tv Squawk Box CNBC April 20, 2012 6:00am-9:00am EDT
good morning. welcome to "squawk box." and we do have two dow components. general electric expected to report quarterly results at about 6:30 eastern time. the street looking to earn about 33 cents a share on revenue of $34.7 billion. as for mcdonald's, con send sis is calling for earnings of $1.23 a share, revenue of $6.5 billion. mcdonald's numbers should hit the tape around 8:00 eastern time. we'll have both reports for you along with the instant analysis. we do have microsoft reported after the close last night. profit topping the street's forecast driven by strong demand from server software products and office application. pc sales holding up better than expected. investors are focusing on the expected release of the windows 8 system. as the world's largest software maker is working on a new tablet printing version. microsoft shares up about 20% so
far this year, that outpaces the nasdaq 16% gain and the 10% rise. several of these big blue chip stocks have really taken this run hike you wouldn't believe. we'll check in with greg in just a few minutes. >> i'm going to start brushing my hair on tv because nobody will know what i'm it talking about. i want to apologize again because i went for another obama rally and the voice -- >> yes we can is still the -- >> and a couple people chanting no, we can't. >> that was joe. >> that was you. i couldn't tell if it was you. i thought it might be -- >> yes, we thought we could, but, no?
they didn't have enough time. but i thought it was interesting, both papers led with the possibility of a swoon or the economic reports fanning fears. but the difference is in the third paragraph of the morning times, it says that this is all sort of as is to be expected after a financial crisis, this is the type of -- type of bumpy recovery that is to be expected. >> you don't think it's supposed to be bumpy at all. >> no, not by now. i think you get -- when we told -- right after when we started with health care, when we still weren't out of it, i was telling harwood every day. and think you get what you sow and this is the type of jobs --
5 trillion added to the deficit, 800 on stimulus, all that time on health care, you ramp up regulations, remember -- >> don't buy it. >> the stimulus -- >> didn't help. >> i'd argue that there was a need for something. i don't know if it was well spent at the time, if it was spent the right way, because we had a -- >> you had the fed going full board, too. and you wonder if you had let things play out whether it would have -- >> i just remember at the time how scary it was. >> this will be the argument. both of the kountsd tcounter fa you'lls. he did things that got us where we are or did things that put us where we are and the weakest recovery ever since world war ii by far. and now it loolooks like we're back down.
you can read it right here. by far the weakest recovery since world war ii. >> i don't buy that. >> we had higher unemployment, higher inflation, woutwo recesss in tree yeahree years at that t. >> jim orr will be back there and he did live there -- >> so did i. >> my parents always talked about this ridiculous more ganl rates. >> all you had this last one was the commercial paper freezing up where you saw the specter of the total financial class. much worse economic conditions, when we rebounded, we were getting 800,000 jobs in a honts. we were growing at 5% and 6%. 7%. pot it this 2%.
this is supposed to snap back at this points. if they didn't write that, you'd have had nothing. if they hadn't written that paper, instead it's just, oh, i've got that and they said that this is true, so it's the worst recession ever. what would you have in your quiver if they hadn't written that? would there be anything else you could cite to say this is typical recovery? >> and what can you cite? >> i can cite that it's the worst since world war ii, a lot of times that we've come back that the economy is using more resilience. >> what i will say is that people like warren buffett has said will is economic pearl harbor and we haven't seen anything like that since the great recession. >> it used to be the deeper the recession, the sharper the snap back. >> it doesn't mean that we're coming back -- >> ceo after ceo says the ren i'm not doing anything is
because of these policy, when bb johnson comes in, who is a democrat, who will vote for obama again, and says that this is why things are so slow and so tepid that still doesn't register? >> it does register. i've pot told you that the president has done everything right. all i've suggested is that to blame the president for exactly where we are today seems very odd. >> when does he get blamed so? >> at some point you have to take ownership. >> you'll hear a lot of blame over the next seckxt seven mont. >> key have done a much better job with the cards he was handed. >> why would you do health care? >> i'm telling you he did a bad job on a lot of these thing, but the idea that where we are today is solely his responsibility is crazy. >> well, that's what the debate will be about. >> i understand. >> i think it's an
intellectually dishonest argument. >> the facts are there in terms of -- >> i think he walked into a burning house and he didn't light the house on fire and you say he didn't put it out as quickly as he could of. i agree, he did not do as good a job as he could have, but the idea that somehow because of this you can somehow claim that 8 1rks '882 is compare snbl. >> when we did the stimulus, that was to keep us from going above 8%. we haven't been below 8% the entire time he was president. january of '08 was the last time we were below 8%. for four year, it will be four year as because it probably won't get there during the re-election. >> and there is the argument that employers got so nervous
and they figured out how to make due with less. and why would you hire more if you can get by with less. there's the chicken and egg scenario. is it that the demand is not will? >> i am asking why are corporations not hiring. and they're not hiring because -- not only -- it was argue that had part of our president obama was rising health care costs. that was part of the problem holding the economy down. instead they passed this will thing which everybody says is unworkable at this point and it can didn't even help the job situation. it hurt the job situation. should have been jobs, jobs, jobs from day one. and i'm not the only one who thinks that. look at public polls on whether people think obama is the right guy to lead the economy. not a single person with any business experience. >> i don't think you disagrees as much as -- >> yeah, we do. >> we actually don't. >> yeah, we do. >> what i disagree about is the
idea of using actually this conversation which we always talk about as a platform one way or the other to push one agenda or the other. i think that's a bald conversation to have. that's all i'm saying. >> i want an administration that has pro business policies, not anti-business policies. >> let's talk about europe this is probably more important than the elections right now. a quick earns alert. beating the street by a penny. revenues slightly ahead of consens consensus. no surprise europe is a big market focus. quich leapt italian and french yields also rose this did despite comments from spain's economic minister who was quoted
as saying it doesn't need to tapt rescue fund to shore up its banks. german yield sinking to a record low. and thank you for the tea. that rally last night, i apologize. speaking of europe, the imf and word ba world bank are meeting this week. christine lagarde is requesting at least $400 billion. russia has said it would offer $10 billion. but brazil is holding out for promises that its voting power at the globe -- as the global lender would increase support for russia, china and brazil. which is also of course crucial. >> what started the whole conversation was this paragraph that says the breadth of weakening activity shows the economy remains fragile as is typical of years following the -- >> but that's not correct. >> it's not in the editorial pages. but if you were to go to like a "wall street journal" editorial
page about whether -- >> joe's right, this is not a typical -- >>this seeps into all the coverage. >> i won't comment on that. >> do you think gail collins will tackle the dog issue now or does she say, wow, shy probably leave. >> i think she'll do the dog again. and i think you'll critique her on doing it again. >> my point is she's mentioned it 45 times in her column, the dog on the roof. do you know -- to mention eating dog, we have another 43 times where we have to bring that up. >> it's not the same to say it on airs as it is to write it. >> no, it's even worse because it lasts forever. >> but you have toed a pl admit tweet was goodgood.
after axelrod said will is how a dog lover trieats his dog, and then a whole new meaning to this, it looks like he's sort of looking at the dog in hungry way. that's what i inferred. that's gets nasty. and did despite global economic concerns, international equities drew a lot of interest from investors in the last week. international stock funds pulling in a net 1.# $3 billion in new capital. this contrasts with outflows from u.s. focused stock funds of about $2.1 billion. >> in other headlines this morning, goldman sachs is facing a new insider trading probe. investigating goldman employees suspected of giving inside information on two public companies to raj rajaratnam. he was convicted in one of the
larger insider trading cases in history. this latest investigation was divulged during a hearing against gupta. also u.s. regulators are claiming their first vehicle noer an effort to crack done on oil market manipulation. a settlement with the high frequency raiding firm. they've agreed to discharge $1 million in profits and pay $13 million in civil penalties. it all deals with allegations that the company used a rapid fire tool hawass nicknamed the hammer to try and influence u.s. oil prices back in 2007. i remember that's when things were pushing north of $125 a barr
barrel. no admission of wrong doing in the settlement. >> and as we've been reporting all morning, microsoft's third quarter results beating the street's. shares rising on the announcement in extended hours. earning 60 cre 0 cents is share. greg, good to see you. big surprise? looked like you were surprised, as well, especially on the enterprise side. what does this say about microsoft from an operating perspective and about the pc business? >> it was a good all-around quarter. the windows business turned in its best performance that we've seen in a couple years about. we had raised our windows estimates about 150 million and microsoft back 300 million. certainly showed good up side deferred revenues grew by 17% year over year. so very strong performance there. the only real disappointment was -- >> i know where you're going.
let's talk xbox. are they losing it to the tablet world? >> it certainly is a big c contributo contributor. gaming is turning to mobile. it's not as though microsoft is losing share, but, yes, it is certainly facing secular pressures. >> is it something they can get back or no? >> the question really comes down to what come do we see with the next cycle. it's been widely speculate that had we will see a new console from microsoft for the next holiday season, calendar 13. >> and search. i was looking at some of the notes on bing. getting alwa little better, but clearly not a money making proposition. >> and we think we're a ways off before that does become a money
making proposition. microsoft has been very focused on cost controls which they were not if you look back 12 months ago. so we've seen the operating loss actually dwindle pretty significantly over the past few quarters. but we think it's a while off before it really makes money for microsoft. >> what's your target on the stock? >> we don't have quantitative price targets. one thing i would leave you with is we entered yesterday 6 cents above the street and numbers will come up a little today. i think one of the things that's interesting is we have a dramatically lower initial windows revenue ramp in the first few quarters for when those eight versus windows 8 and frankly less that vista. so we do think the windows 8 launch the end of this year, we would expect healthy numbers. when you compare to pe ex-cash multiple, we think that's a pretty interesting combination.
when we come back, we have a new nbc "wall street journal" poll that points to a very, very close presidential campaign. we have a live report from washington. plus quarterly results from general electric due within minutes. next week a huge line up of guest hosts. including congressman ron paul, and former utah governor jon huntsman. plus interviews with el-erian, schweitzer, jeremy seagel, greg fleming and a lot more. don't miss "squawk box" all next week on cnbc. laces? really? slip-on's the way to go. more people do that, security would be like -- there's no charge for the bag. thanks.
