Skip to main content

tv   Squawk Box  CNBC  May 7, 2013 6:00am-9:01am EDT

6:00 am
welcome to "squawk box" here on cnbc. i'm andrew ross sorkin along with joe kernen. we've got michelle caruso cabrera with us this morning. we should say that becky is traveling back from omaha today. they will be rejoining us tomorrow. let's begin with the markets. it's folt only good to see you, i was about to say we spent the night together last night, which is probably the wrong thing to say at this hour on television. >> it's cable. it's good. >> but we were -- we did -- we spent dinner together. i don't know what that -- anyway, with paul krol volcker and we can maybe talk about -- >> so there was more than you there? >> it just so happened i moderated this session with volcker last night. >> okay. >> and michelle came, was in the audience. >> but helped out by asking a lot of great questions and then we went off to dinner and she asked more questions. >> ear going to help out more
6:01 am
today because i'm tired, will you do what you normally do, watch the propaganda? >> yes. >> do it in a nice way. >> that's very tough for me. you're better at being nice. >> it's taken me a while, but i do it now. >> i admire your ability to say it so smoothly and make everybody laugh, yet -- >> should i bring a helmet and maybe some shoulder pads, a little armor? >> i don't know where this is going. >> anyway, good morning. tuesday has been a good day of the week for the bulls this year. we should say -- i don't know if it's a -- the dow has been up for 16 consecutive tuesdays. statistically that's at least true. meantime, the transports closed at a record high yesterday. take a look for the first time since mid march and take a look at futures right now. >> they feel good, right? the transports confirming -- >> they pulled back. yeah. they pulled back. wondering what's going on.
6:02 am
>> no, it is good. don't -- >> i'm not. >> the dow, we should say, looking up right now. it looks like it would open up about 23 points higher. >> 16 straight tuesdays or some weird -- >> i'm tell you, nasdaq up about 3.5 points. s&p 500 up 1.5 points. among the test for the u.s. markets today, we should mention a couple of economic stats and earnings report. a light schedule starting with the economy. the labor department, they're going to release job openings and labor turnovers with the labor turnover for more coming at 10:00 eastern. this afternoon, the fed is scheduled to release consumer data. warren buffett is offering his economic outlook on "squawk box" yesterday. take a listen to this. >> in terms of our businesses that we have, 70 plus direct businesses and a lot more indirect, we're seeing the same thing we've been seeing for four years and that's gradual improvement in the economy. and we cut across the whole
6:03 am
economy. so i think it's a pretty good -- a pretty good view of what's going on. and what you are seeing now in certain areas which didn't participate initially, like home building, comeling back fairly strong. >> we'll see what happens with some of those predictions. in the meantime, watch for disney after the closing bell and steve iger will be discussing his company's results and outlook happening at 4:15 eastern time on the closing bell. >> now to the overseas markets, european stocks extending gains in the morm. germany's dax hitting another all-time high. among the catalysts, better-than-expected earnings from some of europe's largest banks. more from ross westgate in just a moment. but the ftse is higher by 0.3%. so is the cac 40 in paris and the german dax higher by 0.7%. ought trail ya's central bank is cutting its key rates to 2.75%.
6:04 am
central banks makes the decision in the opera house, right? that's why we show this video? >> yeah. it looks good. like the eiffel tower almost. >> that's where the french central banksers -- >> it's like if you're going to run unnecessary wallpaper video, which we do all the time, and if you're going to show australia, you show that and people go, oh -- >> it's like the weather is always good there when we show these shots. >> it's weird because it's -- you know, when it's freezing here, it's warm down there. like there's a lot of -- you knew that, right? >> because it's on the other side of the world. >> i've been there. >> have you, really? >> i've been around. i covered the olympics. the olympics -- >> sydney. >> sydney, 2000, the year 2000. >> the business of sports. >> we did at cnbc. >> i was a young boy who -- younger boy.
6:05 am
>> excited, after overseas assignment. >> all of that. we'll talk about that when we get a chance. it's funny yesterday, did you see your paper? in the business section, it had the media guys with the big salaries in there, iger, everyone making money. and the they even pointed out, because i remember the first time the "new york times" does its proxy, it even mentioned in the article yesterday that some ceos wait until after the deadline for the "new york times" piece that looks at ceo -- >> right. >> and the proxy. but the "new york times" went back and revisited it because if you break the law, the new york -- or if you do something wrong, like making all this money, they're going to get you for it. they're not going to let it slide. >> you can run, but you can't hide. >> you can run, but you can't hide. if you get paid a lot, even if your stock goes from 10 to 70 and it's all options, the "new
6:06 am
york times" is still going to catch you because those envious journalists that make whatever, they're not going to let that go by. >> you don't think there's a fair story or even issue to be raised or question to be asked or -- >> something related -- >> performance based. >> related to compensation. >> you know, if you -- people that don't like it -- if you don't like wa -- >> don't buy the stock. >> no, go and get a job in the mail room at goldman sachs. >> look, i'm not making -- >> no, it's a market based thing, andrew. it's just market based. do you have a problem with it? >> no, i don't have a problem with it. >> okay. >> i'll tell you when i was a problem. the only time i have a problem is when people don't perform and the stock doesn't perform and they get -- >> that's not what we're talking about. >> but there is an argument to be made in the media landscape, and by the way i'm not going to
6:07 am
debate the point, but currently the most senior executives in the media world have gotten paid more than in other industries. >> that's probably true. and who knows for whatever reason. >> the question, though, is how do you remedy that if it's inappropriate? >> i think the -- >> why aren't shareholders drp -- >> the "new york times" made the point that boards were koed cozier in media, for some reason. >> no, the answer is simple. you have duer shares. they're saying those shares, the dual class share companies are doing whatever they want, inflating the price and then what's happening is that companies where there's not a dual class, they use that as a peer group to compare to and that raises the overall average. >> the better thing, andrew, was they said because you're rubbing shoulders with spaz -- with stars.
6:08 am
>> that the directors on there get star struck, stars in their eyes and -- >> you're hanging out with beyonce, i think it's your own group. >> and you don't want to give up that gravy train. >> do you remember -- i'm sure you're friends with decker. >> i do know edgar and i -- >> he squandered a family fortune to meet more stars and chicks. remember? >> there were times when he struggled. he did help on the second round. >> he sold it to buy a movie studio to meet all the -- >> it was a stimulus package for -- >> get that music going. >> and as for the broader picture in asia, the nikkei, wow, opened last night surged above 14,000, closed now near a five-year high. japan had been closed for a long beakend holiday.
6:09 am
this is their first opportunity to react to the u.s. markets. weekend earnings drove the momentum today and probably some pick up from last friday here in the u.s. joe. >> in corporate news, jpmorgan has a -- oh. oh. jpmorgan has yet to convince three of its largest shareholders to convince jamie dimon of preparing the ceo. together, the three can sell 12% of jpmorgan shares, both of the nonbinding recommendations going to be tallied on may the 1st. >> can i say if i'm jamie, i think what needed to happen -- i don't know if anybody cares, but a month or two ago, if i was the ceo of basically any company where there was even a question about it, i would say, look, i'd like to be the chairman and ceo, but if i'm not, it's not the end of the world. either way is fine with me. because i think that -- >> there's guys that want to be both. >> i know. but i don't think they really --
6:10 am
>> no, i do think. >> my only point is i now think it becomes tougher if, in fact, you don't get the vote because then there becomes a whole almost public relations issue of how you handle it. >> what i don't understand is the group that's led this whole activist movement about separating the positions at jpmorgan settled for new director at goldman sachs. they said they won't settle for one at jpmorgan. explain that to me. i interviewed the woman and she had no good explanation of why one was different than the other, except maybe one dealt with them, you know? >> there was a little bit of dealing. >> i'm sure there was. >> goldman sachs works with them and maybe jpmorgan is not working with them. >> it hasn't been 50 yet if they are. >> can i continue? >> yeah. my apologies. >> bitcoin regulators -- we have a big regulator coming up on the
6:11 am
show. change that. andrew wants to do that interview, leeann. >> miss leeann hasn't seen it. he could look at spaghetti being thrown against the wall and he would want to relate it because it has wheat in it. the spaghetti was thrown at his head and stuck. the top derivatives regulator is considering setting regulation for bitcoin. says after being asked whether consumers needed more protection from mishaps with bitcoin, it's a digital currency that can be moved by smartphone or computer. the bitcoin, whatever it is, shot up in value in march and it collapsed last month. and bart will join us live at 6:30 eastern. nobody regulate his hair. >> unfortunately. >> there have been people that said, you know, we -- what's
6:12 am
wrong? >> you make -- >> he's called the villain in james bond. >> he likes too bow on tv. i think we're just playing. this is a man who wants to regulate anything. >> we can have a debate, a brawl, if you will, at 6:30 a.m. yesterday we talked to bill gates who talked up windows 8 and now just the other day -- jae. is it in that paper, too? >> that paper is right here. >> and it's also on -- where did i see it? yeah. it's touching up windows 8. the analysts say that the company is addressing complaints and confusion that have been blamed for deepening the slump in pc sales which we asked bill gates about yesterday. he says it doesn't matter what you call the thing that you get. it may be a tablet with a keyboard. but they've got a software program that will compete with the ipad and the changes are
6:13 am
part of a software package given the code name blue. the tune-up is being announced today, but won't be released until consumers and businesses this year. here he is. let's get a sound bite of chairman bill gates talking about pcs, tablets and windows 8 yesterday on "squawk box." take a listen. >> windows 8 really is revolutionary in that it takes the benefits of the tablet and benefits of the pc and it's able to support both of those. so, you know, if you have surface, surface pro, you've got that portability of the tablet, but the richness in terms of the keyboard, microskovt office as a pc. pcs are a big market. it's going be harder and harder to distinguish products whether they're tablets or pcs with windows 8, microsoft is trying to gain shares in what has been dominated by the ipad type device. >> find the life in microsoft shares in recent weeks, though. that's a chart for the last
6:14 am
year. but it's back to a new high. a new -- obviously, a 52-week high it was much higher at points in the past. but we'll see whether this is the time where earnings are finally caught up with the multiple. people for so long have -- whether you talked to google, i don't know, go long microsoft. i don't remember the -- other people that would talk about others, we'll know at this point. i'd buy microsoft and not buy some other tech stock. did you hear how when i said take a listen, it sounds like i'm telling viewers wa to do instead of -- you don't say please, you don't see if you would or hear something -- it sounds bad. >> i'm going to stop with the take a listen. >> oh, yeah, take a listen. >> or listen to this. >> no, i don't know. i just said take a listen and take a listen. i didn't see take a listen to this. >> take a lesson on listening.
6:15 am
how about that? we have some other news to get to, in tech news, no less. youtube is reportedly set to announce a sooerryes of channels that will require payments. >> you know about those. >> those are not those type of channels. i knew you'd go there. this is youtube. >> oh, this is youtube, not you -- you know what. >> no, i don't know. you obviously know. >> oh, boy. >> okay. go ahead. >> an announcement is expected within a few weeks. the pay section will be in addition to the millions of video viewers watching for free. no word on whether the paid videos will come with advertisements. >> oh, oh, do you have any doubts? come on. >> the financial times reporting that viewers would be charged as little as $1.99 the a month for subscriptions which -- i don't know what your -- >> no, currently -- >> for videos. >> for youtube i would but i would never pay the $1$1.99 for the ones you're familiar with.
6:16 am
there's a way to do it with a credit card and suddenly use you're on some lists, aren't you? >> i don't know about that. >> you were about the whole incognito thing that you can do on the -- >> you have to find the right browser. >> you don't have a history to show, yeah. >> you know what? oh, my. >> more news, the u.s. government is expanding its airport security spreening process. the tsa says patients flying internationally may be able to sef domestic screenings. this is available to some international travelers to get fast screening, keep their laptop in its case and keep small amounts of liquids and gels in their carryon bags.
