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tv   Squawk on the Street  CNBC  March 21, 2014 9:00am-12:01pm EDT

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here, too. >> i lovedving about it except for the hours. >> we loved having you. >> 2:00 eastern "street signs" with mandy drury and some other guy. >> that's you. >> thank you, again, for beefing here. becky, we'll see you on monday. watch "on the money" over the weekend, everybody. david thank you for being here again. and "squawk on the street" starts right now. ♪ good morning and welcome to "squawk on the street." i'm scott wapner with jim cramer live from the new york stock exchange today. carl and david are off. let's take a look at the futures and how we are shaping up on this friday. there's a look at how the dow will open up 42, implied. the s&p and the nasdaq look to continue gains of the last couple of days. take a look at the ten year. that's the thing that really hasn't budged much since the fed. that being the yield. 278 is where the ten-year yield currently sits.
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take a look at europe. what's happening across the pond this morning. more green than red right now. at -- well, you got about 3 1/2 hours or so before the european markets closed. and the roadmap starts with the markets. stocks set to open higher this morning after posting a nice gain at the close yesterday but the one thing you really need to be watching this morning is the move in gold. plus, earnings at nike beating the street but the stock slipping during trading thus far. we're going to break down the numbers and tell you exactly why the stock is moving that way. and ecking of earnings tiffany is slipping on weaker-than-expected results in the latest quarter, so why is the company's ceo touting record sales? well, we have some answers. we also have breaking news this morning on the fed. steve liesman is in washington with those details. good morning, steve. >> reporter: scott, good morning. the minneapolis fed president who is out with an explanation of the dissent that is the very dovish. it reads the fed should not have
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dropped the threshold guidance the 6.5% unemployment threshold when the fed would consider racing rates. he called that guidance highly effective at helping monetary policy. what he wants was a 5.5% employment threshold with a bound on the inflation target down from 2.5%. changing the guidance weakens the credibility of the fed's inflation target and the new guidance he says fosters policy and, of course, market uncertainty and that suppresses economic activity. he did endorse the new guidance that said the fed's rate would remain below normal even when the unemployment rate at inflation get back to what the fed considers to be normal. i'm at a conference here with several former and current fed officials and i'll be back later this morning with what they're saying about that controversial press conference by the new fed chair on wednesday. scott, back to you. >> thanks so much. you know, jim, it will be a busy day of fed speak. >> yeah. >> fisher is talking, bullard's
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talking. maybe some clarity on exactly what janet yellen meant to say the other day. >> well, the market spoke loudly. they believe she meant to say was your short rates are going up which therefore means the banks will make much more money which therefore led to the dramatic outperformance of every bank including a bank that failed the stress test. this group got so -- >> zions. >> this is a market where if it loves you, it loves you to death. and the banks suddenly became so loved because people are projecting that those short rates are going to go higher. and do you know what until someone says the short rates aren't going to go higher the banks will continue to ramp. banks, old tech, ipos, by otech and tech, are so loved right now that it almost takes your brth away. so, just going to say stuff today that is just going to break the orthodoxy. i'll suggest that amber road which is not a beer company, a-10 had is not an "a" league -- >> the atlantic ten is going
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public. >> border free is not about border control. and no one wants to hear any of these things. what they want me to say is you got to buy, you got to buy, you got to buy them and i'm not going there. i don't want to be a curmudgeon today but there's a lot of craziness going on. >> i think you are feeling feisty today. i don't know if it was the harvard win. >> because i picked the bearcats! no, because i didn't go with north dakota. no, i mean, i'm just saying that someone has to be -- the late mark haines would sit here and say amber road, have you had that, i mean, is that an ipa? >> can i have a possibility of that. >> a-10, when is the big east coming. >> a peent int of castlight. >> a lot of companies coming public and we're trying to keep track of them and when a lock-out expires like fireeye, suddenly everybody hates them, the stock is sloshing around from established companies that sell at multiples of revenues as
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soon as the lockups go the stocks are rolling over. in the meantime we're taking companies public in one product in biotech and the stocks are soaring. there's a company called endocyte, nonsmall cell cancer and you see the stock is doubling this morning, let's take a breath. this is great. everybody's making a lot of money but let's just take a breath. the banks i can go with. those i can go with because they're well behind the market in name excess. >> so many places to go this morning, and i referenced it already the fact that stocks have gotten all of the fed day losses back. >> yes. >> yields haven't budged from their move. >> it's all because people are interpreting 2015 being the year that the short rates start going higher. these banks are paying you nothing on cds. they will make a fortune every day they turn on the lights if the short rates go higher. and this is -- look, this is a money trade. and jpmorgan which every day you
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pick up the paper and my charitable trust owns it and god love it, i love it. if the short rates go higher and if the ten-year goes higher meaning if rates go higher, they make a fortune. that's all people care about. they don't care about the overhead and all the dodd/frank, wow, that's what we want to be in. >> the day after the stress test i thought the goldman note this morning assessing what the fed has assessed with the banks made a really interesting statement about bank of america that i think we should discuss because i want your opinion on it. because at least at noon so many of the folks who come through our show love bankamerica. i hardly hear anything negative, goldman, though, saying and i think we have the quote, we worry most about bank of america as we estimate only $6.5 billion annual of excess capital versus $6 billion to $7 billion in expected return. is this a time to, say, pause and have a real look at what's happening at bac? >> my charitable big position of bank of america, we have the
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c-car, the stress test isn't as important as ccar. goldman indicates they won't return as much capital and people are worried about the legal bills. i'm not. it's still very inspedexpensive versus the other banks. regions financial did well on the test stress. it's been a he'ster rick underperformer and key did terrific but they are all trading together. there's an xlf, all that matters is the etfs people play banks with etfs it's a rising tide and you might want to distinguish bank of america from the others. i think it may not matter. >> the folks at goldman this morning not only commenting on the banks, jim, but commentsing on gold saying the move we've seen this year which has been one of the early year's best trades from beginning of the year around 1,200 getting close to 14 or so unsustainable.
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not going to last and they can give you a list of three different things but basically saying as the economy continues to get better here as some of the geopolitical risks perhaps subsides that the gold trade just can't continue. >> i think that's right. it's going to cost you money to -- borrow money to buy gold. that's going to go down. the only thing that gold has in its favor when you read the actual 10ks of all the gold companies, they are having trouble finding gold. it's not coming out of the ground as it used to. even rand gold which has the best holdings worldwide they are having trouble producing gold. goldman, talk about a laggard. i wonder what goldman internally and not just in the elevator but throughout the building is saying about their own stock. they've seen morgan stanley stock burst out, bank of america, they pooh-pooh bank of america, but goldman is the outlier bad performer. goldman, been buying it for the trust, don't think it can last
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but someone has to point it out that goldman stock is not doing well as well as the other stocks. >> all of those companies along with a parade of others we're not that far away from earnings season, jim. we're going to start getting reports before not too long and the financials are either going to be justified as a place to be or we're going to have some concern over where they go from here. >> you started the conversation by talking about how the ten year hasn't budged. if the ten year doesn't budge, then the numbers aren't going to go up for the banks. why did we buy those? there's going to be a lot of buyers remorse going on now is what i'm indicating. when you see the ipos come public, there will be big buyers remorse because the secondaries will come faster than you realize and the stock will be unlocked and i'm saying the banks at least are inexpensive but if we do not get more inflection in the yield curve and if we don't get clarity that short rates will go up, then the banks will give up some of their gains. >> let me give you a quick comment and a stat on the biotech ipos. >> i've got stuff, too, on that. >> 26 of 46 ipos this year have
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been in biotech. what does that tell you? >> what does it tell you when the biggest decliners in biotech are gilead and celgene? >> they had monster runs. >> right. here's the conclusion i was talking to cole erkin who does research with me, the conclusion is you haven't missed anything if you buy a biotech on the ipo market but you've missed a lot if you didn't buy gilead. the pill numbers for hep-c are 7% up from last week. it's too late to buy gilead, so let's buy, i've got 100, let's go buy kera therapeutics, why not. you can't -- you lose track of all the different names. >> hottest place to be right now no doubt biotech? >> ipo biotech is working. i think the other biotechs people circle back to them when they realize, do you know what, we were buying companies that were only one product. i spoke with seattle genetics this week with clay segal, he
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has more stuff in phase three than anybody i know and people would rather own endocyte, the ones that are unseasoned and the real unseasoned ones coming public right now that are looking to me like one-product companies. but people don't want to hear that. they want me to get behind these. i watched the twitter feed. cramer, why aren't you getting behind. they don't know the name of the company. why don't you get behind the one about to open. what is it about you and gilead? >> you would be the first one you want them to do well. >> i want everyone to make money. >> let's not go to the moon on day one. >> right. but they are going to the moon. you know, honestly, you look at them, how is paylocity doing? how will it do six months from now. border free the ceo was on this morning on "squawk" he's got a cloud thing going. hey, cloud. meanwhile, went from $68 when they reported the quarter and it lost ten points and no one wants
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and no one wants workday, they want mediwound. here's akebia, have you seen this thing? this is an incredible stock. phase two data. does anyone know how long it takes to get phase two data to the fda? you get through the s.e.c. like this, you get through the fda like that. >> we're just getting started. we have so many earnings reports to talk about we didn't get to. >> those are real companies. i don't want to talk about them, nike and tiffany they're real companies forget about them. i want amber road and a-10. >> okay. i hear you. >> you go for quality, my friend, and i say what the heck are you doing? over. >> word is that st. joe's is priced above the expected range. >> holy cow, are you kidding me? north dakota state will open up at a price i would be a seller but do you know what north dakota state when the insiders start selling six months from now you're going to regret that you took it here. three ceos making news in a big way in one case the stock is
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taking a hit. we'll explain why coming up. and ahead james stewart. >> i had dinner with him last night! i'm not kidding. >> at the place? >> at bar san miguel. i'll take it public tomorrow, saturday. can you take things public saturday? i did it with james. >> well, he is going to be speaking about sanctions against russia and the impact they're having on that country's markets make on guac, tequila, tacos, who knows what else. >> guac is going higher. look out. >> another look at the futures. i can use a tequila shot now apparently. dow futures 42 points implied open and more "squawk on the street" from post nine on the new york stock exchange when we come back. come back.
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♪ ♪ making sure i'm not in too deep ♪ all right, well, nike's reporting earnings of 76 cents a share for its fiscal third quarter and revenue coming in above consensus, but the dow says it sees weakness in emerging markets. >> the charitable trust owns nike and we feel this thing run up into. can i tell you i went through the nike quarter and it's beautiful. it doesn't matter because nike's one of those stocks that i'm describing people feel like they've missed nike so they'd rather find the next nike in the ipo market.
