The formalitier government is accused of being sent rick. Massive writedowns n u. S. And brazil while warning over a weeks global recovery. And hsbc agreed to settle Money Laundering charges, paying a record 1. 9 billion fine. And were getting the bumping out here today, not only because its christmas, but because James Ferguson is here. And we are finally in the same place at the same time. Reunited and it feels so good there we go. My apologies to everyone for that. How about that voice . I feel a christmas sing along coming on at some point. Its the holt day spirit. It is. Also, we are outside the u. S. Senate. Were going to see just how much progress has been made or how little progress between the president and congress on the fiscal cliff situation. And well find out just how much the european debt crisis has affected tourists willingness to travel to southern europe. And then south koreas president ial election, yes, its not just japan, and what to expect from the winner. Lets just plug you into where we are with this Global Market. More now on the Global Trading day in europe. 54 advances just about outpace decliners on the Dow Jones Stoxx 600. Most european stocks were up yesterday. The dax up 13 points. The dax, second highest close of the year, still up 27. 5 for the year. Right now, the ftse sound, the cac kron, closed at a fresh 52week high. And the ftse is up 13 points despite falls from italian banks. Lets show you where we are as far as the bond yields are concerned. We just check in. Italian yields, 4. 4 on the year. Well show you the twos and tens, as well. Ill give you more on how that compares to where we closed yesterday. So the twoyear, thats the low where we were yesterday. 10year spanish yields, 5. 581 . Twoyear yield, 2. 35 , kind of where we were yesterday, too. And theyre continue to go appreciateslide slightly from yesterdays close. As far as currency markets, 1. 2880 was the twoweek low on the euro dollar. Dollar yen, 82. 38. Slightly firmer. Youve got the nexus for the dollar is that the fact should extend their asset purchase plan. In the end, the party is doing pretty well on the polls. Aussie dollar, 1. 0482. Youve got more money printing, commodity currency should do fairly welling. Sterling dollar at 1. 6080. Thats where we stand right now in this european trading session. Only an hour or two into it. Hi, li sixuan. Thank you, ross. The shanghai composite lost more ground in late trade after a fourday winning streak. Agriculture, industrials and commodities puddle back after investors lost profits. But some rebounded after producers refuted contamination allegations with inspection reports. In hong kong, financials lent support to the hang seng, closing around a 15month high. Elsewhere, the nikkei ended lower by just a tad as exporters weakness. Short sales rallied almost 7 after getting an additional 240 million loan. Meanwhile, south korean shares were boosted by ship exporters. In australia, miners and bankers led support to the asx ending higher largely by 4 . Back to you. All right. Thanks for that. Catch you a little later. Now, berlusconi and bersani are already exchanging blows after whats considered to be a controversial moment in italy. Berlusconi has announced hes creating a new center right grouping. Meanwhile, mario monti has been accused oversimplifying solutions during the fiscal crisis. Carolin is joining us now from rome. Do we expect more of this rhetoric today . Oh, definitely. Not just today, but specifically over two months. Elections will only be held probably on february 24th. Weve got about two months of the silly campaigning season to follow. So yes, as you said, the verbal exchange is definitely heating up. It started with mr. Montis response criticism coming from officials about his renewed request for the Prime Minister post yesterday. He said this criticism was out of place. It was offensive not just for him, but also for all of the people in italy who have the freedom to vote. This morning, he did an interview with one of the channels here in italy and he said, i dont really care about this spread because the spread is based on fraud. Thats the direct translation. Meanwhile, if you take a look at the spread, they are moving higher again. 4. 9 . Italian equity markets are moving fractionally to the down side. So youve got mr. Monti on the wire saying, yes, we should care about the spreads. We should care about the italian yields. But at the same time, italian people and investors must know that we still have a government in place. Mr. Monti is hitting back warning against the oversimplified promises that will be made during the Election Campaign. So weve got a become and forth and we should expect that to continue over the next couple of weeks. We will be speaking to one of the biggest contenders in this Prime Minister race later on today. His name is mr. Bersani, of course, and he won the primaries of the Democratic Party last weekend. And as far as current opinion polls go, if elections were to be held today, he would be the clear winner and the Prime Minister of italy. Catch that interview on european closing bell. Back over to you. Carolin great stuff again. Well all keep an eye out for that later in the day. Joining us now more more, poly sabaka and James Ferguson. Welcome to you both. Paula, just to start with you, italian politics, youve been sort of saying frustration for some time, this isnt necessarily new, but as berlusconi try toes elbow his way into the political situation there, how critical should investors be, really . Investors shouldnt be concerned about berlusconi himself, but the fact that the region, yes, a clear alternative. And we heard bersani has won the primary for the Democratic Party and its a good sign because there is something there. But we havent got a situation where we can actually look at the next general elections with a clear scenario of political stability. In the best case scenario, we