6:17 am
i did it for the first time a few weeks ago. >> it's great when it works. here is the one thing. on occasion just to tell you so, they say no. which is a real problem because you have a certainly amount of time on recent checks. >> and what is the point? >> i don't know. you're global entry, though? >> oh, yes, for sure. sometimes the machines aren't working, sometimes they don't have a special lane. i don't know that they're investing enough in the infrastructure of it. it's government run. >> they only carve you a hundred bucks for it, so i'm not sure -- >> you want it to work, right? >> it's time to go to ross. >> it's time for the global markets. ross is standing by in london. roscoe p. coaltrain, it's good to see you. >> thanks for that. european equities are firmer today. let's show you where we stand.
6:18 am
you can see a bit more than 6 to 4 advancers outpacing decliners on the dow jones stoxx 600. the ftse was closed yesterday. posted jobs report today. the ft. if it is up about 0.3%. the cac 40 up about 0.3%. the xetra dax up 0.7%. ftse mib up 1%. focus is very much on bank earnings. we kick off with hsbc. there we go, up 3% for the london/hong kong listed focus. q1 pretax profit, 8.4 had billion, better than the 8.1. but what is potentially driving the stock much higher this morning is the fact that loan costs provisions and embarrassment embarrass impairment is lower than expected. a good increase cost ratio. revenues are light and it has
6:19 am
strong capital position. look very sustainable. the look like they're about to grow the dividend. so all in all, pretty good gains for hsbc this morning. today, a 5 is 1% rise in profit. socgen, up 5% this morning. the numbers are a little bit better than expected. and commerzbank in germany up 1.6% today. better than numbers. lloyd's has been pretty well up, rbs, the only decliner here, but there are two things to point out from both lloyd's and rbs. it's now looking increasingly likely the government will look to sell out their stakes in these two banks, the uk government over next year. and that may just provide a floor, as well. we had one analyst comment on earlier who said he would now spin out of hsbc into rbs. and you mentioned that surprise cut at a record low rate now,
6:20 am
the reserve bank of australia cutting rates down to 3.75%. the aussie/dollar this morning is weaker. but our expectations, you will then get further rate cuts. so just more liquidity being pumped in to help equity players. that's it for now. back to you guys. >> all right. ross, thank you. thank you very much. is there anything as lovely as a tree? >> no. >> did you see this in the usa today? >> no, i did not. >> do you know where that was written? >> no. >> mauwa. >> new jersey? >> yeah. and it's out because people don't like rhyming and they think it's insipid, but not in new jersey where that poem has a birth certificate. it was written in february 19.
6:21 am
>> bruce springsteen said they closed down the auto plant in mawa. i don't think it will had an auto plant, but -- >> joyce was much better. she was awesome. coming, warren buffett told viewers yesterday to buy stocks and beware of bonds. we're going to ask two market strategists if they're ready to follow the oracle's device next. but first, president obama is taking congressional outreach efforts to the atlantics. he played golf yesterday with cobber, chandler and mark uhaul of i saw this year. he had a hole in one on the 11th hole.
6:22 am
i got this. [thinking] is it that time? the son picks up the check? [thinking] i'm still working. he's retired. i hope he's saving. i hope he saved enough. who matters most to you says the most about you. at massmutual we're owned by our policyowners, and they matter most to us. whether you're just starting your 401(k) or you are ready for retirement, we'll help you get there.
6:23 am
6:24 am
good morning. take a look at futures. did dow would up 28 points higher. the nax das 4 points. s&p a little over 2. separately, and michelle was there last night, i sat down to mad rate a conversation with former fed chairman paul volcker at the council on foreign rlgzs. among the topics discussed, the economy. take a listen. >> right now, with the
6:25 am
unemployment, with wages, we strain to say the least with the rest of the world. as bad as our economy is, we look great compared to a lot. and this is not an environment that creates inflation. and i don't see any immediate problem there. but sure, when we get a little momentum in the economy some day, and there's a tremendous amount of potential and liquidity and we're running deficits, yeah. but i don't think it's imminent tomorrow. >> if you are watching "squawk box" yesterday morning, you heard warren buffett talk about picking stocks over bonds. >> in terms of stocks, stocks are reasonably priced. they were very cheap a few years ago. they were roently priced now. but stocks grow in value over time because they retain earnings and they expand basically the cs underneath. i like only stocks. i do not like only -- there
6:26 am
could be conditions under which we would own bonds, but they're conditions far greater than what exist now. >> let's find out what our next two guests have to say about those comments. bob and lou. lou brien, strategist at drw group. >> next time. >> lo! >> thank you. thank you very much. >> it's nothing. >> charlie, since you're at the table, what are you doing? >> i don't know. >> you're moving around every which way. >> i was getting comfortable for this interview. go ahead. >> you were getting comfortable. so you heard warren buffett yesterday. obviously, he's a stocks man. but, joe -- we've been having this conversations because you went to see your broker -- not your broker, but the guy that does your 401(k) or whatever. we don't own stocks or anything. >> but ge, when they set up
6:27 am
retirement plans for us, they deal with ubs because it goes back to the kidder days. >> so automatically, they try to recommend to joe, as they recommend to everybody different -- 60/40. they show you the pie. does that make any sense to you in this environment? >> no. because the way to look at it is they look at everybody's individual personal situation. you could be worth $50 million, $10 million, you might be a doctor and very recurring revenue, you might be an entrepreneur. you have to look at the reason you're investing, what the goals are for the next 10, 15 years and base odd that, you could do 100% equity peps we have clients who are 80 years old and -- >> my grandfather died in his 90s with a hundred percent equities. >> because of where bonds are, you would fundamentally change what you would normally recommend for people because bonds are at zero.
6:28 am
the interest rate is zero. >> thank you for articulating this better than i can. >> no, but i'm just saying, know your clients, but this is a time where you should be de-emphasizing -- >> absolutely. you say, look, if you need something on the side, we'll give you some low duration bonds or cash, that's your safety net. but equity will be the place to be for the next three to five years. >> so you're not worried that we're going to somehow -- we were talking about paul volcker last night about some horrific situations. >> you could, but as long as you're not dependent on taking the money identity and saying i need to live completely on this portfolio, you have to have part of it in growth. >> i have no doubt you're going to be right some day, but nearly everybody has the same consensus. and i remember when the ten year was at 4%. who would ever take 4%? who would ever take 3%? >> but bonds with cash --
6:29 am
>> money market or a government fund or something for your bond. leave some powder dry in case the market pulls back, but it doesn't have to be in something you could lose on instead of a 30 year or bond fund. you're losing on cash, anyway, is the argument, right? >> joe, as far as -- >> not with inflation, yeah. >> well, as far as buffett's opinion, i think as he looks at all things, he looks at it as an investment. i look at it as a trade. when i was on your show in january, i said i thought we could see a new low on the ten-year yield when the yields at the time were over 2%. the interesting thing is we've moved considerably on the yield even though the stocks are at all new-time highs. i think it is a matter of a trade versus an investment. in march 2011, buffett advocated the same thing. use the long-term, the ten or
6:30 am
20-year outlook that he was very uncertain on in regards to the dollar to tell people to avoid things like treasuries. in a trading basis, if you had bought then, the yield in the ten-year was 340. it was a hugely profitable trade. >> but you would have done much better in stocks rather than what you would have gotten even from 340 to 1-7. warren was saying buy stocks instead of bonds then, you would have done better in stocks them, as well. >> i understand. but you also would have done well in buying that. >> 1.70, it's not going to basis points, is it, on a ten year? is it going below 1? >> i don't kno that it can. i mean, look how far we've traveled more than 40 basis points -- >> you could still buy -- >> there would be a very, you know, interesting set of circumstances that i don't understand -- because i think we are sort of at an equilibrium. >> lou -- >> we're sort of in a flight to quantity. there is not the alternatives
6:31 am
for the treasuries for -- >> well, hold on. you could buy nearly one-third of the s&p 500 and get a better yield than the ten-year. and then you still have the hope for underlying asset appreciate because you believe you're buying quality stocks that you're not worried about going out of business. >> that being as it may, the idea of the flight to quantity is ever since the recession began, like the mortgage-backed securities started to crumble amid 2007, the natural buyers of treasuries such as pension funds or insurance companies or foreign accounts, they have increased their holdings of treasuries dramatically. they have gone from holding 62% of that public debt to 72% of public debt at a time when the treasury increased by 25%. they've increased quite a bit. interestingly, and this is just sort of an aside, the fed back in the mid 2007 when they we first heard of those bear stearns funds owned 15.9% of
6:32 am
treasuries. >> but a 3% yield on the s&p, you know, in like a 2009 situation, that 3% is gone the first day. then you lose 37% more over the next six months or something. i mean, if you have a market break, it might be bad and the h11n1 swine flu -- >> you were saying that's tess not necessarily why people wouldn't buy those -- >> but that's why you don't get 1100% invested. he keep the cash on the side and drive on. >> the 3% yield, one day that's gone. you think, well, i have ta back up for a year. >> then the stock falls and it's over. >> i'm thinking you're holding for 10 or 20 years. >> buy and hold used to work, but people think it doesn't. >> within the market, too. if you look at consumer stap staples -- >> i agree, but utility res 19 times earnings.
6:33 am
>> there are times when you want a return of your principal, not a return on, right? now i don't think is the time. >> we have to find the right cocktail. thank you for coming in this morning, lou. thank you for coming in, sir. i appreciate it. >> we'll see you soon, guys. coming, you've probably heard of them now, but do you understand bitcoins? should you be nervous about using the digital currency? regulator bart shillon says yes. he'll explain next. [ male announcer ] with wells fargo advisors envision planning process,
6:34 am
it's easy to follow the progress you're making toward all your financial goals. a quick glance, and you can see if you're on track. when the conversation turns to knowing where you stand, turn to us. wells fargo advisors. sorry to interrupt, i just want to say, i combined home and auto with state farm, saved 760 bucks. love this guy. okay, does it bother anybody else that the mime is talking? frrreeeeaky! [ male announcer ] bundle home and auto and you could save 760 bucks. alright, mama, let's get going. [ yawns ] naptime is calling my name. [ male announcer ] get to a better state. state farm. [ penélope ] i found the best cafe in the world.
