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tv   Squawk Box  CNBC  January 31, 2012 6:00am-9:00am EST

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1997. that's right. all the way back to 1997. the s&p did hold on above 1300 yesterday. 1313 even after some rocky starts to yesterday's trading session ended up down just barely. the nasdaq looks to turn in its best january since 2001. the best performing stocks in the dow so far for the year are bank of america, caterpillar, and alcoa. the top sectors are materials and finance, both for the bottom performers in 2011. >> what starts in january -- >> right. not ends in january. just like my forecast. and if it's 5%, my 30% is going to be very low. >> we'll be there by july. >> we will. it will be 60% for the year. >> how do you feel about being a prognostica prognosticator? >> i'll feel good. >> you'll feel good? >> when it starts going down, we're not talking about it. >> yes, we are. yes, we are. >> while it's working. hear what i said about the
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pythons? >> i did. >> did you read that story yet in "the journal"? >> i did not. >> so many pythons have been released, pets, that there are no medium size d animals in the everglades anymore. >> when he says medium sized he's talking about bobcats, possums. >> in some areas the population is down 99% because of all these pythons. can you imagine? this is like a movie. >> they're going to start eating little kids next. >> let's hope not. >> so many have been released in the everglades but giant 16-foot-long pythons just slinking around -- what happened? you're nervous. >> i'm nervous around you with all these pythons. >> that's why i warned florida voters on their way to the polls -- >> got to watch the pythons. we have a busy morning in earnings. you see tyco and mattel just crossing the wire. set to report quarterly results before the bell this morning include exxon mobil, pfizer, u.p.s., archer daniels and eli
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lilly. oil giant exxon expected to boast earnings of $1.96 a share, higher oil prices are expected to help lift the profits but the refining and natural gas segments are seen lagging. from earnings to the economy, on today's calendar we have a lot. the fourth quarter employment cost index. the s&p case-shiller index, the chicago pmi, and housing vacancies. a lot to keep an eye on besides what's going on in florida this morning. >> we have herman cain on the show. >> tyco looks like it beat expectations coming in at 84 cents versus the 79 cents the street was expecting. the latest out of greece today, international debt inspectors are delaying talks with greece's labor minister. the issue on the table, ways of reducing employment costs. this has been a key sticking point in negotiations between the struggling eurozone country and its rescue creditors but investors seem to be more optimistic about freeing up
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athe athens. the greek prime minister says negotiators have made significant progress in talks to strike a restructuring deal on government debt. he suggests they're aiming to have a definitive agreement by the end of the week and that should hopefully help in portugal but -- >> also mattel out with its earnings $1.07 versus $1.01. they talked about how bar by sales were up. >> and as i said just when you thought europe's problems were calming down the greece problem -- the greek problems -- it's portugal. >> it's now portugal is the problem. >> that's because it's being infected. the longer it takes in greece, the more people worry about portugal needing a second rescue and you saw those credit default swaps soar on portugal so the ten-year bond breaking through. how about that? >> wow. >> 17% at one point yesterday. that's a euro era high. nobody believes 17% is going to be paid off on that, do they?
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>> no. the two year is even higher. it's like 25%, i heard ross talk with about it earlier. >> i think this is a good deal, joe. >> i don't know. return over your principle. >> where is he. >> with the money somewhere. don't see him around. >> that's true. where is he? >> he's with the money. no, i don't think he has the money. i think he's missing. no, he's around, i'm sure. he's not -- i think he's cutting a huge profile in new york, hey, how are you doing? i don't think he's out. do you? >> no -- >> waiter! >> wave some more -- >> waiter, over here! more of that $800 wine. >> did you read that piece, was it in "vanity fair" where he was buying a home in france? >> that was on hold, though. >> is that on hold? >> that was two weeks before everything hit the fan, though. >> right. >> and it was his -- are they married now? >> they're married. >> come on. >> okay, they're married now but before -- you go from -- >> i know.
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but that has a connotation. >> what it s that? lawmakers on the set, what is the definition? >> i don't know. we'll look it up. >> we'll look it up on squawk-pedia. >> lawmakers plan to vote on a new round of sanctions on iran. these are target tehran's energy sector, the package comes, i won't say on the heels. i will not say that. the package comes after new banking sanctions that the obama administration is only beginning to implement. >> you are both right. the first definition is an elicit lover and the second is just any lover so -- >> the elicit part -- has an elicit connotation. >> the second definition is just anybody. >> right. okay. we're learning something every day. >> every morning. a check on the futures. yesterday at this time it did look like we were going to open down relatively sharply through the course of the day the dow futures were down at one point by 131 points. this morning you see things roaring back up 82 points and of
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course this comes after a very modest decline in yesterday's final hours yesterday. we saw gains going all the way into the closing bell. right now the dow futures up by 80 points above fair value and s&ps up by 8 1/2. take a look at oil prices this morning. and you're going to see that right now they are up by $1.74. this is where we've been hovering. 52 cents. even with everything we've been hearing in iran. the ten-year note yesterday the yields plummeting and right now you can see they're still down. 1.872%. some numbers coming out today. we have consumer confidence later in the morning. at this point the euro is still showing some strength. it is higher than the dollar. back above $1.32 even as we see the huge problems that are developing in europe and the yen -- the dollar/yen at $76.39. gold prices -- we'll take a quick look there but that is another one that has barecally
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budged. 1,742 an ounce. what are you watching, joe? >> what are you thinking about? the euro, your trip to paris? what are you looking at? >> no, you know, we've been hearing -- mike jackson talked about eli, the working man, and brady, the dandy. look at that. he's just out there. he's got a vest. the suit itself is $5,000. and his shoes are lace up oxfords $1,290. eli is no slouch. his shoes cost six bills and his suit is $3,600. it's a xenia. eli at least looks kind of normal. look at brady. he's a handsome man. >> he's a model. >> he is. >> i told you at the dinner, i went to dinner in a restaurant in new york city and giselle and
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brady were there -- >> eating like normal? >> and nobody in the restaurant -- they actually -- she did eat, by the way. all the women in the place were watching to see if she was eating. >> she doesn't have normal bodily functionses, i do know that. >> i will tell you nobody else could eat. >> why? >> because -- the with women in the room were watching and the guys -- >> right, right, right. >> although the women were probably watching to see what she ate and the guys were watching brady to see what he was doing, too. >> i just -- >> was there a feeling that it's incredible she and tom brady and andrew ross sorkin were here? >> no. >> you didn't hear murmuring? >> no. there was none. giselle took her sweat er off ad i thought the whole place was going to completely stop. >> are you sure it wasn't just you? everybody else was freaking out? >> yes, the waiter. everybody was talking.
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>> about the sweater? >> there was one moment where the sweater it -- >> you don't think it was just you? >> i have to imagine others were thinking at least what i was thinking. >> you do this so much with these other women. gwyneth -- >> what are you talking about? >> this squawk ward moment has been brought to you by andrew ross sorkin. >> oh, come on. >> that was joe. >> we have other news out of washington. let's go to it. house republicans will propose legislation today calling for $260 billion in spending on u.s. transportation infrastructure for up to five years. it's being touted as a job creator in a tough economy. president obama wants congress to announce tax breaks for small businesses and remove barriers to business startups. plans to send a bill to the legislative body today. the package makes permanent a capital investment and would extend for a year the ability of businesses to immediately deduct all of the costs of the equipment and software
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purchases. that's a pretty interesting development. >> you have nothing to be ashamed of. you have mentioned at least five guys she would leave you for in a minute, right? >> well, we don't need to talk about this on the air. >> brady. >> brady, my wife likes brady, yes. >> some other ones. >> matt lauer. she really loves him. that's true. >> so don't worry about it. you're fine. you're fine. >> okay. let's go to florida. we have news. >> florida. florida voters -- she's doing something, two twins, she is not watching. florida voters are going to the polls today are for the state's presidential primary. here is just a sampling for the most recent poll data. rasmussen puts romney ahead. nbc and reuters 15 points. sufficieolk university gives hi 20-point -- quinnipiac gives him -- what was that? >> 14. >> suffolk gives him a 20-point lead. in two weekend polls newt
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gingrich is down just five to seven points and the gloves have come off between the two top 0 contenders. >> it's been flailing around a bit trying to go after me for one thing or the other and you just watch it and shake your head. it's been kind of painfully revealing to watch. >> we're going to beat money power with people power. we are going to go all the way to the convention. >> and cnbc's eamon javers joins us live this morning. how far are you from the everglades, eamon? >> reporter: we're far enough that we haven't seen any pythons around here, joe. it's pretty civilized in this area of town. >> with all those politicians and their cronies, i think the pythons better be on the lookout. who would win? they eat pythons. >> reporter: newt verse us a python is a fight people might pay for on pay-per-view you. >> she was in yesterday, right? she is awesome. >> reporter: i've known home run
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for years. she is unbelievable. >> so with a do you think? where are we? 15 points? >> reporter: well, look, it's a 15-point lead in some of the polls you read off and the danger here for the romney campaign is a little bit of overconfidence. we just noted here in our press filing area that the romney campaign has canceled a rally they had tentatively scheduled for 9:30, 9:45 later this morning. and some of the romney aides were out yesterday saying, look, no matter what happens in florida tomorrow, that is today, you will not see mitt romney go into cruise control after this. he is going to keep the pedal to the metal. the danger is if you have a big victory here in florida, do you then sort of relax, cancel some campaign events and go into hyper nation? newt gingrich has come back from the dead a bunch of times already in this campaign. could he do it again after florida? he has said he is going on to the convention no matter what happens here today but, guys, voters are going to the polls today and we'll get a sense of
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where this all shakes out by 8:00 p.m. eastern tonight. >> watching some of the announcements yesterday, i think it was chuck todd or someone talking about february is not a kind month for newt gingrich with only a couple of caucuses and, you know, there won't be any big wins. a big win in florida will be the most recent, most familiar, most significant thing that has happened. it will be a long, cruel month, even though i'm told it's shorter than most other months. >> reporter: you know, i talked to some folks with the romney campaign yesterday who were saying that they like what happens after this because they go into caucuses across the country. that really depends on their ground game, their organizational advantage they have over the gingrich folks but really sort of strapping their campaign together as they go on the ply. romney has been doing this for years. he has people in place in all of these states and they're confident they are going to have a really good ground game in all of those states and they also like the fact that there's not going to be a major debate until the end of february at the earliest. that deprives newt gingrich of
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the opportunity to have a rally the crowd moment as he's had in past debates. that's been where he's been able to sort of get lightning in a bottle a little bit and put mitt romney back on his heels. the romney folks like the fact they're not going to have to be on the stage next to newt gingrich for a while yet. they have several weeks of running room and that gives them an advantage. >> when is super today, eamon? is that in march? >> reporter: yeah, it's coming up. and so the question for gingrich is can he go into some of the southern states and eke out some wins? he's going to have to start winning. >> he has a chance in georgia. he'll probably win georgia. >> reporter: that's his home state. that's a key one. and other areas in the deep south he might have a good advantage. >> what day of the week is that on? >> it's march 6th. >> curious about this debate over gingrich's -- this quote gingrich said that the torch was passed -- did you see this? from ronald reagan. >> i did. >> that nancy reagan said the torch had been passed to him
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and, in fact, andrea mitchell and others are saying that's not exactly what he meant. do you know about this? >> reporter: i didn't see that one. >> this whole reagan legacy -- >> this whole reagan legacy, i am -- >> and it's been -- >> reporter: one of the things that newt has tried to say throughout this campaign is that he was at the side of ronald reagan throughout. >> right, right. and then, eamon, drudge has been all over this idea that newt was like a reagan antagonist the entire time. >> a back bencher and he didn't even know him. >> and then said drudge is in the tank for romney and so there is all this stuff. i wish we could have fred. >> drudge unloaded a bomb on newt last week. >> yes. >> reporter: sort of really, really went heavily anti-newt. we do know there are folks on the romney campaign who are very, very close to drudge personally and so the question is, you know, were they waiting and holding that stuff until the last minute? and they saw newt as a threat
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and they called up matt drudge and said let's unload this stuff. there was one day last week where the drudge headlines all pivoted anti-newt pretty hard. >> yes. >> reporter: and that's a struggle for newt. the republican base reads the drudge report. they go there on a daily basis and they're absorbing all that stuff. it's really tough for him to make a slog and come back from this onslaught of negative campaigning and you can tell that it's gotten under his skin a little bit. >> eamon, is there a point in terms of fund-raising that it becomes a real problem to have so many candidates still in the race? >> reporter: i don't think so. if you have a good message and you're out there on television and you're making your case, particularly with the internet in this day and age, i think these guys can raise a lot of money going forward. >> even if you're going up against a president who may have a billion-dollar war chest? >> reporter: well, that's the thing. you look on the other side of the political aisle and you see the president -- one of the stories this morning that was so interesting they're going to give all of the obama campaign
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operatives credit card readers that they can swipe with their iphone, mobile credit card devices so they can go out in the field and raise money as they're barn storming and knocking on doors. normally they would ask for your vote. now they can ask for your vote and a credit card swipe and pick up $5, $10 at a pop. when you have thousands of campaign aides out there, you're going to raise a lot of small dollar contributions in a way that just wasn't even possible in the last election. the obama team is going too much an incredible amount of money. and so whoever win this is republican primary is going to have to really start hitting up the fund-raising immediately to try to be competitive. >> and then you have "the journal" today why gingrich's tax plan beats romney and he's sort of a reagan supply side guy. but i think we've heard some rumblings from the romney camp that maybe they do change a few things in that. it's a 57-point -- >> they need to get it down five
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or ten points. >> 57 or 59. >> one for each state. i'm like gail. i mentioned the 57 states like she mentions the dog. you know what i mean? she's on 45 times. if you look up gail collins now, i'm not going to go into it, but if you look up gail collins, if you hit gail collins m it comes up mitt romney. if you hit d it comes up dog. can the editor tell her, please, it's not funny, it's not elegant -- hello? >> it says gail collins book -- >> put an m, mitt romney's dog. >> david brooks, dog on roof. donald trump. >> she will be known on her epitaph -- >> mitt romney dog, mitt romney dog on roof. >> 45 times, andrew.
