Transcripts For CNBC Squawk Box 20130311

Good morning. Bulls coming off on a historic week. The dow above 14,000 has all the major averages. A rally 2 in the last five trading day. Mixed Economic Data from china is weighing on sentiment and a slow start to the session in europe. Investors there reacting to italys Credit Rating downgrade. It is monday, march 11th, 2013. Its 6 00 a. M. Though et feels like 5 00 a. M. Squawk box begins right now. Good morning, everybody. Welcome to squawk box here on cnbc. Im becky quick along with Andrew Ross Sorkin and steve liesman. Steve is here in for joe today who is enjoying some time off. Were going to start with the markets. The bulls are hoping to pick up where last week left off. The dow has closed higher on every friday of 2013. Thats 10 friday necessary a row so far. Its notable that the blue chip index rose on each of the five days in the last week. That is the first time thats happened since september 2011. All ten s p sectors finished higher for the week led by financials and consumer discretionary. Mondays have been rougher. Most of the mondays have closed lower. Last week was the exception. U. S. Equity futures are indicated lower today. Dow futures down by about 15 points. Were going to head overseas and check in with kelly evans at the moment. Also eunice eune who is in beijing. But first to some of the other mornings headlines out of the United States. All the clocks in my house are still off kilter. 5 00 a. M. Is what my cars clock says right now, too, so i had a little bit of an issue. Years ago, my older son wrote us a note and said, dad, is it 11 00, 12 00 or 1 00 . I feel his pain. We had issues. I have i was two hours off monday morning waking up with the kids and couldnt figure out where we were supposed to be. Goldman sachs has a note from investor investors. Gasoline falling nearly 6 cents in the last two weeks. The lundberg survey puts the National Average for a gallon of regular at 3. 73. The reason for the decline, refiners cutting wholesale prices following weeks of increases. Industry watchers predict prices will fall another 10 to 12 cents in the coming weeks. Amazons smartphone release may be delayed. The digit time reports the company will not be able to release its phone in q2 due to delays in production. Progress at the companys partner, foxconn. Becky. Thank you. And other news, Berkshire Hathaway is nominating Investment Management miryl witmer to the board. Sonys ceo plans to retire in june. And German Hedge Fund manager floria homm has been arrested on charges in the United States of fraud. Hes accused of orchestrating a market manipulation scheme to the improves the performance of his fund. The alleged fraud led to at least 200 million in loss for investors. He has been on the run in five years. And the paper trace reportedly going cold in the s p. The s p tried to clamp down loose talk on emails and other note taking as early as 2005. This may make the case harder as signs of distress began appearing in the Mortgage Securities market. S p executives are is said to have begun advising analysts responsible for rating mortgage bonds to put the phrase privileged and confidential on emails to one another. Does that matter . If you put confidential like you cant have it now . Gotcha. I cant imagine that does it. I think basically you stop sending stuff out . At Goldman Sachs they used to write ldl. And that means lets discuss live which meant lets never put this in email. Do you remember the phrase somebody said to me once where i think we had it on air one time, it was never write when oh wsh barney frank. Barney frank. Do you remember it . Never write when you can talk, never talk when you can nod, never nod when you can wink. Good. Words to live by. S p analysts were discouraged from doodling and official documents during meetings to discuss pending deals and existing ratings. But it turns out the employees didnt fully heed the warning g warningings. Thats always the problem. The governments civil lawsuit relies heavily on emails. But legal experts say the u. S. Case needs witnesses to bolster those emails. So the reasons the United States went after moodys first wasnt because of the downgrade s p first not moody peps. Or after s p and not moodys first was because of the downgrade. But theyre going to have trouble with this or not . Weve seen emails that worked in the past. Im not sure why this case in this case, the s p emails that are identity there are not they sound difficult, but theyre very broad. Its just were screwing this whole thing up as opposed to in this particular call its nefarious because were doing xyz and its showing one thing or another. And theres an argument which they could go after that they may not have to problem. Andrew, as you were writing your book, were you saying to yourself, theres going to be prosecutions . Are you surprised at this point that the failure of the Banking System has not resulted in very many prosecutions at all . When i started the book, i thought there would be. The farther i got into the process, the more surprised i was that when it comes to criminal intent and having covered a number of these white collar cases, knowing you need the intent, i felt they didnt know enough. The book was almost titled failure of imagination was the other title. I realized by the end that there were people would failed to see it. Rather than being a crimin criminal it wasnt so much that they right. I believe at the lower levels there were some real problems in terms of the mortgage lending. But im not sure it ever reached the top. Is that incompetent, then . Call it incompetent. But everybody says they want to say a scalp or this or that. But theres all these prosecutors who would love to make a name for themselves. Frankly, there are authors who wrote all of the devilses are here. And Bethany Mcclain and all sorts of people that love to write books. The unprosecuted criminal acts. They discovered something that would have led to something. But ultimately, im not sure that the although chaino has made the argument in the past, that look, you could have done you could have gone after them. You could have prgd some of them based on the existing laws that were on the books. Sarbangs oxley. Saying you signed off on this as ceo. Even if you claim you didnt know it, that is enough to catch you. You should have known it. So its not necessarily that would have been a civil case and not criminal. But they didnt come after him on a civil case. But it was all about marking. It was about how you marked the books and that is still an art and not a science and thats part of the problem. Thats why Charlie Munger says that is the way they need to crack down on people is looking at accounting because you shouldnt be able to make it up and say, oh, this is what its worth today. Did anybody see the randall for sight in the barons this weekend . Yes. He quotes eric holder saying that there are banks who are to jail. Yes. In fact, i am working on something. Are you working on a column for this . Potentially. Let me recap the bidding on this, which is that he was asked by i forget whom in congress where there havent been prosecution and holder apparently saying, well, were concerned about the impact of criminal prosecutions of these banks on the financial system. And this is an interesting idea that companies or banks are not being prosecuted not because they havent done anything criminally wrong, but because of the effects on the financial system. Which created all kinds of problems saying this is not the consistent view from the administration. I did an interview with paul advocator last wednesday and thats online. He was great. He was really sharp. He said you cannot break up these banks enough to make them not too big to fail. If you think about what is the jpmorgan Balance Sheet, like 2 trillion . At least. So apparently in continental terms of the bank that was bailed out in 1983, in todays dollars, its 300 billion. So do the math to see how many and that was too big to fail. It would have been 300 billion, their Balance Sheet . In todays dollars. So youd have to make what is that, six jpmorgan eps . But go look at the concentration of banks, though, in canada and australia. Theyre even more concentrated. More concentrated. And i covered the savings and loan crisis and that was problem with small banks. So make them smaller doesnt solve the problem. Anyway, time for the Global Markets report. Kelly evans is standing by in london. Kelly. Steve, trading volumes are light today. Here is a sense of why. Take a look. At the weather, outside of you window here in the studios, these are live pictures. And london was supposed to get maybe a centimeter of snow today. Yeah. Its going to be a little more than a centimeter. I know it doesnt quite stack up to the kind of levels that youve seen over there in new york, but nevertheless, keep that in mind when you start to look at some of the activity weve seen. There will be trouble for people getting into work today. Knowing the way the city is, there could be trouble for the rest of the week, as well. In terms of trading, lets give you a quick sense of whats happening in markets. Across asia, we did see a generally weaker tone after china came out with weaker than expected sales. China unveiling its biggest overall in like 15 years. That will give people something to chew over when it comes to investing in asia and china specifically. We turn our attention to the european session, the ftse 1 00 has been struggling to stay in the green, but regardless, everybody else is basically pointed lower this week taking a pause after the kind of rallies weve seen in europe that hasekcooed largely the trading patterns weve seen in the u. S. The ftse mib is weaker, down 0. 8 . Reaction thats not too inconsistent with the behavior weve seen for that index. And if you look at the bond space, were weaker on italy, but not cart mat cannily so. Watch the spread between spain and italy. This is now narrowed to within 10 is basis points, putting pressure on the euro overnight. The dollar is stronger against the yen, so the Dollar Strength continues. Weve seen as a result crude oil and some of the other commodities taking that on the chin. On that note and from a chilly london its actually warmer in the studio for once than it is outside ill send it back over to you guys. Its been warmer here, kelly. Were warming up for spring and gearing up for it. Thank you, kelly. In Washington News this week, paul ryan is going to be unveiling his Budget Proposal tomorrow. John harwood joins us from washington. We think we should balance the budget. John harwood joins us from washington to talk it over with us. Good morning. Good morning. What should we expect this week . Everybody is saying this is the week. This is the week that were going to see a lot of on movement or not. Well, i think its a week where we begin the effort to try to get some movement, and i would say, you know, in tune with kellys report, weve got about a centimeter of hope, maybe two sent meters that something can get done. Interesting, paul ryans appearance on fox yesterday. He talked about his budget and there was some very daunting from a democratic perspective aspects of that. The budget assumes the repeal of obama care, for example, which is not going to happen. But paul ryan also said there are things that we can do that dont offend the fundamental philosophy of either party and i think thats where the you try to thread the needle between the president s position and paul ryan and the republicans position, find some ways to deal with medicare in the tenyear budgets window, which is when paul ryan says he wants to balance the budget and its look, you can easily sketch out a potential deal that the two sides could make, but whether you can overcome the hurdles that have knocked over all the recent attempts, we dont know. John, lets sketch it out, then. Where do we believe the middle ground is . Where do we think there actually is agreement . When paul ryan says there is overlap, what is the overlap so everybody understands where the discussion can at least start . Fundamentally, one of the lines that republicans have drawn, republicans have said were not going to replace the sequester with tax increases, for example. Democrats have said, were not going to reform medicare with vouchers. The president ran against that in the last election. So here is a way you could do it. You could take the sequester cuts, replace them with entitlement cuts. What entitlement cuts would those be . Eric cantor gave a speech about a month ago in which he said he talked about a reform that would combine two different components of the medicare program, have a single deductible for beneficiaries in a way that would deter some use of medical care and raise money for the program. That is a reform that republicans are interested in that within Simpson Bowles that some liberal democrats say, not a bad idea. The white house is not ruling out that idea. It saves over 100 billion over ten years. Thats one place they could go for entitlement cuts. But theyre not going to cut the federal theyre not going to cut federal costs for medicaid and thats is second component of that. You wrote about it with Dick Stephenson over the weekend. Cut federal costs for medicare or medicaid . For medicaid. I apologize. The democrats have pulled back from some of the pedestrian cade cuts that they previously advocated because of the effects of the Court Rulings that has called into question the expansion of medicaid. But i dont think thats an insurmountable hurdle. The second part of the formula that i was mentioning was you could have a second tax reform process that does overhaul the code, reduces some loopholes, maybe