Skip to main content

tv   Squawk on the Street  CNBC  February 10, 2012 9:00am-12:00pm EST

9:00 am
would like to thank neal for joining us for three hours, slacker. he was here as 3:00 a.m. we are officially inducting neal as a "squawk box" master of the market. >> wow. >> we have bill murray -- >> what's he, chopped liver? let's put it up there, too. our thanks to bill murray, neal kashkari, we'll see everybody back on monday. right now it's time for "squawk on the street." >> good party. good friday morning. welcome to "squawk on the street." we're live at the big board. dave faber is back at hq, an interesting finish to this week. if we were to close down here, it would be the single-worst day of the year so far. we have not seen volatile days like this to the down side since december, really.
9:01 am
take a look at europe as well, obviously everyone trying to make sense of what would happen in greece. ftse is down. and we'll keep a close eye on similar/euro today. >> so let's hit a road map for this friday morning. as carl mentioned this could be one of the biggest losses for the year. oil falling from its three-week high. europe the main reason for this pullback across the board. european finance ministers says greece's bailout plan must be approved by parliament. >> maybe why bill gross has to treasuries to the highest since july of last year. still goldman sachs says there are some upside risks for their forecast. no changes to estimates yet, but the data over the past six months are good. >> shares are soaring premarket as it's good news for the ipos that followed in its footsteps.
9:02 am
and apple's date with $500. momentum does seem to be there. are there gains masking underlying sluggishness in stocks, in earnings, in valuation, and a lot more. weep talk about that with all morning long. we are on track for the worst day of the year so far in 2012. the worst day january 27th, when the dow lost 74 points. we've only had a total of 12 down days so star. jim, what is noticeable about this down indication in the premarket is the vix has climbed higher. we're nearing, what is it, 19 at this point? there is some fear creeping back into the market. why the change, do you think? >> i think one of the great themes of this year is we thought that a lot was behind us. yesterday in particular, it was interesting how tepid things were. obviously we didn't have a greece deal. i'm watching the tlt, the
9:03 am
treasuries here. we mentioned bill gross. treasuries had seemed like they were beginning to roll over, and it had been a good theme, because that's what made people feel more emboldened. are we in shape to do this? one of the reasons -- we needed to see the fxe, which is the proxy, take out 132, 133 to make people feel better. and you have something that's not going to be resolved today. it's going to be weekend, monday, tuesday, go on twitter, as we do at jim cramer. everyone said, forget about greece, we're fine. you can't forget about it. >> you're talking about defcon levels, which i thought we were done request. >> look, i was really anxious to wrap up greece, because italy seemed to be fine. italian production numbers were really terrific. but as long as this was out there, then you had the possibility of a major retreat
9:04 am
in the euro, strength in the euro means we have a game plan, weakness in the euro is disarray. >> so in determines of the defcon analogy, where are we? >> i've been waiting and waiting to give a high sign when i felt that greece was behind us. i always felt that the germans have become very much in charge. they're too in charge. i think they think that greece is basically -- i'll use a strong term here -- a sham state, that they think it doesn't raise taxes in any way, it's not able to deliver anything. >> one big reason some are arguing they actually want greece to leave the euro zone. by the way, we should mention people in greece are showing what they think about yesterday's austerity vote. they are not happy. workers calling for another 48-hour strike, almost all government schools, buildings, hospitals are running on emergency staff. public transport is almost nonexistent this weekend. widespread violence, as well. a leader in the splaul part said
9:05 am
his party would vote against those cuts that are required, despite having backed the measures a day earlier. david, we thought we had some coalescence here within greece. >> but we don't. yesterday some should have known better, as the day wore along, it was clearly not what some at least in the market had thought it was. you have to remember, what is going on in greece, by every account is a significant change in the lifestyle of a people, and not for the better, of course. and one has to wonder whether, when it really comes down to a vote on austerity again, and whether they can really meet all the demands being put upon them primarily by the germans, that there's a willingness on the part of the greek people and will be reflected to actually vote for this stuff. i mean, you can imagine being a greek citizen saying, really, why would i do that when it's already this bad?
9:06 am
bring back the drachma, and see the only adjustment mechanism would seem to be default. just bring it back. don't pay or bondholders and let's get back to what we need to do. >> this is live pictures in downtown athens outside of parliament. >> my favorite aneck dote in the times is a greek woman, and she said 20% off of what? i haven't been paid by my employer in a year. that's sort of what they're dealing with. >> a religious country, religious leaders have already spoken out against this. >> i think we go down. i am not going to say we shouldn't be a buyer. i just think today may not be the day to be a buyer. i think the xlf, the financial etf had reached a level where it clearly was extended, but again, look, i'm not saying that greece is the be all and end all. we will have a better day to buy
9:07 am
later on. that jives with what a lot of technicians are saying, that the chart is heady, so consider this part of a pattern. >> but jim, if we get back to headlines, the likes of which we were seeing late in the year, it's march 20th, of course is the deadline for the 14 billion they need to pay back, but let's even assume they do leave the euro, and then port gale is next. after portugal, is it ireland? is it not? we may be back in a pattern that's dangerous not just for our market, but the economy in europe, and overall for the financial system, even with all those safeguards put in last year. >> you put it well. i will say that growth in this country is strong.
9:08 am
>> we are in better shape to handle it this time. >> that's what goldman sachs. better news upsite risks. the goldman sachs estimates modest growth of 2.2% in the first quarter, but seeing momentum due to better data and improving u.s. financial conditions. chief economist is forecasting meaningful upside to the second quarter gdt forecast. >> hard to argue, but a lot of momentum happens to be midwest. don't see a lot in the east, a la tiffany's, but it is important to remember that we do matter, and we were a drag last time we dealt it. right when the s&p downgraded us. we are not a drag on the world's economy right now.
9:09 am
if china were to cut, the numbers have been a little strong in china, but if china were to cut, i think we would come back and say europe can be dealt with. europe can be dealt with. that's different from how i felt in 2011. >> goldman's note, david, is interesting. in part they're holding back because some of these standards are showing some tightening. even gas prices beginning to show some nervous signs, and we all know how sensitive we will be to that come summer. >> it's true, though as jim has pointed out consumer seems to be pretty strong in the face of rising gas prices. it will be interesting to see. i had a conversation who said simply to me action and i'm reading here. all signs are pointing in the right direction. and the same direction, the right direction. i'm not going overboard, not saying things are great, actually. the world seems marginally better and all signs earp
9:10 am
pointing in that direction towards continuing to get better. >> look, this matter. union pacific, along with what david said, expressed -- someone comes and says you were downbeat about gasoline, have you thought about the fact that the heating bill in the country, heated by natural goods, they just didn't have to spend a lot. if you would be more open-minded, you would realize there's more in the consumers' pocket. always have to look at everything in this economic. meanwhile, two very well-known investors, two very different calls, pimco's bill gross, increasing his holdings while warren buffett says treasuries are the most dangerous of assets as "fortune" magazine picked up on some of his comments. why the disparity? >> one guy can only do basically fixed income and is choosing a part of fixed income.
9:11 am
-- no, never mind, i'm going with warren buffett. warren is the best there is david, when you go against warren buffett, has that paid off? >> a couple times, it could have. >> he sold all those puts -- when things were most -- had goes and buys bank of america, he's in the money -- >> he's back in the money. of course he's always in the money, into you he gets these incredible dividends to begin with, whether it's goldman, b of auismt or ge for that matter. >> he can't afford to get it wrong after last year, jim. they didn't see the amount of outflows they might have anticipated, because of the wrong-way bet on treasuries. so you know, two in a row is not good. >> last night you called
9:12 am
berkshire a screaming buy, because of rails and housing and because of reinsurance, yes? >> you've got to break down the pieces. burlington northern has a bit -- but it's powder river cold therefore it's cleaner. david is right, there have been mistakes. reinsurance rates are going up, so you start a pipeline business, you look at the pastiche that is berkshire hathaway and you say this stock is up almost nothing for 2012? >> so if it's that hard to understand, that hard to categoriz categorizes, don't think companies typically trade at a discount? they don't perform exactly in line with the xlf?
9:13 am
isms i would point out there's been periods where there's been definite outperformance and higher multiple, and i think this should be one of them. dropping 38% in january, video game related sales dropping 34%. software sales last month back to 2004 levels. >> you want to short microsoft on that? >> not on this momentum that we have seen. >> you want to short oracle? microsoft, windows 8 coming out. >> you think buys taleo is desperate? >> i think when you're carving up your own business model. if larry ellison or mark hurd were to come on, i think they could articulate it. i don't get it, but i would like to hear it. >> you think it's a scramble to the cloud?
9:14 am
>> their business is not cloud-based. this is not microsoft. i would like to hear what s.a.p., coceo really navigated this period extremely well. he has been doing object, but s.a.p. is doing pretty well. maybe this is a response to s.a.p. i say good luck. s.a.p. is very strong. another round of competition between google and apple, as google moves to take android into your living room. it's apparently developing a new home device that will stream music wirelessly, operate by a smartphone or tablet. marks a strategy shift for google which would design and market a device under its own name for the first time, and of course yes the headline that they were considering a retail outlet, was that the day before yesterday? you never know with apple. >> it would be great if they use
9:15 am
the apple ipad. >> basically that's what it is, a device to extreme -- that's called itunes on my mac using my ipad or iphone to control it. >> look, when apple comes out with the new verse, if it is sir siri-based, but if it's siri-based and yes i'm a big champion -- i want to watch "smash" on monday like 11 million people did -- >> did you watch "smash"? >> who didn't? >> i know david probably watched it. >> i -- it's on the dvr. i cannot tell a lie. i haven't watched it yet. >> that's fair enough. it's wading for you. >> we've been tired. >> who do you play for? >> say again? >> who do you play for? >> on the technology, tell me when i can do it all. mime 8-track is doing well, my
9:16 am
walkman is working fine. i've been waiting. >> do you ever hear of this netflix thing? they send a dvd in the mail. >> they still have beta. >> i love those mixed tapes that you make. >> don't we have to get gloomy about greece? >> i'm real down. as we go to break -- >> germany falling apart. >> i'm real down. >> on that note, we are just machines away from jim's mad dash to the opening bell. plus a key number of the morning. before the break, take a look at ten-year notes across the world. in the works package, we change the oil we change the filter... tire rotation, suspension, we make suspension checks... what we have here is the multi-point inspection. every time a vehicle comes into a ford dealership you'll be presented with one of these. we check the belts, hoses... brakes. tires and the pressures... battery, all your fluids... exhaust system, transmission... we inspect your air filter... it gets done,it gets done quickly and it gets done correctly.
9:17 am
the works. oil change, tire rotation and more: $29.95 or less after rebate - at your ford dealer. you're a doctor... you're a car doctor. maybe a car doctor... you have to dig a little. fidelity's etf market tracker shows you the big picture on how different asset classes are performing, and it lets you go in for a closer look at areas within a class or sector that may be bucking a larger trend. i'm stephen hett of fidelity investments. the etf market tracker is one more innovative reason serious investors are choosing fidelity. get 200 free trades today and explore your next investing idea.
9:18 am
9:19 am
welcome back to "squawk on the street." a lot of the moves predicated on what isn't happening with regard to greece very much make sense, but if you take it back a week, maybe not as much. you know, if you look at right now where the euro currency is trading, the big break makes sense, but it's still up on the week. look at port gee ten-year yield. it's not only down on the day. it's still down on the week. if you look at the u.s. ten-year, of course it's down on the day, but it's actually up a
9:20 am
bit on yield on the week. the bund overseas, down on the week, what does all this mean in english? it means the market is triple to grapple with something, because it never will know the answer, but today look for an extra helping of volatility. i think a bunch of that will emanate from the equity side. treasuries will pay attention. it's about the settlement of all that supply, and a botload of court st. back to you melissa lee. ready for the tweet out there? google is said to be working on a home entertainment system, and it's said the company will market it until its own brand. the news comes as speculation of an apple tv that some say could be a game changer. this morning as they proceed pare to battle for your home, what is the coolest thing that they should be able to do for you? tweet us.
