tv Squawk on the Street CNBC March 14, 2017 9:00am-11:01am EDT
♪ cold enough to chill my bones ♪ ♪ feels like i don't know you anymore ♪ ♪ i don't understand lower manhattan, where snow totals will not be as bad as feared. although 70 million americans still face blizzard conditions today. good tuesday morning. welcome to "squawk on the street." i'm karl -- carl with david faber. a two-day fed meeting begins. oil is below 48 or a bearish
opec production report. our road map begins with the snow coming down. states of emergency declared in new york, new jersey, pennsylvania, connecticut. we'll take you live to the worst of the storm. bill ackma th sells out of valeant, a $4 million loss. the congressional budget office out with its assessment of the republican health care plan, saying millions will lose coverage. we'll dig in on the report. first up, states of emergency declared in several states as the winter storm hammers the northeast. already a foot of snow in parts of the region. more than 8,000 flights have been cancelled this week due to the storm impacting more than 400,000 passengers. jim, we're going to see what the impact is on the airlines. i think right now, i saw a map a few moments ago, there are only eight inbound flights to new york on the entire globe. >> yeah. look, i know we had a good report this morning, talking about whether there was -- how badly the quarters will be.
you know, i'm very concerned. this group has been very weak since buffet came out and talked about it. i know phil lebeau said, listen, it is one off. if you look at the stocks the day after buffet was on our air, you'll see the big rollover. a lot was because southwest reported a weaker month because of los angeles weather. all i can say is when you see these, this group's numbers will come down again. it is too early to buy these stocks. do not bottom fish. there will come a time. this was a poorly timed wreck march numbers storm. we recognized that these companies are very on thin ice when it comes to the revenue. >> indeed. yeah, we're going to watch the airlines today. of course, it's one of those days, jim, where you have a phoner with the ceo of generak. we'll see how the stock is working out. though the sleet line, david,
collapsed back to the city, meaning it is more of a mix in manhattan. we should point out, pennsylvania and new jersey are still getting hammered. >> getting hammered, yeah. as you saw the pictures outside the nyc, and as you and i know from walking in here, it wasn't snowing. it's not necessarily really accumulating. you can see it there. in any great amount. previously talking as much as 18 to 20 plus inches. that's not going to happen here but other areas are getting sopped. >> washington, d.c., guys, the federal offices there are on a three-hour delay because of the weather. they actually put out ppi this morning, jim, live on the website. they did not lock up the media as they normally do. by the way, that's a five-year high on wholesale prices. the fourth consecutive beat. >> bond prices went up. it is hard to figure out what's going, other than the fact we have the fed meeting and they'll take action. i'll pugive a thesis here.
like come on, you have to be kidding me. when amazon has a day like today, people are at home, amazon numbers go higher. amazon's stock is up from when they reported the so-called bad quarter. these are nails in the coffin days for bricks and mortar. people sit at home and buy what they normally would. i know that david faber and i were talking about the idea that, look, it's non-stop. you return them after you get them. these are days where every time this happens, amazon gets new converts. the bricks and mortar malls do worse. >> yeah. speaking of doing worse, guys, yesterday, of course, we got the word that bill ackman has finally exited his long-time position in valeant, one of the worst losers we could imagine in what has been certainly a very mixed track record from the well-regarded hedge fund manager. selling at about $11 a share, 27.2 million shares. that included exercising
derivatives for shares that might not have been on the books. you may have seen in the filings it was only 18. 27.2 million shares. $300 million trade for a position that was once, not even that many years ago, worth many billions of dollars. of course, mr. ackman amassed that position in valeant after partnering with the company in the unsuccessful attempt to buy allergen through 2014. that's a partnership he got a lot of heat and continues to face litigation. hence a litigation management agreement between the companies, in terms of if they'd lose it, what they'd split in terms of liability. val valeant shares are below what he sold it. is it an opportunity for other investors to say, now is the time, with ackman getting out, though it wasn't a large dollar
to sigs f-- position for him. he spent a lot of time in the company and on the board. >> i am concerned the stock is just a stub but the timing is questionable. you know that march 9th, they did a cup size bond offering, refied driven secured notes. there was demand for the short term because they were paying 7% for the mid -- for the shorter term bonds, it was a good deal for the buyers. this was a poorly timed exit. the bond owners are saying, holy cow, did we make a mistake here? why would the guy leave just when the refinancing was actually adored by wall street? lots of questions. joe papa obviously in there. many felt joe in a harder situation. i know you did great reporting on this this morning. maybe they have to roll back prices. their whole strategy of buying, using low taxes, really not
doing as much r&d, is a disaster in a president trump market. a disaster. so i think that he saw the writing on the wall. the last bit of writing was a very positive bond deal. so i don't know. i wouldn't want to be in this because i feel like their business model was set up not for what president trump wants. but we have to start thinking, you know, the man filed a -- he filed a piece of paper that said that he might sell his chipotle. that's something we have to watch next. why did he do that? we don't know. he has a big position at chipotle. i know these don't raise a lot of money, david. it is not like this position comes in and says, i have to meet people who are going to pull out by the end of march. because he does have the bought capital. but i want to know, who bought the deal? who was wearing the valeant pharmaceutical right now? what firm? >> jeffreys did the deal in terms of at least being willing to meet his offer to sell.
apparently, they had reverse inquiries, jim, from potential interested clients that wanted to own some of the stock. you know, they were hoping to get it done$11.10 and $11.40. it's not that pig ofbig of a nu. we've seen secondaries larger than this. in march of 2015, he initiated the position, the stock was $198 a share, jim. >> yeah. suboptimum trade. >> he'd come off a great year. of course, he'd owned the allergin position. though valeant hadn't bought it, activist had. hershing made out well. they had a split with valeant in terms of the profits but they made billions on that. the mistake, of course, was in rolling so much of that, jim, into valeant itself. endorsing the business model you were referencing, in terms of the low tax rate. the roll ups, deal after deal.
not spending a lot on r&d. raising prices on drugs that didn't have a lot of competition. that was the strategy of michael pier pearson. he'd exit as the company came under pressure overtime. his relationship with philador, which it controlled. now here we are at $11. joe papa, of course, has been put into the seat. in part lauded by mr. ackman wiwho was on the board. $29 billion in debt, jim. >> looks like there were no large asset sales to reduce the debt even further. i talked with someone yesterday who had a gigantic short position on valeant. i said, why? he said, we're shooting against ackman. >> does that end? >> right. this guy is going to cover -- >> will the guys go home? >> he'll go against some of the other trades. what is -- i said, why? it is ackman.
he said, it is ackman target. it is ackman jcpenney. herbal life, where carl ichan raised it. a lot of the hedge funds can pull it out of the hat and it is not a lot of money raised. the bet against ackman trade is alive and well and people are having fun with it. i don't know it is the right thing to do or the wrong thing to do. my guy is covering it. said, listen, that trade is done. >> yeah. well, you raise the other point. does ackman potentially sell in other areas? to be fair, he has a large position in mondelez. he hadwiners winners along the . canadian pacific railway. you listed the doozy, jcpenney. >> suboptimal there.