might have a coalition which might not be very stable. In the worst case snowo, we might not have anything. When he says we have extra unemployed, debts are rising, firms are closing, car markets being destroyed, actually, most of those things are true. Right . So he is tapping into something theres a truth in it like all good politicians do. Absolutely. The message is also very clear. We are here because we follow policies dictated by germany. Therefore, italy should come out of the straight jacket. This is the message that berlusconi is sending to italians and actually, i think, its a message that he will use for our campaigns. How much support will he get if hes at 15 right now in the polls 12347. My concern is that he could actually create some allians with other with the populist leaders. There is a lot of discontent and its quite easy to capture the discontent. It would provide a majority for ruining the country, for governing the country, but it will not enough to destabilize the debate. They say the p. W. Trust say that 30 now say the euro has been a good thing in italy. I dont know whether you back that sort of trust. Oolt r its how you present it. There is a clear fact that going down economically for a long time. It hasnt had good growth in more than a decade. So more now are in the face in malaise. At the moment, we dont see that. What do you take for investors . Weve already had issues that the greeks are debating whether they should leave the euro. The thing we were always worried about is contagion, whether this gets into the big countries. So berlusconi may only be at 15 at the moment, but if he starts making comments which are thinly veiled versions of if we have our own currency it will be valued and hopefully many of these problems will go away, that can win a crowd over. Andrew roberts, his analysis of italy says any country in the emu that would benefit from restoring competitiveness, it is obviously italy. I strongly dwrae with that. There is no argument there as there wasnt for greece. We know the countries, italy, greece is in a crisis and its a crisis due to lack of competitiveness. Going back to the currency, under the currency they create a wave of all sorts of problems including inflation and i think it is not a good route. Well, i do rather agree with paula on this one. The problem with the euro is it gives you easy and quick solutions. And were going to keep developing your currency. As you go back to the old days where you keep lowering your currency and you pay relatively high rates on your debt. So the appeal of the euro in the beginning was, oh, chief debt. It looked like christmas. Now were discovering that that regime, a tenyear regime where many peripheral countries got hammered. Only germany sort of really held it together. Now we have to look at how to undo this. For countries who have no ambition about their future, then maybe the policy is the way to go. Italy had so many things going for it that falling back, that seems almost how about the service in the g7. Italy is two countries. Its a mini euro all on its own. Italy has the wealth, italy has the industrialization, it has the export. Italy really could make a go of it. We didnt see any productivity in the last decade. It should have made italy stronger. I personally am much more concerned about france and spain than i am about italy. Well talk about those. Let me add asking. If italy is in this situation now, it relied on the easy way out. And politicians, including berlusconi, didnt have the foresight to see that. Thank you so much for coming by. Staying at the eurozone, investors will be watching for anything coming from the italian crisis. The results of the spanish bond actions are due around 12 40 cst. Hsbc was hit with a 1. 9 billion fine. The ceo said we accept responsibility for our mistakes and are profoundly sorry for them. A full year loft loss of 4. 7 billion euros, thinksen krup has more details. They are starting to look at the positive of what i would call a strategy, i. E. , a clean sweep when it comes to the Business Strategy of thyssenkrupp as well as the instruct occur and the refocusing on being transparent and definitely being something shareholders should trust. So no dividends, jobs may go and the sale of celiamerica being looked at. The cfo says theres a handful of interested parties in that particular party of the business. All in all, i think if you look at the message and the resale note issued by j. P. Morgan earlier on this morning, on the back of the numbers, its a very positive story because all the rubbish that needs to be cleaned out is being cleaned out. When it comes to the actual strategy, it will be reduced process on sale after the sale of about 30 will come from that sector. The rest is being refocused on technology and engineering. Patricia, thanks for that. Still to come, as the Global Economy trudges along the roads to recovery, will we see a high full rebound . Well talk about it in just a few minutes. Mass rallies have been called in cairo, both antiand pro government spaufrters are expected to take to the streets as ongoing divisions over the role of the approximated, Mohammed Morsi continued. Overnight, he increased tough Economic Reforms as part of a proposed 4. 