reduces rates a little bit, but raises money on net. Republicans, when you hear them talk and pars their words closely, some of them are not saying no revenue in any circumstance. What theyre saying is no revenue to replace the sequester. Now, again, it is its possibly in theory to thread the needle. Like as we sit here and talk about it. But can they do it in the real world of practical politics . I dont know, but thats why the president is going to capitol hill. Hes going to meet with the entire Republican Caucus on thursday. Senate republican kaup caucus. Hes going to meet with House Republicans as well as democrats in both chambers, as well. John, were going to leave it there. Thanks for joining thus morning. Well talk to you then. Thanks. When we come back, china releasing mixed numbers and issuing a plan to try and stream line the government. Well have the details and why the Global Markets are taking notice right after this. And in entertainment news, just Justin Timberlake is going to begin his week long work with jimmy fallon. Its a 2020 experience. Here we are, me and you on the road and we know that it goes on and on [ female announcer ] youre the boss of your life. In charge of making memories and keeping promises. Ask your financial professional how lincoln financial can help you take charge of your future. Oh, oh, all the way oh, oh welcome back to squawk box. Eunice eune joins us from beijing this morning. Eunice, the numbers leave anything but a clear picture in terms of whats happening in chinas economy. Well, thats right. The data really isnt selling us that the recovery is uneven and fragile. On the one hand, we have the Industrial Production numbers and the retail Sales Numbers which ticked lower. On the other hand, we have the Inflation Numbers which ticked higher. The january to february figures tend to be distorted because of the Lunar New Year holiday. But its clear, based on the comments that weve been hearing out of the government from last week from the premier wen jiabao that the government is lowering its target to 3. 5 . The authorities here are concerned about rising prices, especially in the property sector. Now, another big factor that we were watching today was the fact that the government had announced a restructuring. The government is streamlining the bureaucracy. Theyre cutting out all the fat with the basic end goal of taking the Government Role out of the business. Now, a good example of this was with the ministry of railways. The ministry of railways responsibilities were basically split. So you had the administrative work was being put into a government agency. Were going to see the commercial functions put into a company. So there again, you see an example of a government and the business being split. Now, one of the other comments that people were focused on today was the fact that the Railway Minister had made some comments that as a part of this process, the government would open up the Railway System to foreign investments. Thats leaving people to think the authorities were opening up competition here. Eunice, stay with us. Were going to bring in another guest to talk more about this. Weve been tracking asian equity market and theyre rebounded from their lows. For more on that, lets bring in patrick ilvanick. Hes an associate professor at sing Wah University of Investment Management. Thanks for coming in the the today. Thank you. What were focused on is whats been happening with the recovery there. And recovery that looked like it was starting to kick in in october of last year. There were a lot of questions about that today. How secure do you feel with it . A lot of what drove that rebound was the fact that the chinese were pumping in more money again. What was driving that was investment and china really still faced the fundamental dilemma that caused the downturn last year, which is that theyre too dependent on investment. They need to shift to more consumption driven growth. And the more they depend on investments, particularly investments that werent paying off, the more inflation, bad debt, overcapacity they were generating. And it eats up more and more of the credit that was necessary to drive further investment. Its a vicious cycle. It sounds like the leadership there may recognize this, at least when you start seeing some of the things theyre still talking about, what eunice just mentioned, the opening of the railways. Is that acknowledge acknowledgement that we need to find more ways to come up with this growth . Theres pretty wide recognition that we need to shift the growth models. But doing it is a little different than what weve seen. What weve seen in the last few years is the process to engage in economic adjustment. They know they need a correction, but they dont want a correction. We hear numbers out of china and tend to take them with a grain of salt from time to time. You hear a number like 7. 5 that they were talking about, the growth that they can look for and that was just last week when we were talking about these numbers. Is there an expectation that they will at least meet that number if not beat it . Well, there is an expectation that they will probably meet it. Maybe not necessarily this year, but a lot of people do believe that the government, when it does lay out its five year plan, that it is going to basically more or less meet the target or beat the target because growth is so important for the chinese economy. Now, i want to pick up on Something Else you guys were talking about when youre saying that the government authorities are trying to recognize the you know, the need for growth. One other thing that was interesting here was with the restructuring of the government, rereally saw that they were targeting points of contention. Area where that have a tracted a lot of public criticism like the Railway Ministry that have become big symbols of waste and corruption. And the food safety sales have been erupting here constantly and there has been a lot of criticism that something needed to change. And also what was interesting is the commission that manages the one child pold policy has been demoted and moved into the ministry of health. Thats suggesting to a lot of people that we are going to see change to the onechild policy, not only as a response to the peoples criticism of this policy, because a lot of them think that its unfair and horrific, but because economically speaking for chinas future growth, it needs to be able to continue to add people to its population in order to concede the workforce. With investors, theres always a lot of caution about do we trust this, can we really invest in these places . How do you feel about it . I think thats true on a macro and a microlevel. Ive always been questioning the data. I and a number of other analysts have said gdp growth was more around 5 or 54. 35 last year. On a microlevel, theres the question of do you believe numbers Chinese Companies report about the performance and thats been a huge issue in markets here. We had jim chanos on the program last week. And hes been very skeptical about china for some time. But he thinks that the property bubble at this point is reaching some dangerous levels. Do you worry about that, too . You know, there is fundamental demand for housing in china because of urbanization and rising incomes. But that doesnt mean that investors and builders havent gotten ahead of the market. We saw the 60 minutes piece with all of these empty cities. You have a lot of investors who have bought properties, empty properties and are holding them purely as investment. As long as theyre willing to hold them, that can persist for a long time. But as soon as they want to exit them, that creates a big overhang in the market. And then if you look at developers, developers have said over the past year that theyve gotten rid of a lot of their inventories. But the reality is that the pipeline, if you compare the pipeline of under construction relative to the last 12 months sales, that ratio is at an alltime high. And, in fact, for office and retail, its nine years worth of sales under construction right now in china. Thats a huge overhang. Yeah. Thats a daunting number. Patrick, thank you very much for coming in today and eunice, thank you. We will talk to you again very soon. Coming up, this mornings top stories, including president obamas choice for the next labor secretary. Well tell you who it is. Plus were going to talk markets and the economy. A bus issy week for data that details when we return. But first, as we head to break, take a look at last weeks winners and users. [ kitt ] you know whats impressive . A talking car. But ill tell you what impresses me. A talking train. This ge locomotive can tell you exactly where it is, what its carrying, while using less fuel. Delivering whatever the world needs, when it needs it. After all, whats the point of talking if you dont have something important to say . 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How bout ya, joe . Lets go ahead and bring it online. Attention on site, attention on site. Now starting unit nine. Some of the worlds cleanest gas turbines are now powering some of americas biggest cities. Siemens. Answers. Transit fares as in the 37 billion transit fares we help collect each year. No . Oh, right. Youre thinking of the 1. 6 million daily Customer Care interactions xerox handles. Or the 900 Million Health insurance claims we process. So, its no surprise to you that companies depend on todays xerox for services that simplify how work gets done. Which is. Pretty much what weve always stood for. With xerox, youre ready for real business. Good morning. Welcome back to squawk on cnbc. Im Andrew Ross Sorkin along with becky quick and steve liesman. Joe kernen is enjoying time off today. President obama is set to nomination thomas perez for labor department. Finally, at the box office this weekend do you guys go to the movies at all . Walt disneys big budget move oz the great and is powerful came out on top, 80. 3 million in u. S. And canadian ticket sales giving it the biggest debut in 2013 and International Sales for oz adding another 69. 9 million. There you have it. Now to markets and the economy. Andrew scott bower joins us now from the cme. Mark whitner of wells fargo. I want to start with mark whitner. Did you guys change your gdp forecast at all after the payroll numbers on friday . No, we didnt change it in response to that. We do print our forecast out the first wednesday after the employment report, so well have an update after that. But the First Quarter loose pretty solid. Were going to have a number somewhere between 2. 5 to 3 . And the second half of the year is looking okay. Although when you do the analysis of the tax increases, you would it would tend to have you take those numbers back down a little bit. We havent done that yet because it seems like were gaining momentum. So this is interesting. Mark, just sticking with you for a second, put some numbers on the on those comments you made. What are we looking at in the First Quarter and whats your best guest for us second and third . Well, we dont have a final number yet for the First Quarter, but i would say its probably 26, 27. The Second Quarter is going to be closer to 2. Weve got some swings to inventories, so we have the bounceback in the first. And then the second half of the year is likely to be 26, 27, those kind of numbers. Fairly decent numbers. The other thing is, on july 31st, we get the comprehensive revision to the gdp data. And if we get the same revision that we saw in unemployment, theyre usually about the same magnitude. Then growing at a 1. 2 pace since the revision. The economies probably average 2. 3 and 2. 4 . So it sounds like a little bit. But thats not as close to the edge as we think the economy has been. Scott, lets talk about momentum. Every friday in 2013 has been to the upside. Have you mortgaged your home, taking out a home equity line and are you now prepared to put everything you own on the futures on, say, thursday night . Yeah. Because theyre paying me to do it because rates are zero, right . Honestly, what the feeling is and i hate to say it is that its like the little boy that cried wolf. With the sequester, you go back to the fiscal cliff. People, the traders down here and main street, also, just feels like everything is going to work out. Regardless of the problems coming out of washington, the complacency out there right now is everything is going to work out. So that being said, the momentum definitely is to the upside. Couple that with the fact that theres still so much cash on the sidelines, people that either missed this rally or just havent gotten in yet that are just waiting for that first pullback, like we had a couple weeks ago, that morning we were down a couple hundred points. People are just waiting for that. So the shortterm is the short run, people are looking to get into the market. The trend is still up. But i definitely would temper that. If youre in the market or if youre getting into the market, obviously, we see volatility, the vix so low. Buy some protection. Dont be degreedy. Buy some protection. Its too cheap not to right now. Scott, i had a guy come up to me t Sporting Goods store and ask me when the pullback would happen. I asked him, why do you need to know . His broker put him into gold. Gold hadnt performed and he wanted to get into the stock market. So youre suggesting there are a lot of folks out there who feel like this rally has left them behind. Which suggests, by the way, there wont be a pullback. Exactly. You look at that contrarian view. I agree with that. So the sentiment is theres not going to be a pullback. But again, i would tell that gentleman and everyone else, if you want to get into the market, get into the market, but buy your protection. Hedge yourself. Dont look for a quick 8 to 10 pop over the next couple of months like weve seen the first few months of the year. Tell me what that protection would look like. You guys talk about it, but i think theres a lot of folks that dont understand, what would you do, call your broker and say, i want to go put some money into the stock market, but i want to buy some Downside Protection. What would you buy right now the terms of Downside Protection . Sure. I would look at s p options. I would look at maybe even the 1500 level put, maybe even the 14. 