Transcripts For CNBC Squawk Box 20100316

and anyway, how people -- because, you know, i played it again for my son's birthday and he says, look, your wrinkles are going, your neck is wrinkle free. >> and it's back again. >> and you're here, so people can compare me to you, which i always lose on that, you know, 50 most people beautiful award. it's going to be a busy one today, though. >> it is. the fomc holding a one-day meeting. economists expect the central banks to keep key interest rates steady. those are the key words. those are the things that traders will be listening for. >> it's very bright in here. >> too bright. the fed isn't the only central bank to watch this week. the bank of japan beginning a two-day meeting today. japanese business ministers pressing for the fed to ease tightening. even looser policy could weaken the yen and boost exports. the yen at this hour, let's take a look against the dollar, 90.65. >> we're at 10,642 all of a sudden. >> yeah. the dow is up five straight. >> the dow is up five straight. >> which is the lornlg longest winning streak of the year. >> in this 11,050 area. at one point, 11,4999. i'm stalling because we're going to talk about greece and i'm just wondering while i'm talking whether this is going to be an indication of what we're talking about. >> pictures? >> pictures, which would let people know at home if they're interested in the grooek situation to turn the mute button off, to turn it on. all right. t no i can start. euro zone finance minister is agreeing on the technicalities of a what? greek bailout plan. few details were revealed about how a stand by plan might work. might be a good idea for some of the states to look at the austerity measures that the greeks are putting in. they're not -- i mean, they have to do it. you get to the point where you have to do things. >> word of warning to the states, this could be your infrastructure. >> the more that we're reading about some of these pension plans that we owe public employees in california, did you see how they spike their final year of -- >> of pay. >> they take all their built up vacation, they take all their overtime. so you've got guys 50 years old that were government employees, wherever, take your pick, some of them making $200,000 a year from 50 on, $250,000, $280,000 that they've spiked and there's no way out. and it used to be that you happen making less the entire time because you were a public employee so you would get these nice benefits. but now they're making more than those in the public sector. >> it sounds like you're calling for maybe a government watchdog to come in there and crack some heads. yes? >> well, i don't know if they can do that. remember, we had david crane who was on who said these promises have been made and it would be illegal for us to go back and renege. >> exactly. i want government regulators in there and those regulators can retire when they're 250 and they could get $260,000. that is the perfect -- more government is the perfect answer for this situation. >> exactly. you're right. i'm with you on that. >> remember, we had a new york gentleman who was in and told us here in new york they're profitability from having the spike at the end. >> anapoli. >> and our own cramer is -- >> new jersey. we'll have to get him in to talk more about this, what can and cannot be done. in the meantime, housing is likely to be a dominant subject today. housing starts come out at 8:30 eastern. polled economists are expecting starts to fall by 4.7%. permits are expected to decline by 3.1%. cnbc will have special coverage all day on the upcoming spring selling season. it's traditionally the back seat busy time of the year. wig question as to whether or not the market will pick up this spring. who is buying a how many house right now? 50% of mortgages are under water. treasury has a $75 billion modification program has helped 10% of those who qualified. government programs helping people stay in their homes or about to buy a new one are about to change. this is happening zip code by zip code. >> lehman brothers filing a plan with the u.s. bankruptcy court to wind down its remaining assets and operations, it would end the largest u.s. bankruptcy case in history. a chapter 11 plan calls for a newly created business called lamco. they will manage what is left of lehman's corporate debt and derivativ derivatives. . >> i believe it's called lameco. >> that makes a lot of sense. >> the dow is up five straight, which is the longest streak we've had so far this year. we had six up days in december of '09. they've all been modest gains, though. >> yeah. it seems like you're watching paint dry. >> well, let's not even talk about it. >> relatively steady on crude, just below $80. failed at close to see 84, but is holding its ground at $79.88. the 10-year note this morning, 3.708% is the latest check on the 10-year 37 the dollar is relatively stable. we're down against the euro, down against the pound. and then gold has been firming a little bit as some of those concerns about greece continue. we're up 8730 to 1114 the and a dime. let's get overseas and find out what is happening in london. anna is there. thank you, anna. >> that greece story is dominating things, pass well. the european finance minister is not telling us anything new out of brussels. all the guys we talk to say support greece and there's a fear of contagious and moral hazard. either way they go, they face opposition. we'll face looking at the e banking sector here today. unicredit has expanded rapidly into eastern europe. their ceo is apparently going to consider resigning today. that is according to some sources who are talking to cnbc. apparently he's been clashing with his chairman and shareholders over a restructuring plan for the business owners and over an exchange for the business which will include an appointment overseeing the directive. but he is saying in the mist of all this reorganize of the company that he might resign. that story will probably run and run. our appetite for chocolate is returning, in particular in the asian market where they are planning to grow in the next few years. back to you guys. >> anna, thank you very much. for a look at the trading day ahead, let's turn to michael darda. mike, it's a great day to have you here talking about what do expect. what are the odds that the fed strips out some of that key language talking about keeping rates very low for an extended period of time? >> you know what? i think they're going to probably wait on that until we see the labor market start to turn and take place. which could be very soon. so at some point, the fed will want to have extra stability, but i'm not sure it's today. >> do you think this is more treading water, waiting for the turn to come? >> i think it's more treading water. the fed, i think, is going to be running a fairly accommodative monetary policy for an extended period of time. even if the momentum in the economy continues to stay good. they're really focused on labor markets slack and on core inflation in those two variables don't change overnight. so i think you really do need to have a sustained and robust jobs recovery to get the fed to do anything this year. and if it happens, it's probably later in the year. >> when you start looking around at just the strength of the economy, we're going to be looking at nebs today on the housing market. do you expect all of these numbers will continue to just show gradual improvement? >> well, it's interesting. if you take a step back and you look at the broader array of coincident indicators for the economy, we've got a v-shaped recovery already in industrial production, in corporate profits, in manufacturing and trade sales, retail sales are certainly a part of that. they're doing a v. certain areas of business investment have been doing a v. but we don't see the v-shaped recovery just yet in payrolls or in income growth. and until those two things turn, i think the fed is going to be low to do anything automatic. i'm fairly optimistic on that score. if you look at the leading indicators for employment, they've all turned. i don't think this is a 6-month to 8-month forecast. i think this is imminent meaning we could very well see a fat print in march. 300,000 up. some of that will be give back for the week of february weather induced data. but i think 300,000 jobs in a month could be in the offing for this year. but i still think they're going to move slowly because they're focused on levels. core inflag, these variables are slow moving. >> but do you think they could move by the end of the year? >> i think they could move by tend of the year. you'll have to see sustained job growth for that to happen. bernanke is basically shown his hand here and essentially told the markets that that is what the fed wants to see, a sustained job recovery. a lot of small businesses are shut out of the capital markets. they can't use the turn in the corporate bond markets to get fund. they rely on bank loans. so the fed is going to lead against the wind until we see that turn. our guest is on the indicators that can give us a heads up on that. you probably don't see that combination between both job growth and bank lending until later this year, early 20 1. that's why we have the forecast of a good witness stand, sustained recovery but a fed that's fairly dovish for a while. >> mike, i know you're not an expert on those financial regulation bills making their way through congress, but with senator dodd making these announcements, if we're waiting for commercial lending to pick up wbl from a quick read, the winners and losers picking in the banking industry, do you think this legislation is more likely to make that lending improved because it helps the small banks or more likely to hurt banks because it hampers the big banks? >> it's sort of tough to say. i think the main reason that we've got very weak lending statistics out there are simply because the banks are capital constraint. it's still very, very profitability to makes loans with the yield curve this steep and rates so low if banks are not he'ding bad loans and they're eating bad loans. so that's the main reason. i don't think the legislative fears out there. a lot of smaller players are going to fly under the radar screen, whether it's the regional banks or some of the community banks and so forth. so i'm not sure that this -- you know, i'd be surprised if the legislation actually is designed in a way that hampers lending. some of the bigger banks are in the cross hairs, to some degree. i understand there's uncertainty out there. but you know, i'd be a little surprised if legislators are going to do anything that destroys job growth or a resumption in bank lending. because it will be tough for incumbents to get re-elected if that takes place. >> mike, it's great talking to you today. we appreciate that. >> thank you. >> and joe, you said you didn't want to hear any more about the markets, so we got rid of the market strategy. >> yeah, you did. >> anyway, coming up, what was the name of that movie that -- crieder house rules, slaughter house rules. the lead he editorial in the journal today, she takes a good picture, pelosi, doesn't she? >> in the journal. >> she's a pleasant looking woman, i would say, wouldn't you? really? >> yeah, i think so. >> we watched that dana car very sketch the other day. >> i did watch that, i did. i loved it, hilarious. we have to come together and not stay apart. >> pelosi, on something cold and wet. >> yeah. coming up, what is that? >> funnyordie.com. >> unbelievable. coming up, why the government says gasoline prices are on the way back to $3 a gallon. plus, senator chris dodd and bob corker, those are the two guys trying to work on this out of a bipartisan basis. still not done. we'll see, financial regulatory reform, the month of bipartisan negotiations. two sides of the story, still ahead. first, as we head to break, a look at yesterday's winners and losers. welcome back, everybody. oouts equity futures right now, up by about 12 points above fair value for the dow. the s&p is up above fair value, as well. this is coming after five days of quiet market gains. we'll watch it through the morning at 8:30. we get numbers coming out, we'll be looking at housing data and that should give us an indication of what's been happening in the economy. gasoline prices rising to the highest levels since october 2008. the energy department predicts it could jump to $$3 a balanceon. that is up about 88 cents from a year ago. "the wall street journal" reports that yahoo! will likely acquire an online sports site this weeks. the company is said to by citizens sports. it allows fans to interact on apple's iphone and facebook. scott williams is standing by with a look at our forecast. >> certainly good news for sections of the northeast and new england. that pesky storm system that we've been tracking here, it is moving out to sea. we will see improving conditions as we move into sections of the northeast. decreasing clouds, diminishing winds as we move throughout the day. we will see temperatures moderating. so taking a look at the past six hours, look at this swirl here as we watch the storm system move away. most of the rain has come to an end and that will be good news as we watch the forecast for today. 