes it even more important, this review that they've got coming up. >> of course. the question has always been what are they going to do with their television operations? it has not been possible for its consumer electronics division, which has not been profitable for quite some time. sony is not the only consumer electronics giant that is struggling in japan. panasonic, just to name one, is struggling in a similar fashion. i think you also have to remember that the government is probably going to be heavily involved in any kind of restructuring at a big company like sony, which really is a brand of japan inc. and there had been rumors that they were thinking about possibly merging some of the weaker operations of some of these large consumer electronics companies. at the same time, i thought this is one of the largest employers in japan. so any kind of restructuring in japan is extremely difficult because it is very, very difficult to downside size japan for a company like sony. >> care horry, thanks for that. plenty more to come on the sony story throughout the program. right now, uk politics, there's a bill today that would make a referendum to make eu vote legally binding. cameron hazard sanctioned the bill from the united states on monday following talks at the white house that president barack obama weighed into this in its relationship with the eu. steven is outside of house of parliaments in westminster. that support from the president presumably quite important. what he said is you normally try and fix a relationship first before you walk away from it. >> if there is a problem, i guess that is the way the u.s. president is indicating he would prefer the british to go. but perhaps we go back a step and look at the local elections throughout the county in the united kingdom. we look at the at what was and wasn't in the queen's speech. there was the right-hand side of the british fiscal spectrum which is now questioning a physical stance. perhaps a lot of that has been brought about the rise of the uk independence party. i'm delighted to see nigel has just joined us. we was working hard and we grabbed him. i think it's fair to say that the people -- you presently are the cat amongst the pigeons. what is the issue that we need to be fighting on regarding our membership of the eu? >> mr. cameron says he'll renegotiate and try and get powers back from britain to brussels. but if he was serious, he would invoke article 70 that exists within the eu treaty by which he would call a meeting of all the heads of state and have a proper negotiation about whether to get powers back. he has not done that. that's why last week michael priscillo says the whole renegotiation -- that was a wounding comment. so what happened this week with the amendment of the green speech and now the government senses private members there. this is a desperate attempt to try and get people trust mr. cameron on delivering a referendum. >> they've been very critical by the timeline for this referendum. i think there was a quote from him today. what about the timeline, when would you like to see one, presumably before the next election in 2013? >> next thursday, as far as i'm concerned. why on earth do we have to wait another four years? we're not prepared to wait that long. we know that the renegotiation without invoking article 50 thankfully isn't serious, but it's a bit rich for mr. milliban to criticize the government saying the nation is not intelligent enough to vote on a referendum at all. >> what is the likelihood of getting airtime and passing it? >> enough time to pass their private members. >> getting it too pass will mean substantial numbers of labor would have to support it. is that going to happen? i don't know, but i doubt it. but even if it did pass, one parliament cannot bind the next parliament. this is merely just politics. it's two things. firstly saying please get your tax off our lawn. would you disappear and go back to your home. secondly, there's an intent to try and show cameron can be trusted. >> what about the relationship between uk and conservatives? a lot of new voters are naturally conservative voters, as well. is there any chance that david cameron is moving his party to the kind of territory where you would consider some form of a y allian alliance? >> no, absolutely not. mr. cameron wants us to remain a member of the european union. he's frightened of what we might do with some of his votes. we want grammar school to give working class, get the jobs to move up. there are, however, some conservative back ventures & that would say exactly the same thing as you were saying and my attitude is we should treat them as our friends. >> what are the policies that brussels and enacting that 2 uk doesn't like that needs to be renegotiated from any uk government? >> whether you have good law or bad law, it is completely unacceptable to me that the people are unelected bureaucrats made in brussels. >> thank you very much for dropping by the camera. many say the man who has created this headache is david cameron. back to you in the studio, ross. >> steve is set to run. thanks for now. good stuff. jules, it's kind of interesting. now we're having this discussion in the eu and uk. how is that going down? >> i'm actually struggling to hear you because they're getting ready for the meeting next week. obviously, it's going to be a lot 06 focus behind the scenes. there's a lot about tax reform and tax evasion. that hasn't stopped us from trying to ask some of the others what they think of the referendum shenanigans going on in the uk and whether it offers a distraction. when i spoke with some of the finance minister these morning, i asked them if there is a credible threat leading the eu. this is what they had to say. >> well, i'm very, very strong fan of the eu 2/7, soon to be '28. i do hope all member countries will stay in. we understand some of the frustrations the uk might have with the european union. >> well, we have our own. it's not necessary trying to yo other people's. what we need is for the economy to get better. >> i think each country can decide whether it wants to participate or not in the -- such as the european union, i hope that the uk see participating in a single market, participating in a peace project with the european union gives a little benefit to the uk. but i think it's within the each and every country to decide on their own what they want to do. >> if any country, however small or large leave european union. so i think the single market achievement. >> maybe have to make their own decision. of course, i'm in favor of britain and the uk and i think that we've got common sense and politics together. but, of course, the citizens will have to decide if there is a referendum or not. but one thing would be clear, we're not in favor of europe ala carte. >> i have to admit that some of these finance ministers seemed somewhat surprised when i bombarded them with request ens about the uk. one person wasn't necessarily surprised. he gave a prepared statement on his hopes on what can be achieved today. he was bombarded with questions about the referendum he received and walked straight in. so questions will still be asked and i know we will be talking about it a little more in the program. back to you. >> thanks very much for that, jules. where are we now with the european economy and stabilization? because we're trying to attempt internal evaluation. >> kind of rather hard thing to do. >> hard thing to do. i think the european economy is about to hit the bottom of the saucer. if you think about the economy, we have good economic expansion everywhere in the world except europe. and especially except peripheral europe. so if you only look at peripheral europe, you say, oh, what troubles we have. but look at the blowup global economy, tremendous monetary policy and the u.s. economy is accelerating. i think we'll have a much faster 2014. and so if the rest of europe is weak as europe, the economy would be in trouble, but that's not true. the rest of the economy is in good shape. >> is that only because of the huge monetary stimulus? >> it's a natural, cyclical pattern. we've had a pattern over many hundreds of years. you've had periods of expansion, periods of recession. the recession in the united states ended early because we strengthening our banks only. >> with balance sheet problems. >> we challenged our balance sheet problems. one of the reasons