Transcripts For CNBC Squawk Box 20100504

bigger than if he was unsuccessful. thank god he was unsuccessful. >> the biggest fweer is when they get their hands on a dirty bomb or nuclear weapon or anything. but you kind of wonder whether someone like this guy is going to be able to would i be wire up a small nuclear device. i'm just saying that that is going to be logistically mosh difficult when you can't dshg you know, get a couple of alarm clocks hooked up. >> no. he wasn't a physicist. >> no, probably not. let's just hope that, you know, there are so many loan wolfs so. >> and we have many, many targets hear in the u.s. ubs posting stronger than expected first quarter profit in its strong efts report since the financial crisis started. the french strategist ceo says his strategy to regain clients trust may be starting to work. >> bp is continuing to fight the giant oil spill in the gulf of mexico. the energy giant says it's going to try and contain the crude with a massive dumb dome structure we saw yesterday. it's offering gulf coast states millions of dollars to move forward with recovery projects. >> obama's spokesperson saying this morning we were going to, keep, our boot on the throat of bp. >> yeah. >> that's really no different than other u.s. cornerings. >> but he said it out lawsuit. yes. >> president obama performances to find another way to help close to state happens $20 billion budget deficit. he said tv images about the spill made his change his mind and that's why the big spill was back in the 60s. >> he mentioned being the bird, which we've -- that is the first thing you see is the bird with the dove soap or whatever it is, cleaning each individual feather. it's obviously a heart wrenching thing to see. but i don't know if you suddenly gauge your entire energy policy based on the type of images that you'll see from the financial media, necessarily. we're not going to suddenly stop using oil. i mean, we are going to continue to it it for a while. >> exactly. would you have been watching. we start with portugal. >> what dodd with portugal? >> what toad with the taller type theater portfolio? >> to. this is no business upon that stands us that immediately identifies -- no cathedral or -- >> probably could use football. let's head to louisiana for the latest where we find scott cohen. good morning, scott. >> reporter: good morning, michelle. that's the gulf of mexico behind me and the lights in the distance are oil rigs. this is port fourchon, which is the main on-shore point for everything offshore and where a lot of the recovery efforts and the various efforts here are taking place. one thing that you notice this morning, the seas are a whole lot calmer in the gulf of mexico. that is going to be a big help as they try and get this thing taken care of. one thing it may allow you to do today is another controlled burn to punch off some of the oil that's already in an oil slick in the gulf of mexico. it's kind of a three-pronged effort. first of all, containing the burn that started the pole, that will be part of it. second of all, if they disburse some of the oil, bp says it has begun drilling a relief well, which will ultimately plug this leak. they're ip injection cement down into that well. but that is a month-long solution. then they're trying to cap the leak and that is the most interesting and tantalizing of the solutions here, a solution worthy of apollo 13 if they can get it right. a giant, four-story, 98 ton containment dome. it looks more like a big chimney with a roof on top of it. they will lower that down into the gulf of mexico, 5,000 feet below the surface. there will be a pipe coming out the top. it will go to a ship on the surface and take care of most of this. now they just hope that it works. >> nos has ever done anything like this before. but never at this level. so it's a new percentage. >> now, the hope is that they will get that thing out there today, at least out into the gulf. they won't be able to lower it until probably week's end and they don't know if it's going to work at that level because of the intense pressure a mile below the service, but it's worth a try. guys. >> absolutely. scott cohen, thank you so much sfp. the dollar is quite strong, and maybe that's having a ripple effect across the board. i'll show you the futures and the big rise that we had yesterday. we now have a weaker open, industrials lower by 5 points, oil is weaker, as well, maybe in the wake of the strong dollar. it is lower by more than a buck. we're going to get -- where are we going next here? oil dwb right? it's frozen. that's what happens sometimes when technology doesn't work. and gold is at an all-time record high against the euro, not necessarily against the dollar, though. joining us now is bill greiner, our guest host today is richard bernstein from jpmorgan and chief economist anthony chen. rich, let me start with you. why are we telling off this morning, do you think? >> it may well be a bounceback or negative bounceback or whatever you call them, a drop from yesterday. but the dollar, i think, is a critical issue. one of the things we heeded in the head. >> that is very important right now because there's there's a consensus in there. if the dollar is focused on earnings -- >> i think if you look at the s&p 500, you see a lot of the earnings come from overseas and a stronger dollar is not beneficial. but we have economic growth that will hopefully offset some of that strength in the dollar. if you look at the economic indicators, especially the most cyclical factor, it is starting to show further signs of life. >> phil, it is your task to balance those issues. we've got all this economic data that suggests some are talking about a v-shaped recovery in manufacturing and yet we have these constant fearful headlines talking about balance sheets. how do you finance it? >> two years, the last two years, the nation's investors like the balance sheet. >> unemployment is subbing to subside. it's a general equity investment. we are starting to get concerned about the crowdedness, if you will, this is a very proud crowded trade these days. many people are convinced this is the market direction over the next six to 12 months' time. >> what does that mean ultimately when it comes to investing? are you positioning for that short-term assessment where there's a lot of momentum, or what? >> we're staying overweight in equities for the time being, but we have a very quick trigger finger on the trigger right now as far as looking at an idea of moving away from the equity market once people start looking back at the balance sheet whether, whether it's the states, the you'd testify sit, we think that is a potentially brewing problem by the end of the year. >> anthony chan, do you have any assessment of whether it's the ripple effect of oil prices or not? >> well, we certainly think that if oil prices go above $100 a barrel, it could be a little bit of a headwind for the overall economy. but our forecast is that oil prices will be somewhere in the $90 a barrel range. and if we're wrong and maybe a little bit higher. so as long as oil prices remain below $100, it doesn't serve as a super negative headwind for this economic recovery. keep in mind, even though we're bullish about this economic recovery, when you compare the prior economic recoveries, i think you'll justify it and say it's going to be more moderate than what we've agreed to in the past. >> did you hear about that region chris? >> well, i think that's right. i think getting to the question you just asked anthony, as well, you love politics, michelle -- >> i actually hate politics. i came to cnbc because i'm rather not cover politics. and yet they keep coming this way. >> it's not so much oil prices, but gasoline prices from where we are at this point in the cycle. if the consumer incomes don't grow enough to offset gasoline prices, i think the economy progresses cautiously. call me crazy, but i think that margins for the refiners and margins for the oil companies are going to come under pressure because of the spill. >> they have just gotten over that. okay. thank you, guys. it will be about to see you today. a bank tax, financial regulatory reform and the oil spill. john harwood, i'm excited to talk to you because of the -- i just read a couple of interesting pieces in a couple of papers. "the wall street journal" is worried what there hasn't been enough regulation industry. but as people decide to try to figure ow how to play this, it's funny to see how people come down on both sides. but john, in your paper, in the "new york times," i don't know if you saw john broader's piece, if you look at previous oil spills, it's unclear at this point the magnitude of this one and how this turns out. we're in the first inning and it depends on a lot of different things. but for example, when i guess in 1991 when the iraqi forces left kuwait, 36 billion gallons of oil were spilled at that point. 36 billion. we're at 210 gallons a day, which is a lot, but there's no way it was for 34 billion years. 140 million gallons estimated to have spilled in 1989. so even in terms of the pill super pektive blowouts, but in 010 it's a huge deal. >> well, we can all cross our fingers and hope that that is exactly the case. the obama administration is trying to paint as dire a situation as possible and as aggressive a response as they can to ensure that nobody thinks they're not -- that they're underestimating this. but the flip side of that, the positive is that maybe this very grave scenario that ken salizar, salazar talked about sunday, maybe we can hope that that is not the case. when you look at the diversion of manpower, resources, money, political attention, away from what they want to be focusing right now, they do not need this. and by the way, joe, can i talk to michelle for one moment? >> oh, no. you're not going to be mean, are you? >> no. but when you say you hate politics -- >> i hate politics. >> that hurts. i love politics. that's whey do. >> joe, you know how fine a line there is between love and hate. >> that's the ticket. >> stls times i do, too, but that's because i'm me. >> you're right on the edge there. >> john, at least people are talking about something else as far as they're concerned. >> absolutely. and this is one of the reasons why it's a problem, if you just look at it, forget the substance, which is kind of a dufuk thing to say, look at the politics, it takes things away from this financial regulation debate which the administration has been winning big and now we're talking about this catastrophe in the gulf, which throws the energy policy of the administration off course. the barack obama proposed expanded drilling as a way of making a deal with republicans, also on nuclear power, to try to get the comprehensive solution that he wants including a cap on carbon emissions. well, the left of the democratic party which never really wanted to reach out on nuclear power, how much of that are they willing to tolerate now? not much. >> i'm going to item you, carbon dioxide emissions. carbon is block and it's sooty and you can't really breathe fwlu it and it's pollution. it's carbon dioxide, one of the most common gases in the world. it's come out right now. >> that's like the chemistry nerd in you coming out right now? >> it is. well, you know, it is purposely -- i don't know whether they decided to make it sound worse, but purposely, people say carbon pollution even though it's the most ubiquitous substance -- >> isn't that interesting, michelle? yet he's become kind of a swaggering frat boy on the financial stuff, but now the chemistry nerd comes out. >> i just want to ask you, are you sure, john, that the aggressive response to make sure this wasn't a katrina-type things for the obama administration, where there were a couple of days that the feet were dragged and this is a revisionist history to say we were here all along? >> it indicates that they felt that they were vulnerable to the charge. on the substance, should he has gone down earlier? these are dynamic situations ee involving. i think that's a hard call to make. but what they do in the second or did i have third day doesn't matter as much as the overwhelming results. if this proves to be j underwomening, they're going to come out just fine. >> i'm hopeful. >> but if this oil, in fact, flows for three months before they can drill the relief well and stop this and if it's a ka tat fee up the east