everybody's worried about europe. ludnick's worried about the u.s. >> the republican party who was elected to control the congress the same time as obama was elected are going to cross their arms and they are not going to raise the debt ceiling ultimately unless they get severe spending cuts and the obama administration is not going to give it to them. you're going to watch the u.s. do crazy, crazy things this year. >> he was pretty clear. he called it crazy. i talked to eric cantor earlier, the republican majority leader. he sort of said we're ready to deal and compromise, but people are very worried about what the u.s. could do. >> oh, and this latest decision to just kick the can, i hate to use the cliche, further down the road, axel neighbor is a former central banker in europe, also the head of ubs and he was absolutely in no doubt that what we are seeing in the u.s. in the political and economic process is dangerous. >> if you have the debt ceiling, the europeans will talk about how you can make that binding. in

everybody's worried about europe. l ludnick's worried about the u.s. >> the republican party who was elected to control the congress the same time as obama was elected are going to cross their arms and they are not going to raise the debt ceiling ultimately unless they get severe spending cuts and the obama administration is not going to give it to them. you're going to watch the u.s. do crazy, crazy things this year. >> he was pretty clear. he called it crazy. i talked to eric cantor earlier, the republican majority leader. he sort of said we're ready to deal and compromise, but people are very worried about what the u.s. could do. >> oh, and this latest decision to just kick the can, i hate to use the cliche, further down the road, axel neighbor is a former central banker in europe, also the head of ubs and he was absolutely in no doubt that what we are seeing in the u.s. in the political and economic process is dangerous. >> if you have the debt ceiling, the europeans will talk about how you can make that binding.

in europe you've seen it to an extreme. they can't stimulate their economies easily with their federal bank. they're a bunch of countries. it's not centralized. they're not dealing with it on a fiscal basis. you actually have actual depressions in parts of europe instead of just, you know, the slow uneven recovery that we've had to experience. we're much better off. that said, we could be much, much better off. we could be to escape velocity now where the unemployment rate is plummeting instead of edging down each month by a tenth or so. or we can see participation rope coming back. and we would be seeing that if we didn't lose a percent and three quarters to a fiscal policy this year. >> and that's how much you think we're going to lose? >> that's how much we'll lose if they keep the sequester going through september. it looks like right now they're not willing to compromise enough on it. that's unfortunate. you saw some movement in this direction and now there's backtracking again. i have hope that they'll figure it out a

>> europe is coming together. the biggest event of 2012 people didn't pay enough attention to is the fact that greeks pulled it together in the face of austerity like no one has ever seen and actually voted for the party that wanted to stay in the euro zone that wanted the bailout. that was an incredible show of will. halting and clumsy and awkward as the eu politics are, they're on the way to banking regulation in the euro zone. it's not going to be pretty and it's going to take a couple years still, but we are on our way to a stronger and more unified eu with or without britain over time. >> what do you think? >> too positive to me. europe is probably not coming apart. different said statement than europe is coming together. the reason it probably won't come together is not greece, it's france. sooner or later, that is the real test. the president of france is taking france in directions that are truly unsustainable economically. france can't leave if you're germany because that's the whole core, the whole dynam

i'm very worried about -- >> but austerity here and in europe. >> i don't think the problem for europe or the united states is today's budget situation. it's a glide path toward a better budget situation. it says a lot about politics. the politicians are more willing to put the economy in a recession than to really tackle serious long-term problems. >> that's a very important thing. so they cut stuff now because to cut the big benefits, the pensions and health care, that's much harder politically. what about the politics of all this? what i'm struck by is if you had said to me five years ago, there's going to be 50% youth unemployment in spain, probably some number close to that in italy, 50% unemployment in some parts of greece, wouldn't you see the rise of massive protests, nationalist parties, socialist parties? and in fact while there's been some of that, the real story in europe is there hasn't been that much sustained organized protests that is overturning political systems. >> there has been sort of a progressive fragmentation of politics. you're seeing more and more coalition g

europe, what do you think is the big trend in europe? is it going to be a breakdown or are they finally going to come together? >> europe is coming together. i think the biggest event of 2012 people didn't pay enough attention to is the fact that greeks pulled it together in the face of austerity like no one has ever seen and actually voted for the party that wanted to stay in the euro zone that wanted the bailout. that was an incredible show of political courage and will. it meant that greece stays in the eurozone and that, in fact, as halting and clumsy and awkward as the eu politics are, they're on their way to unified banking regulation in the eurozone. their crisis fund has stabilized. it's not going to be pretty and it's going to take a couple of years still, but we are on our way to a stronger and more unified eu, with or without britain over time. >> what do you think? >> a little bit too positive to me. i would say europe is probably not coming apart. different said statement than europe is coming together. i think the reason it