50 put. And not just short run like march or april. Go out a few months. Go out three, four months. Buy some Downside Protection. So youre buying put options in the marketplace. And its just too cheap. Mark, very quickly, theres a lot of concern about february retail sales, whether or not the payroll tax cuts hit, whether or not theyre beginning to see some impact of the sequester. How do you look at this upcoming number, mark . I think there will probably be a split in there. Car sales held up very well. Just like spending on big ticket items held up very well. Stock markets have come up, home values have stabilized. Its the lower end that we look at closely because we have that memo from walmart earlier in the month and there seems to be a lot more sting from the tax cuts. I think well get a soft report, but well still have an increase. And you look at the core number, it may be up 0. 3 when you strip out everything. Scott and mark, thanks very much. Have a great day. All right. Are you looking to make a deal but maybe need a partner . You may want to turn to relationship science. Just thinklingedin meets six degrees of kevin bacon. We have the ceo of the Company Joining to us explain this right after this. Welcome back, everybody. U. S. Equity futures, its a monday. This is par for the course on montds last year. This morning, you see red arrows. S p is down by just over 2 points. Dow is off by 19 points. In our futures, intrade says all trading on its site is being halted. Its unclear if theres ever going to be trading on intrade again. The site allows people to trade on a lot of different real life event outcomes. During the election, we would be looking at what the odds are, were it be president obama being ele elected, mitt romney being elected. Late last year, the site was blocked from investors. This morning looking at the site, theres a note to customers that said they have to inform you due to circumstances recently discovered, they have to immediately cease trading activity on the site. The site requires further immediate investigation. Theyve closed everything, closed out everybodys member accounts and they will fought be paying anybody off until they get through with the rest of the investigation. It thought it was a gambling site, ultimately. Well, it was. But its based in ireland so its different rules of engagement. But this is apparently irish authorities looking at it, not just u. S. And financial irregularitities in here. Which is weird. I dont know what was going on aside from the gambling parts. I am sorry to see intrade go. There are others doing it, though. Are there . Fair bet or fair i saw that. Something like that. And theres another one. People that do this, theyll continue to do it. If not, our next guest will figure out how to build something to do it. Its useful to have just so you see where people are willing to put their money down on these things. Plus, one of the issues is there are real world riskings to businesses that have to do with specific events. Right. That normal yaal derivative markets do not allow you to do the hedging. Betting on who the president is going to be, is it the direct impact . Make yourself a company that feels like you would lose in obama care. Just as an example. I get it. I tell it. What is the best way to hedge that risk that your company may face . Although when i looked at intrade last year, i didnt always believe the numbers. I think you could buy it for a couple hundred dollars. Low volume, low money. Anyway, we have another guest who deals with technology and doing some pretty interesting stuff. He spent the last two years building a platform that he says is going to improve the way wall street does business. Neal goldman is the founder and former ceo of capital iq, one of my other favorite services. And i wrote with both of these businesses recently. Thank you for being here. Im happy to be here. Full disclosure, ken langone is an investor. Henry kravitz. Everybody and their brother has a stake in what youre doing. First, id say its not at all just for wall street, its for everybody. And so what it is is basically a data product that models out sort of the most in the mix active people across an array of sectors. Business, finance. 2 million of what you say are the most influential people in the world. I said the word in the mix, but id say people who are relevant and active in those spaces. So there are people who are sort of interacting. That could be someone who is selling software to a tech company raising money or a nonprofit. I always describe it as the six degrees of kevin bacon where somehow i go on or six degrees of Henry Kravitz in this case where i can go on my outlook file and lets say i need to find steve. I need to figure out how i get to know you. But i go in and it looks and it shows me who i would know. Id say thats one small part because it could be steve, it could be you, it could be anybody. First of all, who are you and what are you about . I ask myself that question every morning. I understand. Myself, as well. But then how and then who do i know who might know them . How might i get an introduction . And then what i have in common with you, like that. What, like you like to ski . Potentially like you like to ski. How do you find that information . We collect data from tens of thousands of sources. We have 800 people who have been working for two years and its really a data factory. Its very industrial strength information. But its not facebook and its not linkedin. So people who are on the network, per se, arent really on the network. This isnt user generated information. This is information youre trying to figure out about me or about becky or about steve. What are you, scanning the web to find this . Its not user contributed data. Its not a social network. And its not bots, its an array of techniques to collect data from tens of thousands of sources, but then to spend a lot of time integrating it cleanly so theres only one you, one you, one you. But this makes the hairs on my back of my neck stand out on privacy issues. Its all publicly available at that time data. Were just making it faster and more efficient for people. But its not just the boards youre on. Its not the profit organizations that you might be involved in. If you spoke at a conference, they would know what panel youre on. Its pretty deep, who youre who is agreeable to a husband and wife potentially are depending on their involvement in business or their children. And only if theyre involved in business. I dont know. Im going to push back a little bit. Theres a point at which aggregation of Public Information becomes an invasion of privacy. Its all publicly available and its anything that you could do, you just spent longer do it it. So the more on protest, the more it appears to people that i have something to hide so im going to stop right now. I could think of a couple of panels of conferences that ive gone to that that information is not anywhere on the web. You wouldnt know that, right . Its in the public domain. Its not. They wont have every conference. Only if its publicly available. And we dont know if we dont know. Can i x out of your program . Do i have the right to say you cannot do that . If you had if you had anything that was incorrect on our database, we would be delighted to know that and to fix that. So lets that was not an answer. That was not a you cant opt out, steve. If its publicly available and, again, its a professionally constructed database just about things that are positive and assist people to do business with you. You said its more than just wall street. Are there other areas where you see people that are subscribing . Absolutely. And were having subscribers across whether youre a consulting firm, you sell software, youre a mon profit, you are an accounting firm. Its anybodys developing business. I bet thats big for them, too. Neal, how much does it cost to do this . Linkedin is free, facebook is free, youre about 200. Were about 250 a month or 3,000 a year per license. So we would come into a firm and anywhere between three and several hundred licenses. Interesting. Interesting. Neal, thank you for coming in this morning. Thank you for having me. Good luck with the project. Im hearing about it all the time. Are you . All these big guys they have an iphone app. Do it and figure out who you know. But by the way, no phone numbers or emails. No emails, either. No emails. So theres no spamming. Im going to go x some stuff out about me on the web. No. So coming up, euro crisis or euro opportunity . Well talk to the man who hopes to draw International Investment into the country, next. Its a new day. If your a man with low testosterone, you should know that axiron is here. The only underarm treatment for low t. Thats right, the one you apply to the underarm. Axiron is not for use in women or anyone younger than 18. Axiron can transfer to others through direct contact. Women, especially those who are or who may become pregnant, and children should avoid contact where axiron is applied as unexpected signs of puberty in children or changes in body hair or increased acne in women may occur. 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Look what happens. Isnt it terrific . What a week. The dow, s p 500 up every day this week. Dow continue to go hit all time highs. Welcome back, everybody. Ireland is looking to attract International Investors in commerce. The ceo of ida ireland. Barry, thank you very much for joining us this morning. Its great to see you. People have been trying to figure out what they think about is happening in europe right now. A lot of headlines drawn by italy and the elections there. Can you tell us where ireland stands at this point after all the troubles that have come up over the last several years. Sure. We had these troubles since about 2008. Initially we introduced certain cuts. It was really 2010, the imf, the eu. We have been on a program of doing two things. One is expenditure cuts. The other is tax raising. The expenditure cuts are two to one in terms of tax. We have about 75 , 80 on us. One of the things thats happening in ireland is because of the down turn in the economy, competitiveness is improving, which helps attract international business. What sort of businesses have you been attracting recently . Have you lured any large investments in the last year or so . Yeah. Most certainly. Predominantly from the u. S. , particularly in the technology sector. Boston scientific, johnson johnson. Google els, ebays, pay pals. So we have been attracting quite a good feel and definitely held by competitiveness improvements. What sort of investments have you attracted, though . Are these new factories that people are coming in . Is this additional money they have been willing to put in . So its twofold. If i take an example, we have won about six investments in the pharmaceutical and biofarm suit sal area. Eli lily is spending 420 million. And two new facilities. At the same time there are a lot of american investors to buy irish commercial property, particularly in dublin. Its both mobile investment and then commercial property investment. How worried are you about the possibility of the u. S. Allowing u. S. Companies to repatriot cash to the u. S. At lower tax rates . One of the reasons theyre invest anything ireland and abroad is because theres so much cash tied up there. Yes, indeed. Currently the rules are bringing tax profits back to the United States are substantial sums of money all around the globe. Ireland has benefited from direct investment from the United States in the same way as switzerland, the netherlands or singapore has. Of course its what the details of the tax treatment might be around that. Because u. S. Companies need to remain competitive internationally and they need to have International Operations all around the globe. You know, one of irelands big draws also is its low Corporate Tax rate. You have a 12. 