coast of florida, for example, hurts tourism there, that is going to be a headache for them politically, economically, environmentally, and no other way. >> so the spokesperson says we're going to keep our boot on the throats of bp. >> that was an odd turn of phrase from robert gibson. he got some pushback says, well, boot on the throat sounds kind of hostile, right? and roberts' response was, well, i don't know what part of the country you come from, but that's a term of art we would use. would you like feet to the fire any better. >> how is that any different than the appropriate to wall street companies? >> there hovt business people might say, ah-ha region they tell the truth. >> that against that tells the truth. there comes a point where you've been made enough money, which i like. >> have you reached it? >> buffett should have stopped a long time ago. when you make money, you're saying it away from the zero sum game from somebody else. you're not actually creatining wealth. you never use it for any good and you never pay nilt taxes on it. i would say $10 million is where i would cap anyone. buffett has just -- i don't know. i mean, that guy -- >> you're way past that point. >> that guy. why is that not enough? spread it around evenly. it's bad when people horde it for themselves. ice just not good. do i see the mind-set? there's something wrong here. and that is why the boot on the throat slip and the made enough money slip, that's why the right sort of gets uncomfortable. >> i hear you, but my question is, joe, you've already made way more money than you can ever spend. >> i'm goc to be burning for tsh loif minds me. >> and how much yachts do you need to ski behind? >> i wouldn't mind one. >> big hole in the water to throw money, is that does it. >> between caruso cabrera and me, we need you, john. can you just stay listening to the show today so that we don't lose all the viewers on the left, please? would you mind? >> we have viewers on the left? >> not any more. >> thank you, john. >> you got it. i'm bringing the average income of the show down. >> no. coming up, remember the icelandic volcano? let's coming back. welcome back. making headlines this morning, investment funds managed by silver lake partners skon firm an agreement to buy interactive data for $33.86 per share in cash with a 30% premium over ib's closing price on january 14th. it was the last trading day before its board announced exploring strategic alternatives. the air space over ireland and part of western scotland has been closed due to risk of ash ingestion in aircraft engines. flights will resume today, but volcanic ash could bring disruptions through the week and periodically. coming up, the pictures from the futures pits and bp still doesn't know how much the gulf oil cleanup is going to cost. but what about the impact on the energy giant's image, which was, you know, in disrepair a couple of years ago. and they thought they were on the right track. we're going to approximately the people where it matters most, at the pumps. over 20 million customers have put their faith in sun life financial. we should be a household name. and we will be. so you're suggesting that we change our name from florida, the sunshine state, to...? florida -- the sun life state. the posters will be so cool. sooner or later, you'll know our name. sun life financial. we're not really sure why merck is so late here. their quarter ends like everyone else's, in march. you had all of april. yet here we are in may. fine, we'll mention it. 83 cents, was well above expectations of 74.6. the gap was 9.4 sales. 11.4 billion, well above the 1.75 billion that analysts were looking for. i've got a year forecast for the revenue number of 45.4 to 46.4 and that is above at least the mid point is 45.8 and that would be the mid point of the range that i gave you. actually, it's pretty close to where analysts are. nongap, full year, 3.27 to 3.41. that comes in -- the 3.41 is above where the estimates is of 3.40. but just barely. so the analysts are already have a number posted that is at the high end of what the company is talking about for the year. but they do say that they're -- they're reaffirming, which is a weird word. i think that means that they've already affirmed it once. anyway, they're reaffirm b high single digit nongap the compound growth rate that they had given. so there's a lot of stuff in there to get a gap number that is -- or a nongap number that is so different. >> and they'll have to talk more about what's going on post merger in the integration. they say it is progressive rapidly and they'll have to achieve $300,000 in annual savings. >> unclear on the bid and ask, what is likely for merck. but certainly, if you go back to the days when the vioxx controversy was in full swing, but merck, by not settling and by fighting every case 1 by one, has done pretty well and the stock has come all the way back and a lot of the prognosticat n prognostications about the demise of merck were premature. and actually, the guy who -- do you remember the merck lawyer who decided to try the case, his fortunes have gone up exponentially at the company, as well. he may end up running the company some day, as well. >> all right. >> so you hold your ground and, you know, that was at a time when -- >> do you remember -- >> you remember the trial lawyers? >> oh, yeah, i remember the huge party that that trial lawyer had later on that year. >> with brooks & dunn and everything else. and it was a side effect profile to every drug. some say too much h2o and you drawn. >> everything in moderation. >> we learn the lesson over and over again, right? when you are most terrified, when things look the worst, that is the moment. >> let me see what the low -- >> the greatest reward comes when you take those risks at that very point. >> merck was a $60 stock, fell all the way down to -- i don't think it got under 20, but it got awfully close at one point. $20.05, now back to abouted 36 and still yielding about 4.3%. we certainly see now the market has reacted to bp's oil spill. shares are down more than 13% in the last five days. but how about average joes on the street? are they staring away from bp? i knew i was tossing to you, darren, and i'm trying to figure out the sports angle here. and i realize, as a renaissance man, there does not need to be a sports angle for you to be covering a story. i think that says it all. no. i do the gas station stories, as well, kind of in the same realm, i guess. certain joes are not in the picketers or protesters. in fact, we weren't able to catch any cabbies stopping or trying to go down the street. at least what we're able to see here this morning, there's very little from a backlash standpoint. although the new cycle is slower than it was in -- faster than it was in 1989 with exxon valdez, it's important to note that, you know, there was more than a month before formalized protests for that actually occurred and there's nothing formalized at this point from the boycott standpoint, organizations like green peace and the sierra club are calling for donationes and volunteers instead of directing their anger at bp and admittedly, social media isn't on fire over this issue. on twitter last night, bp wasn't among the trending topics. it was more like lebron james or justin bieber. and this boycott bp page has just 2,800 fans. now, a company called brand keys says that bp's loyalty has gone from first to last in a short period of time over this spill, but, again, this morning, we've talked to several cabbies and they've said that it pretty much still is all about price at $3.13, you know, for regular here a gallon. they're perfectly fine with it. it's one of the best price et in the city. and we've seen that the pumps have been busy pretty much all day here for at least an hour and a half. we'll see if that reflective of the rest of the country. but right now, certainly, nothing from the backlash standpoint. back to you. >> you have so many more followers than that on twitter, darren. give me a break. it's very low numbers. >> twitter is not buzzing. but in the next hour, we'll bring you some sound from some of these guys. but again, it seems to be all about the price and they don't want to pass that on to the customer. now, obviously, if the spill leads to greater prices for bp, they think that is going to drive them instead of just having some social conscious. >> thank you, darren. royal dutch shell predicts it's too soon to say what the government will do after the oil spill leak. steven shork is the editor of the shark report. our guest host is wall street veteran rich bernstein. we've been talking, steven, since '65 about the fundamentals not necessarily supporting some of these levels. but you combine the summer driving season with an oil spill and you just know they're heading higher, no? >> certainly we're at a point where we get the normal rise in gasoline prices. the bp spill itself is not necessarily a drive for oil prices higher. now the implicit fear with all that oil floating around in the gulf of mexico is suggesting of the deliveries to the refineries down in that area. but in that respect, we have to keep in mind, there are 727 million barrels sitting down there in the strategic oil reserve for just such an emergency like this. hence, the market structure in the futures are not indicating any sort of concern with regard to supply. and more importantly, i.e., the fact that prices today are cheaper than prices in the future assures us that inventories are going to remain high, joe. last night, the cost of carry -- the premium on the future market was paying you twice the cost of carry. so why wouldn't you build supplies at this point. and we also have a bit of a pickle as far as wall street traders are concerned because storage at the nymex hub in oklahoma is at virtual max capacity. so even if they guys who are all long wanted to make deliveries into the tanks, they can't. so where does all this production go? it has to be dumped on the market. >> this is tmi. when jarts neischwarzenegger im says, i'm going to pull my support for this project. even though that wouldn't be seen for years, that still causes guys to go long in the futures. and you're giving me all these reasons with all of the supply. why are we at 85? you just told me that we should be at about 45. >> i go into this in detail on any blog on cnbc, joe. why does wall street keep telling us we're going higher? they still stunk. bp, which is the only oil major that breaks out its refinery earnings usa versus the world lost money on north american refineries. they guys cannot make any money. now, look, the numbers that came out from the bureau of economic analysis yesterday indicate we c can, we being the consumer, can ae r afford higher gasoline prices. >> in terms of the stock, would you say we need to be more integrated with refiners and fillers right now? >> you want the -- you know, a company like sunoco is very difficult because they're taking overpriced oil. and rich, i say oil is overpriced because we have yet to see a commensurate increase at the pump. now, consumers are paying 357 cents on the dollar on gasoline. historically, that is very cheap. the problem is, over the past year, our spending on, you know, stuff like plaza tvs has gone through the roof. so yes, we're not going to be able to afford better tvs in the future, but we can certainly afford higher gasoline prices. yet we have yet to see those prices rise. so you really have to call into question demand on the retail level. >> convinced you, right? >> no. i never know. oil i've given up on. >> let's try the futures pits. >> you know they trade derivatives down there. let's get a look at him. >> is that what evil looks like? >> yeah. he needs a boot on his throat. >> he's going to get one. >> hey, todd, so the futures are weaker this morning. i'll give you three choices. you tell me why. is it simply pullback from the big run yesterday, is it because the dollar is so strong this morning or is it these new details that the guy that they've arrested for this failed bombing in times square, pakistani desent, but a naturalized u.s. citizen? >> we saw a 30% resurge in the vix and again, see it spike higher on friday. the equities are a barometer for what his happening around the world. and i think what is happening in europe is there's still question marks as to greece got a bailout package, but there are others waiting in line in