austerity measures in europe have failed. the whole of europe is headed for a depression. why? >> simply, no capacity in southern europe for a recovery, and the dedefinition of a depression is a permanent recession. that will superintend north because the north is dependent on the north to exports its products and we're starting to see unemployment grow in france and pressure on german companies. >> tell me, peter, is what is happening in europe instructive for the u.s. as it comes to belt tightening. >> absolutely. you have to have structural reforms before it's too late. we need to get our social security under control. our rising health care costs. much higher than in europe, under control. but more importantly, what caused them to borrow so much is huge trade deficits. you have to pay for those by borrowing. we need to export more, become more competitive in the global economy so we can pay for the things we buy. it we don't do that, all the money we're borrowing from the rest of the world and to finance our government will ein the end put us in this kind of crisis in the n

and the failure to get credit going again in the periphery of europe. not only huge budget cuts, but very, very tight access to credit and where is the growth they're going to come from? one part of the comparison of the u.s. is, u.s. didn't have so much tightening, fiscal tightening, although now it has more. the u.s. got to grips. it cleaned up the banks and recapitalized them and we kind of got that bit of the crisis out of the way europe hasn't done that. and the fed, those three are different in europe. >> i have to ask you about the irs. the irs commissioner, some people were appointed by bush. do you know any of them and do you have any thoughts about this irs issue? >> i don't know the individuals at the irs but it raises an important point that people have gotten and one that they haven't. the one they have gotten any abuse of power needs to be investigated. both sides would agree with that. but the part that is really subtle is the fact that there is actually value in a lot of political competition. i don't happen to be part of the tea party,

in britain as in much of europe, the debate about austerity rages on. this week the imf actually urged the british government to delay its plans to cut spending and raise taxes and instead to borrow and spend money on infrastructure. i think the data now is increasingly convincing that the keynesians have been right. cutting spending in the kind of recession we've gone through will only hurt growth, not help it. since i have been long advocating large investments in areas like infrastructure, job training, and science, i'm delighted. and yet it's too soon to celebrate. because spending on its own is not enough either. in order to ensure sustained growth in the long run, countries also need to engage in what economists call structural reforms, lowering tariffs, opening up protected industries, making it easier for new businesses to start up, streamlining regulations. in japan, for example, agriculture is so inefficient because it's rice 235r78ers are protected by a nearly 800% tariff on imported rice. in greece before the crisis began, workers in its vas

in britain as in much of europe, the debate about austerity rages on. this week the imf actually urged the british government to delay its plans to cut spending and raise taxes and instead to borrow and spend money on infrastructure. i think the data now is increasingly convincing that the keynesians have been right. cutting spending in the kind of recession we've gone through will only hurt growth, not help it. since i have been long advocating large investments in areas like infrastructure, job training, and science, i'm delighted. and yet it's too soon to celebrate. because spending on its own is not enough either. in order to ensure sustained growth in the long run, countries also need to engage in what economists call structural reforms, lowering tariffs, opening up protected industries, making it easier for new businesses to start up, streamlining regulations. in japan, for example, agriculture is so inefficient because it's rice farmers are protected by a nearly 800% tariff on imported rice. in greece before the crisis began, workers in its vast

and the failure to get credit going again in the periphery of europe. not only huge budget cuts, but very, very tight access to credit and where is the growth they're going to come from? one part of the comparison of the u.s. is, u.s. didn't have so much tightening, fiscal tightening, although now it has more. the u.s. got to grips. it cleaned up the banks and recapitalized them and we kind of got that bit of the crisis out of the way europe hasn't done that. and the fed, those three are different in europe. >> i have to ask you about the irs. the irs commissioner, some people were appointed by bush. do you know any of them and do you have any thoughts about this >> i don't know the individuals at the irs but it raises an important point that people have gotten and one that they haven't. the one they have gotten any abuse of power needs to be investigated. both sides would agree with that. but the part that is really subtle is the fact that there is actually value in a lot of political competition. i don't happen to be part of the tea party, but i would

disappointment also in europe that the u.s. has shifted its focus from primarily europe on to asia. and questioned whether the president doesn't value europe as much as past presidents have and president obama will make clear, we're told, in this speech that the bond with europe is still important to the u.s. and deep and timeless, et cetera. that's part of the important message he wants to convey to germans and to europe in this speech. that's very important. i have one bit of fun information, which is, one of the people that will be attending this speech is the original candy bomber. now, the candy bomber, you have to go back about 65 years to the berlin airlift and that's when the wall came down and the west had to fly in supplies to help feed some of the east germans and the candy bomber was a pilot who would drop candy to the children behind the wall and would sometimes fly in such a way that the wings would flap. so, the candy bomber will be there. we're told. i think the candy bomber is 92 years old at the east side of the brandenburg gate to hear the first u.s. president eve