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the only thing that was wrong was currency, china was better than expected and western europe, it's true that michael jordan apoll jiletzed for the breakdown of an air jordan sneaker that someone from the 76ers was wearing. i think the 76ers were just trying to tank their team as we know. >> they lost, like, 600 straight or something. >> they are trying to go for the record because there's a lot of good guys in the ncaa and for the record i know shat st. joe, i'm not confusing it with st. jude, we know it's a college. we are being facetious because there's so many companies going public. but nike is the classic example of a great quarter but they give a little bit of guidance based on currency. the stock was at 79 and went to 80 and 81 on the futures numbers which were excellent and then right when they did the commentary, the graph before the "q" and "a" the stock tanked and that's where it is now. and i think that nike five days from now will be higher not lower. >> it's good enough where nike deserves a look right here after under armour sort has stolen the headlines. >> it has the momentum. if you go over the nike quarter
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they've got a lot of technology. mark parker is not -- he's totally in the game. the china worries they were doing and now they're doing seven. this is a great company. but do you know what, unless you do everything right, line by line on these conference calls, and raise numbers, you're not going to be able to sustain the move if the stock has run into the quarter. >> yeah. >> and that's what happened to nike. tiffany too, by the way. >> did you hear about the distance runner, she's been with nike for 12 years and then she switched. you don't often hear about athletes leaving the nike stable after a decade or so. >> no. and that's true. and i remember -- we recommended under armour and it seemed ridiculous when notre dame switched from nike to under armour but i spoke with a lot of people at notre dame who were involved in that decision and it was a head-to-head so i understand that. but then again, if you take a look the vast preponderance of sneakers in the ncaa are nike. they rergesed th edreferenced t
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call. nike has a new football shoe, football for them is soccer, and it's going to come out, 2016, really going to be big. >> the boot thing. >> the world cup. yeah. nike is going to go down because they referenced the currency and i'm just saying that if you circle back to nike at 76 i don't think you'll regret it. tiffany, up huge ahead of the quarter. that's going to go down because of some numbers involving asia. these are real companies. okay? >> is it fair that the commentary i heard this morning is, like, tiffany not bad, just not good enough. >> given the fact that the stock has had an incredible move. >> even since february, right? >> it's had an amazing move. but we're nitpicking with tiffany and nike but we're willing to give a pass to just about every company that's coming public right now and i'm just worried about that. i am not saying you shouldn't try to be in some of these companies, when you look at a cornerstone and it's a good cloud play and can't get out of
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its way and everything that calls itself cloud or big data is flying on the ipo market and i'm saying that doesn't last forever. >> a reality check. there's nothing wrong with a reality check. >> don't get too complacent in the ipos if you got some at home don't feel that you have to hold on to it. because the insiders most likely will not want to hold on to it when the lockups expire. that's all i'm saying. cooler heads. cooler heads. >> a trivia question for you before we go to break, did you know there were actually, like, 13 teams in the atlantic 10? what's up with that? >> you are confusing it with a-10, the company coming public. the numbers are weird but pac-12 one time i think had, like, 13 and the big east by the way, the requiem for the big east on another network is pretty good. >> up next it's cramer "mad dash" as we count down towards the opening bell. let's take another look at futures here as we get you set for this friday on the street. the dow looks even a little bit better right now. implied open up 58. more stock on the street from
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♪ all right. seven minutes before the opening bell. time now for cramer's "mad dash" ahead of the market open. semantic. >> anti-virus isn't that what everybody is doing? >> the fralez of tphrase of the. >> but this was personal computer and not mobile you had to be mobile and symantec didn't
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change with the times. the ceo wasn't there that long but he's gone. but just because it has security in it and it doesn't deliver, doesn't mean it can still go higher. fireeye has delivered and look at its stock. look at fireeye, they priced 14 million shares at $82. it is now at $68. and why i'm putting this out, i'm putting this out because this is what i'm afraid's going to happen to all these companies that are coming public right now. when they file the -- when the insiders file and they start selling -- and by the way, there's 90 million shares in this thing that is unlocked in a couple of months, this is what i fear. now, jim, you made this before, yes. i'm not against people making money. i am just being cautionary. once the insiders file ala 2000, scott, the stocks can't hold up. and don't forget these were the guys that had the technology that actually spotted some of the target, okay? >> you have maintained through repeatedly inside selling is what breaks the thing. >> it's not the fed.
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okay? it's not the earnings. it's the insiders. fireeye may be the best quarter of any company i follow in security but they did that 14 million shares. look where that deal comes. look where the stock is. insider selling is what wrecked 2000. just beware it's going to wreck these companies, too. >> all right. words of wisdom. call it ipo friday. what can we expect from today's wall street debuts? the opening bell is just minutes away. away. female announcer: during sleep train's big gift event
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♪ [ indistinct shouting ] [ male announcer ] time and sales data. split-second stats. [ indistinct shouting ] ♪ it's so close to the options floor...
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[ indistinct shouting, bell dinging ]'ll bust your brain box. ♪ all on thinkorswim from td ameritrade. ♪ you are watching cnbc "squawk on the street" live from the financial capital of the world. where the opening bell is set to ring in less than two minutes time. so, jim, we're going to have some ipos again today. >> right. >> a-10. >> they're opening the market. >> proprietary architecture to improve data applications and networks and do security stuff. a lot of buzzwords that people like the stock will go higher and people will be excited about. >> you got a couple of big crowds because also debuting at the big bord board amber road.
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>> automates and export processes to simplify the supply chain. supply chain, cloud, data center. in other words, goes higher. >> there's another one tpg specialty lending, the business development company of private equity firm tpg. >> i'm not interested in that at all. doesn't have cloud or security. doesn't have data, what's the point. >> there are the folks up in midtown at the nasdaq, that's where software maker border free and biotech firm bresardis are going -- >> it allows you to reach international customers, you can't beat that, right? >> how about mary barra and general motors this morning not to be confused with george mason other gm out of the a-10 open this morning. >> charitable trust owns gm. it has a lot of headline risk that will be forgotten one day.
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but it's no a-10. it is no amber road. it is a company that makes car. wow, is that boring. >> there are the bells and you are watching them and the s&p 500 at the cnbc real time exchange as we mentioned here at the big board a-10 networks an application networking company celebrating its ipo today. and up at the nasdaq also celebrating its ipo as we mentioned border free that's a company that lets u.s. retailers sell to customers overseas. we can talk a little bit of retail. >> i am not being facetious, they all have good stories, okay? a lot of them are not profitable. i'm saying that fireeye which was the best security play could not withstand that unlocking of shares. we careful. >> small floats, too, to worry about. you get the secondaries coming down.
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>> these are slimmer deals. they are slimmer deals. we saw slimmer deals in 2000. no one wants to hear 2000. no one ever wants to hear 2000 because that was when all the secondaries were filed and that broke the stocks. they want to enjoy these. i don't mean to rain on the parade of any of these companies, i'm excited for them and wealth they will create and there's not a lot of float and that's how you create an up day. >> speaking of an up day that's what we have. up 50 on the industrials. art cashin swung by a few moments ago and said there's a pretty good bit of volume to the upside. a couple of stocks to talk about off the open. mcquarry goes outperform on apple an initiation on the stock. another comment on apple and that's up one half of 1% 531 bucks. >> apple, everyone when i was out west for the starbucks annual meeting, people were
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talking about apple and, you know, these are revenue -- i mean, pull up with people from zulily i was recommending and it tripled. they say where is apple's revenue growth? people want revenue growth from apple and they don't have the big revenue so that's why this move might be ephemeral. maybe an ephemeral move. >> people will want revenue growth and a whole lot more from twitter. it is up half a percent. >> the stock has been a house of pain lately. there are people saying, look, why isn't twitter going up. i'm saying there's money to come out of twitter to buy the more exciting new companies. exciting be the operative word, okay? twitter is a very expensive stock versus a lot of other stock. the senior growth stocks in the cloud segment and the social media segment have been acting horribly as people rotate out of those and they go into the
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unseasoned stuff. this is a time honored problem. i call it a problem because you don't want to see those big companies falter. their stocks have to stay up. >> by the way, turkey blocking twitter today. >> did you hear the community to project journalists, the november conference, that's a charity i supported. turkey was the worst of any major company. it is a great cause for journalists and the cause says turkey is the worst. one reason that north korea has been a stable regime from a bad way is that they don't allow social media. social media is how you will be able to say i think this government's corrupt. overthrow it. dan hesse from sprint said north
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korea is a stable regime because they don't allow texting. >> tiffany on the earnings, the stock is down 1% this morning. >> that's not bad. ran up a lot. and asia, china was a little bit slower and everybody decided that ftiffany is no good. nike and tiffany are real companies and they are going down because people want the pizza pizzazz. >> in the case of nike down 3% a chance to buy the stock. >> i think it has to settle. people selling nike are people with big positions in nike. they're probably not going to be able to finish their selling until the end of the day and carryover on monday. if you want to buy nike, circle back and wait until monday and tuesday, stephanie link she and i were pondering over the fact stock spiked and, she said, are you going to be hard on nike? no, no. nike is a good company. and they just mentioned currency and everyone decided to sell it. >> they're buying -- maybe some
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of the money coming out of nike is going into under armour. >> go on my twitter feed people are so excited about new fibers? no, they are excited about the 2 for 1 split. that's another sign of things i'm not that happy with. a two for one split does not create wealth. >> another story i thought was really interesting today is the white house apparently testing samsung and lg smartphones. maybe one of the last biggest most powerful bastions of blackberry. >> wow. >> blackberry sold some real estate. >> maybe that's going to turn also. >> the white house going with samsung? >> at least taking a look. >> how has south korea done with us with the trade agreements? are they buying as many cars from us as we are from them? >> why wouldn't they be taking a look at apple? i don't know, u.s.-based
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company. >> no revenue growth. maybe they don't like the buyback. maybe they want to see new products at the white house. right? white house they want apple tv at home. >> you think -- you think jay carney called up carl icahn, look, i totally agree with you, they should be returning more money to shareholders we're going with lg? >> you want stocks putin has the hot hand right now. i'm glad we can be facetious about washington for a moment because washington was killing this market for a while. now everything's forgiven because the fed -- people talking about wanting to raise rates. this market has so much froth in it right now, it is breathtaking. >> blackberry over the last three months is up 30%, right? there's more optimism about what's happening there as a result of john chen coming in. >> he's done a good job. he's done a good job. there was a lot of overhead fat and he's kind of revitalized the company. nokia came back and alcatel lucent came back and anything is
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possible. you want companies that bought a phone company that should be going down, look at microsoft, that stock is supposed to have gone down. they bought nokia, no, microsoft is an inexpensive stock and people are circling back to inexpensive tech. that's the nonfroth part. the banks and tech are nonfrothy, people will say, jim, are you bearish? no, it is the ipo market that is frothy. >> art cashin was on the money this morning. i'm telling you he swung by post nine and said looks like we've got a lot of volume off the open to the up side. here we go the s&p 500 hits a new all-time intraday high. the industrials are up. >> into some industrials. there was a really big call from goldman. they decided unite the technologies is the one to buy and boeing isn't. this is the way i look at these moves unite the technologies is up three on the goldman upgrade. boeing is off slightly on the
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downgrade. that's kind of the ratio of buy to sell that i see. >> fitch taking the u.s. off of negative ratings watch. this plays to your tweet the other day, you know, let's stop and step back and focus on, you know, american exceptionalism if you will. >> right. which is, by the way, why i think you do have to circle back with nike ultimately because they are a great american growth company. remember starbucks trade 68 to 69 on the cost of coffee. these companies recharge. again, those aren't froth. they are expensive. you talk about 22, 23, 24 times earnings with the average, remember, the s&p is at 17.5 times earnings. but i think you have to differentiate the froth from nonfroth. you are seeing citi come up, and they met the stress test and the market reacts to that. there was a very big buyout, david would be critical of me, david faber, who is coming back
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this week, but lind got a deal and that's consolidation on the tv side there's some fundamental positives and also the ipos that i circle back to saying be careful, people. today's a good day for them. it may not be so great six months from now. >> pisani is on the floor in front of the a-10 post. what do you see? >> the important thing right now is we are at a new high intraday on the s&p 500 and the old high the closing high was 1878. we're above that 1882 if we close here this will be another closing historic high for the s&p. big action in ipos. five of them, three of them down here on the new york stock exchange and two at the nasdaq. here's a-10 network which makes software that optimizes data center performance. priced at $15 still waiting for indications looks around there right now. but a lot of action on amber
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road to my right. they do cloud-based global trade management software that stock priced at $13 well above the price talk, $10.50 to $12.50 and priced at $13 right now indications $18 to $20. and tpg priced at $16. business development company. over on the nasdaq we're waiting for two ipos to open that versardsa and border free helping retailers set upn't national commerce you talked about it earlier priced at $16 the high end of the range, they will normally open between 10:15 and 10:45 eastern time. a little bit of rotation going on. we talked about it yesterday. we get why financials and b of a and jpmorgan up this week higher interest rates perceived to be helpful to banks.
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more interesting and much more in the way of commentary from the traders is why some of the old school tech names are up and again today. you see sandisk, applied materials, microsoft, seagate technology all up rather nicely up six seven, 8% so far this week. big moves. and a lot of people talking about the fact if you can get real growth with higher interest rates theems are stocks that move along but they are old school tech stocks. interestingly the semiconductor index has hit a multiyear high. the highest level since 2002 on the semiconductor index right now. one thing that's very interesting is i don't see huge amounts of selling in other grawps. so, for example, biotech is not collapsing this week. they're not buying tech and selling biotech in any big way. i agree with your point about fireeye being down and some of the other favorite names like workday and tableau are down this week but only very minor. i don't see huge volume in any names right now. nothing big coming out here.