the coming weeks, whether it be portugal, spain and others and i think risky assets are going to take a hit here because there is a tremendous amount of risk that is being misplaced in the market. >> todd, has there been, you know, people will argue, but there's an argument that when the dollar rises, smaller capped companies tend to do well relative to big cap companies. are you seeing that yet? are people actually starting to put those kind of trades on? >> no. i haven't really seen that yesterday. when we talk about the dollar rising, typically in environments like this, we're basically looking at the dollar versus the main bucket of currencies. and i think the benefit of the dollar on this recent run has primarily to do with risks overseas and the banking systems and the fragile banking systems that we're seeing in super and whatnot. but we haven't put a correlation together for small stocks yet as the dollar rallies, although i would think the larger cap stocks would benefit down the road with the stronger dollar. >> rich, the russell 2,000 is up to 17% year-to-date while the dow is up only 7%. if we could just erase the rest of the year and go home, we'll take it small caps have outperformed china for nearly two years. >> what should we be watching for the et for the rest of the day, mr. coleman? >> well, i think today we'll be looking forward to tomorrow's adp jobs number culminating on friday. but late yesterday, we go the the report suggesting that loans are continuously made and standards aren't tightening all that much but the demand side for loans continues to wane and that is a problem the banks can't fix. they can't force borrowers to take it. i think that is a key element here. we need to see demands for loans increase. we haven't seen that yet, so we'll keep our eyes on that. >> that comes from small business creation which is crucial to job growth and recovery here. thank you, todd. >> that you can very much. comments, questions about anything you see here on squawk, e-mail us. i got some mail from someone who is really mad that i was on a business show and i was agreeing with president obama about making so much money and that my salary should be capped. did it sound like i agreed with those comments? >> yeah. >> is that scares me about some of on our viewers. people are going to hate me when i'm not serious and when i do -- >> but you have a salary cap, right? you volunteered for it because you wanted other people in the news room to get more. >> quick break now. news making headlines inside and outside the world of business when we come right back. boss: so word's gettin' out that geico can help people save in even more ways - on motorcycle insurance, rv, camper, boat insurance. nice work, everyone. exec: well, it's easy for him. he's a cute little lizard. gecko: ah, gecko, actually - exec: with all due respect, if i was tiny and green and had a british accent i'd have more folks paying attention to me too... i mean - (faux english accent) "save money! pip pip cheerio!" exec 2: british? i thought you were australian. gecko: well, it's funny you should ask. 'cause actually, i'm from - anncr: geico. fifteen minutes could save you fifteen percent or more on car insurance. welcome back to "squawk box." making headlines this morning, dubai world's creditors reportedly agreeing in principal on a debt restructuring. anal arabic language newspaper says they should reach an overall deal within two weeks. time now for a check on the headlines outside the world of business. big news overnight, authorities making an arrest in that failed car bomb attempt in new york city. the suspect, faisal shahzad was taking into custody at jfk's international airport while reportedly trying to catch a flight to dubai. 28 people have now died from those weekend storms in tennessee, kentucky and mississippi. a majority of those deaths occurred in tennessee where popular deaths occurred in tennessee. and fresh travel delays due to the volcano in iceland. it's at it again. because of the drifting ash, flights into and out of ireland have been canceled. back to you guys. >> thank you. coming up, we've got washington watch. a bank tax. financial regulatory reform. debate raging on capitol hill. we'll break down the issues when "squawk box" returns. washington watch today. the senate plans to begin voting on the financial regulatory reform bill. passage of a handful of uncontroversial amendments is expected. there are still questions democratic leaders have not determined whether they will need 50 or 60 votes to pass. >> paul volcker says property pekts for reforms of the derivative market are good. yesterday, he said he believed there was broad support that would keep banks from engaging in proprietary trading. is that going to kill people like your former -- >> no. i shouldn't speak for bank of america or merrill lynch, but i agree with mr. volcker. i think that there's nothing wrong with separating out proprietary tradingng i don't by the argument that institutions are too intertwined now. i don't think that's true. >> in washington today, president obama's going to address the annual meeting of the business council. he's expected to discuss rebuilding the economy. we've got the vice chair and aetna ceo will join us at 9:00. we've had him on before. he runs a huge health insurer and had some -- i guess he ag e agreed with a president on some things and disagreed. >> like the whole industry sold out their business model and it's not working out like they hoped. >> nothing's happened yet. coming up, this morning's top stories, plus two of the top money managers on the streets. crisis on the coast. the oil spill in the gulf raising serious questions about the future of drilling. meanwhile, restaurants, fishermen and local businesses prepare for the worst disaster in decades. sell in may and go away? doesn't seem that way. the three-headed monster is ready to attack. and they're here with their latest read on the markets. the land of opportunity for regional banks. we talk with the ceos of two small banks which have benefit frd the financial crisis as the second hour of "squawk box" begins right now. good morning and welcome to "squawk box" here on cnbc. i'm joe cronin along with michelle ka russo cabrera. >> system of the down or something. why? why? >> in honor of toxic assets. >> any way. our viewers, they're calm people that -- oh, time to wake up. well, we're awake. richard bernstein, how many times have you seen system of the down? you follow them, right? >> i'm a groupie. >> cnbc contributor and ceo. tobias levkovich, a new addition. you can just relax. we will be coming to you soon. some really stuff, all right? >> i'll do my best. >> this morning's top headlines. >> futures are suggesting a lower open, especially in the wake of yesterday's run-up. this morning, looks like we're going to have a pullback. dollar is stronger this morning. that may be causing weakness and more concern about europe. merck, eight cents above estimates. among those excluded items was a 147 million charge related to the health care reform. doesn't really indicate whether or not we're going to go higher or lower. >> even though they beat this quarter by a significant margin, for the year, their guidance is only in line, the high-end of the guidance is only in line with where the street is. >> which suggests that maybe in the coming quarters, they're not going to do quite as well. >> or in most recent history of merck, just lay low. very conservative about what they say a year out in advance. one or the other. at this point, you can't tell. i'm going to do pfizer after you finish. >> the u.s. senate will cast the vote on the reform bill. final passage is not expected for two to four weeks. we're going to speak to the ceos of mid south bank and niagra. an arrest of the failed car bombing attempt happened last night. faisal shahzad was arrested last night as he attempted to board a flight to dubai. he's expected in court today. he is of pakistani decent. arnold schwarzenegger a withdrawing his support for offshore drilling. he promises to find another way to close the state's budget deficit. he had proposed drilling off the state of santa barbara, but tv images of the spill changed his mind. see the impact that tv has, joe? >> yes. we're going to try to impact people now with pfizer. 50 cents a share. 2012 revenue has been reduced by 800 million. 60 cents a share, seven cents a head above expectations. the revenue number was slightly above what we saw on -- they were looking for 16.578 at pfizer and it was just slightly above that. also for the year, it's right in line with where it is. 67 to 69. just like i said with the 2010 full year, the company, at 60 cents, beat expectations by 67, but the number they're giving for the year, more or less in line with what's already there. so even though they beat in this quarter, they're not raising guidance above where the street is. >> are they like merck and not approving and lowballing? >> i think that's been a good way -- 16.75 was the revenue number versus 16.57, so that actually was a little bit -- >> so a little more definitive than what we saw with merck. >> no, that does look good. and merck, i don't know where merck is. >> just keep in mind the drug companies have huge exposures to overseas, particularly in europe. dollar strengthenings. that might be putting some pressure on it. the other thing, you're seeing european governments cutting their spending. >> on health care? >> even health care. about 5, $10 billion out of their drug budgets. >> can they not afford it? >> i think you have to go ask people in greece. >> more on the -- all right. officials fighting a battle to keep millions of gallons of oil from hitting the coast. scott cohn has more. >> two weeks now since the deepwater horizon disaster and they are making slow progress. of course, not nearly enough. that's the gulf of mexico behind me. the lights in the distance are oil rigs. it's raining a little bit, but the conditions have improved and it appears that the seas have calmed and that is important as they try to get their arms around this growing disaster. one of the things they hope to do if the seas are calm enough is one of those controlled burns to get rid of some of the oil slick that is forming. that could help. it will also help them as they continue to drill this relief well that has been started. which started as of sunday. 18,000 feet down, that will plug the initial well that is leaking, but that relief well is still months away. as we wait now, a sort of apollo 13 time solution. this giant containment dome. it is four stories tall, 98 tons. the plan is to get that out there as soon as today and lower it down. there will be a pipe leading up to the ship on the surface and that will carry off some of this oil. there are a lot of people working on this 24/7 and the workers here say it's more than just a job. >> all these guys are from louisiana. this is their home. they want to protect it as best they can and they realize getting their job done to the best of their abilities makes less of an impact on their lives as well. >> the company that's doing this is called wild well control. they're doing it under their disaster response contract with bp. it is something they are working on 24/7 with the hope of getting the first of these domes out there as soon as today, but it's never been tried at these depths before and a lot of these materials are sort of improvised. it's new technology, but they say they are confident and hopeful. >> you make the reference to an apollo 13-like solution. you're talking about the fact they're going to do this at a distance and almost remotely, correct? >> it's that and also the fact they're kind of developing this as it goes along. some of the technology behind this the known. they've done it at more shallow depths, but never this way before. they're cobbling together some of the materials. the main sort of business end of that is is the cooper dam normally used to get divers into the ocean surface. this is going to become kind of a big suction cup. >> thank you. let's get more on the impact of the oil spill. joining us from new york is the head of research for marine transport. i don't mean to through a curveball at you, but when they talk about the oil spilling into the gulf, it's actually small amounts compared to what we've seen in disasters in the past. can you give us a sense of the situation down in