and the people coming out from europe. by the time you get into the 19th century, though, you are able to start building railroads and the telegraph comes in and distances are sclihrinking increasingly as this happens americans are moved to a global system. it's all about the shrinking of space. the geography is driving the story, but what the geography means keeps changing. >> so, if you look at china, most importantly in india and to a lesser extent rising. at the very time that you are having this dramatic shrinking of space, does it, does it matter as much? will they -- will it have the same kind of impact the rise of the west had? >> i think it will. we have this long story here where we're seeing similar kind of processes unfolding in different parts of the world. so, first of all, you have the atlantic ocean shrinking from about 1400 and pushes the west, western europe up to the top of the pile. atlantic ocean shrinks more, north america kind of sclihrink too, in the 14th century. this pushes north america to the to

europe has been experimenting with austerity. the deep cuts to government spending that have failed to turn the euro area economies around. unemployment in the euro area is 11.7%. some countries like spain and greece above 25%. washington is less than two weeks away from austerity in the form of the sequester. $85 billion in automatic across-the-board spending cuts that are set to take effect on march 1st. i'm joined by my good friend, christine romans. host of "your bottom line." john avlon is a cnn contributor and senior columnist at "newsweek" and the daily beast. margaret hoover is a cnn political contributor and republican consultant. christine, let's start with you. economists warn the sequester could lead to a recession. that's not scaring business away. american airlines and us airways will merge. warren buffett is buying heinz. michael dell is taking his company private. there's business going on. as you've said before, uncertainty is the new normal. >> absolutely. you see these movements within the corporate sphere that

within europe one set of rules. outside it, he recommends, rougher methods of an earlier era, force preemptive attack, deception, whatever is necessary. among ourselves we keep the law but when operating in the jungle, we must use the laws of the jungle he wrote. this is what was violated by nsa activities. washington was playing by the laws of the jungle but inside europe's post-modern system. partly this is because the distinction is not easy to maintain. what if you look for terrorists within europe. that is people who still play by the laws of the jungle or even worse. america as a global power is operating all over the world trying to tackle some of the nastiest threats out there. perhaps it doesn't have the luxury to retreat to a garden and renounce nasty tactics. if it did, it's not likely that cha china, russia, al qaeda would follow suit. precisely because washington has to get its hands dirty, it should be smart about this. you don't stop terrorists in europe by listening in on angela merkel's cell phone.

within europe one set of rules. outside it, he recommends, rougher methods of an earlier era, force preemptive attack, deception, whatever is necessary. among ourselves we keep the law but when operating in the jungle, we must use the laws of the jungle, he wrote. this is what was violated by nsa activities. washington was playing by the laws of the jungle but inside europe's post-modern system. partly this is because the distinction is not easy to maintain. what if you look for terrorists within europe. that is people who still play by the laws of the jungle or even worse. america as a global power is operating all over the world trying to tackle some of the nastiest threats out there. perhaps it doesn't have the luxury to retreat to a garden and renounce nasty tactics. if it did, it's not likely that china, russia, al qaeda would follow suit. precisely because washington has to get its hands dirty, it should be smart about this. you don't stop terrorists in europe by listening in on angela merkel's cell phone. the

and the people coming out from europe. by the time you get into the 19th century, though, you are able to start building railroads and the telegraph comes in and distances are shrinking increasingly as this happens americans are moved to a global system. it's all about the shrinking of space. the geography is driving the story, but what the geography means keeps changing. >> so, if you look at china, most importantly in india and to a lesser extent rising. at the very time that you are having this dramatic shrinking of space, does it, does it matter as much? will they -- will it have the same kind of impact the rise of the west had? >> i think it will. we have this long story here where we're seeing similar kind of processes unfolding in different parts of the world. so, first of all, you have the . first, you have the atlantic ocean shrinking for around 14 arms to western europe up to the top of the pile, atlantic ocean shrinks more, america too in the 19th century, then the 20th century we have seen the shrinking of the

and much too little on the kind of overhaul that europe needs to boost growth. i do slightly disagree with you, rog roger, in terms of emphasis. would have both made the economics of the reform program more sustainable and also help the politics. >> so, in a way, you needed less austerity and more structural reform. but the structural reform is actually the hardest thing to do because that's when you're breaking up gills and taking on unions and opening up protected sectors of the economy. frankly, we haven't done that much of it here. >> that's exactly right. on the one hand, italy's problems are clearly worse than ours. we haven't had any demands from the global financial markets to restructuring the way that italy has. we haven't had any sort of valus. the sequester has the opportunity to make it worse. one thing i worry about and you hinted at this before, the sequester effectively hits things that provide to future economic growth. medicare and social security, but don't contribute to economic growth. and growth is the best way to solve deficits. italy's pr