ill advised choice. i think mondelez, if someone is betting against mondelez, it could be a sucker bet. rosenfeld is in the last year of her restructuring and the company has fire company. they could buy back the stock instead of peoplemondelez. this was a company that made a lot of sense. there were a lot of smart people in there. nelson peltz in there. that's a bad bet, to go against that one. the chichipotle, i don't know. five, six months from analyzing how long people remember the kind of thing. are they going to shoot against chipotle? yeah, of course they are. too easy a trade. >> we know about some of the short positions on cmg. of course, ackman comes on african-american, gfrom time to time. this is bill on "squawk box" in august of last year. >> the worst period performance in my hisly lhistory as an inv.
we made a passive mistake. paid full price for the company and betting on management's ability to create assets. we can talk for an hour about the mistakes we made there. >> to david's earlier point, how many mistakes does general growth pay for? >> general growth i would downgrade. it is a tough mall situation. i'm a nine lives guy. i think these guys have nine lives. he'll come back. he'll start a new position. there will be a new movie about herbal life for all i know. there will be a city as a weak market -- kind of a market position. hold issued this morning on herbal life. i wouldn't worry. you said, let's face the music. get the combination of let's face the music and dance. one of sinatra's favorite. he did it and it was a killer, chairman of the board. say don't cry for me, bill
ackman. it fits in terms of broadway analogies. a major snowstorm as we said intensifying in the northeast. nbc news's jay gray is live in central park this morning. hey, jay. >> good morning, carl. look, we've had snow since about midnight. it is shifting over to mostly sleet at this point. it is going to continue throughout the morning and into the evening here. now, the national weather service has backed off a bit of the forecast. they say we'll only get 4 to 8 inches of accumulation when it is all said and done. we're going to see a little bit of rain mixed in with all of this throughout the day. still a mess in the city, as you might imagine. a state of emergency right now. a winter weather advisory that stretches until 8:0 th0 this evening. in central park, we've seen a few joggers and people walking their dogs but nothing like a typical morning. on the roadways, basically empty, which is good news.
a lot of businesses saying, stay home today, maybe even tomorrow. stay out of what is going to be a tough go. this is a system that'll keep moving up the eastern seaboard. boston will be affected all the way to maine tomorrow. millions of people will be hit by this winter storm. a reminder after what's been the last couple of weeks of record high temperatures in the region. not the case right now. it is going to be, again, messy over the next couple of days. right now, most people, at least in this area, deciding to ride this thing out inside, which i can attest to, guys, is a good idea. back to you. >> you've seen your share, jay. good to see you. jay gray in central park. when we come back, a lot more on the snowstorm, including the impact on airlines. we'll talk to the former ceos of continental and america. look at the premarket. futures responding somewhat to crude on this opec production report. we'll talk about that when squawk on the street continues.
say carl, we have a question about your brokerage fees. fees? what did you have in mind? i don't know. $4.95 per trade? uhhh. and i was wondering if your brokerage offers some sort of guarantee? guarantee? where we can get our fees and commissions back if we're not happy. so can you offer me what schwab is offering? what's with all the questions? ask your broker if they're offering $4.95 online equity trades and a satisfaction guarantee. if you don't like their answer, ask again at schwab.
over ten years. while house says it disagrees strenuously with the report. especially the figures on the uninsured. mulvaney saying the story defies logic. price says it is not believable. what does the president and congress do with this? >> well, i think the take away here is the drain the swamp president is in the swamp. this is all about the swamp. this is what happens when you get tied up with congress. a i've been saying we are not going to see anything very big substantively on the tax, corporate tax. we're not going to see anything big in the repatriation. i had the ceo of u.s. concrete on last night, trying to get concrete for the wall. he's in a lot of projects. he's talking about infrastructure 2019 at the earliest. a lot of that is because of the swamp. >> indeed. of course, speaker ryan and some others say cbo is just not equipped to handle the second
and third part of administrative action. congressional action, things not in this bill or this draft, but are part of the promise. >> tom price is saying the same thing, i guess, in terms of the regulatory relief and things that they're going to be able to do to help move things along. you know, jim, it all comes down to timing. back to tax reform, i think, for the market, in terms of how long is it going to take, if at all, for repeal and replacement of the affordable care act. where does it leave tax reform on the callendar for this year, in terms of what they hope to get done. we're waiting from the white house really on much more specific asks from it in terms of what it wants when it comes to tax reform. i don't know. i mean, it comes back to this continued question. how much of the expectation for tax relief is in the marketplace, or is much of that regulatory relief, which is a
lot easier to get to and imagine actually happening than on the tax reform side. >> regulatory relief. in terms of the banks, the idea the banks will raise, i mean, look, i'm not a washington capitol hill guy, but i am an economi economics, interested in reform guy. this debate is the house jumped the gun. i do not think trump would have liked the order but the house voted in on repeal and replace. this is something that'll take forever. i think trump is not in control of the schedule. and i think the people are starting to realize, wow, this is out there. i'm fine with it being out there. one day it will happen. but those who bought expecting -- look at the infrastructure stocks. they're red hot. what the heck? did they not understand how congress works? they're doing everything they can to not make this happen. this is going to be debated forever. i mean, the cbo report, 24
million, i mean, suddenly, every republican is worried. wait a second, are we going to lose when this thing comes up? obviously, the idea that trump was in control, no. he wasn't. >> yeah. congress is not built to make things happen quickly. that's part of the design. >> checks and -- like the hamilton and jefferson thing. >> yeah. >> jim, we'll get your mad dash in a few moments and count down to the opening bell. look at the premarket on this snowy tuesday. "squawk on the street" continues straight ahead. the power of a low volatility investing approach.
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all right. we are about six or so minutes before we get to the opening bell this morning. let's get to our mad dash. unfortunately, you're in new jersey but it is not too far, jim. >> i wish i were there. >> i feel your brain waves. >> i wish i were there. this is one of the things where i'm staying at some hotel. it is like, i don't know. i mean, we were not -- this was not k2. we were not on the north side of everest here. give me a break. david, a lot of times, people remember two documentaries that were done about walmart. including the age of walmart. we may be back. bank of america, merrill lynch, says the multiples are going to expand. why? added to the u.s. one list which, by the way, was probably clear. you can go down without a problem. traffic comps, 1.4%. expanding ecommerce. david, i'll challenge you on something. we've been talking about the border tax, which is another horrendous thing we get caught up in. how about this theory? walmart would be a beneficiary because the other guys, other guys don't have the balance
sheet walmart has. walmart will be able to buy stuff at a better price and really come after the dollar stores, target, pretty much everybody. walmart could be a winner in the border tax because they have such clout. >> i suppose. but isn't it possible that everybody is going to be a loser, if you're selling stuff? you have to accept a lower margin. the point would be, what, that they'll be able to withstand it? >> yeah. >> more effectively? >> massive bankruptcies. why? because look at these companies, the way they're trading. they're obviously trading with the idea that everybody's balance sheet is going to be threatened, except for walmart and amazon's. maybe we have two stores. that would not be exactly optimal. just remember that walmart can handle this a lot better than a lot of the other companies that are completely hobbled here. you see one after another go under. no one is putting it all together and realizing, you know what? if you're in apparel, you're done. stick a fork in it.