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45 times. it's every column she writes. >> everybody needs a theme, joe. >> it's the most trivial -- people complain about how trivial some of this stuff is. it's sad. anyway, eamon, we digress. are you still with us? >> reporter: i am still with you and i wanted to mention one more thing. >> go ahead. >> reporter: andrew mention this had yesterday and i think it's an important thing for a wall street audience to keep their eye on. newt gingrich has been going after goldman sachs and he did it again yesterday. >> oh, boy. >> reporter: tying mitt romney to goldman sachs, new york elites, and washington elites. in newt gingrich's world view the new york and washington elites are exactly the same as much as you and i might disagree with that living in new york and washington. but down here on the campaign trail, goldman sachs has become an insult on the campaign among republican primary voters. that's something a couple of years ago you just wouldn't have seen and it's going to be interesting to see how that plays out. >> yeah. >> it's true. we were talking about that earlier this week, it's stupid.
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anyway, thank you, eamon. appreciate it. >> reporter: you bet. time for the global markets report. ross westgate is standing by in london. i think you like ross so much you actually decided to put that -- it's andrew ross sorkin, ross westgate, right? >> absolutely. >> a personal idol. >> yes. and i got to spend time with my idol last week. >> we did. the last time i saw and rupe was about 1:30 in the morning somewhere. >> is that true? >> i've forgotten where. >> he has, too. >> i think i have, too. >> how is portugal, ross? will you get it together over there, please? i don't know how many times we have to talk about this. >> how many times do you want to talk about greece might be close to securing a private sector involvement in debt restructuring? >> right. >> now they're saying it's the end of this week. of course it was the end of this week last week and it was the
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end of this week two weeks ago. so i don't know. you know, i don't know what's going on over there. we figure most of the discussion was going on between the ecb and the imf on about whether the ecb was prepared enough to take a hit. i think actually that's where the discussions have been going on. nevertheless, ahead of the u.s. open this is where we stand, green on the board pretty much erased yesterday's slim losses by the close yesterday. right now up not quite a percent for the ftse 100 and the xetra dax and the ftse mib up 1.5. one stock to point out today, designs a lot of chips for apple, came out today. fourth quarter and really blew past estimates. the stock up. not quite the reaction to apple. they are reaffirming the guidance as well so expectations might meet or beat on that side. you talked about portugal. just come on to that. german unemployment today. hit an all-time low. the adjusted unemployment number since reunification. over here in italy unemployment
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hit an 11-year high so that shows you the disparities between the ten-year gilt, a sharp supply. more qe. portugal very briefly we saw the two-queer yield today hit a fresh all-time high. 21.5. we just came back to 21.2. no chaps this is coming back in next year. they are going to have to have a continual care program for the rest of the eu. back to you. >> all right, ross. thank you very much. we'll check in with you again just a little bit later. >> what? >> i'm going through gail collins putting a, b, c, d. if you put in "s" what do you think comes up? >> i don't -- >> the name of the dog. i mean, that will be -- >> but andrew is right, they must be customized because i don't get dog first. >> does canine come up? no. >> s for shamus.
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all right. when we come back we're going to go from europe to the united states talking about currencies to the economy. we have two topnotch traders joining us to weigh in on the day's biggest stories. but first as we head to a break check out the global markets headlines. when bp made a commitment to the gulf, we were determined to see it through. here's an update on the progress. we're paying for all spill related clean-up costs. bp findings supports independent scientists studying the gulf's environment. thousands of environmental samples have been tested and all beaches and waters are open. and the tourists are back. i was born here, i'm still here and so is bp.
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u.s. equity futures are pointing to a higher start. ken, i want to start with you watching the futures because yesterday at this time we did see things down. at this point they're indicating a higher open by quite a bit. i guess a lot is still being driven by europe? >> you bet. all that green behind ross is a big factor, becky. the other thing i would point out that more than micro analysis is we're trading in the same place as the s&p as we were on thursday and most of the day on friday. so it's been kind of an overanalyzed move to nowhere and to put that same move in perspective, look at the last hour, the last two in trading in the treasury complex. yes, it was on a big rally, lost
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a point quietly and the ten-year note is now trading, the futures, where it was on friday's close. so i think that's a really hot number to watch for the rest of the week, 131.23 on the ten-year contract. a lot of information that starts today with chicago and i think that kind of overanalysis of the short term could catch some people out when you look at the week as a whole. >> a lot of people said that staying above 1300 for the s&p was a key technical issue. >> yeah, i think it probed down briefly and early in the session and met some buyers. it think that's a big thing. i would also caution, though, that the japanese yen especially on the currency side is the one that traders are starting to pay more attention to. maybe the other guest hosts talked about that. i think there's still reasons to feel the people have responded to the market down. i think that's the key for
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optimism as opposed to a momentum trade that falls apart but, again, this is really a trade that's going to develop out of the end of the month today and through an onslaught of information between now and friday. so, you know, i'd look for a good session today and then caution rising again tomorrow. >> okay. rebecca, that's a lot of information between what we're doing with the yen and we're following with europe. what do you tend to follow most closely? >> i am obviously going to be watching the pmi confidence survey this week. we want to see more signs of a soft landing out of china. we want to see it coming out of the u.s. that would continue to help cyclical assets. the story out of europe yesterday from their summit, i think, is kind of nothing new really. fine, they're going to write into their constitutions that they won't misbehave again but how do you enforce it? how long is it going to take to get it ratified? if olan wins in the french elections he may say i want a do
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over. greece is still a wild card. our guest case is they do get a deal but we want to see it. portugal is still a mess. >> where are you on portugal? we probably should have been talking about portugal weeks ago. >> almost 21%. >> the spread between german boons is about 17% now and it keeps going to new record highs every day and part of that is it has been removed from some indices since it got put on junk status. they do have similar debt and deficit dynamics to greece. they do have a few positives. the parliament has been positive. they don't have a lot of intercountry fighting on that one. they have cut public sector wages. they have taken some about big reform steps. so that's good but that's about it on my positive list. >> but portugal was on -- the firewall -- the firewall didn't come until after portugal. portugal is small enough. it was spain and italy and france was where.
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port fwugal we've been writing . >> we've been writing off greece, too. look how much we talk about it. >> and greece is written off. >> you are not worried about greece. >> what will -- >> it is a union different than if they just default. >> that's totally true. that's still a possibility. >> the gamble is either they don't default at all or they default but they don't leave. >> right. >> what happens if they leave? >> right. if greece defaults, that's one thing to your point. if greece leaves everyone will be looking to portugal. if they have a messy default in march everyone will be looking at portugal. if we actually get the public sector involvement negotiation done and dusted in time, we're going to have a nice relief rally. if we have a default of any kind people will keep pushing on portugal, speculators, short-term investors. i think the real risk for portugal, that's not our base case in the next year at least if greece were to leave i think a longer, drawn-out process because they want to control it.
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>> we hear -- >> can i say something else? >> sure. >> if you look at the german situation, it's up to them and their public, the people would like to say they're not into this. if you look at the german numbers, the ones coming out now, they've gained a huge competitive advantage. record low unemployment during what is a really stressful recessionary time. so there is reason to believe that the public will go along with some of these deals that before they thought all the germans would never go for and it's up to them and so that advantage plays into the ability to work this thing out. >> i almost think the german data we're getting, this very strong jobs market is actually a positive in that you have a cushion of growth for europe but it's also a bit of a warning signal. back in 1992-'93 when we had the last major european crisis and it blew up and we had that 30% fall in sterling, we had the exact same dynamic. we had germany very strong after reunification and the periphery
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countries very weak and they couldn't keep it together. the ecb meets on january 9th and people are hoping they cut rates again. it's harder if we have stable inflation and a strong economy. it's the biggest economy there. so in some respects ironically a slightly weaker germany makes it easier for the ecb to help. >> in terms of rate cuts that would support all european growth. >> that makes a lot of sense. rebecca, thank you for coming in today and, kevin, great talk in to you. by the way, this programming note for you. you can catch rebecca on "money in motion" on friday he is at 5:30 p.m. >> eli lilly is reporting 87 cents versus expectations of 81 cents. nice little beat. and the revenue number is 6.05 billion versus 5.9 billion. the non-gap fiscal 2012 -- now this would be next year because this is a fourth quarter we're talking about. that's okay versus expectations
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of 3.19. 2009 the company earned 4.74. i'm sorry, 2011 the company looks like if you add six to that, 441. they are dealing with expiration on their important drugs. we'll have john lick lighter on who is a graduate from the louisville -- i'm the cincinnati one. they're all jesuits. >> and john will be on the broadcast. >> we don't broadcast but we send out most of our information over cable. >> brian williams, some people still watch with antenna. >> rabbit ears. >> you don't like show? how about program. welcome to the program. okay. coming up on the program, excited about the prospects of a facebook ipo? you are not alone. before jumping in, you'll want to hear what our next guest has
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to say. a form er chief accountant for the s.e.c. joins us next. but first, as we head to a break, take a look at yesterday's winners and losers. [ female announcer ] goodnight gluttony, a farewell long awaited. goodnight, stuffy. goodnight, outdated. goodnight old luxury and all of your wares. goodnight bygones everywhere. [ engine turns over ] good morning, illumination. good morning, innovation. good morning unequaled inspiration. [ male announcer ] the audi a8, chosen by car & driver as the best luxury sedan in a recent comparison test. hey. did you guys hear...