5 Corporate Tax rate. Thats very different than what we have here in the United States. There is a lot of talk about trying to overhaul the United States tax rate. Is that something youre planning for . Do you think the United States could lower its corporate rate with a tax overhaul . Well, i think there would be some lowering of the u. S. Corporation tax rate. The last few weeks i have spent a lot of time in the states, meeting the heads of the major u. S. Companies. I think they would not be very optimistic about major tax reforms starting in the short shortterm. It is important for ireland. If you were going to locate an investment purely on the basis of taxes it wouldnt be ire land. There are many, many countries where you can get a more attractive rate. Barry, thank you very much. Always appreciate talking to you. Hope the next time youre back in the United States you join us on set again. Okay. Coming up, this morning top top stories. Whats this weeks economic test going to bring for the market . Mark zande will join us with the answer when we return. [ female announcer ] its time for the annual shareholders meeting. Therell be the usual presentations on research. And development. Some new members of the team will be introduced. The chairman emeritus will distribute his usual wisdom. And you . Well, youre the chief life officer. You just need the right professional to help you take charge. A talking car. But ill tell you what impresses me. A talking train. This ge locomotive can tell you exactly where it is, what its carrying, while using less fuel. Delivering whatever the world needs, when it needs it. After all, whats the point of talking if you dont have something important to say . Whats ahead for your investments . Moodys chief economist mark zandi. What could come out of the next budget plan and what it means for your wallet. Former budget director joins us. And get the tools of the trade. Experts on gold and equities giving you the details before the days first transaction. The second hour of the squawk box begins right now. Good morning and walk to squawk box on cnbc. The futures right now after a pretty good week last week, now were looking a little bit down. Well see how things turn out. S p 500 off two points. Nasdaq off four points. Paul ryan is saying that a compromise with president obama on taxes and spending is possible. Those comments come as ryan prepares his own Budget Proposal that he acknowledges is unlikely to be approved by congress. We think its unfair to ask them to pay more so washington can spend more. We think we should balance the budget. Gasoline prices have fallen for the first time this year. The average price of gasoline fell more than 5. 5 cents to an average just under 3. 74 per gallon. Prices should fall another 10 to 12 cents in the coming weeks. This one is for becky quick. The z10 finally going on sale today. Tmobile will begin taking orders. They plan to sell it starting march 22nd. Get in line. Blackberry has been criticized for not having models available after the launch back in february. The keyboard is coming later. It has a cool virtual. No qwerty keyboard means nothing. A guy wrote and said, steve, you dont understand. I need the keyboard to text while i drive. Does the virtual one from the letters that are raised. No. It was interesting. My son was talking about a new phone. He said droid or iphone. He didnt even mention blackberry. But its selling up in canada apparently. What would jose about that . Blackberry is based in waterloo. There would be a waterloo joke in there. So far so good. I thought it was really cool. Its a cool phone. I played with it. I am waiting for it. Becky they will be getting a keyboard. So one guaranteed customer. Maybe. Oh, its a maybe now. The first half hour was fun. After that, i found buggy things. But we were playing with the test model. What do you use . Im on an iphone. I am. Im straddles both worlds. I have two ipads, big one and mini. I still own a blackberry. But you dont use it . Not as much. We will talk to a tech analyst with paul meeks for a whats working now segment. Fridays job report making participants thinking about the u. S. Economy in the First Quarter and beyond but note really making too many changes. Heres whats going on, folks. There is a race right now. In lane one, we have the fiscal drag equal to 1. 5 Percentage Points of gdp. Lane two, we have employment growth, income growth. 2. 4 growth path without including any productivity. So heres what we know ahead of the race. Housing inventories, lending, Capital Spending have been rebounding. Prices and jobless claims have been falling. All of that setting up for all of that equal on the other side of the fiscal drive of a point and a half. Heres the date. Mfib in the 90. 5 range. Almost certainly say its an increase. It also remains at discretionary levels. Everybody wants to know what happened in retail sales is february. Was january a lark . Well look at the charts in a second. The big thing the payroll tax cut. How much it hit and how much it hurt. And the retail control group. That number feeds directly into gdp. Other things, i would like to see a three in there not a four. 3. 40. Ppi of course and cpi on friday as well as consumer sentiment. Lets take a very quick look at retail sales chart of the last 12 months or so. We should have that in the back. If we dont i can tell you its surprise to the upside. Yeah. A little bit more strength. Payroll tax cut. Look how good they are in the back. You can see the swoon. 0. 13 . Yeah. It was the control group. X gasoline, x auto. This is the part that feeds into gdp. Because the other stuff, the government gets elsewhere. More reliable sources. We say what is that number going to be . Interesting comment in the beige book which i dont think we have seen before saying spending was okay but retail sales were lousy. So services were doing well. Which, by the way interesting. Services is the biggest bulk of Consumer Spending. Much bigger. Much bigger bulling. If i could get on my hobby horse for a second, the government does a lousy job of tracking the economy. Great job with the 1950s economy when it comes to manufacturing. Tracking either the business side of services, very much would like to see a better job. The expectation for retail sales was weak. Like zero. 0. 2 or 0. 3 . Das lean prices drives it up. But the core will be basically zero he. 0. 2 is the control group. X auto, 0. A. We should introduce mark zandi, our guest host today, chief economist at moodys analytics. And jpmorgans chief strategist. Are we in a better than expected situation potentially . Maybe things are really starting to actually pick up. You look at better than expected jobs report. He thinks its the zero Interest Rates starting to go kick in. Im a very optimistic person. I actually think its going to get uncomfortable this spring, summer. Is this another spring scene . I think so. Government spending cuts are large. The apex of the fiscal head winds that is going to be q2, q3. Can you put up that affect tkpwra again . I want mark to comment on the thing that looks like theyre going okay. Maybe the european thing. That doesnt seem to have too many legs. The housing, inventory, lending, Capital Spending, rebounding. All of that potentially offset by the fiscal drag. Its just going to be not enough. I mean, gdp, sort of the top line when you add all of this stuff up is 2 ish. So q2, q3, one and a half, one. And it goes down to 125, 100. If you look at the Consensus Forecast you dont see what im describing at all. Lets bring tom in. What are you kind ofing as you look towards the future. Are you expecting any more of the spring scene talk or do we power on from here. Thats our base case. The incoming data in the shortterm will start to weaken. What were looking at is the setup for 2014 the second half looks very good. That salad 80s why markets are doing so well. I agree with mark. I think in the shortterm, if the data is weakening and Investor Expectations maybe have not adjusted to that, theres a market to consolidate shortterm. Do you mean a drop of 5 , or do you have a number on it . Yeah. I would say flat would be a good outcome. 5 drop, you know, very possible, yes. Whats your worstCase Scenario . Well, i think the worst Case Scenario would be we have a bigger hit to Consumer Spending than expected. China doesnt really stabilize. And i think that would set us up for a alarmer correction. Thats not really expectation. Mark, incomes earnings in the first of february were rising 5. 6 an annual rate. That will upset the cut, wont it 1234. A chunk of et. It will keep it going. You have a lot of nice things happening to support Consumer Spending. Should i expect some month, may, june, july, to look at the government line is approximate see minus 30 or minus 40. Yeah, i dont think so. Thats how its going to matter. Its also in hours. Right. Theres a lot of furloughs. That doesnt mean it will show up as a job loss but it will show up less hours. And that nails your income. Tom, i just want to get your thoughts quickly too. If thats the case, if we see a selloff, what do you tell people to do . Do you buy on every dip that comes through. Investedors need to be 08 stocks. Thats been our mental last few years. So dips need to be bought. If youre overweight equities and you have additional dollars to put to work, thats a chance. Tom, are you looking at one or two indicators to try to gauge how this is unfolding . What should woe be looking at, whats winning here, the fiscal drag or private economy . You know, investors are getting much better looking through shortterm speed bumps. One way is to look at Mutual Fund Data or hedge Fund Tracking data against the s p. Both are reflecting their willingness to be exposed or not exposed to the s p. The hedge fund data suspect giving us a pause the signal. It is more cautious. Which means the Retail Investors are a good. What i mean by the signal is cautious. It means they are overweight data. If you look at growth managers their data to the market is about 1. 1. One standard deviation above average. Its really the level you see in front of the four last corrections. Tom, if you were telling people they need to be overweight stebgs, if they see a dip and want to buy, are there sectors you think would be well positioned over the next 6 to 12 months. So were thinking about the march to june period. You want to focus on the lag. A lot of groups were left in the dust. Chemicals, basic materials, autos, mining, tech, hard work. The groups that lagged in the First Quarter were out in the Second Quarter. We would want to buy the groups that didnt do well. Tech, hardware. Yeah. Those are meaningful. Mark will be with us the rest of the program. 7 50 i have a chance to talk to mark. Coming up, a budget battle brewing in washington. We will talk to jim nussle right after the break. Comments . Comments. Send them to squawk on cnbc and on twitter. Zap technology. Arrival. With hertz gold plus rewards, you skip the counters, the lines, and the paperwork. Zap. Its our fastest and easiest way to get you into your car. Its just another way youll be traveling at the speed of hertz. Big job number. And the market takes off again. Up 236,000. Told you. Whoa february nonfarm payrolls increased by 236,000 jobs. When we finish with the cliff the government gets out of the picture, look what happens. Isnt it terrific . What a week. Welcome welcome back, everybody. We have been watching the futures this morning. After five days in a row of gains, you see red arrows. Dow futures down 16 points. S p off by 2. 5 points. In our headlines this morning, two Publishing Industry groups are opposing amazons request to own new domain names. They argue it would end in sufficient fixes. Book,. Author and. Read. House Budget Committee chairman paul ryan will unveil his latest Budget Proposal tomorrow. Here to talk about it is jim nussle, former omb director and,000 cnbc contributor. Good morning. Good morning. Is this an exercise in futility from what we see from paul ryan this week . Or is there some reality to finding a meeting in the middle . I wish there was some reality to this. No, i think to start off with, these are the philosophical corners that both chairman murray from the senate and chairman ryan from the house are going to be introducing their budgets. Theyre probably going to appeal to their base. You saw yesterday chairman ryan coming out saying one of the marquis issues was going to be repeal of obama care. I think we fought that battle. Its been over a few times. Good luck with that one. That doesnt make it anymore realistic. All of this is on fact that the president was supposed to lay it out a month ago. And he still hasnt done so. This process has gone down to a lack of any kind of realistic nature. Thats unfortunate. President obama has been making house calls, doing a lot of meetings trying to make friends quick. Is this helping . Is there anything afoot here . I dont think its afoot for the budget process. Long term it might have the help. If youre hoping to got a tax bill through or budget bill or negotiate the debt ceiling, possibly. But this is towards other issues such as immigration reform. Its going to take a little bit longer than one or two dinners out with the boys. I think theyre going to have to do a little bit more outreach when it comes to specific issues. I dont think the budget is kind of the prime real estate for that kind of Common Ground these days. It hasnt demonstrated it certainly. Long term, could that have some impact . Possibly. But i dont see it in the shortterm, no. Jim, ive been watching this process closely for a number of years now. And it strikes me that the attempt at a grand bargain looks like its a loser. And ive been thinking what they ought to do is go for smaller pieces. Whats your recommendation if you were in the job that you held back a couple years ago, the omb jo. Everybody seems to agree on chain cpi. Put it together with something the other side and do one small deal. Another small deal on top of that. Is that a way to go . Steve, im with you. Youre exactly right. The days of two men going into a smokefilled many a, those days are over. The public is tired of it. It doesnt happen that way. Thats part of the reason why our legislative process is so broken across the board. We have to let the process work. Youre right. One step forward, two step forward. Not the 20 steps forward. What would that next small deal with . Well, i think steve is right. If you look at some of the entitlement reform there are pieces within entitlement reform. I dont think you see the same in tax reform. But i think a recitalment firm, cpi may be one. Theres others that might be out there that you could reach for that could be part of a smaller reconciliation deal under a budget act bill moving through possibly. But, again, i think what the white house is doing is looking for other legislative vehicles, other legislative victories. No win has won so far in that process. Either side looks back. So theyre looking at some other legislative vehicles for that. He does have this background. I think certainly the creativity is there. It has not yet been demonstrated to be to have been put forward either while he was budget director or chief of staff. Im not sure youre going to necessarily see it from treasury during his tenure there. But its a possibility. Hes smart enough. Hes got the creativity. Hes got the deft pwe haoeupbtd him now. I think all of it is there. And if hes not, hes decisive. I dont think hes necessarily decisive. I didnt hear that. People in washington who phraoef he has been divisive historically. Thats true. I think more because of inaction, the lack of moving forward. A lot have been in a position topping put the deal together when the president couldnt or when other cabinet members couldnt. He didnt demonstrate that. So you could argue hes not going to argue that at treasury either. Jim nussle, thank you. When we come back, the wall street firm hit the hardest by falling commodity prices. More when squawk returns. To watch it for us. Thank you so much. I appreciate it. Ill be right back. They didnt take a dime. How much in fees does your bank take to watch your money . 