58 degrees in new york. 48 in boston. we'll see the clouds diminishing in the nation's capital. high of about 60 degrees. so looking good for the next several days here. by wednesday, lower six, new york city and 66 as we move into the nation's capital. boston, into the 50s. for today, the active radar will be in the lonestar state as we track this slug of moisture here, so bringing concerns around dallas, ft. worth watching for delays. corpus christi watching that moisture on the increase, as well. temperaturewise across the nation, it's not too bad here. 47 degrees. good morning, new york city. dallas checking in at 54 and portland, 53 degrees. watching for the rainfall as we move around places like houston, a high today of 60 degrees. and atlanta, sun and clouds, 60 for your high and miami, looking fine with the high today of 74 degrees. that's a look at your business traveler's forecast. now back to you. >> scott, thanks for that. scott williams over at the weather channel. the spring selling season is seen as a key indicator of the housing market. what are we going to see this year? can the economy recover if housing does not? realty check, we're calling it, housing battles back. we've sent reporters out from coast to coast. >> reporter: i'm jane wells in phoenix where an estimated 80,000 homes are empty. they call them martini buildings because you can right through them. arizona is second only to nevada in foreclosure rates and homes that used the be sold for $1 million can be had for half that. what is it going to take for this housing market to rise from the ashes? builders are building again. still, economists say the jobs have to come back for the housing market to come back, and things may not return to normal for four years. >> reporter: i'm michelle ka coincidenceky in downtown atlanta. the lights are finally coming on all the brand new kondos on the wore ridon. they're filling up now. in fact, both traditional and investors are filling up with huge discounts. the rate of sales jumped 200% over 2008 in the fourth quart r quarter and that momentum is continuing. some predict the inventory here, which was a dismal five year supply of kondos in 2007 will be absorbed in two years. >> reporter: i'm diana olick in washington. the government's loan program isn't showing results, so yet another government bailout is on the way. a foreclosure alternative program attempts to jump start short sales. that's what the lender allows the borrower to sell the home for less than what is owed on the mortgage. >> in the next hour, is housing recovering? at 8:00 a.m., we'll talk about whether wall street bonuses are helping others move up. today on cnbc, realty check housing. that was fast. >> well done. >> excellent. excellent read. excellent read. >> we're all going to have to compete with that this morning. >> we are, all day. so this is -- we're doing this today. it's a theme thing. so we're doing a theme day, real estate is today. >> very good. >> i need to get on board. i need to get on board. let's take a look at this morning's upgrades and downgrades beginning with color yox. target increased from 71 to 67. the firm believes the company can maintain its revenue momentum. teva, removed from the conviction buy list at goldman sachs. the firm is citing its proximity to i said it is 67 price tarlth, but it remains a buy, just not a conviction buy. wi windham, downgraded to 5. target remains $26. valuation is being cited and also the passages of catalyst. sonic upgraded to overweight from underweight at piper, the target goes to 12. do you like sonic? yeah. >> have you ever had it? >> we do sonic here. >> so it's basically a burger? >> yeah. but it's a drivin and they bring the food out to you. >> it's not on roller skates? >> cherry limeade. >> how are the fries? >> i don't like the fries. >> give it a shot. >> they both cause you to become fat. >> cherry limeads are great. >> cherry limeade. >> yeah. >> let's stick with this theme, shall we? housing for fast food? >> this is not fast food. cheesecake factory, downgraded from underweight to neutral. target remains 2. they've got like 60 different kinds. >> we should do a theme day about fast food or unhealthy food. >> very large portions at the cheesecake factory, i'm told. >> the menus are huge. >> menus are huge, people eating there are huge. finally, brinkers. downgraded to underweight from neutral at piper. so piper downgraded both cheesecake and brinkers. what's brinkers? is that chili? >> i think it is. i was just trying to remember the same. >> i think it might be chili. and the target remains at 16. >> it's funny because i was just trying to recognize. i think it is chili. >> that's a pretty good taquito taco thing. >> macro neen. >> i thought that was -- >> macaroni grilled on the border, romanos macaroni grill cantino and chili. >> the worst one of those sounds pretty good to me, doesn't it? >> like it all. coming up, we will have more of this morning's top stories plus the picture from futures pits. then in the next hour, a news making guest host. jerry levin will join us for two hours today. stay tuned. hey can i play with the toys ? sure, but let me get a little information first. for broccoli, say one. for toys, say two. toys ! the system can't process your response at this time. what ? please call back between 8 and 5 central standard time. he's in control. goodbye. even kids know it's wrong to give someone the run around. at ally bank you never have to deal with an endless automated system. you can talk to a real person 24/7. it's just the right thing to do. "what do you mean homeowners insurance doesn't cover floods?" "a few inches of water caused all this?" "but i don't even live near the water." what you don't know about flood insurance may shock you. including the fact that a preferred risk policy starts as low as $119 a year. for an agent, call the number on your screen. good morning. good morning and welcome back to "squawk box" here on cnbc. i'm joe kernen along with becky quick and carl quintanilla. we're approaching 6:30 fast. we only have 30 seconds. here is what is making headlines this morning. emerging market bond sales setting a record high. new issuan is surging. the ft citing data from deal logic. interest rate premiums have narrowed to their lowest level since 2008 with all the interest in these issuans. that's right. it is a fed day today. i want to find out what traders are watching. kevin ferry of cronus joins us from the cme group in chicago. good morning, kevin. >> good morning. >> and i want to read from people what you wrote, because this is the kind of correspondence we get from you. you think we need to look at policy, easy peezy versus rates, zerpy derpy. is this dr. seuss or is this about the fed today? >> i think that's what they're embarking on i guess is what i'm trying to say. i just don't do a very good job of getting the point across. >> i'm with you. >> they're trying to go on a pr campaign to distinguish between the two. and they've started that campaign, but i don't think they're impressed with how many people are paying attention to it. but i could see how they could march the rates slowing out towards 1% and till maintain that accommodative policy stance acid opposed to a zero interest rate emergency situation. and so i think that's -- if there's going to be a tweak in the language, and as you know, i have extreme respect for mike darda, the only thing i would say is that i think they should tweak the language. it may just be that they move it to for some time as opened to an extended period of time. >> you also make the point that things like excess reserves and fomc rates are not an fomc issue and that could happen outside the box of meetings like today. >> that's another distinction that i think is made that gets a little technical and that's the word they're going to keep using, technical. but the board sets interest on excess reserves and they need to get some appointments in there. so i think movement on the board and the fomc deals with the policy and the movement of that through brian sacks through these facilities. i think those type of actions they can do more to clarify what it is they've done, shut those facilities down and how that is going to affect the balance sheet and what the board will do with regard to excess reserves. so here is another thing to watch for. the discount rate movement coming at the time that it did is the first shot across the bow that things will not always happen at 2:15 eastern time every six weeks any more. and i think that if you get a 300,000 up on unemployment or on employment next month, watch out for what happens after the close that day in excess reserves. >> is it a given, in your mind, that the dollar rally continues anew today? and if so, what does it take to make that happen? some said all that needs to happen today is that hoenig maintains his des end. >> well, it's out of touch right now and gold is up. you're seeing people at the last minute tend to make their decision and that language moves back. but i still think that the dollar play is starting to show a somewhat reduction in the volatility of currencies. the really strange thing that we haven't been able to get our hands around for the past six months is the extreme movement in currencies given the lack of movement in oifs and the interest rate structures that actually support them. and so that reduction, i think, you can see manifester itself in the stock market that then becomes less volatile, but is still heading in the right direction. so, you know, i think that, you know, the best thing the dollar has going for it on a general sense still remains the weak competition around the world that it's up against. and so i think that is what it has going for it. >> the best house in a bad neighborhood, so to speak. >> right. >> we'll see what happens this afternoon. kevin, thanks. >> sure. take care. >> we're hunting for profitable opportunities in the currency markets today and axle merck is the president of merck mutual funds. we just got done with kevin ferry, quite an extend conversation about currency. do you agree with what you were hearing? >> well, i agree on the volatility part. and the reason is that people disagree. and there's one good thing about the current environment, people disagree on how things are moving forward. on the one hand, we have reflationary forces and then the next day people think, the market force is taking over, we're headed back into depression. as far as the federal reserve is concerned, i think they want to wait. we have an extremely unstable recovery and in our assessment, they may see it that the housing market is not doing what they want. they have done the credit easing and they may do quantitative easing down the road. >> we've been reporting on the emerging market bond sales soaring, what the euro was concerned about some sovereign debt between greece and others. will the -- does the dollar have a reason to go up if this goes away? >> well, we all spend too much money during the crisis. now we have to issue the debt to finance it. in my assessment, the u.s. is far more efficient at printing the money. look at the euro zone. look at greece. we are all complaining about the mess they are over there. but at least at the euro zone, they have a mechanism to expand that to work less. it's not working well, but at least in the u.s. we're just printing and printing and printing. so what i'm forecasting is the euro is a greater buying opportunity and the background of lousy economic growth. think about it, during the great depression, the countries that went off the gold standard, they recovered faster from the great depression. the flip side is that those countries that did not have a faster currency on the back drop of lesser economic growth. >> so you're saying that we're more comfortable reflating than europe? although i would think that europe has a lot more -- a lot more things to pay for with the print sglpg they do, with you structurally, they're not capable of printing so much money. the european central bank has given up on many policies. here, we're phrasing out additional purchases. >> why won't strikes shut down the economies? >> well -- >> you saw the slightest austerity measures where you take away the social safety net there, and you get strikes. >> i'm not saying everything is great in europe. greece will be seen for what it is. yes, they will have strikes, they will not push the world of reforms that they want to. but you can have lousy economic growth and strong currency. >> but it's not just greece, right? ireland -- >> look at japan. it has had a terrible growth for decades, yet has had a strong currency. the euro zone doesn't need economic growth to have a strok currency in the medium temple. >> i'm just wondering what is a bigger factor, that is our comfort with printing a lot of money or the entitlement. you know, i think -- we have our own entitlement problems, but they have even worse entitlement problems. >> everybody has significant issues. look at california, greece. problems happen with printing money. inflating your way out of these problems is the most efficient way and the way that our federal reserve is going to be structured. it's going to be much easier and we are much better at it. >> whoa may not be good at a lot, but we're good at something. >> all right. thank you. >> my pleasure. we think the euro is a great buying opportunity. it's rare that the uran sales -- this is a major opportunity to buy the euro, to diversify out of the u.s. dollar into the euro. >> you should go to paris for spring break, carl. if you're going to go, we better go. is that what you're saying? >> so so now while your dollar will still take you somewhere. >> exactly. so if you have any comments or questions about anything you've seen here on squawk this morning, e-mail us, squawk@cnbc.com. we're going to take a