6:35 am
nespresso. where there is an espresso to match my every mood. ♪ where just one touch creates the perfect coffee. where every cappuccino and latte is made at home. and where i can have exactly what i desire. ♪ nespresso. what else? by going low. tdd# 1-800-345-2550 like offering schwab etfs tdd# 1-800-345-2550 with the lowest operating expenses tdd# 1-800-345-2550 in their respective lipper categories -- tdd# 1-800-345-2550 lower than ishares tdd# 1-800-345-2550 and vanguard. tdd# 1-800-345-2550 and with all our etfs commission-free tdd# 1-800-345-2550 when traded online in a schwab account, tdd# 1-800-345-2550
6:36 am
it leaves our investors with more money to invest. tdd# 1-800-345-2550 something they've come to count on with us. tdd# 1-800-345-2550 so as investors continue to set their portfolio goals high, tdd# 1-800-345-2550 we help keep their costs of investing low. tdd# 1-800-345-2550 give us a call and open an account today. tdd# 1-800-345-2550 carefully consider prospectus information, including tdd# 1-800-345-2550 investment objectives, risks, charges, and expenses. tdd# 1-800-345-2550 request a prospectus by calling schwab at 800-435-4000. tdd# 1-800-345-2550 read it carefully before investing. tdd# 1-800-345-2550 fees and expenses apply. tdd# 1-800-345-2550 investing involves risks, including loss of principal. tdd# 1-800-345-2550
6:37 am
welcome back to the top. u.s. regulators considering currency for the bitcoin. bart chilton joins us. your ears were burning earlier. i see why you have that. you get so much play, you're a james bond villain. >> the hair? >> yeah. >> i was real -- you've got to watch out for the freak flag stuff here. that's unpatriotic to criticize a freak flag. >> a what? >> the first amendment, that was long ago. that was from a buffalo springfield song, wasn't it? >> yeah, yeah, almost cut my hair. >> anyway, bart, this is -- i don't know why this wouldn't make sense. if you're going to regulate anything, i figured you could do
6:38 am
this. how big is the market right now? if something bad were to happen, you'd get blamed for not regulating it. how big is it right now? >> well, it's huge. i don't have the exact numbers, but the volatility in it is amazing. i mean, it's gone up to where one bitcoin is worth 266 bucks. it's gone back down to 50. it's about 11 right now. and i'm not a hundred percent saying we should regulate it, but if anybody is going to, it seems like it's something that we should consider. it's being potentially used for guns and money and nobody is looking after it. >> that would be a different set of regulations, right? it's one thing -- i don't think it's systemic in any way? does the bitcoin represent a systemic risk? >> it might not represent a systemic risk, but that's not the criteria for us to regulate it. >> what is the criteria? >> if it is a commodity used as a derivative. so if somebody is buying it and holding it for the future, then it's something that we at least
6:39 am
could regulate squarely. >> wait, wait, i hold cash in my banking account for the future. i buy a house and hold it for the future. do you regulate that, too? >> if you're buying a derivative on it in the future, absolutely we do. and you are regulated by banking regulators and you are sort of glad you are. >> i want to talk about the practical implications of regulating bitcoin at all. my understanding is a couple of things. first, the maximum number of bitcoins that can ever exist on the planet is 21 million bitcoins. the whole thing is done to the extent that viewers don't understand this. i had to look it up to understand this. i asked paul volcker what he thought of bitcoins and he said he didn't even know what a bitcoin was. nobody even really knows who create today bitcoin. it's one of those things, it's almost like napster in that it seems to me like one of those interesting that can't be
6:40 am
regulated. you can want to regulate it all you want, but i'm a little worried that virtual currencies isn't something that from a practical sense you'll be able to. >> well, first of all, and great interview, by the way, i look forward to seeing more of it with chairman volcker. yakomoto spoefly introduced the bitcoin. they're traded all over the world. it's a cyber currency, so how do we get to it? and the answer, if we wanted to -- and the answer is that if it is traded in u.s. commerce, if it's traded on our computers, we could potentially oversee it. now, again, we have to look at the facts and circumstances, but people are actually losing real money on this. i mean, i read a thing on -- >> but that's there, isn't it? you think they don't know that? that's a risk. >> it doesn't matter. they'll put -- >> it is a risk they bare, but it seems to me there is a true
6:41 am
debtal regulation that we may not to insert. if things aren't clear, you don't want to be to just a house of cards that can impact people. it's nos including whether it's systemic. >> you cannot get into bitcoin without knowing that it is all you. page after page, it tells you there is no backup. you better save the information. you got nothing in the future. anything. you'd have to be an idiot not to know how much risk you're bearing if you purchase the -- >> my worry is it's not just bitcoin. on facebook now i think you can buy bucks. everyone is getting these sort of virtual currencies to use to buy certain things. so this isn't just an issue of bitcoin. >> do you want to regulate zi zinga, as well? >> first of all, i was the guy who fought against regulating movie futures years ago because i thought it was gam
6:42 am
knowledging. so i don't want to regulate everything under the sun. if you guys want to be a shil for the financial industry and support a shadow currency -- drugs and money with, have a party, man. my job is a regulator and i'm going look after it. >> i like wa you're doing. you're going like this. you're not -- you're just going, bitcoin. i'm not doing anything yet, but i'm watching you. i'm watching you. >> i'm looking at it. >> i'm looking and watching it, right? >> i don't know that we have for overregulating things. >> object. give me the you -- guy stuff. the next time you're up here, let us know. >> okay. see you guys. >> thank you for being a good sport, bart. coming up, the future of medicine. we're going to talk about it. on the front line, the issues before they become serious health problems. we have the ceo of siemens
6:43 am
health care north america. he's going to join us next. then if you're anything like me, a morning isn't complete without a little juicing. the father of the home juice craze joins us in studio to help get our day started right. [ female announcer ] what if the next big thing, isn't a thing at all? it's lots of things. all waking up. ♪ becoming part of the global phenomenon we call the internet of everything. ♪
6:44 am
trees will talk to networks will talk to scientists about climate change. cars will talk to road sensors will talk to stoplights about traffic efficiency. the ambulance will talk to patient records will talk to doctors about saving lives. it's going to be amazing. and exciting. and maybe, most remarkably, not that far away. the next big thing? we're going to wake the world up. ♪ and watch, with eyes wide, as it gets to work. ♪ cisco. tomorrow starts here. at bny mellon, our business is investments. cisco. managing them, moving them, making them work. we oversee 20% of the world's financial assets. and that gives us scale and insight no one else has. investment management combined with investment servicing.
6:45 am
bringing the power of investments to people's lives. invested in the world. bny mellon.
6:46 am
in a recent survey, americans were polled on medical care. joining us now to talk about the future of the u.s. health care system is dr. gregory sorensen. doctor, good to have you on here. >> thanks for having me on, michelle. good fan of the show. i'm especially excited to talk to you today about our survey
6:47 am
results. >> i know you want to talk about the survey results. quite frankly, it looks like talking about the excise tax. it's a big issue, isn't it? i don't think most people realize that most of the time in america we tax profits, but for some reason in health care reform, it put an excise tax on revenue for the industry. that's a socialist streams did to oil companies back in the day. >> well, you know, we're not at all happy about the medical device tax, that's for sure. and you're right, it is a straight up the top tax just like the old liquor taxes on excises centuries ago. and it does have a tremendous impact on our business. and it inhibits our ability to invest in futures r&d. so, yes, it is a big negative for us. >> can you give me an example? what do you think it's hurting in terms of the innovation that we could be receiving if not? >> well, you know, the president announced this big initiative
6:48 am
about brain imaging. at siemens, we make the best brain imaging there is. this tax, it's a little like if we were interested in sequencing the human gee nom, putting a tax on super computers. >> we have just lost that signal that is really upsetting. >> we'll get it back. >> greg, thanks so much for joining us. >> well, let's see. we're efforting. >> we're estimating? >> yeah. you know better than to give up on that. >> greg, go ahead. >> oh, no problem. it sounds like somebody really doesn't want to hear me talk about this. what i was saying is there's this big brain imaging initiati initiative. and to put a tax on the machines that help us do the imaging, you could liken that to say we want to humanize the human genome. let's put a tax on super computers. it's blocking the tools that are exactly what you need in order to get the answers. >> you make a good point.
6:49 am
doctor, the president has an initiative. the brain initiative for trying to understand the next great frontier, eventually hopefully would be the brain, neuroscience. >> the unified theory of the brain. >> so much we don't know and it's totally dependant on imaging. so it is jurntd cutting his own initiative. >> i scanned my own brain and got one of those 3d printers. and i prohibitsed out my brain. my teenagers didn't think it was actually there. >> is there any hope of appeal of this medical device tax? >> you know, there is some hope. we saw the 79 votes in favor in the senate. the house has already voted once to overturn.
6:50 am
i think there are some misconceptions about where it came from and what its value is. so we are hopeful. >> doctor, thank you so much joining us this morning. we appreciate it. >> thanks for having me on. coming up, it's time treats the big business of it all. the recent increase in cafeteria prices is not cool. when you vote for flo, we'll have discounts. ice-cream discounts. multi-cookie discounts. pizza loyalty discounts! [ kids chanting "flo!" ] i also have some great ideas on car insurance. [ silence ] finding you discounts since back in the day. call or click today. i like her. are you still sleeping? just wanted to check and make sure that we were on schedule.
6:51 am
the first technology of its kind... mom and dad, i have great news. is now providing answers families need. siemens. answers. and never back down. who believe the american dream doesn't just happen, it's something you have to work for. ♪ we're for those kinds of people. because we're that kind of airline. and we never stop looking for a better way. it's how we've grown into america's largest domestic airline. we are southwest. welcome aboard.
6:52 am
6:53 am
welcome back to "squawk".
6:54 am
for more than two decades, our next guest has been the face of juicing. live foods live bodies. how to achieve lasting health. joining us now the father of juicing himself. 90 years young. >> hanging in there. >> a function of drinking all of this. how much do you have every day? >> i try to have three 8-ounce glasses. the main thing is put the juice in my body and then it goes to my cells. >> but you eat solid food as well? >> oh, yeah. especially things like raw spinach. i'm a voracious food eater. whatever is in season, i'm going to eat. cantaloupes especially. >> i'm almost 60. jay is 90.
6:55 am
we realize the more that we eat, we juice not a fruit juice. specifically green juices. they are going to keep us really healthy as we age. >> are you surprised by the success not just what you created bibi the entire juicing industry. it seems everybody is trying to juice one way or the other. >> you know, we have been doing this together 32 years. nobody believed in juicing back in the '80s. >> this is a new blender. >> make something. >> we should make something here. we're not the "today" show, but we try. let's make something. what do we have? >> let's do the one to save my life. carrot apple. >> this is not very loud. >> it will get a little louder. >> and this juicer is really like the best juicer you can buy. you can do amazing greens.
6:56 am
>> isn't it a pain in the neck? >> no. oh, my gosh, no. >> you know what's a pain in the neck? cooking food. >> yes, exactly. >> so the tradeoff, you're saying. >> yes. it's only three parts. kohl's is having a special. you can see the juicer there. >> over here we have almond milk. what's this white drink over here? >> fresh almond milk with carrots and water. it's amazing. this juicer can do that too. >> this has been great. don't forget about our book. >> real quick, can i use any blender? we want to sell these for you. >> this is a juicer. >> no. i blender cannot make these at
6:57 am
all. >> you have to separate the juices. >> we have to run. many canning up in the next hour, are you ready to follow warren rp buffet's advice? buy stocks, beware bonds. [ male announcer ] with free package pickup from the united states postal service a budding artist can ship like a big business. just go online to pay, print
6:58 am
and have your packages picked up for free. we'll do the rest. ♪ made a retirement plan, they considered all her assets, even those held elsewhere, giving her the confidence to pursue all her goals. when you want a financial advisor who sees the whole picture, turn to us. wells fargo advisors. nespresso. where there is an espresso to match my every mood. ♪ where just one touch creates the perfect coffee. where every cappuccino and latte is made at home. and where i can have exactly what i desire. ♪ nespresso. what else?
6:59 am
7:00 am
>> it's the classic slug fest. oracle of omaha thinks there's only one winner. >> i like only stocks. i do not like only bonds. bonds are terrible investments now. >> we put warren's prediction to the test. you decide which is a better investment right now. the possibility of peak oil. a new report suggesting a tipping point could come much sooner than you think. plus, a high flyer in the
7:01 am
cloud arena. we talk growth prospects as more and more content moves to the web. how is he positioning this company to take advantage as the second hour of "squawk box" starts right now. good morning and welcome to "squawk box" here on cnbc. cheers. i'm drinking juice from our last hour. the futures right now, take a look. dow will open 36 higher. nasdaq up 4.5 points. s&p up 3 points. let's get you through the morning headlines. nikkei jumped 14,000 for the very first time in five years. up 3.6% overnight. and the first day of trading in the golden week hole day. also, microsoft is overhauling windows 8 system. confusion over windows 8 has been blamed for contributing to
7:02 am
a record pc sales slump. bill gates talked about pcs and tablets and windows 8 on "squawk box" yesterday. >> it really is revolutionary in that it takes the benefits of the tablet and benefits of the pc and it's able to support both of those. so surface, surface pro, you have that portability of the tablet. but the richness in terms of the keyboard, microsoft office of the pc. pcs are a big market. it's going to be harder and harder to distinguish products whether they are tablets or pcs. with windows 8 microsoft is trying to gain share in what has been dominated by the ipad type device. >> walmart regained the top spot. the retail giant topped the list seven times in the last 10 years. joe, you have to get a drink of this stuff. it's pretty good. >> i'm going to.