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This ge jet engine can understand 5,000 data samples per second. Which is good for business. Because planes use less fuel, spend less time on the ground and more time in the air. Suddenly, faraway places dont seem so. Far away. Welcome welcome back. Tighter regulation squeezing traders. The climb was most significant at Goldman Sachs. Commodity revenues collapsing by 60 year on 2012 to 575 million. Coming up after the break, your tools of the trade. What you need to be watching in the week ahead. [ man ] ive been out there most of my life. You name it. Ive hooked it. But theres one. One thats always eluded me. Thought i had it in the blizzard of 93. Ha never even came close. Sometimes, i actually think its mocking me. [ engine revs ] what . quattro but at xerox weve embraced a new role. Working behind the scenes to provide companies with services. Like helping hr departments manage benefits and pensions for over 11 million employees. Reducing document costs by up to 30 . And processing 421 billion dollars in accounts payables each year. Helping thousands of companies simplify how work gets done. Hows that for an encore . With xerox, youre ready for real business. Welcome back to squawk box. In the headlines, Goldman Sachs disagree on shareholder vote on splitting the chairman and ceo roles. It is unable to concur with goldmans to split the roles doesnt warrant a vote. Am swrapbs planned smartphone may not hit the market Second Quarter as originally scheduled. It says production delays at amazon are responsible for the anticipated late release. World of oz prequel the great and the powerful. It brought in 80 million in the u. S. We kick off another week of trading. Dow is sitting at all time highs. Lets find out what traders are watching. Editor of the golden port. And equity market, scott of the tree om group joins us in chicago. Let me start with our gold expert. I keep wanting to play the neil young song after the gold rush. Is it too early, tom . You know, steve, its not that its too early, okay. But its all about supply and demand. When you take a look at the demand versus supply we have a big problem. This is what it is. The gld is the sixth largest owner of gold in the world. Bottom line. Last year demand went down 16 . Thats a problem in the context of these etf structures are new to the market. When theyre going up, thats great. Had theyre going down, its not an emotional sold. It just has to be sold. Central bank bought 428 tons of gold. Now, i know you know the Central Bank Gold agreement folks came into existence years ago because thats how gold crashed. And what happens with that agreement is this. They can only sell 400 tons a year or 2,000 tons within five years. Well, they bought 429 tons versus selling anything. But when you take that in the context of whats happening with the gld, meaning that they are selling so theres net selling in the gold market. And when youre in a down market with net selling, its problematic in a big way. Right. You put that together with the expect of the dollar going up, we have lower prices coming at us. It will be some kind of event or it will be back to the price of what gold costs to get out of the ground. I want to come back to that but i want to get to scott on equities. I do have more questions about gold. Scott, i think if you go back now and you just look at the day of the week pattern you could do all your investment. Mondays are down, fridays are up. And you could probably take off tuesday, wednesday, thursday. How do you like that strategy . It hasnt been a bad strategy as of late. But i would like to say fridays jobs report was good. It gave folks comfort and saying it wasnt just a ben bernanke rally. I noticed other guys early on the show absolutely we have a worry about europe. The news has been the vatican. We will see more italy. Number two is boy, oh, boy, the chinese need to step in and be there for us as well. Im concerned by what we have going forward. We can still only muster 1 to 2 gdp. Where is the growth . I dont want to get too down on everything, but i cant tell everybody to buy this market with both hands. You have to have one eye open and one eye closed and be very cautious going forward. What do you do with your hands . Dont answer that question. Mark, give some advice to the equities guys. Are you still concerned . In the interim. Were in a 2 world for the rest of the year. Im optimistic about 2014, 2015. If im a stock investors within a few more days, weeks, months, stocks are the place to be. Retail investors asked over the weekend, i asked about this in the last hour, sitting on gold about a year. Hasnt done anything. Hes thinking of selling out of that, waiting for a dip in equities. Are you advising retail guys maybe they should get out of gold here . Retail wise, we have been out for quite a while. Ran it up to 1500, 1600. Nothing goes up forever and nothing goes down forever. You have the expansion from 666 to 1900 was absolutely phenomenal. What gold did is this. Weve already been to hell. You think armageddon is coming . It is over. We have already come out. Gold stphfd out in 2002. Can gold go to 2200 . I expect it will be 2200 probably three or four years from now. We will pull back to 1350, 1400. Its a longevity deal. What gets it up to 2200, tom . Is it renewed fears of armageddon . No, no. Listen, steve, its 10 tons of dirt to get one ounce of gold. Go check that out and then go into Neiman Marcus and buy the shirt you have on. Give me a break. Gold will hold its value. But its not going to be oatkpg. Its not going to be a big deal three, four years from now. If any inflation comes in at all, everything goes up. Milk, bread and cigarettes used to be a buck. Is there an entry point you see for an optimistic investors . Take advantage of anybody that sells the stocks. I agree with mark. In the shortterm, we have some things to worry about. We have a 7. 7 unemployment rate. I dont think growth is good enough for the government to pull that back from the party yet. Any dips in the market, they will be bought. 1575 is definitely in the crosshairs for the s p and maybe higher. Even if its 5 . I know that gets a little scary. At the end of the day that will pay that investor to buy the dips. We will see the market end up with with a higher equity market. Every one says buy on the dip. Tom and scott, thank you very much. Have a great one. Have a safe one. Coming up, facebook board member calling for women to lean in and embrace success. Her new book. We will talk to pattie sellers all about it. Equity futures. Well talk about that as well. announcer scottrade knows our clients trade and invest their own way. With scottrades smart text, i can quickly understand my charts, and spend more time trading. Their quick trade bar lets my account follow me online so i can react in realtime. Plus, my local scottrade office is there to help. Because they know i dont trade like everybody. I trade like me. Im with scottrade. announcer scottrade. Voted best Investment Services company. A brand new start. Your chance to rise and shine. With centurylink as your trusted technology partner, you can do just that. With our visionary cloud infrastructure, Global Broadband network and Custom Communications solutions, your business is more reliable secure agile. And with responsive, dedicated support, we help you shine every day of the week. Futures futures down 20. It was right around there. Down 16 a little bit earlier. Not any meaningful changes. 0. 2 or Something Like that. Were watching shares of dicks Sporting Goods. Reported Fourth Quarter profit of 1. 03 per share. Revenues falling short. The company says positive trend in athletic footwear. Which i was buying yesterday. Two pairs of cleats for my son. Worse than expected sales in outer wear. My son wanted none. And cold weather accessories. What else do you need . I have my kids. Can i ask roughly how old are you . Early 50s . You almost represent the largest single age group in the country. Whats the significance of that . What youre doing is what the whole world is doing. Buying cleats for their kids. Im the last year of the baby boom. They used to fire teachers ahead of us. Im also bald. Baby boomers all think the world revolves around you. It does. And our kids, by the way. So two pairs this is in your future. Already got it. You got the cleats and stuff and all the stuff you have to get. Long, long list. I used the coupons. Good for you. My wife said make sure you take these. Good job. Lets talk about a huge story weve been talking about around the commercial breaks here. Cheryl sandbergs new book has been called a feminism manifesto. Youre suggesting women arent ambitious. Im not suggesting women arent ambitious. What i want to say unapologetically that the data is clear that when it comes to ambition to lead, to be the leader of whatever youre doing, men, boys outnumbers girls and women. Joining us is pattie sellers, editor at large at fortune. She wrote the cover story about everything thats been happening. Thank you for joining us this morning. Good morning, becky. Thank you. So weve been talking about it a lot off air here. Kind of cant help but get drawn into this conversation. Are you surprised by the controversy itself has created. A little bit. You know, the controversy really started out with cheryl pitted against the people who said that its the fault of institutions. That the reason with women arent getting ahead is because of glass ceilings and barriers. Cheryl claims, and i think shes right, that shes taking the braver, more controversial point of view which is that its not so much institutions fault, corporate americas fault, its womens fault. We dont take enough risks. She certainly lays it out that women need to be more assertive. But she also in a more knew answered way blames women as well for the way we raise our girls and the things we allow kids to say. She talks about how she was called bossy. We all worried about our daughters being called bossy. Thats men, society at large for how we treat them and how we raise them. Absolutely. The really interesting thing to me is when i met cheryl in 2005 the first thing she told me is that she was afraid to put the term most powerful women, which you know becky is our famous list we started in 1998 of the most powerful women in business. Cheryl was coming to our conference for the first time. She told me she was at google at the time. And she said i cant put this most powerful women on my Google Calendar because we share calendars at google. And i would be embarrassed to put that on my calendar. She was not comfortable with the word power. Only about three years ago did she Start Talking about power, women, women and careers. She never wanted to define herself as a woman. She talks a lot about this in the book. Pattie, i have mixed feelings myself as a mom who works. I think the Biggest Issue that i worry about is ever feeling im judgmental decisions about somebody elses decision. The decisions working moms make every day is you feel guilty about the kids, you feel guilty about work and how you kind of juggle it all. The good part is it really does jump start the conversation and make people think very seriously about these roles. Companies take this seriously to the point that any company or institution changes based on this conversation thats been kick started. Well, you know, its so fascinating that this debate about Cheryl Sandberg and this clearly controversial book, this debate is taking place at the same time that marissa myer has instituted this rule that you cant work at home at yahoo . Here she is the youngest ceo in the fortune 500 hired last summer when she was six months pregnant, has an infant boy. Shes issuing this rule. You know, on the surface it looks like you have marissa myer saying, you know, sort of limiting womens abilities to do lean in if theyre mothers and Sheryl Sandberg saying do what you have to do to lean into your career. Its not that simple actually. Its not that simple. Number one, as many men as women telecommute. I think i was reading you, its not so much what marissa myer did as the way she went about doing it. That was your writing, wasnt it . It was. And i wrote a piece that said bold move, bad delivery. I mean i think marissa myer, and im going to be writing today a little bit more about marissa myer and talking a little bit about this nursery, which im the only journalist who has