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security regulators have decided to bring an enforcement case against egan jones. the sec alleged the pirm made material misstatements in a 2008 regulatory application. take a listen. >> accurate to the best of my ability and we will-if i had to do it again today, i'd say exactly the same they think because i filled it out to the best of my ability. >> charges expected to be
formally filed sometime next week. an interesting one. we'll have to get him on to talk about it. >> wasn't it the story three days ago that they had passed the final test to become a full ratings agency? >> they had got into clearance apartments now getting fined. >> why wouldn't they have -- so did they get the clearance? >> i think they still got the clearance address tnd the fine. that's what i think is happening here. >> mitt romney consolidating support within his party and there's a new nbc news/"wall street journal" poll that that shows he is setting up a closely contested general election against president obama. john harwood joins us from washington. no surprise that he's clearly the frontrunner. i guess the question is how quickly do republicans come in and support him after all that we've seen that's happened over the last several months. >> they're beginning to come in and that's one of the encouraging signs in this poll for mitt romney is that he's got
his favorable ratings among republican primary voters, 58 abo % jumped up to 70% which is the effect that happens when somebody consolidates their party's nomination and everybody who had been weighing alternative republican choices looks around and says, well, this is our by now and they swing him him and that's a good sign for him going forward as our pollster said yesterday it's the first stage of political recovery from the primary battles and we'll look for a close election. >> does newt gingrich continue to stay in the race or does it matter? >> doesn't matter. he's having absolutely no effect on anything in the race right how. once rick santorum said he was going to suspend his campaign, that is when the rest of the party took it as a cue to line up behind mitt romney and you're seeing one elected official after the other do that. this thing is over. and whatever ron paul and newt gingrich and rick santorum and
anybody else for that matter does over the next couple months is imimmaterial. >> so how would it play if you had obama versus romney right now? >> right now obama has a six point lead over romney. interestingly he hd a six point lead last november when we can our baseline poll. so to some degree, we're looking at a partisan environment where the vast majority of voters have made up their minds. we know where they're going to be. they'll be fighting over a small slice of the electorate. a six point lead for an incumbent president is not that great. so as peter hart, the democrat who does our poll said yesterday, president obama's approval rating has skrept up, people getting more optimistic about the economy, but what that has done is taken him from a serks where he was in an underdog for re-election to now that he's got a 50/50 shot, but not much better than that.
>> what was the approval rating? >> 49%. same as his share of the ballot. >> that's got to get before 50, right? hard to get elected under 50. >> well, george w. bush got elected in 2004 under 50. i think the key thing is to be on the high side between 45 and 50. you don't necessarily have too get over that. right track is 33%. >> wrong track is 59d. that's rough. >> exactly. and that's why the underlying environment is challenging for the president. we've got a 33% right track is better than it had been a few months ago, but not good. >> we got a couple conventions to go through. this is where the veep can kill you, doesn't usually help you, but that will be interesting. you saw that piece yesterday, pick a boring white guy, don't go crazy with -- you you don't need to pick a woman or
hispanic, you don't need to think about winning a different state. his guys were portman, mcdonnell, and he had two other. mitch daniels and one other guy. so that it looks like a couple of romneys there. >> i think that is precisely the -- those are the stars on the short list. we've talked about this before. i've been projecting rob portman, but probably daniels would be preferable to mcdonnell. >> it's going to be a billion versus a billion most likely. >> is everything okay with the lighting down there? as i looked at becky, it looked weird. >> we're rolling at 35. we got to go. >> quarterly results coming up from general electric.
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the more you know. welcome back to "squawk box" here on cnbc. we are waiting for quarterly results from dow component and economic bellwether general electric. let's check on the markets ahead of the report. another day yesterday that saw sort of a slow -- i wouldn't call it a meltdown, but as the day went on, worries increased about both the economic environment here and the ongoing situation over in europe. even though things are a little bit better in terms of spain. really is a -- one accept
forwastep forward, one step back. we'll milk that may employment report like nobody's business. but the one coming in early may. given the claims mnumber yesterday and both major papers leading with fears that the recovery may be faltering given the claims. claims have -- i didn't realize that for three straight weeks have not looked good and even when you smooth things out, it looks likely aoffs havic abouted up again. >> the philly fed index, and another employment -- maybe the empire state employment index, both showed the employment prospects there are very strong and it raises the question from some economists as to when or not employers have already done all they could in terms of productivity. is there a point where they're
forced to start hiring. >> which is a good sign. >> let's take a look at the markets. yesterday the dow was down, but it shaved its losses by half by the end of the session. and this morning it does look like we'll open up by about 52 points. strong gains will. but at least at this point, people feeling a little more opt police tick about things. earnings will be driving that. we're expecting ge earnings and here they come. >> operating net of 34 cents is the number that we want to talk about first. and that is versus expectations of 33 cents. revenue was $35.2 billion. all right. we should have a little -- that's above. >> that is above expectations. >> and as long as i've been reporting on ge, that's one of the things in a as times has the next day if the stock doesn't trade up on a better bottom line number, a lot of times tell's talk about the revenue number
not being above expectations. so that is actually above -- some of the highlights include industrial segment, revenue growth of 14% to $23.7 billion. and even if you just look at organic growth, 11%. sixth consecutive quarter of organic growth. for the future, i won't even say going forward, because you never talk about going backward, right? if you're giving an outlook, it implies that it's forward. >> it's always that forward looking. don't you hate that? >> monot as much as i hate goin forward. earned $1$1.8 billion. but 27% excluding the sale of guarantee. and real estate profit ability, hit for the first time since '08.
on track to deliver double digit earnings in industrial segments and in capital for -- it's a little bitter sweet that we don't have afternoon of n bunch to talk about. >> there are some notes from chairman and ceo who reports this was a strong performance to kick off the year and now says they're positioned for double digit growth and that thevile i cash plan remains solid. so ge has to have some of those very same restrictions that we've seen with a lot of the big banks that have come through.
>> jack, joining us as he does most quarters, long time shareholder and someone who says you always are pretty honest about when you're happy and when you're sad. revenue end, bottom line, both above expect takss. only a penny above on the bottom line, but the revenue number, it hasn't been consistently beating expectations. and it did this quarter. >> it hasn't. and assigns that's due to quicker runoff on the capital business. >> we'd like at it and say that's something the company stated her going to try to do was to shrink the side ze of ge capital. but you try to tell that to the street and it still takes a couple points off the stock. >> i'd focus more on the 11% organic revenue growth. that's the real story about the strength of the underlying business here.
and they target two times gdp growth and came out better than that. i think this year is goinging y earnings should compound around 13%, which is double what the s&p should do. so should you have a relative good return. >> 3.5% yield on the dividend right now. i remember a couple of recent increases, two in one year, when was the last one? >> there were two last year and the last one was in the fourth quarter. and just as importantly, they've indicated they'll increase the dividend this year and next with earning. you'll have a dividend end of next year that's 25% higher than where it was now. >> so in the fourth quarter, there's a hike.