why europe is weak is they've been slow to address the problem of banks that need recapitalization. and dhed a long economy for a long period of time. the banking union, what should they do? it's time to enter the bank and make some decisions and move forward. in the u.s., they called in some banks and said you're going to do a stress test, we're going to force you to raise equity, we're going to rebuild confidence in the banking system and it worked. europe has taken forever to debate whether we do, how do we do it? >> with whatever paper they're written on? >> well, i think the cypriot banks passed their stress tests immediately before that and increased the pull pit. that wasn't really a hard minded evaluation to say the cypriot banks are, a, okay. we've done the stress test. it's really a good place to put your money. that doesn't build confidence. what europe needs is its ronald reagan, its maggie thatcher, it needs its ramp bow to make decisions as opposed to 27 countries says, what do we do and how do we make our coalition an alliance? >> very well put. wheat get more still to come. are there any legal implications? eads has posted a quarterly profit. we'll be in paris for an earnings check on the planemaker. and india's inflation is at its lowest level since 2009. we'll have the latest from mumbai. plus, is china about to lose its limelight on the global stage? we have been deciding whether to look on the eu imposing trade tear yichs. thanks, ross. kospi ended higher %. carmakers such as kia, hyundai and samsung enjoyed a nice rise. the shack high composite slipped 2 1.1% today. property stocks tumbled. the nikkei pulled back a modest 0.2% after profit taking in financials and real estate stocks. but sharp shares jumped nearly 5% ahead of its full year report card which came out after the bell. sony gained shares as well as kansai electric. kyushu soared, as well. their ratings spiking a high possibility as resumed nuclear power generation in the medium term. and we had plenty of coverage on this already. we'll be watching sony's shares tomorrow after the markets close. cnbc exclusively closed that u.s. investor third point called to break up the company and we'll follow that story closely. back to you. >> all right, sixuan, we'll catch you later. right now, 6 to 4 decliners outpacing advancers at the time moment on the ftse 100. the xetra dax down 0.3%. cac 40 down 0.5% and the the ftse mib, as well. there's an auction coming out from spain today. yields heading higher. they're higher again this morning. italian yield back over 4%. ten-year treasury yields, 9.2% over yesterday's level. on the currency markets, take a look at yesterday's dollar/yen, coming down a little bit, 10111.50 is where we stand. sterling, cable just below 1.53. ur he ro/dollar, 1.2995. we'll talk about currencies during the show, as well. investors have cheered eads's momentum. can they sustain it? we'll have the latest. ♪ [ agent smith ] i've found software that intrigues me. it appears it's an agent of good. ♪ [ agent smith ] ge software connects patients to nurses to the right machines while dramatically reducing waiting time. 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[ static warbles ] how old is the oldest person you've known? we gave people a sticker and had them show us. we learned a lot of us have known someone who's lived well into their 90s. and that's a great thing. but even though we're living longer, one thing that hasn't changed: the official retirement age. ♪ the question is how do you make sure you have the money you need to enjoy all of these years. ♪ xhergz bank has announced the latest information. >> decline res limited at this stage. we knew that commerzbank was going to start the capital increase earlier than expected because, obviously, it wants to benefit from the market conditions and this morning we've got all the details. now, the subscription price is lower than expected and that in turn translates into ach bigger than expected discount or dilution for existing shareholders. a 5% for those existing shareholders who do not participate in the rights issue and let's say 38% for those existing shareholders who do participate. commerzbank offers 20 new shares for every 21 shares and the subscription period starts tomorrow. the big question out here is is this the turning point for commerzba commerzbank? jpmorgan is not so convinced. they say this is a step in the rice direction, but it's not going to be a game changer because there are still concerns about profitability and commerzbank's asset quality. back over to you. >> thanks, carolin. a u.s. judge has dismissed a lawsuit over compensation from barclay's. the u.s. district court in manhattan says there's no evidence that the shares were an issue. and eads beat analyst estimates. phillip joins you now. phillipe, thanks for that. they're targeting new orders for commercial jets this year. what do you like about what you've heard? >> good morning, ross. i think that the forecast given by quite conservative. we've seen that in the first quarter of the secured roughly 400 units, aircraft in a pretty good market. the passenger traffic has increased by 5%. the world traffic is very -- the fuel price is a flop and basically we had a very good market and we can be content on the years provided by others for the year 2013. >> yeah. do you think the management's target of a 10% underlying margin by 2015 is firmly achievable? it's probably a bit early to tell. what you can see is continuous improvement margin of the group. not only in the minor divisions like europe or on the side of others. it's 50% of the margin and 90% of the other group. therefore, this will be key in the achievement of the 2015 margin target which is given by eads. in that respect so far, the management of airbus has fared quite well. they are clearly focused on profit improvement. working on the cost side of the operations and making sure that the very strong backlog translates into profit at the end. >> which is obviously the important thing in the end. this is a capital intensive business, right? that's got to play into the mix. >> yeah. clearly, today in that respect airbus is in quite a difficult situation. sure, they have been delivering a lot of aircraft, but on the one side, the s380 has not recovered fully from the quite issue the last year. this year, it will be catching up but not at full speed compared to the type of -- that could achieve. on the side of the air 350 which is the new program which is a very promising product, today we are at the stage of refiner assembly line. the slide is forecast for the summer and, obviously, the gas drain will remain. we have not averted to the market the aircraft which is not for this year. and in that respect, this is why eads is very cautious on the forecast and the run of the profit because it really depends on the result of the side of the -- >> phillipe, thanks for that. still to come, india's headline inflation has reached its lowest reading in 3 1/2 years. can the central bank continue to cut interest rates as a result? we'll talk about it. we used to live with a bear. 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[announcer] you are how you sleep. tempur-pedic. these are the headlines around the globe. sony is not for sale. the company responds to the cnbc exclusive that loew wants to split up the group. a see ondown howdown is exp westminster. there's no ala carte solution to eu membership. the french finance minister gets cnbc's survey from britain's future in europe. and japan's struggling sharp faces bigger than expected annual loss amid a new president getting back to profits in the year ahead. india's wholesale prices appear to be slowing. it's eased to 4789% in april. it's the lowest reading since november 2009. the figure was way below expectations. analysts told by reuters the uptick was 5.5%. phillip is from singapore and thomas, from deutsche bank, thanks very much indeed for joining us. what's the impact of this inflation on the likely to be for the central bank in items of their policy? >> well, the central bank has been somewhat hawkish in its tone, arguing that they're still lingering on uncertainty in the economy. that when you get data like this today, whereas you pointed out they were significantly below expectations and the three-month analyze rate of inflation rate momentum has fallen to 3.75%, core is below 3%, i can't see how the