seen seen the nursery. And marissa, though, i think her mistake here was i actually think it was a very brave move to turn around yahoo . The board says were hiring you six months pregnant. Do what you need to do to turn this company around. The problem is she had her head of hr issue the email to employees. She should have done it herself. She should have done it more thoughtfully. And she has written emails to all the employees since explaining it a little more. Those emails have not been leaked. Pattie, going back to sheryl for just a second. What do you think shes after . People spoke about whether she will run for office or Something Else. Beyond the book its become a platform not just for her movement but herself. What do you think the goal is . Shes been under fire for is this really about Sheryl Sandberg wanting to change the world or about her wanting to promote herself . I think its both. And not to put sheryl in the league of hillary clinton, although i think she is getting there frankly, the reaction of Sheryl Sandberg has been like the early reaction to hillary clinton, which is shes just out for herself, shes self promoting, its all about her. Well, it has been all about her. But you know what, hillary clinton, no matter what your politics, i think you have toe admit, is a woman who wants to do who wants to change the world. So does sheryl. If youre facebook management, board, should you be happy shes doing this . Should you be happy she has a book out and theres publicity around this and not facebook . I dont know. Shes not using facebook as the platform to build this leanin movement. And i think thats probably a responsible thing to do. But yeah. I dont know. I dont know if the building of Sheryl Sandberg is good for facebook or not. That is the question. Pattie, thank you very much for joining us. Thank you all. When we come back, more from mark zandi. And why it may be time to friend facebook. Welcome back to welcome back to squawk box. Are you ready . Save the world . No. But heres the question. Why shouldnt fiscal policy be on the same metric that Monetary Policy is on . Bernanke says, i am not going to stop until we have substantial improvement in the labor market. Why shouldnt fiscal policy be doing the same thing. Why should they be working, in the words of bernanke, at crosshairs to Monetary Policy 1234 why wouldnt you, for example, say im cutting the payroll tax until unemployment is 6. 5 and i am not going to cut spending of the government until unemployment gets to 6. 5 . Theres been proposals like this, right . Part of this deal, stimulus was no, no, no. Theres been similar kinds of ideas we should have fiscal stimulus until we hit some kind of target. Right. But its just a practical question. Look at how were making fiscal policy. Its a mess. By politics by not by the economics of it. If you were able to script it. Let me say one thing, though. The political process is very unseemly and kind of ugly. Certainly not ideal. But at the end of the day the fiscal policy we got through the recession and recovery actually wasnt all that bad. If you had asked me to write why do you say that . If you look at janets graphic in her speech she gave several weeks ago, it was similar to other recoveries but in years two and three it was contractionary. It worked against the recovery. I dont know why you say it wasnt that bad. In fact, it worked against it. Let me just tell you my reason for the thinking. One of the things the fed believes about monetary is the precommitment that helps it work. And i wonder if fiscal policy has been less helpful because its been stops and starts. If there was a precommitment there would be actual but this is nice in theory, this discussion. But just the practicality of it. You have congress, split congress, a president , you know, theyre arguing over everything. For them to execute on Something Like that would be a miracle. Thats why Monetary Policy, the way its conducted, they look at what fiscal policies are doing. Is it insane for the fiscal side to be working against the monetary side . Why is it not good enough somebody should not be doing what theyre doing. I would agree. I would agree. It would be nice if we could coordinate. Well have a wide open Federal Reserve but contracting the economy on the fiscal side. Yeah. I think this tension is most obvious in the current context. Because the economy is growing 2 . And you want stronger growth. 7 rate on inflation. So you would want it to be less contractionary. Even if its stimulate. Mark, thanks for your thoughts on that. When when we come back, the dow pushing to new highs last week. Can the bulls extend the rally . Markets after this plus, portfolio picks that could make you money. One key thing in common. Squawk president bush right back. [ female announcer ] youre the boss of your life. In charge of long weekends and longer retirements. Ask your financial professional how lincoln financial can help you take charge of your future. A talking car. But ill tell you what impresses me. A talking train. This ge locomotive can tell you exactly where it is, what its carrying, while using less fuel. Delivering whatever the world needs, when it needs it. After all, whats the point of talking if you dont have something important to say . Today is gonna be an sometimportant day for us. . You ready . We wanna be our brothers keeper. Whats number two we wanna do . Bring it up to 90 decatherms. How bout ya, joe . Lets go ahead and bring it online. Attention on site, attention on site. Now starting unit nine. Some of the worlds cleanest gas turbines are now powering some of americas biggest cities. Siemens. Answers. Will political will Political Uncertainty derail the rally. A longtime bear on Facebook Changes his tune. I immediately regret this decision. We continue our whats working series with a portfolio triple play from louie navalear. The third hour of squawk box right now. Good morning again, everybody. Welcome back to squawk box here on cnbc. First in business worldwide, im becky quick. Joe is off today. Hes skiing. Hitting the slopes. He is. Where . Colorado. Our guest host is mark zandi. Its the markets that are in focus after the dow rose on every one of the five trading days last week. All 10 s p finished higher. They were led by financials and consumer discretionary. Almost a 14. 4. They have cut back some of their losses. Dow down 8 points. S p down by less than 2 points. Overnight in asia, nikkei up half a percent. Shanghai down slightly. In the early trade already you can see things are mixed. Ftse slightly higher. We have a number of stories were following this morning. The big story of the morning, Committee Chairman paul ryan says a compromise with president obama on taxes and spending is possible. He prepares his own Budget Proposal. He acknowledges unlikely to be approved by congress. We think its unfair to ask hard working tax payers to pay more so washington can spend more. We think we should balance the budget. Gasoline prices falling 6 cents in the last two weeks, the first drop of 2013. Lundberg survey putting the National Average at 3. 73. The reason for the decline Lower Crude Oil prices and refiners cutting wholesale following weeks of increases. Prices will be falling another 10 to 12 cents or more in coming weeks. For more on the markets and what to expect from the training week ahead, the vice chairman at aerial investments and cancer portfolio management. Did i get that right . Close but not perfect. My mom still doesnt know how to say it after 30 years of marriage. I was reading through some of the notes that you put together. And the one that sort of screamed at me was you say go home and find all on the long term bonds you own and sell them. Put your money in cash if you have to but sell your bonds. You have that all in capital letters. Yeah. I think there are times when something is absolutely clear. We in the business have been slow at recommending it. This is absolutely clear. Interest rates are going to go up. And when they do, bonds are going to get hit hard. We thought this was going to happen for a long time. Yeah. But we are now a lot levels we havent seen since the 1800s. What . The only time the 10year bond was this level was pearl harbor. And rates are going to go up. We have the chairman buying 85 billion worth of bonds every month. People say hes keeping down Interest Rates. He cant stand on Mount Olympus and agree they go down. What he can do is bid up the price of bonds. 85 million a month. And when he stops rates are going to go up. Bonds will go down a lot. A 1 move in the 10year takes bond prices down 8 . 200, 300point move. Where should the 10year yield be in a normal economy . 3. 5 . 2. 5 in a bubble rate. People were afraid. So they put their money into bonds. How come people havent been moving money out . Bond flows have not flowed out like you would expect. This is finally the time. Thats right. Whats happened for the last few years, massive flow in bonds. They have gone from 60 equities to 60 bonds. Theyve been able to get away with it because the performance has been good. But when that starts to go the other way and people realize bonds are not risk free. Help me. When is that going to happen . Thats the point. You could still be wrong by another two years. Sure. But im going to be right eventually. Its just a question of when. I say that all the time, by the way. Markets can stay irrational the longer you can stay liquid. I didnt say bet your net worth. But go home and find all the long term bonds you have and tell them. When you say long, is it five, seven. It gets worse every time you take a duration out. So should not be a holder of fives. I wouldnt hold any treasury over a two. It will lose value. The worst is in municipal. Ubl bubble has a price that bears to relationship to underlying values. Theres a lodging, right . 7. 7 unemployment rate. It is well below potential. And fed buying a boat load of security. You can explain it, right . It doesnt mean its a bubble. Its overball. Bubble is a price out of line with its historical nature, whether the fund mentals of that investment, and driven by emotion. We got here because people were afraid. They were afraid of the stock market. They are making irrational investments. Can i just ask one thing. We have heard this message a lot lately. Are you telling people aside from not buying bonds, would you go home and look at your retirement account for the average Retail Investors. And if you have 30 in bonds, would you sell that fund . I would sell a fund with any duration over three or four years. You will have a negative return on the investment. Nobody should have all their investments in the stock market. So where do you go to diverse any . Some cash, access. Gold if youre afraid of inflation. Some people have pretty limit says options. You can own stocks, bonds or cash. Dont be afraid of money market accounts. You will not lose money in money market accounts than you will on bonds. Is there going to be a pullback and should we be waiting for that. What we all learned by now, no disrespect, nobody can call shortterm in the stock. We can call long term. Im not saying i know next quarter the stock market is going to be down. I apologize. That was out of character. I usually dont do that. Let me be clear. Im not saying its going to collapse next quarter. I say they are going to go down. I dont think anybody can predict what the next quarter will look like in the stock market. Andrew, its not about when youre investing, for for a trader, yeah. Its whats happening the next minute. Retail investors play the headlines. To the extent youre right and the next jobs report isnt as good as the next one, they will look at that and say, maybe i need to wait now. Or maybe my drop is coming. What the Retail Investors always does is sell after markets going down. All the data morningstar has done, Retail Investors are worse in the market. I want to make one point about what charles is saying. Theres a different way to look at fed policy. Tell me if you like this idea. One idea is that the fed is trying to drive down Interest Rates. The other idea, maybe bernanke is giving it a chance for it to unwind in an unsystemic way. Hes a better buyer in terms of on the way down. What youre suggesting is use this opportunity where the fed is out there now providing that cushion to get out. Hes giving you a wonderful bid. Shoe hit that bid. 85 million a month bid. Sell them. Find those bonds and sell them to mr. Bernanke because you are never going to get another bid like this. Wow. I dont disagree with that. When i think about why the fed is doing what its doing, im not sure thats primarily in the front of their mind. But im sure its in there somewhere. Thats why you might be wrong in terms of how this unwinds. They will be very careful to taper policy. Now, whether or not that tapering has the effect they think it has is different. The rate of change. There are going to be a lot of people who realize wind up being empty. 2 to 4. 