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I -- -- want to talk more about the situation with University of Maryland economics professor Peter -- seeing is joining us from the DC bureau.
And and we're gonna go go to London -- will -- and just amount of the Peter -- wanna stay with you right now.
Should Cyprus did it -- should Europe have let Cyprus go.
Why they -- should've left the in the Euro -- -- that does it mean leaving European Union it just means continuing to have free trade status but its own currency.
Then it could've worked out its problems in the way that Iceland did which has its own currency.
It is very similar situation.
And it long term they really need that.
Simply this is going to eliminate a lot of jobs in Cyprus and has three basic industries tourism shipping and banking and without -- it faces the kind of unemployment that is permanent in Greece and Portugal.
And certainly it's really will only have the choice of leaving the country which will be difficult because of you know the language barrier to finding employment -- more prosperous areas in this shortage of jobs generally in the European Union.
There have much of the concern over this of European bail out of Cyprus is that this somehow the template if the EU and IA math.
And the European Central Bank has to go and rescue another nation is that overblown you think.
Absolutely not there are two basic this functions in Europe.
One is the bank regulators are separate from the European Central Bank they're very weak bank regulator did give the Greek banks a good bill of health.
As they chalked up on.
On Greek bonds then and and and you know it stress tests and so forth.
Then the European Central Bank when he gets in trouble essentially shuts down the degree banking sector in the United States.
The Federal Reserve.
Does -- stress tests and missed it regulates the big money center banks like like the big Cypriot banks.
And it essentially is prepared to put money into the banks they keep them going if necessary.
The European Central Bank says it doesn't have the authority to do that I don't know that that is true but that's the -- it takes.
If that's the case.
They may say this is not a template but it is institutionally the rules that they may mean that if other banks getting trouble this would likely happen.
That said I think you're better -- -- money and a German bank.
Been saying Italian bank and -- Italian bank verses are very small country bank was larger governments have resources of their own right that the cypriots you know.
Hey speaking of German hey let's bring -- will -- and he's a traitor for IG markets.
Little bit of good news after the German economy and it seems like these Cypriot worries of -- quite a bit well.
Yeah good morning guys it's been a funny morning really expensive perhaps markets be setting off a little bit more we scene some setting in Europe.
We sort of puts you briefly but down -- -- and it's just before coming on that it turned positive again are so I think it's it's been quite coms have fallen and it's good to -- you with you pointing to that.
Pictures from Cyprus busting seem calm so far meaning is that he -- but it's the -- we want to see at least.
What bright spots -- -- well do you see ahead and do you think that the worst is behind us and terms of the market being roiled by the separate situation.
It's -- I -- I've -- anywhere on anywhere out where out of the woods yet I think intensive stuff the way we've been seeing trade this week there's a little bit of -- -- in general and on all of Europe and an -- times that we may have Saudi ticket towards the end of the right the top of the market.
And there's -- a lot of soul commitment with the way the US markets have been pushing on and if -- a lot of money come flooding that wail away from that perhaps in the European.
-- towards US.
And I wanna talk to rich -- and rich what is did sense of all that Russian that Russian money.
Where we'll go back to -- later well we're gonna lazy and just a minute but I wanted to follow up can you focus on some of these Italian concerns.
There -- -- of you know we demand for debt auction yesterday and then again the new government has to be formed stat.
Yet it oceans and what was quite interesting for the reason that we've seen.
Italian debt auctions being a pretty well paid throughout the union that direct Italian problems that we've seen -- -- six months.
And it based on missing and I have a lack of tomorrow and on the back of a facade procedure so I think it shows that the Europe -- European situation in general has reached a kind of more tends to a level again.
Well I'm gonna say goodbye -- you will -- thanks for being your market trader Friday that hater I wanna throw you one final question.
-- what about the US economy we you know there were some weakness in the market yesterday.
We've been on a record breaking run for the Dow the S&P is near that yet we're gonna get the final reading on quarterly growth here in the United States later today.
It's very weak explain that I mean are much better days ahead at least that's what the markets are saying.
Well there will be a balance in GDP will get a small upward adjustment but remember.
A lot of the big GDP number for the fourth quarter was an inventory adjustment that we do not expect to repeat.
And a cut in defense spending that we don't expect to repeat the number to really watch on the US economy.
Is not to Mars GDP number we pretty much know what that will look like point four point 6%.
But rather Friday's number for February consumer spending going forward to have the rebound -- growth into the second quarter.
We have that consumers pick up again they went on holiday in January and February and the question is did -- higher taxes sequestered.
Permanently dampen consumer spending that's the number to watch in terms of the stock market in the vitality of the US economy.
I don't expect quick contagion in Europe but there's going this so warm that's -- -- eat at the credibility of European banks the -- situation.
But I don't expect that to really -- the US economy of the US market you know in the near term.
-- it's great saying thank you so much for getting up early forest university -- -- congress -- embracing and also thanks again to -- hadn't joining us from London and.
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