7:03 am
just give me a second. the street is going to be watching for disney's results after the bell today. analysts are looking for the entertainment giant to earn 77 cents a share. that will be up from 58 cents. revenue is projected to be $10.5 billion for the quarter. shares of disney are up nearly 50% over the past 52 weeks and are currently near an all time high. be sure to watch the exclusive interview at 4:10 eastern. >> is he also involved in a galactic deal with ea. looking to use the force to make some money. the world's second largest video game publisher striking a deal with disney for games based on star wars characters. they will develop games for mobile devices, pcs and consoles. they bought lucas films last year. after hours trading on the news. they are up more than 25% so far
7:04 am
this year. >> take a look. take a listen. >> i can't win this morning. i was ad libbing if you can believe that. >> that's trouble. >> that is trouble. >> the senate passing a bill aimed at ending tax-free shipping on the internet. the marketplace fairness act would give states the power to require retailers with sales over $1 million to collect state and local sales tax. the bill moves to the house where internet retailers and conservatives are lobbying against the tax. bill gates gave us his thoughts on the proposed bill. >> it's very unfair to the person who has got a physical store, not only do they have those expenses but that the
7:05 am
other person isn't collecting the sales tax. so this is -- it's a good thing for state budgets. it's a good thing for fairness in terms of the competitive framework. >> currently retailers can only be required to collect sales tax in the state where they have some sort of physical presence. joe? >> i'm going back and forth. i'm trying to figure out where i stand on this, andrew. >> there's no question. you've got to do it. >> the only thing that would give me pause is that it curtails some of the entrepreneurial startups. and it's going to be really hard for each company to determine and put in a program to make sure they charge the right amount of sales tax. >> ten years ago i might have agreed with you. you want to get the internet up and running. the internet is now up and running. by the way, the internet startups are in business with the guys. best buy is online.
7:06 am
everybody is everything. apple is online. >> what's the biggest benefit for the states? >> it benefits -- it's a fairness argument. and i know you don't always love fairness. it's a fairness argument. the idea of collecting it. five companies are out there that literally it's a turnkey thing. you buy the software. it is a technological problem. it is solvable in two seconds. >> people are this anti tax, tax of any kind. >> that's me. >> well, no. there are people against it. >> steve radner is here. >> equity markets march higher. warren buffett makes it clear he thinks stocks are the place to be, that bond investments are just plain terrible right now. >> i would have productive assets. i would favor those enormously now. and i think it's silly to have some ratio like 30%, 40%, 50% in
7:07 am
bonds. they're terrible investments now. bonds are priced artificially. you have some guy buying $85 billion a month. that will change at some point. when it changes, people could lose a lot of money if they're in long-term bonds. >> obviously warren buffett is not unique, alone or early on this than the five-year thing. >> people have been talking about bonds. >> but it really ramped up three, four years ago. where at the beginning of the year on liesman's survey, rates were headed up. they never did go up. joining us now is head of global credit strategy at barclays new york. >> he's not related to the other. >> president of fahr miller in
7:08 am
washington. investing in the american dream. >> look at that picture. >> and steven radner of willett advisers. long time investment banker. let me start with you, brad. you figure this is still something to not completely ignore. why? >> look, if you take his comments and see if it's more upside. you're not going to get more than 10%. if you look a lot risk/return, risk/reward. and bond markets with spread, we spend our time, on you have a lot of spread to insulate from any rate move. that's clearly what buffett is most concerned about. >> you want to stay short, don't you? >> yeah. the duration of maturity of
7:09 am
corporate bonds, the average duration is seven years in a high yield product. >> you would even go seven? >> if you have enough spread to compensate, investment grade bonds are 130 basis points on average. if you think it's 200 points, 300 points, yeah, maybe you would be a little more concerned. 50100 basis points, which is what most people are thinking about, you will be insulated enough. >> you don't think we could be back 4%, 5% in seven years? >> i think over the course of seven years. if you think the next 6 to 12 month inment i don't think you're getting there. >> spread changes too. if you buy 130 basis points over a 60 basis points treasury, that spread moves up. it might contract a little bit. when you get a dramatic move up, you will lose a fair amount of money in corporate bond and even
7:10 am
buying spread. >> we don't think going into single a bonds, aa makes a lot of sense. we go down quality a little bit into bbb where you are getting mid to high 100s. you have to look at high yield where you are getting 400 basis points a spread. if rates move to 100 basis points. >> there's a big danger, don't you think, for older folks and retirees who listen and see, gee, i should start buying junk bonds at these levels. we don't want agnes and eddie in their 80s going out and buying junk. >> what about agnes and eddie? >> i know, i know. >> we get the point. >> i think the advice there, you know, if you look, they're making a call on the economy much more so than making a call on rates.
7:11 am
so even for them, right, junk bond market has an average duration of four years. it is not at this point. we are seeing people more concerned about rates but want a little extra income. there have been massive in flows. it is secured. it is in between the two as far as credit quality. maybe that's where the older generation goes for a little bit extra yield. >> high yield probably not the place. >> steven, for people that say, oh, buy 4%, it could be gone in the first two days of a selloff. maybe it does make sense. if you need a certain portfolio, fixed income. could you still do it? >> you probably could still do it. i'm in the buffett camp.
7:12 am
i think they're a bad bet. rates are going up. as far as spreads are concerned, spreads are reasonable now. have been in the past.s th they can widen. they are not free from risk. if you want to buy short-term bonds or treasuries, sure. you're not going to make any income. >> all right. i think this is all kind of -- it was obvious what warren was saying. all of this was kind of obvious. that's your business. there are people that are going to want -- >> i have a question for steve. steve manages money for mayor bloomberg. >> right. >> right now, do you have a big bond portfolio at all? >> no. we have basic live no bonds. >> no bonds. >> except a bit of stuff in the competitive area. hive-grade bonds, we have cash.
7:13 am
look, we're broadly speaking in the buffett school which is over the long term. we are the ultimate long-term investors. equities will out perform bonds. >> you're leaving? did you ever turn bullish? >> i have been consistently bullish, cautiously optimistic all my life. my international, have your dividends, i can still collect that with stocks falling. >> that's what i said earlier. why wouldn't you buy that? >> exactly. if you have something driving the value and building the value of that company, over time that will still bear out.
7:14 am
you don't just buy the stock that's with the dividend. >> it's presented as a no-brainer. if there is a big market break it is not going to keep you from losing money. >> you're going to lose money. but you've got that dividend. >> you do. >> 3% on johnson & johnson. aaa balance sheet. there's a multinational company. better than u.s. government. johnson & johnson. it's kind of sad. 3%. >> okay. michael, i'll see you. >> congratulations on the book. >> american flag on it. >> very patriotic. >> you look like the governor of virginia or something. casting right here.
7:15 am
all right. comments or questions about anything you see on "squawk", e-mail us. akamai is positioning itself to benefit. ceo up next. everyone's retirement dream is different; how we get there is not. we're americans. we work. we plan. ameriprise advisors can help you like they've helped millions of others. to help you retire your way, with confidence. ♪ that's what ameriprise financial does. that's what they can do with you. let's get to work. ameriprise financial. more within reach.
7:16 am
it's lots of things. all waking up. connecting to the global phenomenon we call the internet of everything. ♪ it's going to be amazing. and exciting. and maybe, most remarkably, not that far away. we're going to wake the world up. and watch, with eyes wide, as it gets to work. cisco. tomorrow starts here.
7:17 am
7:18 am
nasdaq looked really strong yesterday. up 32. >> we have another tech company to talk b.akamai jumping 30% in the last month with earnings prospects brightening. joining us now on our ceo call of akamai. stock up 40% in the last 52 weeks. for those in the audience who don't know enough about this company, they are the folks that actually get you the youtube videos and all the actual stuff that you see faster than you otherwise would. is that a fair way to explain in
7:19 am
one sentence? >> we make the web be faster and more secure. >> look, i assume this is just a growth story forever at this rate. one of the questions -- only because the internet keeps growing, where are you seeing the biggest growth right now? >> making the web be secure. a lot of attacks recently against major commercial web sites and banks, for example, north america. we can prevent them from impacting the website, which makes the web be a safer environment. we have seen growth making the web be faster. people expect it to work like tv. you click and it shows up on your screen. we have now capabilities. >> where are you seeing the hacking coming from?
7:20 am
the traffic is coming to you. you see the big hacking attacks, is it all coming from china? what are you seeing? >> there are a lot of bots in china, the computers that somebody has compromised to attack a website. actually, the second largest source of the bots is the united states. people's computers at home that don't have the latest defenses and someone has gotten in there and taken control of the machine and used it to do bad things. >> what did you make 15 years ago? servers? you were in the whole buildout of the internet. >> we are a very similar company to where we started when we started at m.i.t. 15 years ago. we made the web be faster. >> servers? what were you making back then? >> we made a service. we bought computer servers and
7:21 am
spread them all over the world, thousands of places. what we made was the software that operates that network of computers to make web sites faster and more secure. >> do you have servers in china? >> yes, we do. >> what's been your experience with that? >> china is a complicated environment to do content delivery. but china is a very important market for our customers because a lot of consumers in china. so we deliver a lot of traffic on behalf of customers around the world that want access to chinese citizens and make it be a fast experience in china. >> are those servers being exploited by the government in any way? >> we have a good relationship with the government in china. they are not exploiting our servers. we deliver content for customers in china on a global basis. it's a natural relationship. it's not one where the chinese government is doing strange things. >> you're one of those stocks
7:22 am
that was so hot back in 1998, 1999, right? i remember those days. >> how low did it go, do we know? >> do we have a 20-year chart? >> we got up to $50, and down to 50 cents. we had quite a ride down. >> it's not 20-year, but wow. >> if you paid a 2% dividend it wouldn't have been so bad. >> if you bought the stock at 50 cents that would have been good. >> your market cap had to have been like 100 billion dollars. >> we had $35 million market cap at the peak. >> did you believe it? >> we believed in the future of the company. and just look out just a little bit for us for one second.
7:23 am
given all the mobile stuff -- actually, you know what, i'm being told you appreciate this on technology. i'm told we actually have to go. 15 hard. tom, thank you for joining us this morning. we would love having you back. >> great having you on. >> coming up, one of the members of the gang of six getting a chance to link with the president. stors could lose tens of thousands of dollars in hidden fees on their 401(k)s?! go to e-trade and roll over your old 401(k)s to a new e-trade retirement account. none of them charge annual fees and all of them offer low cost investments. e-trade. less for us. more for you. and all of them offer low cost investments. all stations come over to mithis is for real this time. step seven point two one two. verify and lock. command is locked. five seconds. three, two, one. standing by for capture. the most innovative software on the planet...
7:24 am
dragon is captured. is connecting today's leading companies to places beyond it. siemens. answers. nespresso. where there is an espresso to match my every mood. ♪ where just one touch creates the perfect coffee. where every cappuccino and latte is made at home. and where i can have exactly what i desire. ♪ nespresso. what else? governor of getting it done. you know how to dance...
7:25 am
with a deadline. 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. this is awesome. [ male announcer ] yes, it is, business pro. yes, it is. go national. go like a pro.