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we're back on this tuesday morning. two of the biggest business stories this week are on opposite ends of the corporate spectrum, one is about growth, the other collapse. lynn turner the former chief
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accountant joins us to talk about-face book. let's talk about that facebook ipo, we're expect to go see a filing as early as tomorrow after the closing bell. is this an investment, and i know we haven't seen the docs yet, but is this an investment you think is worth making and what is it you'll be looking for when the filing comes out? >> i think facebook is just a phenomenal product. there's probably nothing that has become such intertwined with everyone's lives today as facebook so i think it has phenomenal potential. and i think the key questions in those docs is going to be what's the revenue level, what's the ramp-up, and what's the likelihood that they're going to be able to continue this when google came out in its ipo at $80, $90, everyone thought that was a very high-priced thing. but look at what google has
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done. >> lee, google was, you know, four times -- was valued at less than four times what this is. this is -- we're talking magnitudes more what facebook is at. so the real question, is there anywhere to go from here if you were to buy in at let's say a $75 billion to $100 billion valuation, right? >> as usual you raise the right question. it is going to be what is that multiple of revenues that they're pricing this thing at? is it going to be ten times revenue? 20 times revenue? and do they really have the ability to expand that in other parts of the world and ramp up revenues? no one thought google could yet they've done phenomenally well. google had great management with eric schmidt there. whether or not facebook can pull that off is another question.
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>> you raised an issue about the methods groupon used in its ipo and i'm curious whether you think lessons have been learned when we see the filing we're going to see straight-up numbers. do you expect to see some more interesting metrics get raised? >> i don't know. we'll have to wait and see the document as to whether lessons have been learned. i don't think so. i think investors on things like this lose their mind, if you will, and just invest on momentum. hope this will skyrocket. i just -- having lived through the dot-com craze, andrew, and seeing the debacle at the commission, seeing the things like groupon, things that you pointed out where their metrics don't make any sense, i just don't think investors learn from that at all. they continue to repeat mistakes hoping for that one big killing. >> i have one quig quick quiet
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period question. people around the company are speaking. i know last week sheryl sandberg was in davos. she spoke but tried to keep her words away from the ipo, some of their investors have been speaking. how does the s.e.c. look at that issue? >> well, really the whole purpose to keep things quiet is to ensure that you don't have people out there hyping the stock ahead of the documents, ahead of people being able to dig in and seep what the real facts are. i think it's an excellent rule. so what the s.e.c. would look to is are people getting out ahead of the documents, the filings, the prospectuses and trying to sell the stock on hype. >> let's talk about mf global. it does appear this money has disappeared. what a do you expect will happen to jon corzine? >> you know, the fact that the
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press is reporting that a billion got vaporized is amazing. money doesn't just vaporize unless you're the u.s. mint burning up old dollars, dollars don't just disappear like that. so someone transferred the money from these customer accounts to someone else. someone did that. i think eventually over time the u.s. trustee in their investigation, if they do it right, if the regulators, the law enforcement agencies, really do an honest to good bottom's up investigation, they're going to find out who it is that made those transfers. >> we have to run but as the question always goes, will jon corzine be able to have lunch in this town again? >> it's going to be tough for him. i think the further and longer you go on, it's going to be tougher. certainly i think his reputation is permanently damaged. >> thanks for joining us this morning.
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appreciate it very much. >> take care, andrew. >> you bet. >> if you have comments or questions about anything you see here on "squawk" e-mail us. call it the tequila indicator. what the sale of spirits can tell us about the global economy. john mcdonald joins us on the set. >> to start the party early. >> but first check out the euro this morning.
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the u.s. distilled spirits industry doing its part to boost the economy. exports topped $1.3 billion, up 17%. joining us now john mcdonald, coo and chairman elect of the distilled spirits council. >> the company was invented in 1989. >> that reminds me, the guy became a billionaire from grey goose. >> made his claim to fame with the hair care products. >> the guy who started grey goose became a complete tycoon. you can introduce something and within, what is it, 1980 -- so 22 years later, 23 years later, patron is what people normally order if it's tequila. made that name up basically,
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right? >> he thought he could make a better tequila on the market and pa it tron was invented and created it. >> what is the company worth now? >> i've seen reports up to $4 billion. >> unbelievable. was it better? is it better and why? >> without question because everything about patron is hand made. we use the finest raw materials. it's 100% agave. people don't realize more inexpensive are 51% and 49% spirits. >> are they allowed to say it's pure agave. >> you can say it's tequila but that's the 51/49. >> if the label says pure agave it's pure. >> correct. >> this is like the third -- >> andrew wants to start drinking. >> it's like the third hour of the "today" show. the fourth hour, rather. >> in the last ten years how
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many cycles have we had between beer gaining than spirits gaining and beer gains and spirits? now we're back to spirit gaining again, or has it been consistent? >> since 2000 it's been consistent. spirits have picked up five sheer points in the last 11 years. and the future is very bright for spirits. >> you talk about the exports, too. they are pretty amazing in part because of the trade pacts that have gotten passed. >> a good point. south korea and the u.s. government wiped out the 20% tariff and the philippines with the world trade organization they've viewed that the philippines shouldn't be charging taxes on american spirits and we have some coming up in asia and latin america, panama and columbn colombia. the american whiskey should continue to grow. >> okay. so if -- i figure you want to get healthier, people think beer makes you fat. is one beer versus one tequila drink the same amount of
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alcohol? they both make you fat, don't they? >> absolutely not. >> beer makes you fatter tequila. >> i'm not getting into that. >> alcohol in and of itself is high in calories, not just the -- >> 1.5 fluid ounces of pa tron tequila on the rocks is about five calories. it's what you mix it with. in the $40 and above patron has 82 market share. >> i've tried entourage. where we would they be in the 40 and above? >> i don't know. >> you see them as a viable competitor? >> we look at the whole white spirit competitors.
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vd k vodka, gin. >> he told me if you make margheritas out of tequila no hangover. >> hopefully you're a patron consumer. >> thanks for coming in. we appreciate it. when we coack, hold onto your hats, the earnings machine is about to go into overdrive. still to come, quarterly results from pfizer and exxon. we'll have the numbers and instant analysis. stick around. "squawk box" will be right back.
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we're back on this tuesday morning. a quick look at the futures, up across the board. dow would open up about 67 points higher, s&p about 7 points higher and nasdaq about 14 points higher. coming up, huey isn't the only one who wants a new drug. a pharma giant is only as strong
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as the next one in the pipeline. we'll talk to john lechleiter and ask him what's coming down the pipeline. and it's the most talked about ipo since google. how should investors value facebook as it changes its status to public? david wiehl will share his experience at 7:30 eastern. a refrigerator has never been hacked. an online virus has never attacked a corkboard. ♪ give your customers the added feeling of security a printed statement or receipt provides... ...with mail. it's good for your business. ♪ and even better for your customers. ♪ for safe and secure ways to stay connected, visit usps.com/mail
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. ♪ good morning, everybody. welcome back to "squawk box" here on cnbc. i'm becky quick along with joe kernen and andrew sorkin. our guest host is howard dean. he'll join us in a few minutes. first what's making headlines on this tuesday morning. greek prime minister lucas papademos says progress is being made as the country tries to work out a restructuring agreement with private creditors, that's helping some of the overseas markets, moving
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up as 25 of 27 euro states approve an agreement to implement strict budget kree controls. the holdouts, the uk and the czech republic. the eu may downgrade countries. the united states and europe's developed countries are most vulnerable to finances. if performs aren't implemented those countries could see health care related downgrades within the next few years. dow futures up 60 points, the s&p up just over 5 points. >> pfizer could help in the dow today, the can. is reporting 50 cents a share versus expectations for 47 cents and revenue was also above a little bit $16.7 billion versus $16.61 billion in a year ago period.
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they returned $15 in 2011 and updated guidance may be below previous guidance because it reflects unfavorable changes in foreign currency, so a forex-difference looking at adjusted 220 to 230 for 2012. 230 is where the estimate is on the street so the lower end would be below where wall street was. >> we had that with eli lilly earlier. >> stocks trading higher, indicated to open a little bit higher and has other issues other than the metrics as so many companies do as some of their key drugs go off patent. for 2012, revenue is seen at 60.5 to 62.5, versus an estimate
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of 63. they had previously forecast 2012 revenue of 62.2 to 64.7, so we're talking 60.5 to 62.5 and blaming that on currency. so now we're seeing pfizer pull back a little bit. >> you think on the forecast now, once people are getting down into -- >> up a little bit higher. >> i will say i got a ten-year, if you put a ten-year chart up of pfizer it's kind of interesting because we haven't seen that, i think it was as high as, i'm trying to remember, ten-year won't show it but if you go back further to the late '90s when it was one of the great blue chip growth i think it was $80 or $70 at one point. dropped all the way down as you can see down into the teens and stayed there for a while in december of '08, got down below the teens actually.
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it's been a low, steady move higher, and it's one of those big yielders, 4% yield at current prices. let's talk about another drug company that reported. the ce o of eli lilly. 87 cents a share, six cents ahead of expectations. joining us is chairman and ceo john lechleiter. good to see you. >> good morning. >> the revenue for 2012 are you seeing the same for-ex issues or head casting the same pfizer is? did you bring down revenue guidance for 2012? >> joe we gave our guidance january 5th and as we're saying today, we're sticking with that. >> was that below? >> -- in terms of our revenue forecast. >> was that the first time, john, you gave guidance on january 5th? >> right, for 2012. we said we expect between 21.8 and 22.8 billion dollars in
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revenue. now, with the european currencies weakening since then, that may put a little bit of pressure on the top line in terms of sales in those countries. however, it will help our gross margin. we're sort of naturally hedged, so we're sticking to the guidance we provided on the 5th. >> and the other things that we always need to ask you about, how you're dealing with some patent expirations on some of your big drugs like xyprexa. >> we felt in the fourth quarter the impact of losing that patent in october in the u.s. and just a little bit earlier in europe. the 2% revenue decline for the quarter really included some very strong growth from a number of other products, our two insulin product lines, humulim and himalog grew at 20% for the quarter and seven of our
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medicines, two insulins and animal health business exceeding $1 billion in revenue, so we're going to continue to focus on those brands that are not impacted by patent expirations, continue to move our pipeline forward, see our way through this period and resume growth. >> john, another question, people have been looking into this release and you give a little bit of information about that experimental alzheimer's disease treatment, i think it's zylanazumob? >> zolanezumab. easy to say. >> say it one more time? >> zolanezumab. >> mab is monochromal antibody. >> i still don't know how to say is it. john, what can you tell us about whether it's going to continue in these late stage trials? >> becky, all we can say is we got a report earlier this month
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from the data monitoring committee, independent group overseeing the parallel studies in alzheimer's disease and came back and said continue the trials. that means we'll take the studies to completion. that will occur sometime around the middle part of this year and we hope to have more to report in the second half of 2012. >> what's it against, an amalyn plaque? >> it's a monocroakal antibody that gobbles up the precursor, the molecule that forms these plaques. >> everybody must be doing this. who else has got something similar? >> there are several other companies, one other company that has a monochlomal in phase three. a lot of other approaches, several different approaches by lilly. we have an oral medicine in phase one, hope to take that into phase two later this year. that works in a slightly
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different way than the antibody. >> diabetes, are you first in those two classes with the drugs you talked about? >> these represent our insulin lines. humilin was launched in 1928 so it's amazing in the fourth quarter grew 20%. i think joe that underscores how prevalent diabetes is becoming around the world unfortunately and we're taking other different approaches. you remember we entered into an alliance with behringer engelheim a year. we launched tragenta in the united states and other countries around the world. we're trying to take a multifaceted aapproach to treating diabetes at the various stages of the disease. >> and also we're talking about alzheimer's, any treatment for alzheimer's would immediately be the biggest drug in the world.
