tv Squawk Box CNBC January 26, 2015 6:00am-9:01am EST
. and "squawk box" begins right now. >> announcer: live from the most powerful city in the world. new york. this is "squawk box". good morning everybody. welcome to squawk box on cnbc. we're back from the swiss al. s. got back just in time. if you live on the east coast or had any intention of traveling to or from the area this week, take note there's a potentially historic blizzard forecast to hit the region today or tomorrow. people are getting ready for a 1 to 3 feet. that's right. you heard that right. 1 to 3 feet of snow emergency. emergency management teams are warning people to stay off the roads. people are preparing if they need to be here. we got back right in time. >> we brought it back. we brought back the al. s. if there is like a blizzard tomorrow morning -- >> there wasn't even snow --
>> no. it looked good. if there is a blizzard tomorrow morning, you know, we're doing the show from out there. >> good. perfect. three hours. >> i'm bringing the same suitcase here. we can set up. >> i'm surprised i'm sniffling and have this. they have nine hour flight into head winds. you have three straight days. we walk a mile outside to get to where we're going to do an outdoor broadcast for three hours. and now we're back. but -- we'll -- >> we're ready to work. >> we'll persevere. >> we're ready. we have everything set up and ready to go. >> you're sneeszing already today. >> if you're traveling today. look out more than 3200 flights have been cancelled even before the first snow flakes began to fall. i saw a few flurries this morning. candidate is covering the story from new york's la guardia airport. the situation on the ground? >> reporter: that's right. the winter storm we're talking
about expected to bring up to and over 2 feet of snow to select areas in the northeast. we're here at la guardia airport this morning. things are pretty quiet. most early flights haven't been significantly delayed or cancelled. we note the bulk of the storm is expected to hit later today and this evening. flight aware.com is tracking the cancellation and delays in real time. today already more than 1800 flights have already been cancelled. tomorrow more than 1600 flights already forecast to be cancelled. now for the individual carriers what they're doing. delta is refunding you if your flight has been delayed, significantly or cancelled to select cities in the northeast area. they're also waiving the change fee if you're traveling today or tomorrow. other big names including united, southwest, jetblue, and american airlines being flexible with travelers waiving the delay and cancellation fees. if you're traveling to select cities in the northeast area many asking you travel before
january 30th. the port authority on sunday did send out a release saying they are fully equipped to handle travelers and help out people who get stuck in airplanes with cots and blanket and the weather channel this morning saying 28 million people in the northeast under blizzard warning and additional 11 people under storm warnings. >> thank you. we expect things will heat up a little bit later in the session and kate will be watching everything that is happening right there at the airport. this just happening. rkt and mwv agreeing to merge in a deal that would create a combined company to be named prior to the closing. it will create i guess they're talking about sales $16 billion company. $15.7 billion combined net sales and adjusted $2.9 billion. under terms of the agreement unanimously approved by the board of both companies.
stockholders will receive .78 shares of new co and rock will be entitled to receive one share of the new company on the cash amount in equal to the vying weight of the common stock during the five day trading period prior to when the deal closes. they get one share. this is basically rock tenn being acarekwarcquired for .78 shares. and the two market caps are similar. >> they're saying equity $16 billion. i'm wondering what the premium is or if there is a premium. >> what happened to my -- i don't have any quote up here anymore. we got -- i wish i could see rkt we decided -- there it is. it's up $1.13 premarket.
2 .78 shares of mwv. >> you get stake in the new company whatever you've got going into this. >> they're looking to be a provider of packages. you wonder if the online shopping for it will give more online left. >> what is driving this is the synergy or likely the cuts that say amount to $300 million. to be achieved over three years. >> we'll bring you more on that deal in a moment. beyond the deal and the blizzard we're talking about. there are other big stories on the watch list this morning. the top one greece as joe mentioned at the top of the show. the anti-us aausterity party winning. the leader opposed to measures part of the country's international bailout and said he would try to renegotiate greece's debt agreement. chris is going to join us from athens in just a minute on that. it's the front pages of every
paper. huge implications for europe germany, and elsewhere. the fed conveneing the first two-day meeting of 2015. starts tomorrow. other releases include durable goods, new home sales, pending home sales, and a first read on fourth quarter gdp. about half way through earning season at this point. norfolk southern among the names to post before the bell. we'll hear from microsoft this afternoon. >> let's check on the markets this morning. take a quick look at the futures after another rough session as we were winging our way back. i'm so confused. we're going to california eventually and i'm, like you know trying to figure out what it is in the different places. as we were coming back -- that was on saturday. hey, we were down. we're down another 79. >> last week was the first week the markets ended up for the week since the year began. >> yeah. but we -- this is going to be something that the market has to
digest. i think it knew about what it was going to happen. i don't know what it means for that june or whenever the rate hike is expected. i saw, i think we have bruce cassman on later. i was reading -- not in our notes but he was interviewed in one of the newspaper. he said i'm not feeling real sure about my june forecast for a rate hike. because how do you do -- i mean, these people over there are accepting negative interest rates just to get their money back over there. >> i read something from mark yesterday, too. he pointed out that rates in the united states have to come lower. you have to look at it as a global influence and the money from around the globe is going to be poring into u.s. treasuries when you get a yield there versus a negative yeeltd on the other places. he's saying he doesn't like u.s. stocks at this point. i would like to talk to him. >> the big story, also in the weekend wall street journal the dollar has become problem. if we raise rates the dollar is strong. we're talking about party for
the euro. if we raise rates the euro is stronger. the fed is in a box. we'll see whether that could be gdp on friday as well. we'll see whether it starts swinging away from raising rates to where they start questioning whether they come back and do some stuff again. >> the euro was at a 11-year low versus the dollar. the dollar index at 11-year high. not just against the euro but a basket of currency. a lot will play over with what we're asking today about whether grexit is a reality at this point. michelle cabrera has been standing by watching those situations in greece. what has happened after the election there. and she joins us right now from athens. obviously, michelle world markets are watching what you have to say today. >> yeah. grexit stands for greek exit as a result of the election. is the grexit possible? yes. consensus it is not probably. there is room in the negotiations. i'll explain in less than a
minute. it's a squawk tradition i show the newspaper. this is a newspaper that supports the party that won last night. the headline is nike. stands for victory. there's 40-year-old leader of the party celebration last night here as he took the mantle and began forming a government. he has been able to, even though he didn't get an outright majority. he won enough with a commanding lead it's been easy to form a government. he's expected to be sworn in this afternoon as prime minister, which is incredibly fast by greek standards. but winning may have been the easy part. the hard part comes now. because he has promised that he is going to renegotiate the terms of the bailout for greece. and one of the first things he wants to do is he wants to do a lot of things that are supposedly proibt hinted by the bailout. he wants to raise -- he wants to eliminate property taxes. he wants to raise the minimum wage. he doesn't want to do any
privatization. the bailout partners aren't going to like that. but last night it was all about victory and celebration response far we'll see whether or not he can manage those things. it's one of the reasons the fact they're probably going to come to some kind of show down at some point why we have seen some nervousness in the market. but at the same time he tried to calm international markets behind the scenes. the economic advisers have been speaking to wall street and london investment houses. i spoke with him late last week and asked him about what he would say to the united states after he won and what he would say to investors. >> for the united states the message for greece the next day will be a day of optimist of hope. i think that a victory of the people will be a strong message. of progress. >> should investors be
frightened? >> no. >> there's no inferior? >> no fear. so you've been talking about how yields in europe are so solo but take a look at greek yields here at this point. what we've seen is they're off the high but they're relatively higher. what is that telling us? there are concerns about a grexit. they're not as high as they used to be when we see the greek three year yielding 15%. now it's around 10%, 9%. that's a big improvement. we we have to see how the negotiation goes. guys, in march is when we really start to talk about when they might run out of other people's money. because of cash flow issues here in greece. because remember they're getting bail out money and paying it out at the same time. >> the -- they owe a lot of money. what month do they owe the money? >> june or july. like $7 billion. >> they don't have it. >> if you're asking me a
question, i can't hear. somebody in the control room -- >> go ahead. i hear you no. >> okay. they owe it. what month is it they owe i don't know a bunch of money. they need to borrow more money to pay back the money they owe. which shows you how great the situation is. if he decides to change everything they won't be able to borrow and pay it back. >> it could be a short honeymoon. >> right. >> right. exactly. so roughly three months. it's a peter paul situation. robbing peter to pay paul is going on here when you look at the cash fly of the country. that being said i have to tell you some of the reasons why greek yields have come down is because there are rumors -- they won't confirm them to me they're talking behind the scenes directly with the germans and whispering things in their ears that the germans like. very specifically, after asking many many people we think it's their promise to cram to stop tax evasion. to really clamp down on it and
bring in more tax revenues. that means taxing the rich more because they don't want to tax the poor anymore. but tax evasion as we talked about has been an issue. the imf was not satisfied with how it went necessarily into the previous government. that may be something that helps them bridge the gap with their lenders at this point. >> okay. all right. michelle, we should be westbound -- i guess saddened maybe that a country has moved so far left. it's for something -- you know i've been waiting for this. i like to watch the world turn. what is wrong with me? it means the whole experiment that, you know, having all the different countries with -- it's different than nebraska versus new york and not having the same currency. >> how do you have the same currency in greece the other places? >> it seems like an easy way to get around it and a way of making a shortcut. i think that bothered you. it was a shortcut way.