7:26 am
u.s. senator khapbd list. that wasn't him. that was bill murray. chambliss hit a hole in one playing a round of golf with the president yesterday. senators were playing at andrews air force base where i don't think they ever have to wait for a shot. the press secretary said the bipartisan round was in keeping with lawmakers of both companies. chambliss is part of the gang of
7:27 am
six. ranking of golfing washingtonians he was ranked two. 7.4 index. >> there's no video of it. i don't believe it. do we not have a video of this. >> it's not tv. it's not televised. >> we have to go. hold that thought. >> we'll do it right after the break. coming up, an outfor currencies. steve's thought. could peak oil come sooner. citi has a new report. we went out and asked people a simple question: how old is the oldest person you've known? we gave people a sticker and had them show us. we learned a lot of us have known someone who's lived well into their 90s. and that's a great thing. but even though we're living longer, one thing that hasn't changed: the official retirement age. ♪ the question is how do you make sure you have the money you need
7:28 am
to enjoy all of these years. ♪
7:29 am
7:30 am
welcome back to "squawk box". in the headlines this morning, california jeweler ryan shaw has agreed to plead guilty to commit securities fraud. he took information from a trader in exchange for expensive gifts and cash. he will continue to cooperate are prosecutors. you give away a rolex this is
7:31 am
what answer. eli lily ceo is taking a leave with a dilated aorta. australia central bank is the latest to drop interest rates. 2.75%. the move was made in an effort to boost economic growth. after that key interest rate cut from the rba. joe is chief market strategist at worldwide markets. thanks so much for being here. >> my pleasure. >> how is the yen going? >> it's going well. since summertime, 17%, 18% reduction against the euro and the dollar. i would say it's going very well. it's holding at 100. it's been almost four years since we have been to 100. it's going to be a great deal of market interest in blocking that
7:32 am
level and in currencies to go there. i would say it's going well. >> what do you do right now? >> for the time being, i would wait on it. it's not something -- you want to wait until it goes through 100. i don't think it depose far beyond 100. the market overshoots. probably between 105 and 110 once it finally breaks through 100. it is getting response in the japanese stock market. >> it had a huge move when it opened. >> everyone is on the same boat. we're in the central bank world. >> do you think -- i don't know if you think you can answer this question. have we finally arrived at the moment where japan is going to solve 20 years of deflation. nothing? >> i would say no. because the problems are not really currency problems. yes, the currency will will help these companies, the economy. it has already. you have much better profit
7:33 am
margins for the the margin. that is good. as far as the long-term structural problems, i don't see it as a currency solution. >> given this competitive devaluation that's going on around the world, where is the safe haven if you want a strong currency? >> it seems like who is the latest in the cue. we have been doing this three and a half years. >> did you miss the show? we had bart shilton on. >> i heard it on the radio coming in. >> the the regulation is an interesting topic but it's not topic. the dollar is the last in the cue. it is very late to the game. they haven't gotten their interest rates to zero yet.
7:34 am
so they will get there. they will have to figure out how to do massive qe like everyone else. so i would say the dollar. >> that makes sense. it's been that way for a while. when i hear about japan and the -- guys like kudlow, others will say that the worst thing david, you can do is lower the standard of living for each and every citizen. there's a time and place. this is the time and place for japan. no inflation for 20 years. you almost had to do this, didn't you? >> as joe said, it has to be coupled with structural reform. >> what do they need? >> looser labor markets. >> they're like europe in terms of labor. >> they don't take any immigration. they have a declining population.
7:35 am
one of the lowest birth rates in the world and declining population. >> paul volcker said i know how to fight inflation. fighting deflation -- >> very different. >> -- is seemingly hard to do, which is why bernanke is to terrified of of it. >> there is a certain amounted in europe as well. >> have you been to greece? a lot of deflation. >> i have not been to greece in two years. it's funny, though, especially with the european countries, the official statistics are all terrible. unemployment, economic growth, production. but the people in the countries manage better. there is a larger area of black market economy. i asked friends of mine in spain, how is it, i haven't been there in a couple years. they said, well, most people
7:36 am
manage to get by without the official sanctions. >> did you see the guy that sort of helped institute the euro said it's a failed experiment? five years from now, will there be a euro? >> i don't think so. it puts the economies in a natural -- what it tries to do, what it's doing is making the economies all equal. if cultures were all equal it would be a worthwhile endeavor. but it's not. >> you can see how valuable it is. greece cannot do that. >> they could do it internally. >> right. >> i agree with joe completely. you don't agree with me. let's just put that out there. >> it's a badly constructed
7:37 am
currency. i agree that it can't exist in its current form. >> they have to adjust. >> you think the euro will survive? >> i think it survives in a different form. i don't think they're going to be able to go backwards and just go back. we all remember e.r.m. days and all the devaluations. it was great for currency trading, great for the banks but wasn't functional for the economies. we now have a world system, financial system where money can flow so quickly that the people who were trading can flip it back and forth and the governments can't compete with that. >> so what does the euro look like? >> are they going to be able to come up with a two-level system? that would be the most logical thing to do? that has all sorts of unfortunates political, cultural implications. i think you end up with a smaller system. >> for sure. cyprus leaves for sure.
7:38 am
>> if you get 135, short the euro. >> absolutely. i've been saying this a while that the dollar right now is going to end up as the default stronger currency. only because what we're doing is now already in the market for a long, long time. and you have some newer things coming up, since as what the ecb is undoubtedly going to do. >> thanks so much for joining us. >> are you rocking out over there? >> no. ♪ i was walking through ringwood queen ♪ you haven't heard this? >> no. >> coming up protectsing america from a major cyber attack. go inside a lab where people keep america safe. joe continues to rock out. (announcer) scottrade knows our clients trade
7:39 am
and invest their own way. with scottrade's smart text, i can quickly understand my charts, and spend more time trading. their quick trade bar lets my account follow me online so i can react in real-time. plus, my local scottrade office is there to help. because they know i don't trade like everybody. i trade like me. i'm with scottrade. (announcer) scottrade. voted "best investment services company."
7:40 am
♪ (train horn) vo: wherever our trains go, the economy comes to life. norfolk southern. one line, infinite possibilities.
7:41 am
mal mart on the fortune's list. the world's largest retailer
7:42 am
strong growths. 469.2 billion. exxon mobil dropped to second spot with revenue of 449.9 billion but still the most profitable. an true? >> we had a little car story, recalls. general motors and bmw. g.m. recalling 38,000 malibu echoes buick lacrosse and regal sedans. g.m. says it knows of two trunk fires related to the issue. of course they're saying no injuries have been reported. bmw is recalling 45,000 3 series sedan. the passenger air bag may not inflate properly.
7:43 am
they all use passenger air bags made by the same japanese company. let's turn to our guest host steve radner. the one thing we haven't talked about so far is the swoon. michelle swooned when you came on the set today. >> michelle and i have a long history together. >> not long enough, though. >> friday was amazing in that the swoon worries, it was almost an instantaneous relief that we don't do it. >> in terms of the jobs numbers. >> right. >> it was extraordinary sitting there and watching them come across. >> did you see that one number? >> the revision for february. revision for february huge. revision for march was good. i felt the economy was slowing down. >> it was funny. i hadn't brought it up yet. but every time we got a bad number i heard sequester,
7:44 am
sequester. no one brought that up. after we had this great jobs numbers, i didn't hear from anyone. i forgot about that sequester. when you need it, you use it. when you don't need it, you don't use it. >> well, the stoerp of the sequester is not over yet. give it the year. >> we can still hope we really get screwed. >> we don't hope we get screwed. >> the the obama administration did. you almost said it even though you didn't try to. well, you know, it's not over yet. maybe it will still be really bad. >> no, i did not say that. >> are you hoping it will be bad? >> of course not. i am in the camp who think it will be in effect. >> 2% of spending? >> it's easy to say that. remember, it's not 2% of spending. the cuts were concentrated. >> congress wasn't going to cut
7:45 am
entitlements. >> they shelved an amendment that would have given a more surgical -- >> but within the same area of the budget. that relatively small area of the budget that does discretionary. cuts of 5%, 6%, 7%. >> i don't know. we don't know which side to blame on the entitlement stalemate. there's plenty of plame on both sides. >> on the whole situation on the budget and every other piece of legislation up there, there's enough blame on both sides. somebody has me yesterday whether we were going to get tax reform. >> an article said it's on its way back. i said to myself, okay, you're going to be fighting charities, local government, health care. you're fighting all these people who benefit from these deductions. then if you get past that, you have to agree with what to do with the revenues.
7:46 am
so you have another fight whether you lose to lower rates or to lower the deficit. so it's very hard to be optimistic about anything. >> this is the bill gates thing he's got here. this is the bill gates model. >> no. he has an apple, ipad. >> oh, i know. but it's a combined tablet. it's like. >> the keyboard. >> you have to pay extra for the keyboard. >> i have a different question for you. you worked with the president. you've been inside the room. you know who the players are. you've lived through all of this. we all know what's sensible. why can't the president get it done? >> what do you mean, we all know what's sensible? >> a lot of people want to have some sort of tax reform. people can probably agree on the outcomes of that. you flip to the revenue piece of it. to me there's a larger argument. you deal with negotiating.
7:47 am
as a banker or agent, your goal is to get people across the finish line. i'm sorry to say, the president has a tough time getting people across the finish line. what is that about? >> there's a tough time getting people across the finish line. we should play more golf, go threaten. with what exactly, i don't know. but the reality is we're living in a polarized world, more polarized congress on both sides. >> i think a lot of threats. there hasn't been a lot of honey. >> i don't know. there's another way to do it. it's not just vilifying. it's not every two years trying to gain advantage for taking back the house. >> you're arguing from the left. >> you saw the movie lincoln, right? >> yeah. >> you think the president can go to albany, bring back guys and bring them to washington and say go out -- >> and bribe everyone. >> bribe everybody you have to. here's air bag of money to go bribe these people with.
7:48 am
>> hold on. the fact that we're more polarized than everyone. george washington, alexander hamilton, they hated each other. politics in polarizing. >> blame it on redistricting. people that elect the people. and they are still representing a certain contingent. >> let me put the question differently. if you could whisper in the ear of the president in terms of how he should leave it would be what? >> well, i certainly would tell them to do more of this golf and dinner stuff. not necessarily because i think it's going to work. it certainly isn't going to hurt. but to take the issue off the table and be done with it. have people stop saying sit in the white house and start talking to people. see what you can do. i don't want to sound like debbie downer and pessimistic. remember, the fiscal cliff
7:49 am
showdown ended -- boehner could not deliver a majority of republicans to vote for raising taxes. >> both sides have a story on that. >> you know, that's spinning it on that side. other people say the president met with correct me if i am wrong that friday. >> just to hear you blanket statement saying it was because boehner couldn't deliver. >> if you were in congress and you were in favor of keeping taxes low, why not vote for a bill that made 99.3% of the bush tax cuts permanent? why would you not have voted for that? >> that's what eventually happened anyway. >> should we reveal why i give him a hard time? >> sexual attraction? >> you're in the g.m. debt exchange. you never once called me back. >> oh, michelle. >> i'll never forgive you for that. >> oh, forgive me. >> i had 20 different sources on
7:50 am
that story. >> and i wasn't allowed. >> there. >> yeah, right. you're not your own man? >> not when you're in the government, you're not. >> coming up next cybersecurity. keeping american safe. eamon? >> good morning, guys. yesterday we saw a dramatic new report out of the pentagon explicitly naming the chinese against u.s. defense and industrial targets. well, today we're inside the cyber incident. this is a focus for a company all excellis. we'll bring you all the details when we come back. >> tomorrow on "squawk box", reaction to quarterly numbers from disney. plus, two disruptors. ceos of guilt group and raidium
7:51 am
one. man: how did i get here? dumb luck? or good decisions? ones i've made. ones we've all made. about marriage. children. money. about tomorrow. here's to good decisions. who matters most to you says the most about you. at massmutual we're owned by our policyowners, and they matter most to us. ready to plan for your family's future? we'll help you get there. and never back down. who believe the american dream doesn't just happen, it's something you have to work for. ♪ we're for those kinds of people. because we're that kind of airline. and we never stop looking for a better way. it's how we've grown into america's largest domestic airline. we are southwest. welcome aboard.