the gulf? >> sure. right now, it's pretty impossible to estimate how many barrels are coming out of the well. there have been estimates of 25,000, that's definitely a high amount. there's been a few oil spills over the past several years in north america as well as in asia and europe that have amount today a million to two million barrels. >> when it comes to rig in particular, what do we know yet the degree of liability that they face potentially, financially? we're talking about transocean. >> right now, it's an open-ended liability. we don't know exactly what went wrong. under these operator contracts, the way it's set up is bp takes on the sub surface and well risks, so basically transocean is indemnified from that. >> that means what potentially over the long and short-term? >> short-term, doesn't seem there's going to be an immediate impact, but we would expect there to be a liability that transocean has to its own employees who unfortunately didn't survive. and then there may be some stricter regulations from the minerals management service and the department of energy in general. >> we should assume that, right? this is absolutely going to lead to more stricter regulation perhaps less offshore drilling. what do you make of governor schwarzenegger saying this morning after seeing the images that he no longer wants offshore drilling? >> that was a risk that increased substantially after the spill two weeks ago. looking at the equities at the beginning of april when president obama made his talk about wanting to expand drilling off of virginia, off of florida, the stocks did very, very well on that because it wasn't something generally expected. now, we've seen the stocks compress quite a bit, anywhere between 20 and 30% since the incident. it's definitely casting a big question mark, especially off of florida. >> is a lot of bad news in these stocks already, i think you have a hold rating on rig. should this be upgraded or a sale? >> at this point, looking at transocean, it's come to a very attractive price level. we're evaluating price levels, but still need more information because investigation hasn't begun. >> is this a merck situation? from years ago that you got to -- if you have the cash and you are willing to take the risk, this is the moment, no? i'm not endorsing, just saying that the way you have to think about it. >> my question is, are the risks going to be greater or less than what everyone thinks. one has to make the decision. are you going to do it or not. i was just reacting to the whole grading on the stock. >> take a stand, dude. come on. >> if you look at the market cap two weeks ago, it was about 29, 30 billion. it's dropped about $6 billion. we believe that is a substantial drop compared to what the actual liability will be. it's approaching its book value as of the end of the year, around $65 per share. >> thank you. >> thank you. comments, questions about anything you see here on squawk, e-mail us. still to come, outlook for the farm spharmaceutical sector just ahead, the "squawk box" three-headed market monster. he's on the right. rich bernstein there in the middle and city's tobias levkovich, they're going to tell us where they're putting their money. may get a shot of those guys covering their ears. three stooges. when we return. >> three amigos. the answer when cnbc "squawk box" continues. aflac is not how do i fit it in my company's budget insurance. aflac 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... duck: aflac! ...then you don't know quack. to find out why more businesses provide aflac, visit getquack.com. the dow had a big day yesterday. basically though, just got back what it lost friday, but the best gain in more than two months. bob daly is chief strategist of black rock and our guest host, tobias levkovich. you're down 70 pounds, you look great. >> thank you. >> rich bernstein, who looks the same. and bob, you always look good. we were trying to figure out something positive to call the three guys, so we came up with the three amigos. just don't travel to arizona. bob, we made it to 11,000 here, which was not small feat from 6,000. got above 1200 on the s&p. is this another pause we're seeing or do you think something more serious? i have seen less people saying we need a correction immediately. i've seen it in the newspapers, maybe has a ways to go and that worries me. >> i don't think you're going to have any significant downward action. the economy continues slowly but surely to recover and that's the underpinning that's giving great news on the earnings front and i think that path of least resistance continues to be up. could we have a pause that refreshes? we could. >> you worked with bob, didn't you, rich? >> we did. >> were you in the same meetings or different parts? >> occasionally in the same meetings. >> did you agree with him back then? >> sometimes. >> what do you think of this latest -- do you think the path of least resistance? >> now you can be honest. >> bob's still a friend. the underpinnings of the economy remain improving. we could argue whether they're strong or not, but they're still improving and as long as that's happening, as long as we have a steep yield curve, i think the probability of the curve is low. could we have a correction? of course. unless you're a really nimble trader, you don't want to worry about that. >> fairly valued. >> we're actually suggesting the june, july time frame. two things we're watching, the percentage of upward revisions. it's about 70%. when we go above that, historical historically, markets have had trouble. i agree with the comments rich said about a bear market, unlikely in the environment where the economy is positive. is second quick point, the leading indicators pace of improvement are starting to roll over and that's been somewhat negative for stocks. >> 70% of analysts or earnings? >> the analyst earnings revisions. 70% are to the upside. >> 70%. >> yeah, right on the borderline. >> and that's usually a bearish signal. >> it says the markets pull back. doesn't say we're going into a significant downturn. it's more the 10% range, which would be healthy. >> bob, you probably are positioned with the possibility of something like that happening any way. i never think of you as being just 100%, both feet in. you've always had kind of a cautious approach, no? >> cautiously optimistic. i think we are climbing walls of worry. short rates are zero. improve the economy, earnings moving up. in some sense, where are people going to put their money. that's another argument for the path of least resistance is up. i think you need a balanced portfolio. this is not the most vigorous recovery we've seen. so while you want some global cyclicals, whether that be machinery or metals or energy even selected technology, i think you also want some defense in the portfolio, the defense stocks fit that bill and health care, i would possibly -- is an interesting possibility, too. >> can i show you a place where i disagree since you said the bottom. i agree with bob in terms of -- >> used to agree. >> but i agree that i think it won't have cyclical tail winds. i'm more bullish on the united states than the rest of the world. small stocks in the united states have outperformed china for more than two years. nobody seems to notice that, that there's a whole change going on in the global economy. i think you want domestic u.s. cyclicality. i think that's out of consensus. >> would any of you guys buy alternative energy stocks given the backdrop right now? does it ever work when it's not really economically -- it's not -- not time yet, is it? >> are you a venture capitalist or a buyer of the public markets? >> given the backdrop, it seems wind and solar -- >> i think there's lots to choose from, but as one in the public markets, i don't think i would touch them. >> i read this great article on the field sale yesterday and was kind of smiling saying, do you know when the first fuel sale was invented over 130 years ago. so venture, that's an interesting part of a portfolio, but i find hard to get excited abo about. >> bob, would you pile on that valuations as well. every time a look at these great new concepts, every time i do that, look at the valuation, i tend to end up buying more integrated oil companies. >> maybe not the wind and solar, but xom. >> if there's such a consensus, must be very, very traded. >> thanks bob, tobias and rich will be with us the rest of the show. >> green energy is the future, joe. that's why i have this shirt on today. >> wouldn't this seem like a good time. >> for momentum trade, certainly. all right. coming up on "squawk box," speaking of allegories. greece taking the money, but not running. concerns remaining about posterity measures. details just ahead. and then the reform bill hits the floor this week. how banks will be affected by reform and a possible new bank tax. stay tuned. the $144 billion aid package for greece is helping, but the country is worried about the possible debt problems in europe. public workers begin a 48-hour strike in the protest. greek government bond yields have been dropping, but that trend is showing evidence of stalling today. up next, street reaction to earnings from pfizer and merck and steering away from bp, we're going to head away to manhattan and find about the business impact of the oil spill in the gulf and are folks filling up at bp stations? darren rovell will have that story, next. (announcer) roundup extended control does two jobs... at once. one: kills weeds to the root. two: forms a barrier, preventing new ones for up to four months. roundup extended control. after yesterday's rally, futures are lower. s&p opened lower by about 6.5 points. dollar is stronger. that's having a lot of the ripple effects. the senate will begin debate on reform today. first step, senators will consider dozens of amendments and republicans will try to implement changes. motorola may pay a dividend. that comes from greg brown. stock paying dividends to con serve cash. bp shares down over the last five days, but are average joes on the street reacting as negatively? darren rovell is our man on the street at bp in manhattan and i feel like i have to ask you about tiger 79. i just can't do this with the gas and this stuff. can you talk about that while you're at bp? >> i was talking with the cabbies about that. about tiger missing the cut. we had some conversation about whether they're stopping here because of the prices, because of you know, just convenience, but it seems like this is clear. this is one of the cheapest places in the city to buy gas. >> as a consumer, you have to look for the best price because i can't pass it on to my customer, so i have to shop around. >> now, one blog has published suggested picket sign phrases like bp's green sign doesn't mean they care about the environment. drive by. bp, pay at the dump. the internet and social media sites haven't exploded with the line of thinking. only about 2800 people are fans of the boycott bp facebook page. maybe it's early, maybe it's in response to the crisis. so has the company that has worked so hard to be environmentally friendly, well, the answer certain le, what does that mean to the customer, at least right here, right now. it seems to be all about price. guys, back to you. >> all right. come on home then. you're not getting anywhere down there. >> you've got a say. you're going to have to wait until something happens. is there a hotel nearby? >> no, later today, we'll have the impact on the seafood prices, so i'll be going to a couple of restaurants selling gulf shrimp, so you can look forward to that. >> i will. thank you, darren. he's good. >> and you thought he was only a business reporter. >> you read about what's happening at abc. we have to do everything. we have to shoot ourself when reporters go out. writing the script, going all over. >> i shoot myself in the foot all the time. ubs posting a stronger than expected first quarter profit in its strongest report since the crisis started. the ceo says his strategy maybe starting to work. senate is set to begin debate on financial regulatory reform this week and a number of key issues are on the table, all of which could change the way banks of all sizes do business. joining us, the ceo of niagra bank and ceo of mid south bank. guys, i want to talk about, we're definite going to talk about financial regulatory reform. what kind of impact are you seeing with the oil