>> you're upset because -- >> i saw the right wingers tweeting over the weekend that talking about this person is happy that greece went communist. so for some reason i wanted these guys to win. i don't know why. because of what you said. i don't want to watch the world burn. but it doesn't work. >> do things right way and you don't have the proper fiscal. if you're not together as a government then how can you be together -- >> the german word -- it might be a little bit of that. watching these -- >> if there's any lesson it's the elite created the crazy thing without paying attention. >> the bureaucrat government. >> elected tech carats in belgium and each countrys has their own way of looking at this and saying we don't look what you're doing. >> covering the your asia group.
i did not cry when i saw this happen. i'm not sure why. maybe we like to watch things happen because they're interesting. >> i mean, this situation in greece is set to deteriorate significantly over the next three to four months. as you've been reporting with the government is essentially bankrupt. they have a $7 billion bond due to the ecb in july. they have to borrow more money in order pay it back. i think they want to pay it back. they want to benefit from qe. that's only happening if the ecb gets paid back. the set process is going to have to come to terms with the political and financial reality. i think that's con to confront him and do that very quickly. >> looking at, you know, the poor people. that's the unfortunate thing about this. i don't know how you helped the actual average greek citizens because most of their assets are marked down 80%. businesses they owned, things
they owned, and yet they can't devalue the currency which would allow it to get into party with where they can start selling things outside greece again. it seems so impossible given they, you know, the constraints put on by the union that it almost is if they have to leave. they can't do it without devaluing >>well there are definitely a set of macro economic constraints that the government is confronted with. no fixed exchange rate. fixed monetary policy set by the ecb, germany being the largest, let's say most significant determine factor. fiscal policy subjective constraints. but the bizarre situation is the economic situation was actually they're not doing that badly until around two months ago when the presidential elections sbrorp deuced and national
elections. over the last new months we've seen a lot of economic keydeor it your ration. growth was picking up. they a primary surplice. tax revenues were increasing. a lot has been upset as a result of political turbulence. that's going impress itself upon syriza. it's going to require them to introduce more reform and austerity all though they remain opposed to that. >> we have to run. did they have a positive quarter of gdp or did they just cut their losses? they've been in a recession for a long time. did they finally break even or a slight positive gdp? i mean, i think probably at the margin positive but there's no doubt merkel is not going to be flexible. he's going to have to do it. it's going to be difficult for this government. >> going to be watching. as i said i guess maybe as news person i'm interested.
i feel bad for the actual people. in five years unbelievable austerity. and longer -- i don't know if business has been created. we've done some pieces -- a guy wanted a brewery. he was going to make it outside of athens. impossible to do that. >> and at big thing is the lack of tax collection. you can tax a million things. if no one pays them. >> nobody has a pool. you fly over it. >> i don't want to start trouble but we should have a conversation -- we've had the debate about austerity here and you're on the other side of the debate. >> no, i mean you heard what his answer is. a massive tryfect of government. we're not spending and spending money they don't have. and the germans are working their butts off seven days a week some of them. they look down there everybody is sunning themselves. >> the only way they can borrow the money is the promises from the ecb cheaper financing through lending. >> you can't give -- you can't
get blood from a turnip. austerity is not -- >> i get it. if you owe the bank a thousand dollars the bank owns you? >> the difference is -- >> if you owe the bank a million dollars you own the bank. >> five years later the european market is in a better shape. the germans has been setting themselves up if the greeks want to leave. >> if we owe china $100 billion then they own us. we'll continue this conversation plus a lot more a live report from saudi arabia this morning where president obama will travel to pay respects to the late king abdullah. a multibillion dollar deal in the insurance industry. and a big day for bit coin. getting the first license. here is a look back at this day in history.
president obama and the first lady will head to saudi arabia tomorrow. we're reporting on the same set last week but here we are -- good morning. >> good morning, joe. well, a couple of days or just about 24 hours u.s. president president obama will be arriving. it should come as no surprise they'll be discussing terror. the islamic state, and certainly what is happening in yemen. the saudi arabia has an 1100 mile board we are yemen. it's mostly lyly pour lyly pore russ. the government is essentially being run by an iranian backed group. at this point you have problems
in yemen. you have problems in iraq. the islamic state taking parts that have country. major worries for the saudis. they'll certainly be interested to hear what the president has to say about that. and of course they're attempting to patch up some difficult relationships. >> yeah. a lot of conjecture over the weekend, hadley. the deputy -- not the next guy in line but the guy after him is someone that definitely the united states has worked with in the past. they can work with and shown a lot of stability. that would be the first grandson of the country's founder. and he's educated in the u.s. anti-terrorist. >> that's right. >> that has to be thought of as positive, i think, at least there's a stable transition taking place. >> absolutely. and this was a gentleman who is running the interior ministry as well. he's known for being a hard liner when it comes to islamists
like the muslim brotherhood. it's a good thing for the united states. but you have to remember the younger generation as well. most of them are educated in the u.s. they are very familiar with the west. they have lived in the west before. certainly that helps them when it comes to making it a better relationship possibly than when these older generations try to get together and make things work. >> exactly. all right. hadley, we appreciate it. thank you. i'm sure we'll be checking back with you this week from time to time. a lot more news it seems more and more international. >> okay. corporate news this morning. access capital and partner reemerging in a $11 billion deal. one of the largest reinsurers. air lynn gus considering a take over bid from the owner of british airways. the third attempt to buy them. and shares of shire getting a boost today. u.s. regulators approved a drug
from nps pharmaceuticals which shire bought for more than $5 billion. we're back in new york after spending last week in swis land. we teamed up with facebook to bring you face to face with influential leaders and thinkers. i got a chance to sit down to cover everything from leaderships to the worst jobs they've ever had. it's interesting thinking about this. used to say that no two countries that had a mcdonalds ever went to war since they've had a mcdonalds. i believe no two countries that are run by women will go to war. >> i want each of you can talk about how you prioritize and how you figure out what you need to be tackling. >> what i do is i go where my passion is. i follow the data. we look we're data centric
organization. i look to see where the greatest need is. but i also listen very carefully when i travel. >> so when we think about prioritization, we talk about ruth lease prioritization. what that means there's so many great ideas but we can only do a few really well. and so at facebook what we focus on is how people share and make shag sharing experience better. >> we're betting that the lives of the poor in the next 15 years will improve more than any time in the history of the world. it's because of the amazing innovations that are happening and that are being delivered on the ground in countries all over the world. >> we have some questions that come in from the facebook community. i would like to get to that. this is a gre evan. what are we as a society going to do about corruption and government mismanagement? how can we use economic power and persuasion to clean up parts of the world? >> we believe that information releases power.
i was in india last summer and i met a man that didn't know how i worked at facebook. he said i'm great because of that phone. and he said in the state he lives in, there was a lot of difficulty with food prices. they were rising. there's a lot of corruption in the system. because of facebook and youtube farmers were posting what prices they were selling and the prices were going back to market and his family was being fed. >> this is just first thing that comes to your mind. jump out and run with it. iphone or blackberry or android. >> windows. [ laughter ] >> all. we run on all of them. i use them all. >> that's what you carry around in the purse. >> i have a windows phone. >> i switch them off. >> i have a bunch myself. >> what was your worst job? >> my worst job my parents had a side business that got us money to be able to duoto college. i had to clean when people left their apartment i had to clean the ovens with easy off. that was my worst job. >> it keeps you school.
>> it did. i worked in the mall when i was in high school in this really really terribly run store where i essentially was in the back with no light with no tags and my job was to make the tags match the clothes. there was no inventory system. i could never get it right. it was terrible. >> what is the first thing you do when you wake up in the morning. >> meditate. i spend quiet time every morning. it's fundamental to my day. >> that's my new year's resolution. i'm three weeks in. it takes awhile. >> i don't feel it's honest to say meditate yet but i'm going to try. >> have you ever drank water made from human waste? >> not that i know of. >> built it. >> our youngest daughter did but i haven't done it yet. >> so you to brave yourself up. >> bill reminds a lot of water in the united states is recycled water so i actually have. but not from his new processer. >> any old embarrassing pictures
of you on facebook? >> there are many embarrassing pictures of me everywhere. you take the good with the bad. >> exactly. and you can find more of the candid conversations including will.i.am, arianna huffington at cnbc.com. check it out. >> did she take student loans. has she been able to pay them back? >> i think she's made good. yes. >> that was money well invested. >> at that age it was great. a student loan i think i would let it run. >> not with interest rates today. >> you could write it off. stilt to come a potential game-changer for bitcoin. plus a monster week of earnings. apple, google, and more. what impact will the parade of results have on your money. first, as we head to break. here is a look at last week's s&p 500. winners and losers.
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...tightest, ...quickest... ...harshest... ...or nothing. at mercedes-benz, we do things one way or we don't do them at all. introducing the all-new c-class. see your authorized mercedes-benz dealer for exceptional offers through mercedes-benz financial services. good morning. welcome back to 'squawk box." our top story today the northeast bracing if are potentially historic blizzard. here is the weather channel's reynolds wolf. it had to be like the biggest in history.
let's listen to it. >> hi folks. coming to you from philadelphia. to be more specific national constitution center. if you're curious what people in the great philadelphia area are dealing with it's going to be plenty of snowfall. some of you might be able to see a couple of flakes. we'll see more of that over the next several days. by the time all is said and done, might be dealing up to a foot of snowfall here. greater snowfall mass can expected toward the coast and certainly farther to the north and northeast. to the west and the south less lesser precipitation expected. winds steady at times. could see whiteout conditions especially toward the north and west. near in the city they're taking everything seriously. 390 trucks have been treating the streets. schools have been adviced to shut down by noon today. all afternoon extracurricular activities have been shut down. in terms of traffic, and in terms of the air travel we expect things will be getting
much worse. wide spread cancellations. that's the latest. back to you. >> thank you. we're going to continue to follow the monster storm, of course, and bring you latest throughout the morning. making headlines right now through the hour. gasoline prices dropping more than 13 cents in the last two weeks to a national average of $2.70. industry watching said the price many wholesale prices pay for glean arose in the last ten years. that could mean the end of a month long slide could be near. the fd reporting china is buying more iphones than the united states. that's for the first time. coming a of the the tech giant's deal with china mobile last year. there's the first licensed u.s. bitcoin exchange it opens today. coin base is backed by $100 million from the nyse banks and vc firms. backers say it could bring legitimacy to the currency. it dropped precipitously. >> it is a big week ahead for
wall street. with much anticipated fed meeting. a flood of economic data and many earnings. the big names will be looking for include myself soft, apple, caterpillar caterpillar, amazon, yahoo!. that's just naming a few. joining us now with their perspective is ed campbell. a principle at quantitative management associations, and jpmorgan's chief global economist. we're look agent the futures this morning down significantly. i guess we have to think it's because behalf we saw with greece. what do you expect happens from this point? is greece likely to pull out, chris? >> i don't think so. i think what we're going to see is first of all, it's going to be a greek story not a euro story in the sense of where the pressure is going to be felt. and the pressure is going to be felt pretty quickly on greece. greece needs a new funding program. greece is at risk as the financial market starting to show pressure. i think the pressure on the new government to pull back a little bit here defines common ground.