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let me just point out one last thing here i think the important thing we'll get significant reweighting. ibm, cisco, express scripts, apple, all are reducing their weightings in the s&p 500 because they have share buyback programs a couple like facebook has increased the amount of shares this quarter so their weightings in the s&p 500 are going to go up and that will occur at the close so you might get some volatility. on amber 18 to $20 that's where a lot of the action will be. still waiting on a-10. back to you. >> let's go to rick santelli at the cme. i had mentioned how the stock market and the markets have recovered post-fed bond yields have barely budged off their highest levels. >> absolutely. it is all about the yield curve but the funny part we all know it is about the flattening yield curve which has been the huge surprise but there is no
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surprise the debate as to why will it continue and is it a leading indicator, those are all under scrutiny. i'll give you one statistic that says it all. 364 on 30s. we're up four basis points on the week on 30s. we're up 20 basis points on the week on fives. that pretty much says it all. let's look at a two-day chart of tens. we're at 277. and open it up to one week chart, okay? 277s are wild. are we settled on fed wednesday, it is where we settled yesterday and trading today. and even though the yields are up on the week, it really does auger for the following charts to be so important. let's look at a one year chart of tens minus twos, that's had bouts of steepening but it's flattening and five to tens is flattening and the home run i picked fives and 30s, this baby is the flattest it's been since
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summer of 2012. here's the rub. you can have all the spin you want with everything with the fed but the flattening yield curve has been an indicator for 2014 for generically lower rates so we have to monitor the dynam dynamic. let's look at currencies, let's celebrate where it looks like we'll settle on a weekly close actually in positive territory barely for 2014. at the expense of mirror image, the euro versus the dollar. now, this is also fascinating. germany's going to have two regrets. one is they are an export economy with a strong currency so many think the game is to bring it down. that is happening. the other, well, you know, the greenies have positioned them into a situation where they are now dependent on, of course, that gas coming from russia. it's a big deal in the united states as well. if we'd only have more exports would have had a big impact not only on geopolitics but on the notion there's no economy ever
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on the planet that doesn't go up with energy prices not going down. meaning, energy down, economy's up. we have to work out this stuff. technology is an amazing thing. now i'm going to beam myself back to scottie. it's all yours. >> all right, rickie, thanks so much. with ipos in the spotlight the company behind popular mobile game candy crush is getting ready to go public. is it the next zynga? we'll ask the former ceo of the game maker zynga bought.
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all right. there's a big crowd and as a matter of fact there are several big crowds here at the new york stock exchange this morning because of the ipos. there are six ipos altogether in the markets today. a-10 is the one that you're looking at on your screen here. there's another one at the big board around the corner from here and that is amber road, a maker of cloud-based global trading software. tpg specialty lending is having
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an ipo and up town you have more versardis, borderfree another software maker at the nasdaq. it's an ipo parade. >> and the windows open, when the window's open everybody is rushing to it. and they are all working and i just urge people to be sensitive to the idea that if you have really big gains you'll have to take something off the table. >> today is day two of the ncaa tournament and warren buffett is probably feeling pretty good about that bill dollar bracket challenge. insurance company probably is as well. >> right. >> in fact, after dayton upset ohio state in the first game yesterday, 83% of brackets in the buffett challenge were eliminated. >> wow. >> that's out of almost 9 million entries. the -- i saw the end. i caught the end of the dayton/ohio state game. awesome finish. as only march madness can bring you. >> it's true. people always say don't go with your emotions. i didn't go with my alma mater against the bearcats and i lost
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that. the north dakota state game very exciting games. kind of like the ipo market. >> harvard has a great coach. >> and a great team. >> great team. they have good defense. >> classy guy, former guard at duke and knows something about winning national championships. >> i remember when penn went all the way and then villanova in 1985. i mean, there are schools that are dark horses that can go further which one of the reasons why the buffett bet isn't that bad. i want to circle back for a second i want to contrast gilead with the biotech companies coming public. gilead is one of the most senior biotech company out there. the stock can't get out of its way, and the hec-scripts aren't that good. and yet there's a lot of biotech companies with one product out there that are doing really well. that's what i worry about. gilead's a great company but people don't want it. nike is a great company. they say one little thing, the stock can't get -- you can't find a buyer. but there's a lot of other little companies that people are
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very excited about. that's not a great sign. >> amber road has opened. it's up 35%. speaking of some of these ipos and a parade really that is today. this is that cloud-based global trading software company. there it is up 36% on its debut. >> international expansion is also a focus particularly china. they made a small acquisition september 2013. people like it. it's a customer play because walmart is a customer and tyco is a customer and people are excited about the customers. >> still waiting for a-10. it makes you wonder overall, jim, whether, you know, it's the rush to the exits. the markets have been so good and this parade of ipos has been really stunning. >> it's the only conclusion you can reach. we can't just be -- i remember 1999, now, remember, 1999 was a long year. a lot of money was made. and then you had 2000. 2000 starts if you want the analogy six months from now when insiders can sell. obviously they sell a little bit. whet the appetite of the growth
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mutual funds who then have to go in the aftermarket. that's how you get the pop. a growth mutual fund will get 3% and they want to get the position to full and they have to buy it in the aftermarket and they get an average and you the individual investor if you got 100 shares what a great opportunity. ring the register. all right, up next it's, it's "stop trading" with jim. "squawk on the street" will be right back. right back. ♪boots and pants and boots and pants♪ ♪and boots and pants and boots and pants♪ ♪and boots and pants... voice-enabled bill pay. just a tap away on the geico app. ♪ huh, 15 minutes could save you 15% or more on car insurance. yup, everybody knows that. well, did you know that some owls aren't that wise. don't forget about i'm having brunch with meagan tomorrow. who? seriously, you met her like three times. who? geico.
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♪ walking on sunshine whoa i'm walking on sunshine whoa ♪ ♪ i'm walking on sunshine all right, time now for cramer and "stop trading" and we'll stop and eat. >> sally smith talking about buffalo wild wings, this is a march madness play, the more games that do well it impacts their earnings. a friend of mine that does the chart work, we don't talk much about the technicals says it's one of the best in the books. that's a march madness play. let's talk about solar city, my friend herb greenberg does a reality check, a cnbc contributor and the street contributor and he said people are worried about the retained value line but future stream of payments less cost projected less the 6.6% discount, the
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solar cities and the tesla's and the netflix didn't talk about the fight with comcast but these are the kind of stocks going down and the a-10s and the globos and the amber roads are going up. the senior growth stocks that we loved going into the year are being annihilated. not just selling off, they're being annihilated. those are the quality and people rotating into the unseasoned because they feel like that they've missed the quality. solarcity believe it or not is regarded as being a seasoned, a seasoned, senior growth stock. i don't mean to be facetious, i'm just saying be careful because solarcity is the kind of stock going up indefinitely and suddenly there are sellers and people are talking about the fundamentals. they are not talking about the fundamentals of a-10 or amber road or borderfree. >> you've had a great week on "mad, "what are you going to finish with tonight? >> we have pool on tonight. poolcorp, jim, why aren't they
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in cloud? why aren't they in data control? why aren't they in big data? they are in swimming pools and swimming pool supplies and it's a good judgment for how housing is doing. be careful, housing masco got killed yesterday. there are some companies that should be doing well, lennar had a good quarter, it got killed. and the companies that are doing well right now are the least seasoned companies in the marketplace and also the cheapest tech companies. classic, oracle, disappointed, right? that's a low multiple stock. how's it doing? it's going higher. intel going higher. microsoft going higher. these are incredible. in the meantime, people are worried about gilead. which is doing quite well. >> have a great show tonight. >> tiffany's up. that's important. don't sell nike at $75. don't. >> all right. coming up pulitzer-prize winning columnist james stewart it's a cnbc exclusive. jim's dinner mate. >> yes. >> of one night ago. >> last night. >> keep it here. (announcer) scottrade knows our clients trade
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tiffany slipping on weaker-than-expected results in the latest quarter with the company ceo touting record sales we'll tell you how to play it. plus, new york threatening to ban tesla direct sales in the state. we'll talk to the tesla executive that's been leading the fight for the company. and a tech investor that invested in some of the most successful start-ups around before anybody else knew about them. ben lara will join us live. well, we're still waiting for a-10 networks to open here at the new york stock exchange. bob pisani, what's going on a very busy day for ipos? >> it is indeed, scott. we're waiting for it to open. a rather unusual situation there's no indications posted yet because they haven't received approval to actually open. we're waiting for approval from the government, from the s.e.c. they have to get what's called effectiveness which is their okay for them to actually open.
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the indication is we're just waiting for the approvals. it's a little strange. i haven't remembered the last time -- i'm trying to remember the last time this actually happened and i can't. so, i'll try to get a little history on that for you. in the meantime, we had a very good opening in amber road, price 7.3 million shares at $13 and it opened at $17.50 that was certainly a success and we're still waiting for borderfree at the nasdaq, as soon as i get more, i'll let you know. >> bob pisani on the floor. another exciting day and strong open amber road. shares of luxury retailer tiffee turns positive this morning following results that missed expectations. you can see the reaction in the stock fell way off the lows and now higher. let's bring in our retail analyst with key bank capitalti. i know you like the company. it was still a miss even with the charge related to litigation and swatch, still missed
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estimates. what happened there? >> i think there were a couple things that went into play. it was still a difficult retail environment. lots of geopolitical pressure and in light of the environment we thought the results were fairly solid. >> looking at comp store sales probably in the united states even in japan with all of the weakness in the japanese yen, managing to do better. what's going on with the luxury consumer? i thought that the 1% was holding up pretty well. >> clearly tiffany's invested in their product and we think it's resnating with the luxury consumer. they are not subject to the same discounting that some other retailers are subject to this past holiday and that allowed tiffany to win. they invested behind the more entry level jewelry. we think that's resonating and help driving sales particularly in the u.s. >> and entry level jewelry, what do you mean by that? you mean the less expensive silver items under $500 or so? >> you know, it's more kind of $500 to $3,000 and this is jewelry that's not your typical
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tiffany statement jewelry, but it is more differentiated than really what you see in the rest of the mall and they'll continue to add more jewelry through the balance of the year and we think it could be a key driver. >> you think they're getting the balance right? they've made a big push at the company when it comes to balancing out the statement the very high end luxurious gemstones and diamonds versus the silver which is actually higher margin jewelry. >> that's right. tiffany's been in a multiyear process of investing in the high-end piece and we think they've been very successful there and we think we're in the early stages of seeing some of that success in the fashion jewelry point which is very high margin. >> quickly here outlook for precious metals that was a tailwind last year. gold fell more than 30% -- or silver fell more than 30%. gold fell almost 30%. this year, though, those metals prices are higher. is that going to hurt tiffany? >> lower raw material prices should actually help tiffany for the next quarter or two at which point it becomes a little bit
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more benign. they can take price increase if necessary so we don't see it as a headwind for 2014. >> it looks like investors agree with you on the positive assessment of the report. good to see you. also want to point out nike because shares opened lower. the company reporting after the bell yesterday, it was a blowout quarter for nike, they beat on the top line, they beat on the bottom line. shares under pressure now after the earnings call last night. the cfo warning that currencies the fx fluctuations are actually going to drag on profit growth this year. with nike it's really a global story and a lot of people are looking at the futures orders segments. that's how they break down what's coming around the world. nike gets 45% of its sales overseas and here's some of the surprising breakdown. western europe 30% growth there. that is adidas turturf. they are stealing market share and gaining in europe coming out of recession.
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and north america up 9% and china was a weak point with a negative number and china and japan continuing to struggle but the emerging markets strong. >> it's a longer-term story than that. if we can have a look at the new innovations. the all-in-one knitted soccer boot. they spent three quarters of a billion dollars on marketing. this category around the world is absolutely exploding. and it's -- in many senses it's a one-way bet. you can see it on the streets here in the united states. you can see it in europe. you see it with sportswear. yes, the competition is getting more fierce all the way round. but this is -- i mean, this is a potentially hugely growth business. >> big year. >> and it's the high margin products. the ceo joined us on the day they launched the new soccer shoes because of the very important. soccer is such an important market. >> world cup, brazil, olympics, brazil. pipeline's pretty good for nike in terms of exposure going forward. >> that's why you are seeing up tick there in expenses.