9:21 am
we'd love to hear what you have to say. i'm sure a lot of inventive things will come across. >> keep it clean, please. >> or maybe not. >> how about igoogle. >> i robot, the zumba. we are profiling under the radar stock gainers. one you want to take note of before the break. take a look at futures as we count down to the friday's open. it could be a rough one, the dow looking to lose 90 points at the open. ttd#: 1-800-345-2550 let's talk about how some companies like to get between ttd#: 1-800-345-2550 you and your money. ttd#: 1-800-345-2550 at charles schwab, we believe your money should be available ttd#: 1-800-345-2550 to you whenever and wherever you want. ttd#: 1-800-345-2550 which is why we rebate every atm fee worldwide. ttd#: 1-800-345-2550 and why our mobile app lets you transfer funds, ttd#: 1-800-345-2550 execute trades, even deposit checks just by ttd#: 1-800-345-2550 taking a picture, right from your phone. ttd#: 1-800-345-2550 so talk to chuck and put those barriers behind you.
9:22 am
ttd#: 1-800-345-2550
9:23 am
are you still sleeping? just wanted to check and make sure that we were on schedule. the first technology of its kind... mom and dad, i have great news. is now providing answers families need. siemens. answers.
9:24 am
the bell rings on wall street, and it is jim cramer's birthday today. >> on a down day? i don't like that. greece is interrupting my -- heinz and i have something in common today. my nephew said we're calling you 67, because it's better to be a young-looking 67 than an old-looking 57. >> overall, all right, just walk us through your degree of worry today. >> there were a lot of people, i'm not going to call them out, but a lot of famous bears and
9:25 am
negative people who came around -- >> why don't you call them out? seriously. >> what do you want me to do? gilyard is -- when that bottoms, i do think the bottom is coming later. i don't want people to get too bold today. >> do you still feel okay about the gold chart? a pullback within -- >> gold has been -- everyone has tried to -- but it's been up 11 straight years. very different correlation. the only thing is. >> no mira, after this greek drama is on, still seals the ten-year yield -- those who
9:26 am
argue the bond market had stopped, do you think they're still wrong? >> i'm -- i don't want to call them dangerous, i just think they're not a great place to be. you know, hats off to everybody that went with them. i just don't think it's the right level. >> we'll see where this day leads us when we kick off the opening bell right after this break. f you had thermal night-vision goggles,
9:27 am
like in a special ops mission? you'd spot movement, gather intelligence with minimal collateral damage. but rather than neutralizing enemies in their sleep, you'd be targeting stocks to trade. well, that's what trade architect's heat maps do. they make you a trading assassin. trade architect. td ameritrade's empowering, web-based trading platform. trade commission-free for 60 days, and we'll throw in up to $600 when you open an account.
9:28 am
hyundai genesis.ission-free for 60 days, in a new, faster-acting formula. zero-to-sixty in less time than a porsche panamera s. the 429 horsepower genesis r-spec. from hyundai. take the privileged investing tools of wall street and make them simple, intuitive, and available to all. distill all that data. make information instinctual, visual. introducing trade architect, td ameritrade's empowering web-based trading platform. take control of your portfolio today. trade commission-free for 60 days, and we'll throw in up $600 when you open an account.
9:29 am
as we head to the opening bell on wall street, you can see big declines to the likes of copper as well as silver, cramer pointing out silver was one of the best-performing metals this year. >> big speculation. >> crude we should note off its three-week highs, the 7 puff 75 a barrel, also a big decline in brent. >> we need that. i mean, the silver lining, i don't want to be too bold, but we need gasoline back. it does matter. >> i want to quote you from last night -- i have never seen a less positive more gloomy group of analysts as this crop right now. they act like we're on the precipice of a downturn. >> what i've been amazed at is you'll have a whole foods and they'll say listen, forget about
9:30 am
it, and then the stock rallies. you'll have an apple movement. i want the analysts to get on board during this pullback, because they're missing it. >> you're watching the real-time exchange. here at the big board, roundy's, and mattel marking toy fair 2012? new york city. the ceo on cnbc later on today i want dividend raiser, very good turnaround, hasbro tied in with zynga. we overlook sometimes the old and new companies get involved and they do make money. what do you -- >> i want to talk about wells fargo, the largest in the xlf, which is the key way to get short, but it has no european exposure and a big beneficiary of the settlement. i'm looking for that one to bottom 28, 28 1/2, that may be a
9:31 am
place to go. >> all dow 30 stocks are trading lower at this hour. not a surprise as we are seeing the dow down by just about 61 points. not as bad as we thought it would look in the premarket session. >> i think there will be a lot of short money coming back. there will be people, but there's a lot of people who need to be in, and i think we could be down 2% like germany, i don't think so. >> when you say people who need to be in, you mean mutual funds who -- >> undervetted, and hedge funds who have been betting against -- maybe some pressed their bed, because they couldn't believe the market is down enough, but again, i want to come back to -- this is a year where the u.s. economy is strong, we're not dealing with a declining economy. watch wells fargo. that will be your tell. >> bank of america notably, i think it's trading higher right now. >> doesn't that tell us something?
9:32 am
>> actually it's below $8 actually. >> remember, the -- look, people come in, and they blast through the etfs in order to make a statement if it weren't a friday and we didn't have to worry about this weekend's headlines, you know what? you could even intraday, make a call. i just want to see the weekend. >> can we check on diamond foods? there are some reports today that pringle's will officially terminate the deal. >> protecter does need to do something. i feel strongly that pringle's is not as good an asset as it was when dimon was in it, but the spin hasn't been again on. you have to support these brands. dimon liked it because of the -- but remember pepsi is coming in with guns blazing, with a stacks product, pepsi wants to take share back. we heard that yesterday. >> so possibly the reason it's up -- for one, diamond can
9:33 am
operate as a stand-alone company, break up and sell the parts or sell itself outright. >> i always come with his tans when i heard that conagra might buy them. i've learned where there's possible criminal behavior, you may have nothing. you may have nothing. is kettle a good asset for chips? yeah, is popsecret good? i don't know. i don't like to make speculations when the balance sheet is bad. >> wheres wall street right now on diamond foods? basically there are neutrals or hold ratings, one has a buy rating, and he says some of the parts is worth more than $40. >> when there is possible criminal, i'm over my head. these analysts ought to do the same, suspend coverage if you have any sort of morals -- >> right. >> we are at session lows right now. the nasdaq is down by almost a whole percentage point.
9:34 am
dow right now down by 118 points. carl, over to you and bob. >> and of course that would be the weakest day of the year, not that it doesn't mean we don't have crowds here for -- >> this is gse. we're waiting for them to open an ipo, an environmental lining company. early indications is it's going to open around $10. of course we've had almost nine or ten ipos so far this week. the important thing about today, call it won't get fooled again. apparently they bought that who album. you don't remember? i bought it when i was 15. they're not buying it, not until the greek parliament formally votes on the terms of the bailout, finds more ways to save more money, 350 billion euros. >> guarantees it survives the election. >> so they're going to vote on sunday. here's the problem. there is a coalition. in theory they have 252 of the 300 votes that are in the
9:35 am
parliament. so you think, of course they're going to make it. as you've been hearing, this coalition may fall apart over the weekend. we don't know. there's party leaders. they may or may not all decide to stay in the coalition, so this is a very fluid situation. here as the big problem. it's still not going to be enough. the finance ministers will demand, of course, additional issues. they'll demand an cryoaccount. that's another negotiation that will have to happen next week when the finance ministers supposedly meet on wednesday. david, in a sign of just how absurd this has become, we're arguing about whether or not it's 120 debt to gdf or 136. >> and who cares? so everybody say, okay, now the probability of a default when the 14 billion euros come due, want to bet? how about it actually happens, and some bridge loan suddenly materialized out of nowhere from
9:36 am
someplace like the imf or the germans or something like that? don't be spreed if it actually gets to that point where the backup is the bridge loan? i think this will not even be over even by march 20th. that's how difficult it is. meantime, art cashin and you were just talking about it today, a very moving letter from the archbishop of athens to papademos, talking about nightmarish dim memberses. we are being asked to undertake commitments that do not solve the problem, talking about the death of the country that is leading us toward the death of the country. he says the danger of social upheaval can no longer be ignored, a very moving letter and puts a very human dimension on exactly what's been going on there. the new york stock exchange did have its -- the deal with
9:37 am
deutsche borse is dead. they have a two-year plan. obviously they'll have to roll out more details. we'll get more on that. >> jim, obviously we've got to get through today, but are you going to spend the weekend watching for this plasm vote? >> yes. the weekends are back on as a way to be able to analyze the market. monday is going to be important. i'm watching apple. why is it don't only a dollar? people are saying i don't care. i do care. i want to not care. a lot of people are choosing not to care. i have to stay focused on it, carl. >> but is it valid to have the notion that there are stocks where you don't care necessarily what happens in europe, you don't care what happens with the parliament vote. this stock, by the way looks like it just opened. that's why we have applause
9:38 am
here. gse. >> dow stocks, disney reported good number. not that affected. so maybe take a hard look at disney. that was a good number. >> guys, it's david back in ec. on the europe question, just a appoint -- mario monti is in town today, i think he will join us later on cnbc. i know his lunch schedule includes having a lunch with a group including the ceo -- where did that come from? and one of course has to wonder whether blankfine will turn to him and say i have a derivatives deal for you you won't want to miss. it helped to shield many people from understanding how much debt there really was in greece. we'll see what mondayi has to tell those assembled, again, a small lunch planned today with a group of heavy hitters, as we like to say. >> david, what do you think
9:39 am
about the fact that on a day where people are worried about stretch valuations -- linkedin doing well, it's almost like there's a parallel market of red-hot stocks. >> growth is growth, isn't it? if you show it, i get you'll get paid for it. >> that seems to be happening. >> yes, i think that's right. even though linkedin has a lockup coming on valentine's day, i think people are saying they're immune. >> the lockups have been a huge factor in the performance of some of these stocks. it got hit on the first lockup, wasn't it? it's been more than six months, hasn't it? >> i think a lot of them are spreading the world, listen, we're not sellers. when did that lockup expire on see sars world? >> have we looked at it recently? a travesty, really. >> we know a lot of congress
9:40 am
guys like to play stocks. >> i've got to believe there's more stock that hit the market there. as we take a look. now at 15, of course it came at 9. that has been quite a performer. not sure who's been potentially adding to some of the supply out there if in fact they have. otherwise literally got people trading. it's nothing, which is one reason why this thing -- >> s.e.c. blessed deal, which is maybe the new things, just sell a million shares to let everybody else out. is this a new trend? s.e.c. seems to love the suggestion. >> let's hope that no company sells -- we talked about whether linkedin, small floats, that's nothing compared to what el they did here. >> shapiro, didn't they have a chance to stop it? they had a technical glitch. >> i don't think there was anything illegal about it.
9:41 am
>> sometimes the worst things are things that are legal. >> yeah. >> you're referring to this probe that's been reported in "the washington post" over -- about spencer bachus. >> not only was he apparently insider trading, but buying a lot of wrong stuff. when you have that kind of data, you would think you wouldn't buy calls on burlington northern, though that ended up working. one of the things we know is he has denied this nine ways to sunday, but apparently there was call and put activity. "the washington post" has a great story if people want to know more. >> centered around policy announcements -- >> there's a highway bill. i was trying to figure out would hi buy caterpillar calls? i would love to know what he's thinking. no? i mean, "the washington post." >> great story. >> and a guest on cnbc for a long time? >> no wonder. >> he'll have to answer more questions.
9:42 am
>> does he like it here. >> on cnbc? >> no -- >> i don't think he lookics this spotlight right now. >> i thought maybe he would be the first guy to buy some apple calls. >> let's get to bonds and the dollar. rick? >> hi, carl. running around getting the -- here's what i find fascinating. i go bump into one trader, he knows exactly how many numbers are in that far right party, 16. he says that 16 is making noise. that's obviously changing the outcome. when is the drachma going to return to greece. he talked to another trader, i'm in that pool, but my number, my pick is after april or may, because french elections, i was talking to ira harris, he thinks the imf may take a bigger role because of the connection to the french and what's going on with
9:43 am
their elections. today we might take 310, but net-net, we're going nowhere quick. back to you. >> thank you, rick santelli. gasoline prices back on the burner. at what point -- we are talking to a man who used to help set those prices. but before the break, let's take a look at early mover here on wall street. ♪ ♪
9:44 am
[ male announcer ] offering four distinct driving modes and lexus' dynamic handling, the next generation of lexus will not be contained. the all-new 2013 lexus gs. there's no going back. ♪
9:45 am
sadly, no. oh. but i did pick up your dry cleaning and had your shoes shined. well, i made you a reservation at the sushi place around the corner. well, in that case, i better get back to these invoices...