>> you think the germans stands their ground and the yoendseurozone is not that worried. i think the germans and the group over all shows some. it's pretty limited in terms behalf the comprise will deliver. greeks have to make a decision are they going to stay in or stay out. that's going depend on what the new government pushes on the policy side. >> what do you think they do? the conditions would be fairly dire if they pulled out. >> i think there's going to be pulling back here. i think we'll see calmer heads prevail and see, you know, some difficult times here. it's going to be awhile before we find out where it shakes out. i think we'll see greece stay in. >> you have to look at the markets we've. watching. there's so much volatile till. oil prices collapsing yields trying to figure out what to do after the ecb decision last week. >> right. >> embark on quantitative easing. how do you ride out storms? >> well so we expected more volatility this year associated
with the fed exiting the zero interest rate policy. i think we'll have a pretty decent year in the market. we're still expecting u.s. stocks to turn in, you know 8 to 10% returns. so i think we're going have to ride out the volatility. we have lots of worries out there, but i think ultimately the upside is still there. >> why do you still like u.s. stocks? because things are going well in the country. you don't think economic worries will travel here. there aren't many other places investments. >> i think the u.s. economy is moving ton a higher plane. we have the fastest six months of growth in more than a decade in the second and third quarter. we're looking at the gdp for a fourth quarter later this week. it's expected to be greater than 3%. i think the u.s. looks good relative to the rest of the world, which is encountering a lot of economic problems. >> we look at the troubles
elsewhere and think the u.s. is doing great especially relatively speaking. is there a point when we import the woes? >> i wouldn't say we're importing the woes. i would say what is going on here, i think, is going lead to some benefits to countries where we're going to see the surprises this year. i think the u.s. will do fine. think about 3% growth. recognize that lower oil is a help for some parts of the economy. and the lower oil hurts some part of our economy and the dollar rice is a negative. i think the real surprise here is that the euro is going to pick up steam. japan will pick up steam and the emerging markets. how much steam? >> about 2% growth. >> would you say emerging which ones? pretty much everybody not an energy producer and not in the business of having to tighten policies because of macroimbalances. it includes mexico central europeans with pretty much everyone in asia outside of china. >> why better? does qe work?
there was a lot of debate as to whether it would. >> we're talking broadly, i think a lot of countries are benefitting from lower energy prices. and they're benefitting from the pick up and consumer spending. by the way, we're seeing it. consumer spending globally picked up smartly in the last few months and there's more to come. i think the euro area picks up because of the euro is full. the rise in the dollar hurts the u.s. a little bit. it gets transferred to support for economies elsewhere. something we're seeing. look at the what the survey told us this morning. some of the confidence that got hit in the spring and summer of last year in the euro because of the russia ukraine situation is bouncing back. it doesn't mean the russia ukraine situation is getting better. people are starting to see it's not going to create tail events in terms of loss of supply on the energy or in terms of military stuff going on. >> i see you nodding your hid. do you agree with that? >> i think european stocks could be a big outperformers this year. of course we have the questions related to greece and what is going to happen over the next week but much better value in
europe. we've got mario delivering the big one last week. i think growth is going to rebound in europe given the weaker euro. less deleveraging and less us a tersety. >> -- austerity. >> down to the currency wars and who can get the currency to the weakest left estest level. >> i think there will be a beneficial impact. the negative impact of the stronger dollar is going to be muted somewhat by the fact that the u.s. is a relatively closed economy and exports only represent about 14% of the gdp versus in a country like germany where it's about half. >> bruce, you think the fed can raise rates in june or july? >> i think they can. i think it's a close call. it's a horse race between a economy which is seeing an unemployment rate falling rapidly. and core inflation which is likely to surprise the fed because of the dollar not because of oil prices. >> thank you for your time. >> thank you.
still ahead this morning a new wi-fi phone service for data hungry users. plus nobel prize winner is going to be joining us later. and the hud secretary stopping by to talk housing. got a big show for you. "squawk box" returns in just a moment. e financial noise financial noise financial noise financial noise take a deeeeep breath in... and... exhale... aflac! and a gentle wavelike motion... ahhh-ahhhhhh. liberate your spine... ahhh-ahhhhhh...aflac! and reach, toes blossoming...
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welcome back. cablevision is launching a wi-fi tone service. data hungry users fed up with the pricey data plans. they called free wheel and wi-fi phone service will be offered at $29. $29.99 per month. coming up more on the story of the morning that will affect almost everybody. 60 million people. a blizzard headed for the east coast. thousands of flight cancels before the first flake even fell. "squawk box" will be right back. can it make a dentist appointment when my teeth are ready? can it track my crew's performance
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just happened to be paging through "the wall street journal" today. noticed a story that just sort of i thought i would discuss it with you two. and that is bringing back the firing squad in wyoming for capital punishment. the reason they're talking about it capital punishment is still something that's done in certain states. they have a problem.
they don't use the electric chair most of the time. lethal injection, though they're not enough of the drugs being manufactured to go around. so they've started maybe using different drugs, different compounds that haven't been tested. so the supreme court took up the case of whether it's okay to use these -- >> they've had some problems. >> they were challenged by three inmates about whether it was cruel or unusual punishment or not. i just didn't realize that we don't think of firing squads being used. it's still used in utah for any inmate that picked it before 2004. you could pick which way you wanted to go. >> a hanging another possibility? they used to use that. >> i don't think anyone does that anymore. one of the individuals saying he can't imagine a firing squad. that's like putting up gallows. >> this is going to sound awful because we're a business network, but is the cost different? >> that's -- there's no one on death row in wyoming right now. but they said we need a backup
plan. and utah is considering bringing it back. but there's many states that don't have alternative to lethal injections. if you believe in capital punishment, does that mean you believe in a firing squad? >> are they doing this as a way of raising the -- since they don't have anybody actually on death row, are they doing it to make a statement? >> they said we need a backup plan. if it happens and we need it we need something on the books other than lethal injection. >> can there be an option? in utah there's an option. you get to choose. >> i think choosing is probably -- >> choosing is the way to go. i just wonder whether it matters which -- if you could find a way that at least you could argue. >> killing is killing. i understand your theory on this. does it matter how you do it if you're in favor of it. >> it doesn't matter with a
firing squad if they're good shots. that would be pretty fast. >> i think i would choose lethal injection if forced. >> but you've seen a couple of those didn't go so well. >> i don't know. >> right. tough choice. >> it's just a hot button. i just felt like bringing it up. i'm going to have to listen to you interview joseph stiglitz. >> we're going the have a great conversation. we're going to hold hands. let me show you -- no no he has some issues with the pickety book. there was a story in "the times" today. you're a verizon customer they use something called supercookies who. so there's cookies on your phone and on your web browser that can track you. usually you can delete them. on verizon, there's an extra header and other companies have
figured out how even if you delete all the cookies to be able to use the supercookie on top of it. >> the purpose being? >> the purpose was for verizon to track you. it is creepy and we will see what verizon does. >> i always wondered what they were. >> they say it's not secret because it's out there. >> but the idea you can't stop them from doing that is creepy. >> i assume everything we write, do or look at is followed. >> it's following business practices that go out of their way to thwart your attempts to try to prevent them from tracking you i think is creep write. >> i would need you to thwart their attempts. >> can i tell you about something that bothered me? the idea that the president is planning -- he made this proposal saying that the 529 savings plans for college should no longer be something that are tax exempt from different ideas.
that he would like to pay for everything up front i think is a huge problem. obviously i don't think this is something that will pass either the senate or the house, but this is a terrible way to start this debate and to have average americans thinking that they can't be saving money for college. this has been a great, great plan. there was only about $20 million back in 2001 but it has soared. middle class has taken this up as well. most of the families using this according to one study it's something like 70% make $150,000 or less. it doesn't matter. what i do know is this is going to put a freeze effect on families that have been using these plans to save. it's going to keep other people from coming into it. it's now $245 billion in savings in these things. >> for the administration on the one hand propose free community college and then take away the ability for people to actually save and pay for it themselves don't you notice a pattern here? >> i don't want to get into a
right/left debate on this. >> why not? the administration doesn't see it in the two things. >> but i'm coming at this from the point of view of what happens -- what it does is unintended consequence that it means nobody will save in these plans anymore. and that's a terrible way to go about this. >> why would you save if the government's going to pay for it? >> yes. but you are now talking about -- >> so you don't see a tendency towards redistribution and -- >> i do but i bet he didn't even consider what this means. >> he's the president. he has people that are supposed to consider it. >> you're telling american families not to save for college. and these people aren't going to be prepared. >> give us the money you're getting and we'll handle how you -- >> it really bothers me. that's what made me upset. >> i thought just more of the same. two years left. >> this is hosing middle class families. >> two years. still to come this morning, nobel laureate joseph stiglitz
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greek election results are in and austerity is the big loser. what it means for the eu. we have a nobel laureate to break down the drop in crude prices. also the fallout from the greek elections. joe stiglitz joins us on set. and there is a blizzard coming in the northeast. the latest on flight cancellations and preparation for closures. the second hour of "squawk box" begins right now. live from the beating heart of business, new york city, this is "squawk box."