8 billion imf loan agreement. Eyeman is in eye row with the latest. Reporter good morning to you. It has added more to the political turmoil here today. Today there are several messages being sent to morsi. The referendum is scheduled for saturday. Its a controversial constitution that secular liberal forces here have announced it doesnt protect human rights or the rights of minorities and women. There are supporters of the president and they are, too, organizing their rallies for today and friday. And against all of this, the president has given the Egyptian MilitaryLaw Enforcement powers. That means they are essentially now allowed to act as the countrys police force in the run up to the referendum. Theyre allowed to arrest civilians and that has caused a great deal of alarm for human rights advocates and organization ones. So its a great time of uncertainty here in egypt. Right now, the opposition is calling for roadway injection of the referendum. Theyre not calling for a boycott, but they are insisting they dont want the referendum to take place. We dont understand whether or not there are any types of political negotiations behind closed doors to delay it. But there are reports the judges could very much boycott and start questioning the legitimacy of the referendum on saturday. Eyeman, thanks for that. Thats the latest out of cairo. Outside the crisis lit block, there are signs of hope especially in the United States and asia. Earlier i had a chance to catch up with david, the president of Corporate Affairs at manpower group. The u. S. In general is looking positive. And the u. S. Is creating a lot more jobs. China is still positive in the Fourth Quarter. China is going to show a slow and steady improvement. So we need those. Higher expectations stronger in the likes of taiwan, india and brazil. Lets go back to where you say theyre weakest. Greece, italy, spain, the netherlands. This is a very weak feature, indeed. How bad in it . Its bad. The eurozone is the Global Economic problem now. If you look at asia where i just returned from, both countries are feeling optimistic. But they seem to be inwardly focused now by being a triangle of china, india, indonesia. Were not seeing a great benefit into europe as we did before. For instance, germany is looking pretty pessimistic. Based on its lack of export performance to places like china. Yeah. When the bundes bank came out and shortly downgraded forecasts, how is the employment picture . If youve got a relatively healthy china and the u. S. Consumer bounce back, wouldnt that help germany . It certainly would. Germany is relatively flat in terms of the employment outlook. So its not a disaster. But germany trades an awful lot with europe as well as china. So it needs china to pick up in terms of its heavy engineering export performance, creating jobs in the manufacturing sector. But germany and the uk need europe to improve. It comes at an inkrd eblly high cost in terms of the number of people out of work. What has been done . How much have we destroyed so that the jobs outlook and Growth Prospect in this country . Well, what Growth Prospect in the southern European Countries . Were seeing definitive bifurcation of Northern Europe and southern europe. Southern europe, we are creating an underclass of longterm, especially youth unemployed that is going to give us a problem when the economies eventually start to get into balance and start to pick up. We still have this issue, even though we have tens of millions of people out of work, we still cant find the right skills and the right time. You mentioned the uk. The unemployment picture never got that bad in britain. So what happens now . Why did it outperform . The uk is so different from the rest of europe. Weve got london, the Financial Services sector, that didnt actually, in terms of job numbers, get hit as hard as the rest of europe. So the uk has been pretty resilience. That is starting to create jobs regionally all around the country. The thing we have to look at, though, is a lot of the jobs that have been created are parttime and temporary. But both are still jobs and now jobs are being created in the uk. David there speaking with ross. Now, the fed begin aes twoday policy meeting today. Their announcement is due tomorrow at 12 30 eastern. It will be followed by the feds updated Economic Forecast at 2 00 p. M. And Ben BernankesNews Conference at 2 15. The fed is expected to launch a new Bond Buying Program called operation twist that will expire at the enovd month. James, we know this is a huge meeting. This is obviously a good time for the fed to embark on something new for 2013. Is this the wise approach . Well, its the wise approach in a very near term, a, because operation twist is coming to an end. B, because we have the fiscal cliff or fiscal gentle slope or whatever it turns out to be to negotiate and c, because we havent found our legs in the u. S. And we clearly have some global headwinds coming in 2013. However, the thing about this qe in the u. S. , unlike previous ones where they could see big economic problems, lets comfort the market with a really big number, this time were going to do it month by month. Solo the annual figures look very big, theyre going to halt qe as long as it looks like theres inflation. Which means there might not be much Market Reaction as investors realize that. Find out what travelers are still flocking to the shores and how much of that money contributes to eugdp. Be back in a few minutes. Can i . I heard you guys can ship ground for less than the ups store. Thats right. Ive learned the only way to get a holiday deal is to camp out. You know weve been open all night. Is this a trick to get my spot . [ male announcer ] break from the holiday stress. Save on grou at fedex office. These are the headlines from around the globe, bank stocks in europe down for a second day. Some of the biggest lenders of the company have seen over a 3 loss. And Prime Minister mario monti and Sylvia Berlusconi escalate. Hsbc agrees to pay a record 1. 9 billion fine over Money Laundering charges. And one lawmaker offers an olive branch to the white house regarding the fiscal cliff. Gains for most european stocks yesterday outside of italy. And we sort of continued that trend today. The xetra dax just about on its 52week high. The cac 40 hit a 52week high yesterday. The xetra dax up around. The . Yesterday, we saw a real back up in yields at the tenyear level sustained for italy. Really across the curve. Today, were seeing a bit of a rebound in place. Yield falling 5. 55 . Italy, down to 4. 8 , just about. Bund yield is moving a little highe