central bank can remain on the sidelines with this sort of data. i expect them to cut in june when they meet the market time. >> yeah. it's kind of interesting, you know, some of the numbers are weaker because of the production number ves dropped a little bit. how would you characterize the underline strength of the economy? >> it's very poor. the underlying trend is across the board into production, you look at what's happening with the pmi. we saw some figures in the beginning of this year, it's weighing substantially. the upward gap is substantial. therefore, there is no avenue with which producers can raise prices at this point and on the supply side whether it's food or commodities across the board. inflation is falling like a rock and the central bank will have to react when it meets in june. even subsequently, we expect three more rate cuts this year. >> and what happens to the rupee? >> the rupee should go from this point onward towards one direction, which is toward strength. we saw very strange bop trade number yesterday with gold jumping in to head off the restrictions of the central bank is putting in place. we expect that one off to get mitigated and subsequent data to be very constructive and the rupee in our view has to work 53 to the dollar. >> thanks for that. now, fighting to remain viable, circling japanese electronics says sharp expects to return to the black in 2014. let's get more on that. >> hi, ross. sharp plans to post a net profit of $15 million in the current fiscal year compared with a record loss of $5 billion in the previous fiscal year. the electronics giant announced a three-year plan including down siding its pv and solar cell businesses in europe as well as focusing on the growing market in southeast asia. the company took the highly unusual step of repricing its chairman and president after only a year. the current vice president will be promoted to president following a stockholders meeting in june. sharp will also -- its 12-member board and review the advisory post held by the former president. these moves will give him a stronger grip on power as the new president. meanwhile, after struggling, it will raise its capital ratio to 20% by 2016. it ames to build up its capital reserves through public offering of shares. investors bulk on the use and panasonic shares rose 5.7% today. back to you, ross. >> thanks for that. a reminder of what's on the agenda for tomorrow, a big day for japanese financial earnings. we got reports from mitsubishi ufj and we'll get an investor update from hsbc. we get foreign director investment figures out of china for the month of april. philadelphia fed president charles plosser says he wants the fed to begin cutting back on bond purchases as soon as his next fomc meeting in june. he made the comments to be delivered in stockholm. unemployment would see 7% by the year-end. dick hayne is still with us from bny melon. mr. plosser is not in the majority, is he? >> no. charles plosser has had this view for quite some period of time, but the core of the fomc, which is ben bernanke, janet yellen and bill dudley, they're doves, they don't have the same view. i think we'll probably see tapering of the qe in early 2014 conceivably -- >> not this year? >> it could be in december 2014 meeting if the evidence is called at the holiday season is strong. but i don't think they'll be dealing with this every summer. >> we just got the spanish auction, a t-bill auction. 1.1 billion t-bill auctions. have we got the yields on that? we haven't. 3.30 billion of 12-month bills, a little less than the previous auction of the six-month yield. 0.5%. lower in april 2016 and haven't got yields yet for the 12-month. i think it is also lower, as well. yields 1 is.05% versus 1.274%, as well, on the t-bill yields. come back to the fed. how is that, i want to bring in don smith who is with us, as well, government bond strategist at icap. don, it's heading higher in the last two sessions for the spain and italy. but auction yields, t-bill yields continue to go lower. how much lower can they keep falling? >> yeah. well, the comparison, obviously, is that the auction a month ago and we have seen yields even at the short end of the curve. we stand quite considerably in that time. we have seen a modest move up in the last week or so. fundamentally, you know, over the core are continuing to compress despite the very modest back drop we've seen of late. europe levels across the eurozone is edging higher. that's being driven by treasuries, essentially. all yields arising, we're seeing significant underperformance for treasury. the treasury market is thriving, yields higher now. >> yeah. i mean, i just know on the ten-year, 11.62% and we've been up to now 1.9%. how much higher are treasury yields going? are we -- can the spread between u.s. treasuries and bund, not far away from the sort of the most back in june 2010? >> yeah. i think this is one of the next big trades, actually. we've been looking at this for a while now. the widening between treasuries and bund. i think we have passed below treasury yields and probably for bund yields, as well. we have a sharp contrast between what's go the on in the u.s. and what's happening in the eurozone. deflation, it's falling quite sharply now and the outlook for the economy remains extremely weak. it's a sharp contrast to what's going on in the u.s. there are pressures on yields in the u.s. and still very much down from yields with the eurozone. >> yeah. so we don't know how that plays out. don, thanks for that. that was don smith from icap. dick is still with us. what do you think happens to treasury yields? >> well, the absolute low is by 1.38% for a ten-year treasury. that's down from 16% in 1981 and over a three-decade bill market in bonds. i think the bull market in treasury bonds is over. >> you hit the bottom of the saucer in -- >> hit the bottom. but i do think that the rise will be gradual and it will be led not by rising inflation, which would be dangerous to the economic recovery. it will be caused by better economic activity. so you can have your economy -- yeah. you can have a sustained expansion, and i'm forecasting roughly a sustained u.s. expand in 2015, 2014, 2015 and 2016. i don't think we're going to have a recession in the u.s. through the next presidential election. and does that come without a big jump in inflation? >> it does come without a big jump in inflation. the inflationers have made the mistake of too simple an economic model. the fed creates excess surge and inflation surges. what they want is the intermediate function of the speed of growth of credit. and bank credit has been slowly in the u.s. because of the restrictive regulatory policy. so gross monetary policy is super easy, but net monetary policy after that regular clampdown is stimulative. we've got a long expansion ahead of us. next recession in the united states not until after the presidential election. i just put out any new economic update last week. >> great to have you on. it makes me wonder about what's going on with the bank credit in the eurozone. >> u.s. banks are much stronger. it's time with the eurozone to deal with the zombie bank problem. it is time to deal with the balance sheets of the banks. banks don't increase loans if they have a weak balance sheet. that's the problem. >> have a safe trip around the rest of europe this week. despite what's going on, we are in europe. >> i don't know whether you -- >> i believe that to be correct. >> you may not believe that. there there's, the biggest corporate ever debt sale, petrobras has now covered more than half of its funding needs for the year. the offers comes just weeks after a record breaking $17 billion bond sale from apple. still to come, amazon employees in germany are stage ago strike overpay. we'll discuss with the general secretary of the trade union federation. ♪ [ agent smith ] i've found software that intrigues me. it appears it's an agent of good. ♪ [ agent smith ] ge software connects patients to nurses to the right machines while dramatically reducing waiting time. [ telephone ringing ] now a waiting room is just a room. the government is considering levying a new tax on smartphones. sounds unusual, but they are considering it. stephane, how would this work in practice? it sounds rather complicated. >> well, it would be 1% tax on all digital devices. so smartphones in general tablets. and the report, which was