so you don't expect to hear anything today. >> well, i wouldn't, but they surprised me in the fourth quarter. i thought that would come this quarter. so we'll see. >> given the headlines and the "new york times" and "wall street journal," ge is obviously has a lot to do with what happens here and in the globe this terms of economic strength. i wonder if the reaction would be muted just based on macro worries. >> i listened to a call they did on march 7th on their global opportunities. and they pointed out that industrial revenue now comes about 38% from growth markets and 41% from the u.s. just 22% from other developed. so the growth markets now are almost the same size as the u.s. and close to twice the size of nonu.s. developed. so i think we're seeing a shift to more emerging markets growth
and maybe that's why we're seeing tice organic revenue growth number. >> will is bearing fruit the big move into energy and oil and gas. i wonder if -- is there weakness in wind at this point versus oil and gas? are those operations doing better now? >> you remember the wind business fell off the face of the earth. and it bottomed, the margins bottomed last year and they'll probably actually see some margin growth and maybe even revenue growth this year. >> what did they buy, dressers? ge has a lot of oil and gas operations now. >> you bet they do. pumps, valves, pipe, undersea equipment. they've identified the oil and gas as well as health care and water as three of the major initiatives going forward and i
think those are well thought out. those are good initiatives to pursue long time. >> is water a good one right now or is this one that still takes some time before we get there? >> you know, becky, water has been the great opportunity for a decade. but it still doesn't grow very fast. so i think they're in the right place and they're building and that's a story for the future certainly. >> i still don't understand there's all this money around and 2% ten year going nowhere. you got 3.5% and it's ge. people are looking at something that says, all right, it's good, but something has thaem worem w about paying 19. >> i don't think the stock's 40 cents different from where it was the last three quarters.
it's a stock that has left a bad taste in people's mouth. you had 10 or 12 years of multiple compression. people still remember 60 bucks on this stock. and we've owned the whole time. it's been one of our poorest long term core holdings. but we look to the future, not to the past. and it really does especially over the next two years look like a relative opportunity. >> 3.5% or more probably. >> oh, yeah. if any increase it with earnings of 12% or 13% growth, you're looking 4.5%. >> now the bid is matching yesterday's close at this point. so we'll see. we'll watch. jack, thanks. appreciate it. >> thanks for having me. >> this is like the 20th deja vu looking at you talking about ge. but we appreciate it. >> thanks, joe. about it you have any comments or questions about neglect you see here on squawk,
e-mail us at squawksquawk@cnbc.. or tweet us @squawk cnbc. you can see our individual addresses will. coming up, he helps manage more than a trillion dollars. so when black rock's money man speaks, the markets listen. give us one reason to be optimistic right now. >> one reason, the economy's doing better, earnings are going up, stocks are not expensive. what's wrong with the world, becky? >> all right. we'll follow up on that when we come back. zap technology.
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u.s. equity futures at it hour, a little look at ge's earnings. but let's take a look at where u.s. equity futures are trading. we don't have that -- there it's flipping around for us. dow jones would be up about 63 points right about now. making headlines this morning, mid states petroleum pricing its ipo $13 a share, significantly below its intended range of $16 to $18. the company backed by energy focused private investment firm first reserve, it will have a market valuation of about $853 million. shares will begin trading on the nyc today under the techicker symbol mpo. and a unions believe a tie up of the two companies would give
american the best chance to grow and preserve jobs. amr says the company is focused on its own plan to reorganize under bankruptcy protection and calls that the best option for the airlines 73,000 employees. if you are having a case of investing deja vu, are you not alone. beginning of the second quarter, looking an awful lot like this time last year and that has plenty of people concerned. but before you get too worried, bob doll says that history is not likely to repeat itself p is he black rock's chief equity 12r5e7b strategist. tell tell us why the spring swoon won't happen. >> we could get a correction. we've had a huge run up in the market. but beyond that, the u.s. economy is a bit stronger today than it was a year ago. and so the things that come across to buffet us like rising oil prices in my judgment will nick us but not hurts as was the
case last year and the year before. >> but you think eventually we power on through if. >> yeah, markets don't go straight up and this one sort of has until recently. so questions about the u.s. economy or the european debt situation caused the market to stop going up. but i think we'll resume i'll call it the grind higher for the back part of this year. >> so bob basically said we are up 30% from the october lows. >> held's nit-pick and say i said in january so it doesn't count. bob, the last time, little do you know, but i get all of your stuff from my mother-in-law's merrill lynch broker. last time you were on, and you were sort of saying you were still bullish, but at the same time, you said is it the top of the market, question mark. do you remember titling one of your reports like that? >> yes. and in the near term, we would
argue perhaps it is. but last time i was on the show, you tried to get me to say up 30 for the year and i said up 20. >> that's all i'm telling you is i know what you're telling clients now and i'm seeing -- so you can't come in here and say one thing on paeper and then say another thing here. because i've got your number now. >> we know you have all the good stuff. >> in that report, you posited that question because biskly said all the stuff up on the air that day. so actually you were not being -- >> a straw man leap? >> kind of a straw man leap. >> yeah, i think that's right. because as you know, people were asking the question, gee, we got the jobs report earlier this month, europe sewed up on the front page again, and people are saying is in the end. which shows you how shallow sentiment is. people just don't want to believe. >> so if you do see a pull back, you would be telling people buy especially what stocks? >> yeah, the free cash flow story i don't think is over.
kind of like energy in here now. the natural gas selloff has caused to lag other cyclicals. a patchy has a good unit growth file or refining orientation, co chevron or exxon, but you have to own some energy stocks. >> we had kevin ferry on that day, it was october 1st, on air, gary kaminsky is saying -- so we maybe need to go back. >> we'll have to i said forfind. >> we just had this conversation about ge. it's ge -- maybe not aaa anymore, but it's ge. yielding 3.5%. they'll raise the differ denied probably. ten years at 2%. the whole market's at 11 or 12 or 13 times earnings. there's some specter that is keeping the general public away
from this earning more on their money, seems leak kind of a no-brainer. so something that already has people his taesitant to get int this. >> i think what it is is a memory. the memory of the last few years, they're saying the probability of that left tail event that really scares me makes me want to not do equities. i agree, it's in the price.
>> talk about a man who has no problem saying it as he sees it, republican congressman ron paul is going to be our guest host on monday. the gold standard as to whether or not he'll ever back mitt romney. that's all on the table so don't miss it. answers... ...and 1,000 shades of grey duff & phelps finds the sweet spot that powers sound decisions. duff & phelps financial advisory and investment banking services. who have used androgel 1%, there's big news. presenting androgel 1.62%. both are used to treat men with low testosterone. androgel 1.62% is from the makers of the number one prescribed testosterone replacement therapy. it raises your testosterone levels, and... is concentrated, so you could use less gel. and with androgel 1.62%, you can save on your monthly prescription. [ male announcer ] dosing and application sites between these products differ.
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regional banks are reigning supreme. he's our guest host for the next two hours. >> i'll be taking these huggies and whatever cash you've got. >> and we'll break down the company's earnings and outlook for the economy. >> staying ahead of your investments. find out what is on tap before the trading day gabegins. the second hour of "squawk box" begins right now. ♪ ♪ good morning, everybody. welcome back to "squawk box" on cnbc. i'm becky quick along with joe kernen and andrew ross sorkin. let's get to your morning headlines on this friday. dow component general electric reporting first quarter profit of 34 cents a share, one cent better than expected.
revenue also beat street consensus. another stock on the on-deck circle. mcdonald's. it's scheduled to come out an hour from now. plus positive economic news out of europe this morning. german business morale rose for the sixth consecutive month. economists had been expecting a drop. >> i would expect the morale to keep going up over there. >> it's so positive? >> it's so positive. everything is so great. everything here is so bad. >> no, no, things are good here, too, if you look at the futures. the dow is indicated up by about 60 points this morning. a lot of positive thoughts after yesterday's down close. we did end the day after half the losses at the steepest point. the s&p is expected to open up
as well. >> we have kim perly-clark expected to be up by 1.17. and then we have an outlook. adjusted 2012 net of $5 to $5.15 and the estimates 5.10. 7 cent beat but they didn't raise the guidance above where the street is so maybe conservative guidance but you can see the stocks indicated higher. i did see ge, which we reported on earlier. now it's solidly higher, 19.38 on the bid. so let's welcome our guest host. his company's latest earnings beat the street. shares up 12% this year, pnc chairman joins us for the rest
of the show. joe, good to see you. >> good morning. >> wells fargo -- >> they both had good quarters. >> pnc go down that day if. >> the whole industry did. >> what was the worry that day? that business would never be what it used to be? >> the market has its own days. so far this year the banking industry has done well this year. they've come back from the lows. we're still trading at modest multiples book to earnings and but the market has done well and pnc has done well. >> has anyone asked for a loan? have you given anyone anything or is it still like simon -- >> loan growth is back.