why wouldn't we spy on europe to help europe, too? >> here's the thing, erin. you have now the chairman of the judiciary committee, senator leahy, the chairman of the judiciary committee or one of the committees in the house, james sensenbrener, two authors of the patriot act, now saying the head of our intelligence because we don't see to know who's in charge? it's conceivable that the head of the intelligence is spying on our president's cell phone. so we really don't know who's in charge. we think they have overstepped their bounds. but you have people who were authors of the patriot act now saying our intelligence agents have gone too far, not to mention that james clapper came to congress and lied and said he wasn't doing surveillance, wasn't collecting any data on americans. so there's a lot of of trust being lost. i think a great deal of credibility lost in the intelligence committee. and we have to trust our officials if we're going to let them have such sensitive information about our personal lives. >> your fellow tea party-backed republican marco rub

europe is one of our biggest trading partners. if you see the banks getting squeezed, if you see consumers in europe getting squeezed, not just in cyprus but see the ripple effect move throughout europe and make its way to the u.s., that is really the big worry here and why you see investors. the good news is that the general sentiment for the u.s. markets lately has been extremely bullish. still there's a reality of the impact, the potential impact of what's happening in cyprus and then could possibly be used as a sort of framework for other bailouts for other countries in europe. and the worries of that ripple-effect, that is what investors are worried about. even though cyprus is a tiny country, this has huge implications for other countries. can it catch on? we know what richard was talking about. greece, portugal, ireland, they took bailout. they've got to follow strict rules to continue getting their money, but this is over and above that, at least that's how many people feel when you've got the government reaching in to you

we know europe is still a mess. it slipped back into recession, but these fears center around slowing growth in asia. how worried should we be about what fedex is telling us? it's so interesting. fedex global revenue, $44 billion. what's happening in the world really matters. it's twice the size of psi press. a little thing like that can be a problem. they are their thumb on the pulse of the economy. >> when it comes to companies, transparency is crucial. when i say that i'm talking about policies or practices. not their yoga pants. lululemon is a great canadian company and never struggled for survival. excellent anthem in the background. it had to pull several styles of pants from its stores because they were too transparent. too shear. >> the company's stock price got hammered. it's been a tough year, but don't shed tears just yet. the stock is up 220% in the past three years. and stores are packed with the kind of customer every retailer wants, loyal shoppers with money to spend. so the ceo was asked during a con

europe has been experimenting with austerity. the deep cuts to government spending that have failed to turn the euro area economies around. unemployment in the euro area is 11.7%. some countries like spain and greece above 25%. washington is less than two week ace way from austerity in the form of the sequester. $85 billion in automatic across-the-board spending cuts that are set to take effect on march 1st. i'm joined by my good friend, christine romans. john avlon is a cnn contributor and senior columnist at "newsweek" and the daily beast. margaret hoover is a cnn political contributor and republican consultant. christine, let's start with you. economists warn the sequester could lead to a recession. that's not scaring business away. american airlines and us airways will merge. warren buffett is buying heinz. michael dell is taking his company private. there's business going on. as you've said before, uncertainty is the new normal. >> absolutely. you see these movements within the corporate sphere that are telling us that they

panel on europe. everybody was talking about the doomsday, and everything is over, and i told them, keep quiet. let's see what happens. and, in fact, it turned out that things got better. so, before we decide that it's over, i think the expression, it's not over until the fat lady sings, it examines from opera, opera is italian, don't forget that. >> but let me ask you, beppe, why did the italians do this? it is one thing to reject austerity and things like that. but you've elected one or two clowns, depending on one's estimation of silvio berlusconi, what are italians say? >> out of four italians. one didn't vote, one voted for berlusconi. one voted for the center left and one vetted for grillo. that's why we're in a stalemate. beppe grill o is a wrecking ball and to be honest, some of the italian political building needed to go down. political parties asked for it. the question is, will we be able to build up something to replace what we pull down? >> roger, your point about europe, as i understand

italy's the third biggest economy in europe. it got the second biggest debt burdenen in europe. investors do not like the outcome of the election. >> we watched it. the dow dropping 200 points after results came out. the european markets taking a big drop when it opened this morning. richard quest out of london, tell us what is happening. what is the reaction? >> reporter: most dramatic reaction on the italian markets, of course, that fell the best part of 5% in trading on tuesday. yields on italian debt, they rose. and all in all, there is a general feeling that what has happened in italy, because this was an anti-austerity vote, and those parties against austerity did so well, what the feeling is that we could be off to the races again. the people have spoken and they don't like the policies that european bureaucrats are imposing from above in their view and now of course we're starting to see the results. all of the major markets, ftse, dax, all heavily down. >> and the american markets don't like it much either. talking here, when talking about grillo, the comedian, his part