quick break right now. when we come back, we'll get to the news making headlines both inside and outside the world of business, including the late king of pop's big payday. wait until you hear this. "squawk box" will be right back. the estate of michael jackson, won ads 200 million guaranteed contract with sony music entertainment. it's a 10 projects over seven years. the deal would be worth even more money if certain conditions are met. one with of the albums will be never before released jackson recordings and that will come out in november. i guess it's a remix of songs. >> a video game is possible. >> you remember how well the estate of elvis has done over the years. so i guess it's not that surprising, but it's a lot of money. >> it's a lot of money. >> he ran up a lot of debt. >> he knew how to spend. we want to get a check on the news outside of business this morning. monica novotny is here with us. >> good morning. we'll start in washington where house speaker nancy pelosi is considering a controversial alternative to finding enough votes to deal with health care reform. the tactic, deem and pass, would allow the senate to avoid voting on the bill. they would deem it to pass and vote on the parts of the bill they would it to revise. rain and high winds pounded the northeast yesterday for a third straight day. a state of emergency has been declared in connecticut, massachusetts and rhode island. north dakota is bracing for near record flooding with the red river expected to crest at about 20 feet above the flood stage. here is your expenser pratt news for the day. "us" magazine reporting that he's been suspended from mtv's "the hill" for six weeks, during which he must complete anger management training after he threatened to kill a producer on the show. becky, back over to you. >> i have never heard those two words together, spencer and pratt. what are you talking about? what on earth are you talking about? >> you don't read us" weekly or any of -- >> i know. i know. i wish i could tell you what "the hills" is. >> you've heard of spencer pratt? >> if when you're standing in line at the -- >> you can call him fat jack pratt. and i also don't care about kate which is let. >> oh, kate winslet? >> i don't care. >> but she's such a lovelily actress. >> i didn't know she was married to george sloonny. i don't want to live in this world. >> kate winslet is an adult. but the spencer pratt guy, i don't know who he is, really. >> we need to go. let's go to our realty stuff. >> we will in just a moment. actually, in just a minute, we're going to do something you really like. >> i do. >> we're going to head over to the chaers and share the stories that really have us talking today. science times is our theme today. stick around for that. and later this morning, spring into housing. a traditionally strong season for real estate. who is buying and who is selling? at 7:30 eastern time, with richard will join us live. then come up at 8:30, the ceo of hovnanian joins us, as well. we are in the chairs today and we're putting aside the post and the "the daily news." if you watch the show, i have a bits of a love-hate relationship with the "new york times." and as a lot of people do, with obviously. kater to a certain - >> some people have a love-love relationship. >> they do. and we were talking off the camera, i had dinner with one of the giants of the insure time"n york times." and he expressed some chagrin to me of the entire paper. so i can tell you that, that this was six months, i think, before he finally passed away. but the thing he was he was mos he told me was "the science times." >> that was his idea. a lot of lore about that. some people wanted to start a softer section that would draw more advertising like cosmetics or fashion or something and he insisted on starting "science times" when there was no clear economic goal. >> on tuesday i turned to it immediately. i mentioned off camera that you ran something about climate change skepticism because carbon levels were 18 times what they were today 600 million years ago and you'll print that in the "times" and i wonder if someone would grab it from you before you put it in there. >> no. >> people who lived back then really had it tough. trying to breathe. can you imagine? >> there was no concurrent warming is what i'm saying. if you're worried about 400 parts per million worry about 17 times that level. >> we have reporters that could discuss global warming with you if you would like. >> we're here today because we want to talk about "science times." we always find a lot of stories we enjoy in this one but maybe we could talk about the supersonic jump that one gentleman is attempting to do. >> he's going jump from 23 miles up in the stratosphere. >> a space jump. >> a space jump. he'll break the speed of sound. this is something that is being organized by red bull, the brink company. they've worked on this for several years. >> the thing in a normal jump terminal velocity is because of the air stopping you, i guess. up where there's no air he can reach much quicker speeds. >> i think in just -- i can't remember how long but very shortly he will reach the speed of sound after he jumps. >> nobody knows what will happen to his body. >> we know that airplanes are okay when they break the speed of sound but before it was first done -- >> it's almost like he could re-enter the atmosphere and there could be friction. >> probably not so much. there is some air where he is. he'll be wearing a space suit. he's practicing now in kind of a vertical wind tunnel where the force is so great that you can practice. >> will there be a sonic boom from that? >> we don't know. >> any idea how long it will take him to reach the ground. >> i should know but i don't know the answer to that. >> does he deploy his chute at the regular fight? >> a free fall lasting 5:30 and he'll land below where he's jumping. that's a phenomenal idea. >> he will break a record if it's successful which was set in 1960 of 100,000 feet. in that jump the person almost died. when he woke up he thought he was dead. >> that gentleman is helping them to try to make sure they get this right. >> this is a better record than the lady yesterday trying -- the now weight record at 1,000 pounds. yeah. this is a better record. >> this is less dangerous. >> this is a better record. >> in general what's the criteria for a good cover piece in "the science times." what kind of stories do you guys look for? >> something that's timely and has obvious interest to people. sometimes we look for something that's really kind of not right on the news but a little odd that would be interesting. >> which we appreciate, too. another story that caught my eye was the studies where they are trying to figure out what went wrong and why there is the cause of limb growth. >> a couple years ago they noticed that it prevented the blood vessels from forming but they didn't know how and now they linked it to an obscure chemical but they have steps to go. it's an intersection of basic science and this tragedy. >> you're not afraid to put things in. i haven't studied much biology for 30 years but now the controversy about what a gene is. it's not a single stretch that goes through a message and goes into protein. totals totally different think. >> we try to provide something for everybody. there's a variation in tone. it should be that anyone who wants to can get through it. >> it was graduate level science. >> yes. some of them are more appealing than others. we have health columns which are really straightforward and then we go off into the basic science like nature of time or universe. >> that's great stuff, too, isn't it? you need to dumb that down a bit. please. i got through six pages of the book and said okay. >> scientists who do it don't understand themselves. >> it's just a nice break from everything else in the front page of the paper. >> right. we focus on economics, which is not only dismal but a quasi-science in the first place. >> dismal yes. science, i don't know. >> i like you. >> thanks for coming in. this is our own little vanity time. thanks for coming in. >> when we come back, we'll get top stories and one "squawk box" host you will not want to miss. last time he was here jerry made headlines taking played for the merger. we'll talk more when "squawk box" continues. regulate-year reform and real estate, the spring real estate season ready to kick off. should you buy, sell or stay put? power to the fed. senator dodd's plan to overhaul the financial regulatory system. what does it mean for your portfolio? from cable pioneer to wholistic healing, jerry levine is our guest host as the second our of "squawk" begins right now. >> well done with that this morning. good morning, everybody. welcome back to "squawk box" on cnbc. i'm becky quick along with carl quintanilla and joe kernen. we have a "squawk box" regular. david malpass will be joining us later this morning. also, senator chris dodd will be joining us to talk about the latest version of the financial regulation reform and how he plans to get enough republican support to try to pass this bill. plus, in studio with us this morning, jerry levine. former chairman and ceo of time warner. we'll talk to him about a lot of different issues this morning. first, let's get a look at this morning's top headlines. >> equity futures mild this morning. mild gains in europe and asia. lehman is filing a plan to end the largest u.s. bankruptcy case in history. the chapter 11 plans calls for a newly created business called lamco. fed policy makers meet today. economists say unlikely to make changes to key policy. the question is whether the statement will contain language regarding the interest rates. >> you don't speak spanish. people at home go, my word. but i did send you a note the other day. that's okay. let's welcome our guest host this morning. jerry levine, former ceo of time warner. great to see you. >> great to see you. >> welcome to the parking lot. one thing we want to talk about today and i know this is -- do you know who spencer pratt is? have you heard of him? >> yeah. >> do you like cold play do you? >> no. i have one question for you. i stayed up late last night and watched rock n roll hall of fame induction. friends of our wrote the song with the most air play on the radio in history. the hint is righteous brothers. the songwriters were inducted. >> that's a great song. >> it was in "top gun." >> yeah in the bar. >> with tom cruise and anthony edwards. >> he was falling in love with a woman who in real life would really have no interest in tom. any way, let's move onto the fcc and once more fast lanes to the internet. >> this is actual lay big story. >> why? >> replacing broadcast. for 60 years it's been broadcast. >> it's been broadcasting since the 1950s. fcc has favored broadcasting. it took us years to develop hbo and cable. but now the recognition that the internet is in fact the universal delivery mechanism is an enormously significant thing. i was going to ask you of all things you are covering today, the fed, financial reform, health care, march madness, which is going to be the most significant thing happening this week five or ten years from now? i say it's what the fcc is doing do. i think health care debate assuming the bill passes is going to get changed a lot. it's going to happen. this is resetting the course of the basic fundamental way we communicate. it has global implications. so it's not just because that's my background. >> you're a media guy, right? >> i'm a media guy but what binds us together? what's the source of our information and communications? look at when you're doing here this morning just to deliver news. >> as long as you're healthy you're surfing the net but if you have no insurance and you have health problems, you're not going to care whether it is broadcast or internet. >> maybe the internet is also part of the key to health care and wellness information and binding people together. i know you think i'm bias but ten years we'll look back and see what the answer is. >> it's also a way of you saying seeing i was right seeing a promise -- >> just a little early. >> exactly. we're not into legacies. >> we did that on the last show. >> are the goals that have been set out by the fcc in your view too aspirational and selling themselves short or where on the spectrum of reality are they? >> i don't think they are too aspirational. this was really starting in the '90s under reed hunt to start making the internet easily assessable. now i think the u.s. has to catch up with the rest of the world in terms of internet broadband penetration and speed. one-third of the country doesn't have broadband. our speeds do not compare favorably. i think the aspirations are not too high. and the people who are going to get hit the hardest are not the verizons or the cable companies. i think it's broadcasters because you will auction off some spectrum that broadcasters brought they had. broadcasters will have to pay a fee for the license they've been getting to print money for years and years and years and again i'm not bias but i just think that the concept behind what the fcc is saying is rather profound. from an investor point of view, what does it mean in terms of where the companies are going. one company coming up over here, john chambers company, cisco, it has to be significant. they've already been doing a great job. >> today we have disney and news corp and comcast nbc if that goes together but you wonder if it will be google. who will be the media giant in ten years? >> i would take a hard look at google. i