Transcripts For CNBC Squawk Box 20140207

Country ahead of the 8 30 eastern report, u. S. Equity futures take a look. All this may change at a moments notice once we hit it. The dow looked like it would open higher by 4. 5 points, s p up 2. 5 points and the nasdaq up 11 points. Lets take a look at the tenyear. 2. 707 . Weve got a lot of special guests this morning on this jobs friday. The maestro himself, former fed chairman and cnbc 25 contender allan green p Alan Greenspan is going to join us like at 7 30. Before we do that, were going to get over to pebble beach with becky and joe. Hey, guys. Good morning. Its good to see you, andrew. Good morning, sara. A sight for sore eyes, andrew. I believe its maestro. No, its maestro. I said maestro. Im not talking about you. Not you. You said it right. A person has a prime time show now on stop. Its very early out here and its nicer weather this morning. And we are enjoying pebble beach. Its been beautiful out here. Joe has been playing and youve been well, its im glad to be here, right here. I feel like this is something im comfortable. I dont need any practice swings. Ive been hit with a ball from about 180 yards. Theres been some injuries. I havent caused any. Ive been injured. You got to play still today. I have a ways to but you know what . I keep telling myself, a lot of these pro golfers that come in here, they you know, it would be like coming in here cold and not being able to do this job. But i bet nobody would get hurt. Probably no one could get hurt. Were in davos . Where are we . Youre in bebl beach. What time is it . Its about 3 00 in the morning for you, joe. I dont know, what time did you go to sleep last night . Davos time is its noon in davos. Its like 5 00 in the afternoon. No, its the i dont know where i am or what im doing. Its noon in davos. Its 6 00 a. M. In new york. 3 00 a. M. Here. I see, by the way, becky, youre wearing red, becky. I am. And sara is wearing red. Ive got the tie on and this is for heart health month. Womens. You have an excuse. You were packing a week in advance. I barely remembered. Right. And i had a i had a six hour delay on monday with all the snow. My luggage got lost. But you know what . I have been watching, andrew. I was ready. We never got below 5. 8 down on the s p. Never went and i was watching, making sure. Now were back to 4 after that nice move yesterday. So 5. 8 bers is the extent. 5 correction. Not even 6 . It got a lot of attention. A lot of pooem people talking about it, the vix. You wonder if its really over at this point. You do. But ive always said if the bull market is going to continue, it usually doesnt let people buy things on sale feeling really good about it. You have to step in. On the down days, i was putting mope in the kids college funds. You can start doing that. And i was kind of hoping it fell a little further just so i can put more money in. Anyway, at ts chairman and ceo Randle Stephenson. We have Scott Mcnealy. Kimberly clarks ceo tom falk, dave dorman, it will be interesting to talk to him about cbss move. And we have dallas fed president Richard Fisher. Hes here . He is here. Happens to be here on vacation right now. We caught up with him and got a chance to ask him to come in about the jobs report. Hes going to give us a chance to talk about the jobs report both before and after. Thats amazing to have a sitting fed president who can sit down. Especially when we know that were trying to gauge yellen, is she more dovish than bernanke. Has there been any trepidation . Will they blame it on weather . Is there any thought of not continuing the 10 billion every month . Fisher has been a proopponent of he wants to continue this taper. I think it would take a a lot for him to pull back from this. There have been some fed president s that have suggested that raising that to 20 billion a month. Theres been doubt that were not out here doing business business, cnbc business, Business News business, i think that this puts it to rest for richard, you know, having him on. He should be here every year because of the chance of am i right or am i right . You are right. It doesnt look like were trying to make sure we can continue coming up. Well, we needed to be here this week. There are movers and shakers here. Theres a lot of interesting things that have been happening. Of course, its not just business out here on pebble beach. Joe has been busy on the golf court, as well, playing in the at t t pro am. There will r some great highlights that have come out of this. Were going to show one video right now. Why dont you take a look at what hes been up to on the golf course. This is an 18 foot putt on the seventh hole. Its a birdie for that par 3. Take a look. Take a look at this hair as i pick it out and walk away. If theres any doubt that this is a system or a i mean, i could afford a better rug than that. Right . Yes. Thats your real hair. And i know people think all my shots are like that. There were at least 75 other shots that werent nearlily as i cant even say that with a straight face. 80, 85 no, i cant even say that with a straight face. There were a lot of its really difficult with just the crowds and the i mean, theres the camera there. Thats why you saw that because there was a and believe me, its nice that theyre there it is again. Theyre our friends, the golf channel. Showing you this shows the good shot. Seven is a great hole. Its a signature hole. And when the wind is blowing, i think tom when he won the open out here, he hit a 4 iron. I think i hit a gap wedge or a sand wedge. It was windy and rainey yesterday, too. There were a lot of delays