Greenback following the selloff on wall street friday, asian equities also fell sharply starting the week. The nikkei and hang seng closing down more than 2 today. Thats putting pressure everywhere else. Take a look at whats going on in european trading right now. We have a situation where you have red arrows across the board in europe. The ftse down 1. 5 . In italy more than 2 . Well take a quick look at the u. S. Equity futures as well as we take a look now, the good news is we have red arrows with the dow opening five points higher, the s p 500 up three points higher and the nasdaq up 2. 5 points. Over to sarah in the meantime. Among the catalyst most often cited, fears over tightening in u. S. Monetary policy and Credit Conditions in china. Lets start in china. Eunice is joining us live from beijing with an update. Good morning. Good evening. Good morning. It looks like we have averted a potential crisis here in china, there are rising fears that we could see a default in the shadow banking industry, but this is what happened. Basically there was an instrument, an instrument called a Wealth Management product that was going to be coming due by the end of this week worth about 500 million with a company that had issued it, which is a Coal Mining Company, was having problems and said it wasnt going to be able to pay investors back. So once that happened, for the past week and a half or so, there were quite a few people who were talking about this story, a lot of the players as well as the bank that actually was selling the products. Icbc, not really wanting to take on the bulk of the responsibility. And now what we have heard from the shadow lender, China Credit Trust, is that they were able to work out a deal. Not a lot of details, but in a notice they said they would convert loan to equity and that an investor would put money into the Coal Mining Company that borrowed that cash. So somewhat of a bailout here. What people are talking about now is that theres some relief, theres some expectation that thats what is going to happen because there could be major repercussions across the financial industry, if that particular company and that investment was allowed to default. Guys . All right. Eunice, we need you, so stick around in case anything happens. But 300 points on a friday and then its up on a monday . We will see thats not the big scary thing that happens in a a lot of people are saying theres a little trepidation about whats happening in the currency markets, but its now got to get so bad there that it affects us in terms that we cant export stuff there. Its not this is to be expected. Were tapering. Hopefully this isnt going im talking to you, ben bernanke, dont let this last time a little flux, a little vicks goes up 2 and they are going to taper. You are always worried. Im worried. Dont you worry. You are a currency expert, right . How do you know what the taper looks like . We have not been here before and dont know what china is doing either. Ill give you the other side. Two scary unknowns. The one thing that scares me is that we all assume that they were successful in doing this and that its a free lunch and theres going to be no repercussions. If that last employment report is actually characteristic of what we do, and if they have not orchestrated a 3 growth rate in this country, theyll have trouble getting out and then we are in the roach hotel we never get out of. I want to throw one thing at you. Over the weekend i saw a number of major u. S. Hedge Fund Investors who said forget about all the currency stuff and china, thats not what the problem is. The problem is we were all so long we have been so long and after two days, wednesday, thursday, and that people just decided they had to capitulate on friday, that it wasnt the emerging markets, it wasnt china, it was basically our own little problem. Thats an excuse, but the question is, is this the beginning of the 10 correction . And if so, do people just say, well, 10 and then buy . Or are they unable to pull the trigger and it goes back up before they get in . The dow lost 3 last week. Last year it was 26. 5 . Thats just the way it goes. And the other thing is, everyone says, what, were going to do 8 or 9 , thats the consensus this year. The market goes up more than that like 20 or down for the year in general. And im still sort of thinking it goes up more. We have Jeremy Siegal on today. My american trader friends are watching what happens in japan today. If the japanese market stays stable and they think the japanese government comes in quietly to try to stabilize things. Its all the yen. Thats the key to all of this. And its sort of stabilizing today, but the nikkei japanese stock market plunged overnight. Either something happened in davos or someone messed with everything is very tiny. Can you see that . Wheres i. T. When you need that . Sabotage. So its not me. No. Your eyes didnt get worse over the weekend. Boy, there are a lot of socialists over there. How could you stand it . Im glad that they are going to solve unemployment everywhere. I mean, how can you solve unemployment in the United States and also think of africa and also spain. And they are going to come up with the same remedies for all . Heres the worst part, they dont realize they are socialist. They just think they are helping people. But they are collectivists. This is kind of a big love fest for the rich people. We are supposedly helping poor people, right . Thats what they are thinking about, but everyone is going to parties. Werent they optimistic about the economy, meanwhile, look whats happening. You have a caveat on friday night. I did. Was it a Russian Party . It sounds like a Russian Party. And she spoke to people about income inequality. Do you see the disconnect . I see the disconnect. Did you see the comment in the wall street journal over the weekend talking about income disparity . He got in some trouble, though. Comparing anyone to nazis he referred to the attack