7:52 am
nespresso. where there is an espresso to match my every mood. ♪ where just one touch creates the perfect coffee. where every cappuccino and latte is made at home. and where i can have exactly what i desire. ♪ nespresso. what else?
7:53 am
welcome back to "squawk". the first time pentagon is blaming china's military for cyber attacks. eamon joins us from rome. i wanted to say rome, but it's really rome, new york. >> right. we're in rome, new york. this is the cyber incident response center for defense
7:54 am
intelligence contractor they figure out some way to deal with them. as such, that puts them on the front lines of the war. take a look what the pentagon said. it is using its exploitation to support intelligence collection purchase it support u.s. national defense programs. now, guys, u.s. national defense programs, that's what they are doing right here. these guys are on the receiving end of the hacking attack from china and elsewhere around the world. they are seeing something where they don't necessarily have the advantage they had when they are in the military now that they are in the civilian sector and dealing with cyber war. take a listen. >> you have an adversary
7:55 am
adapting very, very quickly. and for most of us in our country, unlike most of my experience in the military where i had a clear technical advantage, there's lots of us in the united states that compare to the people that are coming at us don't have so much of a technical advantage. >> so, guys, what they talk about here when they talk about the enemy, they call them the add very sorry. they say they have a bit of a grudging respect. one person here is an expert said sometimes you see the attacks and they're really cool. they're evil but they're cool. >> when they talk about it, they say they have to respect for the creativity they see and the morphing attacks. you see one thing one day, another the next day.
7:56 am
and zero attacks, the first time they have ever been used. they hoard them. they use the zero day attack and people have never seen it before. >> the point you were making is how advanced they are. i guess we shouldn't be surprised. even though labor costs have been rising, they still have lots and lots of cheap labor. throw thousands of engineers at this stuff and just achieve it all day long when you have people you don't have to pay very much to do. >> that's one of the most interesting things i heard here. we talk about being veterans of the u.s. military. they're used to fighting with an advantage. even though this is a very robust facility here a lot of companies around the country don't have the technological expertise that the adversary has. for the first time americans are fighting on a battle field where
7:57 am
they don't have that advantage. >> okay. . eamon, thank you. see you later. new york attorney general looking to sue wells fargo and bank of america. >> and mayor cory booker talking about the economy and a possible run for the senate. [ male announcer ] here at optionsxpress, our clients really seem to appreciate our powerful, easy-to-use platform. no, thank you. we know you're always looking for the best fill price. and walk limit automatically tries to find it for you. just set your start and end price.
7:58 am
and let it do its thing. wow, more fan mail. hey ray, my uncle wanted to say thanks for idea hub. o well tell him i said you're welcome. he loves how he can click on it and get specific actionable trade ideas with their probabilities throughout the day. yea, and these ideas are across the board -- bullish, bearish and neutral. i think you need a bigger desk, pal. another one? traders love our trading patterns, now with options patterns. what's not to love? they see what others are trading -- like the day's top 10 options trades by volume -- and get ideas! yea i have an idea: how about trading that in for a salad? [ male announcer ] so come trade at the place that's all about options and futures. optionsxpress. open an account today and get a $150 amazon.com gift card when you call 1-888-280-0154 now. optionsxpress by charles schwab.
7:59 am
when you call 1-888-280-0154 now. ♪ ♪ the new blackberry z10 with blackberry hub and flick typing. built to keep you moving. see it in action at blackberry.com/z10
8:00 am
the state of new york suing wells fargo and bank of america for violating the national mortgage settlement. new york attorney general joins us to explain the state's argument. jobs, technology, immigration reform. cory booker joins to us tell us what they need to spur job growth >> and dodd/frank from bill to law. ♪ it's a long journey to the capitol city ♪ behind the scenes look at the back room deals that pave the way for sweeping financial reform. third hour of "squawk box" starts right now.
8:01 am
welcome back to "squawk box". first in business worldwide. becky quick is obviously off today. probably in transit back from omaha. steve ratner, cnbc contributor. more from steve in just a second. first, michelle has your morning headlines. >> let's start with the markets this morning and show you what's going on with u.s. equity futures. a positive open. dow opens higher by 36 points. tuesday has been a good day of the week for the polls. dow up for 16 consecutive tuesdays. this is the first time in history the index posted such a tuesday streak. among the test for the u.s. markets today, a couple of economic stats and earnings reports. compared to recent days, it's a light schedule. start with the economy. labor department releases job openings and labor turnover survey for march, 10:00 a.m. eastern time. the fed is scheduled to release
8:02 am
consumer credit data. warren buffett offering his economic outlook on "squawk box" yesterday. in terms of our business, we have 70 plus direct and a lot more indirect, we have been seeing the same thing for four years, that's gradual improvement. we cut across the whole economy. so i think it's a pretty good view of what's going on. >> as or earnings, match walt disney after the bell. and disney ceo will be on cnbc discussing his company's results and outlook after the bell. >> and shares of microsoft today. the company planning to touch up windows 8. microsoft is addressing complaints and confusion that have been blamed for a deepening slump in pc sales the the tunup is being announced today.
8:03 am
won't be res leased until later this year. microsoft chairman bill gates talking about pcs, tablets and windows 8 yesterday. >> windows 8 is really revolutionary in that it takes the benefits of the tablet and benefits of the pc and it is able to support both of those. so if you have surface, surface pro, you have the portability of the tablet. buff the richness in terms of the keyboard. as you say, pcs are a big market. it's going to be harder and harder to distinguish products whether they are tablets or pcs with windows 8. microsoft is trying to gain share in what has been dominated by the ipad type device. >> one of our newsmakers. empire state suing wells fargo and bank of america or violating the nation's mortgage settlement. new york attorney general eric
8:04 am
schneiderman. thank you for joining us this morning. >> glad to be here. >> we see these headlines. there's been a lot of conversation about what's happened the past 24 hours given the suit that you are planning to bring. my question is whether you believe these banks, wells fargo, bank of america, and frankly we could add a whole host of banks that may have had problems the last couple of years. but specifically in this instance, do you believe these folks have made mistakes, or they are acting in bad faith and doing this on purpose? >> well, we don't actually have to meet a standard of proving bad faith. they have 304 different standards and deadlines that banks have to comply with. they have a legal obligation to comply. we found, and we have had only had our network of legal services providers and housing counselors up for six months. they were far out in front of
8:05 am
every other institution in terms of violations. there is a rule they agreed to within five days of getting an application they have to notify a home owner if there are deficiencies or missing documents. that home owner has 30 days to cure. they have to answer within 30 days yes or no to get a loan modification. they're just not doing it. this is something they agreed to. this is a breach of duty. and we're taking them to court. >> did you tell me about joyce hardaman? >> joyce was one of many, many complaint epbts. we spent some money up front. >> tell me about her and her husband. they are cited in your press release. >> they are people who are victims. they came to one of our legal services providers. they had been walking through and explaining their rights. in a situation where they might have otherwise given up they had been fighting for years to get a
8:06 am
loan modification. they have repeatedly been told their documents were missing. we heard many stories of this. >> they lived in their house for 35 years, right? >> i think 37. a long time. >> most mortgages are only 30 years long. when did they accumulate more debt? >> they were involved in getting induced into refinancing their mortgages during the period where 2003, 2004, five. you have millions of americans refinancing their mortgages. heavy aggressive marketing. >> it couldn't have been a refinancing. the mortgage would have been almost over at that point. they took money out probably. >> i don't know how much they took out. >> shouldn't you know that since that's in your press release. that's the item you cite as an example of why you're doing this. >> you use them as the example
8:07 am
why you need to take this action. >> we have 339 complaints of families like the hardens. this is not an isolated story. getting focus on the hardens distracts from the problem. in the last six months the group of homeowners have seen housing counselors. >> but the hardens bear -- say the banks bear salt of placement i give you that. do the hardens have any responsibility. >> you can make whatever argument. i don't know you know the facts. >> and you don't either apparently. >> the hardens were on hard times. he fell in. i know a little bit more about it. but the fact of the matter is we're talking about thousands of people who did this. furthermore, i'm talking about a clear-cut obligation. we're arking about a settlement
8:08 am
agreement where they legally obligated themselves to follow a specific set of rules. there were these nightmare skin narrows where people were getting checks returned. they were told to deliver documents three or four times. time is your enemy. you go further in debt. they agreed to stop that conduct. they have not stopped. we're taking them to court. it's that simple. >> what i want to understand about the violations, it goes to the culture and all the issues about lessons learned. it goes to good faith, bad faith. i accept on its faith. i'm trying to understand why you think it is happening. is it systemic where they have decided it's the cost of doing business and if we have to payan additional fine it's better than complying with the law? what do you think is happening here? >> i think the culture has to do with the culture of the banks.
8:09 am
i think they entered into this agreement. they had other legal obligations that should have prevented a lot of bad mortgage backed securities in the first place. they feel like they can get away with anything. law enforcement has not done a good job of saying you're subject to the same set of rules as everyone else. and we're going to go after you. this was well negotiated. hud secretary, folks at the department of justice did a good job. 304 separate specific obligations. you can't enter a contract. wells and bank of mark are tpafr far out in front. i'm suing on behalf of a new new yorkers. i think you will see more evidence of this. >> eric, a broader question for you. eric holder was testifying and suggested that our banking system is what he said, too big
8:10 am
to jail. do you agree with that? >> no. i think he was taken out of context. they don't agree with that. you cannot in america have one set of rules for every other business where capitalism works the way it's supposed and some institutions where it's not allowed to fail. it's anti-american. >> the flip side is a different one, which is when do we stop? meaning the banks have been taken to task the past five years. maybe for good reason. there's debates on all sides of that. but there's an argument made that at some point we have to let the wheels of the economy keep moving and the banking system to move forward. there's bad financial construct. the incentive to get more mortgages in no matter how bad they were is well documented. 7.4 trillion in home equity in the crash.
8:11 am
there has to be accountability. i grew up working -- >> sir, can i ask a quick question about the hardens again. >> let me finish. i grew up working in wall street as private sector lawyer for most of my career. i understand how business operates. what happened over the last decade is unpress debted. it convinced the american people that it is a casino. that offends me. we are working to correct that by saying if you enter less than a year ago you have to comply the rules. that's what we are seek to go convey. >> when did the hard times force the hardens to stop paying their mortgage? >> i don't recall off the top of my head what the timeline was with the hardens. i'm sure we can make the information available to you if you're fascinated with their life story. we had a pile of 339 complaints just like the hardens at the
8:12 am
press conference yesterday. we had to set up our own special forum. >> real quick, investors will care about the answer to this next question. are you going to bring cases against other firms? >> we have other investigations on. i can't tell you what's going to happen with them. as co-chair of a working group with my federal counterparts, sec, department of justice, u. s. attorneys' offices across the country are looking into these matters, as are my colleagues in other attorney general offices. until there is a global settlement, this is going to happen. >> thank you for joining us and explaining all of this. hope to continue the conversation with you. >> thank you very much. >> thank you. >> coming up, the friendly activist. cliff robbins will join us next to talk deal making and where to find value. later, newark, new jersey
8:13 am
mayor for be job growth on the garden state. take a look at the "squawk box" market indicator. are you still sleeping? just wanted to check and make sure that we were on schedule.