9:46 am
which i'll do right after making your favorite pancakes. you know what? i'm going to tidy up your side of the office. i can't hear you because i'm also making you a smoothie. [ male announcer ] marriott hotels & resorts knows it's better for xerox to automate their global invoice process so they can focus on serving their customers. with xerox, you're ready for real business. speculation continues to grow on this apple tv that some say could be a real game changer. google is said to be working on a device of its own, an entertainment system that would stream music wirelessly throughout the house. what's the coolest thing that apple and google's top-secret
9:47 am
home devices should be able to do for you? don writes -- walk my dog in the morning, then pour my coffee. i wish google and apple could feed my pets when i travel. amen to that. kyle writes if anyone could uncouple me from my cable bill, we would be the basis for a lifelong relationship. interesting. people love talking about their living room and how it will change. >> i was talking with j & r. look, i beg for one very simple plan. because i am one of those people who has a second iteration of a simple plan that's not working. i literally have seven different clickers, and i am sick of it.
9:48 am
different rooms, different systems. honestly, i do try everything because of who we are, and i don't think i request get more simplified, but i think as a consumer i should -- and i need it organized. >> keep writing in. and this edition of "squawk on the street" is just beginning. before the break some early movers. don't go away. [♪...] >> announcer: bank robbers stole $43 million in one year. but identity thieves? try 37 billion! and guess how identity thieves are getting some of that money. by taking over our bank accounts. they may not even need your social security number anymore. all an identity thief may need are a couple of pieces of information, like your mother's maiden name or the city you were born in, and they could add their name onto your bank accounts in order to make
9:49 am
your money their money. [whoosh, clang] you need lifelock-- the only identity theft protection company that now monitors bank accounts for takeover fraud. we have the most comprehensive identity theft protection available, so call now. try lifelock's service risk-free for 60 days. if you're not satisfied within 60 days, simply notify lifelock and you won't pay. and now, keep your personal documents out of the wrong hands with this personal shredder, yours free with enrollment. call the number on your screen. [♪...]  optionsxpress, where you can trade your favorite products, all in one account. keep watch on the markets. or use our exclusive tools to help find ideas. it's powerful, easy-to-use technology for trading stocks, options, and futures. keep trading whether you're at home, in the office, or on the go. optionsxpress, the broker smart traders deserve.
9:50 am
open an account today at optionsxpress.com.
9:51 am
time for six in 60. six stocks, 60 seconds, downgraded, firm notes a lack of catalyst. you had the ceo. >> i disagree with this call. they have 4% yield, they're getting out of the extraneous property. you don't sell that kind of stock. jdsu among them. >> cisco did not give the -- i
9:52 am
question it, though it is an inexpensive stock. conoco phillips upgrade deutsche bank citing leverage to oil and refining markets, target increase to $90. >> i like this. they're splitting into two, and that guy has said without a doubt they'll shut back if they have to to make the numbers. ak steel. >> why are people recommending this stock? stainless is not working as well as it used to. allegheny tech not doing that well, too. >> pipe are jahvid ray saying they've increased their relationship with facebook. oh, c'mon. >> and first solar, cull to neutral. >> solar stocks have been the hottest place to go. i think you should sell the stock. for more, go to sots.cnbc.com. phil? it's opened a preliminary
9:53 am
investigation into 830,000 toyota models. we're talking about 2007 camrys and rav4s. essentially they're looking into door nights, according to nsse in the official feeling, the fires appear to be originating from the power master switch. so it's the window switch on those vehicles. this is someone step short of a recall, guys action but often they can lead to recalls. six complains have been lodged. of course obviously the concern when you have 830,000 vehicles, guys, by the way toyota cooperating with the investigation. when you are 830,000 vehicles, and sometimes these things can become much larger than the initial investigation. >> snake-bit company. holy cow. >> phil lebeau, thank you. the stock is down more than 3% at this point. >> all right hit by one of those recalls myself.
9:54 am
you hate to see it, because you have to go in immediately and you start thinking is this not the great company you thought? >> overall this morning, doug cass calls this the nba market, the nothing but apple market, in that the results, the waiting is distorting the realistic view of cold profits, growth, is it true? >> i think people are saying cannot believe it's up. it is a marvel, but remember ten times earnings, you back out that fiscal year -- >> i got that, but is it masking the rest of the market? russell is down three out of four sessions. >> it could have that effect, yeah, i think that's reasonable. my issue is that i never like to see throughing in. this is a company that represents -- this is a ford motor of our era. you could arc in the 1980s when you saw exxon, i don't want to overlook it. >> somehow in today's session it
9:55 am
did set an all-time high, a fresh all-time high. >> it is the water cooler stock of the year. of the year. we've got some breaking news. consumer sentiment numbers right now. rick? >> of course we're waiting for $72.5, 72.5, that is light on expectations, but remember this isn't a final number. we're comparing this to the 75, which was the final number of january, and the best since the record number over 77. 77 1/2 from february of last year, so 72.5 is the number, and we see that interest rates are a lot lower than yesterday, but not on their lows of the session. of course, we still have one piece of data much later, the monthly budget statement. many will look at that. for the moment it all seems to be about the triple-digit losses in equities and remember, we're
9:56 am
proceeding to have record numbers for corporate issuance at this point of february 10, and that's a big deal all well. back to you. >> a bit of a turndown. i want to point out the two i'm watching, both down 30 cents, disney and welts fargo. >> how about tonight on "mad money"? and last of our request hours. we're pitting bed companies today. >> is there a special reward for people who call in and start, instead of saying boo-yah, say "happy birthday." >> you just changed my show this evening. thank you, guys, thank you so much. >> 57 is a great number. it worked for heinz and it will work for you. >> thank you, guys. budgets getting released on monday. you mentioned the parliament vote in greece over the weekend. >> i think you just have to -- look, there's no reason to come out and buy today, which is actually the biggest problem.
9:57 am
>> jim, see you tonight. >> thank you so much. straight ahead, hot pockets, one underthe radar stock, the other is in your face every day of the week. more straight ahead. coming up, apple hitting new highs all the time. is there any reason to be a bear on the stock? >> we'll discuss the pros and cons when "squawk on the street" returns. [ leanne ] appliance park has been here since the early 50s.
9:58 am
my dad and grandfather spent their whole careers here. [ charlie ] we're the heartbeat of this place, the people on the line. we take pride in what we do. when that refrigerator ships out the door, it's us that work out here. [ michael ] we're on the forefront of revitalizing manufacturing. we're proving that it can be done here, and it can be done well. [ ilona ] i come to ge after the plant i was working at closed after 33 years. ge's giving me the chance to start back over. [ cindy ] there's construction workers everywhere. so what does that mean? it means work. it means work for more people. [ brian ] there's a bright future here, and there's a chance to get on the ground floor of something big, something that will bring us back. not only this company, but this country. ♪  you have to dig a little. fidelity's etf market tracker shows you the big picture on how different asset classes are performing, and it lets you go in for a closer look at areas within a class or sector that may be bucking a larger trend.
9:59 am
i'm stephen hett of fidelity investments. the etf market tracker is one more innovative reason serious investors are choosing fidelity. get 200 free trades today and explore your next investing idea.
10:00 am
hey, listen anything with a 7 handle is not bad, but less than what we were looking for and it's distancing itself from the mid to upper 70s which were some of the better numbers for not only the index, but for 2011. about rates are lower, but still up on the week. in a ten-year about six basis points, where if you look at the euro zone, the bund is
10:01 am
outperforming. you want to pay close attention to the euro currency. it's very volatile, well off its highs. we're now around 131.80, but still higher on the week. back to you, carl. >> thank you, rick. talk to you in a few moments. s&p, you can see down almost 1%. we have not had a 1% down day on that index since december. so it's been a while since a down day quite like this one. also touch on some commodities, wow, down more than 20, and copper is at 386. a few squawk stories today. the trade deficit widened. linkedin impressing the street last night as they stopped expectation, and arch coal's fourth quarter profit rising nearly 48%. this after the company slashed its full-year adjusted earnings forecast twice last year. >> the reason the markets are
10:02 am
down is we have the rising possibility there would be a disorderly default in greece. after last night, of course, the finance ministers of the european union said they wanted all political parties in greece to sign up to all sister after or for the pertain after the april gen election. there's a two-day general strike, as you are aware, under way in athens from where cnbc's julia chatterly joins us live. julia, what are you able to tell us? >> reporter: it's actually gone much quieter in the square, but earlier we estimated around 5,000 people despite the rains. initially it's quite peaceful, but then some of the protesters were throwing pet roll bombs, and p all the shops and
10:03 am
restaurants were shuttered, our hotel included. it remains that way, very much on lockdown around the central square. a key concerns is this strikes were called before the euro group meeting last night, and news of potential additional cuts only heightened the anger and frustration of the people we're speaking to here. the strikes today are -- we have more protests planned for tomorrow and they're planning to do this again on sunday around 5:00 p.m. when parliament votes on this deal. it's expected to pass, given the government's currents majority here. the finance minister said morning -- that's the key dichotomy here. recent polls show that over 70% of the population wants to remain in the euro. they're just protesting about the way the government handled the crisis and the reforms that it will take. >> julia, the focus according to the people i'm speaking to here
10:04 am
and in western europe is very much about whether we can get -- or whether the europo group can get the three major political parties to sign up, to promise that the all sister will continue there's a huge concern and confusion about whether they stand. are you able to help us with that central point? >> reporter: yeah, that's actually one of the key points of the agreement. now they want confirmation irrespective of what happens in the election, these guys go forward. obviously the leader, who is this consternation about whether he'll even sign the deal. he only represents 16 seats in parliament. so it shouldn't be a problem. thank you very much, julia. apple hitting a fresh record high in today's session.
10:05 am
497-62, though the stock has backed off, as rumors around ipad 3 and itv hit a fever pitch. rob, great to have you with us. you are an apple bull, and you think the march quarter guidance at this point looks pretty conservative. at the same time, at what point do you take a look and say maybe people are putting too much momentum behind the stock, given the trajectory of the rise in such a short amount of time and that it seems like we're moving higher and higher. we know there's going to be an ipad 3, probably an evolutionary, and not a revolutionary product, and we know an i tv will come out. >> i think the ipad refresh coming in march, beefb looking for that for a while, so i don't think that in and of itself is the issue.
10:06 am
that's really where the power if you have the stock comes from, it's the platform. >> do we have clarity to the next platform? >> frankly we have no clarity on even apple tv. i expect an apple tv product, but i'm not holding my breath for it to be anything -- i expect the iphone at the end of the day will still be the biggest product cycle this year. i'm looking for an lte iphone 5. i suspect that would be the biggest product of the year. >> are we kidding ourself that iphone will remain the dominant smartphone.
10:07 am
there's so many competitors coming out. yes, it hasn't been a problem yet, but to believe that it's going to continue being the dominant smartphone out there, are we just kidding ourselves? >> you're right that the challenge for apple is they have to continue to make products that people think are better and willing to line up for and -- that's the challenge. with the iphone, with the ipad and the mac for that matter, they continue to do that, and they still have relatively small share, so that the numbers themselves i don't think is the ceili ceiling. >> can i take you into the discussion on the front page of many papers, and that's that google will launch this low-cost entertainment system and apple is up against it and that is the rivalry. what is your take on that? >> i think you're right, the
10:08 am
competition for apple at this stage i think is google and microsoft. the competition is platform versus platform. it's not box company versus box company. clearly android or google will largely continue to be the biggest direct competitor, but that's actually nothing new. so having that reach into the living room is the next step. >> i can understand why people are framing it in that way. i'm not sure the efforts we're getting from google are really about apple. i think that maybe it's about facebook. the ipo of facebook clearly indicates the value and the ability po templeal to monetize people that are stuck on your system. do you not think that maybe google is trying to launch this low-cost way of being the new backbone to the internet is the way that facebook is at the moment? >> again, i would actually agree with you and simply say that facebook would be in there in
10:09 am
terms of the platform versus platform competition. it's the same thing. it's who has the broad platform when you're talking about your living room or on the pc those are apple's ios, google with the android, and microsoft and windows is always a platform. those are really the platforms that matter. >> which do you buy as a stock? >> apple. i believe apple. i think apple frankly even at $500 is lower than it should be. we have a $650 price target. even at $650, it would actually be trading just a little below the market still. >> do you believe the apple will do something with its cash? at this point it's virtually losing money. it has cashed tucked into vehicles that are a fraction of a percent. >> cash has just gotten to $100
10:10 am
billion and about $100 a share, which is unbelievable. i get the sense -- the company hasn't said anything differently formally, but the body language is such that they're starting to hope -- and i think if apple were to pay a dividend, i think that would be a huge catalyst, because it would open up to a much broader audience. i certainly would like to see a dividend. >> rob, great to speak with you. >> thanks a lot. >> software sales meantime dismal. total software sales on consoles, portability dropped 38% in january, cnn's brian cooley is it live in san francisco with us. and trying to put that in the framework of apple tv. is it part of the same contest? >> i've got to tell you, the google entertainment system, if thesh it sounds like a gateway drug more than anything else.