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>> well it's a disease area i think many of us know about from personal experience. it's certainly proving to be a great scientific challenge but it's clearly an area where we need to make more progress. >> in ten years, it could be a drug that rivals lipitor, or it could be a $20 billion worldwide drug at some point. >> joe, i think we have to wait to see how the trials come out. >> not that one, if you found something for alzheimer's. >> this a winner takes all kind of drug situation by the way? >> i'm not an expert on alzheimer's but i expect bwhen e look back, like with other complex diseases i think it will require a multiple approaches and we'll see in the next five to ten years how successful we are. >> all right, john, thank you. do you remember, what was founded first, lieu izville st. xavier or cincinnati st. xavier?
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who can really talk about being the first one and the copycat? do you know? >> i don't know, they both go back to the 19th century. >> i'm with sin senacincinnatsc. >> i don't know we better with he search that. >> well that's you. whoever was second is going to get jugged. do you no he what that is? >> i don't. >> it's a detention, it's justice under god. >> you're so smart. >> i'm not smart. that's what jesuits do to you, it's like abuse. that's my life anyway, and john's life. coming up next, we're going to be welcoming guest host and former presidential candidate governor howard dean, he'll help us handicap the florida primary and the election when "squawk box" comes back after this.
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it's a big week on "squawk box" leading up to friday's jobs number. got a job prediction? maybe facebook going public? tweet us @squawkcnbc is our handle. 42 seconds ago. thanks for the flowers guys. [ both ] you're welcome. oooh are you guys signing up for the free massage? [ both ] so 32 seconds ago. hey guys you hear frank's cat is sick? yeah, we heard. wanna sign the card? did you know the guys from china are in the office... [ speaking chinese ] [ male announcer ] stay a step ahead with the 4g lte galaxy s ii skyrocket. only from at&t. ♪ all in one account. keep watch on the markets. or use our exclusive tools to help find ideas. it's powerful, easy-to-use technology for trading stocks, options, and futures. keep trading whether you're at home, in the office,
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president pro tempore. welcome back to "squawk" on this tuesday morning. a ban on insider trading by
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members of congress is one step closer, this is interesting stuff, proposed legislation cleared a key procedural hurdle in the senate, a house vote on a similar bill is expected next month. a lot of people have been talking about the fact that right now, if you are a member of congress and you know something, you can trade on it and it's not illegal. it's somewhat shocking still. >> this is fascinating. >> we haven't even introduced you and you're talking. >> i should shut up. i had a personality transplant, i thought i was joe. >> jump in. he's a personality transplant, that's what our viewers say. >> john sununu will be join us in a second but since you had a comment on the insider trader. >> congress hates stuff like this, never want to pass this, this is how campaign finance got passed. it got passed in an election year because nobody dares say no. >> you're saying it goes
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nowhere? >> they'll do their best. the democrats will push it as hard as they can and republicans are smart, they're maneuver it. >> you're saying only republicans do insider trader? >> only the minority likes to pass bills like this because they want to embarrass the majority at the time of the election. >> i think it embarrasses the whole congress. >> it does but they have short memories in congress. we have short memories in congress. >> do you think insider trading goes on in congress? >> yes. >> you do. >> yeah, i do. >> you think it's meanful? >> it's not the kind the guy just got convicted for. there probably is a little bit of that because there's a little of everything everywhere but i think people are going to buy stocks when they pass legislation they know it's going to affect it. >> you think that's happening on the staff level or among the members itself? >> both. both. there's some evidence that that happens. it's not the wall street inside of trader, the earnings tomorrow
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and here's what they are. i doubt that happens except in a few isolated cases but i think it's fairly common for people to buy stock on the notion that something's going to come along that's going to be helpful. of course sometimes they're wrong and the bill doesn't happen and what happens on wall street when you're wrong about the insider trip. >> let's bring in governor sunu sununu, do you have an opinion on the issue? do you believe that members of congress are participating in insider trading in a meaningful way? >> are you talking to me? >> i am. >> oh, i'm sorry. >> goomd morning, john. >> i was listening to the governor on the left side of the connecticut river. i think there's something. obviously it's the kind of the issue as howard said that gets very attractive in an election year. i think they ought to pass it and move on. i think with the news distribution we have now, it's probably less significant than
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it used to be, because now just about everything is done in public and whether you like it or not, you know when legislation's going to pass or not pass. >> let's talk florida, governor sununu. handicap it for us. what's going to happen and what does it actually mean? >> well, first of all, i think people still have to understand that this is going to be a long slog, and no matter what happens in florida, it's going to take a while for this thing to firm up and finish up, but romney is going to win in florida. mitt romney is the best candidate. the republican party will eventually come to its sanity and realize that newt gingrich is a disaster. he's untrustworthy and frankly not even good in debates. >> on that question about gingrich, there are a lot of republicans like yourself who believe that he is a danger ultimately to the party and my question is, is there a moment at which somebody gives him a bear hug and says, look, you got to get out of the way, and when do you think that would happen, if it happens at all? >> there's nobody that can give
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gingrich a bear hug except his financial backers. look, the legend is that newt is great in a debate. he hasn't done anything in a debate against his fellow candidates. he just picks on the media. that's an easy shot to take but after a while it wears thin and i think the country needs somebody like romney that can deal with the jobs issue and eventually that message will get across after we go flu the primaries. >> governor, one of the issues we keep talking about around this table is the idea because gingrich attacked romney so aggressively now, does that make it easier or harder for president obama to take the same tack later in the year? >> makes it easier. what newt has done is legitimize issues we were going to use anyway, the cayman islands, swiss bank account, 15% tax rate whatever it was which i don't think the tax rate hurts him among independents but i think the cayman islands and swiss
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bank account is big stuff. >> are we going to be hearing about that all the time? >> yeah, you will hear about the destruction of the companies and all that stuff. that matters some, because you know, i know joe loves this group and i hate to say anything bad about them. >> what group? >> occupy wall street. >> occupy wall street changed the detroit. a lot of people say they're not organized, but they've changed the debate, the 99% versus the 1%. >> the inequality argument. >> howard i can see you guys embracing those scenes from oakland in the last two days. look, the issue is in jobs and the incompetence of this president, and the stuff you're talking about is not going to stick. >> well, we'll find out about that because i think it will. there's a polling data a disaster for romney down by 8 to
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obama in michigan. the republican brand has been really harmed in florida and ohio because of the governs. rick scott in the 30s, kasich is below 40. that has a big if ekt in the two states. a republican who wins in ohio and florida -- a democrat who wins in ohio and florida will win the presidency. >> howard let's get to the nitty gritty. a gallon of new hampshire maple syrup against a gallon of vermont maple syrup. >> that stuff is motor oil you make over there. i'm not getting any hasment ham maple sear. >> how about the election? >> that would be something worthwhile. >> you don't think vermont maple syrup is worthwhile? that may be true. new hampshire maple syrup certainly is. >> you got that whack job of a speaker up there. how would you like to be governor with the speaker they've got now? >> romney zbg to be talking jobs. people are worried about jobs. romney is going to be talking
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about wasted money in the stimulus package that just went out to bail out public service employees, that's going to stick and romney is going to be talking about the fact that the economy has not recovered, it's the longest non-recovery the country's ever had and that's a reflection of incompetence in the white house. >> i don't think so. >> i don't know if you think the business community matters or not but when you come around this table for better or worse most of the executives say you know what? this has not worked, the presidency has not worked. do you buy that? >> no. i don't buy it and i don't think they get a lot of sympathy. the business community that comes around this table are in many ways the people who screwed it up in the first place, the banks and the insurance companies, the aigs, the citigroups and all this stuff. and that's what the american people think. >> probably 5% versus -- you made a blanket statement all the ceos, it's perfect for the obama
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administration because all business executives are disparaged but in actuality we don't have that many financial service ceos on compared to eaton and all the other -- >> caterpillar, alcoa, boeing. >> did business in -- so the private sector called? >> i actually think they did. when you invest -- i wanted to talk about this with the ceo of lilly. one of the problems in the drug companies they can't get capital. innovations are driven by big phaa and the reason they can't get capital is because the banks invest in credit default swaps which don't create wealth except on wall street. if you want to create wealth in this country you've got to invest in real jobs. our financial folks are not doing that right now. >> what do you say about that? >> that's the investments we've gotten out of the white house in real jobs like solyndra, et cetera. >> great "usa today" piece
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today. >> the biggest problem in this country today, the biggest problem in this country today is that everybody who has got investment capital prepared to go is scared to death that president obama might get reelected. the minute it is understood that president obama is in essence gonzo, you'll start seeing people create jobs in this country. there is money for jobs and they are afraid to put it in, that investment in, because they're concerned about a continuation of this administration. as soon as it's cleared -- >> governor sununu -- >> plug that back in. what did you do? >> i don't know what you're talking about. >> plug that back in. >> thank you to governor sununu. governor dean will be with us for the rest of the session. >> time now for today's aflac trivia question. on this day in 1981, what song by blondie reached number one on the billboard hot 100 list?
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i'm glad aflac pays cash. aflac! ha! isn't major medical enough? huh! no! who's gonna help cover the holes in their plans? aflac! quack! like medical bills they don't pay for? aflac! or help pay the mortgage? quack! or child care? quack! aflaaac! and everyday expenses? huh?! blurlbrlblrlbr!!! [ thlurp! ] aflac! [ male announcer ] help your family stay afloat at aflac.com. plegh! is was the gulf's best tourism season in years. all because so many people came to louisiana... they came to see us in florida... make that alabama... make that mississippi. the best part of the gulf is wherever you choose... and now is a great time to discover it. this year millions of people did. we set all kinds of records. next year we're out to do even better. so come on down to louisiana... florida... alabama... mississippi. we can't wait to see you. brought to you by bp and all of us who call the gulf home.
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20 pages. boom! the other office devices? they don't get me. they're all like, "hey, brother, doesn't it bother you that no one notices you?" and i'm like, "doesn't it bother you you're not reliable?" and they say, "shut up!" and i'm like, "you shut up." in business, it's all about reliability. 'cause these guys aren't just hitting "print." they're hitting "dream." so that's what i do. i print dreams, baby. [whispering] big dreams. now the answer to today's aflac trivia question. on this day in 1981, what song
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by blondie reached number one on the billboard hot 100 list? the answer "the tide is high." >> welcome back to "squawk box" on cnbc. i'm andrew ross sorkin. european markets are moving high on optimism talks to restructure greece's debt are moving toward a successful conclusion. the optimism boosting the euro and putting it on track for its best monthly advance versus the dollar in october. pfizer reporting a quarterly profit of 50 cents a share excluding certain items, three cents above estimates. it did lower its fiscal 2012 outlook seeing earnings of $2.20 to $2.30 per share compared to analyst estimates of $2.30. latest data on home prices is about 90 minutes away. they're expected to see a 3.2% drop in year over year prices in 20 largest u.s. housing markets. becky?