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>> a lot of people in this country may not understand the importance of soccer in driving sales through western europe and driving sales in south america. and arguably increasing in africa as well. it is a massive sport and if they get that right, they're going to make an awful lot of money. >> and it's increasingly becoming popular in the united states the world cup is everything for these consumer giants like nike. blows past the super bowl in terms of viewers. all right. turning now to the crisis in russia. russian president vladimir putin officially annexing crimea this morning despite u.s.-imposed sanctions targeting several russian and crimean officials. here on set is jim stewart, a the columnist with "the new york times" and he wrote a column titled "why russia can't afford another cold war." great to see you as always. >> good to be here. >> despite the fact that putin sticks out his chest and says the hell i can't. maybe i want it. >> i just find this story so fascinating.
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believe me, it was bad. we don't want to have another one. but as i point out in my column, the big difference between then and now is russia has a stock market. and the stock market has been sort of serving as a de facto proxy for the world views of what putin is doing and every time he's going too far he's getting slammed on the stock market i think this is something russia has to pay attention to. >> i wonder in the big picture as well as there are concerns about the energy assets that russia may have, it's been a game change here in the united states so maybe we can afford to have a little bit of a more angry and animus dialogue with russia because we have something on our end, too, we don't need everything from you. >> we have a lot of economic leverage. we have the stronger hand here. the cold war has turned into a capitalist war, an economic war and we have the stronger hand. i talked to several russian business people who went to unbelievable lengths to disguise the fact that they were talking because they figure their cell phones are monitored, the
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internet is being monitored and they all told me that they can't say this publicly but nobody wants an economic sanction war with the u.s. and russia's in a relatively weak position right now. it's a very commodity-based economy. commodities have not been strong. where as you point out the power is tilting to the west and the u.s. and so we really do have a lot of leverage. >> you know, jim, you make a very important point but at the same time i think we should realize that the russian power bases are not bound together in the same way as they are here in the united states. the 111 billionaires may or may not be in the stock market it may be private wealth. putin is belligerent to the nth degree and might as equally take on the billionaires as anybody else and yesterday he was warning them they should start paying more taxes at home. we've seen what they did with the assets of royal dutch-shell and arguably bp, it's not as crystal clear. >> the oligarchs are nervous,
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they don't really know how rational putin is ultimately going to be. >> which is what merkel said. >> exactly. everyone is nervous about it. but my own view about this it's crazy to push this much further. what does russia really want in the 21st century? they want a compliant puppet government in the ukraine. they've taken crimea the largest bloc of pro-russian ukrainian voters and moved them to russia. who is going to vote for russia now in the ukraine? they are forcing the ukraine into nato's arms. . >> angela merkel's also said he's living in a different time. if you look at the opening ceremony of the olympics he's champions a different time. >> exactly. >> when he believes that autocrats should run russia and when they vote they love putin. the people of russia, they've got what they want. >> but several pointed out to me that part of this may be a big diversionary tactic because they love an autocratic leader when the autocratic leader delivers a better standard of living which he had been doing pretty much until the financial crisis. now, this has taken all this
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nationalist excitement and changed the subject away from the russian economy but how long can that go on? >> let's change the subject real quick from the russian economy to your other column of note. on a gentleman that people refer to as the oracle of tampa. because jay bowen is his name has been on the halftime show a couple of times. he's an interesting guy. tell us. >> he's such an interesting guy. i've been writing about low cost approaches to money management and, you know, they came forward and i looked at the track record. he runs the tampa fire and police pension fund which is about $1.7 billion. a lot of money. one manager. this is unheard of in a pension. one guy does it all. it's a conservative mix. 65% stocks, 35% fixed income. he does the stock picking. he's found the sweet spot which is kind of midcap and there are a lot of studies show that midcaps do do quite well if you can get the right one. >> they are doing well now by the way. >> they have an average
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annualized return of 12%, a tiny bit behind yale with all their private -- no hedge funds and private equity. really it was an amazing thing and they've done it year in and year out. >> he's an impressive individual for those of you who don't know him, take a look at jim's column. >> thank you. >> great to see you. >> as you are, jim, nice to see you. >> thanks for having me. >> mt. gox has found 200,000 bitcoins in an old format wallet that was thought to be empty. and that brings us to this morning's squawk on the tweet, what else in mt. gox's forgotten digital wallet? can't wait for the responses to this one. tweet us and we'll air your responses throughout the rest of the morning. simon? up next new york is its way to becoming one of the states that bans tesla's model. we'll be joined live by tesla's vp who at the forefront of that battle when "squawk on the street" returns. street" returns.
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some local new york politicians are joining tesla's fight against a proposed ban on selling cars directly to customers. this bill to restrain tesla cleared a committee on wednesday and threatens one of tesla's largest markets. joining us now for more is james chen vice president at tesla ahead of a news conference at their white plains store, also phil lebeau joins us live from
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chicago. mr. chen, welcome to the program. thank you very much for joining us. it's interesting that we are joining you at what we described as a store because, of course, already direct sales are banned in the state of new york. and the legislation alleges basically that the store that you're in is really a kiosk and carmakers in the future will have to build out the fronts of their stores explicitly to look more like dealers. is that the case? >> yeah, actually, there's a lot of misconceptions out there and that is not really the case. under existing new york law as it stands now we are in a store. a store that is licensed by the new york dmv as a dealership that can operate legally. so, there's nothing illegal about this operation. moreover, this was challenged in the new york courts, and guess what, the new york courts have said we're operating within the bounds of the law and what we're doing is absolutely fine. the franchise dealers, the traditional dealers, brought
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this lawsuit against us. and they were thrown out of court, and the court basically said these dealers cannot use the franchise laws to try to harm competition or to try to push out legitimate competition. >> and so they're trying to change the law to make what you have there illegal because it doesn't represent what the franchise dealers are doing. the bigger issue here clearly is that you have now a number of fights in a number of states, some of which you're losing. are these skirmishes along the way, or is this a principled approach to break the franchise dealer system and whether you succeed in that or not we will see, because ultimately many people argue you will need these dealers, you will need a franchise system, to get to the sort of scale across the country that your shareholders expect. >> yeah, you know, that's a very good question. and do you know what, frankly, this is all about new technology. this is for the first time in 100 years introducing a brand-new technology to our
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light duty market, a technology, by the way, that was invented in the united states, that's being produced in the united states and that's capitalizing on domestic sources of energy. what's not to like? but it is brand new. on average it takes our product specialists and our owner advicers two to three hours to explain the new technology to potential customers and it's really more of an education component to this not a sales component. and as a result, we find that we need to do this ourselves. now, will there come a time when we enter into the franchise system? there may be. market forces will likely naturally push us in that direction when we're building 2, 3, 400,000 vehicles. this is not tesla saying we're trying to up-end the entire franchise system. this is tesla saying this a new technology. give us the opportunity to grow, to develop this technology, and frankly to get into that space. it's like asking a little league player to play in the majors right away. we're not there yet. let us have that time to grow
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and develop and show people the benefits of this technology. >> james, this is phil lebeau in chicago. i'm curious, because you are doing these battles in so many different states and there's different areas where you are moving forward, other areas where they're trying to restrict your sales. ultimately will this wind up in federal court? ultimately will you have to make an interstate commerce argument in court to say let's have the same rules coast to coast? >> well, we are looking at all the options obviously, but do you know what, these challenges are being brought right now at the state level and that's where we're fighting. we've had various successes and various failures in certain places. really it's about carving out room for us, whatever we can do to show people that this is the way to go, that this american technology is the right way to do this for america. we'll look at whatever way we can to do this. and by the way, we've worked in every single state when we've gone in, we have not gone in under cover of darkness.
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we've gone in completely under the light of day. we have met with regulators. we tell them who we are. we are completely open that we are a manufacturer, that we are producing these cars in the united states and that we'd like to sell them. and we're working with those regulators to find ways to work within the bounds of the law. it is really those dealer organizations that have decided that they don't like us treading on their, quote-unquote, space essentially their monopoly and they're trying to shove us out and the way they're doing it is in new york was through the courts and they lost. actually tried to jam the bill through and they lost. they're doing it -- very influential. they contribute a lot to local races. in some cases they're the politicians themselves. what we are trying to do is just carve out that room saying, hey, there is room for all of us here. we're not upending the franchise system. we're saying let us play. >> james, with all due respect, you say you're not upending the
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system but in many ways you are because every time you open a store that is not through a franchise establishment, it makes the dealer say, wait a second, our system is being threatened, so it is upending it in some regard. >> well, it's about getting out into the marketplace. last year we produced 22,500 vehicles. new car sales in the united states last year was 17 million to 15 million vehicles. we're not rounding here. i'm not so sure how in places like new york where we sold about 600 vehicles compared to the -- i think it's 800,000 vehicles they sold, nearly a million vehicles, we're actually hurting a particular dealer. we're not. in fact, there was an ohio court case recently where the dealers in ohio challenged us and the court found that there was no harm. we are not harming dealers. now, is this the new way to go? who knows. let's see the market develop. we think there is a better way. let's let the free market decide. isn't that what the united states is all about?
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you invent a new technology, you get it out to the consumer and you let the consumer decide. let's let the consumers decide here. >> mr. chen, i know that you have -- we have to let you go because you have a news conference starting shortly with state assemblyman david buckwalt but it's been great to hear from you and we hope to have you back on the program soon, james chen there tesla vice president and phil as well, phil lebeau joining us live from chicago. it's no secret that it's been a rough winter for traditional retailers from bad weather to light foot traffic. a lot of the big names are struggling. up next an exclusive interview with the ceo of lane bryant. how are they tackling the issues? find out right after the break. . we only know one direction: up so we're up early. up late. thinking up game-changing ideas, like this: dozens of tax free zones across new york state. move here. expand here. or start a new business here... and pay no taxes for 10 years. with new jobs, new opportunities and a new tax free plan.
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turning our attention now to the fashion world it's been a rough road for much of the retail industry from a shortened holiday shopping season to, of course, this very long rough winter for many people. so, what are retailers doing to keep traffic sales -- traffic and sales up?
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joining us now in another cnbc exclusive is linda heasly, the president and ceo of lane bryant. you are an outsize retailer. how would you term it? >> plus size. >> we're changing the conversation we're calling it her size. >> how is business? >> business is good. if mother nature cooperates business would be great. >> the plus size market we don't hear a lot about it from the mainstream retailers. how big is the market? >> it's a significant size market, several billions of dollars. the fashion industry has chosen not to support it in a great way, our job, our responsibility is to put the fashion industry on notice. >> it sort of has a stigma i guess that's why you are changing the name but are also interestingly enough collaborating with some fashion designers. you are trying to put this on the map in a whole different way. >> and in "vogue," aren't you going be in "vogue"? >> we've taken a placement in "vogue" and we're waiting to hear next week actually we'll
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see what exactly is in the magazine. we never really know until we actually see the publication. >> who is your customer? >> she ranges in age from early 20s all the way to 40 and beyond. and what she is, she's -- she wants the confidence that all women want. she wants the fashion that all women deserve. >> i read a fact that the american woman is about 25 pounds heavier than her counterpart was in 1960 and yet plus-size clothing forgive me for the term generally defined as size 14 or up only makes up 9% of all fashion sales, so in other words, there's a huge potential market there. >> yes. >> the question is, who becomes the disrupter? who is going to take that on? because h & m is stocking up to a size 16. does it come into the mainstream? i'm sure a lot of larger women would like to shop at h & m, and get their clothes from there. can they increasingly dominate the market or will it always be with you guys specializing in a
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different area? >> i think what lane bryant brings that's unique to the industry is the fact that we're only focused on her. we special i'd in the needs of this client. and unlike department stores, unlike h & m, this is her store, it's her place. we're very focused on her. >> are you focused on e-commerce because i think you might have a pretty big opportunity there as plus-size woman might not want to come into the stores to try on? >> we work very hard at being what we call an omnichannel retailer. it's a seamless integration of store and online business. >> what kind of growth numbers have you seen there? >> significant growth in our e-com channel. double digit. very good channel for us. >> if the fashion industry at large does little to nothing to help you promote your customer, how difficult is it for you to go at it alone? essentially what you're doing. >> well, one -- it is one of the reasons why we did the collaboration with isabell and
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ruben toledo. she dresses women of all sizes. we knew she would deliver a product that was beautiful and make her feel beautiful. it was to bring someone at a couture level and bring it to an affordable price point. >> is that what you are wearing? >> i'm wearing the couture label. >> it's got wings on the back. >> it's, like, a cape or something but it's not plus size. >> well, this is isabel's line, but what she did for us was to take her inspiration. she stayed true to her aesthetic and she applied it to our customer and the line is beautiful. >> i just have to ask you lululemon founder a couple months ago put his foot in his mouth saying he wasn't making clothes to all women or some women don't have the bodies to wear his yoga pants. is that an opportunity for you, did you see a sales boost in your yoga pants? >> we're blessing with an active business that is growing and, again, you bee the judge.