10:11 am
if there was -- instead, this could be a way tots people to use android devices in the home, which google has not cracked the code on yet. they're google tv has been basically a nonstarter, but then to elevate that into a video platform later much the way icloud is expected to go later. >> it does set up a clash with apple? >> the tv in the living room is the battle that is so critical, and the apple tv i think is going to be essential. rob's got good points to make about their platform at apple how that's so critical in the home, and that doesn't really print yet with google. they have to try to get some traction. >> the software sales figures out of mpd, largely blamed on a lack of new titles this year. is that all there is to it? >> the gaming industry is very sfm opaquey, so as a result some years you've got a massive
10:12 am
influx of titles that have been in development for several years, other years you don't. there's not a huge number of players that enter with new versions every year, and on top of that, i don't think i can recall a time when the consoles have all been equally as old as they are right now. they're all ready for a refresh, the wii, the xbox, all are in the same capabilities. it's time for the next stage of those consoles on the way, and there will be increasingly home entertainment devices putting them more in competition. >> when you say increasingly -- you're talking xbox maybe with dvr capabilities -- >> streaming media. more and more streaming media and bring in more of their own secret sauce on the media. the streaming is not interesting at this point. it is, but it's simp to do. that's easy. what do you have to offer? how well do you present it? how do you enable discovery and recommendation of content?
10:13 am
and have you cracked the vaults open in hollywood? or if you're sony, have you cracked open your own vaults. those are the things that make it interesting. >> what's interesting is you didn't mention cost or margin. what we learned from amazon was that people are prepared to offer cheap price hardware in order to attract people to their ecosystem. do you think that we could be on the verge of google doing that through the mm acquisition? >> i believe they have great strength with the motorola box market share, which is enormous. they're leveraging themselves into that living room play, and this music streaming box, these two come together very quickly. google can throw money at this thing. they don't need 20 -- amazon is also good for you to bring up. they're another of the major players. look what they do. they're on android, but they use android almost as an asterisk. it's just their foundation without putting it forward. the kindle fire using android,
10:14 am
but it's sort of skin yesterday down and tuned to amazon's purposes. >> we floe google's strategy has been to make the operating system. do you think the google name on a machine is something consumers will want? or is that a stretch? >> google means discovery. that's the main thing about google. it used to mean search, but search is broader than that now, because it has more to do with media, leash choiisure choices. 80% of what we do in our lives every day is discovery of some sort. whether that prints to hardware, i don't know. i'm very concerned because of all the televisions i saw at ces a few weeks ago, you couldn't find one without connected tv linked in. i don't know that we need a box at all, let alone a google box,
10:15 am
given the natural replacement cycle of television. i'll get this function in my next tv. >> brian cooley, can c net, thank you. we're down 144 points on the dow. people been boorking properties on them. should you? we're bulk in two. ♪ a refrigerator has never been hacked. an online virus has never attacked a corkboard. ♪ give your customers the added feeling of security a printed statement or receipt provides... ...with mail. it's good for your business. ♪ and even better for your customers. ♪ for safe and secure ways to stay connected, visit usps.com/mail "for starters, it didn't cost me anything." "and i got a one-hundred dollar cash bonus for rolling over by
10:16 am
april 16th." "i like bonuses." "plus at scottrade, there are thousands of commission-free investments." "and if i need help, i can find it online, by phone or at one of over five-hundred scottrade locations." "it's why more investors with i.r.a.s are saying.." "i'm with scottrade." ♪ [music]
10:17 am
10:18 am
what's not being lifted higher today is the market. a check on the sectors, we'll show you what's not doing too well, as a look at utilities, telec telecom. almost 1% dow down 129, though that is slightly off the lows, as they like to say. first off, financials, the group clocking in as one of the top performs sectors. the xlf alone rallies over 13% since the beginning of january. with this mortgage settlement yesterday, is there any more room for the financials to run? david conrad is managing director, head of large cap bank and research at kbw. good morning. >> good morning.
10:19 am
if sentiment around europe gets worse arguably bearish for the sector. a lot of people argue they are in the process of decoupling, less reliant on europe, and now under power on their own sales which is true? >> -- i think that created a decoupling, so that created this large balance sheet rally for the u.s. banks. so you've seen many banks move to now 70, but now we're 70, 75% of tangible book, we need to now look at earnings, and the multiples aren't quite as compelling as the valuation, so i think the group faces a few head winds as we look at the p.e. ratios. >> i guess you're not taking much solace for instance in the comments how the voelker rule
10:20 am
could be positive. >> i think it will be tough to be positive. we're hopeful to get some flexibility. we don't want to penalize banks at the expense of penalizing the markets, but shrinking revenues and buying back stock is tough over the near term, but we would expect -- >> david, you mentioned multiples, and when i was talking to fred cannon about a week and a half ago he mentioned that earnings estimates for the banks in general must come down for 2012, or at least in the process of coming down. with that said, david, what does that imply? terms of downside risk. >> i think that's why we're a bit cautious with names like citigroup and b of a. we do remain below consensus. however, if you look at names like jpmorgan and goldman sachs, for instance, we're actually in
10:21 am
line with the street. those multiples seem more compelling than some of the cheap balance sheet valuations. >> so jpmorgan, for instance, david, would in your view fare better as the rest of the financial sector deals with compressing earnings estimates? >> with el do. jpmorgan's outpurchased the s&p so far, but really has lagged some of the other financials. the universal banks are trading at ten times 2012 standpoints. jpmorgan is trading more like eight times. we think we have higher r.o.e.s and better visibility as well. >> if cramer were here, he might talk about how you may want to favor banks more -- is that a hard and fast rule to you? >> i think names like u.s. bank corp is something we also like. they're growing revenues and share and has an industry
10:22 am
leading r.o.e., so we like that as a quality name. suntrust may also be a domestic name that's really cheap on valuation, but we also like, again jpmorgan, goldman sachs that are taking the opportunity. we are seeing the european banks pulling back so a longer-term possibility. >> thank you for your time today. >> okay. number two in our block of trades, potentially 80% in what we like to call our under the radar place. shares of avis. fred lawrence is a senior research analyst working for avondale partners. thank you for joining us. >> thanks for having me. >> a great performance so far this year. it had a terrible 2011, did it
10:23 am
not? >> it does. it would a second half, and a lot of other stocks out there. so when it looked like europe play go into a deeper recession, these stocks took a bigger hit han the rest. >> and they had the -- when they record on wednesday, maybe they'll come through with 120 million write-down on that. talk us through briefly that acquisition. it was split off, and i think avis, the avis that we know here in the u.s. has been looking for opportunities to bring that back into the fold. they got that opportunity, and closed that acquisition in october, so you're right, we'll get the first full quarter in avis numbers in the fourth quarter. you know, the interesting thing
10:24 am
about it, and maybe one of the reasons why the stock is flying under the ray dare is people think avis europe, and all they focus on is europe. europe is only 50% of the earnings derived by that business. i think it's a disservice to be called the avis europe acquisition. it did opened up africa, the middle east and asia. >> let's just check, you had a $27 price target when last you wrote your research note in november. that suggests 890% upside even from here. are you sticking to that? >> these things got so cheap that people are looking at a story like avis, you're talking
10:25 am
about an eps kegger in the 50% range, yet trading at about 7 1/2 times my 2012 number. it's a stock that normally trades up in the low to mid teens on eps, so i think we have plenty of runway to go on the stock. >> can you walk us through the impact of what's going on in terms of new cars and the pricing of uses cars? all of these rental companies have to deal with what to do with these fleets once they have gone through the life cycle as a rentable vehicle. >> that's right. the used car market is a very liquid market, but right now what's benefiting the rental car companies is the used car market is still not suffering, but still experiencing low supply numbers, so the oems are being very disciplined with how many of those they're pushing into the rental car space, so they're only getting the cars they want so they're better able to manage their fleets to demand. when they go to sell these cars,
10:26 am
because we have such a tight supply condition, they're getting the best prices they've ever gotten on resale. that flows through to the depreciation line item and better earnings result. >> thank you very much. just before we hit the break, one more stock. congratulations if you're holding cobalt international shares, it says it tests have confirmed the presence of oil off the shores of angola. it's jumped 50% so far this morning. when we come back, we talk bubbles. could we be facing bubble it.0? back in a minute. ♪
10:27 am
10:28 am
oh! [ baby crying ] ♪ what started as a whisper ♪ every day, millions of people choose to do the right thing. ♪ slowly turned to a scream ♪ there's an insurance company that does that, too. liberty mutual insurance. responsibility. what's your policy? ♪ amen, omen the two trains and a bus to the 5:00 arider.holar. the "i'll sleep when it's done" academic. for 80 years, we've been inspired by you.
10:29 am
and we've been honored to walk with you to help you get where you want to be. ♪ because your moment is now. let nothing stand in your way. learn more at keller.edu. tdd# 1-800-345-2550 there are atm fees. tdd# 1-800-345-2550 account service fees. tdd# 1-800-345-2550 and the most dreaded fees of all, hidden fees. tdd# 1-800-345-2550 at charles schwab, you won't pay fees on top of fees. tdd# 1-800-345-2550 no monthly account service fees. tdd# 1-800-345-2550 no hidden fees. tdd# 1-800-345-2550 and we rebate every atm fee. tdd# 1-800-345-2550 so talk to chuck tdd# 1-800-345-2550 because when it comes to talking, there is no fee.
10:30 am
♪ tiny bubbles we have shares of linkedin today. the online networking company beating on both earnings and revenue, helped by strong product and prescription growth, so again 11% on the session. clearly since it actually ipo'd, and back on the earnings last night -- you hearing that? >> it sounds like bubbles. >> get it? we're talking about bubbles.
10:31 am
twitter, gild group, so is there a bubble brewing in techland? we've been discussing this all week long, ever since the facebook news broke, which i think was the dpee markation for some. david, prices versus where they are now, i don't know, what do you think? >> i don't draw the analogies to the mid to late '90s particularly the late '90s so many are growing quickly. we can all quibble about valuation and whether what something should be valued at, but when i go back to real bubble territory and think about many companies that didn't have earnings or real prospect of earnings, yet training at incredible valuations, it doesn't feel the same to me. that being said, you put a fairly small amount of stock out there, they haven't figured out a way to manage these lockups,
10:32 am
which is an issue to a certainly extent, and certainly things we should all be paying attention to, but i'm not in bubble land yet. >> i think what is important is we have learned some lessons from the time that david was talking about when there were actual bubbles out there. when we look at groupon's earnings, we were all very skeptical for good reason. when you start harping on metrics that simply -- remember, david, eyeballs? >> yeah, of course. >> the eyeball metric. >> yeah. >> then you have to start wondering. for groupon when you hear things like is 13% pretax profit, you think how does that makes sense? and why are they not updating metrics that they had disclosed in the s-1, and you think why are they doing that? >> i also wonder if people boiled down to the talent appeared nature of the management teams. linkedin, jeff weiner, and yahoo! a very accomplished
10:33 am
performer, he's a different animal for zuckerberg, who is king absolute at facebook. and i wonder if we won't look at the technology, but increasingly about the talent of those people at the helm, or the nature of at the helm. >> reed hoffman obviously lingedin as well a key part of their future. they do, you know, they ipos importantly serve as a great public bl isity tool. they are an ability to monetize to a certain stchbt some of the stock that has been distributed through the organization prior to going public. >> do you think they're going to lose people? this was his main fear, wasn't it? once you start creating people who can cash out their stock and become instant millionaires many times over, will they say doing what they do for the day job? will the -- that's a huge issue
10:34 am
now. >> and any of these guys you speak to will tell you there's a shortage of talent out there. and it's a real problem for this country. that being said i look at their ability to replenished the ranks of talented people since that ipo and performance of that stock price. simon, i think that issue you're raising in terms of a talent gap is more to this larger issue of immigration and a lack of qualified people broadly speaking here in the states. >> having spent part of this week out in palo alto and menlo park. the way in which people are chatting about foible phony millionaires, i mean luxury car dealers. >> real estate market. >> the housing market, restaurants, whether or not it's justified, there is a real buzz
10:35 am
out there that i don't think you see anywhere else? >> also in new york, it's often said those who would have come to wall street and done banking are outside google's headquarters in the incubator sites they have there. some people on this side are also heading for techland. >> all a good thing. better than going to wall street and being an engineer, creating some product that will ultimately make us all suffer. carl, i'm sure there are a lot of people that will become very rich. there's only so many houses they want to live in, so i can imagine the real estate market is heating up. it's been hot in silicon valley for a while already. it will be interesting to see after that ipo especially. >> we should take the program to the west coast, don't you think? >> why not? i'm up for that. >> i'll set us up. a lot of different interviews. i like that idea. >> safe travels.