naturally europe is one of our biggest trading partners. but for now investors don't seem to be too stressed. it is a very tiny country. it doesn't have the same impact like say france or germany. plus, we have seen a huge rally in the stock market since the start of the year. major averages up 7% to 10%. you know, it would take a lot to change that. michael. >> be half up on the day already. >> right. and of course big frustration, people can't get to their money from the banks. but then, jim, maybe you have some encouragement. any sign perhaps banks will reopen as early as tuesday perhaps? >> that can only happen if there's an agreement here to save the banks. the restructure, shutdown, whatever you want to call it. and reorganize these banks and europe says, okay, we'll allow the european central bank, think of that like the federal reserve, putting money into these banks just to keep them alive for a few more weeks. the federal reserve of the european central bank says we will shut that money off come monday night. so it's really, reall

up being a trial in europe. what's the likely homeland security -- likelihood, putting a man that old on a plane to face trial. >> i don't know if the u.s. will put him on a plane. if he winds up in europe and there's evidence, he'll wind up in prison, because they don't care about age with these war criminals. these are crimej that have so scarred europe, that regardless of age, they will try potential war criminals if the evidence is there. >> again they haven't proven p'ything yet. investigators are looking into it. paul cal lan, good to see you. >> thanks very much. >>> a former hitman takes the stand in the trial of james "white y "whitey" bulger. we'll have a live record just ahead. ready? happy birthday! it's a painting easel! the tide's coming in! this is my favorite one. it's upside down. oh, sorry. (woman vo) it takes him places he's always wanted to go. that's why we bought a subaru. (announcer) love. it's what makes a subaru, a subaru. >>> a confessed hitman takes the stand in the trial of james whit

europe, that specialize abducting people of all ages and there's a market to sell little babies as an unofficial or black market adoption service. in some cases to sell these kids to be beggers on the street or factory workers or sex slaves. this is a worldwide problem. when i ran the organized crime problem with the fbi in the late '90s, early 2000s, we had a number of issues with interpoll and police agencies around the world to deal with human trafficking which was very prolific worldwide. >> presumably a lot of questioning will be carried out with the two people who claimed to be the parents and then dna testing showed that they are not the parents because maybe they do have information that may be the tip of the iceberg for any kind of crime spree that you mentioned. tom fuentes, thank you so much. >>> all right. also here in the u.s., an investigation of a very different sort. the parents of a missing autistic teen are desperately asking for help to find a teen who ran out of his school on october 4th and he hasn't been seen since. police have pulled out all stops. today they ar

. >>> up next, is it the end of astaiusterity in europe? i have two smart economic experts. later on salman rushdie. with centurylink as your trusted partner, it can. our visionary cloud infrastructure and global broadband network free you to focus on what matters. with custom communications solutions and dedicated support, your business can shine all week long. i am an american i'm a teacher. i'm a firefighter. i'm a carpenter. i'm an accountant. a mechanical engineer. and i shop at walmart. truth is, over sixty percent of america shops at walmart every month. i find what i need, at a great price. and the money i save goes to important things. braces for my daughter. a little something for my son's college fund. when people look at me, i hope they see someone building a better life. vo: living better: that's the real walmart. 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 ch

a reminder that europe isn't even close to being out of the woods. also another question guys is what message does this bank tax send to depositors across europe? is this going to be the new way of dealing with crisis, tax deposits, closing banks, that kind of thing? how long is it going to take for cyprus' economy to recover from this? >> very good question. that's what a lot of people were really worried about whether or not what's happening there could happen in other places. >> we saw in europe seizain was saying hang on this might have longer term implications and reigned back a bit. zain, thanks so much. zain asher there. >>> secretary of state john kerry dropping in to meet with president hamid karzai. announcement coming at a time of tension as you can imagine between president karzai and coalition forces and u.s. forces in afghanistan. >> those tensions escalated this month after a bomb blast in kabul that killed nine people, kerry and president karzai just wrapping up a news conference actually. we'll update you on any developments from tha

why wouldn't we spy on europe to help europe, too? >> here's the thing. you have the chairman of the judiciary committee, senator leahy, one of the committees in the hour, james sensenbrenner work the authors of the patriot act. we don't seem to know who is in charge. it is conceivable that the head of the intelligence is spying on our president's cell phone. so we don't know who is in charge. and we think they've overstem their bounds. you have people who were authors of the patriots act saying our intelligence agents have gone too far. not to mention that jail clapper came to congress and lied and that he was not doing surveillance. he was not collecting any data on americans. so there is a lot of trust being lost and i think there is a great deal of credibility lost. and we have to trust our officials if we're going to let them have such sensitive information about our personal lives. >> your fellow tea party backed republican marco rubio is among those who seem to support these programs. we've though there has been a huge lack of transparency. here's