>> all right. well, so may be the border adjustment tax. >> really? you got new stuff? >> no but i think it'll be tough. we'll be talking a lot about the opening bell, jim. stay tuned. maybe go outside and check the weather for us. >> please, it is sunny out. >> i know. do some shoveling. we're back after this. hey gary, what'd you got here?
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in the prospectus at thriventfunds.com. jo you' you're watching cnbc, "squawk on the street." opening bell in a minute. floor relatively populated as a lot of people in the city made their way to work despite the snow. the fed, a two-day meeting begins in washington as scheduled. jim, it looks like the saudis are back to their old tricks, if you look at the production numbers. >> yeah. look, 47.44. we'll get the oil inventories tomorrow. no reason to believe that there has been a decline. the speculators got caught on the wrong side. you have to let oil come down a little. the stocks were reflecting the fact that oil was going to come down. yesterday, they kind of flat lined. way too much pressure from speculators. way too much oil around the
system. >> a risk of 45. >> makes sense. no place to put it. got to go somewhere. >> let's get to the opening bell. the s and p on the bottom of your screen. u.s. military veterans of colombia university over at the nasdaq, chemical financial based in michigan, celebrating its 100th anniversary. we'll keep our eye on the post. see where it opens. down 14% in the premarket, vrx. >> i'm told that was done, the block trade, of ackman's position. 27.2 million shares traded up to the bell yesterday. the stock is down further now, down 11%. this is a new low for valeant at this point. >> yeah. >> you know, we're talking really about not much of a market cap. one reason we talk about it a lot, still has a large enterprise value. that includes, of course, its debt, which is roughly $29
billion. we've reported in the past, companies attempting to sell assets. one that had gone down a path of selling was salix. chose not to do that. bausch and lomb continues to be considered its gem of an asset. even though the last quarter, it didn't grow much. >> look, this is a completely overrated asset. i think one of the things we absolutely know, without a doubt about bausch and lomb, it's worked much less than those guys typed it for. the ones who knew it best were the ones that said it would be antitrust action if they bought it. no reason for a drug company to say, i want this asset. this has been a cutthroat market for years. by the way, a lot of people understand that valeant was wounded and they are cutting them anyway. everyone was shooting against valeant. this is the whale. the whale is a beached up whale. it is hard to get back in the
water when they're beached up like that. doesn't really work. >> beached whale. >> beached whale, man. >> okay. all right. >> oh, man. >> so the next berkshire hathaway is not happening then. disney gets an upgrade today, jim. goog talking about attractions offsetting the nervousness of tv networks. >> espn was a major focus down the 93 and we forget. oh, yeah, they're fine. lose a few people. the theme parks are great. the movies are great. by the way, is this not exactly what iger said? listen, the focus is going to be all the great things they're doing in the theme park, the movies, the franchises making a minimum of $800 million. it'll cushion against espn, who will be doing technological things you haven't seen yet. espn is a -- i brought my cell phone to show you. this is how i get espn now.
you have to sign up with your provider. but i think the miscounts of espn are far more important than people realize. i do not think that espn is doing as badly. then again, tv is doing not that well. nobody else has what disney has against it. though cbs, one of the ten best performing stocks since the bottom. >> that's right. >> yeah, up another 6.5% this year, is cbs. its sister company, viacom, up over 22% this year so far under the new leadership. certainly made a comeback after what was a very difficult year. of course, a lot of internal struggles there in 2016 for viacom. >> have you seen next star broadcasting, some of these smaller broadcasters getting a lot of ad dollars? a lot was from the election. their stocks are soaring. sirius satellite, people ask what is going on there.
i say it is good business. the other ways to advertise besides giving the money to senasnap are doing well. i'm being facetious with snap. i'm waiting for a buyback. >> we haven't talked about snap in a few days. there it is. $20.80 a share. still trading nicely above the $17 offer price. >> yeah but the quality of snap, it lasted for a quick bit. i believe snap can go back too where it was but we need to see short form programming. something else. snap got a little overheated because millenials came in and felt, well, listen, we really like snap so we'll buy it. i like snap. it is very good. i do believe that people click on some of the programs. the stock got overheated and now it is going down. i think it'll stop going down. it's not twitter. by the way, twitter has been weak lately. >> yeah. >> i find that, other than facebook and al fa bphabet, thoe getting the online dollars.
the tv networks with it geing the offer. >> that's going to be four days down on snap. >> yeah. >> into the -- >> not a dividend or buyback but it is kind of out there with holders that felt this was going fob the next big thing. >> yes. >> and i do believe there's fundamental work to it, but 10% that it was okay. it was going down like this and 10% said it was okay. then it bounced. you have to come on every minute. is ackman in it, david? >> we're not going to get it every day. >> not yet. >> i wondered what you thought of what was said yesterday. i see sitron said yesterday they're skrar cratching their h over a deal over revenue. >> he can scratch his head all he wants. i have a term for what sitron was on that.
it's called wrong. here's the thing, this is a data company. i find that krasanich -- intel is an inexpensive data company and an expensive pc company. this is very good, very forward thinking. the amount of chips going into these cars is incredible. i think it was a brilliant move. i think people were saying, wait a second, only a 663 employees, only has $300 million plus in revenue. doesn't matter. it'll be competitive. versus invidia and the google chips. googles cars are being tested everywhere. when i was in a driverless car with google, i was shocked at how it is not even a novelty. i mean, it is not a novelty anymore. it is here. it is now. >> and it is coming to a highway near you. >> oh, yeah, it is coming.
>> guys, not too often we get to mention air medical transportation or air tourism. when i say air tour. i'm talking more about, like, helicopters and things of that nature. i mention it because a company named air methods is being acquired this morning by a private equity firm. the price, $43 a share in cash. we can take a look at air methods stock price. airm if you're follow ing along in the control room, guys. it is up a bit again. they say this transaction will enable us to continue to execute our strategy and strengthen the market position as a leader in air medical transportation and air tourism, jim. >> i thought you were coming to me with money gram, david. it's resurrected. >> do that in the faber report. >> oh, gee. the faber report. >> i know. haven't done one in a while. we'll do money gram in a second. >> all right. see j&j go up every day.
>> why is that? >> i think the triple-a balance sheet. the slowdown is good. united health and that have become go-to names for the large managers looking for health care. money is flowing out of a lot of the other drug stocks. they don't have the momentum. and i think these two are -- j&j should never have been down. >> no. >> people like that acquisition, david. they like the acquisition. >> they also went to cagny, where they have beauty and over counter stuff. listeri listerine, a lot of things. some believe they're trying to get bigger in consumer. >> makes sense. tylenol, they're gaining back all the shelf space. do you know who they lost the shelf space to? >> no. well, perrigo. >> joe papa.