10:36 am
>> see you monday. we've got to take a break. we're talking the market sell-off the the dow is down just by about 1%, and nasdaq down by 8%. stick around. like in a special ops mission? you'd spot movement, gather intelligence with minimal collateral damage. but rather than neutralizing enemies in their sleep, you'd be targeting stocks to trade. well, that's what trade architect's heat maps do. they make you a trading assassin. trade architect. td ameritrade's empowering, web-based trading platform. trade commission-free for 60 days, and we'll throw in up to $600 when you open an account. our machines help identify early stages of cancer and it's something that we're extremely proud of. you see someone who is saved because of this technology, you know that the things that you do in your life, matter. if i did have an opportunity to meet a cancer survivor, i'm sure i could take something positive away from that.
10:37 am
[ jocelyn ] my name is jocelyn, and i'm a cancer survivor. [ mimi ] i had cancer. i have no evidence of disease now. [ erica ] i would love to meet the people that made the machines. i had such an amazing group of doctors and nurses, it would just make such a complete picture of why i'm sitting here today. ♪ [ herb ] from the moment we walked in the front door, just to see me -- not as a cancer patient, but as a person that had been helped by their work. i was just blown away. life's been good to me. i feel like one of the luckiest guys in the world. ♪ 
10:38 am
glue gold man sax forecasting gdp will be up more than 2% in the first quarter. the chairman of the house financial services committee, spencer bachus is under investigation for possible
10:39 am
violation of insider trading laws. greece is experiencing widespread violence amid a mass strike today. protesters are up in arms over yesterday's austerity vote. >> in addition to greece, we should mention the fact there's a concern about china and the strength of the chinese economy. january imports down over 15%, not all excluded away or explained away, they say, by the fact it was the lunar new year holiday and some of the lending. material stocks are lower, industrialing are lower, steel companies are hurt, a general move down after a great rally. that's the context to look at. let's have a look at the advance/decline line. almost 5 to 1, and over at the nasdaq, there you can see roughly the same. home builders gathering together down in orlando today for the annual fahb conference, one of the top issues for builders is financing for future developments. cnbc's diana olick is standing
10:40 am
by down there in florida. good morning. >> reporter: good morning, simon. we're coming to you from the finance pavilion of the home builders show. this is really ground zero for the housing recovery. builders are starting to see more demand, but coming off the worst year for volume and sales in history. they need cash going forward to meet this demand, because they simply have for supply. trouble is acquisition and development loans from the big banks are gone. where are these getting their financing now? from private equity, from small regional banks, but the ltvs still very conservative. that puts the big public home builders at a huge advantage. thousand they are eating up all the land. a lot of the builders we talked to say that means many of these guys are dead men walking. >> there's a lot of builders here that the economy almost killed them, and they don't know they're walking around and
10:41 am
already dead, because when 2013, '14 and '15 roll around an the national builders have absorbed the lot inventory, they won't have anywhere to build and they'll go out of business anyway. >> the they formed their own council. there are far fewer builders here. the top used to be about 111,000 builders. we're seeing in the range of about 40,000 this year. a lot of the builders telling us that these were family businesses. they say the number one american family business was home building. believe it or not restaurants was second. they say that's no longer going to be the case because of difficulty of getting financing to meet the demand they feel is coming down the pipe the next couple years. let's bring in art cashing, floor operations for ubs. wimp commenting that it's not as bad as one would have thought.
10:42 am
>> i think a couple things happened. the euro sold down, but didn't go into free fall. i think that's protected by the very large short position. as we were discussing, we haven't had as dramatic a down day, but we've had -- of the 26 days where we've opened down, markedly 22 of them we managed to close up. unions europe is closed, you get a different personality. >> you can get some stability. important too are some of the levels we're defending seemingly. we're really holding in at around 1339, 1336 or so. >> yes, that's a very good area to watch. they break below 36, it could develop a little short -- >> at the same time a slow march higher on the s&p 500 throughout this year. all of a sudden the vix has started to creep up the past few days and see some reaction in the market. do you think finally there is a concern at this point now that the markets have advanced that perhaps this could be a problem and maybe it's time to just paw
10:43 am
and take some profits at this point? >> very good observation. jason goldberg, who was a noted technician, has pointed out when the vix went up for two or three straight days while the market was going up, you went into just what you said, kind of a neutral for a couple weeks. maybe that's where we're headed. >> maybe that is where we're headed. we could get a vote from the greek parliament. how you does that play into today's trading? last weekend was the super bowl, maybe this week is the greek parliament? >> i don't know. i think the wild card that the viewers may watch out for is in the middle of the day, the republican candidates are appearing before one of the big conservative unions. any all have to make speeches. there may be a misstep. >> why would that be a wild card, if there's a misstep by whom. are you implying that the markets want to see romney as the nominee? >> i think they would like to see it get resolved. >> i see. and you know, the three key
10:44 am
candidates are speaking, so if somebody puts his foot or maybe both feet in his mouth, it might affect the markets. >> seems like the odds are high. great to speak with you, art. trait ahead on the program, electric car maker tesla is -- we'll talk tesla in just a few minutes. [ technician ] are you busy? management just sent over these new technical manuals. they need you to translate them into portuguese. by tomorrow. [ male announcer ] ducati knows it's better for xerox to manage their global publications. so they can focus on building amazing bikes. with xerox, you're ready for real business. how they'll live tomorrow. for more than 116 years,
10:45 am
ameriprise financial has worked for their clients' futures. helping millions of americans retire on their terms. when they want. where they want. doing what they want. ameriprise. the strength of a leader in retirement planning. the heart of 10,000 advisors working with you one-to-one. together for your future. ♪ you have to dig a little.
10:46 am
fidelity's etf market tracker shows you the big picture on how different asset classes are performing, and it lets you go in for a closer look at areas within a class or sector that may be bucking a larger trend. i'm stephen hett of fidelity investments. the etf market tracker is one more innovative reason serious investors are choosing fidelity. get 200 free trades today and explore your next investing idea. today is gonna be an important day for us.
10:47 am
you ready? we wanna be our brother's keeper. what's number two we wanna do? bring it up to 90 decatherms. how bout ya, joe? let's go ahead and bring it online. attention on site, attention on site. now starting unit nine. some of the world's cleanest gas turbines are now powering some of america's biggest cities. siemens. answers. it is the nba market, nothing but apple. apple sitting at $495, just $5 from that date with $3500. another record high set in today's session. >> do you think it will get that date before valentine's day? >> before valen tie's day? i can't say. i would think so. >> that's next week, right? tuesday? >> tuesday, yeah. we'll see. not that far away.
10:48 am
mitt romney's raise for the gop nod forcing private ecity under the microsoft. that are actually flowing into p.e. david faber back at headquarters with a special guest. >> thanks very much. my guest today is scott higby, offices in 15 countries, a bit under the radar. we hear so often about kkr and blackstone, but you've been active for a long time. have you been picking up flak given -- >> it's interesting, david. we've had to do more education than typically. i think it's incumbent upon us as industry practitioners to educate the general populace about how it benefits the average person.
10:49 am
>> i can certainly give you some of the other side of that argument. >> sure, i think private equity is something that stimulates economy development rather than impedes it. private equity can either create jobs or eliminate jobs. we certainly air on the site that it creates jobs. i think private equity, when you look at who the beneficiaries are, looking back 30 years, they are the pension plans, the average americans that in essence unfortunately probably don't understand private equity as well as they should have -- or as well as they should, but the teachers, the firefighters, the policemen out there are the people that over the last several decades have benefited from what private equity is. at the end of the day. it's not all that different from what your neighbor does. whether they got small capital to start a business from a family member or traditional bank, there are private equity endeavors happening all over
10:50 am
america. >> some would say the fees are fairly high. it ultimately has accorded great riches to those who manage the structure meaning a great deal of leverage that if you or i were leveraging the s&p we might be able to get similar returns. >> right, i think private equity the way we look at private equity, david, the reason it outperformed public markets over time, there are a number of reasons. number one i think the markets are less efficient in the private markets. the number of opportunities are far greater than what we have in the public company universe. i think number two you have access to better in fgs in the private markets, with we're able to spend months if not years -- >> how long do you stipcally hold an investment? >> three to five years. today it's probably on the higher side. sometimes investments held five to six years but typically we like to see turnover within a three to five-year time period. >> pe relatively quiet last
10:51 am
year. the financing for the enormous deals obviously not there but what's your prediction as we move into this year in terms of activity? >> certainly, i think the need for capital in business is no different than the need for capital three or five years ago. i think the difference is the traditional sources of lending are not as active today as swwee seen historically and the firms that have the ability to provide the private financing in addition to the equity financing are well positioned. you're right, the large deals, it will be difficult to get those done simply because putting financing together will require the forces of many institutions, whereas one or two banks would step up for that in prior years. corporates, record amounts of cash on the balance sheets we'll see a lot of activity from strategic -- >> so they're competing against you for many of the things you might be interested in. >> absolutely, the interesting thing a conundrum, pricing on the high end of the market has not come down to the level that
10:52 am
we would expect, given where we are in the macro environment, and in essence they're not as many bargains in large cap buyout for example. >> and that is because of what specifically? >> well, in essence we have a lot of competition for deals. in essence we have strategics looking at record low interest rate environment, what are they doing with their cash? they need to put that capital to work rather than returning it to share gen hold shareholders, people are trying to grow through acquisition. >> on the fund-raising end of your business, before we conclude, we hear a lot about carried interest being treated as a capital gain rather than ordinary income but there's a huge potential change taking place as a result of the stress that pension funds are under, you mentioned them being key contributors of course for funds. going from defined benefit plans to defined contribution, essentially saying we got to get this return to say hey employee, you can pick. private equity would suffer, would it not if there was a big movement from defined benefit to
10:53 am
defined contribution? >> that's a key issue the industry is facing. a lot of people are talking about carried interest, something we're aware of but the biggest threat i think to this industry that most people don't recognize or certainly don't talk about is indeed that, the change, the conversion from defined benefit plans to defined contribution plans in america. we've seen it in the corporate sector over the last couple of decades where there are few new defined benefit plans being implemented, defined contribution in an era where people want liquid, portable retirement plans that has a significant effect on private equity because historically i think the fact, the number is 40% to 45% of capital to private equity has been provided by public plans or corporate plans in the u.s. if that goes away, suddenly i think the industry is going to be scrambling to find a replacement for that capital in the future and i think that's something that potentially can turn the industry on its ear, even more so than change in the carried interest tax
10:54 am
legislation. >> interesting. glad we got to it. something we'll watch closely. scott higbee thank you. >> thank you for having me on. >> back to you guys. >> thanks very much. when we come back, pain at the pump, rising gas prices denting consumers' buying power. how high can they go and when will we see signs of relief? we'll talk to former president and ceo of u.s. operations for shell. first jane wells who brought us the bacon milkshake is working on a way to combat germs. is this right, jane? >> oh, yes, there's a new app which will let you keep your hands to yourself in a hotel room. i'm going to demonstrate it after slipping into something more comfortable. after the break. oh! [ baby crying ] ♪ what started as a whisper ♪ every day, millions of people choose to do the right thing. ♪ slowly turned to a scream ♪ there's an insurance company that does that, too.
10:55 am
liberty mutual insurance. responsibility. what's your policy? ♪ amen, omen laces? really? slip-on's the way to go. more people do that, security would be like -- there's no charge for the bag. thanks. i know a quiet little place where we can get some work done. there's a three-prong plug. i have club passes. [ male announcer ] now there's a mileage card that offers special perks on united, like a free checked bag, united club passes, and priority boarding. thanks. ♪
10:56 am
okay. what's your secret? ♪ [ male announcer ] the new united mileageplus explorer card. get it and you're in.