>> are you giving anything? >> occasionally, occasionally. even people in cincinnati. >> i don't recommend that. >> cincinnati's doing very well. loan demand is back. we do a survey twice a year of small business and middle market. 40% of them say they're going to increase employment, 40% of them say they're going to increase capital expenditure over the next six months. that's higher than 27% only six months ago. two-thirds of them say they're confident about their own business. the one missing pee pees is nobody is saying they're going to go build a new facility or new plant or make a big investment. they see hiring being incremental. >> do you feel confident making loans now, more confident that than you did six months ago or two years ago that you're going to get your money back? >> we've been in the loan business right along. if you strip out the loans we've
been getting rid of from the acquisition we had, we been growing loans for over two years. >> have the metrics changed? >> if you go back five years ago, the metrics have changed a lot. >> if you were to compare the credit standards today -- >> five years ago -- >> no, are we back to 2002? >> we're back to 2002. you make the best of loans in the worst of times and vice versa. >> when things get better -- >> the banks get more competitive and cut terms. we've seen the prices come down but the terms are relatively stable. >> who is the most aggressive out there right now? >> the state of ohio on the
prices side is the most competitive. >> you know that from your acquisition of that cleveland bank. >> we've been in cincinnati for a long time. >> there's the old -- the crew tower and the one next to it and now it's the pnc tower, right? >> it used to be central trust back in the 80s. >> i get mail all the time about if things are so bad here, why are corporate at record highs? i always get that, about how corporations are -- why are they not building facilities? >> the survey came back and it exactly the same as it was. they're nervous about the government. we ask them what about the government and they say the regulations are changing so the platform is changing that they're resting on, the government is spending more money than they can imagine and there's going to be taxes. i think when when you have enough risk in your business,
you're going to go make a big capital expenditure, u want to do it in an environment that -- >> whoa! the light just -- is that combined with fear of the recent past and what had happened? so that's fresh in their minds what we went through a couple years ago? so they're still more risk averse? >> i think they're more optimistic. >> but they're not doing anything. >> they're not making large capital expenditures. >> if they did, you would need to hire people to build the factories they're not building. >> boeing, for example, you build a large facility and you get delayed before you can open the facility. >> you were yelling at me earlier. take a shot at him. >> here's the question. >> yes. >> was the financial crisis of 2008 as bad, worse or better than '81 -- '82?
'80/'82. >> i was a young person in '80/'82, we had controls on all loans, the fed funds was at 20, prime was at 17. i didn't experience the full effect. but that was in my experience the most recent financial crisis was the worst when we saw lehman brothers fail and -- >> the following question then becomes the snapback or lack of sfabback that we've had, is that a function of the president, is that a function of washington and the other question is how much better could it have been? >> does he get credit or blame for -- >> i think he's going to get blame. >> i hear from axelrod all the
time we're going to give the keys back to those who drove it in the ditch? people are giving us credit for bringing us out of the mess and there are other who is give him blame for not coming back quicker than we have. >> it's easy to say we can come back more quickly but housing is not going to come back quickly. the slowdown in foreclosures has restricted the rapidity with which -- >> that's another part -- >> housing is a big part, too. >> housing is a big part. >> should we have let it flush itself out more quickly? >> i think so. the banks have lost about $4 trillion in subprime so far. they're going to lose the money. >> let me ask you, if there wasn't the activist agencies like the nlrb or epa or expect the specter of higher taxes or
$5 trillion of additional debt, if there wasn't obamacare, would we be -- where do you think we'd be? >> you'd have to say what would replace it. i think if you make the assumption that we would have had a bipartisan program in washington, d.c. so that people would actually work together and get things done and build perhaps a different health care plan -- >> would we be at 2%. >> >> we would be better off if we had a bipartisan -- >> i don't think anybody is due distributing that. how much better? >> let's break it down. if you look we're at 8.3 trs unemployment, 8.2, the cleveland fed said if we didn't have 99-week unemployment benefits, we went back to the 26 weeks, the unemployment rate would be lower by 75 basis points. >> but that doesn't mean more people would, working.
>> no, no -- >> or it would mean -- >> we have people that come in every day and say i would like to apply for this job but i want it in seven months. i'm still on the benefit program. >> but that assumes you can't find people to still. is that true you have jobs sitting empty because people won't take them? >> sure. >> how many jobs do you think are empty? >> that's fascinating. >> i buy the argument people will wait to get a job. i have a hard time bleaching employers have job that will sit empty when you have 8.3 unemployment. >> we have job open all the time. we have a large web site people can apply to. >> and you have people who literally i'd love the job but i don't want it this second -- >> they want to stay home and watch "squawk box" instead of working if you can make the same
amount at home. >> but the sort of larger issue -- i conceptually get it but in this economy i would have thought there would be people racing for these jobs thinking they wouldn't be available. >> that's what i would think. >> they want to be assured they have the job when benefits run out. >> we can't agree to it because we have to fill the job now. >> and i would say forget it, i don't want someone who doesn't want the job right away. >> given the amount of people who lost their jobs in 2008 and 2009 and the depth of the recession, you look at what the fed did and stimulus bill, it would have been too much to ask to get a 4% 5rks% quarter, given the nature of the recession? >> you have to understand housing is not going to come dash quickly. >> so it's all housing. >> capital spending is up,
consumer -- >> we had a couple of 5 mrs and 6% numbers back in the 80s. >> but you're not going to have that. >> then we're europe. then it's a new norm al just like they said at pimco and we're stuck above 8% unemployment. >> the housing situation is being worked through. we were looking at 20% down on housing prices. now we're flat. >> stay where you are. they're playing us out but you're here for the next two hours. if you're feeling dazed and confused thinking about the european markets, our next guest is one of our favorites. she's my cliff note verse to what's going on in the rest of world. jillian ted joins us right after the break. between listening to e numbers... ...and listening to your instinct duff & phelps finds the sweet spot that powers sound decisions.
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future. >> and the european debt crisis is arguably the biggest question mark weighing on the global markets. jillian ted, thank you for being here. i want to talk europe. you were in washington yesterday with gene sperling talking labor numbers. >> absolutely. we had a conference in washington and gene sperling spoke to us. he made an important statement is that last summer a lot of companies in america wanted to start hiring people because they were feeling more confident. then the crisis came and they froze their plans. you go to the beginning of this year and they relax again. you saw a sharp reduction in the unemployment rate but in many ways it was quicker than people like the federal reserve reserve had expected. the big question now, though, is that once again we're seeing the eurozone worries resurface so are we going to see companies
freeze again, if you like. >> joe and jim, are you going to agree with this assessment or do you consider is a rationalization? >> i heard gene sperling and i thought i'm not going to believe a scintilla of this. >> we've watched the prices go up and down over the last six months. >> the democrat didn't concede there was any uncertainty until the republicans blocked the debt ceiling. then -- europe doesn't help obviously. >> the ce is what is going to make companies confident enough to not use that $2 trillion cash pile to go out and invest and to go out and create jobs. to hire people you have o to believe things aren't going to get better for the not just the next three month bus for the next three years. it's a commitment. companies need to have some
visibility about where things are going. right now what's happening in the eurozone, could create a repeat of the last few years. >> could you draw a pie chart of uncertainty. you what's my tax rate going to be. >> and what ben bernanke calls the fiscal cliff that's potentially going to affect the economy at the end of this year, beginningneck year if there's no budget. >> how big a slice of that pie would you say the eurozone issues should be? >> well, i imagine at the moment it's probably a third to half but that's just a guess. >> and it almost seems like we desperately want to forget about the eurozone and the euro crisis. we forget about it for about a month and something happens and we decide to remember again. >> it's eurozone crisis is like having a friend in a really bad
relationship. they go off, they have a rao, they call on the phone late at night. you say they're going to split up or get rid of it. and then they go away and a month later they're back again. >> the imf tries to measure the anxiety in the market. ne look at cds spreads. if you look back over the last three, four years, you've soon anxiety go up and down up and down in the markets but there has been a constant rach elling up. so if you start down here in 2007, we went up, then down, then up again, then down. and if you look at say spreads in the eurozone right now, they're basically telling you the underlying level of concern notwithstanding those short breaks when it seems like they were fixing things keep going up.
>> can mario draghi fix things? >> they gave him six months. what happens after the six months? >> if they don't use it, we'll be back where we were at the begin ing. >> five years from now will we be going tofr to europe and sayer that iing, wow, that was scary or will you be saying i'm going to greece, i'm going to have to turn toll dars into drachma. >> the problem is the voters, the mass of people never quite bought into. >> and what if they change the political elite. >> right now you're dealing with fragmentation in europe and conflict between germans, greeks, spanish, finnish but also this real tension between the voters and the elite. >> we have to talk france.
>> well, french is critical. there's one factor to know and that's in the last couple of years we've seen no less than ten ibt governments in the eurozone essentially be kicked out by vote of professional testing what they don't like. i think there's a good chance france can be another supply in. >> in your heart of heart, don't you think you'll still be using euros in the next five years? >> she's from where they never bought into it anyway. >> at the end of the day -- the issue is this -- germany could basically guy greece. they could send all of them down on the club med and solve their problems and the whole thing is over. they can't do that with spain and italy. that's why spain matters so much right now. >> gillian tett, thank you for being here. you have to come back soon. >> sparks flying between goingle
and oracle. and then at 8:00, if the fed is -- bill poole, never one to filter his thoughts. we've got a bone or two to pick with him as well. he was one of. first policy makers to take the pulpit and speak his mind. faux he has an issue with current fed officials who called him on the carpet. >> time now for today's aflac trivia question. what clint eastwood screen role was originally offered to john wayne, frank sinatra and paul newman? the answer when "squawk box" continues. don't pay for? aflac! or help pay the mortgage? quack! or child care? quack! aflaaac! and everyday expenses? huh?! blurlbrlblrlbr!!!