on being compared to modern day germany. Where you have a percentage of people going after kids riding buses to work. That was his point, all these kids going to google, et cetera, buses are clogging the streets and people are mad about that. People are going to work and youre trying to bring them down . Come on. A lot of people came out against him on twitter. Of course they did. And hes he likes to stir things up a little, but in general, not a good idea to ever compare anything to either hitler or that kind of happened thats just left to history. And the state of the union tomorrow night. It is. Tom harkin will be sitting in the audience. I saw a piece in the wall street journal. The president is using it as a wedge issue, not really trying to solve any of it. In fact, during his presidency, its gotten a lot worse if you think about it in terms of food stamps and terms of disability and terms of participation in the workforce. Its not like it has been front and center. And even the fed is probably to some extent added to it. I agree with you on that. Not really bringing it up to address it structurally. Longterm, hes bringing it up to excite. But a lot of democrats are starting to worry it implies too much that hes a redistributionist and goes into the thinking, the negative thinking thats all he cares about, is taking from the living in the de blasio world. Im living in the super bowl host world of new jersey. 11 of the population voted de blasio, remember that. When you look at how many people voted, it is hard to do you want to talk about this . Joining us now, who are you . Michelle cabrera is our International Correspondent, for me going there is different for you. It is different for you to be here. I was in puerto rico. Shes got color in her face. I got a tan line from the necklace that i had. It was great, yeah. Tan lines are another thing. Its probably a good idea not to we dont have to talk about it. So i was going to talk about this chinese wealth product expected to go bust on friday. Which has got an lot of fears raised about the shadow Banking System in china, so well give you the details. It matures on friday. They think the original 496 million not necessarily going to get paid back. So far only 96 million has been paid out of 149 million worth of interest. The expected return, look at that, thats what is important. 9. 5 to 11 . What do you get when you deposit money in why pennsylvanichina . You get 3 . So people are going into the Wealth Management product, of which there are a bazillion. Now the concern about the Wealth Management products that have been on the show before is lot of them are backed by junk. Ponzi schemes, garbage, et cetera. And many of them we know are going to go bust. The question is, what is china going to do when they all go bust . There are pros and cons to either side. Eunice just reported that theres probably some deal structured on this one. If they dont bail this out, do all these chinese depositors suddenly do what would be the equivalent of a run on Wealth Management products . In other words, stop investing and you cant roll them over any more. Lots of small and mediumsized businesses go bust. If you do bail it out, then you continue what is essentially a very large ponzi scheme and it raises questions on whether or not china is committed to reform. Two things, this is like the implied guarantee on money Market Industry here in the United States. My second question is in davos on saturday, i dont know the name of the official, he suggested that the government was not going to be rescuing these things. Right. There is deep internal division in china about exactly what to do about it. Because you bail them out, everything stays calm for a long time, right . And we in the rest of the World Economy are happy for them to keep growing at 7 to 8 , right . If they dont bail it out does he have to say that a week ahead of time and then you switch at the end . Possible. Theres possible theres a halfway deal. You get your principal back but not interest. Somebody sells the asset to a different bank, theres other things that could happen in the next five days. Could they push the payout a couple weeks . They could extend maturities, lots of things. Are they going to wake up and say, oh, my god, these are not guaranteed . I know in the paperwork it says they are not guaranteed, so what happens at that point, because they provide a tremendous amount of credit to small and mediumsized businesses in china. Whats interesting is the regulators have tried to get on top of this issue tackling smad doe banking and so far have made no progress. They never do it in a way that would matter, though. Which is you have to let Interest Rates flow. Why do you have shadow banking . Because 3 in the deposit stinks, right . And youve got up nation running faster. Youre a Small Business but all the loans go to big businesses that are backed by the chinese government. You need the money. If they let Interest Rates flow, you have the market setting the lending. All right. Michelle, thank you. Great, see you later. I want to say, fantastic explanation of what the heck is going on across the pond where we are going in a second. Well see you again at 7 00 a. M. To talk more about this. In the meantime, well talk about the Global Markets. The Global Markets report with Ross Westgate standing by in london. Good morning to you, ross. Hey, andrew, very good morning to you. You can see plenty of red on the Dow Jones Stock 600 board behind me. Decliners here by 8 to 1 after the moment. And we are down on the session. The losses arent huge, only up a percent for stocks 600. The ftse down 2. 4 . One of the bigger losers today up 1. 5 . And the dax is near a half percent low. The ftse of italy is lower 1. 2 today with banks of italy under pressure with a rights issue in the first half of the year posting a bigger loss of 600 Million Euros in 2013. Large loss provisions, there are concerns about whether the rest of the sector will face similar things. Back to the ftse down 1. 