10:57 am
i love this story. jane wells we hear you've got the latest on an app to turn your smartphone into your own remote control. everybody knows you don't want to touch those things when you go into a hotel room because heaven only knows where they've been. >> exactly. especially when you're in las vegas where i was this week. lodgenet interactive managing inroom interactive media and 1.7 million hotel rooms. to broaden its presence it creates a new app which lets you
10:58 am
manage parts of your hotel, maybe eventually all of it on your tablet or smartphone. why? as melissa said germs on doorknobs, tv remotes, the in-room phone, the app lets you keep your hands to yourself so i tried it this week in las vegas. i'm in my hotel room at the venetian and logon to the lodgenet app, which is right here, now i am required to touch the tv remote with all its germs once to turn on the tv the first time. now i need to go to the menu. i go up to gomobile, that is a code i get now that i put into my ipad to activate this. so now i apparently have control of the tv from here. it says on and off, let me see if i can turn it off. yeah, that turned it off. so i can control volume on here, i can change channels on here. eventually you're supposed to be able to do things like order
10:59 am
room service, maybe even get tickets to shows. so far that's not set up, at least not in this hotel so basically what it does t gives me information about nearby restaurants, events that are happening but i can't book them through here. all right so eventually you're going to be able to check out remotely and then even check in, they say in some places you can order room service off your tablet. i couldn't. you can contact the front desk and someday you can use your ipad as your room key though that will take new technology in the door key system. lodgenet hopes to make money inserting ads in the app and get a fee when you book tickets through. it launched this month and the company tells me, carl, it's getting thousands of downloads a day. >> and germaphobes watching every word with great interest. i wish you'd spent longer on the shot of you in the bed with the hairpiece. >> i put that on my facebook page and my husband said who is taking pictures of you in a
11:00 am
bedroom at a hotel room in las vegas? >> the app still doesn't get rid of the problem of the glass in the bathroom. never drink from the glass in the bathroom. it's the last thing they wipe. >> gosh, i haven't thought about that. that's one more thing to be grossed out by. >> jane, good stuff as always have a good weekend. >> you, too. >> melissa, simon, see you soon. markets seeing red at the nyse. if you're just waking up out west here is what you missed this morning. >> welcome to hour three of "squawk on the street." here's what's happening so far. >> we have no confidence they'll be able to deliver on the austerity and we have no confidence it can get their economy to grow so whatever they come up with in the next couple weeks is not going to be enough. >> in my opinion, i'm not a pro of that, i figure the companies don't have the ability and they're not run well enough to
11:01 am
exist then they should go into bankruptcy and work their way out of it. that's when the creativity comes in. >> december trade balance of course, a trade deficit, grew on the red ink side. >> if i'm playing this badly, i should be talking to the google guy there. i said "how's it going" being as coy as i could be and he said "well we've had a good run" which i thought was one of the funnier things i've heard this week "we've had a good run over at google." >> reporter: germans are too in charge. they don't -- i think they think that greece is basically i'll use a strong term here, a sham state. >> you're watching the opening bell, real time exchange at the big board. >> reporter: 72.5, 72.5, that is light on expectations. >> the company hasn't said anything differently formally but the body language is such that people are starting to hope that they might do something
11:02 am
particularly pay a dividend and if apple were to pay a dividend that would be a huge catalyst for the stock. >> good friday morning. markets ending this trading week on a down day although we are off the laws. the major indices, a check of the dow, what would be if we closed at the levels the worst decline of the year so far, s&p down more than 11 and the nasdaq down 21, a 34% slide in video game sales weighing on stocks like electronic arts, activision, gamestop, all three stocks sharply in the red. some stocks hitting new highs, apple on the list yet again as it gets closer to $500 a share, coach, visa, equifax trading near highs. there is a fracking mess in north dakota, how the state's oil boom could be doing more harm than good. gas price on the rise, we could hit four bucks a gallon by screen.
11:03 am
john hoffmeister tells us how that could affect the country's economic situation. planned austerity measures in greece, how will their markets close in half an hour and it's halftime in america. american icon clint eastwood talking auto bailouts and politics with becky quick on "strauk" ea "squawk" earl why are today. congressman spencer bachus is under investigation for possible violation of insider trader laws. john harwood is live in washington with details and how messy it may get. good morning. >> reporter: good morning, carl. spencer bachus, chair of the house financial services committee and somebody who came into the spotlight with a "60 minutes" report late last year which alleged that members of congress and spencer bachus in particular may have engaged anyone sider trading. the office of congressional
11:04 am
ethics opened a probe. spencer bachus talked to larry kudlow after the original allegations came out. >> i buy non-financial stock etfs. i don't buy financial stocks, and when "60 minutes" called and said you short a g stock and you bought etfs in the financial sector i said i don't think that's right. let me get back to you. i can't imagine doing that. it actually scared me. >> reporter: since the news of this congressional ethics investigation broke, we've got a written statement from congressman bachus saying he respects the ethics process. he looks forward to a full exoneration, that he's followed the rules governing congress but neel kashkari who served in the bush treasury department at the time when the treasury department went to congress and asked for immediate action on t.a.r.p. because of the threat to the financial system, expressed some alarm today at the prospect any member of congress would have been trading on those briefings. here's neel kashkari.
11:05 am
>> we had republicans, democrats, the house and the senate getting full view of what we were thinking about, what data we were getting from the banks and so it's shocking to me to think that any member of congress or senator would ever potentially trade on that information. >> so we don't know, carl, where this ethics investigation is going to come out, but for the moment, unfortunately, for spencer bachus, he is becoming the face of the stock act, as it moves through the congress. we have separate versions that passed the house and the senate and they'll try and reconcile those. >> his response to larry, john, uses his purchases of etfs as a defense but according to the probe is centered around the options activity. >> and the question whether or not he was using information he got in his capacity as a high-ranking member of congress to trade those options and we'll see where this ethics investigation comes out. it's part of what this legislation is trying to prevent.
11:06 am
>> i know you keep an eye on it for us, john. we'll talk cpac later on. thank you. let's check in with rick santelli at the kr, me and get friday's "santelli exchange." good morning, rick. >> reporter: doesn't everybody love fridays? good morning, carl. if we look at some of the key headlines, jgiants like pimco, you want to be long treasuries, other giants like warren buffett saying not so much. with enit comeso equities we have the contrarian views as well. dr. death, mr. rubini considered mostly pessimistic, he may be turning positive on the markets and equities. where am i going with this? we have a contrarian balance. trader osen the floor i talk, to evenly matched. that's important because the market on the surface is about the way it's going to be for a while. equities are probably going to slant more positive and the fixed income markets can yields
11:07 am
go lower? yes. can they go higher, yes but most likely many believe they'll stay in a range. let's switch topics. investment grade corporate supply, i thank thompson reuters ifr for this information. if you look at dollar denominated global corporate supply, some fun things going on. on the week, approximately 26 billion. month to date, about 47 billion, year to date, 127 billion. why is all this important? here we are what the 10th day of february at 47, a record february from '09, 72 billion, we're on pace to test that. it's also something people have talked about that hasn't happened, maybe not happened for a while but think about all the governments and debt, could there be a tipping point? could this be the catalyst maybe. my last point on housing, i'll keep it short. i have real issues with yesterday's bailout because some entities involved like allied financial, which has gone under
11:08 am
other names, owes the government a lot of billions of dollars. are they really paying to recycle the tax dollars? let's talk about something else. everybody wants to protect those and not let housing seek its true bottom has many pointed out might be the best medicine but think about young people, think about the military. you know, are we stealing opportunities for those that carry more water than they drink to get in at lower levels? military, if i was going to have the government give benefits to those and i don't believe in no fault, i think the military is the area you should give those benefits to. back to you. >> a lot of people might agree with you on that, thank you, rick santelli in chicago. one north dakota oil boom town has more workers than it can handle and some are wondering whether or not the oil boom was go to good to be true. brian shactman, on a weekend you brought us a fantastic documentary about the subject, a new angle involving a company some of us are familiar with. >> yes, thanks, carl. you know, there's a new story
11:09 am
out walmart trying to seek out squatters in the parking lot because it's time for them to go. they we [ inaudible ] there's nowhere for them to go. walmart has let people park there and they don't have anywhere to go. >> brian thank you for that, obviously difficult getting some cell signals where he is, but the ripple effects continue out of what is turning out to be an amazing phenomenon in an unusual part of the country.
11:10 am
meantime average u.s. gas prices at record high levels, our next guest is predicting $5 a gallon gas by the end of the year. john hofmeister, former president and ceo of u.s. operations for shell oil, founder of citizens for affordable energy. john, always good to see you. >> thank you, carl. >> you've been pretty bullish on your forecast for gasoline. some are talking about an epic summer in terms of gas prices. what factors are in place that lead you to believe $5 is in the cards? >> what's really unprecedented, carl, is the fact that developing countries, especially china and india, have this insatiable need for more oil, and that has not been taken into account as we've thought about public policy in this country. so while we may be producing a bit more oil in this country, and while demand is down a bit, on a global basis i'm afraid we face a continuing onslaught of prices creeping ever higher. i hope i'm wrong in this. i'd love to be wrong, but we saw
11:11 am
last year's record gasoline prices through the course of the year, and we're seeing the same phenomenon starting out this year, and i'm afraid it's just creeping up and creeping up, and in the meantime you have refineries closing on the east coast because they can't get the margin they need to stay open. we are suffering a deficit in public policy. >> i'm not sure, i'm trying to follow you, john. you point out production up a little bit, obviously the white house is making some baby steps offshore. today alone the iaea cuts their demand forecast for 2012, that's not the recipe for higher prices. what is in there that's making it happen? >> well, it's the combination of geopolitical uncertainty and when the administration is doing victory laps on increasing production in this country, it doesn't really offset the declines that we're going to experience in the gulf of mexico from the moratorium and the slow permitting process.
11:12 am
so when you do the net-net, and i realize the iaea is cutting its forecast, but it's still growing, isn't it? demand is still growing, and we have not had the kind of public policy support for domestic natural resource production increases that would actually carry through into market prices in the united states, given the global demand and given the geopolitical uncertainty that still comes out of the gulf region daily. when i say gulf i mean the persian gulf, daily. >> yes. then there's the whole bachus story we were talking about prior to your appearance story just now. is that gas the hole in the doughnut and would you expect prices to remain like this throughout the course of the year? >> i think what will happen is getting the backan oil into the market, not knowing when we'll build the keystone pipeline is problematic. when you price commodities a lot of it is psychology and
11:13 am
expectation of the future. the expectation of the future is it's not only going to get worse before it could popping get better and that's what complicates it. i hope i'm wrong but i haven't been for the last year and a half but i'd love to be wrong. >> it's a political year, john, and a lot of political fortunes are going to pivot around job growth in this country. we know what's happening to employment in oil and gas. we know how low the unemployment rate is in the backan and north dakota. are you encouraged by the possibilities, the opportunities around exploration domestically right now? >> i'm very encouraged by the opportunism of the industry taking advantage what have they can on private land. but remember this is a big country with a big market and the couple hundred thousand barrels coming out of the backen increasing supply is not enough to meet the material millions of barrels a day demand that we're
11:14 am
seeing around the world. it's just not enough, and the industry shows that it's spending capital like it wants and needs to do more but it takes time for that to flow through. >> finally on your call for $5 gasoline, two questions. one, what's your projection on crude, on west texas, and what percentage likelihood are we talking? are you saying there's 100% likelihood we see $5 a gallon gas? >> i think it's better than 50%. i think we'll see crude touching west texas crude, touching mid teens to $120 a barrel sometime this year. >> john, we will hold you to that and see if that forecast comes true. have a good weekend. always good to see you. >> thank you. >> john hoffmeister joining from us washington. the company known for sleek electric roadsters making its first suv for the mass market. we're back in a moment.