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when you see the pictures from last night's fashion show, i challenge you to say those women didn't look beautiful. >> all right, we'll take a look. linda, good to see you. thank you for joining us. >> thank you for having me. the ipo-palooza taking place today. do you want to highlight borderfree? it was one of the six ipos apparently has opened. is that correct? yeah, there it is. borderfree is trading up 32%. that comes after amber road here at the new york stock exchange has already opened and it sounds like, guys, from the sizable crowd behind us and the noise starting to emanate from it that they will soon be open. >> silence means intense scrutiny. >> right. silence means i guess getting close.
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we'll bring you the headlines from that as they emerge. in the meantime retailers are not the only ones having to find new ways to entice customers. restaurants are facing many of the same problems it's been a rough few months. how can restaurants satisfy their customers and increasingly raise their bottom lines? the ceo of cke restaurants which operates carl's jr., hardees and many more will join us after the break this friday morning on cnbc. cnbc. joe doesn't know it yet, but he'll work his way up from busser to waiter to chef before opening a restaurant specializing in fish and game from the great northwest. he'll start investing early,
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he'll find some good people to help guide him, and he'll set money aside from his first day of work to his last, which isn't rocket science. it's just common sense. from td ameritrade. i have a cold with this annoying runny nose. [ sniffles ] i better take something. [ male announcer ] dayquil cold and flu doesn't treat all that. it doesn't? [ male announcer ] alka-seltzer plus fights your worst cold symptoms plus has a fast-acting antihistamine. oh, what a relief it is!
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check out the markets here because we are in record territory. the s&p 5001878. that is above the 1883 number hit march 7th, the last time we saw a record high. the dow jones industrial average now up triple digits over 100 points. nasdaq lagging. it is actually down right now. down about half a percent. really the story, scott, this week and today has been ipos. >> it is. and, sara, six of them today to close the week. we're still waiting for a-10 to open here at the new york stock exchange. that's a software company and bob pisani coming over a moment ago saying the delay is because
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they were forced to file an amended eed s-1 with the s.e.ct evening. that's why you've got a delay in the open here. there's been some noises from the crowd. then some silence as simon mentioned but we are still waiting. we've had a couple of ipos open borderfree which you saw up better than 30%. amber road which is here at the new york stock exchange that opened better than 25% to 30% but we do continue to wait for a-10. >> it's fairly serious to me if you do your book building on one s-1 and you have to price and amend your s-1 i would have thought that gets complicated. >> bob said it was pretty unusual to see it happening. awaiting the ipo. >> i wonder if it will open or whether they will actually now reserve the process and go back. >> okay. bob pisani literally just walking over just a second ago and saying you are starting to get indications on this open of
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a-10 so presumably this is going to happen in fairly short order, they got approval from the s.e.c. bob's telling me now. this could open, you know, a matter of minutes here, bob. yeah, maybe 20 minutes or so. >> we need to find out what the amendments to the s-1 and whether they are material. >> and the broader market continuing to climb. got word with the jump here the dow is on track for the biggest weekly gain of 2014 despite some of the volatility. >> despite yellen. >> despite the ukraine. this morning darden restaurants set its third quarter earnings sank 18% as olive garden and red lobster continue to perform poorly. the competition has been increasing as newer fast food and casual chains expand quickly and mall foot traffic is declining. we're joined by the ceo of cke restaurants the parent of carl
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jr's and hardees. good to have you on. >> good to be here. >> the competition couldn't be more fierce between yourself and the products and the brandts that you have and the mcdonald's and the wendy's. how are you standing out from that crowd? >> very well. we had the system-wide sales were up last year significantly. we added 150 restaurants domestically and internationally. right now we're promoting an extra bacon cheeseburger in conjunction with the x-man movie. when mother nature cooperates, sales are very good. and brands are doing very well. obviously when people can't get out of their houses and go to the restaurants, sales go down and i think you see a lot of that in the numbers. but the weather will change. the weather will improve. and we'll get back on track. >> the weather, you're saying had a significant impact on your business lately? >> well, i'm in california. so, less here. but there in new york where you are certainly and we've got a lot of restaurants in the midwest and southeast where there were days where they couldn't open. this is one of the worst -- one of the worst winters on record.
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and that does affect sales when people can't get out of their houses. they feel like they need to stay home. they're afraid to go on the roads, that will impact sales but, again, it's a transitional thing. next year we may have a good winter and sales may be way up and we'll all think we're geniuses so we'll see what happens. >> you've had one heck of a drought out there in the state of california. so, it's not just out here on the east coast in terms of weather impact. you paying more for your fruits and vegetables for the restaurant? >> not yet. but we think that will hit soon. i think the prediction for inflation in food costs went from 2.5% to 3.5% for the year based on what's happening with the drought out here. so, it could well have an impact on the food. but i think if you're looking to the business, if you're looking to your cost structure and your pricing, you do have to anticipate that food costs are going to go up. particularly beef. beef has been rising very
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rapidly. >> and pork, too. and i know you are piling on the bacon. >> pork, too. >> in a hurry before it goes way up. >> i want to ask you about some of the rivals in your space. zbarro filing chapter 11 and quiznos, what kind of mistakes are being made and how difficult is an environment is this? >> i think there were circumstances that were institutional to those particular brands. i think the way they were run, the way they've been managed over the past 10, 15 years. those are some of the contributing factors. there's a lot of competition out there but there always has been. there's big competition from mcdonald's and from wendy's. they are coming online but they're really not impacting our sales that much.
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they don't have the drive-through, they don't have variety. they've got other issues. i would say we're not worried about the competition, but the government and the weather than the competitors at this point. >> where are we in your view on the discussion about the minimum wage, sick leave, obamacare? i know you've been quite vocal locally that actually you don't believe the country is in the right place. how do you shift the debate towards job creation as you see it? >> well, i think that's one of the reasons i agree to go on shows like this, we're not a public company, so our stock isn't traded, this doesn't help the stock much. but i do appear on these shows so we can make the case for letting the government -- allowing us to create jobs. the government right now the policies of this administration discourage job creation. we found out a couple of weeks ago that obamacare and other government policies actually discourage people from working and now we've got to manage the -- the president wants to
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pay overtime to managers basically paying them to log hours as opposed to manage. so if you're discouraging job creation, you're discouraging people from working and you're discouraging american managers from managing, how can you expect the economy to recover? how can you expect jobs to be created? i think the decline in the labor participation rate is basically due to these policies that are not sprg a very positive impact on the people that are out there unemployed. >> forgive us, we got to run. we appreciate you coming on. >> i can hear it in the background. >> we have an ipo that's just opened behind us after a lengthy delay. that's a-10. the stock was priced there -- the ipo was priced at $15. it has finally opened lower. which can only be seen as a tremendous disappointment just given what's gone on with recent ipos and the fact that you've got six today alone. bob pisani had mentioned to us they had to file an amended s-1 with the s.e.c. that caused a substantial delay in the opening of this stock. >> might be why as it's lower as
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well, if you don't know what the amendment is, do you want to hold the stock? it's a big unknown what that might be. >> exactly what the lawsuit was that was the reason for the s-1 to be filed, the amended s-1 to be filed. it's unusual to have a delay without getting what is call an effectiveness from the s.e.c. they have to approve the s-1, and we never talk about it because it happens routinely and usually you cross your "is" and dot your "ts" when the company is ready to go public the night before. occasionally wuc allally once i something happens like an s-1 has to be amended and the s.e.c. wants to take a closer look at whatever happened. regardless the company is now open and we'll never know whether that, in fact, caused the stock to open a little bit lower than its initial price.
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>> at the open it looks like it's fighting off the earlier losses down 8% now cutting that in half. we'll continue to watch the new ipo. he's been an early investor in some of the most success start-ups around. we're talking burch box, rapid genius, what is he looking to invest in next? the candy crush deal, ben lere lcl joining us live. joining us live. on my journey across america, i've learned that when you ask someone in texas
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investing in start-ups is certainly a risky business. it's hard to know which companies will take off and which ones will fail. the carlyle group's co-founder david rubenstein knows it first hand. he was on "squawk box" earlier today talking about how he missed out on a big opportunity. >> i had never heard of it. everybody else told me they had heard of it and it was air b & b and his company may go public at some point at a higher market
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value than mine. in three years his company might be worth more than in three years than mine in 27 years. >> how do investors pick winning start-ups? here on set is ben lerer, ceo of thrillist media group and he's invested in buzzfeed, in the very early stages, obviously those have been home runs and these people know them very well. and you here on this big ipo day, not necessarily the goal of a lot of your start-ups. >> theoretically it's the goal but we've found there's a really robust market for acquisition right now and a bunch our businesses as they've sort of grown and been on the trajectory have gotten picked off early. it's not necessarily the end goal. >> how many start-ups are you in right now? >> we're in over 200 start-ups which -- good news behind us. i think -- >> just ignore it. >> do you know why they are cheering? they're cheering because the stock went positive for the -- the stock went positive for the first time after opening lower. >> a-10.
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it opened down 8%. >> tell us about some of the ones you are interested in. >> you mentioned a few buzzfeed and maker-bot which is a 3-d printing company for us a company called burch box is another. for us though we're investing in the earlier possible stages of businesses. >> seed capital. >> it's seed capital. >> you are throwing it everywhere and hoping that one bites. >> knnot quite. >> it's when a company is beginning to build and at times it gets tough. and then they can be left to kind of just flay on their own. >> absolutely. >> while you are looking for new ideas. >> for us the strategy is founder focused. we're investing in people not necessarily businesses. we find a guy or girl we think is incredibly intelligent, really, really capable and we ultimately write a check into them. >> can i ask you about thrillist? can you define in a nutshell
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what thrillist? >> we are sitting at the intersection of media and commerce. >> it's a men's lifestyle brand with a lot of stuff in it online. >> yes. what >> what's really interesting you defined e-commerce into three waves. the first wave was ebay and amazon and then was guilt and fad, you think you're the third wave. what is the third wave? >> like you said i think sort of commerce 1.0 was fulfilling existing demand. easier, faster, cheaper. i know i want something. i go, i search for it. i buy it. commerce 2.0 was the idea that sort of a company would inspire you to want to buy a product that you didn't know you wanted in the first place. >> what's an example? >> an example is you -- guilt a is great example. you wake up that morning and you see a deal or an offer for a product that you didn't know you wanted to buy something that day but you get inspired by great storytelling, by a great deal. sort of timing. >> come to the third wave.
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>> the third wave -- their lives. will sort of create an exclusive run of a limited edition sneaker that will get you to come into the store but ultimately you're buying staples. guys s that classic bricks and mortar retail, isn't it? >> it's just bridging the gap between what people want and need and having both of those things. >> what's next? you've bonn done e-commerce and the content. >> it's about doing the vertical expansion. we cover gear gadgets and technology at super compressor and fashion style and jack threads. i think we think about other categories interesting, business. we think about fitness, and we think about women. >> you're thinking at an ipo? >> i will. if it's going to go like this,
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absolutely. >> all right. thanks very much. >> thanks. we're rallying into the weekend. up 90 points on the dow. let's send it over to dom chu. >> check out shares of visa and mastercard. visa spiking up toward session highs. this as u.s. federal appeals court has fluld favor of the federal reserves plan to cap debit card swipe fees at 21 cents p this is a victory for the payment networks and financial firms and perhaps a blow to retailers looking to, again, for this decision to go the other way. so visa and mastercard up on news that a court has ruled that those debit card swipe fees capped by the federal reserve is a good thing and it's going to go it that way going forward. big deal here for visa and mastercard. >> visa, especially, looks like it's hopping on that news. >> thank you, dom. city ahead on the show, re/code's kara swisher is here
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want to do a quick check of opening just behind us here. that stock did open lower but has since reversed itself.