papa is integral to a lot of things. not talking about papa john, which had a bad quarter. i'm talking about anything papa. >> consumers going to get a lot of attention today. there is a consumer conference. walmart presents. macy's. delta. jcp. whirlpool. dick's. >> i saw dick's upgrade. >> we don't have to talk about ruby tuesday but they are up today for various reasons. >> that was the best salad bar i've seen. i could bang them for fortunates. >> yeah. last time posted a profit was 2011 on an annual basis. it's been tough. >> del taco had a good number, which was surprising. chipotle lost a lot of customers. i think chipotle will compaq. remember, the chipotle ackman trade is alive and well. they're banging it down. could be an opportunity there. >> jim, yesterday, mark zuckerberg gave a talk, broadcast on his facebook page,
in which he said that the notion the company wants fake news for the monetization of those clicks is crap. that's what he said. he says, we are also victims of this. we don't want any of it. we don't want to be in the business of deciding if what people say is true or false. what do you make of that? >> i think facebook uniquely is trying to -- is pro-user. one of the reasons why it's worked so much. the ads aren't intrusive. zuckerberg is trying to monitor everything to make it a good experience. i know there is conspiracy theories about facebook. it is nonsense. instagram and facebook are both powerful. snap goes down i think because instagram puts out things that look like snap. it's an ecosystem that doesn't want to be polluted by fake news. i find that zuckerberg is the ultimate winner during this period. >> zuckerberg said this yesterday in north carolina. >> we are really against fake news and misinformation. there have been some accusations
that say that, you know, we actually want this kind of content on our service because it's more content and people click on it. but that's crap. right? i mean, no one in our community wants fake information. everyone wants real information. >> easy to say, jim, when they've already made a lot of money off of those views. >> they have. but i think -- remember, i think they're playing a long game and they don't want fake news. speaking of fake news, for those shooting against chipotle, when purging filed the 13-d thar, thd no current plans to sell. facebook is a terrific long era. i just feel like that combination of chief operating officer sheryl sandberg and mark zuckerberg. they are policing. they want great content for
great advertisers. fake news drives away the proctors and gambles. they don't want to say, you're against fake news. sorry. >> good point. very good point. they're playing a long game. meantime, dow is down 21. let's get to bob pasa knon the >> advancing stocks improved a little. look at the sectors. a little bit of a reversal of the old reflation trade. energy, the weak link. bank stocks are weak. there's the trade. energy is the story everyone is talking about. look at some of the big oil names. chevrons, furry, marathon. murphy down to 3%. marathon also weak. the immediate news, saudi arabia saying it raised its output to 10 million a day, reversing 1/3 of the cuts it made in the
previous month. oils was down, what, 11%, 12% this month. down again today. ongoing trend going on over there. the energy e.tf is down 4%. this is adding fuel to the fire and the concerns of the oversupply. this has been going on for a while now. crude troubles. now the additional question of whether or not saudi arabia is throwing in the towel. indications it might be true. a high u.s. recount. high inventory trends. we have record speculative longings in oil that may be unwinding. one of the reasons we're getting problems here. exploration and production capital growth out there. we're expecting the companies to increase earnings 60%. exxon is supposed to increase earnings 60% this year, including increasing revenues of 30%. all of this is on a simple idea, that oil prices will go up, near $60, not near $48 where they are
now. the point here is saudi arabia obviously is sick of losing market share and carrying the heavy lifting. complacency is getting flushed out of the system. exxon, 52-week low last week, and near it now. the dividend is safe, but obviously, other people are holding it because of hopes oil will go up. they're going to hit their earnings target, starting to throw in a towel a little bit. this is affecting other oil companies, of course. etf has been down 6%. all the pig names, the hall la burton. you're looking at marathon, noble, same situation there. it is just for the month of march. finally, the decline in oil is also starting to affect some of the high yield names. remember, they sort of came up, a lot of them reduced their
holdings in oil companies. if you look at the hyg, that's moved down about 3% this month. right in line with oil. not as much as oil but in line with oil. on similar concerns. david, the thing i note interestingly about that j&k, right now, above a 6% yield. that hasn't been there in a while. the competitors are 5.5%. that's notable. right now, david, dow is down ten points. back to you. >> thank you, bob. jim mentioned moneygram earlier. not a large company but you have an overbid this morning for moneygraham financial. it is an agreement to be acquired by and financial, a month and a half or so old, not quite that, announced at the end of january. it is the financial services giant eamericai emerging out of controlled by jack ma.
alibaba and alipay, and it's become a consumer financial services giant in the chi nynes market. also servicing small businesses. they've got a deal under where they agreed to pay $13.25 a share in cash. this morning, yuryu euro net, a bit. valuing moneygraham m at $1 bil. they're talking about cost sinner ynerg synergies. yur euro net tried to get this company years ago. it fails to succeed in that. a lot of this would seem to come down to the potential review in the u.s. of the committee for financial investment in the united states. it looks at the national security parameters of deals that it chooses to review and, oftentimes, when the buyer is chinese, you can imagine, you're
going to get a review. euronet says, we don't need a review. and they question whether or not the deal will be approved. to come back at them, i think, ant financial would point out it's been through a review when it bought i verify biomettic r not long ago. $60 million is what is being cited at euro net's synergies. there are none associated with the ant deal. in the current environment, they're talking about job additions here in the u.s. not job cuts. to the extent it comes down to economics, and it often does, $15.20 is 15% more than the current deal on the table. we'll see whether ant financial chooses to increase its current bid. you see the stock is trading above the new bid from euronet,
jim. there is a voting agreement already where ant and moneygram have an agreement. 45% of the vote is committed as long as the board is committed to that deal. the question is, would the board change its opinion after this higher bid? >> it is interesting, western union is trading up, not down. competitor. maybe people feel it is next in line. western union has no plans to sell. it would be hostile. inexpensive stock and doing pretty well. >> yeah. moneygram used by immigrant families, for example, to send money across the border. and it is very expensive. i reviewed some of the ant financial's operating systems. ecosystem they created on this. it is really, truly extord na extraordina extraordinary to see. far beyond what we use in the united states regularly, what they are doing in china. let's get to the bond pits now and rick santelli joining us from the cme group in chicago.
>> thank you, david. you know, this morning's ppi was definitely higher than expected. the headline number wasn't as hot as last time. that is not the main focus. to take it a step further, tomorrow's ppi will capture more eyeballs. if it is hot, regarding how to price it into the markets, specifically treasuries. all treasury maturities have made a pass at popping through the top of the range. they jump the range. not all of it has lasted because the curve is flattening a bit today. you'll see what i mean. let's go to september 1st, '09 -- sorry, june 1st, '09, when it comes to a two year. still basically at the highest level. fives are down, too. yesterday on the close, april of '11, tens are flirting with 2014 september and also the 260 level from december. it popped to 263. there is a lot of buying of
calls as the price rises and yields drop. july of '15. bunds, january of '16 or march, flirting with the high to low 50 level. the last chart. they're going wild. people yelling here today. the dollar index, 3/4 cent down on the year. a lot of central bank meetings, a lot of elections. the treasury market, with the euro curve, solidly to the downside of price and the upside of yield. back to you. >> thank you very much. when we come back, obamacare repeal and tax reform. we'll discuss both major issues with grover norquist. dow is down 23. exxon down 10% for the year. back in a moment.