11:15 am
oh! [ baby crying ] ♪ what started as a whisper ♪ every day, millions of people choose to do the right thing. ♪ slowly turned to a scream ♪ there's an insurance company that does that, too. liberty mutual insurance. responsibility. what's your policy? ♪ amen, omen "for starters, it didn't cost me anything." "and i got a one-hundred dollar cash bonus for rolling over by april 16th." "i like bonuses." "plus at scottrade, there are thousands of commission-free investments." "and if i need help, i can find it online, by phone or at one of over five-hundred scottrade locations." "it's why more investors with i.r.a.s are saying.." "i'm with scottrade." ♪ [music]
11:16 am
11:17 am
it used to be a niche
11:18 am
automaker but tesla is up 40% while the other car companies are seeing double-digit losses. it is now unveiling its first suv and phil lebeau live in chicago with more. >> carl we had a chance to look at the model x, they unveiled it last night and late yesterday in los angeles, we were out there and had a chance to look at the model x. this is the first suv coming from tesla. it is going to have a range of between 220 and 270 miles fully charged, but one of the unique features getting a lot of attention is the way that they've combined the suv with the mini van and designed it so it has the space and the utility of a mini van and here's why. felken wing doors for the second and third row gives you huge access. the ceo gave us a sense of how much access. >> in fact when it's open you can imagine normally if you had a mini van door the door takes up space here. if you're trying to get in from
11:19 am
this side you have to shuffle past the door. here there's not a door. i can stand up inside the car. >> and he did. look at shares of tesla, this stock has been outperforming the rest of the auto stocks, up more than 30% in the last year. this is a story that's getting a lot of attention today and one other story getting a lot of attention, it caught our attention within the last hour, kid rock firing back at the detroit free press which apparently wrote an article criticizing the made in detroit brand which is owned by kid rock, the clothes aren't made in detroit. he uses very salty and straightforward language saying you no he what? i'm going to cancel my subscription to the "detroit free press." this is not about where the clothes are made, it's about the marketing of "made in detroit" and creating jobs around the marketing and the sale of this brand. carl if you get a chance read his response to "the detroit free press" it's what you would
11:20 am
expect from kid rock. i can't say the words on air but you would enjoy reading it. >> is he denying the facts of the article saying the shirts are in fact made in detroit? >> no, he's not saying the shirts are made in detroit. on the company website they come out and they say listen, like most clothes in this country, they're manufactured somewhere else. he's saying this article portrayed made in detroit as saying their clothes are made from detroit. he's saying your facts are not correct. we never said our clothes are all made in detroit because they're not. >> right and as far as the gull wings on the tesla -- >> they're double hinged and that's why they're different than gull wings. most swing out way out and high. these come out and up. no different in terms of how much space you need than a mini van. they're very unique. >> still makes you wonder if there'sfluxcapacitor inside.
11:21 am
nine minutes or so until the european end of trading day. first rick santelli, we'll will there live after the break.
11:22 am
today is gonna be an important day for us. you ready? we wanna be our brother's keeper. what's number two we wanna do? bring it up to 90 decatherms. how bout ya, joe? let's go ahead and bring it online. attention on site, attention on site. now starting unit nine. some of the world's cleanest gas turbines are now powering some of america's biggest cities. siemens. answers.
11:23 am
11:24 am
rick santelli at the cme looking at how greece is impacting the markets in a way we haven't seen for some time today. >> reporter: absolutely, finance ministers resigning, my guest is dan stesich, independent trader, generally a smart guy. i know you're bullish on equities and we've had this conversation for a while. i guess quickly, why do you like equities and then how is that opinion affected or not affected by what's going on in greece? >> i think the reason i like equities i believe where you have some solid underpinnings in our economy, you look at the numbers that have been coming out, they've all been positive to slightly positive when you go to housing. the greece effect and we talked about this a few weeks ago you get the headline that moves us 10 or 20 points in the s&ps. the trick is for the europeans to contain the greece situation in our perception of that being contained so that it doesn't have a massive effect that you're going to have the domino effect from portugal to italy
11:25 am
and spain. not portugal as much as italy and spain. we want to keep away from the countries because they're powerful. >> do you differentiate between a band-aid or creating market stability in terms of the substance long-term solution or equity trading doesn't matter? >> at this point we've been divorcing our self from the whole -- >> reporter: is it memorex in. >> obviously we'd like a long-term solution. they have to make a decision with greece. this is silly. in the long run their problems are very real but what is their alternative if they don't have an ecb bailout and go on their own, worried about 20% cuts in minimum wage and pension reform. what happens if they don't get it? >> no, that's key. last topic everybody knows my feelings on housing, we had the plan yesterday. i'm not sure if it's a plan or recycled bailout. do you have thoughts? >> i do. you know, the one thing that drives me nuts is the principle reduction.
11:26 am
i don't buy into it. when i bought my first house many years ago i had a 13% mortgage. i knew what i was paying, i knew what i had to pay and i did. i expected it. >> reporter: yes, the no fault that we hear in so many different parts of our society these days, i don't like insurance and i'm got really fond of it when it engulfs our culture of finance. back to you. >> rick, thank you for that. rick santelli in chicago. trading in europe entering the final stretch. we'll bring you the close live in about three and a half minutes and tell what you it means for your money, both this afternoon and beyond when we come right back. tdd#: 1-800-345-2550 like a lot of things, the market has changed, tdd#: 1-800-345-2550 and your plans probably have too. tdd#: 1-800-345-2550 at charles schwab, we'll give you personalized recommendations tdd#: 1-800-345-2550 on how to reinvest that old 401(k). tdd#: 1-800-345-2550 so talk to chuck tdd#: 1-800-345-2550 and bring your old 401(k) into the 21st century. tdd#: 1-800-345-2550 rollover your 401(k) or ira and receive up to $2500. tdd#: 1-800-345-2550 see schwab.com for terms and conditions.
11:27 am
whee! whee! wheeeeeeeee! ah heads up. wheeeeeeeeeeee! everything you love about geico, now mobile. download the new geico app today. laces? really? slip-on's the way to go. more people do that, security would be like -- there's no charge for the bag. thanks. i know a quiet little place where we can get some work done. there's a three-prong plug. i have club passes. [ male announcer ] now there's a mileage card that offers special perks on united, like a free checked bag, united club passes, and priority boarding. thanks. ♪ okay. what's your secret? ♪ [ male announcer ] the new united mileageplus explorer card.
11:28 am
get it and you're in.
11:29 am
there was hope yesterday the greek austerity deal would be something different. turns out not. simon hobbs, some are calling the dissolution of the greek government even as we speak. >> let's come to that in a moment. we are off our lows in europe as we head in towards the close. the main achilles heel was always going in investing in the european markets was always going to be greece. so off our lows let's have a look at the euro which as you're aware has been under pressure today as a result of the confusion we see politically in athens, the greek banks have obviously been hit because if you are going to get a disorderly default how will they be recapitalized, how will come in if not the rest of europe, the french banks are down, they're the ones that most
11:30 am
people here will worry about and the german banks are also in negative territory, quite big moves there, carl. >> we'll talk about this on the other side of the bells. >> the european markets are closing now. yesterday you argued the fact a labor minute sker was stepping aside as a result of the talks. does that still stand? >> yes but it's two-edged. what you've had from the rest of europe overnight is a three-point plan. you into ed to vote through what we tell to you do on sunday, you need to save an additional 300 million euros or thereabouts and importantly all the three major political parties must sign up to continue with the austerity after the general election, in april, and we spoke about that 24 hours ago. you asked me the question, carl, the issue is we've got four ministers who have resigned. i don't think the analysis coming out of athens is it shouldn't be difficult to get the vote through on sunday.
11:31 am
'whether you can get the electioneering parties in particular the socialists to sign up to what the rest of europe is asking them to do, and clearly, that tail risk, there will be a disorderly default the risk of that is rising. we've had a great rally in europe, the hedge funds are bought into europe because they felt the risk of a sudden move down on the equity markets had broadly been removed because of that cheap three-year money and more of it to come from the ecb and importantly because they thought they assumed the central assumption was that the greeks would get their money from the rest of europe in march, and we would hold the situation until then. it now looks as if those, that risk is growing and the deadlines are being very purposely brought forward now by the rest of europe in a huge sense of compass operation. >> bob pisani is here on the floor digesting all of this information as well. some say the vote this week in athens is a vote on euro membership to begin with. >> i think probably but there's
11:32 am
a lot going on. this is complicated. you' find a tough time getting this through the overall electorate in greece. i don't think we can go for it. we can see the social fabric of the country getting rendered. >> the european declines we haven't seen all year. >> germany is 1.4%. believe it or not that's the worst decline, worst close we've had all year in germany. greece is down about 3%. i don't know if that was the worst of the year but they're unusual numbers. when i say look at the headlines, reuters has a story the greek police union is threatening to issue arrest warrants for imf and eu members. obviously that doesn't have any hold, they have to get a judge to issue an arrest warrant but gives you a sense of the sentiment that is going on there. germany spiegel, well-known weekly magazine has a rising about the anti-german sentiment going on in greece and the
11:33 am
rising anti-merkel sentiment going on. it's a tense time over there. look at what's going on here, 120 points is not much compared to where we've been the last seven years. we were down 1% earlier the s&p, we haven't had a day, there's only three day this is year where we've been down 1% on an interday basis. there's not a single day this year where the s&p has closed down 1%, the worst day this year it was down maybe 0.6%, a day in january i think it was the 23rd or so, so we haven't seen much moves at all in terms of serious declines and the volume, let's say the volume is on the light side once again. so rather unusual situation. >> yes. it's shaping up that way. let's bring in rick santelli from chicago, if bob's right, rick, and this does not go well this weekend, it's going to raise some questions about how we open on monday. >> reporter: i think it is.
11:34 am
my call to that, i've looked at the greek and european scenario as much more asymmetric than symmetric in terms of how the market deals with it, so i will continue to think that anything good that comes of this is going to be worth less to the upside than anything negative, which will give you a more to the downside so i completely agree that the equities especially the european equities which are off to a wild start, just like we are, to me, the last man to the fund parties will be the guy that gets shut out of this one and to me that will be the equity markets. >> monday of course also brings the release of the 2013 budget, and from what we read in "the journal" today, rick, there's not a whole lot of deficit reduction language in there. i wonder where you think that leaves traders. >> you know i'll tell you what, there's just no political honesty here and it's not about a party. it's not about an individual. we have things we need to tackle, entitlements, various programs. we all know it can't go on this
11:35 am
way, and i think that would be a big issue but in the end, writing a budget and passing a budget, if my path is correct we haven't had a passed budget in let's see i think about 1,100 days, something along those lines, a scary number. >> yes, and in an election year, it will be more than ever a political document. we'll talk more about it on monday of course. see you soon, rick, thanks. don't miss an exclusive interview with italy's prime minister, mario monti, that is coming up today live on "the closing bell" with maria at 4:00 p.m. eastern time. when we come back, volume tilts down, the market's up so is it time to take some risks with your portfolio? we'll see if you should be playing it safe or if you're playing with fire. before the break, some winning and losing stocks from the trading day in europe. [ male announcer ] if you believe the mayan calendar,
11:36 am
on december 21st, polar shifts will reverse the earth's gravitational pull and hurtle us all into space, which would render retirement planning unnecessary. but say the sun rises on december 22nd and you still need to retire, td ameritrade's investment consultants can help you build a plan that fits your life. we'll even throw in up to $600 when you open a new account or roll over an old 401(k). so who's in control now, mayans? when ybetween taking insulin, or roltesting my blood sugar. is this part of your life? freestyle lite test strips? why, are they any beep! wow, that hardly needs any blood! yeah. and the unique zipwik tab targets the blood and pulls it in. so easy. freestyle lite needs just a third the blood of onetouch ultra. really? yep, which is great for people who use insulin and test a lot.