welcome back to "squawk box" here on cnbc first in business worldwide. i'm joe kernen along with becky quick and andrew ross sorkin. our top story this morning, this big blizzard the northeast is bracing for. could be historic. they've screwed up before but this looks like it's really going to happen. remember the time they didn't know it was going to happen and it did and bloomberg got flack for not having things ready. >> i think we'll be ready this time. >> i hope it's 12 inches. i don't want 30 inches. >> i saw 36 at one point yesterday. i think we've stepped back from that a little bit. but two feet. >> remember when poor buffalo had six feet and people were stuck in their houses for a week. >> that was last year. >> just a couple months ago. that's what i don't want to happen. we are expecting somewhere between two and three feet of snow from northern new jersey to southern maine. the national weather service is also warning of powerful winds which makes it cozy if you're
able to stay home. but we can't. widespread coastal flooding. airlines have already canceled more than 1400 flights. the big board would cooperate and just close it down we could say home. but we can't. we have to come in here. >> yeah. we're here. >> kate rogers is at laguardia. kate joins us now with an update. >> that's right. when we got here this morning, there weren't too many delays or cancellations, wu there's a lot more red up there in the past two hours. flight aware.com is tracking cancellations and delays in realtime. they say in the next two days within the u.s. and in and out of the country, nearly 4,000 flights are going to be completely canceled. we should also note they're tracking the airports with the most delays and cancellations within the country. not a flake of snow has fallen outside, but laguardia where we are, number one as far as delays and cancellations go this morning followed by newark jfk,
and philadelphia. now travelers are telling us airlines are keeping them up to speed with notifications and they are changing their plans plansinglyplans accordingly. >> we got on alert to move us back and then again. so we have to cut the festivities short to make sure we could get up this morning, but we did it. >> and we'll be here all day keeping you up to speed. but i have to say some are expressing some skepticism as to whether or not winter storm juno is going to live up to the hype. i personally think it will given all the delays and cancellations we're seeing so far. >> thank you for that. becky, you've got some headlines. >> we do. the price of gasoline is now at its lowest level since april of 2009. the latest lundberg survey shows the average price is down 13 cents in the last two weeks to $2.07 a gallon. the anti-bailout syriza party
won over the weekend in greece. that sparked questions over greece and the eurozone. right now let's get a check on the markets. after hearing about what happened in greece, you did see some red arrows here. dow down 65 points below fair value. s&p off about 6. nasdaq down by 7. remember last week was the first week all year that the markets ended in higher territory. if you look at the european markets, they started the day lower but have recovered a little bit since then. the dax is up by .8%. the ftse down by .4%. also if you look at the currencies, the euro dipping to an 11-year low following the election. we had already seen this because of the moves from the ecb last week. but right now you can see the euro sitting at 1.1225. dollar up against the yen sitting at 118.22. we'll continue to watch what
happens with these currencies. >> when you look at that chart, the euro is down 7% since the start of the year sparking fears of a eurozone that could be unraveling. this is due in part of greece. our next guest this morning authored a letter published in the financial times along with 17 other prominent economists calling for greece to get off ahead of that election. joining us now is joseph stiglitz, 2001 nobel laureate also a world bank chief economist and professor at columbia university. good morning. >> nice to be here. >> you've campaigned or been vocal about the need to write some of this off. in this game of chicken which is sort of what it is, who's going to win? >> i think greece will. i hope greece will. and i think it's important not only for europe but i think for the whole global economy. the policies that europe has
foisted on greece just have not worked. gdp is down over 25%. that's worse than the u.s. great depression. youth unemployment is 60%. and it's been that way for years. can you imagine a society where you -- to use the phrase that people talk in the united states, you play by the rules, you work hard. you can't get a job. >> do you think the euro unto itself is a failed experiment? >> it was a mistake in the beginning. that to me was clear. that was clear. your only question right now is can they make it work? >> should they try? >> i think they should try. but they can't using the same medicine that hasn't worked and failed in country after country. if greece were the only country
facing a problem, i would say, you know it's greece's problem. >> but if you're living in germany and you're working your tail off watching what's going on in greece, what are you supposed to think? >> there are two things i would say. first, i look back to world war ii. what enabled germany to become what it is today? the west said we'll forgive your debts. not only did we forgive their debts, we gave them martial aid and sent troops over there. they're spending american dollars to help boost their economy. >> but that was after a war what do you say to economies that have spun themselves into this. >> greece may have made a mistake, but it didn't try to destroy the other people who then forgave their debt. to me there's no comparison. greece made a few mistakes. we can agree with that. but i think europe made even
bigger mistakes. when this crisis began, the debt to gdp ratio was 110%. now it's about 170%. so the medicine they gave was poisonous. it led the debt to grow up and the economy to go down. >> and everybody's guilty too. you think germany's been minding their ps and qs and working hard. how much have they benefitted from lowering the value of the euro? a a. >> because of the cheap euro and greece owes them that money. and that's bolstered -- >> they were complicit. part of the reason they created euro money flowed into greece. people thought because of the euro there's no risk of default. >> but that is a logical
conversation. try having that with the electorate in each of these countries who see things from a very different perspective and who are going to elect their own politicians. >> that goes back to exactly what you said. but i think the hope was that by having a shared currency they would grow together. they would have more -- >> there during good times, not bad times. >> really interesting thing is while it was an experiment to bring them together nothing has divided europe as much. >> what if you looked instead of the swiss franc, you let the german currency rise to where it should be right now. it would probably have moved more than the swiss franc. how do you run a union like that? just in terms of where it would be if -- you talk about being a manipulator. >> one way of thinking about this, if you look at the current account surpluses, exports minus
imports. a few years ago we were complaining about china. germany's current account surpluses are greater than china's were. you know we haven't been saying global implansbalances. >> although this is what larry fink told us last week. he doesn't think it's a likely scenario that switzerland's economy can get out of what's been done without having a severe recession that takes place there. if they do if they're somehow -- if they skate through that, he thinks it means bad things for the euro because you could see the germans wanting to do something just like that. like forget it. >> that's possible. but i think germany is wise enough to know -- should be wise enough to know that it's become a very integrated economy. if they throw a hand grenade into that and say we don't care if euro leaves.
and people of spain will say if greece leaves i think greece will actually do better. the exchange rate will adjust. there will be a period of adjustment. it's not going to be easy but i think they'll see that greece will start to grow. then if that happens, you're going to see spain and portugal saying they've been giving us toxic medicine. and there's an alternative course. >> i'm unclear. you think it would be a good thing for the greece to leave then or no? >> no. i think for europe as world as a whole, i think -- >> but long-term you think it's better to stay together? >> if they can figure out a way of making it work and that requires a banking union, euro bonds. there's a whole set of unfinished economic agenda which
most economists agree on except germany. >> better not put it to a vote in each individual country because it will never happen. right? >> i think it will get support from a lot of places. >> from the people in the individual countries. >> but the real problem is germany. and if germany doesn't agree, then of course it doesn't work. and most economists are saying the best solution for europe if it's going to break up is for germany to leave. and the consequence of what you said, the new mark would rise. german economy would be dampened. just going through that makes it clear how much germany benefits from the euro. i hope they go through that experiment. >> then they'll see they're benefitting too. the uk looks smarter than anyone at this point. >> uk sweden decided not to join. they went through the
calculations. >> aren't they supposed to eventually or they don't have ever to? >> part of the agreement was they were all supposed to. but i don't think that provision will ever be enforced. >> i want to switch topics on you. i want to talk about inequality because we talked about that a lot o davos last week. you say tomas pickety gets income inequality wrong. what is it he gets wrong? >> the facts are right. there's ban huge increase in equality. basically what he says is the period what we think of as middle class america, shared prosperity was a short interval between world war ii and 1980. >> do you think that was just a
historical anomaly? >> this is what he argues. he says this inequality is almost an inevitable consequence of capitalism. and i think a lot of this inequality is a result not of capitalism in the 21st century, but our democracy where we -- people at the very top pay lower taxes. >> is there a way -- >> the french academics analysis says you have housing in here and that it's not -- or you have land calculated. therefore the whole thing is skewed. people said that here as well. you say that also. >> that's right. so that's the point. it's not about capitalism and capital being emphasized. it's the way our whole economic system and political -- >> you almost sound like a right winger here joe. you actually like capitalism.
you think that's the way to go. >> in market economy. but not the kind of distorted market economy we have. >> is there a way to solve the inequality issue if you think it's solvable at all by raising the bottom without taking away from the top? >> i think a lot of it can be done by that. and this goes back to the issue of opportunity you were talking about a little bit earlier. the fact is that young americans like prospects are more dependent on the income and education of those of virtually any other advanced country. even though we call ourselves the land of opportunity, in terms of the numbers we're not. they have to go down and say why is that. what we do know is the consequence. then you ask why is it that we're not doing it and part of it is access to education. only about 8% 9% of those in
the bottom quarter of our incomes get a college education. and if you don't get a college education in today's world, you can't compete. and the numbers are just dramatic how their incomes have gone down. but what's so concerning today about it, it's not just the bottom. it's also the middle. median income income in the half above, half below today was lower than it was a quarter century ago. >> i'm sure you would say we've got to do two things. we've got to have more people that have the skills to get the more jobs that the private sector is able to create because it's more competitive. it'd be nice to create opportunity for people once they go through the education process which we improve to have a place ready for them to compete globally. and so it's -- '01, we're just arguing past each other. we need both answers. >> absolutely. and i think part of creating
more jobs is you know we have to have better infrastructure. if you compare the united states -- you were just in switzerland -- the kind of roads they have through these mountains are just fantastic. the airport can't be compared to those in the united states. >> but joe let me ask you. we talked about the 529 plans that the president threw out in his state of the union address he wants to throw that out. i'm concerned at the fact of throwing that idea out there because it makes middle class families stop saving for college like they have been to this point. >> i don't know exactly what was going into that. but what i got was that there had been a proliferation of different plans, with different regulations. >> the 529 plan is a national plan. each state offers its own plan but you get national benefits. some states offer additional benefits. >> trying to say let's get this all organized in a clear way and not only to make college education more accessible to those who are paying taxes --
>> this is just savings you do yourself. it doesn't matter from -- tax benefits are not benefits you take now. it's when you remove the funds from them. you don't need to have anything. it's something like more than 10% of the people make less than $150,000 a year. >> a strong and simplified program does make sense. >> this is a nationally run program. >> what i'm saying is that it's trying to simplify the overall, you know how do we provide finance for education. one of the important ways in which the u.s. is different from australia where they've gotten education enrollment up is that they allow income contingent loans for all their students. so you go to college, you get debt. we now have more than $1 trillion of student debt. but the amount we repay depends on your income.
>> we have that now with our loans. you have to qualify for the grants and loans we go through -- you need the right financial aid package put together for it. >> that's exactly the point. i think we have to restructure how we finance higher education. i think, you know he didn't in the state of the union give the full answer. and i think that lobbing a hand grenade is not an answer. but i think we -- >> -- from 529s are people paying taxes. that's not the group of people the president is most concerned with. >> this is not a tax break now. this is a tax break down the road. this is not a current tax break. >> but i think if he looks at the numbers, you know it's that bottom quarter where only 8% or 9% are going to college and that are weakening our economy. >> but you shouldn't take the
second tier and take it away from them. in the meantime they're going to -- >> i need to ask you -- no i'm going to do it away. 20 seconds. the s.e.c. do you think they are in the pockets of the high speed traders? you were supposed to be on the committee and they said no to you because you faulted them. >> i think that's right. i think there's a real problem. and the fact they weren't able to have a discussion with experts about this rating is very disturbing. >> i think ohio state took care of the whole s.e.c. issue. >> thank you very much. when we come back it is emergencier monday. we've got the deals you need to know next. then the fed kicking off the first policy meeting of the year. we'll tell you what to expect from the markets. and nfl deflategate. is it real or a distraction? we'll have more on that. stick around.
merging. and cereal maker post holdst buying mom brands for $1.15 billion. the vast majority of that in cash. the deal expected to be completed during the third quarter. in international news president obama was the guest of honor at india's mammoth republic day parade. despite rain and overcast skies, tens of thousands were gathered along the route for the spectacle. the government has put up to 40,000 security personnel in place for president obama's visit. and coming up a big win for netflix at last night's s.a.g. awards. we have a lot of awards. what network was this on? do we like it? i think miss universe was on. i think i was watching that. although i wasn't. >> i saw the red carpet on e and
that's part of our family. >> and then later the nfl striking a deal with google. what it will mean for traditional media. please, stay with us. breath in... and... exhale... aflac! and a gentle wavelike motion... ahhh-ahhhhhh. liberate your spine... ahhh-ahhhhhh...aflac! and reach, toes blossoming... not that great at yoga. yeah, but when i slipped a disk he paid my claim in just four days. ahh! four days? yep. see why speed matters, at aflac.com.