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or perhaps joe, we can talk pfizer. >> i guess we can. yeah, what was that, 1841? >> zxavier, i don't know, i wasn't looking. >> xavier and new orleans as well so i'm sure it started by the same order. >> right, exactly. the world's largest pharmaceutical companies out with quarterly results and it wasn't 80, i think 47/48 was the highest pfizer ever was but multihundreds of billions and never been back, it's $165 billion now. we go with pfizer's junumbers wh john eade, positive or negative or as expected? >> fizer is doing a great job of managing everybody's expectations. they beat slightly in the last year, lower slightly moving ahead. we get a pullback in the dollar later this year and my guess is
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they're at the upper end of the range this time next year. >> so all of these issues with lipitor are in the rear view mirror at this point? >> no, there's still some execution risk they face. i think lipitor was down 40% year over year. they need to drive growth with new drugs, lyrica and embrel, some of the replacement drugs. in the meantime they've aggressively cut costs and ramped up cost-cutting plan faster than expected, they're slowing down r&d, one of the lowest spenders of r&d as a percent of sales in the universe and they're going to buy back stock of course, something like $9 billion last year and i think they'll talk about that this morning in their call. >> dr. dean? >> great, very interesting company. they put money into a company called glyco pneumetics,
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treatment for sickle cell. they have lots of capital which is great and not just buying back stock but also creating jobs and buying innovation. >> talk to john about your issue with having trouble with capital. >> yeah, i mean my principal problem with capital is that the very, very large financial institutions are still playing the same shell game they played in 2008, credit default swaps, collateralized mortgage obligations and other things and we fleed to deploy capital in things like buying pieces of glycopneumetics. i think the pharmaceutical industry is fascinating because they have so much capital. how do you think they're deploying it? >> i think pfizer has something like $28 billion on its balance sheet. and pfizer i think is like the third pharmaceutical company this quarter to enact this
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quarter, bristol-myers and amagain in the $1 billion to $2 billion range. >> they've found a way to fix their pipeline if they can make smart investments. >> they're buying critical companies with drugs in phase two, phase three trials primarily targeted in oncology, that's the growth area now. >> right, although of course when we have health care reform it's going to be downward pressure on all of that, that probably makes the market nervous. what do you think about that? >> it does and we heard from the eli lilly ceo that diabetes is a great growth area, too. so there are other areas for the country. >> and alzheimer's. >> john, you're assuming that everything has been legislated does finally become law, john, in your models or does the supreme court become a question
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mark for you? does a republican win become a question marks for you in november? >> we've seen the first round cut in the industry by 3% to 4% per year and we're expecting additional pressure from regulation. you know, i think no matter who wins, this is all about bringing out new products, which tend to have higher price protection, and in driving revenue growth with new products, not by raising prices on older legacy products >> john, let me ask you quickly the fda just came out with a thing a week or two ago said they were going to process things faster and so forth and so on. we know that has been a big bottleneck. do you think that's real with the fda improvement? >> they've been talking about that for four or five years but they are getting better at
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setting dates. for example pfizer has a major drug, eloguis and we're expecting a decision on that march 28th so there's more transparental lall lall lall la there. toshiba reporting a 72% drop in profits and a strong yen and a weak global economy hitting profits at the industry electronics conglomerate, flooding in thailand also hurting quarterly earnings. >> also honda posting a 65% slide in quarterly profit. the automaker also forecasting the same drop for the full year. of course, natural disasters in japan and thailand hitting honda a little harder than some of its rivals. research in motion committee concluding no future chief executive or other employee can be chairperson of the blackberrymaker. this panel is stressing the importance of an independent chair. >> you just got a new blackberry
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which you like. >> i do. it's the bold 9900, whatever it is. >> everybody is calling for the death of rim. >> it's a good one, i like it. coming up, former presidential candidate and gingrich backer herman cain joining us to discuss the fight for florida. more "squawk" in just two minutes. up next, facebook is about to change its status. should you be buying the i. o? a closer look at one of the most anticipated and largest public offerings ever.
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welcome back. wall street and the markets gearing up for an eventual facebook ipo with a filing expected sometime this week. joining us on set is david wield, capital markets advisory founder and chairman and former nasdaq vice chairman. thank you for joining us on the set. >> thanks for having me. good morning. >> there's an awful lot of excitement about the facebook ipo. when you dig through the numbers is the excitement warranted? >> i think absolutely. any time you have a company that has 800 million users globally, and this is a monster, and the real question is, what can they
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ultimately do with these interfaces in terms of monetizing them and my guess is that they've just scratched the surface of what they'll be able to do. everybody is really waiting to see what the numbers look like. there's speculation that they're doing about in 2011 already about $3.8 aboutle in advertising revenue. we'll see if that's the number. on a multiple bases people speculate $75 billion to $100 billion but it almost doesn't matter. if you remember when google went public it grew and grew and grew. >> it's hard to be a naysayer when you look at these. when you follow what happened with google everybody was proven wrong but if i look at facebook i'm one of those 800,000 users and i can't remember my password. i haven't logged on in so long. 800 million. i haven't logged on in so long. i wonder how many people are there? >> there are people who live on
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it. my wife is pinging people all day long off of her facebook account and they enhance the system so that it keeps you engaged. you get communications now that say you haven't been to the site frequently. >> i do get those reminders. >> it evolves and i think one of the wonderful things about the internet is it's a bit of a science laboratory and you can track exactly what the user patterns, and you can improve upon them. there's no question when you look at the 800 user base this company has hit on something that is really quite a phenomenon. >> with google if it was only pop-up ads, if it didn't have that fee word, what would google's valuation be? does facebook have that magic bullet, where they get all the -- >> sure. >> really? >> they know everything about you. they know much more about you than google should. >> here's my question, this is what makes me nervous about tech, although google is an exception to this, that the
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barrier to entry is so low. google's done a great job protecting their ip. so what do you say about people who are old fuddy duddies, nervous about getting into this because the barrier entry is lower in tech? >> i don't think that the barrier to entry is low. the barrier to entry is that these folks created an enormous first mover advantage and they own the market. they have scale. if you listen to the pundits out there talking about raising $10 billion potentially in capital on this ipo and that's an incredible war chest. i don't think anybody's going to be able to compete with them. >> except myspace came first. >> well you know -- >> look what happened to them. >> you have a point, but there are these folks who are actually much further along in terms of their life cycle at this point and you know you look at some, zynga's ipo and zynga exists in the facebook environment. so i think that the fact that
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they have that interface and that they can deliver other products and services and advertising and to your point, andrew, the fact that they know more about people, allows you to do better and better target marketing. >> you're a former nasdaq guy. is this going to trade on the nasdaq or the nyse? >> from a brand standpoint, nasdaq has historically been the growth sector, that's where google listed and i'm a little bit partial. they own soil convalley. the flip side is the new york stock exchange has been pouring a lot of resources into cultivating relationships in the valley, so i think this one is a toss-up. >> david thank you for coming in. >> my pleasure. coming up woody johnson owner of the new york jets and romney backer talks politics and who he wants to win the super bowl. the afc rival or the stadium he owns. still to come, he's throwing
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his support behind gingrich. tea party favorite herman cain tells us why he thinks newt is the man. "squawk box" on cnbc will be right back. line. you never take an upgrade for granted. and you rent from national. because only national lets you choose any car in the aisle. and go. you can even take a full-size or above. and still pay the mid-size price. i deserve this. [ male announcer ] you do, business pro. you do. go national. go like a pro.
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it's a big week on "squawk
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box" leading up to friday's big numbers. got a jobs prediction in maybe a thought about facebook going public or just want to say hello to the gang. tweet us @squawkcnbc is our handle. >> the voting booths in florida, the chads are starting to hang. latest poll shows mitt romney with a strong lead. joining us is former presidential candidate herman cain and guest host, former vermont governor and dnc chair howard dane. mr. cain, good to see you again. >> good morning, happy to see you, thank you. >> what do you think is going to happen in florida and does it matter? >> it does matter. and i think it's going to be closer than a lot of people are anticipating because i don't believe that the polls are totally reflective of the surge that's going on with the newt gingrich campaign. i was in florida yesterday, and i appeared at two events with newt, and there's an enthusiasm
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and an excitement there that tells me that it could be a lot closer than a lot of people are expecting. >> what was it about newt's approach versus governor romney's approach that got you to endorse newt or to throw in with the newt band wagon? >> my number one priority was economic growth and jobs. newt's plan is closest to my 9-9-9 plan and it's bolder than what governor romney had proposed. this current administration has no idea about how to create jobs, because all that the president wants to do is to continue to raise taxes and spend more money. newt's plan comes closest to my plan, and he is open to input from me by appointing me and asking me to serve on his economic growth and advisory panel, so there's going to be some give and some take and some discussion. we need a bold solution to creating jobs in this country. >> i cannot imagine you, herman,
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disparaging capitalism, private equity, goldman sachs, corporations. the populist -- i guess you can be a conkerveive and be a populist, but are you -- you really can look into the camera and tell me none of the things that newt said, when other people said he went beyond the pail in the attack on the private sector, none of that stuff bothered you? >> no, and here's why. i worked on the economic growth and tax reform commission back in the early '90s. newt gingrich appointed me to work with jack kemp. i know he's pro-capitalism. >> he just does that to, i don't know, to try to gain some ground on i guess you got to win the nomination to become president, so whatever it takes? >> i think that a lot of that was taken out of context, and it was put -- he was attacking romney in some way because of all of the attacks. look, let's face it, this whole primary contest has gotten too
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dirty and too ugly, and here's the thing. many of the american people don't care about that. they want to see solutions and they want to hear about specific solutions, and that's what i have been trying to do, even in supporting newt, so i believe that was taken out of context. >> but mr. cain it appears when you talk about the campaign getting nasty, that it's gingrich who has been the, who has taken the nastier approach. >> no, go back to when it first started. blame both. go back to iowa. i'm saying i don't like the nastiness coming from either one. that being what it is, we still have an election going on today and the people still have to make up their minds, and i'm suggesting, look past the nastiness, the dirtiness and the negativity and who has the strongest plan for getting this economy going. >> where does your guy win, mr. cain, if he's not going to win in florida he has to win states to do all this. where does he win? >> i think he'll win big on
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super tuesday and a lot of states will be involved in that. >> he's not on the ballot in virginia which makes it tough. >> come on, super tuesday there are a lot of states. i'm saying super tuesday is going to be much more telling. he may not win florida but we don't know. he wasn't supposed to win south carolina. what i'm saying guys, and lady, look, the voters will decide. let the voters decide. all of the speculation will be over with at 7:00 eastern time tonight. >> mr. cain we just had john sununu on a little while ago and he is supporting romney. he said that eventually the republican party will come to its senses and realize that newt gingrich is a disaster. that's a quote from him. you have heard some very harsh commentary coming from what some people say is the republican establishment. what do you think about the divisions that seem to be deeper than ever before in the republican party? >> i believe that the romney supporters are doing more to divide than newt gingrich is.