11:37 am
max and i are gonna run out and get some right now. or you can call or click today and get strips and a meter free. test easy. my dad and grandfather spent their whole careers here. [ charlie ] we're the heartbeat of this place, the people on the line. we take pride in what we do. when that refrigerator ships out the door, it's us that work out here. [ michael ] we're on the forefront of revitalizing manufacturing. we're proving that it can be done here, and it can be done well. [ ilona ] i come to ge after the plant i was working at closed after 33 years. ge's giving me the chance to start back over. [ cindy ] there's construction workers everywhere. so what does that mean? it means work. it means work for more people. [ brian ] there's a bright future here, and there's a chance to get on the ground floor of something big,
11:38 am
something that will bring us back. not only this company, but this country. ♪ the the new spark cardnth from capital one. spark miles gives me the most rewards of any small business credit card. the spark card earns double miles... so we really had to up our game. with spark, the boss earns double miles on every purchase, every day. that's setting the bar pretty high. owning my own business has never been more rewarding. coming through! [ male announcer ] introducing spark the small business credit cards from capital one. get more by choosing unlimited double miles or 2% cash back on every purchase, every day. what's in your wallet? welcome back. coming up in about 20 minutes, linkedin shares are soaring today and we'll go behind the interviews with ceo jeff weiner and ceo bryan stockton reveals
11:39 am
his goals for mattel. that's just ahead on the halftime report. back to carl on "squawk on the street." >> see you in a few minutes, scotts, thanks. the cboe volatility index down more than 20% this year. the u.s. market on the other hand of course continuing its upward climb. today notwithstanding. leads us to wonder whether now is the time to take on more risks or safer investments like dividends still the better way to go. bill mcveil is the lead portfolio manager in the turner growth fund and michael geo president of permanent portfolio funds. good to see both of you guys today. thanks for being with us. >> thanks, carl. >> bill quite a run so far this year. why take risks at levels of which people say are a little overbought at least in the near term. >> it has been a good start to the year. the two things i want to focus on are macro events and gdp. 2011 macro events dominated the
11:40 am
headlines, etf and index focus so really hard for active managers to do well in a high stock correlation. 2012 macro events more under control, leads to a less etf-driven environment, better chance for active management to do things and on the go, dp side, less than 2%, tougher market historically for equities. this year better employment, better construction, better manufacturing, i think better than 2% real gdp should be good for stocks. >> although when you say the headlines should be less pressing, i mean famous last words, right, bill? >> no, that's true. obviously today we're seeing that. i'm not trying to say we're out of the woods. there are lots of things that can happen but whereas last year i think you had a big macro event and the market went crazy, it feels like this year people are processing it, they're putting it in proper perspective but looking at the underlying fundamentals of the economy, which are getting better, i think almost unquestionably and i think from that perspective we like people getting more involved and active equity
11:41 am
management and that's going to be so far this year it's been clearly the case. >> we're beginning to see economists playing catchup on the forecast for gdp. michael, i guess from a dividend standpoint i saw six flags this week hike their dividend ten-fold and i wonder if you're looking for dividends, do you need to go for a trajectory of acceleration or is a solid dividend enough? >> you want to see acceleration over long-term but a solid dividend is good. i would quibble with dividends being staefer. stocks are stocks and they're volatile. in terms of adding to your total return if you look at dividend yields versus the ten-year treasury, most dividends in the s&p 500 are well in excess of that so you know the risk is not there as much in equities going up, as economic statistics improve. there have been dividends supported by corporate earnings very strongly and we see that continuing, and companies are sitting on a lot of cash. you mentioned six flags but many others that could increase payouts especially with a dearth
11:42 am
of investment opportunities or lack of aggressive business developments so increasing payouts would be an option for management. all that said it's very positive for dividend yields and then you look at potential multiple expansion from a lot of cash sitting on the sidelines from equities in general. >> yes. >> given improving economic activity in the states it's a positive environment for equities going forward. >> bill i'm curious to get your take on dividends, too. there's always a threat of the tax structure in the country changing, dampening appetite or dividends. do you see that as a serious risk? >> maybe. i like to follow up on michael's point. he made a great point about corporate balance sheets. in my world small cap investing one thing that drives stocks is m&a activity and the balance sheet to michael's point you have corporate balance sheets that are full, easier sometimes to buy than to build. i think you're going to see that kind of activity that will drive not only the stock that's acquired but that entire industry or entire sector will
11:43 am
see multiples go up. i think corporation also look to not just dividend growth which is important for a certain group of investors but in terms of their business development, acquisitions clearly another at list that could drive small equities in general small kacapn particular. >> freeport, adp, wynn, chevron, boston, what do they have in common, recent hikes or more aggressive than others? what about them do you looic? >> well there's a diversity of industries there. they are leaders in their industry with good business prospects, depending on the particulars for some of the energy, freeport-mcmoran we need in terms of growth, wynn resorts another global growth story, air products, more of a manufacturer, industrial, a play on the global growth over the long-term. diversity unites them, a variety of industries but there's
11:44 am
healthy dividends throughout the stock market. i would also mention one thing on the tax rates, carl, that's interesting. at the moment dividend yields are as long-term efficient as capital gains and that bodes well for capital companies to increase dividends in terms of a tax-efficient payout. that equation could change depending on what goes on in the tax debate going forward and the political activity going on the next year or two here. >> bill, your appetite for risk, can it be kept alive only through u.s. economic data points or is europe enough, separate of what's happening here in jobless claims and a recovering housing market if greece falls into it, does that make you turn tail? >> again, i run a basic u.s. centric small cap portfolio. i think that what we've seen over the past three to six months is money coming back to the u.s. and coming back to
11:45 am
smaller cap because there are emerging markets, some other areas alpha generators in people's portfolios. there are concerns. eventually you buy when things look bleak. we've seen companies reporting bad numbers, seeing stocks bounce because people are saying the bottom is here. we may be getting close to that in europe. i think we still have to wait and see what happens as this plays out but again, focusing on the u.s., focusing on economic activities here there's fertile ground for investors to add to their portfolios. >> it makes it easier to the stomach when the fire is in europe and not on our home turf. gentlemen, have a great weekend, thank you for your time. >> thanks, carl. when we come back, clint eastwood speaking about the super bowl ad everyone is talking about and touches on the auto bailout, politics and more. we'll hear what he had to say, after this break. long, comin' back from the lake, and all of a sudden, ka-plam. it blindsided us. what is it? our college savings account.
11:46 am
how do you think it happened? not sure. i think something we bought a while ago turned out to be something else, annnnnd, i remember a lot of other stuff in there had the word "aggressive" in it. is everyone okay? well, now, yeah. who knows later. ♪
11:47 am
11:48 am
♪ that was one of the most talked about ads in the super bowl, spawned a new saying, "it's halftime in america" and the champion of that ad, clint eastwood is speaking out for the first time on cnbc. he sat down with becky quick at pebble beach who joins us this morning on "squawk on the street." always good to see you, beck. >> great to see you, carl. >> you got him to talk about
11:49 am
almost everything and his responses lit twitter ablaze. walk us through what he said. >> carl the thing we most wanted to get out of him was whether or not his ad for chrysler that we all saw during the sbo el had a political message. it was an ad that was played and immediately spawned some controversy, carl rove and others said thkarl rove and othd this was an endorsement of president obama and he got slammed for it. we gave him time to set the record straight. he sat down and had big defenses are the ad and choice words for karl rove and company. listen in. >> the average man or woman on the street took it for exactly what it was, it was a core message for america, it's half way through the recession, let's work our way out of it. that doesn't mean we were, anybody's endorsing or any
11:50 am
particular products or any particular philosophy. i'm surprised that people that are supposed to be intelligent have interpreted otherwise because it's very disappointing when you see that, because the average person seems to get it. >> now clint eastwood is somebody who has spent a lot of time thinking about what's been happening in washington. in the past we spoken out against the auto bail lout and even after doing the chrysler ad we talked to him about the auto bailouts. he does not think taxpayer dollars should go to bail out a company in trouble. having said all of that he thinks the problems in washington are with government spending. he thinks that simpson and bowles had the right idea when they sat down to address a bipartisan way of dealing with the major deficit problems, said he'd be a huge propoenette of something like that being brought back to the table. again these are all things he spent a lot of time think being and he has the chops for this, mayor in carmel and he sees himself as a libertarian.
11:51 am
he didn't say which one of the candidates he's getting around. he thinks many have pretty good ideas. >> a lot of people make fun of celebrities with political points of view. this is a mayor who knows how policy works and clearly paying attention to what's going on in the country. meanwhile bill murray in the last part of "squawk" you got him to talk about not just the tournament which he won last year but the mix of sports and business that takes place at pebble every year. >> that's right. >> he was paying more attention to the guy from google. i'm going like harris is getting rich while we're playing here, getting stock tips. i kept thinking if i'm playing this badly i should be talking to the google guy, too. i said how is it going over there at google, being about as coy as i could be. >> he said "we've had a good run." which i thought was one of the funnier things i've heard this week. "we've had a good run over at google." >> that gives you insight as to what happens on the playing field here on the greens, with
11:52 am
all these different people who are here, there are not just movie stars who are here, there are a lot of ceos who are on the field and they do talk some business while they're out there. >> you talked to larry summers today about the euro and randy stephenson from at&t about capex in this country, a capex crisis as he put it. what's the most interesting comment you've gotten from those people or others off camera for that matter? >> i was a little surprised by one thing that randall stephenson talked about. capital expenditure, and what i did not realize to this point is that at&t spends $20 billion a year investing in america. they pointed out that, he pointed out that they are, the company, the public company that spends more than any other company and they've been that since 2007, and just the idea of what's going on in washington, what companies would like to see coming out of that, it is very talked about here, that and simpson-bowles seems to be talked about just about everywhere. >> tiger woods five shots off the lead going into the second round. >> oh.
11:53 am
>> for the rest of the day, i mean are you literally going to get up from your chair right there and go see the rest of the tournament? can you move around freely? >> shhh. >> or is the paparazzi troublesome for you? >> the paparazzi doesn't notice me. i become the paparazzi, look out when i have a camera in my hands. i took picture action show you later. i'll walk through the links a little bit but don't tell anybody. >> you look fantastic. have a great time, a good weekend. >> thanks, carl. miss you. >> you, too. becky quick in pebble beach. linkedin up about 16%, almost 17% off of its stellar earnings number last night. apple, too, getting closer and closer to $500, 496 and change even though the down is down 111 points, 0.8%. keep the tweets coming, apple and google working on top secret device fos our homes. what should they be able to do for us? let us know @cnbc squawkst.
11:54 am
we'll read some of your answers after the break. ♪ you and me and the big old tree ♪ ♪ side by side, one, two, three ♪ ♪ count the birds in the big old tree ♪ ♪ la la la [ male announcer ] the inspiring story of how a shipping giant can befriend a forest may seem like the stuff of fairy tales. ♪ ♪ you and me and the big old tree side by side ♪ but if you take away the faces on the trees... take away the pixie dust. take away the singing animals, and the charming outfits. take away the sprites, and the storybook narrator... [ man ] you're left with more electric trucks. more recycled shipping materials... and a growing number of lower emissions planes... which still makes for a pretty enchanted tale. ♪ la la la whoops, forgot one... [ male announcer ] sustainable solutions. fedex. solutions that matter.
11:55 am
the two trains and a bus to the 5:00 arider.holar. the "i'll sleep when it's done" academic. for 80 years, we've been inspired by you. and we've been honored to walk with you to help you get where you want to be. ♪ because your moment is now. let nothing stand in your way. learn more at keller.edu.
11:56 am
get to "squawk on the tweet" for this friday afternoon almost. speculation continues to grow of the apple tv some say could be a
11:57 am
game changer. google is working on one of its own that streams music. what is the coolest thing they could do for you and your home? got a bunch of responses today. luigi tweets "it should recognize when you get home and welcome you with a greeting and your name. john tweets a virtual wife who doesn't yell at me when i don't take out the trash. amen to that and diana, the iboyfriend, like jobs, he would know what i need before i do. thanks for your responses on that. get to rick santelli before we sign off. rick what are you watching this weekend and how impactful do you think the news out of the greek parliament will be for trading next week? >> reporter: i think we know the greek parliament will have some issues and finance ministers seem to be leaving, but in the end to hook into the topic we discussed last time i was on, the equities probably you'll feel the brunt what have we call
11:58 am
tape bombs, things that have to do with europe that aren't good especially after that piece we have some great viewers out there, they sent me so much information about the shorts in the equity market, and as that number gets smaller and smaller, it makes the possibility that these corrections of negative greece pushing stocks down, albeit not for long may be more exaggerated than we saw last time. >> do you think if you were greek and lived in greece, would you be more worried about the overall euro, worried about membership, would you be allowing the germans to come in with some kind of oversee r or would it be all about sovereignty? >> reporter: sovereignty is a big issue, and i think that many greek citizens believe because their culture has been so affected by some of the things that have caused their financial distress, like their income tax situation, and how much employment is with the government, but i do think that they probably would feel better
11:59 am
if they thought they were deal with their own destiny, even though i think when they took control of the car, they'd realize why it's in a ditch. >> and then as the jobless claims and some of the urgency takes out of the domestic economy a lot of people say the markets have to turn their eye to washington, the payroll tax going to expire at the end of the month. exactly that's not going to go well. >> reporter: listen, when we turn our heads because we think that the direction we're aiming is going to be the answer to problems, and that direction for me is east or northeast, i say washington, we're going to be in big trouble. it's an election year, that makes things even dicier. programs are going to be coming out of left field and in the end, i'm not, this is probably the only tax cut i'm not for because i don't look at it as a tax cut. i look at it as though it's robbing social security funding because politicians don't have the nerve to deal with tax policy and throw all the real cards on the table.

205 Views

info Stream Only

Uploaded by TV Archive on