slick? >> certainly, our bank is one of the largest in the area dealing with the services company. we've seen all equipment go to work, every boat i know of in south louisiana right now is out there. boat day rates have went up substantially and additional equipment is being put at this. they're throwing everything they can at this situation. we've been deeply involved. my father served on the first rig in 1947, so we've been at offshore drilling a long time. >> let's move on to financial regulatory reform. is there anything in the bill as we know it thus far that is particular concern to you at a bank of your size? >> well, you know, i think there are some positives in the bill. also, negatives. we're concerned about the consumer protection agency. we're pretty simple. we don't deal in dreftives and other products. we take loans and make loans and take deposits. there is some positives in that. reign in too big to fail, do away with the advantage -- 1% net interest margin right now, so hopefully, we'll get rid of that government guarantee and balance the playing field. >> john, are you as worried about the consumer protection agency and are you convinced the benefits to the big banks don't go away? >> i'm a free market guy, michelle, so anytime we're dealing with additional regulation on an industry that's already very regulated, it's certainly of concern for us. this isn't coming to pass because of how rusty and we do business. we're part of a solution here and continuing to stay focused. we're very concerned. politics are driving the politics not policy. that motivations are other than affecting systemic change rather than mandating some of the significant issues and concerns that have surfaced. >> gentleman, is the difference more a function of if you're a regional bank and you've got compete with a bunch of players? if you're a large, global bank, you're going to be competing with other banks that have different rules and to a degree, your views are not really affected by that in terms of this wha this bill looks like in the end. >> we're very much a regional play ner competing against the industry every day. we do that by being more nimble and having some flexibility to operate as i say within the free market system and serving the customer and keeping the customer first, so our execution's been strong. i'm sure rusty's has as well as has much of the industry. this needs to be targeted reform that doesn't make it coupler sm for all of us to do business. >> is the process too politicized? >> absolutely, i agree with that. i think to answer the other question, we care about main street. we care about america and american citizens. we're not concerned as much about what's happening in the rest of the world. certainly, you know, this stuff of international banking gets way overplayed. i don't know who is so strong they're competing with internationally. when i read the headlines, most of the international banks are in serious trouble. >> good observation. rusty, let's talk about the future for your bank. how steep the yields curve is, that's got to be great news for you. what does it rook like in terms of loan, loan demand and a turn in the economy? >> our loans are starting to grow again. we've had good loan growth over the last 60 days and this oil spill is going to put a lot of money into the economy of south. >> alana: louisiana. service rates are going up. everybody down here is working. down where you've been, we have a bank in that area. unemployment there is now below 4%, so it's a very strong economy we're banking in right now. >> john, first niagra bank, what's your assessment of the economy? >> the rebound's been slower than what rusty might have framed there, but it's headed in a better direction. for us, we're able to progressively take a bigger slice of our pie. our loan demand has been very strong. it's just we're able to take a bigger slice and the competition you know, remains a bit challenged and customers are looking for banks that can support them in even challenge times and the best of times. very optimistic, very upbeat. >> i'm glad to hear that. thank you so much. and good luck down there as you guys struggle with the situation in the gulf. >> thank you so much. thank you all for coming here. coming up next, reaction on the street to pfizer and merck earnings and bob corker joins us to discuss the next step in financial reform. "squawk box" comes right back. o about all the discounts boswe're offering. i've got. i some catchphrases that'llideas make these savings even more memorable. gecko: all right... gecko: good driver discounts. now that's the stuff...? boss: how 'bout this? gecko: ...they're the bee's knees? boss: or this? gecko: sir, how 'bout just "fifteen minutes could save you fifteen percent or more on car insurance." boss: ha, yeah, good luck with that catching on! anncr: geico. fifteen minutes could save you fifteen percent or more on car insurance. we have numbers we got from merck and pfizer, both out with first quarter results. joining us now is tony butler, equity research managing director at barclay's capital. did one or the other outperform? >> actually, both did slightly. revenues were affected by foreign exchange in a positive way. for pfizer, it led to $150 million better than expected and for merck, $400 million better than expected. earnings per share on pfizer, it gave you 60 cents consensus at 53 and for merck, 83 cents consensus at 75. i would say largely in line, but again, foreign exchange helped out a great deal. >> both companies beat by six of seven cents in the first quarter yet they're -- are they going to miss in some subsequent quarter? >> that's a great question as well. my sense is you remember, one of the folk points is what was the impact of health care reform into the full year and with pfizer, there was some question as to whether they would reduce full-year guidance. they're keeping it the same. nothing really changes. they will be affected by top line by approximately $300 million. so the question is whether they can exceed that estimate toward the latter half of the year due to the cost cuts. our guess is that will happen. that is to say they will exceed expectations, but again, from the coast side, not necessarily the revenue side. in the case of merck, they had not given guidance. that's coming in at a range of 427 to 441. the lower end of that is a little lower than i think we would have expected, consensus at 449 to 440. the question is, can merck push out better numbers the second half of the year. they're claiming that many of the cost cuts will come in the back happen half and again, assuming currency stays somewhat in that favor, they should be able to do the high-end of that range. >> how much did currency contribute to either company in the first quarter and right now, if you just do the math, it is ahead in the second half. is that part of the aspect to the forecast? >> i think when we've had conversations with the company as you've alluded to, back half will be more of a head wind. merck was positively affected in the quarter by 4%, pfizer by 7%. my sense is really the question comes in, what's going to occur with the cost cuts for both companies and let's be fair. drug stocks are going to work only when they produce new products. it's a revenue-generating story and the key will be what happens in the second half of this year when some of the late stages these companies have, will they be positive when they read out. merck has an analyst meeting next tuesday and i think all eyes already focused on what they say about their r and d prospects. >> how pfizer, i mean, they had to buy a company to get over the lipator protection. merck was a $95 stock at one point, ten years ago and now, it's 35. is there anything on the horizon? these guys haven't come up with anything in so long. are they come up with are extended relief versions of the best-selling drug. they've got the whole genome that's been sequenced now. we're on this age of discovery and drug design, what's happening, when, tony? >> clearly, a decade of problems. the whole genome issue gave rise to fumbling the ball, if you will. if we wanted to use a football analogy and they didn't fumble once, they fumbled many times. as i look ahead, one of the largest class of agents i've seen in the last decade at least will come to fruition and that will be a class of agents called factor 10 as. bristol, in conjunction with pfizer have a drug in late stage trials. these are blood thinning abo in and could be between 8 and $12 billion. cardiologists are looking for something. could you imagine this notion of generics really changing to brands? i haven't seen that since cla e claritin. i have seen something on the horizon quite large and can change the prospects, but it will be later this year. >> you don't worry we head down to euro path where it's more difficult to invasion to thrive with what's coming? >> i do believe innovation's more difficult. i believe some of the -- we're looking at, the notion even of diabetes, oral rheumatoid arthritis drugs, all these agents are difficult to track because they're multiple pathways. the easy fruit's been picked. >> i'm talking about the political wind. >> the political wind is a whole other different task. what these companies have really focused on is comparing current or let's say future drugs in their clinical trials to what's currently available, so that type of opportunity is not necessarily against a placebo, a water pill. it's against standard of care. and my sense is if it beats standard of care, then all of a sudden, politics don't play a role. if it's better for the patient, it will get approved. that's my bet, but i think the other side of the coin is it's going to be more expensive, it's going to be timely and that's why we really haven't seen much in the last decade. >> thank you. >> thanks, joe. still to come, aetnaceo, ron williams, join us us after his dinner with the president last night. we'll find out what mr. obama discussed with his dinner companions as well as the outlook for his part of the health care sector when "squawk box" comes right back. futures down about 75 points. pfizer is up 30 cents or so and merck is down a little bit. here's some other results to at least consider today. archer daniels midland reported 65 cents. that appears to be a couple of cents below expectations. company had revenues slightly above expectations and stock looks like it's off a little bit in premarket. cvs reported revenue below expectations. 23.76 versus 24.1. full year's guided 277 to 284. they raised the lower part by three cents, but the reuters estimate is in between. molson coors, you don't have a lot of great soim symbols left. oakley has a good one. >> also the one for the lbv. lvb -- >> four stineway and anheuser-busch is gone. used to be bud. test. the next step for financial reform. senator bob corker of the banking committee will give us an update as lawmakers start voting on amendments. the captains of industry. we'll hear from the commander in chief. president obama will address the business counsel about job creation. aetna chairman and ceo, ronald williams, talks to us first. crisis on the coast. >> we have asked bp for their plan many, many times over the last two weeks. it's become clear there is no detailed plan to address this incident of this scale. >> the senor member tells us why drilling is unnecessary. "squawk box" begins right now. morning, michelle, welcome back to "squawk box" on cnbc. becky and carl are out today. becky was in omaha, an extended interview with the oracle -- she had some steak while she was out there. had a little on the plane. >> no way. >> always. >> really? >> always. if you're on a plan and it's missing that thing, she probably used it. we have two guest hosts today. tobias levkovich, you drove yourself? i would drive myself. how about you, rich? ceo of bernstein capital management. we send cars. >> i would have driven myself. >> we do that. we want to make sure you get here safely. you're not helping the markets very much today, either one of you. futures down about 67 points. we had a good day yesterday which bounced back from a bad day on friday. then this news was probably not the most settling to the markets. >> the u.s. authorities arrested a pakistani-american man for the car bomb on saturday. faisal shahzad was arrested about 11:45 p.m. last night at jfk international attempting to board a flight to dubai. he