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that is a frontal attack. look, i have said that whoever gets the nomination, i will support. we must come together. but the attempt on the part of some of the long time republicans to bash gingrich like that, i don't think it's necessary and i happen to believe that that's doing more damage than newt's counter attack. >> you just said you'll support whoever gets the nomination in the end. >> i will support whoever gets the nomination in the end. absolutely. at this point i disagree with mr. sununu and many others in the so-called establishment that newt is a disaster. no he is not. when you look at the facts and you look at some of the specifics that's when i came to the conclusion i was willing to give him my support for the remainder of this process. >> herman, when you see polls, poll after poll after poll. >> yes. >> that takes about the general election, and i mean, i know that paramount to you is
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probably defeating president obama. you can again look straight in the camera in your heart of hearts you think that newt gingrich has as good a chance with independents or with the general election, in the general election of defeating president obama as mitt romney does? we have independent after independent come in here a lot, herman, and corporate guys all of them and they'll say one thing about romney and maybe they're new yorkers, i don't know, maybe that's part of it but they said if it were gingrich i could never vote for gingrich. why is that? >> well, they may have to eat those words, because if you don't vote for gingrich, if he gets the nomination, you're voting for barack obama, and i happen to believe especially businesspeople have a greater dislike relative to the policies of obama than they would of gingrich. here's why i believe he could beat him. first of all, all of the negativity that has gone on in this primary has distracted a lot of people, and i don't think that the polls are totally
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representative. secondly, when you get to the general election, and it becomes solutions versus failed presidency, i believe more and more people are going to see that newt gingrich is not a disaster. he is not all that of these things that all of the negative publicity and all of the negative attacks are basically trying to say. look at the meat of the proposals. we've got serious crises that we need to address and newt has the boldest, most convincing solutions in order to address those n my opinion, at this point. i think that's what's going to cause a lot of people to not look at him relative to his past, or relative to all the negativity. it's about solutions, which is why i started cainconnections.com, if people want more information about we're going to do this. >> you don't think his record matters? >> his record matters. you know don't call it an absolute. of course his record matters. you want to talk record? go back to the fact he led the passage of most of the items of
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the contract with america and the speaker of the house, when we got major, major welfare reform and got bill clinton to sign it, so yes his record matters, but what i'm saying is we can't go into his record and flash one little thing and call that the sign of a disaster. >> herman cain great seeing you today. >> you're welcome. >> when we come back, more about u.p.s. and what brown can do with your portfolio, beating expectations by two cents a share. we'll talk more about the record delivery packages over the holidays. onight. and when i do find it, i share it with the world. you landed the u.s. tour ? done. this is fantastic ! music is my life and i want to make the most of it thout missing a beat. fly without putting your life on pause. be yourself nonstop.
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as florida voters head to the polls we break down the primary. the gop presidential election with woody johnson. >> j-e-t-s! jets! we're in the earnings for major companies, pfizer, u.p.s. and exxon mobil reporting. analysts are ready to analyze on the squawk u.s. in line. the third hour of "squawk box" begins now. ♪ let's go away for a while, you and i to a strange and destined land ♪ ♪ where they speak no word of truth but we don't understand
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anyway ♪ welcome back to "squawk box" here on cnbc, first in business worldwide, i'm joe kernen along with andrew quick and becky ross sorkin. guest host howard dean, former head of the it, nc, he's been with us for an hour. >> i once spent a week in philadelphia, one afternoon. it's been like that for me for this first hour. >> come on up to vermont we'll brain wash you. >> i'm afraid to come up there. >> we have a break called moscow, vermont, now working on pyongyang. >> you have a havana. >> we don't have a havana, i think they have one in maine. >> i do love vermont. what is it, what -- woodstock, beautiful. >> yes. >> beautiful golf course, beautiful, i love vermont. >> pfizer better than expected
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fourth quarter earnings revenues but sees full year eps between $2.20 and $2.30, five cents lower than prif forecasts. street is at $2.30, lowering its full year revenue guidance. shares of arthur daniels under pressure, the agra business giant posting a, would than expected 89% drop in second quarter earnings as it made less money from processing oil seeds, corn and other commodities. revenue topped consensus. the ceo characterizing the quarter as "tough." >> you get some of the numbers over the phone, lines with them, before you actually see them on the wires. it looks like fourth quarter net was $9.4 million, earnings per
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share $1.87, better than the street expected. >> if they can't make $10 million billion don't talk to me. what was it, 9.4? >> i haven't seen the revenue number. you can't match the revenue. >> it's different, something changed in the past couple of years. >> a couple of analysts. >> up near 100 in the quarter and they used to do ten, used to make $10 billion in a quarter. i think it's great. kills howard when that type of profit for a private entity. >> profit is good. in the right hands. >> in the right hands, that's right. as long as the government can control who has the profits, that would be fine. >> how do you put up with this? >> it's a challenge. which is what you're working for. >> is there a week in philadelphia one afternoon, you hear that -- >> yeah, yeah, yeah. >> we'll tell you more about oil prices, headlines that an opec chief is making at this point talking about some of the
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escalating tensions with iran, how that could hurt the economy and also saying they see a military attack on iran unlikely, which goes against what you could have read in the "new york times" magazine this weekend. there's an iaea stockpile release on iran it would be a sovereign decision. we'll keep an eye on some of the things but they talk about what's happening there. if iran moved to curtail exports it would be a sovereign decision. we'll have more on the exxon mobil earnings in a few moments. u.p.s. fourth quarter profit of $1.28 a share, two cents ahead of expectations. revenue somewhat shortcoming in at $14.2 billion versus consensus of $14.5 billion. joining us is art hatfield, managing director with morgan keegan. is the revenue number a little bit light, in igto worry about? >> it is a little bit light but i don't know that it's too much to worry about. the numbers just came out so we haven't had a chance to delve through them. volumes were in line and better
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than expected. the revenue shortfall very well could be timing related to fuel sur charges and i think those were coming down a little bit in the quarter, we'll just have to quantify that to see how much of the shortfall was related to that. if it is related to that or any small currency changes, it's not something i'd worry about. focus more on what's going on, on the volume side. >> and what dictates what happens in volume? what can we tell about the backdrop of the domestic economy from what we're seeing. >> well i think the volumes that we saw on the quarter, clearly the holiday season is included in this, shows the u.s. economy is picking up a little bit in the fourth quarter, not substantially but we're seeing slight improvement on a sequential basis in the u.s. economy, and i think that's something that we should expect going forward. i think the volumes are very consistent with the 2.5% to 3% type gdp number. >> for u.p.s., what else logistically do we look at how the managers run this company?
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i mean, are there any logistical issues like with railroads or everything's humming at you u.p? that's not something you factor into your analysis anymore? >> no, these guys do a great job. they're very solid in how they run their operations and you know, u.p.s. and fedex are time definite oriented and as such, we really never see any problems in their operations. the biggest problems we'll ever see are weather related but we haven't seen that this winter and so i would suspect that first quarter numbers look good and the guidance they gave for 12 is very good, at $4.75 to $5, $4.86 so the guidance looks good. >> other than the economy and weather there's not a whole lot to think about then with u.p.s. why would you buy the stock, purely as a play on the improving the economy? >> absolutely. keep in mind, too, u.p.s. and fedex strengthened their
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position in the last few years globally. they'll have better pricing power going forward and that's going to create a lot of shareholder value. volumes are good but pricing is great, and pricing can really drive profitability, and that can be passed baaing to the shareholders in the form of dividends or share repurchases and that creates value for the shareholders and that's a reason to own the stock going forward. >> thanks, art. >> you're welcome. thank you. >> so let's talk more about earnings season and what the rest of this earnings season is going to mean for the stock market. joining us is howard ward, whoes portfolio manager of the goamco fund and charlie smith for ft. pit capital. howard, the earnings today, exxon mobil, pfizer, eli lilly, u.p.s., anything from these reports jump out at you and think hey there's really good news or really bad news on any of the fronts? >> i think this is consistent with what we've seen of late, the u.s. economy is showing a lot of resilience. we're in the 31st month of an economic expansion, and for the
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last 17 weeks, by and large the economic data has been better than what wall street was expecting. that includes the earnings reports. they're mixed, thisser' not terrific, not the best earnings season we've had but it's pretty solid and there's no indication in the guidance the economy will have a recession this year and if you went back a month ago and said we're going to have the best january in the stock market in 20 years people probably would not have been willing to make that bet but yet we have because the economy is looking pretty good. >> are there any reports we've heard today maybe at u.p.s. that came in with some of the better volume numbers than had been expected? when you hear something like that, are you inclined to buy any of these stocks? >> well u.p.s. has had a bit of a move. it's not on its back. it's reflected some of the improvement we've seen in the economy in the last year or two. i'm a little bit more neutral on the valuation basis but i'd love to convince you, you could buy an apple at ten times earnings or qualcomm at 16 times earnings
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or microsoft at ten times earnings. those are all terrific companies, generating in each case billions of dollars of free cash flow that can be used to grow the business and reward shareholders with dividends and share buybacks. >> dividends can be key with the exception of apple. >> i think that's something that we look forward to with apple. apple generated $50 billion of free cash flow in the last 12 months, gentlemen, open up the purse strings and share that with the shareholders. i think we'll see that in the not too distant future. >> as opposed to acquisition? >> apple will always be in the market for small tuck in acquisitions but this is the large market cap company in the world so there's not much they can do acquisition wise. >> you think they really do give it away? >> a portion of it absolutely. if you're generating $40 billion or $50 billion of free cash flow in any 12 months you got a lot, you can give away $10 billion and give yourself a 2% dividend
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yield. how much cash do you need for that rainy day? and i think apple realizes at this point that enough is enough, and it's time to reward shareholders. >> do you have any fears about their innovation now that steve jobs has passed on? he had to come back and kind of take over the company again after it sort of hit the skids when he left the first time. >> i think long-term you always have to be concerned about innovation with technology companies but for the current year and the next couple of years, their blueprint game plan is etched in stone and this year you can look forward to an iphone 5, probably a september/october event and that's going to be a big hit, i'm willing to bet, and most likely earlier in the year, perhaps in the second quarter, you're going to see an ipad 3. the iphone 5 and ipad 3 and maybe a new apple tv and many
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news outlets which are extremely productive. ale is a phenomenon and in china new carriers will be selling their gear and the chinese are very fond of the apple brand. >> copying it you mean. >> well they'd like to. >> charlie let's get your thoughts on this earnings season as well. the numbers today have been better than expected from several of these companies, but as howard pointed out, this is not necessarily the best earnings season in terms of knocking things out of the park. where do you feel with where we're headed now in terms of growth of some of these u.s. companies. >> well i think the interesting note from pfizer was on forex, the first part will be nixed by forx delaines and that's been a trend we've noticed in the fourth quarter, the guidance is, has been light, a couple quarters in a row guidance has been low so we're starting to see in the short cycle
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industrial businesses we're starting to see some weakness there. dana herr kept their estimates up. i think we're starting to see some of the short cycle businesses the companies are struggling a little bit to make the numbers. >> you've got a few stock picks of some of the companies you like as well. boeing is one. what do you see in boeing? >> obviously the 787 is in production, they expect to get up to ten planes a month by the end of next year. the defense business is problematic but between the production of the 787 and the high profit they should earn there and the fact that they've got the new 37 max introduced and will be eventually in production they've taken the competitive hit from the neo, from airbus and put it aside. boeing has a nice runway ahead of two or three years of solid earnings growth and i think they'll execute well on the 787 and produce good numbers. >> you like sandus because of the weakening yen. >> i think that could be the one surprise that rocks portfolio
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managers who are positioned sort of wrongly this year. i think the yuan could weaken and sandus said every 5% change in the yen will push up their gross margins to the tune of 2% to 3%, so if the yen weakens, sandus could see a nice tail end to the earnings. >> what if the trend continues and the yen continues to climb against the euro? >> if then sandus has to do their basic blocking and tackling in terms of driving cost of production down. they're moving to under 20 nanometer on their lithography, so they have the tailwind but it will continue to be tough in terms of cost if the yen doesn't drop for them. >> okay, we're about out of time. i know your third pick is comcast, the owner of this network. what do you see in comcast? >> well, the key for comcast and all of the telecomes is the fact that capex is continuing to
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decline. that will help their free cash flow. we expect a 20% increase in the dividend when the new dividend is announced next month. they're generating a lot of free cash that i think people are missing. >> and management is just superlative. both, i don't think you can emphasize that enough, charles. >> becky asking only the right questions this morning. >> go ahead, charlie. >> that was the third -- >> i have a question, when are the promotional geniuses at comcast are going to get you on david feherty's program? >> i know david pretty well. he's a good man. >> a great cross-promotion. >> that's a great idea, from your lips, charlie, thanks. >> charlie, thank you. howard, thank you for joining us on set. we appreciate it. >> thanks for having me. coming up we'll go through the exxon mobil report with an analyst who covers the stock.