. >>> up next, is it the end of austerity in europe? i have two smart economic experts. later on salman rushdie. and islam extremism. digestive balance. ♪ stay in the groove with align. ♪ need help keeping your digestive balance in sync? try align. it's a probiotic that fortifies your digestive system with healthy bacteria 24/7. because your insides set the tone. stay in the groove with align. because your insides set the tone. trust your instincts to make the call. to treat my low testosterone, my doctor and i went with axiron, the only underarm low t treatment. axiron can restore t levels to normal in about 2 weeks in most men. axiron is not for use in women or anyone younger than 18 or men with prostate or breast cancer. women, especially those who are or who may become pregnant and children should avoid contact where axiron is applied as unexpected signs of puberty in children or changes in body hair or increased acne in women may occur. report these symptoms to your doctor. tell your doctor about all medical conditions and medications. serious side effects could

now, some of that has already been tested in europe. according to the "wall street journal," london's gatwick airport processed 3,000 passengers this year through the boarding gate of british airways using just their irises. that eliminated the need for boarding passes and identification. they already can identify some of those passengers. this is again, being used in limited fashion overseas in europe and in the testing them in other plays. but experts believe this is kind of the wave of the future. then they'll go from eliminating boarding passes and getting you streamlined at the gates to possibly doing that for security screening. but that could be a little bit further down the road. as you mentioned, it does kind of prompt this debate at least in the united states and in europe and elsewhere over what is better at catching potential toifrts. could a machine do it with some kind of faisal recognition or is it better to have a person do that. there's some debate as to whether this might eliminate the job of a tsa screener. some exper

in europe you've seen it to an extreme. they can't stimulate their economies easily with their central bank. it's not centralized and they can't, they are not dealing with it on a fiscal basis. it's making the situation worse. you have depressions in parts of europe instead of just the slow uneven recovery that we had to experience. we are much better off. that said, we could be much better off. we could be to escape velocity where the unemployment rate is plummeting instead of edging down each month or see participate coming back because people have hope. we would be seeing that, i believe if we didn't lose a 1.75%. that's how much we lose if they keep the sequester going until september. they are not willing to compromise enough on that. you saw some movements in this direction. there is back tracking again. i have hope they'll figure it out and both sides will talk to each other. it's i got to come from both sides. let's back load the pain to when the economy can absorb it better rather than front loading it and prolongi

we are slightly higher in europe, you know, on the month. so, you know, they are ready to take this on the chin, although they would like to avert it because, you know, they've got so many -- so many crisis already to deal with here in europe. to be honest, they could do without this. >> isa, thanks very much, live in london. john in hong kong, what's been the asian market reaction? >> reporter: well, initially, hala, it was positive. seven hours ago when this deal started to cross between the senate and the house we saw a rally in japan up 1% and markets up 0.5% across the boards. let's take a look at the numbers nikkei trading up 0.1% off the highs of the day. the other markets are dismal. hong kong hang seng down 0.25%, same with shanghai after losing 2% in trading the day before, and kospi and seoul up 0.25%. the other interesting trend is the dollar-based assets rallied into this when the deal was signed. oil was up $1.45, now trading below the line. gold was up $5 an ounce, now trading down $3. now the dollar is trading slightly lower

big problems there for europe. thanks to you in the weather center. atika in london, our thanks to you also. >> and another obama care, another meltdown for the website. now tech giants including a former head of tech projects for the white house are now saying silicon valley would have done a better job setting up the internet exchange. you're watching cnn. the secret is out. hydration is in. [ female announcer ] only aveeno daily moisturizing lotion has an active naturals oat formula that creates a moisture reserve so skin can replenish itself. aveeno® naturally beautiful results. aveeno® medicare part d plan did you know that if you enroll in a where walmart is a preferred pharmacy, you could save up to 80% on your co-pays over other pharmacies? this could lower your prescription co-pays to as low as a dollar so you can enjoy the things that really matter. and now that we're a preferred pharmacy for many national plans, it's never been easier to save. choose any plan where walmart is a preferred pharmacy provider by logging on to walmart.com/rxpl

i think our policy historically has been europe focused. today the center of political gravity has shifted from europe to asia. in the sense that both are now important. we ought to think of our role in asia. not in the fashion that because of two world wars we were compelled to think of it in europe, but more in the fashion that is similar to british rule in europe in the 19th century. britain was not a protagonist but a balancer in europe. i think that's the model for us in asia. we should avoid getting involved in mainland contests. for example, when they offered us a use of cameron bay, we're not acting on the charity, they're obviously trying to get us to cam ranh bay so our navy would be in an assertive political support for them against the chinese. >> the danger is involvement, which is not of deceasive importance. >> i think what is important to us we be a balancer so we discourage dramatic shifts or particular use of force. >> james baker served as secretary of state under george bush, senior. >> there are a lot of countries in as