will appear in manhattan's federal court later today to face charges. greek bailout dominating the world market. a $144 billion rescue package removing the country's dependsy to raise markets. investors worry the bailout will not be enough to cover greece's needs for the next three years. there's also been rumors that spain is going to ask for billions in aid. fitch reiterated its triple-a rating on spain. did you see that in the paper where they said so much was coming from spain and portugal and italy. >> some is coming from greece. >> okay. bp continuing to fight the giant oil spill in the gulf of mexico. also offering gulf coast states millions of dollars to move forward with recovery projects. scott cohn has more. >> michelle, british petroleum, bp, is fighting a number of battle here, of course not the least of which is the oil spill, which is not over yet. one thing they may help everybody today is as you can see, somewhat calmer seas. the weather is not great, but it's supposed to get better. that will help them do a number of things. they'll be able to do, they hope, another controlled burn of the oil that's on the surface. they're continuing below the surface, injecting dispersant at the site of the leak and a lot of other efforts, which we'll get to in a moment. they're also beginning now to take claims and offering to help states. this is really a lot of major damage control. >> bp is going to make a donation to each state, a blocked grant, of $25 million, that the state will help deploy those resources to engage the local oil spill response contractors that are available and ready to help. >> well, that's after they get the spill stopped and that's the big problem here and the immediate issue. they are drilling a relief well at the site of the spill, but that will take months. what they're doing is building this giant containment dome. a lot of it is somewhat improvised. they hope to bring it out today and get it lowered by week's end. essentially forming a cap over the spip and the pipe above it will bring the oil to a ship on the surface and they just hope that it works. >> we hope to have in place. we're going to do everything humanly possible to get it there as fast as we can. >> so you've got this one and one back-up? >> have to have a back-up and we're building it as well. >> if they can do that, they think it will be somewhat heroic, but it's something they need to do. otherwise, we will have oil continuing to leak out of the that leak, the site of that wreck, potentially, for weeks if not months. guys? >> so, physically, it's just like what it sounds like. first time i've really thought about what that would look like, scott. so, it would be a dome that you put around the actual hole and then with the tube out the top. that's what we're talking about. 5,000 feet though is the only problem. >> it's like it's a big suction cup. they've done it before at much shallower depths. never this far down and that's the issue is whether this whole assembly will be able to withstand the pressures at that depth. wow. thanks, scott. we have senator corker -- oh, okay. two big pharma names today. merck posted big results, but now, that is unclear. doesn't look like it's going to open lower. 83, was above expectations and 2010 earnings was guided by the company to 327. pfizer indicated higher first quarter results. also beat the street. full year earnings between 210 and 220. financial reform remains front and center on capitol hill with the senate beginning to debate amendments today. joining us now, senator bob corker, member of the banking committee. it's always good to see you. i just realized that if i'm confused, it doesn't mean our viewers are more confused. i don't know where this bill stands, what the key components are, what the chances are for republicans finally supporting it. can you simply give us a point in time summary of what's happening? >> amendment strategies are being developed. we're meeting this morning at 9:00 on the republican side. obviously, there are a lot of pieces of this bill that need to come out. i think you're right that americans don't understand the components in this bill. it's a pretty complex bill. it addresses everything from consumer protection to derivatives to certainly trying to deal with large companies and how they go out of business in an orderly way, how they're liquida liquidated, but there are lots of other components. again, i hope we'll spend a lot of time on the floor so people will actually understand what they're voting on by the time this bill comes to final passage. again, that's what amendments are for, debate is for, is to make sure everybody understands what's occurring. i know that's not the case within the senate today and not among americans across our country. >> until we see amendments, we don't know what it looks like until that happens. >> there's a meeting that's being developed, but until we see that language, it's very difficult to even make amendments that make sense. you've got to see what the final print is on the manager's amendment that we think is coming forth any day. when this bill has pieces of it that even the obama administration is concerned have gone way too far, you know this bill's a little out of control and i think that again, some solid debate, discussing the real aspects of some of these features like 106, it's something we need to do and hopefully, everybody will calm down. there's a lot of populism, as you know. people are trying to outdo each other, trying to make it tough on wall street, but they're really making it tough, in some cases, in my opinion, on the heartland of america. on people in tennessee that right now, are devastated by floods, businesses are closed. much in this bill will make the longer term recovery more difficult. >> do you need 50 or 60? >> in the senate, one senator can cause there to be a 60-person vote. one senator can object to an amendment and when that happens, it goes to 60. so, joe, anything that's contin controversial or meaningful will require the vote. >> the bill as we see it doesn't include anything with the gses, which are very much part of the financial system. how can there be a financial regulatory reform bill leading them to the side? >> jeb hen serling has developed an amendment that's pretty thoughtful. it doesn't give a solution to fannie and freddie, but what it does do is put in place a process to absolutely ensure that something occurs and so you know, there's a lot of different attitudes involved about what ought to happen. there hasn't been a consolidation about how to deal with them, but this would put in place a process to make that p happen. it looks to me like a very thoughtful piece of work that hopely will be offered on the floor by mccain and bring them into proper focus. while they didn't create this entire issue, much of the culture that dropped around fannie and freddie spread into the private markets. our problem is that all across the country, bad loans were made and believe it or not, this bill doesn't even address mortgage underwriting. we do all these other fancy things and attack wall street, if you will, in the name of pitch forking, but the fact is, we don't deal with the issue of bad loans being underwritten. there's nothing, nothing in this bill that deals with that and certainly, i plan to offer an amendment to move the bill in that direction. >> let's focus on derivatives for a second. wall street loves to talk about derivatives because they're very opaque. i think that has led this mystery around them. some have said, their helmets of mass destruction, but realistically, they're no different than any other investment, just a little more leverage built in. why is there not a concerted effort to really focus on one thing. if we think about what just went on with goldman and the issues of that, should there be anything in this bill that forces wall street to say whether they are acting on behalf of another client, in other words, client to client, or whether they are acting on behalf of their own book or risk book. so there is complete transparency so you know if they're really acting in your best interest or their own, trying to clear their own books. shouldn't that be in there? >> i think there is a move in the bill towards repositories and making sure people do understand on a daily basis what's occurring as it relates to positions and that type of thing. certainly there's a move to ensure that clearing takes place, but there absolutely should be more transparency and transparency ends up narrowing that mechanism right, and it makes it more efficient for people across our country. i'm a very strong proponent of that. >> senator, does this bill get done, we're going to have a financial regulatory reform bill, right? >> the way the wind is blowing, it appears to me that there is, you know, a likelihood that there's going to be a financial reform bill. i'd like for it to be one that i can support. i've got a lot of problems with this bill and it feels it might even get worse on the senate floor, but if you had to gauge the way the wind was blowing, you would think it's likely a bill will pass. at the end of the day though, this bill, even when the administration is saying, time out, let's put the brakes on, this bill is getting into a bad state. it already has many, many problems. >> thank you for the update and i don't know, what are you doing next week? we're going to need you again. >> i will say this, people across tennessee, it's unbelievable what has happened in our state and i do want to say to my friends and associates back home that we're doing what we can to get financial assistance to the state of tennessee. i thank you for giving me that time to say that and to you, i look forward to coming back next week. >> thanks, senator. coming up, president obama is going to address the business council today on the topic of job creation. before he does, the council vice chairman and aetna chief, ronald williams, i think these guys had dinner with the president last night, too. and jamie dimon, i hope we can find stuff out. what stays in the white house or what happens there stays there. >> you're not allowed to go to vegas anymore. >> that's right. we'll have that first on cnbc "squawk box" coming right back. welcome back to "squawk box." the futures are indicating a lower open. off their lows of the session, but still suggesting the dow jones will open lower by 68 points. president obama's going to be delivering a speech of job creation in a few hours following the dinner with the business councils last night. joining us now, chairman and ceo of aetna, also an american express board member. great to see you. >> well, good morning. >> i said you can't really tell us anything about the dinner, but i was just trying to motivate you to be more forthcoming about last night. what was it like? what was the tone? did anyone ever really push back or is there a lot of difference to where you are once you're in the white house? >> i think one, it's tremendous that the president reached out to the business community and really gave ceos of a wide variety of industries an opportunity to sit down and have dialogue with him and key members of his administration. i think these are ceos who are used to expressing their opinion in whatever setting they're in and people find a right way to do that. >> can you update us on -- was there any criticism of some of the policies that maybe some think are an thet cal to business? >> i think i would be fair to say that all points of view were represented. i don't want to comment specifically on the dialogue, but it's fair to say it was a good give and take conversation. >> we're looking at a big financial regulatory bill. i'm sure jamie dimon had something to say about that, no? >> as i said, i really am not going to comment on the nature of the conversation, but i think it's just really constructive to bring together people who represent diverse points of view. the health care industry certainly has a point of view. we're focused on how we implement the law that's been passed. >> the mission of the meeting is to talk about job creation. do you get the sense that the business council members there believe the policies thus far promote job creation? >> i think the meeting today is really about the whole issue of taxes and the deficit and ultimately, the competitive position of american business globally. there are many companies that have