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topping box office for the week. probably be the biggest war film in history as well. i haven't seen it yet. i know you saw it andrew. did you notice the scene where it was robo baby? like the baby they were supposed to use was sick. there's a lot of regulations for when you can use an infant. and after trying to film it for a week a kid was either sick or taking too long, he said go with the robo baby. >> i could not tell. but i didn't know it going into the movie. >> so you weren't looking closely. >> they did a great job. because i didn't know it. >> okay. that's good. and you liked it. >> i did. i didn't take away the political clint east wood things that people said. i watched it as a movie. the value of the movie. >> i don't try to understand michael moore or the other side. i've given up trying to understand. i know it's going to agitate me.
>> great film. >> but they're saying the one that's in the lead now is "birdman." but i haven't seen it. >> because it won last night. it took away top honor. >> and i heard "whiplash" -- >> is supposed to be spectacular. >> i went to see at the first party my idol for 40 years. i said i just wanted to say hi. and he goes joe? he did a lot of trading in the late '90s. i mean, he's a big cnbc guy. then we hung out. >> i met him too. >> you going to talk about the oligarch party? >> what happens in davos, stays in davos. >> but you actually dove into the caviar vat. >> head first. like that.
>> that one i skipped. >> unfortunately i can still sort of -- you know. >> oh, stop. >> it really is pungent. >> by the way, from what i heard, he arrived first. >> he got there first and left early. >> i did. but i said had hi to the host and i also met one of the rothchild. >> it's a good event. coming up when we come back we're kicking off the first fed meeting of the year. steve leisman will join us with what to expect. then the impact on currencies, oil, and stocks. our trading block is ready to go. as we head to a break, take a look at the weather map. that blizzard closing in. we'll bring you an update in 15 minutes on how bad it's really going to be. we're back in a moment. recently, a 1954 mercedes-benz grand prix race car made history when it sold for a record price
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the white house grounds early today. secret service responded and determined the drone did not pose a threat. three more planes evacuated after bomb threats. two passenger planes landed in seattle. another flight was diverted to dallas for same safety procedures. and bitcoin exchange opens up today. it's backed by about $100 million from the nyse banks. backers say it could bring legitimacy to the currency. it's a week full of economic data and a two-day fed meeting that kicks off tomorrow. steve leisman joins us with more including the most important piece of data you probably haven't heard of but could move the markets this week. just hesitant to even let you do this, steve. but go ahead. what is it? >> work with me on this joe. >> okay. >> this is an important piece ofday ta. it comes on friday. if you give me a second i'll show you how it ties into the federal reserve. let's look at the calendar.
that meeting as joe said begins tomorrow. and we'll get the statement on wednesday. but also tomorrow we get the durable goods report looking for 0.3% increase. wednesday we're looking for the policy statement. and the story there is going to be i think they're going to continue to say that they can be patient. jobless claims still seen in the 300,000 range. finally on friday and the drum roll we're looking for is the gdp number. 3.3%. good number considering the strong number in the third quarter. and there it is that employment cost index. everybody wants to know what's happening with wage inflation. it's an industry survey and it shows what's going on inside the individual businesses. you see those with reporting rising prices. those with rising costs down 13%. and there it is. rising wages. up 31%. up 7% from the prior survey.
why does all this matter? remember the december payroll jobs report? therest that decline in december wages that confused everybody. everybody thought the wiejs were on the upswing. that's not what we got. and that differs from this index we look at which is a quarterly survey. looks at different things. there it is. it's been on the upswing. but don't get too excited about that chart. let's take a long look at this chart. what you see is where we are right now. of after every other recession we have during our current recession. there's a long way to go. how does this all tie in? evercore isi writing, time is getting very tight for the price and wage data to support a hike. which is why we're looking to friday's report and whether or not there's any wage inflation in the economy right now. because if everything is two
meetings ahead, unless we start getting it in one of these reports, either the employer report or the quarterly eci, the fed will have a hard time figuring how it's raising rates. >> thank you. between the fed's two-day meeting and the flood of earnings, there is a lot of news to digest this week. it is time to fire up our trading block. joining us this morning we have carl larry. on currencies this morning we have nick bennbrook. and jeff let's start with the markets this morning. it looks like the futures are indicating a bit of a giveback. you think that's nerves because of what happened with the greek elections? >> yeah. i think the market is kind of in limbo here. i saw one of the best setups to the downside i have seen in a long time. until draghi's announcement last thursday. that threw things back into limbo. the market is measured by the s&p has been trapped between its
support level at 1990 and 2000. and the resistance level between 260 and 280 since late october. you know, it's got to get resolved in the near future. >> you were saying that you thought we were setting up for a turn lower before we heard from the ecb. but you still think we're in a long-term bull market. you think this is eight to ten years of the bull market. how do you add those two things up? >> the tactical would be on the downside. i think we're in the secular bull market. i've said that since '09. they typically compound at 16% per year. you've got another eight to nine years left in it. >> so you tell people buy when you see any sort of a dip or any sort of a pause? >> yeah. we did tell people to raise some cash at the end of last year because the indicators were suggesting the first few months
of the year were going to be volatile and rocky. we have put a little of that money back to work. there are special situations that i think make a lot of sense. especially under weakness. but longer term it's a secular bull market that has years left to return. >> the weakness you're talking about, the special considerations. would that be something you're seeing? >> my energy team which i think is as good as it gets thinks we're in the bottoming phase. i would tend to agree with that. and we think the energy space presents some really good risk reward ratios. especially for the mid-stream master limited partnerships. >> definitely bottoms somewhere between 40 and 0. i think. we got the best energy team around too. and i think we're in a bottoming place. somewhere between where you owe money to take oil and zero, i think it bottoms. i think you're right about that
jeff. we've had everyone tell us that jeff. every time it got to a point, 85 it was bottoming, 65 it was bottoming. so i'm with you now. we're not that far from zero. so we've got to be close to a bottom. i think you got something there. >> i think boone pickens said 40 to 45 a number of months ago. i'll put my money on boone. >> i think boone -- i don't know. but okay. >> carl let's talk about those oil prices. what do you think? >> i think it all comes down to demand. when it comes to the u.s. this is something everybody overlooks. record high last year when it comes to crude refineries, but the global demand is one that's really hard part right now. that's why the saudis have to wake up here and realize the rest of the world is not going to pick back up. so you know outside of america, everybody's between a rock and a hard place. inside america, demand is just great. that's keeping prices kind of
supported here. >> you think the saudis need to wake up in other words, and cut production? is that what you're suggesting? >> they have to. the sue deeaudis, opec everybody does. china's doing what it has to do but it's not going to -- >> but opec is falling apart and the saudis don't trust their partners in opec who didn't cut when they promised to cut together. >> now when you have this new king, it's going to be tough. they're going to have to make economic reforms starting by cutting oil. >> if they don't do that. where do oil prices head? >> oil prices could head down to probably $30 a barrel. i don't think they will but they could. and the issue is that when it goes down below 40 everybody not just the saudis they say they can handle $20. but it's ludicrous. so i think that everybody when it gets under or near 40 is going to be in panic mode. you'll see countries cutting back production. >> is the pain over for the euro yet?
>> no. we expect to see the euro continue to go lower. the ecb's announcement was huge in terms of the quantitative easing. i don't think that greece will leave the euro but there's going to be several weeks of uncertainty. both of those probably deal with direction. we'd be looking at any of the balances like we've seen this morning as opportunities to get even longer the euro at this point. >> you said if you were short the euro you'd stay short the euro meaning you expect it to go well below 112. does it have to hit parity before you get to that point? >> well probably two things. one would be a level and i think we will get to parity. i would be short all the way to that level. but the ecb has spent a lot of monetary ammunition. we got a huge policy move last week. i think the thing that would
perhaps make me change our outlook would be more on the u.s. side. and if we were to see any significant shift in the timing of federal reserve rate hikes or timing, that's probably not going to happen this week though, i think will get the same that we got previously. so watching those wage numbers, watching those employment numbers here in the u.s. is probably the main thing that will change our view on the euro. >> all right. thank you, gentlemen, for your time this morning. >> you bet. when we come back this morning, an update on the massive blizzard headed for the northeast. stick around. "squawk box" will be right back.
welcome back to "squawk box," everyone. right now let's get an update on that massive blizzard closing in on the northeast. nbc's dylan dreyer joins us right now from pittsburgh. what's the word, dylan? >> well the word here in pittsburgh is about two inches of snow. certainly doesn't sound like much and it's hard to believe that what's falling right now is eventually going to transition into the monster storm that's going to hit major cities like new york harvard, boston. just to put this in perspective, here in pittsburgh we picked up
two and a half inches of snow. as the storm gets going, we're looking at easily a foot of snow in new york. and as much as 30 inches of snow just north of massachusetts. but add to that the fact that this is eventually going to be a light fluffy snow winds could gust as high as 70 miles an hour. hurricane-force winds are expected during the height of the storm overnight into tuesday morning. we could see snow drifts as high as five to six feet high. now, there are a lot of residual effects. already we have reports of more than 2,000 flight delays more than 2,000 flight cancellations in advance of the storm. and then when you have that much snow, 30 inches in some areas, we are going to see the ripple effects last for a very long time after that. most likely have significant power outages. so just a couple of things to keep yourself safe. make sure you have that emergency kit in your house that includes batteries and flash lights in case your power goes out. in case it does go out, you want to drip your faucets a bit to
loosen up the load on your pipes so we're not seeing the pipes burst if they do in fact freeze. you need to play it safe. that goes for shoveling too. you think about the pulled backs and pulled muscles from shoveling. but we also get reports of a lot of heart attacks. stay on top of it if you can and stay hydrated. you don't realize how much you sweat because it's so cold outside. but you really need to protect yourself when we're using words like crippling and life threatens and historic to describe this storm. >> thank you. stay stay out there. when we come back is now the time to buy? we have a first on cnbc interview with hud secretary julian castro. first, though, scandal in the nfl. the fallout from deflategate. take a look at the patriots getting the "snl" treatment over the weekend. >> all i know is that a football is a pigskin so i just assume that the air in the football is how much air was inside the pig
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many nfl players current and former say they're having a hard time believing tom brady's denial about whether he knew anything about deflategate during the team's afc championship win over the indianapolis colts. joining us we the latest is dave briggs anchor with nbc sports. we have two weeks between games. >> too much maybe. >> a lot of times there nothing to talk about. >> so we guys have created this. >> off lot to talk about. i like it. here's the only thing. i hope before sunday we are able to just -- let's assume that the officials -- >> you're assuming that deflategate will end. >> no. let's just hope on sunday that the officials check all the balls. >> they will check the balls. it will not be a factor in the super bowl. >> let's assume that and then let's talk about the game itself and russell versus brady. >> we will. but first let's look back.