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first as floridians head to the polls we'll hear from a businessman who got behind the romney campaign early and new york jets owner woody johnson is making his way to the set. we'll talk to him next about politics and what's going to happen this weekend. "squawk box" coming back right after this. this new at&t 4g lte is fast. hey. did you guys hear... ...that mary got engaged? that's so 42 seconds ago. thanks for the flowers guys. [ both ] you're welcome. oooh are you guys signing up for the free massage? [ both ] so 32 seconds ago. hey guys you hear frank's cat is sick? yeah, we heard. wanna sign the card? did you know the guys from china are in the office... [ speaking chinese ] [ male announcer ] stay a step ahead with the 4g lte galaxy s ii skyrocket. only from at&t. ♪
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welcome back to "squawk box." the florida primary sunday way. what will this year's presidential race mean for business? joining success woody johnson, owner of the new york jets, national finance co-chair for mitt romney and our guest host today is former vermont governor and dnc chair howard dean. we know you're endorsing romney. are you endorsing the giants or the patriots? >> i endorse the new york jets number one. >> i suspected that. >> this may be the all-time most watched show in tv history. i think it will be. >> probably will. are you backing the giants because of your local -- it must be hard for you. it was only a couple of weeks ago you were locked in that incredible rivalry. you can be a giants fan? >> i'm a fan of both, because
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this is going to help the league this a major way. >> is there an economic part it helps economically? >> the stadium has a glow, and i think you can make that argument. >> you are friends with both owners? >> i am friends and they're both of my partners. one of them is a partner in the stadium. >> are you going to wear a blue tie? >> probably a blue and kind of a -- red. >> blue would cap tature both. >> blue and red. >> mark sanchez there's no way he will not be the guy next year? have you said that already? >> there is no way, as i see it now, that he won't be the quarterback for years to come. he's a great quarterback developing, you know. interestingly if you take a look
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at mark sanchez's development over the first three years it mirrors eli manning. you look at the stats, very, very similar. >> see i'm driving people crazy because they say, we want business news, not politics. now i'm not even talking politics. i'm going to sports. now sports to politics and we may end up it shall it shall. >> 90% of the too emwho watch this program are really interested? i am fascinated. this is great. >> that's what we say, you're always going to hear about a few things. so romney wins by double digits in florida in your view? >> i don't know. this is like a game in a way, like an nfl game. you never go in too optimistically. i'm cautiously optimistic but i think this is a very, very, as you know, a very, very hard-fought contest, and everybody's trying to bring ideas out to the public that will sell, and so you really don't know until all the votes are counted, double or single digits, i don't know.
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>> what was the mood at the campaign after south carolina? did you see any real nervousness or second-guessing or questioning? >> i think we were confident in that the campaign was designed for the long-term so we had the ability to have resources and planning and i think we had the staff. we were always planning on this elongated campaign, much longer than last year, because of what michael steele did at the end, trying to be more like what you do on the democrats' side. but yes, when you lose a battle, a squirmish like that, yeah, it's time for reevaluation. >> it was scary the first couple of polls in south carolina. makes me wonder how quickly people can change their mind and how fickle the actual primary voters can be, too, because those people gave different answers. >> howard dean is an expert on this as well. yes it's amazing the last week how important that is in presidential elections, whether it's the actual election or the
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primary, and sometimes the last kind of few moments. >> that's true. it's a phenomenon that's gone on every year since 1980 in the general election. carter and reagan were tied ten days before the election and reagan blew them out in the last. >> exactly. >> there's a shift, a consolidation, an ah-ha moment for voters and usually takes place late. i would say as many as 10% of people decide in the last day or even in the booth. >> september 1st is kind of when people make their decisions from an economic perspective. >> that's true. yes, that is true. that's why gerry ford did not beat jimmy carter. the average person has to feel like it's getting better, not just a matter of numbers. we had good news this quarter, very nice but until the average person believes it's getting better it doesn't count. >> what number is where it feels it's getting better? >> nobody knows. you can't measure it. the closest you might consider watching is the michigan consumer confidence index.
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>> which comes out later this morning. >> there's this gestalt and nobody really knows. >> people in michigan shouldn't be deciding how the country feels. if i was in detroit i wouldn't be feeling too great. >> i tell you something interesting, we talked about therlier. >> it's not really. >> romney is behind in michigan in eight points. i was shocked at that. >> how many times are you going to mention that? roment kn romney is winning a lot of the swing states. you're like a broken record. >> when you run on the campaign that you wouldn't have saved the automobile industry it's hard to think you'd win that state. >> this is little sorkin day. >> i'll take whatever i can get. >> mid march do we know? >> theoretically you might not know until later. it's possible because this whole month is caucus states so you get the meaty part of the market voting in march, but you have to get to 1143, 1144 delegates to
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win so whenever that occurs they'll get it. >> the truth is this will stop when adelson stops writing the checks. that's the only way newt has been able to stay afloat. >> it's possible. i don't know if that's going to be day factor. >> woody, is newt gingrich as electable as romney? i would imagine you'd say no. people have come in here and said with independents, it doesn't mean you're a moderate. you might be an independent because you want the more conservative viewpoints that newt espouses and it's not a slam dunk. >> i think if you look at mitt romney, the people as they're getting to know mitt romney more, clearly, and you'll see that hopefully you'll see that this afternoon, and this evening, they like what they see. they like the experience and the
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point/counterpoint with the other party in terms of what each person -- the great thing about the american electoral system is we get to contrast ideas and i think that my own view is that mitt will answer that question for most of the people that are voting. and as we go down the trail of campaigns, they'll gravitate towards mitt romney. >> well, you had a great season and could anything be better than the outlook for the nfl? i mean, i guess goodell deserve it is. he got a raise. >> he did get a raise. >> the super bowl, i mean, if there's ever a reason for network television, it's a game like that. >> this is it. going to be great. woody thank you for making the effort to come in. we appreciate it. >> thank you. >> thanks, andrew. >> super bowl, what a coincidence, it's on! >> the jets. >> it's on nbc? wow! i didn't know -- i don't know if i would have been talking so positively about it then. so it is on nbc. well that is fantastic.
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>> super bowl sunday on nbc, the national broadcasting corporation, parent of this show. exxon mobil reporting a couple of minutes ago, we'll dig through the report with an analyst. as we head to a break check out the price of crude. "squawk box" is coming back right after the break. is
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is. welcome back to "squawk box" on this tuesday morning. exxon mobil reporting just a couple of minutes ago. joining us now on the "squawk" newsline, chris edmunds, managing partner of enerecap. when you can't make $10 billion in a quarter don't get in the game. >> what are the high lyings for you? >> i think it's becoming more difficult and expensive to produce oil and you know adjusted in the upstream side of the business, adjusted production, down 4%, and the way they made their money was all on price. oil prices at 100 plus will cover a lot of mistakes and difficulties and on volume they lost about $1.5 billion quarter over quarter and we don't see
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that immoving. they are the largest integrated exposed company with natural gas which we know compared to oil is not so hot. to put things in perspective they spent $10 billion in capex in the quarter, exactly what they spent last year at this quarter yet volumes were down 4% to 5% and when you have to spend $10 billion to tread water that's a tough business. mid stream margins were pressured. it's more difficult and expensive and you got to spend money to make money and if oil prices come down it will be a challenge. >> chris let's talk about oil prices coming down at 100 bucks you can cover up a lot of mistakes. where are you on price? >> i think we trade between, i think we're close to the top of the range absent some sort of geopolitical event which certainly could happen, but i think 80 to the low 100s, 105 is probably where we are. if i'm right about that, these
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numbers are going to be more difficult to play out over time. >> i'm just going to question you about the future. at some point, not that i'm a peak oil guy but at some point these companies to stay alive have to invest in other forms of energy that are not fossil fuel related. exxon's chairman famously said ten years ago, if that happens they'll just buy it. what do you think about oil companies starting to diversify. some of them are. i think exxon is not. >> exxon is probably in the lower tier of the companies. you look at projects from shell, chevron, conoco. >> right. >> all of those companies are committed to research and whether it's traditional fossil fuels in a different way, be it shale plays and the like to unconventional or new forms of renewable energy, i think you're going to see over time more and more companies, including exxon, spend more and more money because frankly that's the wave of the future. now that said, that doesn't mean that hydrocarbons aren't our
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number one source of energy for the rest of their lifetimes. i think realistically they will be. >> chris? thanks for joining us this morning. >> you're welcome. some of the headlines we've been watching overseas, the european trading day now in full swing. stocks reversing a sharp two-day slide and here's what's in the headlines. you can take a look at some of the things happening. there is an improving mood about the situation in greece. the country's prime minister says negotiations have been making significant progress and talks to reach a debt restructuring deal with creditors. the goal is a definitive agreement by the end of this week. of course there is mounting tension surrounding portugal's debt troubles. the two-year bond yields hitting a record above 21% and that's got a lot of people paying attention as well. when we come back we'll talk more about a political smackdown in florida. we'll talk to jen saki, a former deputy communications director for president obama about the
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president's primary and election. coming up, news you need in the trading day ahead. cnbc's rick santelli is standing by at the cme in chicago to bring you the latest from the futures pits.
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welcome back to "squawk box." cnbc's rick santelli joins us from the cm negotiation chicago. our guest host today is governor howard dean. rick, what are you watching this morning? >> reporter: there's a lot of talk on the floor about a fat finger error in crude oil futures around 6:00 a.m. eastern. we're also looking at a 131.79 euro versus the dollar and we continue of course to see the greek tragedy play out, portugal may be catching a bit of the flu, employment data looking better in germany, not so good in italy. i like what you brought up regarding portugal's debt costs. it seems to me that probably something gets done with greece, but i think you're going to have this rolling hiccup of, if you
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did it for thy neighbor why aren't you going to do a better deal for me. i this i that saga will plague europe for a while. >> there's a lot of too emwho just assume whatever is done for greece will be done for portugal as well, right? >> yes, and spain once again, it's not as though from where i sit today, it looks as though they're going to be next, but when i look at 22% unemployment, when i look at how their economy is behaving, austerity measures hit without appropriate growth beneath it, these are all topics we're not going to be shaking loose any time soon. >> rick, it's easy to figure out how people can take the hit on greece and portugal but you don't think you can do that on italy and spain. s' too big a hit for the banks. >> absolutely and i'll tell you, mr. dean, i think that if people were more objecti ivive with th whole global debt scenario, that conclusion would be drawn from a global perspective as well. there's many naysayers to this
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argument that think i'm crazy, but you know if you go back to the '30s or other periods in time, war periods, where we've had this type of global debt, if you looked at the biggest economies, they are in completely different surroundings, so to speak, now than they were back in those times, the u.s. in particular. we have a boatload of competition, we don't have countries that lay in ruin because of war, we don't have countries like china that were pretty much in the dark economic ages the last time we had the levels so i think it's disingenuous of global leaders thinking that subsidizing debt is not going to choke economic growth. i don't see how it can't. what do you think, doctor? >> i'm just thinking about the facical stability of the eu, and in order to do that you have to forgive some of the debt and the problem is going to be what happens when you have to forgive really big amounts that the private sector can't afford to do. that's the issue i worry about.