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going to go to nike. that's betting that the competition from adidas is going to die down. this is something i think was eluded to in the foot locker conference call. this is the apparel play people are gravitating to. walmart, david, only 1/3 of their stuff is imported overseas. they've done work to get manufacturers in the u.s. of course, that's also food. nike is a border tax name people are worried about. maybe that is, again, a sign of what you're talking about, that the border tax is dead. >> jim, "mad money" has an anniversary to celebrate tonight. >> yeah. a dozen. we've done 12 years of "mad money." kind of one of those things, what do you do for 12? you do another one. it is going to be -- really, it is a milestone only to the people who cannot believe we've been on for so long. we will get fired up tonight with john ferriola. john is nucor, the best steel company to own. i've been focus oing on the
distribution centers. when you go district to consumer, these companies thrive. we're going to look at that industry. yes, thank you for 12 years. executive producer. >> amazing 12 years. congratulations to you. >> thank you. >> see you tonig6:00 p.m. easte. gordon bethune on the nor'easter. don't go away.
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the global investment management businesses of prudential. ♪ good tuesday morning. welcome back to "squawk on the street." i'm karl quintanilla with sarah eisen and david faber. slow is slowing things a little bit along the eastern seaboard. not as bad in manhattan as some feared. dow is having a rough start out of the gate. s&p down 11 are crude lower, as well. >> our road map begins with the winter storm slamming the northeast. blizzard conditions, states of emergency being declared. we have the latest for you.
valeant crushed as ackman sells his stake. plus, a new cbo report says 24 million more americans would lose health insurance under the new gop plan. we'll tell you the details straight ahead. first up, the major winter storm hitting the northeast. many cities declaring a state of emergency. let's get to nbc's meteorologist angie at hg with an update. >> things looking better for some. we've actually had changes as far as the forecast goes. we have been watching the live radar. we continue to track the storm up the east coast. a couple shifts in the storm pushed it a little closer to the coast and it's changed things as far as the blizzard warnings. with a blizzard warning, you have to have decreased visibility, below 1/4 mile and for three hours. we didn't see it along the coast. new york, long island, the cape dealing with little better conditions but they are still watching for basically those conditions to continue as far as the strong winds. we've had the gusty conditions, as well. so keeping in mind that all of
this, the strong winds and that heavy snow, the really wet, dense snow we're dealing with, is going to cause power outages. it is already causing trouble travel wise. many thousands of flights delayed. we've seen a little better conditions across new york. we'll start to see things get better. i with anith want to know you forecast. large amounts of snow inland for basically the mountain ranges. as far as what you can expect through the cities, you can see washington, d.c., about 2 inches. we're starting to see that tapering off. as you go toward new york city, boston, about 6 to 10 inches. there's a little bit better news as far as not dealing with the 20 inch, 2 feet as far as the accumulations go. still, very tough conditions. driving wise, travel wise, not a day you want to be out there. we continue to watch this storm move up into the northeast. it'll continue to affect us. keeping you updated. sarah in. >> thank you. stay close. we'll check in with you, angie. over 7,000 flights have
already been cancelled due to the blizzard. for more on that angle, we're joined by gordon. >> good to see you. >> flight aware says 7800 flights cancelled across the u.s. we've had you on a number of times for travel disruptions. how does that stack up? >> it's getting near the top of the disruption. it's an awful lot of revenue to lose. it happens every other winter, where you get wiped out like they're getting wiped out late this winter. >> yeah. this spring almost. one week, gordon. >> right. >> >> we wewurp tal it comes at the airlines. delta cutting guidance on key metrics. how are the airlines broadly doing and does it make it harder to deal with something like this during times of relative weakness for the industry? >> well, sarah, it is not that
crucial. obviously, it is a lot of revenue. you get the expense but none of the money when you cancel a flight. then you get the crude oil price to go down, so it kind of offsets that particular expense for you. i'm still kind of bullish on the airlines. i think there's a lot of runway ahead for these guys. it may not be as easy as it has been in the last 12 months. >> are they getting better at dealing with these sort of mass cancellati cancellations? >> what happens is you get really good software. you make the investment for crew optimization, airplane optimization, and especially inbound flights like from europe that won't be able to land in new york. where do you displace the crew? who has the time? that's all fairly automated. they're really good at getting back up on their feet. >> i just wonder how much more difficult, gordon, it makes it that in this storm in particular, you have hubs closing like washington-reagan, chicago, philadelphia, boston, new york's airports. these are really big markets and important hubs.
>> that's right. that's where all the money is and all the crate. it is disruptive to the whole economy. there's a lot of people, i'm sure like you'rself, who had to prepare to get to the studio. that's happening in washington all the way to boston. >> how long does it take for an airline to bounce back from this and to recoup some of the revenue lost? >> well, the good ones, the ones i'm used to, 18 hours, maybe, something like that. the revenue loss is gone. but optimization of getting back up on your feet and getting the airline working again, they've got that -- the big boys certainly have it down really well. less than two days, they should be at 100%. >> gordon, all year long, we've talked about the buffet play in airlines. >> yeah. >> how it helped out delta. i wonder if you think it's led to a bigger base of institutional buying in the sector than we've seen the past few years. >> i think, carl, what you see
is a general up look, uptick in revenue and the economy which boosts them. the moderation of oil prices and guys like mr. buffet, who give them a vote of confidence, gives the rest of the masses, like myself, confidence, as well. >> so that old -- i mean, the old munger, when he once said the business is a marginal cost with wings, is that truly in the past? >> well, he made a big blunder back years ago buying u.s. air which tanked. >> yeah. >> when he did, he was betting on the horse and not the jockey. the management wasn't up to it. what he is doing now is looking at the management stability, especially in the big four, and saying, pretty smart boys. they learn their lesson and are controlling their expenses and the revenue. >> one last question here, gor go don from me on sfruinfrastructu. we're talking about it not being a 2017 story.
maybe 2018. how much will air traffic control, for example, be part of that, do you hope? >> i've always hoped for many, many years that they would modernize and put the money in and the air traffic control system. it isn't happening in the budget fights in congress. there is a move to take the atc, air traffic control system, off balance sheet and make it a private group government owned company to fund it like a capital spending company, not take out the expense. i hope it is going to happen. i just hear so much talk and have been disappointed for the last few years. >> final word on the storms here, gordon. i'm looking at the s&p airlines index here. the worst performing of all the big groups down 2.6%, down more than 5% for the week. are you surprised to see that selling action? i mean, airlines are used to this revenue hit on cancellations and weather disruptions all the time. >> i think so. you're taking the right attitude but there are knee jerk guys
that are day-traders who move the needle. the next two days doesn't mean it'll be like this the next 12 months. they're making the decision on short-term events. >> we'll leave it there. always good to check in with you on days like today. >> thanks. >> for some industry perfective. gordon bethune, the former continue continental airlines ceo. it is normal here at o'hare. the cancellations are mounting, however. we'll give you perspective on the latest numbers in terms of total cancellations the last couple days we're seeing primarily in the eastern part of the united states. over 7100 cancellations over the last two days. what does it translate to in terms of travelers? more than 400,000 people have been impacted. basically because their flight isn't taking off. they've had to change their plans. when you look at the most impacted airports in terms of percentage, these are the four that really stand out.
jfk, laguardia -- or five -- newark, philadelphia and boston. all of the airports have had at least 70% of their flights cancelled today. that's going to continue into tomorrow. southwest, american, jet blue and united, that i ha they've bd the post in temost in terms of airlines. then the flight schedules start to normalize late tomorrow. really more on thursday and friday. that's when you see the flight scheduled get back to normal. guys, back to you. >> thanks very much, phil. phil lebeau, of course, at o'hare. we'll see how things, as he said, develop through the day today. keeping an eye on shares of valeant this morning. trading at the $11 price now, down 9.5%. at which one of its largest shareholders, bill ackman and its hedge fund exited. this took place after the close.