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forgive me for looking over my shoulder here but it's trading at the post behind us. it's up a little more than 4%. priced at 15, opened again lower. there it is. it's been pretty active. they had to do an amended s1 with the s.e.c. and that caused a significant delay. not because apparently of a lawsuit has has been suggested but the company just saying that because of a claim that was made by an individual that tig last moment, simon thanks had to do an amended s1. this is the week the fed dropped language on unemployment rate thresholds, stating that it will now monitor a wide range of information on the job market and inflation on the economy before approving any rate increase. in other words, it's time for the santelli exchange. take it away, rick. >> thanks, simon. it has been an exciting week and even more exciting now. when you talk about the fed, you
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talk about the yield curves, one name always comes to mind, that's professor john taylor. thank you for taking the time. i know you've been extremely busy, professor. >> enjoy this. >> listen. if the john taylor rule was in place right now what would the overnight federal funds rate be? >> probably about 1 1/4, 1 qurtd% if they started this earlier but obviously they're not there yet. i expect it will be a while before they get there. that will be about 1 1/4% given where we are in the economy and inflation, gdp growth. >> i'm going to throw politically correctness out the window. i do that often, i guess, po pro fesser. would you agree or disagree with my notion that the exact opposite of a rule-based premise to central banking something like the taylor rule is the opposite of forward guidance? am i on solid ground?
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>> certainly the exact opposite for the way forward guidance has been played out so far. they basically change it, you know, change it five or six times since it was put in place. that's not anything like a systemic rules-based policy. it's just trying to describe what they think should happen. so it's very discretionary. i agree with you in that respect. >> all right. let's take this conversation a step farther. in many discussions i have with euro dollar option traders, they believe that the extreme central banking that we've seen basically going into the sixth year is going to have and leave a permanent imprint on the financials system analogous to financial entitlement. would you agree or disagree with the kind of the continuity or the logic of that statement? >> well, i think it's likely to happen but i'm hopeful that somehow central bankers will realize that these policies just haven't worked very well. they haven't had a great recovery in the u.s.
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it's been quite disappointing overall. hopefully it will get better as the tapering continues. but the truth is, we could get back to a much better policy like we had in the '80s and '90s. things work pretty well. we didn't have these big crises like we've had. i'm hopeful that with people talking sensibly and maybe with some changes in philosophy that we get back to a better policy so these predictions don't take place. it would be bad if the whole financial system becomes so dependent on one government agency. >> right. and i mean, a conversations, of course, then go into the boom/bust cycles. let's move on to another topic. when we consider elections coming up, what i find very disappointing is it seems as though lately whether something is untrue or factor opinion, if you say it enough you certainly do get a wider audience of belief. how can we go forward if we don't assess accurately what's
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behind us? over the last 24 hours i've seen six pieces on the news in the newspapers, rehashing things like the stimulus and seeing words especially out of washington say that there's no doubt that the majority of economists believe the policies work. what would you say to that statement? >> i don't think that's true. you have to keep saying it's not true. huge debate. i think the experience of the stimulus package we have had recently just confirms suspicions that they don't work very well. there's going to be people on the other said. to say that most agree or everyone agrees is not right. i've written about that. you list people in careful studies. the only way to come ba it is to keep doing it and repeating the facts about what actually happened. i think the good thing about it here is most americans realize that a stimulus package didn't do very well. the word stimulus is kind of a dirty word, in fact. >> final 20 seconds. just a quick answer to the following. give me the number one issue in your mind that is negatively
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impacted for the jobs regarding keeping interest rates too low for too long. >> i think the main thing is the markets don't know what to expect, is a great deal of uncertainty, unpredictability, i call it, where we've seen in the past with strong recoveries and strong economies is a predictable fed. we're not getting that right now. >> excellent. i hope you have a great weekend. it really has been a pleasure talking to you, professor. back to the "squawk on the street" gang. >> okay, rick. thank you very much. in an hour on the "halftime" report. >> spring housing summit. >> i've gone back to the beer aisle on "street signs" to talk about the water shortage. >> happy hour starts early. >> very special hour. watch this, of "squawk on the street" starts right now. >> thank you so much, simon. of course, we're at post 9. i have a special guest here today, andrew. >> thank you for having me. >> "squawk box" here, double duty today. >> double duty. >> it's 11:00 a.m. in new york.
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8:00 a.m. on the west coast. here's what we're watching. the first days of t satya nadella trying to make microsoft ceo an offer he can't refuse. it is the ipo crush, candy crush, it is, as king gets set to ipo. what does it take for a mobile game maker to survive? a ban on twitter as it celebrates the eightth birthday. we go behind turkey's controversial move. and we will take you to the site of a mystery campus in silicon valley. who is the mystery tenant? we have clues. first, we want to get to the squawk beat where we talk about the latest in tech. if it's friday, that means that kara swisher of re/code joins us early from san francisco. as always, we have jon fortt with us here at post 9. we've got to get to your microsoft exclusive in just a emt no, but first, we want to get your thoughts on reid hastings, the netflix ceo blasting internet providers, particularly comcast, which is this network's parent company, hastings says netflix shouldn't have to keep paying what he calls internet tolls. of course, this comes just weeks after netflix and comcast inked
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a deal to maintain some of the higher speeds. kara, what did you make of this blog post when you read it? >> it's right now net trneutraly is being debated. i don't want to pay the toll but i paid the toll in order to have the good consumer experience. the idea, i will do it for now to preserve my business but is this the right way to go. and so it's part of a larger lobbying effort. >> kara, what do you make of the fact that he made this net neutrality argument about something that's arguably not part of net neutrality. comcast on papers will hard committed to the net neutrality rules. this is about interconnect. why is he mixing these two issues? >> these are going to be increasingly important to his business in order to connect things. and his argument is that the isps have control over his business that they shouldn't have and perhaps congress should step in and make it cheaper for him, presumably, so he doesn't have to keep paying tolls. >> is this a shot across the bow
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across the comcast/time warner action? extracting something from that deal, trying to block it? >> i don't think he's going to block it but it certainly is a good opportunity. reed always takes his opportunities and makes side comments. he always does that, makes a commentary on that. it's very -- it's good for his business to cause a little trouble for comcast and the other cable operators. so here's a good opportunity to do so. >> were you surprised only because i thought there was some side deal that was made. when comcast made the deal with netflix i thought that meant e reed was zipping up. >> reed shut up, no. >> he didn't want to do it in the first place. seemed like a fairly am mickable deal when it happened. after the comcast deal happened everybody thought, okay, this is the first step in netflix inking a deal with verizon and comcast was just the first step. but we haven't seen any of those. >> i think it makes sense what kara is saying. here's a moment where he's got leverage.
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comcast needs something. netflix is the primary example of the service that everybody loves that they're worried about. stifled under net neutrality. why shouldn't he ratchet up some pressure to be sure he's in a good position down the line. >> who is right? in all this. i know we've got to get to the next topic. kara, who is right? >> i'm not picking a side on this one. >> too many dogs in this fight. >> exactly. >> it's a tough one to comment on but none the less the debate will continue. kara, we have microsoft which san interesting stock. satya nadella has been in the job for a month but you had an exclusive where he recently impressed about 120 senior executives at the company's first off site where he was leading it. he laid out the groundwork for the future of the company and told execs that they needed to behave like what he called challengers rather than followers. and then there is an encounter with yahoo!'s ceo marissa mayer. also an interesting tug of war. she's been trying to get out of the deal with microsoft apparently and to reconfigure yahoo! to be a core search
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company. kara, first about the off-site. when you spoke with microsoft executives how impressed were they with what they heard and how fis i believe were some of the goals he tried to communicate? >> i think it's the tone of what he's trying to do. long-time executive and is responsible for some of the slowness of microsoft to get to a lot of things. it's interesting that someone who was a key executive is saying we have to change. change is always good, right? if you say the word change you seem like a change maker. he's trying to get the themes that he's going to have for his tenure, i suppose, as being challeng challengers, don't act like we can dominate things, we've been followers too long. it hasn't been communicated to the troops at microsoft quite so clearly. i think that was a good idea. >> kara, on the search thing. one of my cnbc predictions for 2014 was that marissa mayer would try to maybe get bing from microsoft when she's got the proceeds from alibaba. what do you think are the chances of that happening if she's able to convince satya
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around others that they will stay on azur and continue to give them benefits? >> i raised the issue at the bottom of the piece. i don't think it's for sale. it's integrate into microsoft's services i don't know how you could pull it apart. it's in xbox and in their phone especially. and so do they want to give up a core feature and a core ability. and i'm not sure they want to do that. i think she's going to have to build it herself. >> the question is, if she builds it herself, can she? >> well, money buys a lot of things, doesn't it, andrew? i think she has a lot of money. that's a lot of money to hire back these people. search is changing. it's not the same web search. it's mobile search, streaming search. there's all kinds of new areas. she thinks she has this expe expertise and she does have an expertise in search, that she can win here. she's not as great in advertising but she certainly does know search. >> there's the nugget of marissa mayer asking to get out of the
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microsoft partnership. what does nadella say? >> i don't think she can actually get out of it until next year, the five-year mark. she can claim the performance isn't going well. >> we will see what happens there. it is also an important day for twitter. it's the eighth birthday. and a day when turkey is celebrating by trying to shut down the site. turkey's prime minister saying, quote, we'll eradicate twitter i don't care what the international community says. of course, that's just drawing more attention and people are finding their ways around the ban. one of the main ways they're finding their way around the ban is the most simplistic form of twitter, kara, which is just texting a message to the twitter service. does this signify that there's really no way a government can actually ban twitter? >> no, they can't. i mean, it's not -- it's not turkey that's banning twitter. it's this very corrupt prime minister that's doing it because he doesn't like what's being said on it. it makes it more popular to call attention to how much damage they're doing to this guy. i think he said twitter, twitter
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shmitter or something like that, it's not going to stop people from talking. twitter is an effective way to do it. >> twitter has become this canary in a coal mine for uprising in places. i have a friend on the ground in turkey i was speaking to a few minutes ago. he's there trying to organize a head of these municipal elections, particularly the mayoral election in istanbul which they see as being key. and he says, by trying to shut down twitter, they've actually inflamed a lot of the public toward pointing to the fact that this regime actually is being a bit heavy-handed, which is the argument against him. we'll have to see where that goes from here. >> comments this morning from a key member of the european commission, nelly kroes. she heads the d.c. effort and she said, look, the european community is frowning on this move. this is not the sign of temperi speech. turkey is one of the most
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penetrated markets for twitter. it's interesting to see this done there. >> it's not going to last so it doesn't really matter. i think they're becoming more popular, calling more attention to it. it's one prime minister who doesn't like what's on it. i don't think the problem is twitter. i think the problem is him and what the people think of him. >> on a day where we're celebrating first tweets, kara, we looked up your first tweet. it was writing e-mails. >> at 3:00 in the morning. at 3:00 in the morning. >> what day was that? may 4th. you were early. >> yeah. >> what was that supposed to -- what were you trying to signify, sitting there writing e-mails. >> i'm signifying i work too much. i should have been something exciting, hanging with bono or something, i don't know. >> are we going to be tweeting in eight years from now? >> i am. i don't know about you. >> okay. >> all right. kara swisher, editor and chief of re/code. thanks. just a reminder toern watching nbc news group is a minority stake stakeholder in re/code and we have a content sharing partnersh partnership. tesla, along with the new york state legislator leading a
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news conference as we speak. phil lebeau has been listening to every word. >> andrew, this is all about state lawmakers joining forces with tesla really fighting back against the latest push which is happening in and make more restrictive in terms oft sales from automakers to customers in the state of new york. just a few minutes ago we heard from state assemblyman david buckw buckwald about why they called the press conference. >> the reason we're here, we're united in the belief that new york should not make the same mistake that new jersey did. new york should send a message that environmentally sustainable and innovative companies that want to produce jobs here in new york are welcome in the empire state. >> representative buchwold, that press conference being held at a tesla store in his district. he has two tesla facilities, 35
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jobs in his district. he says don't follow the same path that new jersey went down in terms of restricting sales. by the way, 600 vehicles sold in the state of new york last year. overall, the state sold more than 800,000. so it is interesting when you compare those numbers. and i get a lot of these questions. where are tesla sales banned, restricted, allowed, and here's the numbers as of this morning. three states have banned sales of vehicles from an automaker to the customers. not a specific ban on tesla but that's who it affects. texas, arizona, new jersey. sales of are restricted in some fashion in maryland, virginia, colorado, and minnesota. bottom line is, guys, we're now in a stage where we're going to see this state by state where they're going to be considering whether or not to change the laws or make them more restrictive. >> phil, thank you for that report. thanks for the context. appreciate it. we will be talking to you soon. we're getting ahead of the king candy crush ipo coming up. we're talking to the man behind the game draw something who sold
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his company to zynga. before we go that, rick santelli, what are you watching at the cme this morning. >> there's an old song "tie a yellow ribbon around the old oak tree," we're going to discuss more in-depth about the yield curve. will it give us a clue as to ultimate direction of interest rates. we're also going to tuck a little tech on where the ten-year yield closes today and what it means. all in about five minutes from right now.w.