commissioned by the french government, points out that the french consumers are spending more money to buy hardware and money to buy campaigns for their public and the culture minister supporting the plan, she complained that yesterday that the new tax on digital products would impact international companies such as apple or samsung and not french companies and, therefore, it would be for the economies. now, there are two problems. the first one is that it is the first cut that we have in france on digital products. there is a tax on digital storage for the memories such as a smartphone. you already pay your tax in france to finance the exception to the copyright which gives you the right in theory to make a copy of whether you buy just for your personal use. now, the second problem is the amount of money that should be raised from that. 86 million euros. and you probably know how much money used to produce that, especially when you talk about like big budget, hollywood and 86 million euros. so why all this for only 86 million euros, we should say? >> yeah. the interesting thing is, there is david cameron, of course, at the moment and in helping to push forward the trade agreement. as i understand it, france would look for an exemption for their artistic industry? >> it's called the exception for control group. france also considered that culture is a different product. it cannot be traded like any other group like computers or cars. for that reason, probably they would like to have an exception. yeah, okay. and that's the way they go for it. other than that, our tax plan flight, as well. thank you. is it one thing you would hang up on straightaway? let us know. e-mail us, worldwide@cnbc.com or tweet us, @cnbcwex. the lumia 925 has been released. it focused just on the camera. last week's new phones are higher in the u.s. and a cheaper smartphone for emerging markets. so that stock is down 11% today. but, actually, that did boost nokia's stock price yesterday. meanwhile, the eu's trade chief will ask for permission this week to start investigating firms y and zte over allegations they benefited from subsidies. ericsson's spokesperson has told "the wall street journal" that the eu faces a negative spiral by targeting individual firms. sharon bowe joins us now. thanks very much, indeed, sharon, for joining us. how much -- the economic crisis has developed, how much more pressure has been put on workers? >> it's a disaster. the international files, government -- in the face of demand for tests from their own workforce and it's become a humanitarian profit. we have the greatest in equaleq. seems to be the question. aggregate demand is way down because wages by and large are going to cut in costs with this country and jobs have been locked. this is a jobs plan and income risk focuses on jobs. and the economy is -- >> the plan is, though, for internal devaluation and you have to regain productivity which means lower wages and/or job lows, probably both as we see in the case of spain. that's just the price, isn't it? >> well, is it worth it? we think it's an oxymoron to suggest on the common currency even in a country that can devalue, that the shrink is to grow. so if you look at the misery for people outside of the economics, for france now, tomorrow there will be in -- but the cost of countries such as spain, portugal and so on, you tell me how they're going to get out of it. will that jobs -- for the economy? >> i have no idea, but that's the price that politicians are saying they're going to take. >> if the u.s. want to -- and the unions have committed across europe to maintaining the euro, in the eurozone then the unions know that big countries are small. but you need not only economic numbers and they're talking about financial union and tech reform. they have to be debated. but you need jobs and you need a sense that you're looking at the economic sitting across the eurozone, not country by country. and that's -- for failure. but the european central, the european central bank have got it wrong. now two more countries, france and netherlands and take them. >> the dutch number is kind of interesting. a big jump up we've heard in the last month or so. >> the court in bangladesh building, its policy collapse a few weeks ago. the fashion chain led by the international organization trade union and other goods. at the same time, calvin cline has been so far resisting. also, workers who belong to trade union are post ago strike today. they're hoping it will put pressure on the company to improve pay and benefits. around 9,000 people in germany are refusing to implement a collective bargaining agreement. it could increase salaries by as much as a third. collective bargaining, is that one of the consequences? >> collective bargaining is under attack. this is bad for aggregate demand. if you look at all the events, and this is just a reporting at the base currently called front line, treasurers and im paperworkel data, that tells you how collective bargaining is. you have bigger growth and longer growth spiraling and collective bargaining, equality is at the heart of that. then you can participate in the economy. >> just one thing. in places like spain, those workers have just have all their rights and new jobs have a lot of temporary workers, completely different pay levels and they have a job. >> how can you raise a family, participate in the economy, invest in a house or other assets if you don't have secure wages? so those that argue inequality is good, collective bargaining works. >> thank you very much, indeed, for joining us. we'll take a short break. the second hour of "worldwide exchange" still to come. our next guest says the euro has been riding a wave of optimism. ♪ ♪ the new blackberry z10 with time shift and blackberry balance. built to keep you moving. see it in action at blackberry.com/z10 this is "worldwide exchange" and i'm ross westgate. sony says no to daniel loeb's intention to split up the group. david cameron is set to publish a draft of a new bill amid pressure from members of his own party. there is no ala carte eu membership. colleagues in brussels say an exit from the eu would be harmful. revelations over the tracking companies stretched back further than previous thought. if you've just joined us, welcome to "worldwide exchange" been we have the latest snapshot of investor confidence out of germany. the economic expectations lower than expected. 36.4. pretty much among the numbers of 36.3. there was a rise at 39.5. the current index is also slipped. it was 8.9 and 9.2 in april. the euro is slipping down to the lowest of the session. not by much. 20 wrb 1.2990 is where we stand on that. haven't got the industrial production numbers, but i know that they are out. i'll look for it. otherwise, we have a monthly rise, the fastest since july last year. we did actually help a lolong te we go. there's much industrial output. 1.1% year on year helped by the german number. charles schlossberg joins us. good to see you this morning. you were just looking at the zew slightly weaker. it's very much in the ranges on euro/dollar. i know some of the currency guys are looking at this spread between treasure yields has widened out quite a lot. is that going to tell us the bottom of the range on euro/dollar? >> definitely having an impact. i think the spreads are driving all of us, the spreads between treasury and jgbs is driving dollar/yen and to a smaller extent driving bunds and u.s. treasuries. but the euro has been remarkably resilient. if you look at the euro, it's had everything but the kitchen sink thrown at it and remains very much bought at 29.50. it's had a tremendous amount of support at that level. for the last month and a half, it's been a lackluster range as the market is trying to figure out where the next stuff happens in the eurozone. i think the conventional wisdom right now is the worst may be behind the eurozone and they're looking for any kind of inflexion point up. it's just a rate of negative change becomes less and i think that would give markets a little bit of a -- optimism and hope. that's keeping the euro propped up for the near term. >> how much of this is just flows -- clearly they're invested at putting a lot of money of the yield into political debt. how much of that has come from outside of europe? >> that's right. i think one of the greatest ironies of the world is the greatest supporter has been the boj. you have this dynamic going on right now. sovereign debt yields are a year lower. it's a multi year low. that's because a lot a lot of japanese investor money is starting to come in for the euro. euro/yen has been propping up the euro baht because of that. we see this going on through the summer as you have outflows out of japan. supporting the eurozone and in that sense providing the financial stability. >> stick around. we'll come back to you. good to have you on this morning. more to come from boris. right now, if you've just joined us this morning, let's show you where the futures are. we held off towards the close despite the better than expected retail numbers. the dow is down 22 points. we're below fair value by some 27 points. the nasdaq at the moment is about 5 points below fair value and the s&p 500 is around about 3 points below fair value. that's the implied open. you are negative here in europe. up 0.5% fort ftse. the cac 40, the ftse 100 down ten points. we haven't done very much. yields have done a little bit higher in spain and italy again today. we're back over 4% for the italian yields. another t-bill auction this morning out of spain, yields lower again in may versus the auction. cash yields, as you can see, slightly higher. 