27.2 million shares of the company sold by mr. ackman. he is now done with what has been a disastrous investment for him in valeant. this is a stock that was as high as $250 a share back in -- let me make sure i remember -- yeah, back in 2015. it was in 2014 that mr. ackman first teamed up with valeant. then in an attempt to acquire the larger allergin. mr. ackman's purchasing square fund bought shares of allergin as part of that group. then, of course, it was followed by a hostile or unsolicited offer from valeant. it was unsuccessful in actually closing the deal to acquire allergin. in part, mr. ackman helped to lead its strategy that some have since criticized in terms of how they went about trying to buy the company. all allergin selling itself for
activists, renaming itself. but ackman's fund was up strongly in '14 because of it. in '15, he decided to take much of the profits from that trade and roll into valeant, saying not just that he was a partner of them in the spursuit of allergin but he believed in the business model, which used a low tax rate, little spending in r&d, raising drug prices and an acquisition machine to fuel the stock price that had really been nothing short of miraculous in its move up. and has been nothing short of miraculous, if you want to call it that, in its move down. over 90% plus, a position once worth over $4 billion sold for little more than $300 million yesterday. ackman, of course, stepping off the board of directors, which he also entered not that long ago. helping to engineer the hiring of jo papa.
formerly the ceo of perrigo to take the place of pearson, who suffered health issues and came back and finally said so long after a great deal of controversy with valeant. the question now is with ackman's exit, sarah, is it time for investors to reconsider? it was still a roughly 8% position. of course, one that was far, far, far smaller and really insignificant overall to what is still a roughly $10 billion hedge fund. >> doesn't look like much reconsidering this morning. the stock is down 9% on the news. i guess the question is why now? clearly, this was a big money loser for him. he was on the board. if he thinks it can turn around, why is he exiting? does he see something troubling ahead for valeant? in other words, where are they on dealing with some of their problems? >> and they have quite a few. >> right. >> the last quarter was not a particularly good one. they did lower their guidance. although they had an important refinancing deal with some of their debt that helped give some
confidence to investors. remember, we talk a lot about the company. it's only got a $4 billion market value but it has 29 billion in debt. there continues to be conversation about potential asset sales. for his part, ackman simply saying, you know, now is the time to do it. it took a disproportionately large amount of time and resources for him. that's the reason, he said, they elected to sell the investment. a large tax loss, which will enable them to dedicate time to other portfolio companies. >> time will tell the answer on that one based on how valeant does tackling the debt problems and the legal problems, too. >> there is a litigation, management agreement is what they call it, between valeant and mr. ackman involving the litigation arising from the original allergin bid. ackman no stranger to not great investments. this perhaps the worst. but the vehicle to acquire
target shares many years ago did not do well. we all know what happened to jcpenney when he put ron johnson in the job there. that stock plummeted, as well. borders, that deal didn't do well either for him. a checkered track record. >> i think even bill would go along with that. when we come back, cbo scorecard. a new report says the gop health care plan could cut the deficit but may add millions to the uninsured. the fed kicking off the two-day meeting. the rate hike a near certainty. doe is down 41. kevin kevin kevin kevin kevin kevin kevin kevin kevin kevin trusted advice for life. kevin, how's your mom? life well planned.
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cbo, as you probably heard, releasing its report on the gop health care plan. kayla joins us with the plans. >> the cbo report out yesterday said over the next ten years, as a result of the american health care act, the deficit will shrink by $337 billion. premiums will rise initially and then fall. and 24 million people will be without insurance. mostly because they won't be required to buy it. yesterday, speaker ryan pointed to the report as an endorsement of his plan. the white house continues to challenge it. here's the director of the office of management and budget, mick mulvaney, on "morning joe." >> i'm not just saying that because it looks bad for my political position. i'm saying that based upon a track record of the cbo being wrong before. we believe the cbo is wrong now. the cbo is good at counting numbers, maybe not about making
decisions about coverage. >> this morning, i asked health and human services secretary tom price about whether he agreed with the cbo's deficit estimate of narrowing by $337 billion. he said that part of the report he did agree with. the deficit narrows largely because less is spent to expand medicaid. that point does little to win over midwestern gop senators who favor that expansion. the cbo says $880 billion of cost cuts will come from that. then there are the moderate conservatives who back planned parenthood. $234 million of funding will be cut there. then libertarians oppose governments subsidizing health care at all. democrats say it is a tax credit for the wealthy. the tax credits were said to benefit those people with higher incomes. there's quite a bit of fodder in the cbo report for opponents of the bill. the budget committee will hold a hearing on the bill on thursday. it'll be important to see how they treat the cbo figures going forward. >> big story today, kayla.
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♪ it feels so good ♪ oh, yeah ♪ and it feels so good ♪ oh, yeah the federal reserve kicking off its two-day meeting today. that means the results of cnbc's survey are in. we're going to washington for a look at the outlooks on tokstoc >> interesting results. 50 responses this time. economists, fund managers and strategists. what they're saying is increasingly that it is economic fundamentals and corporate earnings behind the rally here. now, just to be clear, 62% say it is the expectation for fed policies that's the key here. you can see that over time, this number has come up. those who say it is really got
fundamental underpinnings from 18%, doubled from the time we asked this question. more of a debate as to what is driving the rally. less debate over the fact they are overestimating the possible positive outcomes of the policies coming from the president. the 64% say the market is too optimistic about the policies. 32% say they're realistic. those numbers have grown in terms of those who think the market is too optimistic about this. looking ahead at the actual outlook for the s&p, you can see they've bumped it up over time. certainly since the election quite a bit. looking for 2% or 3% more to go here when it comes to the s&p this year. call it 8% by the end of next year. not too shap bby but not the returns we've had since the skyrocketing events of november. on bond yields, interesting story. look at the long run here. now looking for 2.9% by the end of the year on the 10-year.
3.4% by the end of next year. know that this number is only back to where we were about a year ago. it came way down before the election. then it's come up, as about 50 basis points have been baked back in. you also note from our earlier reports that we're now looking for three rate hikes this year. some debate, about 25% of the respondents say we're looking for four rate hikes this year. >> starting to hear more about that, steve. thank goodness the fed is meeting. they're not cancelling the meeting because of the weather. >> no, they're better than the post office on this. >> i just wonder how much that discussion on the markets in particular, that stunning surge in stocks we've seen since the election, gets factored into the conversations they have today and tomorrow. and how much that actually goes to improve the outlook for the economy, in relation to the federal reserve. >> i think they think there is some impact to it. i think they're concerned that -- just like from the survey, i don't think the fed is going to think all that differently about the market.
they've overdone it in terms of anticipati anticipation. i think they're happy to use this moment, sarah, to do what they've wanted to for a while, claw back some of the interest rate declines and decreases they had there, get the fund rates up a little bit and use the cover of this rally to do so in a way that's not upsetting to markets or the economy. >> we'll see what happens tomorrow. steve, thank you. >> sure. when we come back, the latest on the storm crippling the northeast. we'll talk to the governor of connecticut who called for a state of emergency. europe adding to the losses. back in a moment. hey gary, what are you doing? oh hey john, i'm connecting our brains so we can share our amazing trading knowledge.