closer to europe was one idea. the people on the streets wanted more to get out of it. what did they want to get out of the proximity to europe and what is the fear in terms of where this could be heading? >> they want, or at least a good part of the country's population wants this is the country to modernize, to grow economically, socially, politically in ways it believes it hasn't done over the last 20 years since the soviet union fell apart. a great many of the people feel they've fallen a long way behind many of the other eastern european countries that have since joined the eu, modernized brought up their political system so they're free of corruption. they have growing law, that's what the pro european people in this country want. that is largely geographic, basically the western half of ukraine. the eastern half of ukraine have always been closer to russia, ethnically, culturally, they have seen russia as being their natural ally and to a significant extent they still do. by no means has the president lost the country. he still has a significant political base in

i think our policy, historically, has been europe focused. today, the center of political gravity shifted from europe to asia. in the sense that both are now important. we ought to think of our role in asia, not in the fashion because of two world wars, we are compelled to think of it in europe, but more in the fashion that is similar to british role in europe in the 19th century. britain was not protagonist but a balancer in europe and i think that's the model for us in asia. we should avoid getting involved in mainland contests. for example, the vietnamese offering us the force of cam rahn bay were not acting out of charity. they were trying to get us to be in cam ranh bay so our navy would be a form of support for them against the chinese. >> so the danger is -- >> involvement which is not of the size of importance. i think what is important to us is that we be a balancer so that we discourage dramatic shifts or particularly the use of force. >> james baker served as secretary of state under george bush sr. there are a lot of countries in

coming up in our next half hour, we will speak to our reporter in london about secretary's trip to europe and if he won any more support for a military strike on the assad regime. >> we are hearing from bashar al assad himself. the syria president telling charlie rose of cbs and pbs his administration had nothing to do with the chemical attacks. assad suggestses the rebels may have been behind it and says syria may retaliate if it is attacked by the west. >> one country not planning to strike back is iran. the country's foreign minister is brushing off reports it has asked militants to go after the u.s. embassy saying the world needs a peaceful diplomatic solution to this crisis. >>> where does president obama stand now? we will find out later today. wolf blitzer sits down with the president to talk about the situation in syria and the effort to win over the votes in congress to authorizing military action and coming up at 6:00 p.m. interest and stay tuned at 6:30 for the premiere of "crossfire." the panel will debate syria and a lot of issues of today. >> a big debut tonight at 6:30. not

assets overseas, certainly our troops in afghanistan, to protect our embassies, to protect our allies in europe and in central asia and the middle east. and i think all of that should be explained more forcefully by

. >>> a version of that concept that began in europe has been brought to america, a minnesota foundation that's dedicated to finding work for people with autism. he's in minneapolis, tim, specialist is danish, right for the specialists, that's what i'm being told. i'm wondering how are you translating this concept here in the u.s. and what is the quote-unquote autism advantage? >> well it's a great question, martin. we're translating the danish model to a capitalistic system here in the united states and the model is that we provide the supports that are necessary for these very bright individuals to get a job and keep a job. the advantages to autism are just as were described earlier. in the segment. the ability to process large amounts of information accurately, to do so in a short period of time and to do that repetitively. these are characteristics that are very much sought after in the high-tech and i.t. industries. >> i mean, it's a very exciting concept. i'm wondering what's your sales pitch to companies? i mean when you go to them, to try to explain the advantage? i mean what do

i think our policy, historically has been europe-focused. today the center of political gravity shifted from europe to asia in the sense that both are now important. we ought to think of our role in asia not in the fashion because of two world wars, we are compelled to think of it in europe, but more in the fashion that is similar to british role in europe in the 19th century. britain was not protagonist but a balancer in europe and i think that's the model for us in asia. we should avoid getting involved in mainland contests. for example, the vietnamese when they offered us the use of cam rahn bay, they were not acting out of charity. they were trying to get us to be in cam ranh bay so our navy would be a form of support for them against the chinese. >> so the danger is -- >> involvement which is not of the size of importance. i think what is important to us is that we be a balancer so that we discourage dramatic shifts or particularly the use of force. >> james baker served as secretary of state under george bush sr. there are a lot of cou

also on europe. do you believe that you will be able to weather these challenges from the base of the conser conservative party. >> i'm a conservative that believes in reducing people's taxes, government living within its means, vested interest in education being overcome so kids are properly taught, welfare reform, i take those conservative boxes but succe successful conservative parties have to reflect the world around them if they want to represent that world in government and on an issue like gay marriage, i was a supporter of that, it's a conservative government in britain that made that law. i think on many of these social issues which are not as hotly contested as they are in the u.s. political debate. you have to aim off a bit and accept that it's a different context. i think in these areas, there's no reason why the conservative party can't lead the agenda. if you look at british history, it was a conservative who abolished slavery and conservative who allowed women to have the load in brita