10-year treasury yields, down slightly. 11 is.92% this time yesterday. and on the currency markets, a bit of a pull in the dollar slipping back from five-week highs on the dollar index. it's still below a hundred. dollar/yen, 101.43. 1.2992. that's where it's down. european asset prices, sixuan will recap the asian session for you. >> thank you, ross. asian markets were a bit mixed. the shanghai xcomposite was a standout loser amid concerns that beijing may pump more stimulus into the economy despite recent data. the south yeah outperformed the region after declines hit the pulse button and that helped bring automakers higher. hopping congress's stanchart up 2.38% today. meanwhile, the world's biggest aloous aluminum producer, rusal, fell after disappointing q1 profits. in australia, miners slipped lower after iron ore prices fell to a new low on the year. sharp shares jumped almost 5% ahead of earnings after the bell. the panel maerpmaker posted a record net loss return to profit by 2014. utility stocks after nomura upgraded earnings on expectations that they will renew nuclear generation in the medium term. meanwhile, after the market closed, cnbc exclusively disclosed that sony's u.s. investor thought to break up the company and we're watching reaction tomorrow. back to you. >> all right, swiixuan, thanks r that. >> sony says its entertainment business is not for sale in response to hedge fund investor dan loeb. loeb met with sony executives over the weekend and is pushing for a spin-off to unlock more value. the share price could rise as much as a 60% by separating the division, which includes its movie studios and music labels. andrew laid out those plans earlier. >> the plan has proposed by dan loeb would be to break up the company in three parts. it would include a break up of perhaps the most famous part of sony, the hollywood entertainment piece that both encompasses the music unit as well as the film unit. separately, he is proposing that they spin off what is known as sony financial, which is an insurance unit that would leave sony core, if you will, as the last remaining piece of sony and that piece would encompass the electronics business. that includes things like its tv business as well as its playstation gaming unit. >> that was andrew earlier. sijuro, this is a company that initially just returned back to profit. how much sense is there that this plan now? >> well, personally speaking, if i were an employee of sony, i think the proposal is a little bit rich. and the reason is that sony entertainment and sony financial made about 350 billion yen. this is where the prospect of the future lies. away from a conventional manufacturing base auto a lot of utilization of the ground image, etcetera, etcetera. the negative part is their hardware point which was a loss of 250 billion. naturally, the area that this investor is talking about is exactly the area. obviously, they wouldn't want to sell that off. their plight answer is thank you, but no thank you. >> there is a point that the whole should be greater than the sum of the parts. they haven't been able to -- you should be able to make the hardware work with the entertainment business. why haven't they been able to do it? >> well, it's easier said than done, i think. obviously, it's modelled by samsung at all and the koreans and emerging powers for many of the players that you're finding pumping up in southeast asia and with them making it easier for the third party or the fourth party to really follow into the market, it's becoming a lot more difficult for sony to sustain the benefits of the hardware side. obviously, there is a clear problem in this area. so the synergy that people are talking about is i think they've been trying this for many, many years, but they've failed constantly. obviously, i think sony has to seek a new method or new pathway of growth for the future. >> the way you're speaking, maybe the plan should be to spin off the electronics division. >> unfortunately a lot of people do suggest that. unfortunately, sony has become far too big as a corporate entity. and this is, but its government style is very, very japanese. you can't turn that around the next day. for them to divide as we do suggest right away and, for example, like the u.s. governs race is unlikely in the near foreseeable future. >> and talk about the culture, as well. i wonder how this idea being pitched by a u.s. hedge fund manager will have gone down in japanese corporate board rooms. well, i think -- well, i think a lot of the people have been looking at it. obviously, it's a natural supposition by these investors. but, you know, again, i think it's a little rich because it's pretty obviously an area where they want to expand into. but again, as you noted, sony itself is far too big to make that transition into a smaller piece of pie. this is where some of this lies. so i don't think they're at a point of releasing that. if anything, what they're trying to do, the board room is trying to do is use that as a gearing for further growth of sony has a total entity and certainly not sell that off. >> yeah. at least a weaker yen will help with that at the moment. good to see you, as always. thanks for that. bloomberg reportedly leaked online thousands of private messages by accident which contain sensitive pricing data of users by its terminals. the messages were uploaded by a former bloomberg employee. the spokesman says the post is a clear violation of our policies. ubs complained after bloomberg mentioned on air his monitoring of logging activity by the bank's rogue trader. bloomberg has been contacting its subscribers in recent days. in a blog post, he and his executive team have personally reached out to more than 300 clients and now appears from the login screen of the bloomberg terminal. the times reports that a company hired outside lawyers on friday to help steer it through crisis. the french government is considering levying a new tax on smartphones as it seeks financing for its creative industries. earlier, we asked would you pay extra for your tablets? culture bound, #fail. keep your responses coming here on "worldwide exchange." worldwide@cnbc.com or @cnbcwex. still to come, the publish prime minister has sed out to make good on his promise to hold a vote on eu member. is european equity really on the cards? we'll get the reaction from leaders from brussels when we come back. are you still sleeping? just wanted to check and make sure that we were on schedule. the first technology of its kind... mom and dad, i have great news. is now providing answers families need. siemens. answers. sony entertainment group is not for sale, after a cnbc exclusive report saying titan daniel loeb wants to split the company up. david cameron is introducing a bill that would make an in or out building binding. and bloomberg faces more questions after the company accidentally leaked thousands of client messages online. british conservatives are looking at a bill to make an in or out vote on bill binding. president barack obama weighed into the debate urging the uk to fix its relationship with the eu. steve has been following the story from westminster. he sends this report. >> here