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been cancelled and thousands are without power in new jersey. there is a risk of flooding along the coast, as well. the u.s. and south korea began military exercises as part of the annual joint military drills. the exercise taking place aboard the uss carl vinson at an unadent un unidentified waters. three child welfare officials were arrested who were responsible for overseeing a youth shelter where 40 girls died from a fire. they're charged with suspicion of homicide, mistreatment of minors and failure to fulfill their duties. on a lighter note, today is march 14th. that means it is national pi day. as in 3.14. whole foods is offering $3.14 off large bab bakery pies and ps while supplies last. pi is the ratio after is circle circumference to its diameter.
that's the news update this hour. back downtown to you, carl. >> sue, thank you very much. the winter storm, of course, hammering the northeast. let's check in with the weather channel's jen carfagno in narc. hey, jen. >> hey, carl. good morning to you. happy pi day. thanks for the reminder there. today is a big day because this is the 24th anniversary of the big super storm back in '93. the 13th and 14th. this storm we have going on, while it is not the same, it is still a big one. it has a big impact. we know when a northeast snowstorm hits, it'll have far reaching impacts. the storm itself got started in chicago yesterday with the record daily snowfall for them. they had more snow now in march than all of january and february. that's how crazy this winter season has been. let's talk about the sea, where i am. you can see behind me, we're actually getting some -- rain
mixed with snow and it is icy. like snow cone substance. it's be the case throughout the district and the suburbs. you have to go far, north and west, like frederick, where they had 10 inches of snow. the sleet has been a calling card of the system. the fact warm air is lost, causing some of the precipitation to fall as a wintry mix. it is happening in newark, new jersey, right now. they're getting thunder sleet with winds gusting to 44 miles per hour. that's the storm this is. we are anticipating more of that coming in as the storm continues to develop and bomb out off the coast. we're going to see the pressure drops driving the winds up. winds could gust through the northeast today. really the entire northeastern corridor starting from here but right up especially into eastern pennsylvania, eastern new york, connecticut, rhode island, massachusetts and maine. gusts will gust over 50 miles
per hour and we're anticipating power outages because of that. governors asked their communities to stay home in these states. connecticut, no travel allowed. no trucks, no cars on the roads there. massachusetts, they have reduced the speeds on the roads because of the snow happening there. of course, the flight delays have been a wide ranging impact. the snow in d.c. for kids, they got a delay, back in school. we'll see them on the streets later today if they clear the slush a iwway in d.c. for more on the storm, we're joined by the governor of connecticut, dan malloy. governor, welcome. thank you for phoning this. >> great to be with you. >> so what are you expecting right now? can you give us an update? is the blizzard going to be as bad as you initially thought when you imposed the statewide travel ban? >> we have part of the state already had 12 inches. parts of our state are being badly affected. if you think 12 inches now and we probably will have snow continuing through the 3:00 hour, they're going to get to 18, 20 inches or so, i think.
on the other hand, along the coast, it's a little more -- it's a little lighter, in part because there's been some rain mix and the like. all in all, we're doing pretty well. because of the travel ban, we've had very few accidents in the state of connecticut, a mere fraction of what we would normally anticipate on even a smaller snow day. you know, we'll be back up and running tomorrow. school systems will make their own decisions. sometimes that's the sidewalks and the parking lots that decide it. i'm quite confident we can be up and running tomorrow. >> how strict are you guys being? for instance, are there fines imposed if you're found on the road and not an essential e employee? >> fined up to $92 on a standard fine. some of those will be written. quite frankly, we're getting very good cooperation. we have seen some trucks go through because the other states haven't done what we've done. you know, connecticut people
have been good about staying home. i know it is pi day. i declared it brownie day in connecticut. people are making brownies and reading books. >> sounds good. >> hopefully watching television, governor. i wonder what lessons do you take from -- it is always hard when you've got the sleet line. it is a tough call. you have to sort of hedge your bets and plan for the worst. then the worst doesn't happen and people, once again, are trained to believe that these reports are always inflated. what do we learn from the stuff like this? >> well, you know, first of all, if you look at what was predicted in this storm, we certainly made the right call. quite frankly, we're experiencing few accidents. as of yesterday, they were saying we could get up to 6 inches of snow in an hour. if you get an accident on a highway and you back up three lanes and you do that for an hour, suddenly, everyone is covered with 6 inches of snow.
you're not moving it. it's become a marking lot. that's what we wanted to avoid. that's happened in connecticut back in the '70s and '80s. we learned from those experiences and we apply those. now, we don't close highways too often. we did it once in 2015. i think you have to go back to 2013. if you think about over the course of four years, we've actually closed the highways three times. then if you go back to '11 and super storm sandy, we did it once in '11 and once in '12. we're not doing this very often. that's why we get great compliance. our citizens understand that if we make the call, it is a serious event. >> yeah. i just remember back last year, new york city imposed a travel ban. then there was a lot of criticism from mayor bill de blasio. the storm underwhelmed and it was a gross overreaction. is there a threshold you look for when you make a call like this? because you did put this in place, but i don't think any of the other states along the east coast have put in as strict of a
travel ban in place for this storm. >> they've had a lot more accidents than we have. again, i think -- let's not write the postscript of this storm yet. we're getting a lot of snow in connecticut. as i said, we have locations that already have 12 inches of snow. that's a lot of snow under the regular conditions. anything over 18 inches predicted really moves us in the direction of making a declaration. i think a substantial portion of our state, not all of it, will have snowfalls of that amount. again, a lot of what we were doing was based on what you all were predicting. we follow that stuff pretty closely. we make decisions based on that. i think we made the right call. >> hope everybody stays safe, enjoys the brownies in connecticut. governor malloy, thank you for calling? >> thank you and have a great day. bye. our next guest has been involved in the restoration of storms in the past. how are they preparing for stella once the storm slows
down? sheldon, good to have you this morning. >> pleasure to be here. >> what's usually the best way out of situations like this? >> i think as, you know, numerous guests on your show have said, the preparation is important. and to listen to the reports that are coming and the predictions. to try and not travel if you don't have to. i think, again, homeowners and business owners need to be aware of their flat roofs and, if possible, maybe shovel some snow off the flat roofs if you can. i think although we're hearing early reports that there are fewer few er inches of snow, the snow seems heavier than originally predicted. with the heavy snow, we're anticipating a lot of collapsed roofs with temperatures that can stay into the 20s over the next day or two. you're going to be looking at busted pipes. i think to prevent your businesses and your homes from mold and mildew growing, to make
sure you're remediating this properly is important. and we have 16 offices up in the northeast that are ready to respond. we've brought in people from 21 other offices throughout the country to beef up our crews. they're all resting up right now. we're ready to go. a lot of our clientele has already put us on notice. in fact, we're shoveling a few flat roofs right now, trying to prevent damage. >> amazing how the nor'easter aside, for a lot of the big parts of the country, precip has not been the problem. for a number of years. thinking of california and some parts of nevada. now you have a lot of water and, to a large degree, the people may be out of practice. >> i think you're right. again, as i just said, the snow that was projected, 18, 24, 25 inches of snow, was one thing. if it was a light, fluffy snow, which would qualify the blizzard conditions. the fact that the snow is coming down with a lot of precipitation
in it, it makes it a heavier snow. ultimately could lead to more damage than less. and, again, with the temperatures in the 20s for an extended period of time, you really have to keep an eye out for broken pipes that could ensue after. and i think that as we look back on this storm, what we're seeing so far from people out there that we're meeting is that the reports that you guys have put out are really being heard and listened to. people are staying in. people are not traveling. the roads are clear. i think it is going to help the recovery process and hopefully let these communities get back up and running sooner. >> sheldon, can you put any numbers around it? i notice you've been involved in so many different types of disaster recovery, from hurricanes to 9/11 world trade center attacks. the winter storms, how costly are they from an insurance perspective? >> surely in the tens of millions of dollars.