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i think it will get through. >> reporter: in this country what do you think? >> we'll get through greece and portugal and everybody will take a haircut. if you don't take a haircutten i under italian debt you got a real problem. what bernanke did was helpful. >> reporter: i don't know if i agree with you there. >> i know you're not a fan of the good ben bernanke but i am. >> reporter: bernanke is really emulating more of a european model and i think that europe is now emulating his "new toolbox." >> i was talking money supplies. >> reporter: yes, i am, too. >> but bernanke did that first. >> reporter: a simple question, do you think the ecb should take a haircut and bring it over to this country? i find it fascinating that debt forgiveness seems to be something that many in government want, whether it's a mortgage, whether it's avoiding bankruptcy, but in the end, you know, aren't the same people that are against or for this embedded in it, like cappers or
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mutual funds, reset buttons or haircuts if you follow the money, they're going to affect a lot more of the people that don't want them or do want them than i think meets the eye. what do you think about that? >> my argument is, and actually there's a lot of people beginning to think this, including the europeans now, austerity is important to control the spending that hasn't been controlled for 30 years in some of these countries, but most people would agree that too much austerity means that you can't grow the economy and i think where we would both agree growth is the only way out of this. >> unless you're david cameron who says they're not doing enough and we need more austerity. >>'ser it sit good for governments that haven't been in control for a long time and there's a lot of they will. you go too far on austerity and you damp down economic activity and that's a problem. >> reporter: so what do you do, if you have too much spending, need to cut back and that's deemed austerity and austerity slows economies, what's the real answer? >> you got to do that anyway and
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work through the problems. my own personal belief is the housing problem in this country has to be worked through more than any other issue. >> reporter: you want me to pay for somebody's mortgage who bit off more than they can chew. my family is supposed to pay for another family. i can be charitable but why does the government have to force that charity upon me? isn't it my decision? >> this sounds like a famous rant that started a political reunion. >> reporter: we've had three years and how much have we solved? of course we're talking about it again. >> conis encess around the table most people think we're better off than we were in september. >> we are better off but they're talking about mortgage forgiveness and that's something that came up in the president's state of the union address. >> it's a very, very complicated, i would prefer workouts rather than forgiveness, but you got to lengthen terms. the banks are going to take a haircut one way or the other. if you have to foreclose on a house you're taking a haircut.
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think of how many banks have houses not lived in legally and they are being lived in by somebody who doesn't pay any rent and trash the house. that's a total loss for the bank. >> the taxpayer still takes a hit because we're giving a benefit to the bank to take the haircut. >> rick, we're all on the hook. >> reporter: we're all on the hook and it's no fun. >> we'll get through it, i'm optimistic much more than i was a year or so ago. >> reporter: because there's an election, thank you, nice talking to you, doctor. >> see you, rick. >> howard dean will be with us for the rest of the show. coming up, politics in the sunshine state, we'll talk to former white house communications director jen psaki about the primaries. sparke the most rewards of any small business credit card. the spark card earns double miles... so we really had to up our game. with spark, the boss earns double miles on every purchase, every day. that's setting the bar pretty high.
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welcome back to "squawk box" here on this tuesday morning. i'm getting in a lot of trouble for what's going on during the commercial break. joining us now, former white house deputy communications director jen psaki, also with the obama campaign, of course our guest host for the broadcast has been governor howard dean. >> good morning. >> i'm curious, lessons learned from what's going on in florida taking notes in terms of opposition research what are you seeing? >> last week the obama xab and everyone supporting him watched in awe as mitt romney and newt gingrich duked it out, talked more about going to the moon, talked more about money managers than they did about what they'd
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do for the middle class and they have really lost the opportunity over the last couple of months to lay out what their plan and agenda is, so that i would say is a lessoearned but today in florida, this is an opportunity for the obama campaign as well, because they're doing what they do best there, they're organizing, they're building the operation in the state, there are 11 offices there and this last weekend they had more than 100 events, phone banks, volunteer trainings and that's where they continue. >> i have to get you off the obama talking point for a sec. and try to get you to talk about some of the issues being raised in florida. >> absolutely. >> buy gingrich, buy romney. i'm curious because we are a business channel to talk a little bit about some of the issues about how the president should be approaching business, some of the lessons that have been learned. a lot of people going after gingrich for taking on big business as he approaches romney. does that work? does it not work? >> well look, i think that there's one thing that's lost here, and nobody's talking about
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how much better we are as governor dean mentioned before the break, than we were three years ago. the stock market is up. exports are up. there are in the manufacturing sector, we've had two straight years of growth in the payrolls so those are some positive signs. those are things that have happened under the president's leadership. there are a number of issues i actually think that the business community cares about, including immigration. >> jen i love you but i got to beg you here. i want to talk about the approach to business. i understand all the things that you're talking about but i want to talk a little bit about whether you think that there is going to be rhetoric from the obama campaign and if there is a lesson learned at all from gingrich and romney about whether attacking big business is good business for politics. >> look i think the president is talking about what he would do to grow the economy that helps large and small businesses. that's what he talked about in the state of the economy.
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>> i'm going to answer this. i'm going to answer this for a second. frank luntz is, one of the wordsmiths for the republican party he sent out a memo telling republicans not to defend capitalism. >> not to defend capitalism. not use that word. >> because? >> because it's not a word that's valued very highly by most americans right now. >> for the general election. >> free enterprise -- >> free enterprise is not the same thing. >> capitalism is a loser word right now. that's interesting. >> yes. so i think the answer about what she's going to say about -- big business and small businesses are very different. you've seen the president. the president went out i think late last week after his state of the union, early last week, and talked about small businesses in ohio and iowa and whatever. i think small business is critical. what people think of capitalism is these huge banks that screwed up your mortgage and that's not a good thing. >> people use the phrase "free
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enterprise, capitalism." >> same thing. >> romney, free enterprise, he doesn't talk about private equity or capitalism. why is that more palatable political a asflaz phrase? >> what frank does is brilliant whether or not you like him, and he happens to work for the other side. he is a wordsmith, had a lot to do with putting the contract together with america and he picks words and tests them and i'm giving you the data. i don't know why it works differently but that is what he has said. >> that's really interesting. >> isn't that? >> jen, i assume that the obama campaign prays every day that somehow gingrich wins. having said that, how much time and effort do you spend on opposition research and thinking about what would happen if there actually was a line-up of obama and gingrich, considering that it seems just when you math it out almost impossible, can i say
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that, at the moment? >> well, look it's a good question and i think we're prepared for any scenario, of course. the fact is there are not -- of course there's a focus on the differences between mitt romney and newt gingrich, but when it comes down to it, there's really more of a difference between obama and gingrich or romney, so regardless of who the nominee, the strategy is still going to be very similar regardless, and i think the president is going to talk about what he talked about last week, which is what his blueprint is for america, what he wants to do moving forward and we'll see what the republicans come up with on the other side. >> jen, thanks so much for coming on the broadcast today. >> thank you. >> you bet. when we come back the latest buzz on wall street, we'll head to the new york stock exchange right after this. "squawk" will be right back. from the beginning. we were just driving along, comin' back from the lake, and all of a sudden, ka-plam. it blindsided us. what is it? our college savings account. how do you think it happened?
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not sure. i think something we bought a while ago turned out to be something else, annnnnd, i remember a lot of other stuff in there had the word "aggressive" in it. is everyone okay? well, now, yeah. who knows later. ♪
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today, two hot pro
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welcome back to "squawk box" and futures up indicated 47 points or so. down to the new york stock exchange and carl and melissa and jim joining us now and again, news for today, you have pfizer and exxon and you have u.p.s. and lot of interesting things to look at within those
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reports i think. >> yeah. it does seem that today we are taking a lead from the europe, and jim, i wanted to ask you, because you felt that perhaps we were at a point in the markets to be bifurcated and u.s. could happen, and europe could have the developments and we trade separately. >> i know it seems like europe is dragging on, but each time they tackle up the new problems, they are going faster. i feel like they have more control over the situation, and i feel like they have a pattern of how to do things, and it is interesting on twitter, and with carl around the same time, and they want to make portugal into a reason why you should sell pfizer. the bears want to say that the portugal is a reason to go against the s&p 500, but it does not resonate, because the u.s. banks are not the linchpin and we belief that germany has come up with a game plan. so it makes it a benign atmosphere over there which allows us to focus on the good, and i think that lily was good
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and pfizer a push, but exxon not that great, but nobody seems to care. >> and we always love to talk exxon because of the sheer scale of it, but you called it a glorified buyback and that is it is. >> well, they generate a lot of cash and not making you a lot of money and a big dividend and exciting, but they always talk a big game and if they know what they are talking about why did they buy tso at the absolute high of the natural gas, but they are teflon don, so nobody says anything bad about them, so i thought i should. >> and you have them in the blind trust? highs or lows or 4%? >> well, pfizer is terrific. i like pfizer. somebody is going to say that the range is not so good -- >> and lipitor is out of the way, jim? >> well, don't you think that they did a great job given that lipitor is supposed to be it all. >> and pfizer, and j&j. >> well, they had lipitor through the end of november. so we don't have a full quarter exactly. >> and it was $47 and i remember
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when it was $12 and now it is 4% and still 4%? >> well, you pay that dividend and that is what people want with a five-year that pays nothing and all of us are paying for the poor people's houses, and how do you like that? how do you like that? i put that in for no picky reason and i don't necessarily agree wit, but it is kind of like -- >> shocking. >> and a new u.s. stock exchange spring, but when it comes down to it and you want yield people got it and they are willing to buy it and not willing to look through it. >> we will see you in four minutes. >> all right. >> be nice no the governor. >> we will. >> we are trying. >> joe is on the best behavior and except in the breaks, of course. >> all right. guys, we will see you in a few minutes and when we come back, we will have final thoughts from the guest host howard dean. stick around. tomorrow on "squawk box" we have a big lineup to break down the results of the florida primary. keith guberstein, the chief
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staff to president reagan and florida governor rick scott, and flori florida congressman connie mack, and plus a early read on the jobs friday with the jobs report starting at 6:00 a.m. eastern on "squawk box." on system? or what if we told you that ferrari borrowed technology from cadillac to develop its suspension system? magnetic ride control -- pioneered by cadillac, perfected in the 556-horsepower cts-v. we don't just make luxury cars. we make cadillacs. tdd# 1-800-345-2550 i'm a serious trader.
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all right. [ laughter ] welcome back to "squawk box" and parting shots from the guest host today, former vermont governor and dnc chair, and cnbc contributor howard dean, and one thing that we have not addressed, howard s the tax code and how it stands today, and all of the candidates have different thought thoughts of what they would do differently, and what would you do differently? >> well, we were talking about this earlier. i think that the tax code disincentivizes businesses because of stock swaps and things that you can do to -- it is crazy in the tax code. i'm not a flat tax guy, but we have to have discussion and we need tax reform. >> and what about the flat tax that created different rates for different income levels? what if you took out a all of the deductions? >> and take out all of the deductions and drop the tax rate down significantly, and i think

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