let's do a test. one ball is -- >> this is a blind test. >> blind test. how long does it take you to identify the underinflated football. >> this is the over one. i can tell without touching the other. >> she didn't even need to hold it. >> this is underinflated definitely. >> yes. it's very easy to tell big fella. here you go joe. >> so they give it to the officials the day of the game. >> two and a half hours before the game. >> they all felt it. >> even sorkin could throw a spiral with the underinflated football. >> i want to see if i can do the full inflated. >> say that again. 45-7 -- >> still would have been the score, in my opinion. >> or maybe 38-14. >> still would have been a blowout either way. >> how about the week before? coming back from down 14 twice. >> this is about integrity. >> but we don't know how it happened yet. >> you're going to find out there's some ball boy -- >> he wants to water board the
equipment manager. water board him. don't presume innocence. it must have happened so let's water board anybody who touched the ball. >> we're going to have water boarding of equipment guys. >> it's obvious, by the way, no i'm feeling it. totally obvious. it's not even like a question. >> so over the weekend, bill belichick has his second press conference -- >> we're going to call him bill belicheat? >> no. he's the greatest coach that was. he quotes my cousin vinny. defense of the patriots tactics with of their ethics. then it's skewered on "snl." bill nye the science guy even weighed in on this on sunday. >> he's a moron. >> he says it doesn't make sense. his explanation of natural deflation of a football. we may not know how 11 footballs
were underinflated. and it didn't play into the ultimate outcome of the afc championship. >> so what did happen? >> it's a brilliant story. it's even better than the snow. it is a perfect storm. >> we haven't had a story this good since the underarmour speech. you don't cover beheadings or financial crises so this is it for you guys. >> he's been practicing this line. >> he has. tom brady even talked about isis in his press conference. >> you guys cover games. keeping the scores and everything straight is tough enough for most sports anchors. >> that's right, tough guy. our parent company will have 115 million-plus viewers. all-time record. gillette is a winner. flex ball was the backdrop for all the press conferences. >> if the patriots -- i love russell but i'm not picking either team. if the patriots win, will there be any satisfaction. >> i think the important part is if they lose.
if tom brady struggles and can't throw the football people are going to say it's because it's a properly inflated football. even though that had nothing to do with the brilliant career that tom has had. and bill has had. but yes, pressure is inflated on the patriots to win this football game. no question. and they will joe. they'll win by six points. >> once new york tabloids guys said the patriots were bad guys. that's when i believed it. we've got to run. next up we've got the hud secretary. >> nice!
the anti-austerity party winning in greece. a quick look at how this can shape europe's future. is billionaire george soros car shopping? looking he's wanting to follow in buffett's footsteps and buy a dealership group. and ready or not, hear it comes. a historic blizzard ready to blast the northeast. how much snow will you get? we'll tell you as the final hour of "squawk box" begins right now.
live from the most powerful city in the world, new york, this is "squawk box." >> welcome back to "squawk box" here on cnbc first in business worldwide. i'm becky quick along with joe kernen and andrew ross sorkin. from washington to new york to boston preparations are underway for a major snowstorm. the weather service estimates 62 million are under a warning. more on how the northeast is preparing for this storm in a bit. let's tell you what's happening this hour. they're on edge after the antiausterity party won that election by a bigger than expected margin. renegotiate greece's debt agreements. on track now to hit $5 trillion in assets. reporting this morning that comes as more of the nations the
vehicle. and china is buying more iphones now than the u.s. for the first time. this comes after the deal with china mobile last year. we are less than 90 minutes away from the opening bell on wall street. you're still looking at dow futures down by about 40 points below fair value. but earlier today we were looking at losses at about twice that. the nasdaq down by about one point. part of what's been happening is all these concerns about the greek elections. that did cause concerns in the european market trading. they've shaken off the majority of those concerns. the dax up by almost .9%. the cac up by .3%. and greece stock market there still under a little bit of pressure. down only by about 1.5% right now. there are a couple of stocks to watch that are on the move this morning. packaging companies meadwestvaco
and rock tenn will have a combined of 16$16 billion. and with rock tenn up that has them headed up. before that move the premium was slim. when it's all said and done. >> you can take cash or stock, right? >> cash were one of the companies could take -- >> rock tenn. >> which one? i don't know. let's go to d.r. horton posting better than expected revenue. 29% increase in closings. and almost 7% rise in average sale prices. analysts suggest it's on the back burner as a priority for
the shipper. mortgage rates hovering near historic lows. now it's getting cheaper to borrow for a home. today the fha is lowering its annual premiums. joining us now on cnbc for the first time since taking office julian castro. also with us diana olick. thanks for joining us today. >> thanks for having me. glad to be here. >> let's explain this. when we talk about lower premiums, the premium they have to pay on the insurance. if you don't put 20% down on a house? >> we're talking about fha insurance premiums that's right. so today the fha is lowering its insurance premiums by 50 basis points. >> and what brought the fha to that decision? >> well as folks may remember we got our last annual report in november. and what it showed was over the last couple of years, the mutual
mortgage insurance fund has gained $21 billion of value. since the housing crisis started, these insurance premiums had gone up about 145%. these are our annual premiums. and really what this is about is first of all, maintaining a great balance between ensuring we have a strong mutual insurance fund and also fulfilling the fha's mission of providing opportunity for first-time home buyers and middle class families to be able to own a home. over at hud we call ourselves the department of opportunity. and i think this is a very prudent step in the direction of providing more opportunity for middle class families to be able to afford a home. we anticipate that this is going to mean a $900 annual savings for about 2 million folks over the next three years. that it will spur about 250,000 new first-time home borrowers over the next three years.
>> obviously when the great recession hit, the pendulum swung a little too far. it was difficult for people to get loans. that caused a lot of problem for people who had less than 700 credit rating people who had trouble getting together a down payment. but the fha has run into problems itself. i think it was a 1$1.7 billion bailout that was needed. how do you convince people this is the right time to swing the pendulum back? >> that's a good question. first, we're not changing for the fha loan. what we're talking about is affordability. secondly, even with this premium reduction, we're still going to be 50% higher in terms of insurance premiums than we were just a few years ago at the beginning of the housing crisis. and even after the premium reduction, we forecast $7 billion to $10 billion of growth over the next four years for that mutual mortgage insurance fund. so what we see is that this still puts us on a strong
trajectory to get to that 2% capital reserve ratio. >> but you talk about opportunity for home buyers and this could help on the margins. but really don't you have to do this because you're in danger of losing some of your best borrowers to fannie mae's new mortgage. and you need those borrowers or you can go back into the red again. >> certainly director watt and the folks at the gse are doing some noteworthy things. but that's not the ultimate driver of this decision. the driver is two things. what's in the best interest of keeping it strong and the mission that fha has historically, you know furthered which is to provide middle class families and first-time home buyers with the opportunity to own a home. >> what you're talking about really is a savings of 84 bucks a month for a borrower who has a $200,000 loan. is that really enough?
it's going to help people to refinance and save a little. but is it really enough to get those first-time home buyers when we need off the fence and into home ownership or is there something else fha and the government have up their sleeve to help? >> first let me say that i think this helps. secondly if you look at what's happening, this is a confluence out there you mentioned rates at a 24 month low in that time period. gas prices are low right now. the rate starts to stabilize. it meebans folks are able to put more in their pocket to save towards a home. we're going to get a quarter million new home buyers because of this premium reduction. >> the idea that the government should be doing more to get people in in the first place. >> that's a big argument. some people think that's how we
got in trouble with a first time. >> i'm sure realtors and home builders think that. what does the government think of that? >> the fact is the fha has been doing what it can. a point of that is housing counseling. one of the strong points i think, of what the fha has done and hud has done has been to support housing counseling so we have more borrowers that understand the responsibility that comes along with owning a home. it puts them in a stronger position to be able to buy one and to have better credit. but this announcement today, what starts today really is not a conversation about who qualifies for a home loan. that conversation is ongoing. and there's a debate about that. it's really about the affordability of those home loans. >> to that points, should people be allowed to put down 3% and qualify for a home mortgage? >> absolutely. >> and what has to go into that? just because some people say you have to have skin in the game. if you have at least 5% down.
you have just 3% down people are saying you're basically a renter. >> i think that if we take a look at the fha and how well it has performed historically there is no question that this has been a very useful tool at ensuring that people have a step into the middle class and home ownership. i will say over the last few years, fha has taken steps to ensure that things don't slide back to where they were. i'll give you a good example of that. for the first time ever we put a credit score floor of 500 in place. we also required a 10% down payment if your credit score is lower than 580. so these safeguards that are in place are making sure that we don't slide back to where we were when the housing crisis came upon us. at the same time we also don't want to be at the other extreme where nobody can get credit. >> agreed. >> you guys heard about ben bernanke is few weeks ago who said he couldn't get a refinance
of his house. so what we want is the pendulum to be right in the strong middle where we have those safeguards in place, but also robust opportunity for americans that are responsible for middle class families to be able to buy a home and own a piece of the american dream. >> could i just throw in one more? you and i are both from washington. it has to be asked. you've been asked several time ifs you would be interested on being on a hillary clinton ticket in 2016. you said there's no plan last week. do you think you would be an asset to that ticket? >> first of all, i'm trying to do a great job at hud. that's a hypothetical i'm not going to engage in right now. i've said many times that i don't believe that that's going to happen. and, you know i hope if i can do a great job at hud, that the future will take care of itself. i have a four-week-old baby that's right. >> you tweeted you'll be on "the daily show," i guess. then i saw you tweeted you were going to be on -- >> are you jealous i didn't
tweet for this? >> yeah. are we chopped liver here? what caused you not to tweet that you're going to be on? >> if you convinced me if you can show me your ratings with millennials and i'm satisfied, i will tweet that out. >> you can't help us get some millennials? >> i'll do what i can next time. >> too late now. next time you come on. >> that's right. >> thank you very much for joining us. >> thank you. >> cute baby. coming up next is now the time to buy tech? we're going to find out why and if it is. names like linkedin and google have room to run. and later, greek elections and the eurozone qe program. wilbur ross joining us to discussion. george soros wants to sell you a car. we'll talk about that. plus jim cramer live from the new york stock exchange. "squawk box" will return in a moment.