there would be no way for me to project numbers at this point. but you're talking about extensive damage. there's been business interruption issues. there is additional living expenses that will be incurred for people that have to move out of their homes or businesses that are shut down. you're talking tens of millions of dollars involved. >> sheldon, we'll see how the east coast digs out, and the midwest. thanks for your time today. >> thank you. >> sheldon yellen. as we head to break, look how today's oil slump is impacting a lot of energy companies as you see. they're amongst the largest losers in terms of percentage certainly in the s&p 500. when we come back, americans for tax reform founder and president grover norquist is with us. "squawk on the street" is back right after this. at fidelity, trades are now just $4.95.
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we've got some news on potential retail consolidation. kourtney reagan is at the breaking news desk with more on husba hudson bay's continued ambitions. >> here we go. there are headlines crossing from dow jones citing sources that hudson's bay is turning its interest away from macy's and looking toward neiman marcus. they pulled their ipo in january for the second time. neiman put out its second quarter results. comp sales down 6.8%. these headlines from dow jones say that hudson bay seeks a deal that would not include neiman's nearly $5 billion in debt. hudson's bay is a canadian retailer that owns saks fifth avenue and it also owns --
richard baker likes real estate. most folks say most of his land grabbing when it comes to retailers has to do with the physical location more than the operations within. david? >> yeah, although interesting. the macy's thing, there wasn't much there. >> right, we never knew. >> that is sort of -- that stock has reacted to the lack of real significance with hudson bay. but how do you do a deal without taking the $5 billion in debt is the question. >> exactly. >> private equity is debehind neiman marcus. you'd want to delever the company. i guess they'll try to come up with a struck krture here but i be tough. >> it is tricky. that's right. as i mentioned, neiman marcus pulled the plans for the ipo in january for the second time. they're currently owned by private equity, including
canada's pension plan investm t investment. interesting canada play if the headlines are spinning going forward. >> all right. we'll be keeping an eye on it. thank you for bringing us up to date. another top story we've been following, the cbo releasing its assessment of the gop's health care plan. indicating that the legislation would reduce the federal deficit by $337 billion over the next decade. but leave 24 million people uninsured by 2026. joining us for more, grover norquist, americans for tax reform founder and president. that gets the headlines, the 24 million or how many many million left uninsured, versus obama as a result of this plan. is it a blow for souhouse speak paul ryan and everyone else bashing the plan? >> the democrats will play that but they miss the issue. what the cbo was asked to score was does this increase the deaf
so -- deficit or not? >> if it doesn't, getting rid of obamacare and reforming health care, then the legislation that paul ryan and president trump have put forward can be passed with 50 votes in the senate plus the vice president and a simple majority in the house. and their answer was yes. not only that, a $300 billion reduction in deficit spending, which means those house republicans who think it is not conservative enough and some senators, you can now take $300 billion in reduced deficits and cut other taxes in order to earn support that wasn't there. there's a lot of wiggle room that didn't exist before the cbo. on the question of their guessing what happens in ten years on who would buy insurance, if you read their text, they make it clear. they don't know. they're making predictions on what state legislatures do. that's not a bunch of experts. it's a bunch of guessers. what they told us six years ago
was that today, there'd be 24 million americans who had insurance than do today. they're off by 24 million in six years. they want us to believe make believe numbers in 10 or 20. they don't count the dramatic expansion of health savings accounts, which are in the bill. i mean, this is a dramatic reform. it is not just cutting taxes and so on. block grants medicaid. just as we block granted aid to families with dependent children under clinton. all the experts misunderstood how well that worked. they make the same mistakes about block granting medicaid that the hard left made about block granting families with dependent children. understandable. haven't done much of this. but we have seen them make this mistake before. >> so there's the reaction, grover. i take your point about this potentially being able to win over some republicans that were worried this was just obamacare 2.0. a massive new entitlement.
but what about those like senator tom cotton from arkansas, tate states that hav benefitted from the medicaid expansion and are worried about the effect on republicans in the 2018 midterms? >> one of the most important things you can look at is how successful bill clinton's block granting of welfare was. there was an effort then to say -- google clinton welfare reform quotations. you'll get all the same people who are now attacking block granting medicaid. said the exact same things about block granting welfare. it turns out they were 180 degrees wrong on welfare. very clear why. what we had was under medicaid top down, one rule, 50 states, everyone lives under the same rule. with 50 different states taking 50 different approaches on welfare and states, states can do everything to require a work
requirement for medicaid. if you have single men, a lot of whom get medicaid, you say, you have to work for it. you have to have a job or be trying to get a job. there are a lot of ways you can reduce the costs as it they hadt over after welfare reform was block fronted. real people who need real help in may, even now, they have said able bodied people have to work and they have to target the elderly and the indigent. now all 50 states could begin to make shoes decisions to target the people who really need them. the addition to capital gains, those who simply say it is a transfer of benefits to the
richest americans, and that is really the main thrust of the bill. how do you respond to that criticism. >> we heard that when palm put these taxes in. he would not tax anyone that earned less than 50,000 a year. 30 million americans with flexion accounts pay obama care taxes to fund obama care. that is gone. 20 million thought you said taxed by obama care. that is gone. 10 million americans who have very high costs of health care and low incomes so more than 10% is eaten up by taxes. obama took that away from the poorest and sickest americans and said no no, you t has to be 10%. they are screwed by obama care with tax increases. that obama tax is gone.
you can selectively say there was taxes on rich people, that's why taxes do that. they tax medical devices. if you have a medical device, you pay higher taxes. they tax insurance. your insurance kogss more. they tax chartable hospitals. so it is a tremendous help to middle and lower income americans. >> we have to leave it there, that is certainly one side of the argument. a lot of people disagree with you -- >> but i'm right. >> americans for tax reform, the president and founder there. >> i say the same thing to my family, but i don't get the right answer. >> that must be really pleasant to live with you. >> see you later, david. let's send it now to john fort
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welcome back to "squawk on the street." we're watching the health care industry very closely. some insurers are down around 2%. community health, lifepoint, and hca holdings are down as much as 5%. largely in reaction to that cbo report saying the number of americans with no insurance could raise to 24 million under the gop plan.