5 . The reason for that is vodafone currently up 5. 8 . The stock has been up 30 since selling off verzizen. Plenty of speculation for at t. There was greater speculation over the weekend that the at t chief spoke to the commissioner in charge of things like telecom to approve any kind of deal. So theres been speculation. At t forced to make an announcement to the London Stock Exchange saying we have no plans to buy vodafone. The stock is down 5 . What it means is it is out of the picture for six months or so. So thats the individual stock we are looking at. Elsewhere, we have seen yields continuing to fall on the european debt as well on this risk aversion move. So red, yes, we are low, i wouldnt call it heavy sell for this stage continued to other parts of the world. Back to you. All is right with the world, ross. We were down 300. Of course youre down. But you watch what we do today so then youll know what to do tomorrow. But today you need to thats it. Its a taleall type of thing. I want to say one more thing about davos, while you had caviar on friday night, i was channel surfing out of my four channels or whatever it was in the stupid hotel. All in german. Except al jazeera. So that was in english. They had a special called meltdown. You were in it. I was in it . You were in it. And so was Charlie Gasparino and a bunch of other people. You dont remember sitting down for an interview in this . No. Just the way we had a guest on that sent hank paulson was one, two and three in who saved the planet, did you see this special many can you imagine how aljazeera portrayed this . They talked about him being a snake and at the top of the crisis he called his wife and said, pray for me. It was the most slanted sickening they also spoke to a bunch of euro people about the United States in general. How it was all our fault, what we did to their jobs, what we did to the entire planet, and you were part of it, though. Thats what im saying. They quoted you and you looked so serious and said, i dont think anyone knew that it would be so infectious abroad. They didnt know we were so interconnected. Do you remember saying that line . Thats good. I like that line. Do you remember saying that people didnt know we were so im happy i said that. Thats good. Where were you sitting down to do the interview . Charlie gasparino mentioned my name. Come on. Really . It was bizarre. I want to talk currencies coming up. Theres a bit of a crunch going on. Concerns about china in the emerging market creating plenty of unconcernty in the market. But first, well get the National Forecast now from the weather channels alex wilson. Good morning, alex. Good morning, guys. We are talking snow in the southeast down towards the gulf coast as well. Winter storm watches posted in the light blue. Winter storm warnings out for places like myrtle beach where you notice mobile, alabama, near new orleans, it is included. Arctic air diving off to the south. Moisture from the gulf of mexico overriding this area of the cold air. And when that combination comes together, were going to see a wintry mix from new orleans to mobile tomorrow. Snow showers off to the north. Tomorrow night, a wintry mix for savannah, charleston, up to atlanta. Central and eastern North Carolina as well. Even wednesday, snow showers inland right along the coast. Were looking at a wintry mix and could be picking up hefty accumulations. Around new orleans, especially north, three to five inches. Five to eight in the light purple. And the deep purple, up to a foot of snow. We are back after the break. Welcome back to squawk box. Well check the futures right now, which are when you see Something Like that on a friday and then on monday, you never know. Sometimes its better to have a big selloff on monday and then it comes back from that and makes a decent spot. And sometimes this isnt the way to go, but certainly not a lot of panic at this point in the markets after 300 points isnt what it used to be, but 578 points last week on the dow, that was equivalent to the horrible how are things not turning over in a good way over here . It is still historically very low, but it was not a doomny gloomy research over the weekend. 18 has been where its been. We have an expert at the table on currencies. This is perfect. Of all days that sarah could be here, this is kind of a good thing. Thank you. The malaysian ringet is at multiyear lows. The rupiah is getting hammered. Im sure you havent checked ukraine also. Joe looks at that every morning. Argentina is down because of argentina. The you capukraine, we see what happening there. And turkey, the election is coming up. He made a good point that once it starts it has nothing to do with the individual circumstance. I thought that was spot on compared to credit. If you get in that mentality, it becomes scary. Thats when we were down 80 points on the future and they closed down 300. So i think then again, he also said within a year, it would be long. The question is, is it going to turn into the macro event where it starts to really get scary, like the 97 crisis. That was so different than in this case its because it is pure and simple that all the qe caused a lot of money to go over there and it may have been invested in places that werent necessarily economically you are comparing this to mexico, though. 94 mexican peso crisis. Is that a better compareson . Well, you have to see how much that contagent hits the market. Joining us, mark chandler, global head of currency strategies. Mark, you and i are constantly checking the argentine peso, but explain why u. S. Investors need to be looking at these situations very closely. Well, i think in general what were having is people are worried like you and joe were talking about, that the emerging market crisis spills over and knocks the fragile recoveries in the industrial countries. I think that we find that people are often give International Level o