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dow is up 108 points but not everything is on the move in that direction. >> shares of symantec are down near session lows, 13%, 14%. late yesterday, fired ceo steve bennett effective immediately after less than two years on the job. he will be replaced on an interim basis by a board member. he was on "squawk on the street" just last summer talking about how optimistic he was about the company's prospects. >> we've got a nice tail wind. so we're still losing share though, carl. i'm pleased with our progress but we're still losing share but we're making positive strides. so our goals over the long term are to get back as leader of the industry to gain share. >> se say man tech has been struggling. consumer ships toward mobile computing. entering today's shares were down around 10% in 2014 and 12%
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over the course of the past year. let's take a look at what's ahead for the king candy crush ipo. dan porter is head of digital. he's the former ceo of omg pop. he sold that company to zynga for $180 million in 2012. you also sold that in cash which was sort of the big win there, i think. >> yes. >> actually two years ago today. >> so the big -- would you buy into this ipo? >> look, on the provide, average person uses their phone 150 times a day. they look at their phone. and games is a number one thing on your phone. so if you look at the macro, yes, you want to be on the phone. you want to have a slice of people's time. but there's no doubt games is a hits business, right? and so you go up and when you're
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number one, you know where there is to go from there? nowhere but number two, number three, number four. >> you kind of shorted zynga. congratulations on one of the better timed exits in the past ten years. what troubles me is we see candy crush in decline and the question is whether they're going to have something sticky enough to make up that loss, right? >> yeah. look, i think in the short term there's no doubt. in a hits business you're going to go up and you're going to go down. but the one thing that king has that zynga has and others have is they have a huge infrastructure to know how to take advantage of that hit game. even though it goes down there's still going to be millions of people playing for a long tale of time and they're going to cross-promote other games to them. you've got value that's bigger than just the hit. >> what's your hindsight on the omgpop deal. a year after you sold it to zynga they took a big write-down, half the value. you left the company and they sended up shuttering the company, too. is there something you could
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have done differently to maintain that momentum? >> as they say hindsight is 20/20 vision. i think that it's really -- it's hard to say. the one thing that's challenging for a smaller company like us when you make a hit is you don't have that infrastructure to figure out how to ride that hit for such a long time. xa companies like zynga have a lot of experience with it and people. people are fickle on the phone. >> a hit like candy crush, you have a billion games being played a game. 188 million daily active users. that's a multiple of what you guys had. >> yes. >> is that something you can ride for a long time? >> i think it is something you can ride for a long time because this is the universe of people who like to play games on their phone and this is the universe of people who have phones. if you ask the people on this universe who say i don't play games on my phone but if you ask them if they play candy crush or draw something, oh, i do play that game. when you crossover to the game people to everyone, that's so hard to do. it's incredibly valuable. >> some of russ in denial.
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>> when you sold it did you know? did you know that was the top for you? >> no. i thought -- i thought we were going to do a game show, i thought we were going to do lot more. we had no idea. when we sold we were number one. i'm t not going to go to number zero from there. you have nowhere to go except -- and then the day you're number two, everyone is like, oh, you're number two. >> valuations, broadly. does this make sense to you where we are in silicon valley and gaming? >> it's expensive but so is real estate new york city. things in demand in the valley with expensive. yes, it does. >> thank you for being here today. big question today, who is behind that mystery tech campus? a massive building twice the size of facebook's hq going up in silicon valley. we are on the hunt for clues. that's coming up when we come back. back. (vo) you are a business pro. maestro of project management. baron of the build-out. you need a permit...
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welcome back to "squawk on
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the street." friday, never met a friday i didn't like. let's talk about technicals a bit. we all know that the 276 level is an important retraszment for tens. but like any important level, you know, i always like to think pac-man. the more bite you take out of an important level, in many ways the less significant it becomes. so when i see that the high yield close of 277 occurred wednesday on the fed meeting, yesterday, and now we're getting below it, i really have to question, what did the fed meeting really mean and why did the markets move the way they did? let's go back to may of last year when the ten-year note yield was at 160 and then, poof, in a short period of time it was at 260. what was going on there? we could go back and look the verbiage of the fed or step back, use our brains, and take an intelligent look at the notion that after all the years of central banks and crisis management moat that last they
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notion of the taper not in and of itself made the markets move but the notion that it is not normal for central banks to buy the paper of their own treasury for long period of times. so it was kind of a shock, kind of a slap. a certain kind of logic came into the market. i think the same could be said for wednesday's meeting. but the logic wasn't necessarily dictated towards the taper. i think all investors globally now understand that the fed really wants out of qe and they're going to get out of qe. by december, if they don't do one meeting within extra 5 billion, it will be 5 billion left. what did wednesday mean? i think it's the notion of what we are looking at on the taper, the slap is now the slap that normalization of zero interest rate policy is the next issue. i think it's as simple as that. now, we talked about yield curves. i always talk about them like everybody understands. all right. so here's a line that goes from basically two year.
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we could put all t bills and what not. the yield curve is like this ribbon. okay? if rate's on the long end move higher faster, short end, it steepens. vice versa. if you're steep and the short end rates start to move higher and faster but kind of flatten. what you saw after the fed was this flattening a bit. it really did zero in on, yes, we could say a t. two year because that's just odd. it's so closely aligned with the fed. remember, when people say the fed interest rates in the same sentence they can't really tell you what's happening here. it's where the fed is here and how they try to use that and, of course, qe, to try to make longer term rates to behave the way they want. what's important here is that the yield curve has been in the flattening mode and that's correlated with lower rates. but be careful now because i think it's all about the long end. if long end rates start to do what short end rates did, steepening is definitely going to mean higher rates.
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but if the short end comes down, that's steepening, in my opinion, is going to mean lower rates. so the yield curve is giving us a bit of mixed signal as well. we'll continue to handicap what technicals can do for you if you're trying to trade treasuries. kayla, back to you. >> professor rick santelli, thank you so much. enjoy your weekend, sir. >> you, too. a new mystery in the valley. coming up next, giant tech campus crops up in california. who is moving? "squawk on the street" is on the trail in san jose. trail in san : up so we're up early. up late. thinking up game-changing ideas, like this: dozens of tax free zones across new york state. move here. expand here. or start a new business here... and pay no taxes for 10 years. with new jobs, new opportunities and a new tax free plan. there's only one way for your business to go. up. find out if your business can qualify at
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here's looking at a live picture of what is presumably highway 101 out west. there's another mystery in the valley now on land. city of san jose has signed off on a ten building 2 million square foot complex. the catch, no one will say who the tenant is. josh lipton is on-site looking for clues. josh, what do you know? >> it's a big deal and a big secret. no one will say who is going to occupy this separations behind me, but it is huge. we're talking about 2 million square feet of office space, basketball court, swimming pool. expected to start construction this year. the estimated cost, $700 million. now, the mayor of san jose says he knows who the tenant is but she not talking, saying the tenant asked him to keep all of
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this confidential but he also says that this project is going to create thousands of jobs, generate millions in tax revenues for the city. the development is enormous. it's a campus twice the size of facebook's. it's a fortune 500 company. it's specifically a silicon valley tech company. recognizable name, we're told. it would need space to accommodate up to 10,000 people. there are 22 fortune 500 companies here in silicon valley. some names to think about. gilead has 6,000 employees. sandisk has 5500. amd has about 10,000 xwremploye. they could squeeze in. that's all employees, not just those in silicon valley. who is this mystery tenant? forget march madness. this should be your next office pool. guys, back to you. >> yeah, josh, it's already igniting twitter. someone telling me potentially it's sprint. not sure if that qualifies as a
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silicon valley tech company. jon, what do you think about this? >> well, you know, if not for the fortune 500 designation i might think maybe linkedin, they're growing quickly. it's probably a name that's expecting cloud growth. probably somebody from sought of area trying to come in quietly. they tend to want to come in quooi it. >> can i try to make this fun if what's the chance that two cains plan on merging it and using that space? >> boy. >> right? >> i don't know. >> then all of a sudden you have a whole new world of companies to guess about. >> that would be something we haven't seen before in silicon valley. >> josh, when you talked about the developer did they say this was going to be a secret forever? do you know when they will be moving in? >> no, no secret forever. right now the mayor is just -- in fact, the mayor says he's the only one who knows right now. i did speak even to council members from san jose. they don't even know. so just the mayor knows right now. no timeline on when we're going to get this name. >> maybe it's a new cnbc bureau in san jose and they're just not
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telling you. josh lipton, thank you for now for bringing us that story. >> growing in leaps and bounds in the valley. s&p setting a new all-time high. next guest out with a new report that is bullish on equities but warning that investors need to resist the temptation to overload that. larry kantor is a managing director and head of research with barclays. good morning to you. the reports name here, a balanced portfolio still makes sense. i have to admit we were joking. when does a balanced portfolio not make sense, larry? >> well, early in the cycle, actually. we were the first oning out in march '09 with a green shoots piece that nobody believed. that was a generational opportunity to load up on stocks just because they were so cheap. if you didn't believe we were going in to a depression and we didn't. it was a tough sell then now, then, and one of the points, andrew, it's now an easy sell. noerds, i go around and see investors all over the world. everybody loves u.s. stocks. people, it was about a year and
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a half ago, turned super optimistic. not only that -- sorry. go ahead. >> but when you say balanced, are we talking 60/40 balance? what do you want to do with the stuff not in equity snsz alternatives, bonds, what do you want to do? >> right. good question. i would say the globe plate standard of asset allocation, 65/35. we're still saying overweight but not as much. maybe 60/40, 55/45. and that's against the grain. given the performance we've had in stocks, everybody is so enamored of them you can understand why. it's still a great environment forum. and yields are still very low. what we're saying is they're very good hedge. one, we haven't had a correction in almost two years, a real correction. and not only that but bonds have sold off enough from last year, in a 2 1/2%, 3% range for the ten-year, that's reasonable. we will be a good hedge if we do
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get that correction. we saw a mini version of that in january, remember, stocks pulled back 5% bonds rallied. that probably wouldn't have been the case when bonds were trading at 1 1/2 but they are in this range. so that's what we're thinking about, is more balance is sparter right now. if we did get that correction, we would be buyers of stocks still. >> larry, you know, we did see a sell-off in bonds in the emerging markets. but you say in your report that now might be the time to jump back into some of these, brazil, india, i'd ndonesia might be attractive. how do you separate the wheat from the chaff because some people are jumping into argentina and turkey. >> one, we look for fundamental improvements. what we saw -- and it's really over the last year, it accelerated early this year -- is the typical, what looked like an em crisis, poring out of emerging markets. currency depreciating significantly. policymakers hiking rates and
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the whole thing. where do you look for? you want to see the current account balances improving. and they are in some of those countries. it's not just import collapse but also exports doing better. you want to see inflation stabilizing or coming down. in other words, they've hiked rates enough. and you're seeing that also. and the countries we like as you pointed out, india, brazil, we're still nervous -- >> china, right? where are you on china? >> china is a different story. we have a different short run. i think in the three-month to six-month window the next move in growth is up. we're seeing policymakers pull out the same thing they always do. easier credit. bringing forward some infrastructure projects. you've seen short-term rates come down. the next move of gross is probably up. go beyond three six months we're nervous. we see that as a brewing problem. and the odds of a serious accident in the world's second biggest economy is pretty high
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over the next few years. >> larry, what about gold? no one expected it would outpace stocks, outpace bonds and pretty much every other asset class so far this year. is that run about over or will that continue? >> i think we're okay for now but i don't want to be there. one of the things we were remined of the other day is the fed is not going to keep rates at zero forever. as we get closer to that, attend of year and people start pricing in more i'm nentd fed rate hikes, i think gold takes another leg down. so -- and always remember, gold is an asset that has such a high speculative element in it because so little of a demand is for actual usage. so many people that play gold. that makes it much more volatile. and more difficult, i think, to trade. once you get closer to tightening monetary policy in developed markets i think that's in trouble. >> larry, thank you so much. if gold is doing down, hedge
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with bitcoin, i don't know what you do. coming up though, he is paid to update wikipedia. a new era in crowd sourcing with our next guest, wikipedian in residence. why you need one. on twitter's eighth birthday, look. carl, icahn's first tweet, twitter is great. i like it almost as much as i like dell.