and this has been the reaction across europe and among other allies as well. i mean, the fact that apparently eu offices, allies' offices in d.c. and new york were being bugged in many different ways has come as a shock. and in fact, "der spiegel" magazine has said germany was targeted for spying as much as china or iraq was by the united states. so that's what's really shocked a lot of politicians here-s they considered themselves friends and allies of the united states and yet they're not being trusted and are being spied upon. >> and yet some countries are not being spied upon like britain, australia, and new zealand and others are. so it's a difficult one for the americans to explain. but how much harm has been done by these revelations? could it seriously impact a trade deal between the united states and europe? >> we have some very important trade negotiations coming up. the trans-atlantic trade and partnership starts talks on the 8th. and france's president francois holla hollande already suggested it could derail the trade agreement. it could have seri

they're all over europe. if the public outrage in europe gets to the point where he has to close it, you don't know. i think this man snowden is, could possibly be the death of americans if we lose this big ear as they call it. >> you're saying if the u.s. is forced to pull back, basically by public opinion in europe. as you and i have discussed, in europe they knew it was happening. there could be real implications. >> we just, how can they trust with us secrets? one revelation after another. and this is, this should be to have secret signals intelligence which is the crown jewels which should be untouchable and it is all out there. and who knows where it will stop? i don't think the national security agency knows. >> marco rubio said what you and i have been talking about all week. that everybody spies on everybody. but humor aside, people have been raising real questions about the effective know of manager's spying. as if bob was u.s. intelligence really getting anything out of listening to angela merkel's

those people on the street they'd like to have those ties with europe. >> choosing russia over europe. imagine, an entire country falling into chaos was rebels running the show. the u.n. is sounding an urgent action alarm for the central african republic. the situation is dire for most of the almost 5 million people there, their reality is child soldiers torture and rarely any schools or hospitals open. vladimir is tracking the story everywhere nigeria's capital. he reports france is sending in 1,000 more troops. >> the reason france has decided to send more troops into the central african republic is simple. the cycle of violence between the muslim minority and the christian majority could become a genocide. since march thousands have been killed after a coup replaced the leader with the rebel commander. since then the u.n. says 4/60,000 people, close to 10% of the population have fled their homes and more than 1 million are in dire need of food aid. ffrds. >> very bad situation there, 400,000 people displaced. the u.n.en deputy secretary-general says it's descending into chaos. >> i

. >>> up next the well executed diamond heist at an airport in europe. millions of dollars in precious gems whisked away in minutes. >>> and later, new developments in a 360 investigation. multiple cases of legionnaires disease at one v.a. hospital all linked to contaminated water. one congressman says there's a cover-up going on. [ lane ] are you growing old waiting for your wrinkle cream to work? neutrogena® rapid wrinkle repair has the fastest retinol formula. to visibly reduce fine lines and wrinkles in just one week. neutrogena®. new griddle-melts to yourimees usual breakfast sandwich. week. a lot more flavor. [ anouncer ] ihop's new griddle melts... made fresh and hot! hand crafted just for you. it's like a sexy sandwich. [ anouncer ] compare new griddle melts yourself. just $4.99. it's an epic breakfast sandwich. or treat gas with these after you get it. now that's like sunblock before or sun burn cream later. oh, somebody out there's saying, now i get it! take beano before and there'll be no gas. >>> crime and punishment tonight. a spectacular

but europe, europe is a very different story. you look at ford, it made $1.6 billion in profit over all last quarter but it lost $462 million in europe and it expects a full-year loss there of $2 billion. many other u.s. companies have also mentioned challenges that they're having in europe as they mention this in their latest earnings report. clearly, it's definitely having an impact on u.s. companies and, thus, the u.s. economy as a whole. this is nothing new. it's something we've been living with for a while now. by comparison, our economy here in the u.s. is doing much better. also by comparison, look at stocks. the u.s. stock market is doing great. the dow is coming off another record high. tuesday was the 19th time this year the dow has closed at a record high. it is up more than 16% year to date. the s&p 500 is not far behind up 15.7% for the year. you look at the u.s. economy, u.s. stocks, and then you compare it to europe and you say, we're sitting pretty compared to europe. opening bell just rang. stocks are starting a

across europe, not all bad news. in italy, the first italian first in recent history of the italian republic to be re-elected. that paves the way for eventually calling snap elections in july or an interim government and that helps to shore up the eurozone. back to you. >> thanks, nina and pauline there. >>> now to a couple of cases of celebrities behaving badly. reese witherspoon may want to be careful about what she says the next time she is pulled over. >> witherspoon and her husband were arrested and jailed on early friday morning. a georgia state trooper says toth was driving in the wrong lane when he was pulled over. the trooper says witherspoon started interfering with the sobriety test saying she did not believe he was a real police officer. i told mrs. witherspoon to sit on her butt and be quiet. >> at another point the trooper says witherspoon asked him do you know my name? i said, no, i don't need to know your name. witherspoon replied you're about to find out who i am. you're going to be on national news.