very serious concerns about the ability to be competitive long-term. we think this is a great opportunity to have that dialogue, share our point of view and try to be certain as congress debates these many important issues. the president, they're hearing what the business community believes should be done. >> do any of your groups think the administration's proposal to tax foreign earnings, that that's a good idea? >> i would not say i have found any who believe that's a good idea. >> when expressed to the president, does he defend his position or say, i understand, but we need to do this? did you get anywhere? >> well, you know, i think in general, and i think this is not just with the president, there are many dialogues the business community has, that the business community reflects it point of view. i think these are complicated issues. the president has his point of view, the senate and house have their point of view. the business community is trying to communicate with all constituencies what will work were america. i think the president coming to talk is understood scoring his importance in if we want real job growth in america, it's going to take american businesses to do it. >> he really believes that, you think? >> i believe he does believe it. if we're going to grow the u.s. economy, we're going to have to make certain that u.s. businesses are competitive and that global businesses who do business in america view america as a good place to do business. we have other important issues. education is an extremely important issue. making certain we have the right workforce. >> but an ally in helping in job creation? >> i would say my opinion is that the president and his administration does understand the importance of american business and businesses both large and small are is source of major job creation in the u.s. >> one quick question. as somebody who hears a lot of stories from corporations, there's kind of a mismatch going on here in that everybody says it's important to create jobs in the united states, but whenever i hear a pitch from a corporation, they're telling me about expanding abroad. i don't hear from too many companies that they're expanding in the united states. what do you think it would take to get companies to change that view, to saying i want to expand in the united states? >> of course, i would agree with your comment. when i talk to our clients, we serve 85 of the fortune 100, that a lot of the job growth is outside of the u.s. and one of the big parts of that is when you look at the rate of growth in china, india and asia, these are countries that are having their industrial revolution at a later stage than the u.s. did. in terms of the u.s. being productive, clearly, taxes are an important issue. economic certainty in terms of what are the rules of the game. >> would you support some kind of tax break for jobs created in the domestic 50 states who are for investments put in place in the domestic 50 states? >> i guess what i'm arguing for first is more clarity and certainty. i think if you look at all the sectors of the economy being changed, health care, 16%. energy, education, cap and trade. there's just -- in the financial markets, there's just a lot of uncertainty which will cause large and small businesses to say, is now the time to add one more working until i know what the rules of the game are going to be. i think i would argue first if we could get stability and predictability. i realize these are extraordinary economic times given the recession we've been through. >> i hope you do well. you did very well on cnbc. we look forward to hearing the president's comments as well. >> very good. thank you for the opportunity. >> you're very welcome. cnbc will be taking the president's speech live at 11:00 a.m. eastern time. coming up, to drill or not to drill. the gulf oil spill raising the tension level over the decision to open the atlantic coastline to offshore drilling. one congressman will tell us why drilling, he thinks, is not the answer. and crude oil is pulling back this morning as we see strength in the dollar. "squawk box" is coming right back. crude down by more than a buck. dow jones futures are lower by 64 points, suggesting a lower open giving back a lot of what we got yesterday in the big run-up. next, we have a strategy session on whether to follow that old market adage. coming up next on "squawk box."  welcome back to "squawk box." we're one hour away from the opening bell. here's a rundown for the next half hour. we're going to have a strategy session for the market. several key reports on the horizon. then new jersey congressman and commerce committee will tell us why he's against drilling on the atlantic coast and art cashin will get us ready for the opening bell. >> we'll get a key reading of the housing market in about 90 minutes. the national association of realtors will report on pending home sales for march. the measure of contracts signed, but not yet closed, is expected to rise 5%. greek public workers have again a strike. that's created doubt that greece can effectively implement a long-term fiscal plan even though a bailout package has been approved. delta airlines earned nearly $26 million from ancillary fees last year. that's up 47% from a year earlier and comes in part for new charges for baggage. delta earned the most of any airline from such fees during the quarter. american airlines were second. this morning, the futures have been lower. suggesting a negative opening. joining us with the latest market activity, doug, this morning's guest host, tobias. >> as long as we're doing it i don't know why we have cleg et. >> okay. >> this is only six boxes. you can't get these in sight with six boxes. >> what's weird, i could actually move into this box here, i think. i could move into this box out of my box. and then how would you do the math? >> out of the box thinking. >> but doug -- >> this is for you and "power lunch," obviously. a trick he's constantly using on that show. >> rick, any suggestion as to why we're seeing weakness this morning in a particular sell-off? >> well, you know, i think part of it is what's going on in greece, which you just showed. i think it underscores how we live in a time where if something could be right in front of you, obvious, you could almost touch it, but you completely ignore it. to push money at a culture that doesn't want to change and say it's all going to work out, i think is a tag line for a lot of issues we've seen in many governments for the last two years. >> doug -- >> he's got a point. they will put up any new buildings where those old buildings were. 3,000 years. >> is it greece or just a great run yesterday and this is going to be a pullback? >> i'd put more in we had a -- a great move two days before, we had a sharp move down. we are really becoming extremely volatile and to me, it reflects a change in regime. you know, a lot of the tail winds we've been experiencing for five quarters now, some of them are starting to turn. you talked about one of them when you were talking about the pharmaceutical companies this morning. the euro has been a great tail wind to u.s. earnings. i think it was what, 128 in the first quarter? >> 131. >> a year ago. so it was still a tail wind to us in the first quarter, which we're getting the numbers now. in the second half of this year, the comps are 144 and 148. so that's one tail wind that's going to turn into a pretty stiff head wind. what we're also going to see is the potential for a globally coordinated fiscal tightening in 2011. we're going to tighten policy a lot. obviously, a lot of european countries going to be tightening policy. what a sea change. >> sounds like you're negative. >> we came into the year thinking we're trading between 1,000 and 1,200 on the s&p. we're right at the top of that range. we've started seeing possibleties of much, much slower earnings growth because these problableties are switchig to drags or going away. >> wow, the recovery and manufacturing, finally getting proof the economy is turning, but sounds like it's too late. >> i can't speak about the valuation of the market and what's clear is that the stock market priced the recovery and rebound well ahead of the economists. they saw it coming and they got there and now, the numbers are confirming it. i just think there is quite a bit of extra room for movement here. we haven't had the job growth that's going to spill over into the top line fwrout of a lot of companies. i want to show you a chart from deutsch bank. joe had this chart in his report. these are tax receipts, 3%, that's a sign of job growth. we have a couple of other indicators. we'll talk about them as we lead up to the payroll numbers on friday. the other thing is how nicely mortgage rates have behaved since the fed pulled out. doug is right in talking about the regime. we are slowing taking away the legs of the stool that propped up the housing market. that's when the fed pulled out. you had a spike in rates. they've come down and have been well behaved. i don't really care -- >> we give the fed a pass now. it's freddie and fannie. >> if the feds stop buying the mortgages and that interest rates remain flat and the spread to the ten-year is wider, but not too bad, really, so if that's the case as we get rid of the tax credit here, we're talking away the problem of the housing market, i think there's good stuff ahead. >> i think it's great. post that program, but i urge everybody to read the article, the op-ed about fannie and freddie in the journal. one group isn't sub sizing mortgages, it's another group and this group is like way opaque. you talk about a -- >> point taken, rick, and you know i'm on your side, but i want to talk about the markets. tobias, is the retail investor back in and if so, good or bad time? >> retail investor is starting to nudge in the market, but that's after an 80% run in the market. they're not generally the best lead indicator. probably a little too much -- >> sounds like we're having trouble with your mike for a second. we're going to work on that. rich? >> the retail investor is still not in completely and where they are going in is a little misguided. where they've been going is to non-u.s. fixed income. you have tremendous in emerging markets. from my point of view, the dollar rallying and rick's point about greece in debt. i think people don't understand that the stories are credit-related stories and credit's going to get tighter. i don't think people appreciate that yet. that's why i'm such a big fan of u.s. assets. >> tobias -- >> he yanked off the mike. i should try that with joe sometime. >> retail investor is starting to get back in as we see the money flows coming back. in january, we saw the same thing before the market started to roll. one issue really on the comments, that we are going to see better economic indicator, but if you want to look at the thing most tightly related to market conditions, it is what's going on in earnings. there is a massive correlation. we're about to see some of the best quarterly numbers now for the year and then it kind of drifts off a little bit. >> so now meaning the ones we just got in the first quarter? >> first quarter, second quarter. it's quarterly. here's the interesting problem in my mind, which is one of the things that's gone along with these earnings is the productivity. one of the things i would like to see, lower productivity numbers and that, i know the fed is sort of thinking this way, that the idea that productivity numbers come down and that means we could get better than expected employment numbers in the quarters ahead. i guess my question to you, when you think about better job growth, how do you plug that into your numbers? >> very simple for me. the market leads employment trends by 12 months consistently for the last 12 years. that's priced in. >> job creation is coming? >> job creation is definitely coming. the question is degree and sustainability. >> best idea. >> or your best idea or single idea. either one. or your single best idea. >> i want both of your best ideas. >> capital goods. i like both. >> too late. pharmaceuticals, health care. >> worst can happen. what worse can happen to health care? >> small cap u.s. evaluated stocks. everybody still hates them. >> all right. >> doug, rick, steve, thank you so much. good to see you, doug, here in the studio. why, you don't like that? >> i don't like it. >> yeah. what's going to happen -- i don't like fresh, new high either. because some are still -- they're generally rotten. >> seven. >> i said, you can't get -- no, we don't have seven because doug and -- >> are they still in the same box? >> you can't get sent analysis. the decision to drill our way out of oil addiction. the spill giving opponents a lot of ammo to keep exploration at bay. next, a new jersey congressman will tell us why he's against offshore drilling. "squawk box" is coming right back. hi, ellen! hi, ellen! hi, ellen! hi, ellen! we're going on a field trip to china! wow. [ chuckles ] when i was a kid, we -- we would just go to the -- the farm. [ cow moos ] [ laughter ] no, seriously, where are you guys going? ni hao! ni hao! ni hao! ni hao! ni hao! ni hao! ni hao! ni hao! ni hao! ni hao! ni hao! ni hao! [ female announcer ] the new classroom. see it. live it. share it. on the human network. cisco. california governor arnold schwarzenegger ending his support for offshore drilling. he promises to find another way to close the budget deficit. he says the images on tv helped change his mind. due do the potential risks outweigh the rewards? joining us now, senior member of the house energy and commerce committee. it's good to have you here, sir. >> thank you. >> so, you believe we should not be drilling offshore, correct? >> we shouldn't expand the drilling that's taken place for the last few years. president obama announced this major expansion off the atlantic coast and basically in deeper water where this technology is simply not proven and it can't be safe. i think we should go back to the moratorium we had two years ago that basically prevented any expansion of offshore drilling. >> by that, i presume maybe drilling closer to shore? >> no, we shouldn't. for 20 years, we had the moratorium. the bottom line, the technology, when you go further out and deeper, for example, along the atlantic coast where a lot of the drilling would have to be even deeper, the problem is, there's no way to contain it or cap it. this is what we're seeing now. the oil companies sold us this bill of good that they could do this deepwater drilling. >> they didn't have a shutoff switch. there's thousands of platforms in the gulf. right? >> the point i'm trying to make is that we need to move towards renewables. this is an old way of doing things. >> we can't do that right away. >> the problem is the longer we say we're going to continue this, or go further out, the less likely it is -- >> do you concede that will lead to higher energy prices and that's a trade-off you're willing to accept? >> no, if you use windmills and solar power, you can make things cheaper. if you use the atlantic coast where i'm located, the amount of oil and natural gas that's available is probably less than a month's simply for u.s. con sumgts. the point is, we have to invest in renewables. >> but in the meantime, we'll be stuck dealing with opec and people that don't like us. no one wants to drill in their own backyard. >> i'm not saying off jersey. i agree with schwarzenegger. in order, what obama did is he moved ahead with major expansion in the gulf, in the atlantic, in other parts of the country, which you know, had been off limits for years. and instead of emphasizing that, which there's not that much resources out there to make a difference, let's do what china and india and other countries are doing and invest in windmills -- >> china's also buying oil companies and reserves around the world. >> the point is, if we don't start investing and prioritizing the renewables like so many say we should, then we're just going to rely more and more on this old method of doing things with fossil fuels and we're not going to move forward. it's a mind set in terms of how we're investing. >> if we shifted immediately to renewables, everything would come to a grinding halt and anyone realizes it's going to be 10 or 20 years. >> the offshore resources are out there are very limited. if you think they're going to solve our problem even in a minor way, they're not. you're risking this very small amount of resources for more environmental disasters at the same time when you should be putting all the emphasis on renewables. we're not doing that. >> rich has a question for you. >> congressman, i think everybody agrees that there's a need for alternative energy in one form or another, but i think most people also agree that when washington's fiscal situation is not good. why don't we tackle elements like that is this. >> we don't have a choice. if we don't quickly move towards investing our dollars privately and publicly in the renewables, which is what's happening with other countries in the world, we're just going to fall further behind and more reliable on fossil fuels. >> my point being like why not just tax things like hummers, inefficient energy use. nobody seems to want to do that. >> i agree with you. we have to find the resources to do that. >> i'm not sure your colleagues from michigan would agree. >> i understand that, but look, this is an environmental disaster and i think it could have been avoided if he hadn't move nd a certain direction, but let's use the example to try to make something good happen from it. the answer to that is move away from fossil fuels towards renewables. manufacturing of windmills. >> thank you, sir. next, words of market wisdom. oh, we got someone else coming in for that. all right. fine. kidding. you guys have been great. we got art cashin and the stock of the day when we come back. all right, we're counting down to the opening bell on wall street. joining us is art cashin, dir t director of floor operations at ubs financial. do you have a good reason, art, why the futures are unsettled today? is it terrorism? is it greece? what is it? >> i think it is more concern about greece and the dollar come back in. my concern about terrorism is that wiley coyote car bombing that this guy did so many things wrong that the press in pointing them out is probably giving somebody a good recipe to be a copycat. that's got me concerned. >> what about the fact he's a u.s. citizen, art? >> i'm less worried about that. i think you get a couple of lone wolf copycats out there and this was not a good example, you know? he did it ineptly and everybody points out, like, the wrong kind of fertilize, the wrong kind of fuse. that's not in everybody's self-interest. that's information that we don't need to have on the front page. >> and then there was some, i guess, some things in england or europe or something, people are, i don't know -- >> false alarms earlier. >> false alarms. now i'm seeing -- you know doug cas, right? >> yes, sir. >> did you see that lloyd blankfein will have a conference call, i guess, with some private wealth management clients. is that -- that's interesting, i guess, isn't it? is that an offensive move at this point, do you think? i don't mean offensive, but are they taking the offense? >> i think it is probably a pr offense. i mean, the pr out of those hearings was absolutely dreadful. he made it almost u-turn with his appearance on "charlie rose," that seemed to go pretty well. i think they have all the best public relations minds out saying we got to get this thing turned around, they got a boost from buffett over the weekend. i think they'll see if they can expand on that. >> are you done? >> yeah. >> okay. all right, arthur. going to say i haven't seen you in a while. good to see you. bye-bye. >> two guest hosts this morning, tobias lefkowitz and richard bernstein. what do you make of what happens next year? we seem to be at this turning point, right? markets have done really well and can we continue? are earnings going to be strong enough or the economy strong enough? >> i think the economy will be strong. think a lot of this is starting to get priced in. i think investors have become more complacent. back in january, 52% of our clooint clients, based on survey work, earnings estimates are too high on the street and others are saying it is fine. you've seen a pretty significant change in the mind set. you can even get better news now to keep it going. >> which suggests you're actually negative, not positive. >> i think we're going to see something around 10% correction as we go through the summer. >> rich bernstein? >> i'm not smart enough to call corrections, never have been. i think the question is what is the underlying trend in the a economy and i think it is continued improvement. i think as long as you say it is continued improvement, i think you want to be reasonableably bullish if not more so. i think we have very low interest rates, but in the second half of the year, the interest rates will start going up. i think the dollar will appreciate more because of that. and i think that's a big shock to a lot of people whether in commodities or non-u.s. bonds or wherever they are. i think that will be the big shock, the dollar, the strength of the dollar. >> next we're going to have -- for michelle, a couple of -- no, we're going to have three or four stocks of the day. no, there can only be one. it is a single best stock of the day is what i'm going to have. maybe a fresh new high. >> you'll be shocked to know that joe is -- get inside each. and see what you find. if perfection is what you pursue, this just might change your course. meet the new class of world class. the twenty-ten lacrosse, from buick. may the best car win. come on, guys, sack those unwanted pounds. i'm lawrence taylor. i lost 35 pounds on nutrisystem. give nutrisystem for men a try. losing weight has never been easier. that's me 22 pounds ago, and i'm never going back there again. don't miss our best tv offer: order now and you can get an extra four weeks of meals free. that's right, 140 meals absolutely free! hey, get back in the game like i did. i did...go...all...the...way, whoop! i lost 50 pounds with nutrisystem for men. get off your butt and try it. nutrisystem worked for me, and it can work for you, too. don't miss our best tv offer: order now and you can get an extra four weeks of awesome meals! 28 breakfasts, lunches, dinners, desserts, and snacks. 140 meals absolutely free. call or click now. don't make me come looking for you. stock of the day, going to do hummer for rich, but that's not a -- what about the poor hummers? you want to tax them. you want to tax them all. mastercard, $3.40 well above expectations. revenue was also ahead. we have got that at least going to be up about seven bucks today. >> wow. >> not bad. >> not bad. i was going to say, percentage basis, you're good at that. >> i'm looking for the big bang. what is it? 3%. >> that will do. get 3% a day, yeah. >> we want to thank tobias levkovich, viewers say they don't recognize you because you're so thin. >> thank you. >> congratulations. keep it up. >> what did you do? >> i watched calories. all about discipline. >> you didn't need to lose any weight. you were perfect as is. >> thank you. >> rich bernstein, thank you. and michelle, thank you for joining us today. >> a pleasure. >> and you're both here tomorrow. just to see that -- >> you'll be fair and balanced tomorrow. >> yeah, exactly. maybe a little bit that way. to the left. make sure you join us tomorrow. "squawk on the street" is next. we are so live from the financial capital of the world. this is it. "squawk on the street." good morning, everybody. i'm mark haines. >> i'm simon hobbs, erin burnett is in louisiana. we'll get to her in a moment. we want to run through a few numbers. bp is higher. the stock may have hit a bottom after two weeks of drops, down about 13%. that's about $34 billion in value gone, mark. >> wow. $34 billion. we're also watching futures this morn. they're not doing well. down after yesterday's big jump. we'll get to those in a minute. but as you can see, we're looking at an open, could be 100 points on the dow to the downside. first, burnett is on the bayou. erin burnett in louisiana. good morning, erin. >> good morning, mark. we are here on the bayou. this is the heart of america's oil industry. this particular town, mark, you drive in a single line road out and out out and you see every single oil services and driller and oil company you can think of from halliburton to devon to chevron. they're all here. this morning coming out here, we were come out early, rig crews were getting ready to go to work. we passed the chevron helicopter station. helicopters taking off, they were packed. the little trailer where all the crews wait to go