in westminster, we could see a further evolution of the story. it seems as if david cameron has been forced into a position now where he has to offer euro skeptics within his own party some form of carrot in the form of a binding draft bill, which would probably away draft private members bill backed by the government to put in a shrining law in or out of the eu. this will probably be 2017 which is after the next general election which is due in 2015. of course, we have a coalition government and the departments. so a lot of questions remain despite the hard line coming out from the parliamentary. >> this has also been a topic that julia has been putting to leaders in brussels. and she joins us for more. jules. >> i did pose this question to them. this is what they had to say. >> i'm in very, very strong fan of the eu '27, soon to be '28. and i do hope all member constituents stay in. >> you find some of the frustrations that the uk might have with the current european union. >> well, we have our own. so it's not necessary to understand other people's frus traugzs. what we're seeing is very much needed is that the single market gets better because we need europe as a growth engine. also for us, even though in a more confident situation than some of the other country sgleps each country can decide on its own whether it wants to participate or not in the -- in an organization such as the european union. i would open hope that the citizens of the uk see participating in a single market such as the european union gives a little bit to the uk. but i think it's the right of each and every country to decide on their own what to do. >> it would be possible for the european union if any country would serve a european union. we must preserve thegs values. >> the participants would have to make their own decision. we'll look at the common history and the politics together. they would have to decide maybe if there is a referendum once. but one thing to be clear, we are not in favor of europe ala carte. we must stick to what we are together which is this european union with a place for the uk, but we must not adapt the reconstruction. >> that position within the eu is clearly understood here. i think the point here is that ultimately that still has to happen. some discussions that i've had, the discussion is necessary. >> that topic is one that is going to run. if you're just joining us, u.s. futures indicate ago weak open this morning. the s&p called down 2.5 points right now. the dow is implied loir by 20 points. the nasdaq lower by 4. we'll have more on "worldwide exchange" in a few moments. ♪ [ engine revs ] ♪ [ male announcer ] just when you thought you had experienced performance, a new ride comes along and changes everything. ♪ the 2013 lexus gs, with a dynamically tuned suspension and adjustable drive modes. because the ultimate expression of power is control. this is the pursuit of perfection. otherworldly things. but there are some things i've never seen before. this ge jet engine can understand 5,000 data samples per second. which is good for business. because planes use less fuel, spend less time on the ground and more time in the air. suddenly, faraway places don't seem so...far away. ♪ the central bank and bond buying sooner rather than later. he wants the fed to begin cutting back on purchases as soon as the next fomc meeting in june. he made the comments in the text of a speech delivered in stockholm. he said the gains in the stock market warrant such a move. he said, one, it's unlikely he would be open to increasing bond buying if inflation eases further. the dollar index, mean wile, coming off five-week highs today. you can see the dollar index down marginally. we're talking about europe a little bit earlier. that is the view of mr. plosser you might expect. i also spoke earlier to richard hoey. he said i don't think we'll get any tapering december at the earliest. >> i agree. there are too many doves on the fomc that basically want to make sure the economy is growing at a roent 2.5%, 3% pace before they decide to taper off. the trade in the dollar right now is very much the u.s.'s to win or lose. i think at this point, japan has done pretty much all it can as far as the qe and the dollar/yen story now tips over to the u.s. side. if the u.s. economy continues to tip to the up side, that's when we get the continuous rise in dollar/yen. there seems to be a strong correlation between the spread between the jgbs and u.s. treasuries and dollar/yen as we go forward. >> yeah. the question is, are treasuries going to rooid rise, such a big rise since the employment report. how much more can we push on that? >> well, it's going to be a question of continuous u.s. economic data surprising to the up side. as you've said, we've had a couple of months where we have surprised to the down side. u.s. sales were decent. even after the u.s. sales yesterday, we clearly were overbought in dollar/yen right now. there is profit taking due after the massive runs that we've had in the last couple of days. i think we're going to pull back to maybe 1011.50 consolidates and wait for the next piece of marp u.s. data. if we can continue to see that on the u.s. economy through the summer, you will see dollar/yen higher, probably 105, maybe even some analysts spec lathing 110 into the fall season. >> all right. good to see you, boris. thanks very much indeed for that, as ever. you have your whole day ahead of you, boris. isn't that good? >> i do, i do. i start any day early. and i watch you every day. >> we appreciate it. good to see you, boris. still to come on the program, bloomberg executives called a privacy brief inexcusive and apologize. but is that enough? more when we come back. 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[ female announcer ] today, cisco is connecting the internet of everything. so everyone goes home happy. all right. sony entertainment not for sale. the firm responds to cnbc's exclusive that the u.s. hedge fund giant daniel loeb wants to split up the group. showdown is expected in westminster. british prime minister david cameron is going to publish the draft of an in or out bill of the eu amid brush your easy of his own party. there's no ala carte membership. colleagues in brussels say an exit would be harmful. plus, more potential trouble for broom burlg. reports say the company accidentally leaked thousands of sensitive messages online and revelations over a reported tracking company do back further than previously thought. >> you're watching "worldwide exchange," bringing you business news from around the globe. and if you've just joined us, a very good morning to you. right now, the dow is about 18 points below fair value. we are indicated 4 points below fair value for the nax das and the s&p 500 is currently implied down just over two points lower. the ftse cnbc global 300 is down not by much, just over a point. european equities, the ftse is up six points at the close. it's currently down, so gone nowhere overall. the xetra dax, just got those record highs at the moment. they're flat on the ftse. the cac 40 is down 0.3%. very minimal moments for indices. bloomberg reported le leaked online thousands of private messages by accident containing sensitive pricing data exchanged by users of its terminal. the messages between traders of banks between 2009 and '1 0 were uploaded by a former bloomberg employee. a spokesman says he posted a clearly violation of our policies. the "new york times" since incidents involving bloomberg stretch back to 2011. ubs complained after it was mentioned on air his monitoring of activity by the bank's rogue traders. bloomberg has been contacting subscribers in recent days and on blog posts the ceo and his executive team say thief reached out to more than 300 clients and a letter from him appears on the login screen of the terminal. and the ceo of cridco joins us now with his view. thank you very much b deed for joining us. >> thank you. >> the latest news that thousands of private messages were also posted by accidents, what does that do for the story? >> you know, last night when i went to bed, i was thinking, you know, it will be okay. they responded very quickly. this is a first rate news operation. very unimpeachable. this morning waking up to this news, i'd say they probably have a lot more work to do. i think reaching out to clients one-on-one the way they have with their executive team is a step