would not discount time warner, disney -- >> i forgot time warner. >> i would not discount them. but let's see what brian roberts does with nbc universal. >> interesting regulatory things happening on that front. the appeals court recently upholding something that is hard to own content. you can't feel like you own the content if you can't decide what pipe you use. >> this is the problem with too much regulation but it has to do with exclusivity and the fact that if you are in the cable business and you be own programming, you have to make it freely available. >> bs. why if you own it? >> being a content owner and copyright, we need more respect for that. and this dates back to the '90s. >> this only goes another couple years before they got to put it back into effect, don't they? >> you're going to have a lot of interesting issues. maybe you want to talk about it when comcast and nbc get together. you have must carry. this recent fight between cablevision and abc and the oscars, we'll see more of that. and what happens when the same company owns nbc and the cable company? so this must carry thing is a past relationship between the fcc and broadcasters. >> i remember when movie studios couldn't own a movie theater. >> 1948. >> yeah. what about now? >> is there going to be a network over the next five to ten years that bites the bullet and cuts their broadcast division all together? >> now slowly but surely they will become more like cable networks where there's a dual revenue stream where they actually get paid. >> it's not a matter of one moving to cable. >> no. >> you think broadcasters will actually win abc's battle it's been pushing back and forth and they'll get paid by the cable companies? >> i think they will get paid but it doesn't solve fundamental problems and eventually the fcc is going to move away from this universal carriage requirement for broadcast networks and move more toward internet distribution of everything. >> is that going to be something that again are we going to build this out to make sure every american has equal access? >> there's a universal fund now. that will now get shifted to bring internet broadband speed to rural homes. you know, the fcc started in the '90s to deliver internet to schools, libraries and then the whole thing about fire persons, police having access to this for safety so there are so many public policy issues that the use of the internet and there's a broad philosophy that this kind of hundred million people having hundred megabits per second, that innovation put aside job creation because you'll definitely have that but innovation is somehow going to be sparked by this. new business. that's what google is all about. by the way, i would kind of say google company of the future, that is surely one of them. >> a lot more to talk about with jerry for the next couple of hours. up next, he has submitted the paperwork and now the tough part begins. why david malpass decided to throw his hat into the ring for a u.s. senate seat. speaking of senators, we'll talk to senator chris dodd about the latest bill to overhaul regulatory financial reform at 7:45 a.m. stay with us. this is not more benefits at greater cost to your company insurance. this is not how does it fit in my company's budget insurance. this is help protect and care for your employees at no cost to your company insurance. with aflac, your employees pay only for the coverage they want or need. and, the cost to you - nothing at all. if all you know about us is... aflac! ...then you don't know quack. to find out why more businesses provide aflac, visit getquack.com >> now the answer to today's afl aflac trivia question. the answer james madison. >> let's look at the futures this morning. right now those dow futures are higher. futures up by about 12 point above fair value for dow futures. data at 8:30 today with a look at the housing market. housing starts out in an hour and 15 minutes. gasoline prices rise to get highest level since october of 2008. the energy department predicting prices could top $3 a gallon. the average price for regular unleaded increasing four cents to $2.79 a gallon. compared to a year ago, that's 88 cents higher. a chief economists taking the first steps toward a u.s. senate run. david malpass is a longtime friend of the show. good morning to you. we're not looking at an official announcement this morning are we? >> no that will come in mid april. >> you did file the paperwork. what was that like of filing that? >> it's very interesting how complicated the system is. what i've been doing is reaching out to county chairs around new york state to get on the ballot. a grassroots process but bucking the old system. there's an entrenched party system on both side. i want to convince people that the race is serious and i'll be able to raise a lot of money and the message will be clear that we need jobs and growth and we need washington to stop tax and spend policies they've been doing for so long. >> you've been a longtime critic of the way government is spending money and degree to which it is not going to smaller businesses. what could you do as senator that you can't already do using your voice at encima. >> it comes down to voters having the say. in washington senators voting the right way. i was troubled in february when our new york representatives voted for $14.3 trillion in national debt. in effect they went into everybody's house and signed your children's names to $14.3 trillion with no strings attached and that's very harmful for growth. if i'm a small businessman, it's daunting. how can i want to hire people and make new investments when the government is just going to tax it away. >> david, it's been a while since massachusetts now so we sort of have forgotten how historic that was. i don't think individual voters have forgotten. this is a time when strange things could happen. have you bought a pickup truck yet and i don't think you posed for "cosmo" but i was in aarp. any sk anything we need to worry about? how do you think your competition is on your side of the aisle at this point? >> i think the competition is people voting for this health care bill. you see it every day. massachusetts was energized by people not wanting the government to keep spending and taxing and passing big bills and that's what i want to stop. i think it is critical that people realize that washington really can control itself if they're given the right direction but the votes just keep coming in the wrong way. just this week we're seeing yet another big jobs bill. i'm all in favor of jobs but they aren't created by washington. they're created by the private sector and they've been doing is choking off small businesses and creating government jobs. that's not the way for long-term prosperity. >> just a question. have you looked at what is being done in california and how that campaign is going and also the videos she's turning out against barbara boxer? >> i think there's a huge nationwide groundswell to change what's going on in washington. i call it an upheaval. one thing that's scary is how much money they have to raise there. the website is up and running and i hope to tap into that nationwide feeling there needs to be change in washington. >> you talk about votes passing all of these expensive bills. they're being passed with practically no republican support. you would be going in as a republican with a party that's already resisting as much as they possibly can. >> that's right. i talked to my friend congressman paul ryan yesterday. he's got a bill in to reform the budget process. look at what this reconciliation process is doing to the health care bill. they'll put a bill through that the public really doesn't want. that's got to stop. they need reinforcements and that's what we're talking about yesterday. >> you can do more if there are 60 republican senators than if there's 40. what can you resist with 40 guys and with minority in the house. you can't resist anything. the democrats are resisting themselves right now. that's why it's been so tough. >> look at dennis with a firm no on the health care bill. >> he was on air force one getting arm twisted. >> they're looking for their way. the correct way i think is to focus on jobs and growth, freedom for americans, personal responsibility, small businesses creating jobs and they've lost that in the campaigning process. new york state is critical for this change process. i'm going to get way outspent because it's been a democratic state for so long. it's in shambles from a political process and from a budget process and so that creates a big opportunity and massachusetts showed an example of that. >> david, if health care is dealt with this week in one form or another, whether it pass or not, the administration says it is turning the focus to the jobs picture. is there a chance they could get on message and get on target and followthrough with things that voters have been eagerly awaiting? >> i think they will talk about jobs and small business but when you actually look at the legislation and look at the executive branch decisions, they're stopping the small business job creation process. plus, now they're coming down the pike with this huge new financial reform legislation that basically creates more government. it's got a big consumer safety operation in the fed -- >> somethings that to be done in terms of regulation. even financial firms themselves admit something need to be changed and be done. >> we need financial reform legislation but one that get us toward more jobs and growth and not one that gets us toward washington. >> what about towards more oversight? >> i'm in favor of more oversight but what they're doing is setting up this super apparatus of governors that takes the same decision making process that was broken over the last decade and sets it into a bureaucrat committee. i don't think that's going to help save the world. the starting point for what they're doing is the idea that washington is supposed to save the world. i don't think that's a good change for the financial system. for new york, it's especially harmful because new york needs jobs and tax revenues that come out of a vigorous free market banking system. we didn't have that. i'm not defending the system. it was a bad system and needs to be changed. the bill that they're putting forward is going to make it worse because it doesn't focus on the right things. >> well, once you're a senator, you're going to come back, right? we're not going lose you forever. >> that would be great. it's going to be a very long, hard slog in washington. you can't change it overnight. it it will take quite a few people working year after year to stop the spending machine. it is embedded in washington and it will be hard to stop. >> pickup truck. don't buy a prius. >> okay. >> it will be fun to watch the process as you go through. we'll talk to you soon. >> thank you. >> just quickly, we want to tell you about some reports that are coming in of an earthquake felt in los angeles. this is a 4.5 magnitude or 4.4 depending which wire service you are watching. no reports of damage yet. >> i was in a 4.6 in '87. northridge. >> you hid under your desk. >> it was in the '90s. >> it was the one in '87 during the same year just before the stock market -- rough month. october 10th. yeah. i was on the first floor. it was scary. changed my whole view of the world. >> and then the market tanked. >> yeah. it was a preshock for the market. coming up, senator chris dodd on overhauling the financial regulatory system and much more from our guest host, former time warner ceo gerald levine. "squawk box" will be right back. >> as we head to the break, here's a look at the widely held stocks. 