8:14 am
the first technology of its kind... mom and dad, i have great news. is now providing answers families need. siemens. answers.
8:15 am
8:16 am
welcome back. the world top hedge funds managers will be meeting tomorrow. joining us now to talk about the role of activist investors is cliff robbins, founder and ceo of blue harbor group, the friendly activist. what does that mean, the friendly activist? you never try to oust board members? >> over nine years we have never sued a company. we approach the management teams and tell us what our ideas are. if they want us on board, they will partner with us. >> and powers of persuasion just to make them do that? what if they don't tphpb hrpb? >> we bring ideas to the table. it's really about the quality of the conversation.
8:17 am
>> give me an ample. >> chico's is one of our largests. it is growing its business and improving its balance sheet. >> what do you think of the role of activists public, very public? eye horn came out with his short position. sometimes it works. what is to say that the investor knows more than the folks in the room. >> auto it's a different approach. sometimes management teams need to be pushed around or urged in a way to unlock value.
8:18 am
that's not our approach. it's also an effective approach. >> you are long-term investors. a lot of people are put under the activist category. the appearance is they are in it for the short-term. they are in it to move the needle for a day, week, month, whatever. they want to get in and out. do you worry about that? >> that's really not investing. it's hard to make money and permanently unlock value in a company with air short-term focus. and our approach is much like private equity investor. really we want companies to create unlocked value for the long term. >> what percentage are you interested in investing. you're done your work. you say i'm a friendly activist. what percent say okay, that's great. i don't want them or who knows
8:19 am
what. >> only a small portion, 20% or so that we meet with ultimately. there are a lot of reasons for that. >> some you are excited. how often are you excited? >> a good deal of the time. we spend time with companies that want to unlock value. if we spend the time. some of the best investments are companies we made years ago. we didn't have a good idea then but we kept the relationship up and it was more timely, or the price was right. >> any investment in jpmorgan? >> no. >> we're invested in companies in the $1 billion to $5 billion range. >> oh, that's your excuse.
8:20 am
>> that's where the best opportunities lie. it's the chairman -- it's the corporate governance question. as investors do you care if the ceo and chairman are the same person? >> i have a strong view on that. i believe they should be different people. almost always. >> how many that you invested in have a this structure. >> is it a prerequisite? >> i think it's good corporate governance. >> we did the same thing at chrysler. you need to have somebody to help the ceo. >> oh, gosh.
8:21 am
>> you have the european model growth rate, a lot of european models. >> one or two things that come out of europe that may be okay. >> the beatles. >> i don't know if you saw the compensation in the 6:00, 7:00 hour. how much do you care about compensation when you're thinking about an investment? >> i care a ton. a couple things are important to me. i want the ceo to have significant skin in the game. ceo and the top folks in the company. i want them to own stock and be in cented. that's very important ownership. and compensation should be a lined with stockholders. return on invested capital. >> the you're pleased if they make a lot of money. >> thrilled. >> is there a number that's too much? >> no. it was in the context -- >> you just heard what he said.
8:22 am
he's obviously saying no, there's not. >> there's not a number that's too much. >> there's a team of reasonableness. but the important thing is to have management aligned with stockholders so they're making the right decisions. >> no one needs that much money. >> thanks, cliff. >> $210,000 a year retirement. won't be many trips to martha's vineyard or hawaii. >> i'm thrilled to be selected to speak there. i'm interested in cancer care. >> all day tomorrow kit kelly will be there. so will cliff. coming up, newark, new jersey mayor expect to go run for senate next year. he will talk a lot of stuff at 8:40, technology, job growth. plus, michelle has a report on
8:23 am
economic freedom in cuba. >> that's an oxymoron. >> right, exactly. may not be with fidelity,r s but we can still help you see your big picture. with the fidelity guided portfolio summary, you choose which accounts to track and use fidelity's analytics to spot trends, gain insights, and figure out what you want to do next. all in one place. i'm meredith stoddard and i helped create the fidelity guided portfolio summary. it's one more innovative reason serious investors are choosing fidelity. now get 200 free trades when you open an account. [ penélope ] i found the best cafe in the world.
8:24 am
nespresso. where there is an espresso to match my every mood. ♪ where just one touch creates the perfect coffee. where every cappuccino and latte is made at home. and where i can have exactly what i desire. ♪ nespresso. what else? ♪ the math of retirement is different today.ek. money has to last longer. i don't want to pour over pie charts all day. i want to travel, and i want the income to do it. ishares incomes etfs. low cost and diversified. find out why nine out of ten large professional investors choose ishares for their etfs. ishares by blackrock. call 1-800-ishares for a prospectus, which includes
8:25 am
investment objectives, risks, charges and expenses. read and consider it carefully before investing. risk includes possible loss of principal. welcome back to "squawk box". making headlines, cuban bloggers talking to cnbc about the economic freedom at home.
8:26 am
they have allowed people to travel. the bloggers have been able to come to the united states. they have been asked a lot of questions about what's going on in cuba. i wanted to ask about the power to vote, express themselves, what do they know about capitalism, et cetera. and there you see them. they are so well spoken. >> there are people that saw that. it hasn't been that long. people are still around that were there precast troe. >> and yani sanchez at one point holds up a u.s. b stick. and said some day when a monument is built to cuba it will be dedicated to the u.s.
8:27 am
they have pseudo internet. they copy stuff whenever they can get a chance, hand it off to each other. >> there will be elites that end up not understanding. people from russia, cuba. they are much more in tune with the benefits of capitalism. beyonce is going down there. >> the inside story on how the dodd/frank bill really became law. tdd#: 1-800-345-2550 markets on the rise. tdd#: 1-800-345-2550 companies breaking through. tdd#: 1-800-345-2550 endless possibilities. tdd#: 1-800-345-2550 with schwab, i search the globe for the big movers. tdd#: 1-800-345-2550 i can trade in 30 different markets tdd#: 1-800-345-2550 to help me seize opportunities, tdd#: 1-800-345-2550 potentially better returns and new ways to diversify. tdd#: 1-800-345-2550 to get an edge, i use schwab's global research. tdd#: 1-800-345-2550 they give me equity ratings on foreign stocks tdd#: 1-800-345-2550 based on things like fundamentals, tdd#: 1-800-345-2550 momentum and risk.
8:28 am
tdd#: 1-800-345-2550 i also have access to independent firms tdd#: 1-800-345-2550 like ned davis research and economist intelligence unit. tdd#: 1-800-345-2550 and with my schwab global account, tdd#: 1-800-345-2550 i can trade directly online in top markets tdd#: 1-800-345-2550 in their local currencies-- when the markets are open. tdd#: 1-800-345-2550 plus, their global specialists are on call around the clock. tdd#: 1-800-345-2550 there's a world of winners out there. tdd#: 1-800-345-2550 and now i have a better shot at finding them. tdd#: 1-800-345-2550 now get our best global offer! tdd#: 1-800-345-2550 trade commission-free online through september 2013 tdd#: 1-800-345-2550 when you open a schwab global account. tdd#: 1-800-345-2550 call 1-800-264-3010. [ agent smith ] i've found software that intrigues me. it appears it's an agent of good. ♪ [ agent smith ] ge software connects patients to nurses to the right machines while dramatically reducing waiting time. [ telephone ringing ] now a waiting room is just a ro [ static warbles ]
8:29 am
8:30 am
welcome back to "squawk box". stocks on the move this morning. the big one, shares of officemax are jumping. even though the retailer reported lower than expected first quarter products. investors focused on 1.50 per share special dividend declared by office max who is planning to merge with office depot. shares of fossil are also higher this morning. $1.10 per share. 13 cents above estimates. sales exceeded street estimates. they made a nice watch. ive saw an ad for it.
8:31 am
hsbc said first quarter profit came in $8.4 billion, double from the year earlier. >> the dodd/frank financial reform bill was signed into law nearly three years ago. but we're learning about the closed door negotiations that made the law possible. steve liesman joins us now with more hi, steve. >> you remember we covered every twist and turn of this debate. >> right here on "squawk box". all the major players on shelby, corker, barney frank. now comes bob kaiser with the rest of the story. for his new book and act of congress, he was given unprecedented behind the scenes access to chris dodd and barney frank and all the major players at the unbelievable horse trading, successes and many failure that built this into law. thank you for joining us, bob. >> thank you. >> the first horse trade i read about in the book, something that got to the community bankers and traded a billion and
8:32 am
a half of deposit insurance money. >> it's a great story. camden fine president of the community bankers association. really sharp lobbyist. a guy from missouri, whose father was a personal friend of harry truman. and barney frank know each other for a long time. barney makes a speech at the press club in the spring of '09 inviting small banks to participate in the process. fein picks it up. thanks him. they start back channel. ends up in frank's office. frank said i need you. cam, let's make a deal. they make a deal. fein will keep it neutral on the consumer protection agency. and frank will embrace an
8:33 am
amendment to change the formula for fdic payments. change it in a way that saves the community banks $1.5 billion. >> so a billion and a half of money paid for the fdic shifts from small banks to big banks in return for neutrality. >> which is huge for barney. >> they stayed neutral. >> what do you think about that? is that good? is that the way we should be making law in america? >> there's a lot that's not good about the way we make laws in america. this is democracy. we make trades, compromises and pull it together. this is not new. it has been going on for years. >> he didn't tell us about that. >> look, cam did well by his people. he did what he was supposed to
8:34 am
do. bob, let me cut to what i think is the overall theme here, which is as you read this book -- and it's very detailed but very readable. it's a great narrative. it's the death of bipartisanship. and it dies in this book. the old ways of the senate doing business dies in this story. but nobody seems to kill it. who are the antagonists in this story in europe? who are the ones who keep this from being a true bipartisan bill? >> it's the culture of the modern congress. chris dodd really wanted to pull ate you. he drove some of the democratic colleague nuts because he came coming back to the need for a bipartisan bill. even obama got angry with him at one point. he kept trying, kept trying. >> bob corker, the knight in shining armor gets whacked.
8:35 am
>> he told me his hero was howard baker. i said do you know why howard baker left the senate? he said no, i don't. because these conservatives came and took over caucus and he couldn't work anymore. he said i hit this and he left. >> but i don't see in it the conservative republicans are more at fault than the liberal democrats in the sense that both of the guys in the middle, shelby, are dealing with their flank. >> yes. >> and their flank seem to have more power in this book than the center has. >> dodd wasn't seeking reelection. >> that was a big part. that's why there's a bill. >> anywhere in there why the the irony of this answer to the financial crisis after a friend
8:36 am
of angelo and the biggest protector of fannie and freddie and enabler of fannie and freddie and we rename the reform bill dodd/frank. i disbeauty. i think that's silly. they earned the name. >> barney never defended fannie and freddie. do you remember the quote there's no risk. >> we will have a debate about that. >> oh, okay. you remember the quote. but he didn't enable fannie and freddie? >> i saw you last night at the paul volcker talk. >> was the president bringing it back to the four? was that completely political? a huge debate came out of nowhere. >> he announced the day after scott brown got elected. >> right. >> in fact, and dodd confirmed this and other people do.