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portfolio is in session. now you can go on cnbc.com to track the managers' picks. plus read their exclusive analysis. here with us now to share her picks is the cofounder at winblad partners. you have three stocks that are pretty interesting that you like. the first that's most fascinating to me is linkedin because it's new for you. >> i think it was sort of the rodney dangerfield of the fast growing companies until recently. >> so what was the tipping point for you to decide this was world while? >> the real tipping point was my university, the university of st. thomas in st. paul minnesota. and we were doing a fund raising activity. and i went from our alumni side to linkedin site and looked a t the e density they had. and then i started digging and digging and realized it's not a human resource company.
it's a data company. >> so what happens with all that data? when you look at the stock, where's the stock going as a function of this data monetizing it somehow? >> i think they monetize it quite well in human resources. and they're just beginning to monetize it in revenue which is sales. bringing it into the enterprise. i think it's going to become a big enterprise software company. >> so do you compare this to sales force eventually? >> i do. i think sales force valuation, it's just as valuable a company. >> and one you like is sales force. because you think what's going to happen to it. people talk about that as a takeover together forever. is that part of your equation or no? >> i think it's hard to be an applications company. there's really only one big new applications company and that's sales force. their ability to upsell into
other functional areas in the corporation, they're just starting that right now. >> just so we understand both how much room do you think it has to run? >> i think quite a bit. >> quite a bit being 10%, 20%, 50%? >> depends upon the time frame. >> let's do it over the next 12 months. >> 10%. >> 10% for both. >> uh-huh. >> easy. and let's talk about google. you like google a lot. >> i do. >> there's been a lot of questions about whether they're spending too much on all sorts of rnd projects that haven't hit. there's this cloud of what's going to happen in europe. >> google does spent 13% of their revenues on rnd. and it's really easy to understand google's core business because it's been enormous. but if you look at what's really going to happen the internet disappears because we just see it everywhere. it's ubiquitous. and i think google is prepared to be that ubiquitous company.
they're willing to really investigate almost everything toss out what doesn't work. double down on what works. and that's going to make them a big company. >> what about twitter? >> i think somebody needs to buy twitter. >> you're not buying twitter. hold on. would you buy twitter stock then? >> no. >> but somebody needs to buy it because? >> i think it's a great company. but i see -- i can't see the samebred that linkedin had long-term for twitter. >> over-valued right now? >> i don't know if it's overvalued, but i don't think it has as much room to roam. >> okay. we're going to leave it there. thank you for joining us this morning. i hope you don't get stuck here. >> i'm a minnesota girl. >> so you're doubling down and sticking around. >> a remind tore go to cnbc pro on cnbc.com to read their
exclusive analysis. joe? coming up it's winter. but a potentially historic storm is set to slam the northeast. an update on how new york's prepping for that storm next. then is george soros looking to get into the car dealership business? has warren buffett started a new trend? we'll go under the hood in just a few minutes. e financial noise financial noise financial noise financial noise
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blizzard warnings in place for the tri-state area. morgan brennan joins us from times square with a look how things are getting prepared here in the city for the storm. morgan? >> hey, becky. officials are preparing for a potentially historic snowstorm. one that meteorologists and government leaders warn could be the worst that we've seen hit the area since the record blizzard of 1996. >> the early projections for this storm are that it would easily be as much as two feet of snow potentially pushing on closer to three feet of snow. >> for that reason the national weather service has issued a blizzard warning. that goes into effect for the region later this afternoon. 1:00 p.m. eastern through
midnight. the new jersey port authority has mobilized about 60 snow machines and prepped bridges, tunnels, and airport roads with road salt. they've prepped buss with snow gear. and for the city itself, the sanitation department says it will deploy 1,600 snowplows and it's got 255,000 tons of road salt on happened. nonetheless, new york governor andrew cuomo is urging commuters to work remotely if possible given the potentially life threatening conditions that could be associated with this snowstorm. as for businesses themselves the ones we've spoken to say they're playing it by ear. the new york stock exchange for example, says it's business as usual today. that could change once the snow accelerates and accumulates. back to you. >> okay. thanks for that. coming up what the greek elections mean for the global economy. vul chush -- i don't want to call him a vulture.
price will be paid in cash. jenerac holdings is up this morning. the maker of backup generators up ahead of the snowstorm. also drug maker shire gets okay. and greece's anti-austerity party winning the general election over the weekend putting the country on a possible collision course. michelle caruso-cabrera has got more and she is there. michelle? >> the radical left party, it's called syriza. they didn't win an outright majority, but got a commanding enough lead they were able to form a government. alexis sipris likely to be sworn in in the next couple of hours. this is a party full of
socialists and marxists. they say what they want to do when they get into office they want to undo many of the things that they have been forced to do over the last several years by their bailout partners. they want to raise the minimum wage. they want to eliminate a realize property tax. they want to renationalize them they want to do a lot of things that means they're going to go head to head with their bailout partners in the next coming months. so it's going to be a real showdown. that's one of the reasons why while european yields on average are incredibly low, greece's yields are much higher. they started to rise when it looked like sipris would be the next leader of greece. it had gone to 15% a few weeks ago because they worked hard behind the scenes to talk with every major wall street firm and london firm to say we're not going to touch the private sector debt. that's important when we show
you the yields for greece. it's only for a very small pile of the massive debt that greece has. roughly $30 billion. remember they've got $350 billion worth of debt to other countries. i spoke with alexis sipris last week and said what would you say to the u.s. and to investors, should they be worried? >> for the united states the message is for greece the next day will be a day of optimist, of hope. >> should investors be frightened? >> no. there's no fear no afraid. only hope. >> so here are the next steps we're waiting to hear. who will be the new finance minister. that's crucial. then they've got to do that because they have to address or likely to be some cash flow issues in march.
they're still very dependent on bailout money, guys. it could be a rock and roll ride. most analysts say they don't think a greek exit is probable but they certainly do think it's possible. back to you. >> all right. thanks. here to help us break down more wilbur ross. people talk all the time, wilbur you got money in this. you got skin in this game. >> we do. maybe more skin than we want. >> but there's something called risk/reward. this is not your first rodeo, i don't think, is it? >> no. and i don't think this will be the world's worst bucking bronco either. >> you made how much money on that bank in ireland? >> oh, we about tripled our money. >> it was down by a third. just like your bank is down a third from your initial investment. >> that's right. >> but it's unpleasant, isn't it? >> it is. and it makes you feel scary. but i'm feeling fairly good
about what just happened in a couple of regards. they're not wasting any time organizing the government. they've got to deal with it. they will give them 162 seats out of the 300. that also means they have room for defection from some of their most extreme people when it comes down to resolving things. we believe that sakas will be their prime minister. equivalent of vice president but more powerful. barfukos is a professor at the university of texas and is much more than the rhetoric that's been put forward. and so is sakas' belief. most importantly they're professional economists and they truly understand the financial conditions of greece. >> when you made the initial
investment, were you assuming that this would not have been the outcome at the time? >> we made two assumptions. one, we were hoping that samaras would stay in. >> that didn't happen. >> but his rhetoric when we ran was just about as extreme as the rhetoric. then as soon as he got in, he became very cooperative. it's every month. it starts in february at a few hundred million euros and it ramps up. by august they need 15 billion euros of debt repayment and interest payments on those loans. >> so how does it play out? >> yeah. when does that -- >> i think again the good sign is that speed with which they are moving i think they'll have their whole team in place by tomorrow. then it will only be ten ministers rather than the 18 before. so that suggests to me that it's
consolidating power in a relatively smaller group. and that's probably a very good idea. in fact, today there's a meeting with the finance minister in brussels and they're having him by phone participate in that meeting. so it sounds to me like they're not going to fumble around in the very early days. i also believe the eu will make concessions. not in the sense of actually canceling debt but they could cut the interest rate. greece right now is paying about 8 billion euros a year in interest. the average rate is about 2.5%. they cut that in half. that would save them 4 billion euros a year. >> they still don't have the other 4 billion to pay though. >> they don't. and they'll need some relief from the early maturities. i don't see that it's very likely they can pay the 15 billion just on their own, but i think everybody knows that.
so effectively if you cut interest rates and postpone maturities, you've really cut the debt. even though you're not cutting the nominal face amount of it. that's really how i think it'll play out. >> i've never seen you with fear. i've never seen it. and you just said it is scary. what could happen? could you lose everything? what would the scenario be where you are crushed? >> nothing goes to zero. i don't think they all will blow up. i don't see that happening. i think mark to market there could be ugliness on a temporary basis. but a government can't function without banks -- >> can you buy more? >> you could, you would be able to? >> not banned from buying more. >> and the same investment yeah. >> yeah. we did that with bank of ireland.
we came in at ten cents. >> you haven't done it yet? you have not done it yet? >> no the election was just last night. >> all right. what about you are seeing some stuff -- i don't think vulture. i think you're probably -- what's wrong with a vulture? >> you like vulture? >> no. i like phoenix. >> just because of the way a vulture looks? you don't like picking -- >> should we talk about a vulture market? >> i'd rather be a vulture than a billionaire investor. >> i'd rather be a phoenix. >> so oil, how would you play it? >> we think oil is going to be very low for at least through 2005 probably well into 2016. >> '15 and '16. >> and it more or less levels out at around 70 a barrel. we don't see it going back to anything like where it was. and it could get messy because
it's low. so nobody's going to stop lifting just because of fed 45 or 35. >> if you wanted to hit a home run, what would you buy? if you want to have less risk and good reward? how much would you buy? >> i don't understand about less risk. but we've been getting very interested in the busted bonds of the smaller production companies companies. >> that's a lot of risk. >> but when do we think it turns? >> yes. >> i don't think it the oil price will turn until late into 2016. >> you just said late 2016. that's two years out. >> well that's a long time. >> yeah. >> they probably have already gone to where they're going to go, right? >> no. i think it could be a little lower before it goes back up. but -- and i think the real key for the financial stability of
those companies, most of them have asset-backed loans from the banks. and they redetermine values every april and every october. the first hurdle for banks, these companies to get through is april. the bigger hurdle would probably be october. >> all right. any -- just in europe or anything we got qe which is they got to get rates lower than half a percent. >> that's just the currency though. >> yes. that's effectively what it's doing and will do. >> 1.12 today on the euro. we picked the one european country to visit that we got nothing from. >> switzerland. >> we prepaid everything. so we were okay. >> but we thought we were goek to bring some things back. luckily becky gave me some little swiss army knives. chocolate ones. i told at the airport, my friend
gave me -- >> knives. he told them knives. >> i almost didn't make it back. >> you could have eaten them and solved the problem. like, look. >> they weren't for you and you're not supposed to answer yes when they ask you that. >> i'm supposed to lie. nobody gave me something. do i count as somebody? >> were they dark chocolate or light chock lan? >> milk chocolate. they really look like swiss army knives. and i was carrying two of them. someone gave them to me to take. which the whole thing -- thanks wilbur ross. coming up next, would you buy a car from this man? that's right, george soros is looking to follow in the footsteps of warren buffett apparently on the hunt for dealerships. phil lebeau has the story. and then we'll get an update on how prepared if the city is for this coming blizzard. "squawk box" returns in just a moment.