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"squawk box" continues in an hour. as the spring home selling season gets under way, we're taking a look at housing which is a key component of any economic recovery in the united states. joining us is richard smith. president and ceo of a company that oversees brands you know well. thank you for joining us today. >> my pleasure. >> if you have to look out right now at the spring selling season, are things off to a good start? does this indicate it will be a strong season or are there a lot of people waiting on the sidelines to see what kind of bargains they can get? >> it's a good start in part driven by the tax credit. we're not sure just yet how much of the activity is driven by that. it's showing very good signs of strength. it won't be a robust recovery. not as robust as many in the industry previously thought but a healthy recovery. >> in terms of strength people are buying homes but there's a lot of negotiation taking place before they agree to sign anything. >> that's always the case especially in this environment but it's also impacted by the tax credit. they have to be under contract by april 30th and close by june 30th. there's a lot of activity that we're going to see leading up to that april 30 deadline. we saw it in the fourth quarter. it was driven by that tack credit. december was weaker than expected. i think we're going to see that in the spring buying season. we'll see january by healthy standards. i think january is up about 7%. if you look at the northeast, the northeast was up the best at about 17%. the south is coming in around 8% increase. these are year over year numbers. the midwest around 3% or 4% and west around 2% to 3%. so we're seeing strong signs of activity. we have to see if it closes in april. >> if you have six weeks left, what do you think will happen at that point? will we pull sales forward who may buy later because they were trying to get in in time to make sure they qualified for the program? >> perhaps. that's the nature of a stimulus program. we want to pull people forward and make a decision earlier than they would have otherwise. the real question is what will happen after the tax credit expires. that's an interesting question for a lot of people from a legislative standpoint and an industry standpoint. some discussion about what happens next and the jury is out on that. we think the first half will be a strong half given the recent past in housing but the second half is a puzzle to us. >> even with better signs it's no question still a buyer's market? >> there's some markets where that's not necessarily the case. san francisco is an example where there is little if any inventories. units in san francisco are down 20%. price is up 24%. you have the hamptons with a lot of inventory second home market december of last year was strongest december on record. >> a ton of inventory. >> it's amazing. i tell you what's interesting about housing. we've gone from this environment where it was a macro environment. there really isn't a national housing market. housing is local. always has been. in times of crisis it becomes a national real estate market. so everything sort of weighs heavily on housing. we're moving back to a microenvironment where it really does matter what's happening in the local market. where is it located? location becomes more relevant. the house on the right side of the street and right side of town? those microissues are far more relevant. >> the areas where you see strong growth or maybe it's becoming more of a seller's market, you could probably list those easily on a short list. >> we have markets in new york city where we have an inventory problem. the right apartment at the right price sells within a week. and they are getting the price they're asking. we're really getting back to what i think is a healthier housing market where it is driven by the microissues and not macro issues. >> do you worry about foreclosures to come and how that will affect? >> let me tell you why it doesn't trouble me a great deal. we're the largest independent resaler of reos in the country. there's a very robust resilient market for value. >> it's low priced. >> a value play. selling half of what the banks have them on the balance sheet under the unpaid principle balance but the issues are selling. about 70% of them are going to investors. these are not institutional investors. these are mom and dad buying the third rental property. balance going to first-time buyers and high percentage are closing with cash. there's no financing contingency. it's a robust market for this. a true value play which is encouraging because that segment of the economy is much stronger than we're giving credit. >> is it tough to get a mortgage if you don't have stellar credit ratings? >> in my view it's what it should have been five, ten years ago. i think they are underwriting the loans right now. there is value at looking at assets and income statements and proving your worth. i don't see any problem. underwriting is what it should have been ten years ago. >> just a question. what do you think will affect the psychology of people having gone through this feeling about what home ownership used to be and now there's been a trauma. what do you look for to pick up the psychology of home ownership again? >> that's a great question. probably the most important question. housing is very emotional. always has been. over the past ten years it became more of an investment. people were trying to figure out what return they would get outside of the emotional attachment to the house. i think we're moving back to an environment where the emotional attachment becomes a place to live and not necessarily going to be your bankroll for your retirement. that, too, will come back. i remember well and you probably remember in 1987 where the stock market crash and everything was doom and gloom. nothing will come back. luxury is out. everything attached to luxury was out and beyond the scope of reality. that's not true in this case. we're going to be -- we're very impatient. we'll have a brief period of time during which we'll worry about whether this san emotional attachment or financial investment and be back in short order realizing that the house is truly a good investment. now, the psychology will depend on this economy. we have gray clouds hanging over the horizon. the sooner those are behind us, the better off we'll be. >> can i ask a ceo question? we have too big to fail. is there such a thing as too big to manage? you have an impressive company with a lot of employees and a lot of franchisees. what's your take on that? >> too big to manage depends on how many different industries you are in. if i as an example reflect on the old days where we had a variety of industries under one umbrella, that's a difficult task to manage. i'm industry specific. i think that -- i appreciate the question. thank you. i do have a complicated job but it's not that complicated. i have good people working for me. >> it depends on the quality of the management. >> no doubt about it. >> i'm very comfortable. >> i will answer for you, richard. i didn't see anything in the entire interview. i want to help you out here. >> you're very right. >> should have asked. >> thanks for coming in. >> still to come, senator chris dodd on financial reform and getting his latest proposed bill through congress and we'll get reaction from bob corker whos w was close to a deal. we'll get his side of the story a bit later. >> announcer: you're watching "squawk box" on cnbc, first in business worldwide. chris dodd unveiling his plan to overhaul financial regulation. here with more is the senator. chairman of the banking committee. welcome. good to see you as you appear on your favorite morning show. sometimes you do other morning shows that isn't your favorite. >> this is my favorite. >> get the other one out of the way. practice a bit. get your story together. then come on. senator, you need somebody from the other side of the aisle obviously. how are you going to get them? >> look, we already have parts of this bill -- major parts of this bill have already been endorsed and helped written by on a bipartisan basis. we don't have support yet of the underlying bill, i didn't expect that would be the case when i offered the bill yesterday. i just laid the bill down. we'll begin a markup next weeks. it takes time to build that support. as richard shelby, the ranking republican on the committee, former chairman of the banking committee said yesterday, he felt that 80% to 90% of this bill was agreed to or at least good parts of that. i appreciate richard's comments. he's a good friend. we talked last night on the phone and working together. we have work to do yet before there's going to be complete bipartisan support for this but i think we're on the right track in my view. we're doing things that need to be done. we need to stop the too big to fail and implicit guarantee and deal with consumer protection and deal with having a systemic risk radar that you can start to identify problems early on. i don't want to bore you by going through 11 titles of the bill but much of the bill has been hammered out and worked on by democrats and republicans over many, many months i would say to you. >> you don't need to speak for senator shelby or corker but where is the sticking point in your view right now? we're learning so much about making sausage. more than we learned with that bill thing we saw back in grade school and high school. you throw a lot of stuff out there initially. what are you willing to give back on that you put out? you put it out there. we don't really understand why. you are willing to take back some of it, right? >> let's sit down and see where we can. the point is not taking it back to satisfy political interest here. we lost 8.5 million jobs. 7 million homes in foreclosure. trillions lost in retirement income in this country. when the next crisis happens, we need to have the tools to make sure you don't have the economic wreckage around the landscape we're seeing today. >> you don't want to do all or nothing either. better to get something than not to get anything. how about the idea that you do the volcker rule but you don't let investment banks exit their bank charter. >> you need to read the bill carefully. trading is something we want to put brakes on. it's been dangerous in our view. i won't write a regulation. congress doesn't have capacity to do that. so we've asked the advisory council to make recommendations and regulators to promote on how to do this. it leaves a lot of flexibility on how this gets done. the last thing congress should do is write specific regulations in these areas. that's why you have regulators in place to do these jobs and oversight by congress to make sure they comply with your legislative intent. >> you're referring to hotel california provision where you can check out but you can't check in -- you can never leave. senator, people have learned some lessons with health care and we all remember what happened in the finance committee and now there's this running theory that somehow chuck grassley kept the issue alive long enough that opposition swept in. is that what is going to happen here? >> not at all. again, i worked closely with dick shelby, bob corker of tennessee, and these are very serious committed people that want to get to a bill. what i'm not doing is letting this go on much longer. last week when it appeared we weren't picking up necessary the votes that you have to go forward on, i decided we would lay down this bill and begin the markup. i appreciate the effort. i can't underestimate this or underplay it. the fact that people like mike warner, bob corker, jack reid and others on my committee, democrats and republicans, they have spent hundreds and hundreds of hours together working on major provisions in this bill. this is not something i laid down and wrote up over the last weekend. >> you can understand why they might have issue with what you did last thursday? >> not at all. they understand. i don't write these things on my own with one or two other people. it requires building a majority. i need at least 12 votes in that committee to leave the committee to get to the floor of the united states senate. this is complicated stuff. you can't just do it overnight. we spent a lot of time at it. now we have to move forward. i'm confident we'll get the job done. >> senator, to go back to this point. senator corker said that you guys were 95% of the way there. there was only 5% left. what's in that 5% that -- >> people throw percentages around. the fact that he and i were some place and if you don't have 21 members willing to go with you, it's a nice notion that we've agreed but i have to produce votes. if i don't get 12 votes in that committee this bill goes nowhere. >> is there one provision that you think is the biggest sticking point? >> not necessarily. there are two titles of the bill still in controversy. the consumer protection title and corporate governance title. there are other issues more technical and other nine titles of the bill. title 1 and 2 dealing with resolution of what we call orderly liquidation as well as systemic risk, that's been agreed to. those are major part of this bill that we never again have a bailout of a firm because they have an implicit guarantee from the federal government that they will get a check where they get themselves into trouble. that's been agreed to. that part of the bill. major other parts of the bill agreed to as well. a lot of work has been done here in areas that i mentioned to you need work and i think we need to hold to value and consumer protection is critically important. you and i can buy toys for our children and be guaranteed there's a consumer product safety commission. you buy a financial instrument in this country and there's no guarantee that you as a consumer will have someone making sure you're not going to be taken to the cleaners. >> senator dodd, jerry levin, i see the federal reserve is now continuing to have fairly significant functions. what's your view of the federal reserve? >> again, i never felt we should be punitive. i can't write a bill in anger here. people are legitimately upset over what happened either because regulators didn't do their job or there wasn't regulation in certain areas. the federal reserve is critically important to us. we had a debate back and forth over supervision in bank holding companies and major ones in the country, 100 of them out of 8,000 or 9,000 banks in the nation. i came to the conclusion that if we're not going have a single prudential regulator then allowing the federal reserve to continue its function on these large bank holding companies with assets over $50 billion made some sense. let me quickly add to you, we have designated the vice chairman of the federal reserve to be specifically responsible for the supervisory function. we took the chairman of the new york fed and made that a presidential appointee no longer chosen by the banks they regulate in in country. we're seeing to it that the federal reserve has an audit function where we have a better ability to monitor what's going on in the federal reserve than ever before and the other institutions, the other prudential regulators, the office of the controller of the currency, federal deposit insurance corporation have clear lines of authority in our bill between state banks, national banks and the level of bank holding companies. that never existed before. we have a lot more clarity. we have a federal reserve focused on core functions involved in the supervisor of large institutions with the ability to take a look over what's happening to us systemically in our nation. >> senator, last time you were on i asked but health care quickly. 