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if you guys only knew. up next live at post 9 on the new york stock exchange. stocks taking off the yellen jitters and hitting record highs, so what's the next big catalyst the pros are watching? we're going to take that to the traders. and big worry, why is goldman sachs calling a top performing bank a big worry? can the housing market kick its winter blues? from the brokers to builders, all the angles in a special halftime spring housing summit. that's coming up, kayla, from right behind me at post 9 in just a bit. citing wikipedia in a research paper may still be a faux pas but it's now the assignment. the campus hired the first wikipedian in residence to advise professors on the task of
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editing articles for wikipedia. it's first post of its kind at a u.s. university. certainly not the last. kevin gore man is their new wikiped wikiped wikipedian in residence. thanks for watching your wi wikipedia uniform. i know a lot of people probably want that t-shirt. you used to do this as a volunteer. how did it involve into an actual paying day job? >> i did previously do similar work as a volunteer after i graduated. i essentially suggested to the professor who i had been volunteering with that it would be a really neat idea to expand the scope of the program to cover more courses, other types of content and generally make it a larger thing than it had previously been. >> so how do you actually get more credibility on to wikipedia? i joked on twitter that my wick media page says there i was born in atlanta, georgia. that's not true, i was born in indianapolis. if you were going back and combing through the content and
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making it accurate, making it more diverse, at what point does that become a real encyclopedia and legitimized sort of information? >> the question is what is a real encyclopedia is an interesting question because people previously thought of brittanica as real encyclopedia but wikipedia or the english version of wikipedia contains north of 4 million articles and dwarfs brittanica and redefined what it is to be an encyclopedia. >> a lot of it isn't accurate, that's the problem. >> a lot of it is copy edited. we have an idea that wikipedia articles should be going off of what reliable sources say. so if there is an error in a reliable source such as a news report, then that error does tend to get propagated into wikipedia. but a lot of what i'm doing at berkeley instead of focusing on copy editing existing content about that sort of thing is
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focusing on the areas where we currently have no content whatsoever. >> so, kevin, give us an idea. what the day job. day to day are you going and trying to find courses and information from professors and trying to put that on and then does it become professional for berkeley at some level? >> i don't think it really becomes promotional for berkeley at any meaningful level just because most of what i do is promoting the use of academic journals and other high-quality sources on wikipedia that are not berkeley specific. lots of our students are citing things from columbia or from nyu or other well-regarded universities. a lot of what i target is trying to address the system bias that is currently present in wikipedia. we're viewed by about 550 million people -- different people every single month but ear onliy edited by 80,000 peope and 30,000 of those people edit the english version of
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wikipedia. >> so, kevin, what is the coolest thing you've done so far? what's been your favorite project? >> well, this is still a position that's relatively new at berkeley. i definitely have done some neat things so far at the class i'm working with in the environmental, science, policy and management dealing with environmental justice is writing some really, really high articles like high-concept articles that you would expect we would already have. things like the topic of climate resilience doesn't currently have any wikipedia article, even though it's pretty much a hot button environmental science issue. beyond that, some of the other classes that i've worked with previously have written things like the first wikipedia article about infectious disease in prison which is another thing that you would think wikipedia probably would already have this. >> right. >> very cool. then on top of -- on top of that i'm working with some of
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berkeley's galleries, libraries, archives and museums to try to get some of our historically significant media collection such as images of the free speech movement that may not be available anywhere other than berkeley to be released. >> i need your advice on something. it's a bit of a selfish question. the people say you shouldn't try to edit your own wikipedia page, companies shouldn't edit their own pages because it gets a little conflicty and people can see where you're coming from and all. but what's your recommendation? there are a lot of people out there who have especially reputation issues that they're trying to deal with. i know this is sort of off the academic issue but you live there within wikipedia and you see a lot of people battling it out over these types of things. >> generally if the issue is one of absolute slander, if it's just a statement that's both offensive and just not at all correct, then even if it's ability yourself, it's completely fine to just totally remove it from the article. it's usually good to disclose
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that you do have a direct connection to the article when you're doing so. if it's a slightly less clear-cut case, then it's a good idea to make a mention of it on the talk page, potentially -- >> well -- >> sorry, go on? >> no, kevin, i apologize. we do need to go for now. such an interesting discussion. and wikipedia obviously a well oiled machine. as we were talking someone did update my wikipedia page. i don't know if you're typing on the iphone below the screen there. well-done, wikipedia. kevin gorman, residents at u.s. berkeley. >> that sentence about how wonderful you are, too, i did that. >> you did? >> it was interesting. harvard is looking for a wikipedian residence. i wonder if he'll trade up. what are experts saying about janet yellen's performance and the market's reaction to her fist news conference. steve liesman is at brookings today and he's got interesting
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behind the scenes thoughts. steve? >> yes, andrew, you've been at these things. it's a high-level conference. a lot of former around current fed officials in monetary policy, pers and they're talking about big things like america have abenomics, what's going to happen to interest rates policies over the short term. what do you think of what happened at the yellen at the press conference. most of them are just saying, hey, it was probably a mistake that was made and not saying at least six months or six to nine months. and almost certainly no intention on the part of yellen to make markets think that the fed was accelerating the plan or the timetable for raising rates. and she's going to have to come back and really be more specific about this but there's a lot of balls in the air and she had to care one of thing which was the 6 1/2% threshold thing and now she has to come back and provide more clarity on interest rates next year. there's a lot of work to do. generally giving her high marks for how well she did except for
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that one thing. but not uncommon, everybody, saying for a new fed chair to make a mistake or stumble out of the gate. andrew? >> thanks for that, steve. next up, carlisle's david rubinstein on air b and b. is the start-up worth the 10 billion where it's valued? so alo hidden fees on savings accounts? that's right, no hidden fees. it's just that i'm worried about, you know, "hidden things." ok, why's that? well uhhh... surprise!!! um... well, it's true. at ally there are no hidden fees. not one. that's nice. no hidden fees, no worries. ally bank. your money needs an ally.
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welcome back to post 9 at the new york stock exchange. ipo frenzy today would air bnb be on that path? they are in talks to value the start-up at $10 billion. first reported by the "wall street journal." carlisle's david rubinstein had this to say about airbnb on "squawk box." >> i had never heard of it. everybody else told me they had heard of it. it's airbnb. i was just saying, i think 32 years old. company may go public at some point at a higher market value than mine. after three years his company might be worth more than mine after 27 years. >> he's not wrong. carlisle has close to $2 billion in assets, not even a $2 billion market cap. the disparity between these two companies is large but what does it mean for a company like
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airbnb when you're fund-raising round includes tpg, fidelity, t. rowe price. >> it meends the end, i'm going public soon. that happens every single time. is that the dumb money or the smart money or just the late money? >> it's late. it's hard for me to say it looks hard at this point. we talked about it this week. running into regulatory hurdles. airbnb is running into it and it is going to continue to run into much the same thing. betting on airbnb at this valuation especially is betting they're going to be able to leap over those and probably disrupt the hotel industry at a level that would be really impressive if they pull it off. >> david rubenstein not only does he not know about airbnb but i give him a free pass. a friend of his, i think his sons or something -- >> daughter went to harvard. >> tried to get him to invest in facebook. $10,000 investment and would have been worth so what now. >> when people ask what his
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greatest investor regret is, a guy like that must have few regrets but that the one he names every single time. >> high on my list of regrets. we have a couple of other stories. world water day is tomorrow. cnbc is looking at the business opportunities in water. our own jane wells is in -- where is she? she's watching the fracking industry this morning. good morning to you, jane. >> hey, guys. yeah, i'm in buttonwillow right in the middle of the central valley. there are a lot of industries competing for water in drought-stricken california. here's a new one. it's small but growing. the oil industry. that's because it needs huge amounts of water to frack and massive shale behind california surface if accessed could be a guide mine for water suppliers if there's any water to sell. water currently is plentiful in pennsylvania and ohio where companies like american water is supplies 3 to 7 million gallons per well depend ok depth. cfo and soon to be ceo susan
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story says this is still a smart part of her overall business but it's growing. >> in fact, in 2013 we did more than we had done in 12 ands the 11 combined and looking at 2014 at building more water lines to provide water services for drilling and hydraulic fracturing, more than we even did in '13. >> now, they are building out pipes to take water directly to the sites. this takes trucks off the road. it also brings water to rural customers who have never had access to it before. at the same time they're continuing to monitor the water a mike shaur it is safe to drink. that is a huge issue. hold on. gas prices are coming down and aqua america which also provides water to that industry, says that is slowing down some fracking for now. >> this is our hope for national security in the energy business. and the more gas that's in those wells the better it is long term for our society. so if it takes us a little
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longer to get our investment and get a good return on net investment, that's fine with us. >> jeffries says that hydraulic fracturing would be a $1 billion a year business to water companies. that's if it isn't stifled by regulation or falling prices. and, guys, if there's enough water. back to you. >> thank you, jane. bitcoin exchange mt.gox has found 200,000 bitcoins in an old format wallet that was thought to be empty. which brings us to this morning's squawk on the tweet. what else is in mt.gox's for gotten digital wallet? we'll tell you when we come back in just a moment.a we only know one direction: up so we're up early. up late. thinking up game-changing ideas, like this: dozens of tax free zones across new york state. move here. expand here. or start a new business here... and pay no taxes for 10 years. with new jobs, new opportunities and a new tax free plan.
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request a prospectus or summary prospectus with investment information, risks, fees and expenses to read and consider carefully before investing. hi, this is kermit the frog and you are watching "squawk on the street." sounds like the name of the new muppet show. >> welcome back. embattled bitcoin exchange mt.gox has founded 200,000 coins in a wallet that was thought to be empty. bring us to our squawk on the tweet. what else is in mt.gox's for gotten digital wallet? drew twees, they're blockbuster video rental card. bitlint. danny tweeting, 200,000 shares of enron.
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i think that may be my winner. matt tweeting, jimmy hoffa, elvis, and ohio state in the final four. >> as long as he didn't say unc i'm okay with that. they play tonight against providence. >> how are you doing in the bracket? >> doing okay. >> you haven't lost yet? >> i didn't have harvard. >> how many brackets do you have? >> one. tim cook tweeting today enforring coach k and duke so it's okay, tim cook. >> he does a bracket? >> i guess he does. >> a bracket on the -- tim cook, the president, buffett, everyone is in it these days. we want to get a check on the markets. the dow is off the highs of the day. off 92 points. s&p an intraday high. right now, 1880. we have a lot of earnings moving right now. nike, tiffany, and, of course, some of the banks moving on the back of this stress test yesterday, as well. so a lot of stuff to watch today in the market. right now it's still green day though. >> green day, it's the end of st. patrick's day. >> is that a full week of
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festivities? >> for some people in is color coordinated with all the green arrows. >> a lot of green for the ipos today, too. i know a lot of people will be watching those including the halftime crew. >> thank you for having me. >> thank you for coming down here. you'll have to do it again some time soon. >> that's all for "squawk on the street" today on this friday. have a great weekend. let's now send it over just a few pefeet away. >> guys, thank you. both have a great weekend. we'll see you on the other side. welcome to the "halftime show" today coming to you live from post 9 at the new york stock exchange. and here is today's big game plan. stressed out. the hits and misses from the big bank test. why goldman says it's worried most about one stock many of those traders love. #anniversary as twitter turns 8 today. can a social stock reverse its recent slide and trend higher? halftime's housing summit. we're going to see where your money works best right now on the home front. let's meet today's starting lineup, jon and pete najarian are here


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