5 , 5 . It may not happen in one year. But i think youre right, its going to happen. Equities. You like morgan stanley. You like bank stocks. I felt like i was at a cubs game in november. I was by myself. The fact of the matter is these things which were out of fed last year are coming back. 90 . Its still a very effective price. Morgan stanley, the brokerage business is many coming back. They make more money in stocks than in bonds. Smith barney very strong. They will benefit from housing recovery as people have more money to spend. We like banks as a way to play the housing market. Thank you for being here this morning. Had a lot of fun. Scared the hell out of us. Marcus is with us the rest of the show. Coming up, a portfolio triple play from louis navellier. Still to come, paul meeks. Why is he buying stock for his most aggressive portfolios . Find out at 8 40 eastern. [ indistinct shouting ] [ male announcer ] time and sales data. Splitsecond stats. [ indistinct shouting ] its so close to the options floor. [ indistinct shouting, bell dinging ]. Youll bust your brain box. All on thinkorswim from td ameritrade. Departure. Hertz gold plus rewards also offers ereturn our fastest way to return your car. Just note your mileage and zap youre outta there well email your receipt in a flash, too. Its just another way youll be traveling at the speed of hertz. [ construction sounds ] [ watch ticking ] [ engine revs ] come in. Got the coffee. That was fast. Were outta here. [ engine revs ] welcome back welcome back to squawk back. The futures right now were down eight. Now theyre down seven. This kind of excitement is no good for my heart, becky. I dont know. You know whats interesting, whats going to happen on this monday. Because mondays have stunk. Mondays fridays thats what i said. Last month when things really turned around for the market, we started out with red arrows. Tuesday, wednesday, thursday off. Short on monday, long on friday. And you get a twoday workweek. Whats wrong with that . Yeah. It works until it doesnt anymore. Until they start to anticipate. What do you think the odds are now . 25 cents on the table here. Over friday being up again. How about monday . Why dont we watch todays . What are the odds of monday being down again . I know fridays had been up every friday this year. All right. That will be part of our game show weve got. We have another thing that investors can play along at home as well. If youre looking for diversification for your port folio, look no further. Louis navellier has three stocks from different sectors that share one common trade. I want to run through this. Let me think about this for a second. Winnebago, sure minute williams and mexico three stocks. I dont know what they have in common. Do you want to give us a little bit of a clue here . Strong sales growth. Earnings are growing faster than sales because the operating margins are expanding. Next quarter will be the slowest for a while. We expect the market to get smart. We expect the leaders to break out. Theres been a lot of froth in this market and its tying to go to quality. Winnebago, what do you like besides First Quarter forecasted sales and earnings . Not only that. We have order backlog three times what it was a year ago. Consumer confidence is up. And its it has a very strong earning surprise history in recent quarters. So we expect another big earnings surprise. I think one of the Big Questions people have, correct me if im wrong, but winnebago was like a hog, went into the 2008 financial crisis. Where you saw the middleclass americans who had been able to purchase some of these things in the past really pulled back on spending. Has that changed, that dynamic . Sure, its changed. They have financing available for mobile homes and of course its tax deductible. As long as you dont have too many homes. Sales are definitely up. Okay. So winnebago. Sherwinwilliams. Talk us through that. Its not just the paint business but an acquisition. They bought a cemex, one of the largest worldwide. Theyre benefitting from the housing boom not only here in america but around the world. Especially cemex acquisition was a big deal. But you like what you see in terms of housing in the United States as well . Oh, its definitely recovering. Its not recovering fast enough. Its slow, steady, adding jobs. If youre going to fix up one of these Many Properties that are still on the market, paint is the first thing youre going to get. Talk us through fermento mexico. A big cocacola bottler in mexico. 43 gallons of soft drinks by mexicans a year. It might be what diabetes on the rise there. Their sales and earnings are stunning. Theyre getting stronger and stronger. They have beer down there too they sell. If you looked at the market overall, you did say a little bit you think its going to be tougher that earnings will not be coming in as great. We have mark zandi on set with us. He talks how hes expecting another spring swoon. Maybe you see things slow down the next several months before they pick up again. Does that fit with your thought process as well . First quarter earnings may be up four or five with surprises and all the stock buybacks are going on. But they definitely get better in the second half of the year. One thing im watching is the dollar. When the dollar was getting weak a couple months ago it was going to fuel profits. But it got its mojo back when britain got downgraded. A comedian got elected in italy. Although you look at Central Banks around the world and theyre all printing as fast as they can. In that sort of environment currency the dollar hasnt always reacted the way a lot of people expected. Thats correct. The dollar rallies when everybody is scared. And so britain and italy squared everybody. Of course probably another italian election coming up. But we do have the lowest rates in the world outside japan and switzerland. And those low rates that are going to be with us for a couple of years is definitely causing foreign capital fleet. You know, its going to be interesting to see how the fed unwinds this. You can already see that wall street gets scared any time they talk about unwinding it. But fortunately bernanke and janet yelin confirmed the pump will be on for a while. Louis, thank you very much for joining us. Thank you. Coming up, squawk booze news. A fight brewing in europe over the definition of absinth. And now hes investing in the social networking giant. Find out what changed his mind. You dont smoke pot but you drink absinth . Its monday. A brand new start. Your chance to rise and shine. With centurylink as your trusted technology partner, you can do just that. With our visionary cloud infrastructure, Global Broadband network and Custom Communications solutions, your business is more reliable secure agile. And with responsive, dedicated support, we help you shine every day of the week. Welcome back welcome back to squawk. Breaking news. The stock is moving. Dell stock. Icon enterprises announcing it is entering into a confidentiality agreement with dell. As you know, carl icahn said that he is pushing for a better deal at dell. Doesnt like the management buyout. Proposed a different transaction to lever up the company. And getting a big, fat dividend. For himself and the other shareholders. The big question now if they are entering into this confident agreement is it possible he could enter into the bidding contest himself. Shareholders asked whether he should be coming into this and saying, look, im buy put up or shut up. If you want to do the deal, do the deal. If you dont want to do the deal, dont do the deal. The big question is whether icahn will be buying this. My personal view, just to share it, i cant imagine him buying this thing fully. So im not sure whether this helps or hurts the situation but it does clearly its one of two things. Either he is getting in and is interested in participating in some part and whether you take it private, or you basically buy off the loudest vocal critic of some of these things and put it out there. The market reacting positively. Becky, this is totally outside of any area of expertise i have. Why a confidentiality agreement if thats what was going on . The purpose of the confidentiality agreement would be if he wanted to buy the company and he wanted to be a bidder you would sign a confidentiality so you could get a look under the covers. Thats what this traditionally is about. Is he a serious bidder, do you think . I think hes going to say hes a serious bidder. Is there another reason why there would be one . The only one i can think of in this context, give him one, take him under the covers and say check it out for yourself. See if the numbers add up yourself. Does he have to show any seriousness ahead of time to get that confidentiality agreement . Last week he showed as much seriousness he owns, what, 6 of the company. And then you get a look for 6 . Southeastern is another major investor. They have said they would support some type of transaction that ultimately levers up the company and keeps it as a public entity. The argument is a management buyout unto itself is untoward because somehow michael dell and his team at silverlake know more than anybody else. Am i going to get a nasty phone call if i say carl eye karpb is green mail. We do modern day green mail. In old days if you wanted to get rid of him you pay him off and say please go away. Now you have to say is come under the tent, be part of my team. Thats something that can happen. By the way, it has happened. Blockbuster said come in, play with us. Others have done the same thing. So let me just game this out. Carl eye can makes a big stink how the dell buyout is not sufficient. Right. Makes a big thing. And then they bring him into the tent. Is this going to rault in a payoff . Theres no way to buy off carl. You could bring them in and make him part you could make him part of the buyout. The big question is people talked about whether there should be a public stub. You guys are going to run off with this thing. I will have sold too soon. If you believe that let me own a piece of your private company. Now, theres been a lot of questions whether people want to do that. And there are a lot of risks. Huge. So you are making a bet on the business. We have to go to break. How great is it that andrew is part of the squawk box on set. Can i say one last thing odell . This is a risky deal. People dont appreciate that. Most of the private equities not silverlake thought this was a dog. Every shareholder who thinks theyre being ripped off, there is another side. They would be happy if this thing fell apart. So, you know, people are on the deal obviously want it to happen. Its not. So simple. Dell thinks its a good deal. Of course michael dell thinks its a good deal. And you think hes wrong . He may be wrong. He may be right. Is he right or wrong . Tough sledding ahead. You think hes making the wrong call . Five years from now if he makes this work, we should all applaud and call it a day. That applause and a quarter might get you half a cup of coffee in new york city. There are two sides to a market. Thats what year watching right now. When we william back, the trading week ahead. The latest buzz in the south by southwest conferences. Find out whats turning thaed that forced twitter and foursquare to popular culture. Tdd 18003452550 seems like etfs are everywhere these days. Tdd 18003452550 but there is one source with a wealth of etf knowledge tdd 18003452550 all in one place. Tdd 18003452550 introducing schwab etf onesource™. Tdd 18003452550 its one source with the most commissionfree etfs. 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Stocks on the move, dicks Sporting Goods, up 1. 03 a share. Revenue fell short of consensus as they sold less outer wear and cold weather gear than anticipated. Best buy updated from overweight to neutral. The Electronics Retailers new management has best buy on track for a multiyear turnaround. Well see about that. And genoa financial on a past mention. The paper says it could double because of improvements in its mortgage and health care segments. As we were talking earlier in booze news, an sinth. The definition at its meeting in straussbu straussburg, france it contained a toxin called therjon. It was believed to cause intense drunkness and vision blurriness. The french want to protect the historical method of producing the drink requiring therjon. Germans are concerned about health risks. They want to allow the term absinthe. I remember drinking it once in college. You dont remember it . I remember going to a place that had it. I was a junior in college. You have been talking in my ear. If you drink one shot its like warm and fuzzy. Two shots, everything is woozy. Three shots you take off all your clothes and run up and down the streets. That didnt happen. As far as you know. The other part might have. I was in college. So that kind of thing happens. This is an excellent sign. If theyre debating this, this is what theyre talking about in europe. Come on. Were making progress. Used to be a big debate over what was chocolate. Right . A chocolate debate and whats meat. It doesnt replace any of it, mark. Oh, darn. I was kind of hoping. Lets talk a little bit more about the markets and see whats happening. Rick santelli joins us from chicago. Rick, we got through the last couple of weeks, last week. Now everybody is trying to figure out if the economy is starting to pick up a little steam since the jobs numbers came in a little bit better than expected. Whats the talk down there today . Well, you know, people are looking up in the sky and they are seeing that the pieces of it arent missing. So the sequester doesnt seem to be an issue. And the notion its going to gain steam over time, you know, nothing outlives the 24hour news cycle down here. Its all about foreign exchange. Many very good technicians have been looking at the pound dollar and thinking 1. 50 was going to hold. Here we sit at under 1. 