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until it's not just lines you see... it's the world. now the answer to today's aflac trivia question. what clint eastwood screen role was originally offered to john wayne, frank sinatra and paul newman? the answer: "dirty harry." >> aflac! welcome back. making headlines this morning sparks were flying in that oracle-google trial in san
francisco. a google engineer denying he refefrd to oracle or any other company when he said any could could use the java language. coming up, why general electric is getting a bump in premarket trading. stay tuned for that and a lot more when "squawk" returns. and it's very affordable. it was very delicious. could you please taste car insurance y? this one is much more expensive. ugh. it's really bad. let's see what you picked. oh, geico! over their competitor. you are a magician right? no., oh. you're not?, no., oh, well, give it a shot. i am so, so sorry. it was this close.
by 1 cent. and microsoft earned 60 cents per share, benefiting from the fact personal computer sales holding up better than expected. x-box not doing as well. do you have an x-box over there? >> an ipad, not an x-box. >> honeywell doing better than expected. they had higher than expected organic sales. all of this is signaling pretty good stocks. the stock is already indicated to open between $59 and $61 a share. that will shake a bit but you'll clores than yesterday. the oregonic growth stronger
than even the company had been expecting. on oil this morning we have ste steve. why don't we start off talking about oil. there is the sentiment at least at this point we've seen the peak for oil prices. it's not begin gg to continue to push higher as we get into driving season. what do you think? >> at this point i can't argue with that. we're trading at between 100 and 105. back in february over the president's day weekend, we shot through that. we had that big spike in new york up to 110 and we've been bleeding lower and settled into the range of 100, 105.
if we see any showdown with iran, the sky is the limit pip also we've destroyed a significant amount of demand and there isn't a fundamental reason to expect oil prices higher at this point. so if you are bullish, you have to be under the assumption we'll see a supply disruption to the global flow of oil at some point this sum person. >> i watched this morning and they talk about how brent crude is up so sharply and it's because of supply and demand issues. how come that's driven by supply and demand and there is a global issue and wti is such a different picture at this point? >> the wti context is not the real per size of oil. that price ol is 10, $15, $250 below the real price of oil.
if you look at what the refiners are actually paying in the gulf coast and east coast, they're payingup ward of 115 $120 a barrel, which is indicative of fly and demand and -- >> why isn't wti the real price? who's to argue what the real price is? >> the real price is if we look and the globe, the preel price is closer to $120 based on a number of streams from different countries and different markets. we have a lot of oil sitting in oklahoma. new production coming done from canada and north dakota. we don't have enough pipeline capacity to get that cheap oil to the market. so it trapped up there in the middle of the country. now in a couple of weeks we are going to reverse the flow of a pipeline and some of that cheap oil will be nous ld to the
market. because that supply is where it is, it's not where it needs to be and, therefore, it is well below the global price of oil. >> when will we see a shake out. >> i that's what happened. before when whe woo not. now that you have some access, that oil is being pulled up closer too the global price of oil. the next mix contracts or 103. if you do not see any sort of discorruptions here then the contract is bound to fall and that will push wti prices higher. if we do not see sort of increased flow of these mid continent barrels that will keep the disconnect between the global price and wti price well
apart. >> the dollar is trading weaker against the euro today after those numbers we saw on germ confidence. this is a push me/pull we every mind. i guess based on the consensus about what people think about the economy here versus the economy there. euro despite every single owe owe has managed to tofully the currency to remain real bust going forward. i think it's a great job. i think right now. i'll is the key driver to whether the u.s. economy improves or slows down as we go forward. we clearly saw u.s. dig a disappoint often the last i think driver of concern in
europe the u.s. was going to be the engine of global growth. that was going so serve rescue forward and patifies the critics marks. that's why oil is such a critical factor for the turncy market. do you change your mind on a particular by take basis? >> that's what happened. s that why we've seen the incredible small rng market for the last nun and a half because we're it's a real trend of slowdown or just a pause. >> and coming up, william poole will tell us what factors the
fed is neglecting in its forecast. quack quack will be right back. upneck, the ceo of kimberly-clark joins us to expect products, the economy and the state of the personal care industry. and seven-dollar trades are just the start. i'm with scottrade. i'm with scottrade. i'm with scottrade. and i'm loving every minute of it. [ rodger riney ] at scottrade, we give you commission-free etfs, no-fee iras and more. come see why more investors are saying... i'm with scottrade. but not how we get there. because in this business, there are no straight lines. only the twists and turns of an unpredictable industry.
welcome back to "squawk box." we're checking the futures right now. we have some green arrows after good earnings reports. nasdaq looks like it would open 46 points higher and s&p would open up close to 5 points higher. we're waiting for quarter results from mcdonald's. it should be hitting at 8:00 eastern. we've also got a headline breaking. a chesapeake shareholder filing lawsuit against ceo aubrey mcclendon. the company has come under fire for revelations that the ceo dierd $1.4 billion equity eveneds and he's used toes loans
to then buy asset along with chesapeake. >> nice leverage if it works, right? >> raises other questions about how these transactions are -- >> maybe he'll buy the dodgers now. at a higher price than the guys who use the insurance. do i smell another -- up. >> smell another column. >> when is that, tu? >> maybe. this is perfect. >> i know we have kimberly clark coming up. >> cramer thinks this is -- >> this is crazy. because these loans are being -- >> the bigger issue is borrowing the money without disclosing it.
>> if it's great, you should be able to go ahead with the whole thing. this goes back to a lot of con flib of interest this evening ps. >> they have a program where you can put 2.5% into -- >> that means the company gives less investment. if i say this is a great deal and i'm going continue to vest alongside, the sthar holders get less. >> that's where it gets kpli kpated. >> interests should be aligned because you own stock in the company, right? jim as a ceo, if you find a great deal, you're not going to go invest alongside, you're going to invest the country money in it. you're used to be programs where
if you went back in the 90s, a lot of banks would invest their own private equity dollars and have the employees in the same private equity and then what happened in the technology boom, the employees had more money sart of their investments in a private equity firm than they had in the bank. obviously the issues were not aligned at that point. so the performance of those different investments aren't always aligned. i think it's important to maintain that alignment. >> i have a hard time thinking as the ceo i think this is a great opportunity. you had that opportunity using the resources of the company to find that benefit. i have no problem with you benefiting along with the rest of the shareholders if you're doing it as a shareholder. >> let's kim jong un berle here.
$174, 30 cents ahead of expectations. first, tom faulk, chairman and ceo of kimberly clark. inflation and input costs for all of your different products and, number two, a global look at areas of the world that are stronger and actually domestically how you see the economy. >> sure, joe, thanks. input costs were not a big factor for us this quarter. oil related costs were up 40 million or 50 million. input costs net only cost bus $10 million. emerging markets for us were super strong again this quarter. our growth in kmn organically this month in china was up 48%. it was up huge. russia was up 25%, latin america was up 2%. so much good emerging growth in emerging markets. europe was on plan so no real
issues there, given all the purr toil and in price increases coming through that week took of the commodity crossed increases. but volume growth was a little weak, as particularly baby and child care were soft. >> is that baby and child care? what is that? >> we're selling loss of huggies. art ofit as we're expanding in 80 cities. several years ago we were in 50 cities. we're also launching some new products. wooech experienced from the premium tear into the main line tier. >> i'm certainly no diaper
expert. is everybody around the world, a, wearing something and, b, are they all disposable or -- disposable diapers might have bnt greatest invention of all times. >> when i was in china, i saw a lot of kids that didn't have it. i bet it's the percent of people there using them probably. >> go ahead. >> you get experts on the show. becky and andrew i know are in this category still. >> you didn't say me. >> joe, we've got depends whenever you need them. >> you're right there, dude, so don't start on me. go ahead. >> well, in emerging markets, in the u.s. if is mom is using five diapers a day, many emerging markets might be one during the day. during the day she may use clothe or in some markets, if it's a warm clie mats, beat nir around the dork patriot.
nonuse is the predominant competitors. so much you have to bring those products could consume. outside what difference would it make with all the dogs and everything else but you're a diaper guy, right? >> i'm a diaper guy. and i change them, too. >> you don't believe me. no, i do. >> does the input about your business tell you anything about the uneven recovery and whether we have a chance of repeating over the last two years? i was. >> with some of our distributors recently, the guys selling into small business or selling into hotels and they were pretty bullish. they were thinking high single dij id, even double dij id kroet. . these are some of our mef
section kept. there you a a lot more mitch. this was in the last month or so. >> you're in 175 request countries and 25% of all the households notice world. how much of your growth comes from emerging markets versus developed markets? >> well, this but it up to 27% of our sales now. probably save years ago that was in the ms. 80. it's raing -- innovation there, there are diapers to be innovated with? are things coming down the pike that are even better? >> absolutely.
in every major market we've got a strong innovation plant an improved huggies pain line in u.s. this you know, there's new moments tennering entering this category every day. we've got to continue to be innovative to make sure we'll relevant. >> tom, did you say dying pans? >> yeah. >> explain what is it -- >> it's basically for those we gole baby. in markets like japan, it a huge% of the category. >> it's more like bull-ups. i thought they were full on ties and. you catch it at the inc.le.