17%. wouldn't you really -- should be it done in a partisan way. you said absolutely not. we need to do what we need to do. it was about reconciliation. the self-executing rule called the hereby rule. i know you know about all these things. if speaker pelosi realizie ins won't work on friday with the house, do you think that's okay now to go one step further and do a deem and pass strategy with this bill. >> i have tremendous respect for speaker pelosi. she's done a remarkable job as speaker. we have people across the country that are struggling. we have talked about our percentage of gross domestic product consumed by health care costs. those are issues that effect families in this country and affect individuals. i would prefer we did this in a straight manner. you have seen what's happened politically. someone struggling isn't interested in process questions here in washington. what they want to know is are you going to do anything about the fact that my kid is sick and i'm going to an emergency room because i can't afford health care. >> they're hearing from constituents that don't -- >> i don't think so i don't disagree with you. would you prefer this be done without going through exotic procedural motions. absolutely. i agree with you. those are more important than the ability of someone to get health care, i disagree with you. >> we have to go. do you know that scarborough's first name is charles. the whole idea of "morning joe," i don't know whether you knew that. tell some of your colleagues. it should be "morning chuck." >> you're getting me involved in this. i have enough problems in my life. >> that's for sure. >> it's your favorite show. >> this is right here. i keep you on all day. i don't just listen to you in the morning. i watch you all day long. i'm an addict for you here. you do a good job. >> focus on the 6:00 to 9:00 show. thank you, senator. we appreciate it. up neck, we'll talk about fear and volatility that could be leaving the markets. and senator bob corker reacting to senator dodd's unveil of the financial overhaul plan after being left on the 5 yard line as he puts it. (announcer) we're in the energy business. but we're also in the showing-kids- new-worlds business. and the startup-capital- for-barbers business. and the this-won't- hurt-a-bit business. because we don't just work here. we live here. these are our families. and our neighbors. and by changing lives we're in more than the energy business we're in the human energy business. chevron. senator dodd's financial overhaul bill setting up a battle with wall street. >> every day we delay is a day we're unprepared for what's around the corner. >> the measure is in need of support from the other side of the aisle. senator bob corker gives us his reaction to the dodd bill and whether he and his republican colleagues will go along. >> we should have tried to introduce something in the middle of the road and have people on both sides try to influence it in a better way. is fear leaving the market? >> what do you think of this? do you like it? >> we get a lesson on volatility. and a realty check. the head of one of the nation's largest home builders will tell us how housing is battling back as "squawk box" begins right now. ♪ >> welcome back to "squawk box." i'm joe kernen along with becky quick and carl quintanilla. our guest host is gerald levin former ceo of time warner. he's with us for the rest of the hour. we should have started with "you lost that loving feeling." >> we have another hour. >> we're waiting on economic data. federal report on housing starts at 8:30 a.m. eastern time hence our theme day. it's because of the housing starts. >> what's the name of the theme day? >> realty check, housing battles back. >> you set the standard on how to read that. you're like the guy that reads our promotions who mispronounces every word on the planet but he does read them. >> headlines today, fmoc holding a one-day meeting. economists expect the fed to keep interest rates steady. the key question is whether or not the central bank decides to reiterate its pledge to keep interest rates at low levels for an extended period. saudi arabia has said to expect no change as it is content with prices and supply. china is warning google it must obey chinese government rules even if it decides to retreat from the country. reports suggest the search giant is soon to shut its website down in that country. the vix trading at the bottom of its two-year range. a possible signal that fear is leaving the market. the vix has gone as high as 47 over the last year but it's come down substantially from there. joining us right now live ahead of the first annual global volatility summit are two power players in this field. gentlemen, thank you both for joining us. why don't we start talking about volatility. paul, is volatility truly dropping and people feeling complacent and comfortable in the market. >> they're feeling more comfortable undoubted because of where the vix is trading. it feels like we're in the eye of the storm at the moment. much more risk capital back in the market and to me it feels as though we are waiting on some key decisions from policy makers before the real volatility kicks in. >> what are the most important of those decisions? >> i think you have a huge, huge event coming up with midterm elections in november. and i don't think the right decisions are going to be made. they will be more political rather than economic and that's going to affect the market and that's going to affect volatility in the market and to be able to withdraw all of the stimulus and liquidity that fed and treasury have been putting in will be an enormous impact on the market and that's going to drive the vix higher and drive volatility markets steeper. >> would you agree with that idea? >> yes, i would agree. there's a significant amount of uncertainty about that strategy and in my view damn if you do and damn if you don't. if you exit too soon from the stimulus, you get back into a recession. if you have runaway fiscal deficit and there will be high inflation and that will also harm the recovery. it's going to be difficult and a risk of major policy mistake in election year in the united states our u.k. or other country so policy uncertainty is an important risk in the economy. >> what do you make of these low readings on the vix at least? low volatility trading numbers? is it the idea people are waiting on the sidelines or they're feeling more confident now? >> we push rates to zero and we double money and budget deficit 10% of gdp and we had $11 trillion and a debt free fall and that's why risk is used and recovery of the economy. in spite of these policy stimulus, the economy should be growing at 6% or 7% rate instead of debating whether it it will grow at 3% means volatility has been repressed and once the stimulus policy goes away we'll have to see if there's enough robustness in private demand. i'm skeptical. >> what are the odds that even though we're at this difficult inflection point and it's going to be tricky for the regulators and policy makers to wind their way through this, what would you say the odds are that they can step through the minefield and we make it out okay? >> i'm worried about these run away fiscal deficits around the world and there is gridlock right now in congress. the two parties, republicans vetoing tax increases and democrats are vetoing taxing cuts. there may be more gridlock in republicans take over the house and if we can't raise taxes or cut spending, they'll keep running the printing press as the fed has done for the last year. so the risk is runaway fiscal deficits and we saw what happens when this what happens in greece and u.k. and ireland and iceland. significant policy risks. >> just a question. we're concerned now with financial regulation and policy. let's go back to the input here. what's happening in our business schools? are we changing the way these future financial service people are being educated? >> i've been teaching courses on financial crisis for almost a decade right now. there's a greater awareness that things look like black swan events are not black swan events. they don't happen once every 100 years but they occur with more frequency. we have to understand what other factors will lead to buildup of microfinancial crisis. there's greater awareness and the economy will reflect those concerns. >> paul, you know, average investors have been deeply scarred by what they've seen over the last couple years. what's your sense of where in t investors stand right now and what it would take with putting their money back into the market? >> i think it's a fantastic point. everyone feels that these black swan events are 1 in 100 year events. history has just proven itself that they are clearly not and that they are very, very cyclical and so i think investors are getting confused by expecting these 1 in 100 year events now being 1 in 10 year events. investors need to protect against those events and that's what the summit today is there to do is try to educate the marketplace of how to use volatility in ways to enhance your portfolio and also to protect your portfolio as well most importantly. >> is there a risk that as investors try to be cautious in their investments to protect themselves from all this risk that they miss out on some of the biggest gains? >> well, as i always try and liken that probably younsurance if you want to drive a car, you need car insurance. if you want to own a home, you need home insurance. most of the people with your viewership have life insurance but nobody has got any form of portfolio protection. and that to me doesn't make sense. it makes a huge, huge amount of people's net worth and that for me is what's important for investors to understand is how to protect their portfolio. >> all right. >> i just want to ask, you got yourself into this stock market forecasting business. we're at 1,150 on the s&p. what's fair value? >> don't want to predict right now. >> is it overvalued? >> i see downside risk to the economy especially in the second half of the year when the fiscal stimulus will fade away. there's a risk that will be massive slowdown of growth and earnings will start to surprise on the downside as we run out of steam on the cost cutting and topline revenue will recover and there will be more losses for the financial system than currently priced to the market. so we'll see more volatility and higher risk. >> thank you both for joining us. still to come this morning, more with our guest host former time warner chairman and ceo jerry liven and find out if big apple real estate is bouncing back and senator bob corker. we'll talk to senator corker about his reaction to everything that transpired over the last couple days when "squawk box" continues in just a moment. ♪ you lost that loving feeling ♪ ♪ that loving feeling ♪ you lost that loving feeling >> welcome back to "squawk box." the futures this morning have been above fair value. they still are above fair value. the dow futures up eight points after five days of gains in the market. in our headlines this morning, lehman brothers ousting a whistle-blower. "the wall street journal" says matthew lee was let go in june of 2008 after he voiced concerns about lehman's auditor. the report says the firm was temporarily moving $50 million in assets off its balance sheet. we heard about this this week. the ceo has said that he was not aware of what those things were. the repo 105. this guy went to the board and complained and was ousted weeks after he talked to an auditor. >> in downsizing. >> nobody likes a rat, becky. >> look, if you didn't know what repo 105 was -- >> you didn't think he would say he's a snitch on the air. i'm kidding. >> we want to spend a couple minutes with jerry liven. as you listen to all of the discussion this morning about financial regulatory reform and health care and we talk about the mid terms during the commercial breaks, where do you think we're headed specifically with health care? >> health care i think may pass. there's so much that pelosi and rahm emanuel and david axelrod let alone the president have at stake but it's not a victory for anybody. i think there's -- clearly there's a tremendous need to renovate our health care system and pay attention not only to rising costs but also to wellness and just changing the habit structure of this nation. but on the other hand, you know, the american public has been he can exposed to this partisan sausage making and i think it will be a losing proposition. it will get changed eventually. i think everybody that votes for it will have a problem. once you get the tea party and tom brokaw coming after you, it's really sad because obama was right to focus on it because from a financial point of view as well as human need, it is the most important issue but look what's happened and how it's been swallowed up. >> don't you think then that focusing on coverage over cost was a fatal error? >> well, i think right from the start, you know, notion there would be a public option and let's take medicare and give it to everybody, whether that was the right move or not then to back off so there's no principle here that's pal and ple about what's going on. let's go back a bit to financial regulation. no one talks about