8:37 am
he decided in october and november, obama, that he wanted to do the volcker rule. >> i broke the story of the volcker being in the dodd frank bill. i get off set and got a call from two lobbyists who said i had to go back on air and make a correction because they had seep the bill a few days earlier and it was not in there. >> right. >> so somehow this thing reappeared. guys, if you have that quote, i know we have to leave here. i want one quote from the book where bob says you look back at the month-long floor debate would be frustrated by the fact that it featured very little substantive debate. if the senate was the truly deliberate of body it would have deliberated on the big changes, consider their impact and debated alternatives. bottom line is this thing, 1300 bill becomes law without a whole
8:38 am
lot of debate. >> we have a broken system. that's what this book is about. which doesn't work very well. this is a good example. >> are you hopeful? >> not very. >> thanks for joining us. it's an interesting week to learn about congress and the recent history that was very important. >> thanks, guys. the book is called "act of congress". >> squawk news maker of the hour, cory booker on jobs, technology and immigration policy. as we head to break, here's what bill gates told us yesterday about the importance of immigration reform for high-skilled tech jobs. take a listen. >> there's two issues here. one is the high-skilled worker part where this group of eight has come up with something that looks pretty good on that. and that's bipartisan. and then there's the overall issue where you have this great injustice of a kid who is undocumented not being able to get scholarships, not being able
8:39 am
to participate in a lot of things. so i think it would be fantastic to get this issue resolved. [ male announcer ] they say that hard work is its own reward. but there's nothing wrong with enjoying a little extra reward. ♪ that's why southwest built a better rapid rewards program with unlimited reward seats, no blackout dates, and points that don't expire. rewards that actually reward you.
8:40 am
we are southwest. welcome aboard. [ whirring ] [ dog barks ] i want to treat more dogs. ♪ our business needs more cases. [ male announcer ] where do you want to take your business? i need help selling art. [ male announcer ] from broadband to web hosting to mobile apps, small business solutions from at&t have the security you need to get you there. call us. we can show you how at&t solutions can help you do what you do... even better.
8:41 am
♪ welcome back to "squawk" this morning. take a look at futures right now. we do have green arrows across the board. dow is up 35 points. nasdaq up about five points. s&p 500 about 3.5 points.
8:42 am
>> welcome back. newark mayor cory booker sharing tech voice. before the tech savvy mayor steps up to the mike he will speak with us first. cor wr booker, mayor of newark, joins us now. mr. mayor, good morning. one thing -- whenever you're on, i like your eternal optimism that government can be a force for g. i think it has something to do with being a mayor rather than a beltway individual. tell us some of the good things you hope come out of this. >> first of all, you're in the center of one of the great tech innovators which is mayor bloomberg and his team. what we're showing america is we can go from egovernment to we government, create ways for people to work together. when weather it's implementation of technology, streamline city services, things we're doing already in newark to some of the things he's on vanguard of,
8:43 am
creating predictive government. for example, better figuring out what a strategically placed am ambulances and shorten their time towards finding people from three minutes to two minutes just by looking at positioning, at routes. and inviting in the private sector, inviting in a tech community to take this big data and to use it in a reasonable way, even to use it to create apps that could create businesses and revenues in the private sector. it's a new era really. it's bringing governments together to solve problems, get away from philosophy and get to practicality. >> whenever we do anything, it almost comes back, we're trying to educate our kids better. how can it help them? >> well, we've got two problems in america. understand this. we really don't have an unemployment and a problem in this country. what we have is a training and education problem. i talked to companies, big pharmaceutical companies here in new jersey, 60% of the
8:44 am
biomedical statisticians, they have to hire out of the country because they can't find people to do it. stem training is critical. i was at a tech conference where a company stood up and said, look, we don't care what grade people have graduated, how many degrees they have, we want to know if they can code. people with ninth grade educations but they are so good at coding we start at six figures. this is the new economy we live in. we have to grow our gdp here in america. one is a long-term effort, shifting our american education system to really focus on stem training. two, is changing our eupl laws so the people i talked to from california, stanford, rutgers, when they see the brightest minds in the country coming here to study in america for degrees that i can't even spell, as soon as they finish their degrees we kick them out of our country rather than letting them be job
8:45 am
creators and innovators here. we have to have a country focused like a laser beam on preparing our citizenry for 21st century economy and making sure we are doing everything to grow gdp as rapidly as possible. as a mayor with challenges with enduring poverty i know what will will help us is training, citizenry, job expansion here at home. >> mayor, steve ratner. >> hey, steve. how are you? >> good, thanks. you're thinking about going to washington as a senator. what's your level of optimism that washington can actually do any of the things you're talking about? we don't see a congress seems to be able to pass a bill on anything, let alone the ambitious ideas you're throwing out. >> well, a lot of those we get the government we deserve. americans are -- we have to get out of this partisan nature we're in and look at the pragmatic problem-solving that will move our nation forward.
8:46 am
>> it sounds like you're not optimistic. >> i'm very optimistic. oh, come on. when i was running for mayor i had people -- friends of mine, why are you doing that? urban inner cities. ungovernable bodies. you can't change things around. 60-year trends we're reverses. first time in 60 years we have had the biggest economic growth since the 1950s. there is a surrendering that is unacceptable. american history is perpetual testimony. >> great, great platitudes. i love them. but he asked what do you think can actually get done on this? >> i think, again, when you have 90% of american citizens agreeing with things like the visa problem we have for bringing in talent, we have seen it recently with the gun debate. but often it's darkest before the dawn. the more americans start to understand, as they get involved
8:47 am
and engaged and get out of agitation and we are so upset about things. they fail to get up and get involved. this is what changed for me. the experience i have had in the city of newark. and i know of its cities in many ways could be great obstructors for engagement and for transformational systems that don't work. >> why does washington not work? no, no, no. sorry. they're giving me a hard time here. >> we're going to get more we should do this, we should do that. >> well, no. i want to know who are you going to blame? >> everybody but him. >> that's the problem. we're looking doctor everybody is looking for somebody to blame. >> right. >> the economy in america is not a zero sum game. you win. actually you create more opportunities so i can win too. politics is exactly what you're saying. zero sum game. >> they're cynical. you're one of our -- i'm a
8:48 am
jersey guy. core zone drove me out. >> you know the man that took over. new york most, i saw this this morning, coy. chris christie, the wait is over. he's finally got a lapband. i thought he joined a rap band. maybe they got the story wrong. i don't believe anything in the post after recent history. but a spokesperson has confirmed this. and i think it's great for our great governor. for his own health and for his family. it kind of makes me think some political aspirations are in the offing as well. do you read it that way? >> you know, i have too hard of a time reading my own mind, not to mention reading the mind of my governor or other people. at the end of the day, governor christie and standing up, taking his health seriously. he took a dramatic action but a definitive one.
8:49 am
and i think we should applaud him. >> i agree. >> did you know about it before it was in the post? >> i know his family very well. i know his kids. the reality is the governor loves his family and loves his kids and know one of the most serious health challenges, in fact, the most expensive driver of health care costs in our country is obesity-related diseases. >> cory, you could work with him, i think. a guy that -- >> we're working together now on a lot of things. >> what you're talking about it, it's always darkest before the dawn. the governor will say, yeah, the president kept every promise. he will get vilified from the right. but he will say i disagree with 95% of his policies. he's able to do both. that's what people used to be able to do in washington. that's the way we got things done. so he may be the answer. >> yeah. i disagree with the governor on
8:50 am
everything from gay marriage to cutting the tax credit to closing planned parenthoods. we focus on things that we do agree, on education, economic development. that's what we have to get away from, defining ourselves uniting ourselves, instead of where we disagree. >> they're like the guys from out of town who don't have a job. >> ouch! ouch! >> they don't have a job. >> it's that a bigger insult to mackenzie. >> he's come in and helped me on a lot of projects. >> mackenzie, i love you. >> we've had some experiences. >> you wouldn't be a ceo anymore. i'll of course of a different metaphor. mayor booker, we appreciate it. hopefully we'll see you. we're not that far from you. come into the studio. >> i need to send you sunshine and rainbows to get rid of the
8:51 am
cynicism. >> they live in new york. >> i'm tired of shoulds. i want dos. coming up, jim cramer's mad dash to the opening bell. we'll take a look at some stocks to watch next. tomorrow on "squawk box," reaction to quarterly numbers from disney. plus, two disruptors who want to shake up the shopping and advertising industries. the ceos of gilt group and radio one will tell us about the next big thing in tech. "squawk box" starts tomorrow at 6:00 a.m. eastern. now's the time to send in the scotts turf builder plus 2, man! it kills weeds while it feeds and strengthens your grass. feed your lawn. feed it!
8:52 am
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.
8:53 am
missing workouts because of sports injuries. runner's knee... ...it's right there. shin splints... ...it hurt right on this side. injuries like these can come from the pounding your feet take. but i found something that helps. dr. scholl's active series insoles with triple zone protection to help reduce pain from three sports injuries: runner's knee, shin splints, plantar fasciitis. i can feel the difference. i'm a believer. i'm back working out. i'm a believer. try dr. scholl's active series. i'm a believer.
8:54 am
welcome back to "squawk box" this morning. proxy adviser glass lewis is now urging j.p. morgan shareholders to separate the roles. we were talking about those roles earlier in the broadcast. the firm wants directors to work on the committee. iss has made similar recommendations. we talked about it just yesterday. jim cramer joins us from the new york stock exchange. jim, what's your take on the -- the jamie dimon-j.p. morgan soap opera that is. >> full of sound and fury, signifying nothing. >> tale told by an idiot.
8:55 am
>> they're just really good headlines. the administration for reporters. in the end, the earnings are good and this other stuff is noise. it's great noise. it's fun noise and terrific because we're all supposed to be revering jamie dimon and he looks bad every day. we should move on. >> let me go a different direction. what do you think of iss and proxy and all of these proxy guys who have become much more aggressive over the last couple of years? >> i've discovered their lack of homework is incredible. i don't think they do any more homework than the investment banker did than sterling draper and whether to bring it public. the lack of diligence and lack of rigor. it's almost funny. i mean, wow! because i'm on a publicly traded board i'm sure they'll come after me. it's okay to do homework. there's nothing wrong with homework. i find it often helps. >> did you see the new york
8:56 am
attorney general on earlier? >> yeah. it's great. they do the great mbi deal and he comes along and tries to spoil that. everybody wants money from bank of america. i'm the only guy that hasn't gotten $1 billion from bank of america. >> it was weird. >> go after an executive already, will you? all that will happen is the shareholders have to pay. how about taking an executive and saying, you know what, pal? you're done and banned from the securities industry and you're lucky we're not putting you in jail. it's like, here. let's just take shareholder money and give it to the state of new york. how about some jail time. >> i would never make another loan. i like how chris christie is. i thought that was good. >> jim cramer, we'll see you in just a few minutes and he'll be doing a public hanging on "squawk on the street," stephen rattner, we'll give him the last word when "squawk returns." it gd before we even picked him up.
8:57 am
it found out the doctor we needed was at st. anne's. wiggle your toes. and it got his okay on treatment from miles away. it even pulled strings with the stoplights. my ambulance talks with smoke alarms and pilots and stadiums. but, of course, it's a good listener too. [ female announcer ] today cisco is connecting the internet of everything. so everything works like never before. [ penélope ] i found the best cafe in the world.
8:58 am
nespresso. where there is an espresso to match my every mood. ♪ where just one touch creates the perfect coffee. where every cappuccino and latte is made at home. and where i can have exactly what i desire. ♪ nespresso. what else?
8:59 am
welcome back to "squawk," let's get the last word from our guest host, steven rattner. >> i think in general having more shareholders is a good thing. we need more democracy in
9:00 am
corporate america. splitting the chairman and ceo job is good, but this is not the place to start. jamie dimon has done a fantastic job. >> despite the whale. this bank is making record profits despite the whale and he deserves to stay. >> thank you for being with us. >> thank you for being with us. >> pleasure. >> make sure you join us tomorrow "squawk on the street" is next. can the dow make it 17 straight tuesday gains in a row? we're going to find out today. good morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer and david faber at the nyse. it's supported by decent macro data. we have good car sales in europe, german factory orders pretty clean over there. nikkei did get to work after the holiday and catching up from friday, back above 14,000 for the first time since

145 Views

info Stream Only

Uploaded by TV Archive on