>> these have easy open sides, andrew, so you don't have to pull them all the way down if you have other things to deal with this about. >> is it to and. >> actually, sitting hooer right now. no. oust this pop. come back, join us on set again sunday. i heard from jim. you mentioned what jim cramer said about the moves at chesapeake. he did say he's been very strongly opposed to these moves and they go against what he said he would done jim's show. aubrey said he'd never lever up again, thee came specifically to apologize for it. heap said he wasn't using margin this time around but he sure
deal because bernie phone call. i wonder if at this point if it's -- up redaemable. >> because jim if i. >> and don't miss "squawk box" next eke. we have a huge lineup ghost, include rgs ftw and a full line up for you. squawk will be right the teacher that comes to mind for me is my high school math teacher, dr. gilmore. i mean he could teach. he was there for us, even if we needed him in college. you could call him, you had his phone number. he was just focused on making sure
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more now from our guest hosts pnc's ceo jim rohr. what are pnc's highlights? >> we were very pleased, we had $1.44 a share and we acquired a company in march. on an adjusted basis it was $1.62 a year. rbc in the first quarter, we converted the entire thing, 400 branches, almost a million customers in one weekend and moved us into the southeast. we're very excited about that. so the revenue line is moving up.
we had a 5% increase in total revenue, 4% net interest income, 7% in fee income. we had a lot of customers, and the risk being relatively stable to slower growth, think think we're looking forward to a good rest of the year. >> and credit quality is -- >> stable. but i think it's hit a level it will be relatively stable for the rest of the year. >> and of all the states you operate in, which state is doing the best? >> it's interesting. last year every single one of our markets exceeded plan. and this year 24 of 32 markets exseated plan in the first quarter. >> is that because of the local economies? >> i think it's because we're taking share. >> he has the same answer. you say management -- you might
not say it but -- >> there's no question i grew 240 commercial customers in the quarter. i was very busy. a lot of people throughout doing a lot of good work. >> stick around. jim will be with us for the rest of the show. we're going to talk about next week's fed meeting. duff & phelps finds the sweet spot that powers sound decisions. duff & phelps financial advisory and investment banking services. omnipotent of opportunity. you know how to mix business... with business. 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 could get used to this. [ male announcer ] yes, you could business pro. yes, you could. go national. go like a pro.
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signs of weakness in europe and a slowdown in china. jobless claims ticking higher while home sales drop. bill poole will weigh in. >> and today marks the two-year anniversary of the bp oil disaster. why some people are still waiting on their claims. >> and an earnings report from our second dow component of the morning. mcdonald's is the bellwether for global recovery. the third hour of "squawk" begins right now. welcome back to "squawk box."
i'm here, becky's here, and drup's hedru -- andrew's here. mcdonald's is reporting. >> in line. >> the comp store numbers, the u.s. looks good. and actually, global looks really good, too. revenue is in lien with expectations. maybe a couple thousand short. revenue was -- no -- 6.546 and theest mavs the 6.54. u.s.-generated comp sales 8.5%. that sounds like a total -- >> it's comps. >> they did benefit because of one additional day, it was leap year. >> that helps. >> it not all of it. >> global was 7.3. but the stocks -- it is moving higher on these numbers.
i don't see really an outlook. the company says as we enter the second quarter, a comp store sales growth for april is expected to be about 4%. that definitely helps i think. >> you look at the mcdonald's in the u.s. they said it was robust guest traffic, a lot of people coming through. but the top line benefited from on going popularity of classic core favorites like chicken mcbites. it like little popcorn chicken. i like that stuff. they also got help by favorable weather. weep keep asking what that means. with more people who get out and go through your car. >> imagine what it cost to salt the parking lots of all those stores? >> i didn't think about that
either. >> as we enter the second quarter, global sales rates -- >> 4%. >> 4%. pretty good. dow component general electric reporting first quarter profit of 34 pint cents they are share. revenues also beating street consensus and we heard from microsoft after the closed last night. pc sales holding up better than expected in the wake of all but speculation of things like ipads and tablets and what was going to happen there. >> we've been talking about the fed. there's no change to policy guidance at next week's meeting. but in an era of renewed transparency, many are looking for a forward looking plant for the solution fed.
it is a pleasure to have you on set here today. >> thank you. >> i'm not going to put you on the spot. >> why not? >> you know you look at the fed's forecast and you have problems with the errors that have been there and not really looked up to. >> i'm not a forecaster, i'm a consumer of forecast. but we need to look at the standard errors. we like to joke about the forecast areas and we've got to incorporate those in the policy process. so the standard error from all the evidence is about 1.5 percentage points on a four quarter head forecast. so a soak cussed for tres. >> quite a big difference. >> that's a huge difference. >> that's the current joum come because he sort of likes to have a little fun here, sort of a sour outlook on things.
and we'll call a 4 a becky quick outcome, okay? just for short hand. >> it does depend who's in washington. i could be at a 4. >> depends on the government policy. >> i want to talk about the current outlook first. if that's what we get, then i think the feds -- that would not be a surprise. if we more or less come in downtown center, the fed will stay where it is. supposed we get a quick outcome, a 4 outcome. that would be great news. what would the fed do? the fed has been totally, completely silent about what it would do. now, there's got to be a plan there because everybody knows about the possibility that it could have a better outcome than
forecast. we know about forecast errors. so what is the plan? well, there's got to be a plan. and in the interest of all the transparency the fed talks about, that plan ought to be discussed with the market and that's what's missing. >> i'll try and play devil's advocate on this. maybe they say we don't want to talk about that because what we're trying to do with policy is prop the markets up and if you start talking about what you're going to do if the party gets better, take away the party bowl, the punch bowl, it will have the opposite effect and the market will the. >> the -- you're right. it seems at this point in the kof riff we'd be at 4. right?
>> i happen to agree with you. >> why aren't we? >> i've been on that same track as well. >> you were there in '80/82. . people don't remember now frightening that period was. we looked into the abyss in '08 and thought the world might end. weren't we just miserable in '80 and unemployment and the standards. >> we had big problems butch. we did not have the edge of clams of the financial system at that time. >> the housing -- not in the same way? >> you don't remember we had to work out the s & l. continental-illinois. i've been reading white the show has been on on this issue. >> no, i think that the strange in the fings much, much greater this time.
>> there was height, clank result in the industrial areas of the country. that's where that term came from. so there were a lot of problems but there was a momentum to growth and thereof a agree growth oriented administration and we got wrults to show for it. >> that's the question. was it not as deep that we were age to come back with 800 and 900 jobs? is it because the pee sipgs lo to whaer saying back? are we now becoming park now the of sun these. >> now the xl pipeline.
independent not seen a study that adds those up across the country. >> republicans say 30,000 jobs. >> i happen to believe that story but we've not seen, you know, a paper that we published in a peer reviewed journal. so that's where we are on that. i happen to believe that. now it will be interesting during the election campaign because if the -- if the election prospects for governor romney start to look up, then you may start to see the industry's most impacted by these constraints showing more signs of life and particularly the equity market. >> that would be a tough cause and effect to prove, though, wouldn't it, to connect those dots. you start seeing employment pick up and things it would be a benefit from a romney presidency? >> well, it will depend, of course, on how he plays this
issue. ronald reagan campaigned on less regulation. that was repeated over and over again in the campaign. that was part of his campaign theme. when he came into office, i think the very first thing he did was to deregulate natural gas, which had caused a lot of problems. then there were a whole sequence of things. he appointed people to regulatory positions that had a mission to deregulate. and that's what happened. and it made, i think it made a big difference. away there were other things, tax policy, spending policy. all those uncertainties hanging over us. >> the stimulus that we had, dodd-frank and obamacare saved us from a worse recession or made the recovery tepid? good or bad? >> net-net? >> net-net. >> i think the main thing that saved us into really sinking
badly was the banking system -- >> tarp -- >> it was tarp, which was money out of treasury. >> that was before obama. >> that's right. but the obama administration carried through and continued that. >> right. >> but i think that most of the other things were actually negatives. i agree with you. >> bill, we want to thank you so much for coming in here. >> and thank you for agreeing with us. >> and joe wants to thank ul for agr -- thank you for agreeing with him. we hope you'll come back soon. >> coming up, bill poole is going to stay. i'm going to give him another ten minutes. >> and we have some stuff for him. >> we're going to emphasize, reporting earnings a few minutes ago. in the next half hour, this is a great story, a guy, he gets a business card printed up and uses the office and he's in there in a conference room pretending he works there. he's the best. >> or the worst.