corporate governance because it seems to be a problem. obviously there's an issue here. every time something happens regulation comes along. you know, law of unintended consequences. ceo had to sign off on financial. you know, who is in there on the board and management down the line auditors, advisers, lawyers, there's a real fundamental problem. i have a solution which is to just insert into companies. we don't rely on just the government to tell us what's in the public interest. when you make a move as a company particularly a financial services company you have to take into account more issues. there's no reason why the courts can't then adjudicate our corporate governance issues. we need to get -- that's why i asked the business school question. we need to get to value systems that are part of the company. >> you don't eat meat, how will tyson foods stay in business in meat isn't in the public interest? what about cigarettes? >> the courts can clearly handle it. it relates to just taking into account the impact of what you're doing. >> pouring salt right out of business. >> maybe we should go to sea salt. you never know. >> the guys like you could be deciding what i'm eating. i'm eating sea salt. >> some of the policy issues we have now which are built into our securities act -- >> you acknowledge that's pandora's box. >> this is not a red state or blue state thing. >> i'm not saying it is. >> this is how do you shake up your corporation so the board and the management pay attention. what's the answer? that's all i'm suggesting. >> coming up -- >> they pay salaries to some people. >> it's not in the public interest to smoke cigarettes, is it? >> a lot of people would argue. >> there's the music. breaking news on the housing market. new york real estate battling back? there's one area of the market that's showing signs of life if you have a few million dollars and patients. what about soda makers? >> already under pressure. >> we'll head to the big apple. "squawk box" is coming right back. ♪ the sun coming out in new york. cnbc is having a day long realty check. we're focused on prices in the big apple and if they are battling back. nicole lapin joins us right now with a part of the market that may be seeing a comeback. good morning. >> reporter: start spreading the news to carl that apartments in his area of manhattan are on sale if you have a few million dollars to spare. the pricey manhattan real estate market seems to be bouncing back. i've been speaking to several high powered real estate brokers who tell me that after the lehman collapse 18 months ago real estate specifically in the 3 million to 5 million range is bouncing back. >> everyone waiting to see where things will shake out with the financial crisis take hold and would prices drop in new york and everybody is sitting and waiting and there's this pent-up demand almost so much sew it's tough to keep up with the demand. >> reporter: we're talking demand for places like this. dolly lenz took us on a tour of this conversion in the city. this is what you get for $3 million bucks. a two bedroom two bath apartment on the upper west side. demand is back but the buying pattern has changed. >> now because of bank restrictions and all kinds of financing restrictions, people are actually selling first, having nowhere to go, deciding possibly to make an interim move like a rental and then looking to buy because they really can't do it any other way and be safe. >> reporter: so gone are the days of $20 billion bonuses so the mega apartments are moving slowly but $3 million to $5 million range is bouncing back which could be a bright spot as housing battles. >> thank you, nicole. >> getting productivity out of nicole finally. >> are you kidding? she does two early hours. >> working a two-hour day. this is what i like to see. >> watch out. turn their sights on you next. >> answer our question of the day. what's your house worth? is it more than you paid, less than you paid for it or do you think your mortgage is worth more than your house right now? we'll report results throughout the day. go to cnbc.com and give us a heads-up on what this question is for you. >> when we come back, our real estate theme gets breaking news. the housing number starts will be released after this quick break. we'll talk about the real deal about the home building market and then senator bob corker reacts to the financial overhaul bill presented by senator dodd last week and why he was dropped at the 5 yard line when "squawk" comes right back. >> we have breaking news on the way. housing starts. let's check futures ahead of the numbers. how many days have we been up? >> five. >> five straight. >> and it looks -- we'll see today. it's early. up about four points. rick santelli is in chicago. this is a pretty shot. steve liesman is in the studio today. i don't know whether you noticed, rick, what is it again today? realty track day? >> it's my dad's 80th birthday. that's what day it is. he's a big fan. >> jerry lewis as well. >> 84. >> all right, rick. i'm going to give you five seconds now for these numbers which we've been waiting for on realty track day. is that it? >> import prices down .3. down .3. if you look at year over year up 11.2. let's go to housing starts. 575,000 seasonally annualized adjusted units. close to expectations. down from an upwardly revised 611,000. month over month, that's down a nick less than 6%. look at permits, 612,000, that's down a dozen from its slightly upwardly revised 622,000. that's february data. t a rise on that. half a basis points. a bit of a rise in futures markets as represented by the dow and s&p. dollar index was down about a quarter of a cent. that's about where it is right now. not a lot of substantive changes. i guess you could say that housing is slowing down a little bit in the permit side but there's going to be a lot of debate. do we want new starts? do we want to clear out inventories. import prices was well behaved. market will look toward ongoing issues of the last couple days. >> very good, rick. thank you. let's get to steve also looking through the report right now. >> it's a good question what level we want. you want to see economic activity that feeds into gdp but you want to work off inventories that are out there the revised, i haven't seen that since the end of 2008. still because it's a higher level, you end up with more drop than expected by the economists minus 5.9% and the northeast was down almost 10%. midwest was up almost 11%. the south was down. that's big right there. 15.5. the west was up. very mixed across the country. i will say the data that i've seen from february makes me question the impact of the snowstorms. you had some impact here with big decline especially in the south. snow in the northeast expected but a bit of snow down in the south could put a lot of people out of work in a hurry. that's important not only for housing but it makes me wonder how much of an effect there really was in the jobs number and how much of a snapback we'll get in march. that's a debate we'll have in just a couple weeks, guys. that's one area that i think bears watching as we go back and look at the incoming data from february and how much the snowstorm really impacted there. 575 is not a terrific number but given where we've been, it's not a terrible number. >> thanks. rick, are you still there? >> yes, sir. >> what would make you with the fed today would make you go, yes, finally. what would you like to hear? >> i would like to hear them raise rates half a percent or so trying to get overnight lending rate to 1% to nudge a bit of bank lending instead of steepening and surfing. i would like to hear a definitive answer that they are so sorry for using quantitative easing and they won't buy anymore securities. i don't think we'll hear all that. >> i don't know if we'll get any of that stuff. i wondered in your world what would be -- >> you asked me. it's my fantasies. fantasies don't always come true. >> we can all fantasize. >> the committee apologizes. we're so sorry. >> wow. exactly. go right to 1%. let's just take it there. why give the medicine in stages, rick? >> i first of all think that if you try -- let's look at this from an 8 year old's perspective. joe, the elderly and those on a fixed income are not enthralled about getting a goose egg on their savings. there's a demographic issue that is quite unfair. i think that many perceive low rates to be we'll build a bridge so they have to invest in equities because they're getting no return anywhere else. it's a bridge that many people want less traveled and i think in the end that if you look at the notion of the auctions and the supply and who is buying it and why they're buying it, you could point to a lot of negatives on an artificially low rate. >> ask your father whether he remembers a radio show called "life begins at 80." >> somehow i have a feeling he would say yes. >> thank you, rick. >> joining us with the latest on the numbers, is chairman and president of hovanian. is this what you expected? >> yes. we are seeing stability in the marketplace in terms of sales and housing prices. >> you recently reported results and we see revenues going down from a year ago period. it's still a difficult period. you have land related charges and i guess you posted a profit but that was after some gains. when will it be business back to normal? any idea? >> depending on how you define normal -- >> being in business for stocks to go up and make money. >> i think clearly 2010 is going to be a transition year. we're buying new land right now. that's important. both to get revenue up, open more projects and get lower cost land. 2010 will set ourselves up for turning things around. >> survivors as they do so often probably are licking your chops looking at the opportunities but you just got to be around to capitalize on it. >> absolutely. as we announced last quarter half a billion in cash on our balance sheet plus we got few hundred million dollars back on the nol tax benefit. we're definitely going to be around. we're taking advantage of it buying new land. the market is going to bounce back. numbers that we're talking about with releases, 500,000. we are at levels that we haven't seen even since world war ii. it's unsustainable. we're just in a growing population mode in the country and we can't sustain that for a very long period. >> how much of the backlog needs to continue? how long do you think it will take to drain excess inventory out there right now? >> the issue isn't that we over built. if you look at the homes we built in the peak we overbuilt in '05 and '06 but compared to '60s, '70s and '80s, it wasn't different but demand is down. much further than demographics would suggest they should be. >> the percentage of people in america who own homes skyrocketed over the last ten years. do you expect to see that growth or too many people in homes? >> people misinterpreted and don't understand details of that. people buy homes more as they get older. it's greater when you're in your 60s than when you're in your 20s. the postwar baby boom generation is getting bigger. even if we never had the subprime mess, there should be a greater percentage of home ownership as we go forward because we're all getting older. >> what's the play of the rental market? what's happening there? >> rentals out of the 570,000 starts or so, the estimate is it rentals would be about 200,000. for sale will be 300 some odd thousand. it's a traditional mix right now. >> in terms of the government and specifically fannie and freddie and fha and their willingness to subsidize the market still on a track that you see as healthy long-term or go too far out on the risk curve to keep the market afloat? >> underwriting standards have never, ever been tighter and that's fine for right now. qualified buyers with regular credit with regular down payment can find plenty of money right now and that's as it should be. >> can i just ask, home ownership is 68.8%. is that a level we'll push through? >> well, it was at about 69%. it's decreased a little bit. it did get a little ahead of itself. i think that's a demographically sustainable number and even a bit up from there. >> all right. we appreciate your time and your comments this morning. thanks for joining us. >> glad to be here. >> when we come back, settling up a battle between washington and wall street. senator chris dodd unveils the financial overhaul bill last week. he needs support from the other side of the aisle. on that side of the aisle sits senator bob corker who was working on the bill until the last minute and says it contains some provisions he cannot support. we'll hear from senator corker after a short break. , at schwab, tdd# 1-800-345-2550 every online equity trade is now $8.95 tdd# 1-800-345-2550 no matter your account balance, how often you trade tdd# 1-800-345-2550 or how many shares... tdd# 1-800-345-2550 you pay what they pay what everyone pays: $8.95. tdd# 1-800-345-2550 and you still get all the help tdd# 1-800-345-2550 t you expect from schwab tdd# 1-800-345-2550 millions of investors. one price. tdd# 1-800-345-2550 at charles schwab... tdd# 1-800-345-2550 investors rule. tdd# 1-800-345-2550 are you ready to rule? senator chris dodd says his financial regulation overhaul will have both bark and bite when this comes to protecting the american taxpayer. >> we've lost 8.5 million jobs. 7 million homes have gone into foreclosure. trillions have been lost in retirement income in this country. we need to get this right so again when the next crisis happens and it will, we have the tools necessary to