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welcome back to "squawk box," everyone. we've been watching the futures this morning. right now you're going to see that those futures, wow, things have really turned around. s&p futures are positive at this point up by almost 1 point. the nasdaq up by 6 points. nasdaq down by 3.5 points. that's a big turnaround from earlier today. george soros looking to follow in the footsteps of warren buffett and buy a large
auto dealership group according to reports. phil lebeau has more on this developing story. hey, phil. >> hey, joe. we talked about how in the dealership space this is the sweet spot of the market. because they have so many vehicles that will be coming on the next couple of years. it's no surprise when they reports came out over the weekend that the soros management fund was in san francisco at least a couple of representatives at the national auto dealers association annual meeting. and at that meeting according to reports in automotive news there were a couple of representatives from the soros funds meeting with dealers looking at whether or not they should invest perhaps buy. strike up some kind of a deal with some of the big larger dealership groups that are out there right now. that's really the idea here nap if this is a deal it will likely be for a large group. so why would the soros fund be looking at dealerships now? as i mentioned in the auto space, when you look at the dealerships, they are entering the sweet spot of the market. look at things from their
perspective. you've got a large number of vehicles that are going to be coming off lease. that's really what you'd want to invest in the strong cash flow. when berkshire hathaway bought the auto tile group or decided to partner with them last year for $4 billion, everybody said that makes a lot of sense. there are a lot of independent dealers out there. over time you can snatch up more of those. as i said earlier, you've got so many of these off-lease vehicles coming on market over the next several years in addition to the aging vehicle fleet. and it's really on the service end, guys where you're going to make your money in the dealership space. that's a reason why the soros fund is following in the footsteps of berkshire hathaway and perhaps looking at investing in these. take a look at shares of autonation and group 1 over the last couple years. people realize the value that's there within publicly traded auto dealerships. there's no indication soros is looking at the firms but there
are plenty of large private firms out there. you got a lot of these that are second or third generation. they're ready to sell or at least look at possibility of selling. >> phil what are the limits on how many of these dealerships that you can kind of roll out, how many are they allowed at this point? >> i've not heard any limit. i don't know that there is one that's out there. i would imagine, becky, that look. if you start snatching u. thousands of dealerships that at some point perhaps you get the attention of some regulators somewhere. but there is nobody who said you can only have "x" numbers. >> i guess you get the attention of the auto manufacturers too. >> you bet. >> so wayne and mike thought about this ten years ago now and ten years later buffett and soros are figuring it out. that's something, isn't it? >> look at the success autonation has had. >> i know. >> everybody is looking at that saying now you're going to take that brand and go nationwide that's a smart business plan to follow if you're interested in
the space. >> i can't believe it worked. after waste management and then blockbuster and republic and this other stuff, i can't believe it worked. but it did get down to three or four bucks during the crisis before they were bailed out. remember? that got a little dicey there. >> it got dicey for everybody in the business. i was a regular appearance for you guys. >> phil, thank you. >> you bet. let's get back to the big weather story of the morning. boston bracing for a blizzard. nbc's miguel almaguer is in beantown this morning. good morning. >> hey, becky. good morning. boston certainly is bracing for what's expected to be a wicked winter storm. we could see two feet of snow here starting later on tonight. of course the temperatures here are already freezing. the mayor is asking for everyone in the city to brace for this storm. he's asking for folks to stay inside that don't need to venture outdoors. they have some 700 pieces of snow-removing equipment at the
ready. 35,000 pounds of salt ready to hit the roads here as well. the conditions here are expected to be whiteout later on this evening. the snow will continue to rain down on boston and this region affecting some 29 million people all the way through wednesday. it's going to be certainly some tough days over the next 24 to 48 hours out here. >> good luck. we see the snow already coming down here in new york. when we come back this morning, jim cramer is ready for the opening bell on wall street. we'll get his monday morning strategy just ahead. right now as we head to break, look at this week's economic calendar. tomorrow durable goods. thursday jobless claims. fourth quarter gdp on friday. stick around. "squawk box" will be right back. financial noise financial noise
let's get down to the new york stock exchange. jim cramer joins us now with a cup of earnings reports this morning. i know you watch housing. any other things that give us something to key off of today? >> well i think that the market seems to be shaking off greece pretty well. it's almost as if people feel that this kind of coalition government including the far right, is a further wake-up call to germany that look this is what happens if you're just too stringent. norfolk southern reports, not that great.
the horton quarter i love. we need to see more and middle buyers of homes. that was a good number. that could really help the economy. it's a positive picture being outlined right here. >> nerd that you are, which earnings report are you -- i mean, when you think about it you just get all -- the hair on your neck stands up. you're just so excited about seeing how they did. which one this week? because there's a lot of big ones. >> i think this week it will still be apple because the expectations have really ramped up in the last couple days. so what we see is when this stock heads towards the 52-week high, there's almost nothing they can do that's good enough. so be careful. i think if you don't own it yet, you should just kind of way. there's no reason to go in at 113. >> microsoft, too, right this week? >> microsoft is big. this is a quarter where he can do a lot. kind of break with the previous mold of steve ballmer. obviously cloud is beginning to be the issue. how quickly they can take business to the cloud. but what can they do with xbox
what can they do with skype. i think it is ripe for some value creation. >> give me one more. it's a busy week. >> yahoo. i think that people are saying that yahoo's got a strategy to be able to sell some alibi baa baa. at the same time the core business, people are saying is better. >> talk about this later i'm sure on "squawk on the street." >> okay thank you. when we come back this morning, from snow in the alps last week to a potentially historic blizzard in new york city, we are living in a winter wonder land here. check this out. we know the blizzard gets worse later, but this is what we are looking at right now in new york city. snow starting maybe earlier than some people had been anticipating. get ready. flights are being cancelled. people are preparing. we'll talk more about it when "squawk box" comes right back.
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you'll need the right it infrastructure. from a partner who knows how to make your enterprise more agile, borderless and secure. hp helps business move on all the possibilities of today. and stay ready for everything that is still to come. the northeast has been preparing for a major blizzard, and guess what if you are out there in new york city today, the snow has already started. a lot of places in the country dealing with just this right now. this is what it looks like right outside of our studios on 50th and 6th avenue. this has been playing its way
out throughout not just the tri-state area. we heard earlier from a reporter standing by in pittsburgh. boston is waiting for this. but this is what we are seeing in new york city right now. morgan brennan has been standing by. she's been hanging out this morning in times square. morgan, what have you seen so far? >> well i'll tell you, in just the past half-hour, the snow is actually picking up. and it's actually gotten colder out. it's about 27 degrees here in times square. as for preparations that are under way here the city the sanitation department says they've got 255,000 tons of road salt on standby. once about two inches of snow start to hit the ground they're going to have 1,600 plows out taking care of that. the port authority, the new york-new jersey port authority says they've got 60 snow machines. they've been prepping all of the bridges, tunnels, airport roads with salt. the new york transit authority is putting trains underground. they're prepping all their buses. folks are still walking around.
they're going to work. but we've got a blizzard warning that is going to be getting under way at 1:00 p.m. eastern, so we could start to see some shortened workdays for folks here in the city because the governor as well as the mayor of new york are telling people to just go home or stay home if they can and work remotely because they're expecting really harsh conditions. >> thank you for that. i think we just lost her. >> i think she was having some trouble with her ifb. but obviously this is a situation where, again, governors are asking people to stay home. mayors are asking people to stay home. >> could have a real impact on the economy, if you think about it. >> sure. >> nobody's going to be shipping anything. fedex and ups go down on the east coast. >> retail stores go down. >> we've talked about this in the past. it was a huge issue last year when these storms came right around the holidays and it kept packages from actually getting pushed off. this is, again, what it looks like in new york city right behind our studios. >> i think morgan may be back. morgan you still there? >> yeah guys.
you just mentioned ups and fedex. and i've actually reached out to them. i also reached out to the postal service to see if they're expecting any kind of impact from weather. all of these parcel carriers do have contingency plans in place. they also have meteorologists on staff. so they are making plans accordingly. both fedex and the postal service have said to me that their customers are aware of the conditions and that their first priority is the safety of their drivers of their workers. so it will be interesting to see what happens on that front. yeah. >> is there any history of closing down the stock market midday as a result of snow? >> not that i'm aware of. >> i've been speaking to the folks over there. right now, it's business per usual. but in severe storms, that has happened. it's a very rare occasion. >> pretty greedy. i don't see that happening. but what should we do? we'll be hanging outing right?
you've done this before. places stay open here don't they? restaurants? can walk around. >> you haven't thought about what we're going to do? >> i thought we were going to get some movies and popcorn and snuggle. >> so we're going to hang. >> we're going to hang. >> more of the same. that's what you guys were doing last week in davos. >> three's a crowd, baby. >> i'm leaving it to you two. >> not that there's anything wrong with that. i'm going to go home and i'll be back. >> you're coming back. >> let me know where you're going to be. >> we're going to have a big party tonight. >> stay safe be careful. >> can you rent "whiplash" yet? >> maybe we should just go to theaters. maybe theaters will be open. >> or "birdman." >> movie night. "squawk" movie night. join us tomorrow. there will be a lot of snow. hopefully we'll all be here. "squawk on the street" begins right now. good monday morning. welcome to "squawk on the
street." i'm carl quintanilla at the new york stock exchange. what a week we have in store. the busiest stretch of earnings season. a two-day fed meeting begins tomorrow. obviously the snowstorm, the market actually rebounding a bit after those greek elections over the weekend. european stocks mostly in the green. oil is about even after falling about 6% last week and then the ten-year yields right around 1.82. our road map begins with the markets steadying a