>> just the gall. he is slaughter. securities fraud and money laundering. he's even bad for a lawyer. and mark simon tells the story in "unravelled" and he joins us. >> you'll have the iphone and androids and windows. windows is coming strong. what's come being next is the home automation where you'll be able to turn off your lights, turn your ac on and all of that from the palm of your hand. we'll have 4g throughout the country. it's going to be where 90% of americans live in the next 18 to 24 months in is something we we all obviously are using every single day but i think it's going to get even more important in our life than it is today.
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welcome back, everybody. we've been watching the futures. dow is up, the s&p is up. you have dow component mcdonald's that came up with strong numbers. at least seven companies have cut sandisk this morning. warning of a poor revenue outlook as pricing pressures continue. >> see how even a middle of the road guy from the cato institute -- anyway. mcdonald's reporting minutes ago. there's something to that leap year, isn't there, andy? they're going to go from 7 or 8% comp store now they're going to 4? >> that's exactly right.
they like the rest of the industry have beb fitted from the laeb years as well as the very hield w-- high that we've seen. >> any outstanding parts of the world that weren't quite as good in the report, andy? >> i would say europe is the focus right now given a few headlines coming out of there every now and again. europe did bounce back a little bit in march with the 7% number after showing 4% comps in january and february. so that's a little bit better. you know, we'll have to see what the trends look like in april. obviously it sounds like with the global comp expectation slowing to 4% that europe probably continues to be choppy would be my guess. >> we've had a few reports, jane wells has done on cattle and
cattle prices. how did that affect mcdonald's? >> yeah, you're seeing that show up in restaurant lefl margins. right now the u.s. business looks like it actually had in terms of the details a little built better than expected margins. but as we move into the summer months and beef prices continue to tighten up here, that's probably going to continue to have an impact on restaurant level margins. the company only owns about 15% of its total restaurants so not as big for a franchise like mcdonald's but beef prices will continue to impact the industry overall. >> we're looking at a chart, you can almost see all the yogurt stuff and fruit. all these innovations -- i don't know whether you have a monitor. it was a $40 stock not that long
ago. was that phase of mcdonald's, is that in the past? they've got most of the stuff that they need or will they still be introducing new things for breakfast, different items on the menu? is that still important for mcdonald's? >> it is. but i think what you're seeing now is really extension version new ref luc luce -- revolutiona indications. the company is in a sustain mode right now. there is an incredibly powerful brand with huge marketing dollars. to see kind of same store sales numbers historically in the 6s or 7s, that's probably going to get a little bit more challenging going forward would be my guess. >> the new guy, is she talented? do you like the succession plan there? >> i do.
done thompson's been really i think well groomed for this tonight. as jim skinner retires. really bringing together, now, the global powers of mcdonald's and a lot of collaboration and the strategy will remain the same on the plan to win, staying focused on being better, not just bigger and i think don will continue to drive the company forward. >> he's a friend of "squawk" but i think -- i'm worried. >> he was on "squawk on the street" last week. >> was he really? >> yeah, carl is his buddy. you were right. >> maybe we can get ronald mcdonald on here and we'll go head to head with him on that. >> or the hamburglar.
>> the hamburglar? >> we have a long history with ronald mcdonald. >> someone's politics -- if someone is going to dress up as a clown, it's not going to be me, my friend. >> aren't there girl clowns? >> yeah. >> this is a running theme we've had this morning. can't do math either. >> appreciate it. >> okay, see you. >> still to come this morning, this is the two-year anniversary of the bp oil disaster in the gulf. and while a fund was set up to help pay off the victims of the disaster, many have yet to see a payout. our brian shactman is going to tell us why in just a little bit. "squawk box" will be right back. >> when you miss "squawk box," you miss market analysis from
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welcome back to "squawk box," everybody. general electric is calling higher. 34 cents a share, a penny better than estimates. revenue of $32 billion beat street expectations. honeywell getting a pop in the trading. $58 is where it closed. earnings came in at $1.04, it beat expectations by a nickel. >> coming up, we'll give you your guide to a market trading day ahead. and today marks the second anniversary of the gulf oil disaster. what's changed since the spill? >> one thing that hasn't
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welcome back to "squawk box." a federal judge has narrowed a billion dollar lawsuit against jpmorgan. the judge cites safe harbor rules regarding jpmorgan in their dealings with weaker banks. and the japanese automaker nissan is trying to challenge the dominance of german rivals in the world's largest car markets. becky? >> let's check a check on the markets now. joining us in chicago are rick santelli and john brady. rick, why don't we start off just trying to wrap up what this week has looked like. we got the numbers yesterday. the jobless claims has plenty of people trying to figure out if we're headed for another swoon for the spring. what's your take?
>> i think that many investors -- many people that really watch are students of the market. their intuition has been correct and the numbers are bearing it out. what i'm referring to a some of the seasonalities of the good weather pulling forward business activity. whether it fully fed, empire job index jobless claims. but most importantly the day we had on good friday, 120,000 jobs. when you put all that together, the data is starting to match the intuition. if you look at equities and earnings and europe we get to see very accurately that what's going on in europe is driving our equity market in large parts and our equity market rallies are about the only thing in mild form that puts the sellers in treasuries every since the last fed statement and we have a new fed meeting coming. so, yes, i think in a globe that is mired in uncertainty and
debt, that even a u.s. economy as resilient as it is is going to have issues. >> john, cramer talked about this yesterday on "squawk on the street" and his point was, look, the earnings have been fantastic. if you're watching and you did through the numbers, they've seen you top tons of great things. we see this with mcdonald's, microsoft last night. when does it start to quell when you hear what the countries are saying about the kme? >> we have an important french election this weekend and of course the data has taken a slight turn to being a little bit softer. but likewise, too, we've given the legislation, the election here later in the fall, markets are concerned about moving precipitously higher.
there was a lot of talk this week about high beta apples and missing numbers so the equity market has been held back more than otherwise just on rumor and innuendo on apple. we would suggest two things. we think for the consumer and the economy, a fallback in gasoline futures this week, a nice 7% drop in gasoline futures has been important. it will be very important for discretionary consumer spending this summer and likewise with the stabilization of spanish debt, specifically because they've got so much of their debt needs taken care of that perhaps a stabilization of debt will lend itself to higher equity prices in june and july. >> our guest host today is jim rohr of pnc. you've got boots on the ground. you see what's happening in the country. is the market getting it wrong by focussing on some of these bobbing numbers in the country or focusing on europe? >> europe has been probable
housing prices have stabilized, which is a very positive thing, down 20 over the last three years. we're seeing a great deal of liquidity teed. the banks have doubled the amount of capital the banks have and are in much better shape. you're seeing the earnings season grow. i think the economy is growing and the consumer is clearly back. you sigh it in autos and a lot of consumption. there's a lot of momentum in the economy. how do we get capital spending to pick up? >> do you see improvement in certain places? >> certain pockets. when you look at case shiller, it's flat. but it was only down a half a point in december. and in some markets housing prices have about begun to tick up. so, you know, on a national basis it's flat, which is a big
deal, big improvement up approximately people are actually building houses before we get the housing business to be back to a normal state. underlying that is a good, solid economy i think. >> jim is going to stay with us for the rest of the show. rick have a fantastic weekend and talk to you soon. >> it is two years after the bp oil spill and many questions remain about claims and legal settlements that could cost the company $8 balance. has the process been fair and why are people still waiting for money two years later? brian shactman joins us. >> an independent auditor says 7,000 claims were underpaid. that's actually pretty good when you look at the overall number. about a million in claims were processed, 220,000 individual
businesses were paid more than $6 billion. soap that's 7,000 is is small percentage, mr. dine sterg h-- g has stepped aside. >> i think we did exactly what they said, set up a special fund for the victims, get the money out and get it out fast. that's exactly what we did. we got about $6.5 billion out the door before the date of the first trial in louisiana. i think that is proof positive that we did exactly what was anticipated. >> what would you have done differently in hindsight, if anything? >> oh, in hindsight. you have to be careful, when i
went down there into the gulf and promised paid they'd all be paid in a week or paid in two weeks, i greatly exaggerated our ability to process all those claims. we received over a million claims from 50 states and 35 foreign countries. we were inundated. i overpromised, certainly you shouldn't do and i made a mistake there that's for sure. and so people's expectations soared and then there was a delay in getting the money out, that posed problems we had to overcome. >> pretty interesting interview. that man right there is taking over for mr. feinberg. he has to process 20,000 claims and administer the court-ordered settlement which could cost them up to $7.8 billion, though there is no cap to it. that's $14 to $15 billion, which
is still five lefs than tss tha original $20 billion set aside for the original project. >> mark dryer, the lawyer who embezzled millions from hedge funds and client, he's the subject of the new documentary "unravell "unravelled". producer and director mark siemor will join us when we come back. shows you the big picture on how different asset classes are performing, and it lets you go in for a closer look at areas within a class or sector that may be bucking a larger trend. i'm stephen hett of fidelity investments. the etf market tracker is one more innovative reason serious investors are choosing fidelity. get 200 free trades today and explore your next investing idea. [ female announcer ] the sun powers life.