make sure you don't have the kind of economic wreckage around the landscape that we're seeing today. >> senator bob corker was working with the banking committee chairman until last week when senator dodd announced he was going it alone. he joins us this morning from the hill. senator, good morning. >> good morning. >> the morning he dropped the bill, you were giving a speech somewhere and we were watching the feed here at work after the show you were taking q and a and i'm wondering just how taken aback were you when you heard that dodd's office was doing that? >> was going it alone? >> yes. >> you know, a little taken aback. i sensed it the day before. i called him early that morning to sort of bike him up a bit. i could tell he was getting a lot of pressure from treasury and other members of the banking committee on his side of the aisle. we now have the opportunity to seek print and i know our staff is working on numbers of amendments right now and i would have liked to have seen a bipartisan bill. it's not. hopefully we can get there over time. >> the senator thinks that it's made a lot of progress thanks to the efforts of both republicans and democrats so far. is that true? >> i do think the orderly liquidation warner and i worked on have been good contributions. the prefunding piece is something that will be debated and changed over time. mostly there are a number of technical errors even in those two titles and changes that need to be made but seeing a bill that has no federal preemption in it with 50 state ags across the country can challenge banks, that was an issue we moved past in two seconds. i think most people realize that federal preemption needs to exist and so obviously there was a little veer to the left. i understand that. now the process of working through the bill and getting it right may be more difficult but hopefully we can get there. >> a little more difficult. senator shelby said that 80% to 90% of the bill is already in the realm of agreement. do you think that's fair and does it bother you that the chairman is bringing it to committee so soon? >> i don't mind him bringing it to economy so soon. i think to begin working on it and have it print to work off of it something healthy. trying to move it out of committee in a week, you know, i've had 36 days of seven day a week 16, 18 hour days staff work and myself being involved in it. i think many of the members have not. obviously this bill is very different. took a big turn from thursday through the weekend. i think to try to move a bill of this nature that's chalked full of substance that actually affects our financial industry in a real way and moving it out of committee in a week is way too quick. i said the other day that any committee member it seems to me that would vote something that quickly out would almost be like a robot. there's a lot to it. i hope we'll have the chance to actually amend it in an appropriate way. look, i understand the clock that he's under. i realize if it will move out of committee as quickly as he says that it is, that probably getting to a bipartisan agreement will happen after the committee process is over and before it goes to the floor. look, we think this is an important issue. we're going to stay engaged. we're going to try to make those changes that are necessary to get this bill back into the middle of the road and i look forward to doing that. >> senator dodd told us earlier there are two arenas where the most disagreement stands. it's under corporate governance and under consumer protection. what has to happen for you to feel comfortable enough to vote for this bill? very specifically what changes will it take? >> i start with federal preemption piece. that's a no-brainer. hopefully that's something we get to an agreement on in a couple of seconds. the issue of making sure that the regulators have the ability to keep in check consumer loss so you don't have that particular situation getting out of balance. >> what does that mean? >> well, you don't want a consumer agency that's roaming around the landscape, if you will, making rules without regard to the safety and soundness of our financial institutions. we had actually achieved a great balance there as of wednesday night, thursday morning. obviously that balance is a little out of balance now and needs to be corrected. >> is it fair to say that senator dodd would like a consumer protection agency with a lot more teeth and would you like one that makes recommendations and defers to other regulators? >> well, defers is a word. we looked at joint examinations. i think we achieved -- i think where we were was a very, very good place. it expanded for those people who on the consumer side wanted a ten, it was probably a seven and much stronger and actually did some things that i think were very, very appropriate. so i think there's room there. the corporate governance there are some issues there that really have nothing to do with financial regulation but this bill is something that is going to move and -- >> what issue in corporate governance? >> things like proxy access. there's concern over the language of proxy access and what may happen with groups as it relates to boards. there are all kinds of things that we're not even talking about right now that i would like to see us work through and these are hot button issues and i know that people focus on them especially in the public. there is a lot of substance to this bill. we'll probably have hundreds of amendments that are constructive amendments to just clean the bill up and again i look forward to hopefully having a product that will stand the test of time that will be bipartisan and hopefully will have an 80-vote threshold. >> i had volcker on. he said if you have a bank charter that doesn't necessarily mean that you're going to not be able to ever do -- i don't know what he said exactly. i don't know what mark warner said either. i don't know if it would be mandatory or voluntary. what's going on? >> if you remember paul volcker who we all respect when he testified in committee, we tried to get him to explain it. he said you kind of know it when you see it. i think that all of us would like to get at that issue of insuring that institutions are not taking unnecessarily risky behavior using the benefit of the federal government and the taxpayers to do so. i think there are ways of getting at that. i think that will have to be refined and that will be an issue that will be refined in committee or certainly before the bill goes to the floor. i think we're all trying to get at the same thing. there are different ways of getting at it and i think that' certainly where a lot of work needs to be done. >> is this -- senator suggested on one of the other shows this morning that congress should not be allowed to recess without this getting done. are you willing to go there? >> you mean easter recess? >> i'm not sure whether he meant easter recess or later in the year, august recess. >> i'm sure he didn't mean easter recess. >> don't you go out on the playground every day at about 1:30 and pick on each other and kick sand in people's face, bullies and -- what about -- go ahead. >> i'd like to know whether or not you would be willing to let this eat into campaign time or not. >> look, i, you know, i don't -- i came here to get work done, and recesses mean almost nothing to me. actually recess is more work than being here. i end up doing town hall meetings from a to z and a lot of work. it is not an issue of work. let me say this. i do think this is a bill that should be addressed, that's why i put so much effort into it. others have put a lot of effort into it. i know our whole committee, senator shelby and his staff and many of us will be engaged in a very real and serious way over the next week and a half. and then beyond. and i don't think there is an issue of senators wanting to leave and not deal with financial regulation. i think we all know it needs to be done. we want to get it done. we want to do it the right way. and i still have hope. i know where they were willing to go as of thursday morning. that's one of the benefits that i do have at this moment. i know where they were willing to go. >> you've seen the books. >> i hope to get back to that point and i hope we'll pass a really great financial regulation bill. this country deserves that and i want to see that happen. >> do you want to give us odds as to whether or not one gets voted on this year? >> i think the odds are high. i think the odds are very high. and i think that there are people on both sides of the aisle that actually want to see a bipartisan bill. i don't think this is the case and i haven't seen any evidence necessarily of this yet, i hope the white house wants to see a bill and not have an issue this fall. that would be the only thing to me that would keep this or cause this to get into a contentious mode. i think people on both sides of the aisle want to get it right. >> you can either have the bill or the issues, but not both. senator, thanks for the time. we'll be watching. bob corker. >> coming up, we have got the stock of the day. plus we'll be firing off a final barrage of questions for our guest host, jerry levin. stock of the day, dow has been up five straight days. two days ago, paced by the move in general electric. about 3.6% two days ago. up again yesterday. that shows the trading this morning, up another -- yesterday was up another couple of percent, i think. and then today up another close to a percent. today there are comments, though, from jpmorgan, yeah that is a weekly -- that shows the weekly chart. you can see from -- well, from $16.40 or so to $17.40. estimates being raised at jpmorgan. jpmorgan believes losses are peaking and should decline in mid-2010. now sees a potential for a beat in 2011. as a result, the company has raised estimates above consensus and they continue to have an overweight rating on general electric. and it is the parent of this company, still, although we know there are things happening in d.c. as comcast tries to get -- >> isn't that why the stock is going up, because cnbc is being spun off? >> yeah, cnbc is being spun -- actually, yeah. very funny. no. and you were mr. cable. you're not -- >> yeah. >> you love the dual revenue stream. >> we love it. we love subscription revenues. >> exactly. >> i was going to read some more. but go to a dollar for 2010. they have it at 92 cents. $1.30 for 2011. had been at $1.15. >> our guest host is jerry levin, former ceo of time warner. jerry, one of the questions that keeps coming up today is corporate governance. we heard it from senator dodd and senator corker. what needs to be done at the corporate level to try to keep the problems from happening? you're somebody who sat on the board, who has been through this enough times. what do you think? >> it is an age old question. when i was on the board of the stock exchange, leon panetta and i had a an effort to do something about corporate governance. we came up with a number of standards that were then put into anybody who listed on the exchange. but over and over again we see there is kind of a failure and a lot of these corporate governance remedies come after the horse is already out of the barn. so -- >> they're very specific to fix the problem from the last time around? >> yes. and then law of unintended consequences, they kind of go away. you know, kind of sitting back, what i really think is important is the financial press. the scrutiny that comes from coverage of business. and not just the shame factor, but that there is somebody really -- i really think that's important. i can give you kind of anecdotal history of what -- we did certain things because of the public perception of what was happening. who is the guardian of the public perception? that's why, you know, the need to perform is so important. >> isn't it a farce to think that happens at the board level? because we have guests that come in and say a lot of these things can be handled by a good board that is is in place. >> but someone should keep discovering the fact that boards have been asleep at the switch, just keep saying that. and the other thing is what do we do with our old retired ceos? one great example is jack welsh on "30 rock" last week. i thought he was tremendous. so it shows, you know, the versatility of our ceos and, by the way, when you're kind of out of the company, you have a lot of freedom to be able to talk and speak. why should that be? why can't we get ceos while they're in the company to talk not only about how great their business is, but what's going on for them and what do they see in the world and kind of do battle with joe? >> it is a riskier proposition, right? >> you also, you know, the errors you can make there is by being caught up in the flavor of the day, the populist anger of the day, the corporate -- we get enough corporate bashing from hollywood, every media outlet, every tv show, movie, you need a villain, it is always a corporate villain. sometimes i think it might be our duty to pop some of those things. >> it is your duty to keep popping. >> popping on both sides. >> absolutely. >> okay. >> jerry, thank you very much for joining us today. it has been a pleasure seeing you. that does it for us today. join us tomorrow, "squawk on the street" is coming up right now. live from the financial capital of the world, this is it. the one you've been waiting for the last 22 hours. "squawk on the street," good morning, everybody. i'm mark haines. >> i'm erin burnett. and front and center this morning, housing starts. they were down in february. but part o