in the right direction. but even last night, i was thinking to myself, appointing someone inside to be the chief comply an compliance officer is a step in the right direction. they need to do a full audit and then make the audit public. i thought this might be an arrant, you know, one off type of issue, but it could be systemic and i think that's what they need to address right now. >> and to do that, presumably, they need a different kind of guy to be their chief compliance officer. do they need to that be almost an outside operation now? >> i can they do. he's an insider. i can't find anything on him that suggests a background of compliance or mismanagement or any sort of background. i do think they need to do that. but, again, the one thing i will say about this organization is i have to give them major perhaps for making their executive management, editorial folks, everything so accessible, they're contrite, they've been humiliated publicly. it doesn't sound like they're broke b any laws, but i do feel they've handled the ukz xhoos crisis here today very well. >> what's interesting is that they talk about, you know, the original looking at what happened in 2011. but then we've gone further than that. matthew winkler admitted bloomberg reporters have been doing this for more than a decade. it contradicts the statement. >> it certainly does. i think they could have avoided some of the crisis they're in right now had they proactively disclosed this issue in 2011. i think the calculus involved in organizations like this is if you communicate this proactively, just see how people talk about quite often. and i think that now they're paying the price for waiting and they probably should not have waited. >> at the end of the day, they need to assure their clients. i presume there's not going to be an issue with that. >> i don't think so. but for others, maybe whether there is a wall between the news organize and the rest of these organizations that is not just platforms, information, distribution, is that wall really a fence or is it a wall and can it be a wall when they're part of the same organization? do they need to be spun off or separated? >> thank you for joining us. australia has released its brujt. 11.4% of gdp. last year, it forecast 9.6% of gdp. we know at the moment, the rba story has a record low and could go lower. and they're talking about a multi national tax. australia will push other nations to crackdown on tax evasion. something the uk has been looking at. we'll see whether that goes anywhere. right. the house ways and means committee will hold a hearing on friday. the acting irs commissioner is scheduled to testify. irs officials took part in discussions as far back as 20111 over targeting tea parties and other groups other application for status. the associated press says the justice department secretly obtained months of phone records of its reporters and editors. the u.s. government sought information far beyond the scope of anything that could be justified by specific investigations. the justice department won't say why it sought the records. but officials have previously said washington is conducting a criminal probe into -- may have leaked information in a may 2012 ap story about a foiled terror plot. still to come, more on sony. our very own andrew ross sorkin would broke the story earlier today will join us in a few minutes. plus, the fed says u.s. banks need another round of stress tests. this time they're very different. find out the push on that when we come back. all stations come over to mission a for a final go. this is for real this time. step seven point two one two. verify and lock. command is locked. five seconds. three, two, one. standing by for capture. the most innovative software on the planet... dragon is captured. is connecting today's leading companies to places beyond it. siemens. answers. how old is the oldest person you've known? we gave people a sticker and had them show us. we learned a lot of us have known someone who's lived well into their 90s. and that's a great thing. but even though we're living longer, one thing that hasn't changed: the official retirement age. ♪ the question is how do you make sure you have the money you need to enjoy all of these years. ♪ sony says its entertainment business is not for the sale in response to a plan by dan loeb suggesting he's going to split the company. andrew ross sorkin spoke earlier this morning. andrew joins us now from the states. great story. what is driving dan and what exactly, you know, is he looking for? >> there's a couple important pieces though think about. last week scott wapner did some reporting on this from the conference. dan loeb effectively hinted that he was very interested in japan. he's a big fan of abe. he believes there's a real doesn't in japan going forward. and the investment in sony is really a stake in the ground. it's an opportunity to say, you know what? if you want to make structural changes, if you really believe those changes are coming, this is the chance to do it. and so he went today in tokyo, physically handed over a letter outlining his plan. i should say there seems to be some confusion, and i don't know if it stems from sony, if they haven't read the letter carefully. sony has come out and said the entertainment assets are not for sale. his letter and proposal does not suggest that he wants it to be for sale. what he is saying is that he would like it to be spun off, 15% to 20% through a subscription offering to current shareholders. he hints around the edges about spinning off or doing something with sony financial which is their insurance business. at large, this is a play on japan. this is a play on structural changes in japan and in particular, obviously, an opportunity for sony. he has now invested, by the way, something like $1.1 billion. that's 6.5% of the company. from my reading, that makes him not only the largest shareholder in the company, but possibly the largest shareholder by a factor of two. and the real question is going to be how does sony truly respond? this is a process. you're going to see them come out with statement saying nothing is for sale. we're not following this plan. over time, as we saw with yahoo! the board is going to get involved. adviser res going to get involved. and i think it's going to be taken seriously. the real question then becomes do enough western investors pile into this stock so that come around next fall, if sony doesn't follow through with some of these things, and right now this is being done instructly on a friendly basis, you know, when you get to an annual meeting where you can actually elect officers, is there a contest to be had? >> and i was going to say, i don't know what sony's rules are on how big a shareholder base you can have before you say i'd like a director on the board, but presumably, that will be in the processes. you know, he's already passed that. he can ask for that. he has asked for that seat in his letter. he says that he would like to accept one. he doesn't sig he's asking for one. he says i'd be happy to accept a seat. i think directionally, we begin the process. you could see this escalate. but my understanding is that -- and i poke to several people after the move -- they said he came away very impressed with the management and was very happy with the meeting. of course, you know, we had our report. we came on cnbc, discussed it and now sony seems to be pushing back and we will see how this all plays out. but in japan, of course, this is a huge issue because sony is the iconic company. and to see a werner come in and try to push them, you know, some afraid of what is happening, but a talked to a number of people who are thrilled, one person said to me, wall street has arrived. and i suspect we're going to see what happens to the japanese stock market tomorrow if people believe that more people believe people like dan lw are coming. >> the consumer side is losing -- and look, the strategy at sony has always been we need to hold on to this business. we need to hold on frankly to the insurance business. because that's where the money is coming from and they're subsidizining what is a losing consumer business. if you read through the letter carefully, my sense is that he wants to spin the entertainment business because he thinks there's more valuable on that. he wants to look at the edges around what could happen on insurance and some of the other