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welcome back to "squawk box," everybody. things are still looking pretty positive right now, at least for the bulls. dow futures up by just over 70 points, s&p 500 indicated higher by about 6.5 points. we have news, apollo is raising its offer to $7.85 a share. the original bid was for $7 a share. today's announcement comes after great wolf received an offer of $7.25 a share in cash from ksl capital partners. the apollo offered has been unanimously okayed by the great wolf board. >> and royal caribbean's results just hitting the tape, earning 22 cents a share. the ceo calls the performance satisfactory given the difficult operating environment. the stock is trading a little lower at this point. >> i wonder what he meant by that? >> probably with all the other
cruise ships -- >> that ship like lying on the side -- >> that wasn't royal caribbean. >> my guess is when you see pictures like that, it instantly impacts -- >> and your thing with the party -- >> i'm howard hughes-like. i've got issues. >> you'll never take a cruise. >> there's a lot of things i won't do. i've never been on one. >> you have been on a cruise? i've been on a cruise. >> you have been on a cruise? >> i've been on a cruise. >> but do you eat all the seafood on there? does that seem like a good -- they have broadway shows. huge. >> on the big ships, yeah. >> our guest homes this morning, jim rohr. you been on a cruise? >> i was on a cruise a long time
ago. they're fun. >> they are fun. but you don't want to fall off because it's a long way down, they can't turn it around. like with kids -- >> they have rails for fellas like you. >> they do but there's space between the rails. jim, as a banker, can you go back to the glory days with dodd-frank and with all the constraints right now do you think? will there be a golden age of banking again? >> i think the banks -- >> they'll be fine. how about small banks? >> small banks will have more of a problem. the banking industry, the 25 and 28% returns i don't think they are coming back because the capital levels of the bank have been doubled the return will be lower, some of the risk will be lower. i think low demand is coming back, rates will be higher and both of those build well -- >> underwriting standard will be better. >> should be better. >> do you follow this whole
london wales situation of jpmorgan, this idea that they're using the firm to buy all sort of cvs, but this argument thoo they still have a huge and things look that? >> toker obviously that you're cornerings market, even as large as jpmorgan -- there's a lot of players in the market that keep that from happening. >> and jpmorgan would say they're hedging their risk. others might say they're hedging their risk but they're also making money at the same time and that unto itself represents some form of a proprietary trade that would go against volcker. >> well, at pnc our trading operation is very small. it's basically customer driven. so we're not a big proprietary trading shop. so the volcker rule
particularly -- >> do you think the big banks should be in there? >> well, it's important for them to make markets. it's very important for them to be able to hedge their risk. but to the extent they're taking outsize risk, you have to look at the company which volcker and some of the boezel rules allow them to do it safely. >> what should we have done to help housing? should we not have done as much as we've already done or should we do more? >> everybody uses that as overhang for why we're growing so slowly, let anyone get foreclosed? >> i think there's a number of things we should have done. one is the fannie and freddie issue should be addressed. we wrote almost 3,000 pages of regulation for dodd-frank and fannie and freddie's future or
current activities haven't been addressed at all. i think that's a very major part of the crisis that needs to be addressed. secondly, the foreclosure issues. there were some real bad practices done in the foreclosure process. i think that's evident. it's been studied. the banks are coming up with new servicing standards that are paying people for inappropriate -- that's a good thing. >> did anyone get foreclosed on that shouldn't have been foreclosed on? >> not the way -- i'm sure there's within or two. >> why are you putting a practice in -- >> well, tlp administrative practices that should not have been done. >> should we have helped more people not be foreclosed on? >> first of all, the banks helps everyone that can he. the eye the bank wants the house is not right. the banks would much rather people have in the home and honor the homes andes expect payment. the average period of time
before any foreier is only a yearing a. without making payments. but. we try and i think the entire industry is trying to do modifications. >> it's the same thing, on any given day wall street journal editorial on what we should have done, "new york times" editorial. the program should have been billions and billions for keeping people in their house. wall street journal, we should have everything tlfrg be prepared. >> some houses, 20% of all closes are vacant. whenever you need to take the pain near term to make the fuss better, it minimizes the amount of plane that people are doing in. >> well hourk do you do it? >> you just have to let the process going forward. we're seeing the housing market hopefully stabilize and come back over the next couple years.
we built too many homes and financed too many homes. no no matter what the government did, that was going to take time. >> his new movie is an in-depth look at the mark dryer fraud case. he's the director and producer of "unravelled." and on monday, our guest host will be ron paul and stephen roach and oil guru john hofm hofmeister. "squa "squawk" is back after the break. be clear. they are but this is important too. [ man ] the receivables. [ male announcer ] michelin knows it's better for xerox to help manage their finance processing. so they can focus on keeping the world moving. with xerox, you're ready for real ness.
wow. is this me? >> that's you. >> well, welcome back to "squawk box." futures right now are indicated up and it's something to watch. stocks rising in china due to speculation that the government will ease monetary policy and increase fiscal spending on infrastructure. i was talking to our next guest about what sounds like be a
classic -- i mean, mark -- >> if you ever wonder what's going through the minds of criminals like the bernie madoff or mark drier, we're going to get a look at that massive fraud case. this is a story of mark drier'ses massive fraud. i don't know how you manage to do all of these at the same time. this is a documentary that really follows mark drier before he goes to jail. >> yeah. >> you get the cameras in the room with him. >> yes. >> how did that actually happen? >> i was an attorney for mark drier for six years and was there when this implosion happened. he was not just my boss but someone i thought of as a mentor, someone i aspired to be and then betrayal. >> so do you like this guy? do you hate this guy? >> i am disappointed with this
guy. i don't have hate towards him. >> what drove him? now that you've seen both sides, do you think you understand how that happens? >> i think that's the value of this movie. you're getting an inside look of someone who is representative of all of these individuals. i don't think it's about the greed. i don't think it's about the money. those are the tools to get what they want. to be the big man, to get the attention, and to be important. it's sad. >> he had a great law firm. it was built on heir, i guess, but he made it to the top tier very quickly of a law firm. >> it was a legitimate law firm and he just wanted more and wanted more quickly and wasn't willing to wait patiently. when he did the first fraud, approximately $1 million, he did
it because he couldn't get the money legitimately. >> he was making a lot of money. lawyers were making a lot of money. >> more money than most lawyers. >> so he just borrowed the $1 million. he didn't think in his mind that it was illegal at that time. >> what does he say to you now, after the whole house of cards came falling down? >> you know, the interesting thing about these individuals is they have aspect of psychological problems. when you're a narcissist -- i was with him for 60 days from the time he pled guilty. he did not apologized to me. >> did you ask him to apologize? >> i didn't ask him to apologize. i was trying to excavate the reason and rationale. >> why do you think he let the cameras in? how do you explain it? >> several reasons. one is, he saw this as his last argument to the public, to say i'm not an evil man but i'm someone that did something bad, just like anyone out there could do. there is also a deal.
he was running out of money. house arrest is very expensive. it costs over $50,000 a month. he was under house arrest for five month. we were able to get an access fee and the guards which was mutually benefit. >> you always start small. >> we have to go, but did he ever do anything to you or while you were a lawyer to him? did he ever lie to you directly? >> yeah. my bonus for 2007 was deferred until 2008 because of the economy, so he said. that never came. that was one of the many unfortunate aspects of this. it's available in theaters all over the country. >> hopefully you will get your
bonus. >> exactly. when we come back, we have thoughts from our guest host, jim rohr. >> announcer: next week on "squawk box," congressman ron paul, jon huntsman, plus, montana governor brian, working school professor jeremy segal, greg fleming, and a lot more. don't miss "squawk box" all next week on cnbc, first in business worldwide. all by cob. 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'm going b-i-g. [ male announcer ] good choice business pro. good choice. go national. go like a pro.
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stock of the day, mcdonald's. it ran up over 100 and pulled back with better than expected. real good same-store sales, 9%. globally, 7%. february 29th. >> february 29th. the extra day for leap year. >> right. >> we should point out, jim cramer is going to have more in a moment on "squawk on the street" on the situation we've been talking about with chesapeake. he'll have more on that in a
minute. our guest host is jim rohr. mcdonald's points out what we've seen across the board. a lot of strong earnings. >> the earnings season has turned out pretty well so far for the quarter. the banks have done very well. mcdonald's, this morning, kimberly-clark, a number of companies showing that the earnings trend is continuing to grow. >> especially when people had been thinking that this earning season could be the time that we actually saw a little bit of downturn? >> the question, of course, is some of the european issues that we're facing. we have an election in france on sunday and we're talking about the new commitments to make sure that the euro will remain stable. but those issues are not the issues that we were facing six and nine months ago. i think the next six to