49. I think thats very important. Were looking at the downgrade op italy. The bank of japan pretty much trying to buy everything in its quantitative mode. Maybe down to kenmore washing machines. Central bank gone wild has become ensconced in our financial nature. One said sell stocks while you can. The biggest debate on the floor might be the old debate, the news story cycle how the fed will hold everything until it runs off. And i think, you know, that pretty much summarizes it. So thats a collision for those that believe in the john taylor exit will be messy. Many people down here are big john taylor fans verses the notion that after four shots of absinthe, they can deal with all of this. The bond bubble theory is something people started talking about a couple years ago. But in the last, i would say month or so, it seems almost every day a guest comes on and warns about it. I know we cant time things. But it feels like there are so many more people who are expecting it to happen sooner rather than later. Thats the sense you get too . Yes. Its kind of like mid06 when people were debating there was definitely a credit bubble. The spreads were too tight. Credit was underpriced. But yet things didnt really crash for another year and a half or so. Many use that analogy. And i think the other issue to pay very close attention to is were even though technically all the ney sayers have been wrong for the last three years, they are right in one category. The last several years the appreciation in price has always come to bail you out on total return. Its been a while since our 1. 38 low yield close. If you sell it, you may not get rich. You may die from old age before one or two years down the road selloff occurs. But its much more difficult to make any money buying it down here. You have very little protection. The tipping effect could happen a lot faster. Bidding something up and deeming that youre owe i think his quote was dealing with zeus looking down, i agree with that sentiment. Excellent, excellent analysis. Thank you. Thank you. The conferences and festivals known as south by southwest have been used to propel new companys innovation into pop culture, notably twitter and foursquare. We have the trending innovations at this years event. Julia. Well, this is where twitter and foursquare took off years ago. This year, instead of social networking physical products are in the spotlight. Scott weiss calls this the year of the gadget. A motioncontrolled sensor for pcs. It is designed to transform the way people play games and surf the web. Another called momodo is a 280 miniature lifeblogging camera. It clips to a shirt to take photos every 30 seconds and document your day. The accompanying app experiences into a digital flip book of sorts and 3,000 cameras have already been sold worldwide. Of course there are the apps. Local mobile transportation apps like uber are seeing competition here. It is investing in a highend service here offering teslas and rolls royces for the next generation taxi market. You can have a big impact with a really creative idea. But it has to stand out. So for us pushing a button and a rolls royce ghost picking you up, people get excite build that. Uber partnered with samsung to offer pedi cabs over the course of the week. It has a huge return on investment. They expect about 10,000 new customers after their presence here. And he says they have an even bigger impact when you calculate all the social media buzz. I dont know if you saw this, something about a google shoe, sneaker that tracks your walking. Did you see this at all . A talking shoe. Heres the thing. Google is not going to start selling sneakers. This is an experiment to show off all the things you can use with google technology. They are demoing a shoe that uses sensors to measure how fast youre moving, the kind of pressure youre putting on the sneakers. Its all rigged with an adidas shoe to tell you move faster, stop sitting there, get off your tush. Its a trash talking shoe. Theyre having a lot of fun with it. Its not a product theyre going to sell. Its just a fun thing. Have some fun out there. I dont know if you noticed, an article about a bar in seattle that will not allow you to wear google glasses. They say you should be part of the moment. If youre looking up in the sky at your little thing you cant do that. Did you get that . I dont want to talk about it. No, no. I havent seen it 1234r release. Well do the break, come back and give you all the details. Coming up, the dell deal ic. Accelerrental. At a Hertz Expressrent kiosk, you can rent a car without a reservation. And without a line. Now thats a fast car. Its just another way youll be traveling at the speed of hertz. With fidelitys new options platform, weve completely integrated every step of the process, making it easier to try filters and strategies. To get a list of equity options. Evaluate them with our p l calculator. And execute faster with our more intuitive trade ticket. Im greg stevens and i helped create fidelitys options platform. Its one more innovative reason serious investors are choosing fidelity. Now get 200 free trades when you open an account. Welcome back. Welcome back. We have breaking news to bring you again. Carl icahn confirming hes entering into a confidentiality agreement with dell to look at their books. It means, by the way, potentially he could be a bidder or Something Else. We dont know. There has not been additional commentary from the Company Beyond the statement that they will be entering into this confidentiality agreement but it does suggest that perhaps he is being brought in under the tent in the hopes that he might bid for the company. Other shareholders suggest if he wants to keep the Company Public or take all that money out from a difficult deposited, might as well buy the whole thing. In the meantime, were continuing our whats working series. A long time bear on facebook stock. But now hes ready to buy. Is facebook the right pick for every investors . Pull joins us now. Cite are na capital, is that correct, paul . Thats correct. Why do you like it now . I remember you hated this thing. We manage 4 billion in the smallest of fractions only for the most aggressive folks. These are folks that dont even expect much from the stock in 2013. To put that in perspective, to set the stage. But i would say with when the Company First went public they didnt want to talk monetary traffic. Now they want to do that. The big thing not only with this company but with any of the social Networking Companies is what are you going to do with mobile apps . They have only broken out revenues for a couple quarters. Last quarter in december 2013, 306 million in mobile app revenue. I expect in the march 13 quarter it will be 3. 50, 3. 60. Last year they did 458 million in mobile app revenues. I expect it to be closer to 1. 6 billion on a total revenue of about 6. 8. Thats where the market is going and thats where we need to see more progress. What is your target on the stock . You said we shouldnt be thinking about the end of this year. I assume you do have investors who care about where its going to be a year and a half from now. For 2019, where do you think this should go . I think the stock should go much higher than even its ipo price from may of last year. Are you a bull on google . Google has had a huge run recently. The reason i ask i put it potentially in the camp of facebook. But theres a lot of ney sayers out there. I like google as well. We own that in a bigger size. It should go to 900 when you add net cash per share. Of course google is further ahead. But i think what happens down the road, im talking a couple years out both companies will be among the three, four, five horsemen that dominate the space. Who else are the horsemen . Through time, apple will continue to be a major league player. Is apple a major league player. Lets talk real briefly. You on apple . It was the opposite of the last two we showed. I like apple very much longer term. Its obviously very with the reven revenue. Analysts are still lowering estimates. I dont know how low it could go. I was thinking 375, 400, 425. Long term i think apple is a really goodbar began at this price and people should buy it. All the services, all the Different Services google has that make that product and annan droid ill tell you i was with all these young kids who think that is the future. They said how is it possible they will ever be able to keep up but they dont get services. The thing you have to remember about android versus iphone. Yes, it has a hell of a lot of market share, unit share. But the revenues to the overall eco system are dominated by apple. Real quick before we go, do you like dell in this whole mess . Are you following it . No. Because every time you turn around you see more and more negative data. Even worse than the bears originally thought, with estimates for worldwide and United States pc units. So hp and dell its just getting more and more dire. Thats just an art basically they should shareholders should be happy to get rid of the company. Give it to michael. 13. 65 is much higher than the offer. And the Company Generates cash. I can make a Valuation Case there. But the long term, whether it is public or private, unless they drastically reform their business and lessen their reliance to pc, it doesnt matter. They are still in the pc business. Sheryl sandberg is on usa today. She was on Television Last night. Is that a positive or negative . Do you factor it in when looking at stock . I dont factor it is. I care about the quality and the depth of the management team. As far as what she does communicating her thoughts to the public in any venue, that really doesnt factor into my analysis for facebook. Paul meeks, thank you for joining us this morning. Thank you. When we come back, dont start your trading week without jim cramers stock to watch. Well check in with jim right after this. I know what youre thinking. Transit fares as in the 37 billion transit fares we help collect each year. No . Oh, right. Youre thinking of the 1. 6 million daily Customer Care interactions xerox handles. Or the 900 Million Health insurance claims we process. So, its no surprise to you that companies depend on todays xerox for services that simplify how work gets done. Which is. Pretty much what weve always stood for. With xerox, youre ready for real business. Lets go down to the new york stock exchange. Jim cramer joins us now. Buy on monday, take tuesday, wednesday, thursday off. If it were that simple wed be pretty rich. Or rested and relaxed, anyway. Well, true. This is one of those moments where i think people are trying to search for something to trade off of. Its always a suckers game. The market has been very good all year and if youre looking to something to buy you have to circle back to things that may be dead in the water that may be picking up because Gross Domestic Product in this country might be stronger. Mark, what do you think of that . Which . Jims saying gdp could be stronger. In the next couple of quarters . It could be, but the odds are no, we have significant spending cuts coming our way. Jim, you dont worry about the retailers, jim . Theyve been very strong and my checks indicate theyve been stronger than expected. The fema money isnt even here yet. Were still, people are rebuilding in the northeast. Incredible, there are 1 million housing starts. If they do 1. 2 million housing starts. I havent let my optimism shine. I am quite optimistic. You know, i think as we move into 2014 and 15. The housing numbers youre talking about will just take over and you can see it in the employment data, right . Yes. Im just nervous that were taking the next three, six months for granted, and that, you know, these Government Spending cuts will be quite significant. The other thing ill point out is a statistical thing. Weve seen this picture for the last three or four years, and you come into the new year and then things real willy slow quite significantly. There could be fundamental reasons for that, but it could be seasonal adjustment issues, as well and the data can be juiced just because of the way were measuring things. Absolutely. Its been a terrific trade to get the first couple of months of performance and the sell in may has worked 50 of the time. I think my issue is that the fundamentals are better than they were these last couple of years in the United States and its difficult to deal with the companies who have always told me that things are good and you dont know what youre talking about because i have the macro view and you dont know what it looks like because im smarter than you. I cant do it. I dont know what to do with home depot when they tell me look, things are finally turning around with Gross Domestic Product, and you may think you know because youre a grower of tomato plants. Its a race between higher incomes from working and what we saw in the wage numbers and employment and whats happening from the tax hikes and the payroll tax hikes and the sequester. If youre telling me home depot is telling you that the consumers are in the race. Home depot is where youd see it, right . Its that the other retailers where youd be more nervous about. How do i deal with macys . Theyre clearly not a liar or a bluff artist. I dont know what to do with it. Youre supposed to sell in may and go away. Listen, you are so clueless. How do i tell Terry Lundgren hes clueless when he tells me business is good. Well see you in just a few minutes. I have four things i want to ask joe, but we cant. Well see you at the top of the hour. When we come back, our guest host has been mark zandi. Well get his optimism. More on that when squawk comes back. Im a conservative investor. But that doesnt mean i dont want to make money. I love making money. I try to be smart with my investments. I also try to keep my costs down. Whats your plan . Ishares. Low cost and tax efficient. Find out why nine out of ten large professional investors choose ishares for their etfs. Ishares by blackrock. Call 1800ishares for a prospectus which includes investment objectives, risks, charges and expenses. Read and consider it carefully before investing. Risk includes possible loss of principal. [ laughter ] [ female announcer ] each one of us is our own boss