businesses. it's all about focus. how can sony get focus? how can they get less skus? they have so many different products and that has been one of their biggest problems. but their problem, howard stringer, the former ceo has said multiple times, it's a cultural issue. you can look at the balance sheet and decide you think you know how to restructure this company. but culturally, it is a huge calling in a country where most of these employees believe -- and it's a huge challenge for the board and the new company's ceo. >> and on top of all that, helping everybody is the weaker yen. so that sort of flames it, as well. andrew, thanks for that. plenty more to come today on "squawk box" and on cnbc.com, as well. as he said, it's worth reading the details of that letter. also in the headlines, as we've started, sony is insisting its entertainment group is not for sale after a cnbc exclusive report suggests daniel loeb wants to split the country. david cameron gets serious about introducing a bill that would make an in or out vote binding. and bloomberg faces more questions after the company accidentally leaked thousands of client messages online. and still to come, find out why morgan stanley's ceo could land him in the hot seat at the bank's shareholder meeting later today. ♪ ♪ ♪ ♪ ♪ the new blackberry z10. with time shift and blackberry balance. built to keep you moving. see it in action at blackberry.com/z10 ♪ je t'adore ♪ c'est aujourd'hui ♪ ♪ et toujours ♪ me amour ♪ how about me? [ male announcer ] here's to a life less routine. ♪ and it's un, deux, trois, quatre ♪ ♪ give me some more of that [ male announcer ] the more connected, athletic, seductive lexus rx. ♪ je t'adore, je t'adore, je t'adore ♪ ♪ ♪ s'il vous plait [ male announcer ] this is the pursuit of perfection. ... you thought wrong. get up to 50% off hotels this memorial day with travelocity. the fed says it's time for the biggest u.s. bank to go back to school. but this time, there's a twist. jackie has more for us. >> good morning, ross. there's always a twist, right? the fed saying that the 18 biggest uk banks must admit their next round of stress tests by july 5th. now, this is the first time that the fed is conduct mid year tests. but unlike previously versions, each bank must decide and run4b their own scenarios to test how they would fare under various economic positions. they must show how their capital and other losses would be affected under baseline, adverse and severely adverse scenarios. the banks are required to then publicly release the results from the severely adverse facts by tend of september. the fed isn't going to give results of a passing or failing grade. but it will use them to evaluate and prod the banks in terms of their capital positions. earlier this year, banks were subject to two rounds of tests, an exercise known as comprehensive analysis review and mandated stress tests under the dodd frank financial reform law. the fed approved capital plans of 16 of the 18 largest banks and rejected plans from allied financial and db&t. the fed approved jpmorgan and goldman sachs's plan to address some weaknesses. ross, back to you. >> jackie, thanks for that. and morgan stanley holds its meeting today. shares are down 5% since he took over in 2009. gorman has promised a turned around. the business is still struggling. iss glasgow is split over whether the shareholders should aprocedure gorman's compensation. they're divided on whether shareholders should afrof the pay plan at goldman sachs. as far as stocks are concerned, goldman is down a percent in frankfurt. morgan straply st flat. marty, thanks so much indeed for coming. what do you think they should do in terms of compensation and performance? is the balance wrong? >> well, as you look at it, there's been a severe shock to the system that some of these banks had to absorb. if you look at jpmorgan and wells fargo, they've come out the other side. we've had others, still having to regenerate their earnings in relation to where they were prior to this crisis. morgan stanley, if they're looking at consolidating, these are things that will eventually improve their returns and they'll be able to reduce their cost of equity and that's how they're going to continue to recreate shareholder value here. >> so when you look at the price of the stock, what are you recommending? >> we're wanting to see more progress on those initiatives that we talked about. there's some time in it. 2014 is where a lot of these things will kick in. it's around about 15% upside. we think, again, most of that will be later as you move into 2014 and that will get these initiatives to accuracy some increased profitability. >> the issue of jamie dimon, what's your view on whether he should be keeping those jobs? >> well, this is a hot topic at this point. but you have to take each situation unto itself. it made sense in the way they wanted to structure it and the personalities and the people they put in those two positions. if you look at jpmorgan, jamie has a dominant permit. he really is leading that company. is very active in the sense of how he does that. we're not sure that dividing that would be constructive at this point. we could do a lot of different things to react to whatever the voter turnout is next week. there's a lot of different ways to handle this, but we think keeping jamie dimon is important. >> could he be the executive chairman? >> could be, yes. a very active chairmanmanship is not at all out of the question and doesn't change the dynamics of the company at this point. >> okay. we'll see how that one pans out, as well. we also have the next round of stress test results. how much is going to come out for investors? >> well, i think what we just went through is a pretty extensive stress test. wa we're llg is the relationship between risk and capital. coming up with random capital levels isn't the right answer, but looking at how much the company has and getting better at monitoring that, estimating that, and eventually managing it better. those are the things that are going to make the system more safe and sound. and looking at their capital in relation to that over time is how we're going to continue to improve this process. so let's redo a lot of what we just did in march. but doing and exercise more and more times could be a benefit. >> we appreciate your time. u.s. equities pretty flat this morning. we're just 0.1% lower for the ftse 100, xetra dax. u.s. futures right now are stocks closing last night currently called down around 19 points on the dow. the nasdaq is concernedly called down 4 points and the s&p 500 is currently down 2 points. on the agenda today, we've got april prices at 8:30 eastern. and just a pair of noticeable earnings today from valspar and agilent technology. thorsten heins is giving a key note address today, as well. that's it for "worldwide exchange." "squawk box" is up next. whatever happens, we hope you have a profitable day. [ kitt ] you know what's impressive? a talking car. but i'll tell you what impresses me. a talking train. this ge locomotive can tell you exactly where it is, what it's carrying, while using less fuel. delivering whatever the world needs, when it needs it. ♪ after all, what's the point of talking if you don't have something important to say? ♪ good morning. hedge fund manager dan loeb wants to break up sony. we have a guy who knows all about it as part of the show. he's a coanchor. and a government obtained associated press phone records in a probe. that came on top of like six other scandals yesterday. and on wall street, a fallout from the bloomberg breach. the company's ceo says he's listening to customer concerns. meantime, reports say that more than 10,000 private terminal messages have been leaked online. tuesday, may 14th, 2013, and "squawk box" begins right now. good monk and welcome to "squawk box" here on cnbc. i'm andrew ross sorkin along with joe kernen. we have mandy drury at the table today. becky is on assignment. we have a number of interesting stories to get you this morning on wall street and in washington. before we do that, let's take a quick look at how the markets are shaping up. futures are setting themselves up. dow was open off about 25 points. nasdaq off about almost 4 points and the s&p 500 off about 2.5 points. on the economic calendar today, the nfib, small business optimism index is going to
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