on this. Threehour delays. But everybody was in the same place. I saw Peyton Manning and curt russell and lucas black. Do you believe slingblade . Andrew, remember the kid . I do. The kid has grown into a major actor. Theres curt. And theres another i dont know what id blame that face on. That cant just be from being wet, is it . Anyway, thats me. Thats who i am. We had goldy in davos a week and a half ago and now we have the hubby. All the family. There she is. There she is. Was there a gallery . When you hit that, was there a gallery right there . Oh, yeah. There absolutely was. Rocket cheering. You stopped right before you were about to pick up your ball, though. What was going there . I noticed that. Shock. Consternation that i knew i was going on to number eight, which is such a tough hold. Theres other video from five and i did an interview and i got the kids mentioned and penelope mentioned and Everything Else, which i did again, as a matter of fact. That was well done. No, but anyway, its really been amazing watching this. My pro is kicking tukus, too. Its a rookie, nice guy, james hahn. I noticed when they were showing a lot of the action with james, im Walking Around slouching and, you know, luckily i didnt pick my nose or anything. I didnt even know i was on camera half the time. Anyway, but i digress. Weve got to get you a hat. Weve got to get you a hairbrush. A hairbrush. Well, lets do some corporate news. Well get back to the golf in just a minute because theres a lot more to talk about from pebble beach, including what at t boss Randle Stephenson told becky about his pricing strategy. First, some corporate headlines. New data showing that emerging market equity funds outflows so far this year have surpassed those of all of 2013. Epfr global reporting that emerging equity funds have now suffering 15 straight weeks with out flows yeartodate. Investors are pulled 18. 6 billion from stock funds. Google is partially going to be owning a nearly 6 stake in lenovo once the Chinese Companies dooep deal to buy motorolas hand set division. That stake will be worth 750 million. Motorola agreed to buy that hand set last week for cash and stock. I wonder how long they will continue to own that. Perhaps the bigger news, apple buying back 14 billion of its stock in the last two weeks since it reported those disappointing Fourth Quarter results. In an interview with the wall street journal, the ceo tim cook saying he was surprised by the 8 decline na apple shares. Apple has now bought back nearly 40 billion of its shares during the past 12 months. He said look, the stock is down. Were putting our money where our mouth is. We believe in this thing. There was a great quote from carl icahn in that article, too. Tim cook says im confident and then carl icahn said so am i. So am i. Tim cook called it opportunistic. The interesting thing is to see the apple shareholders day meeting february 28th, i believe. It will be interesting to see where the stock is a year from now. We have a number of other stocks to watch this morning. Earnings beating the streets and the social Networks Revenue fell short of estimates. Also watch shares of Health Care Company etna Health Getting a nice boost. Shares of Online Travel site expedia higher after its better than expected quarterly results. And activisions earnings targets on strong holiday sales. That didnt hold back a rally in the stocks. Ceo bobby kotek says he expects the coming around destiny to be the companys next 1 billion franchise. Also keep an eye on news corp. The companys earnings and revenues topped wall street estimates. Cost cuts helped push profits there. The company posting a profit beat, it also is raising its share back bye program and naming a Warner Brothers Home Entertainment executive to run its redbox video rental business. Open table, forecasting weaker than expected Quarterly Earnings in the Current Quarter as it hires more employees and increases investments on marketing. Finally, weve got a retail name for you. Gap shares rising on upbeat Fourth Quarter and full year outlook. With that, back to you in pebble beach. Becky. Sara, thank you. Among the Business Leaders spending the week in pebble beach, at ts ceo and chairman, Randle Stephenson. We caught up with him last night. Among the topics we covered, at t recently announced price cuts to its friends and family plans. I asked if they could turn a profit with all the bidding wars going on. I think this has been a fascinating evolution in our industry over the last year. Because were seeing something, i think, transformative happen as it relates to how the consumers buying behavior has changed. That is the consumer is being given an option. Look, in the past, the carriers, the Telephone Companies would heavily subsidize an iphone or an Android Phone and give it to the customer for very little money. How much was the subsidy . On average, probably a couple hundred dollars. Right. Well, the customer would pay a couple hundred dollars. But you were paying closer to 650 or something . Yeah, thats probably a fair inspect. 650 would be at the high end of devices that we would buy. But you get the equation, right . The customer would pay 200 and the device could cost carriers, 500, 600. Then all of a sudden we offered the customer a choice and we said, look, if you would rather pay more for the hand set, we would give you much lower price points on a recurring basis. And the consumer is overwhelmingly opting for that equation. So pay more for the hand set in exchange for lower, ongoing pricing. And weve been, you know, kind of pleased. You put that choice out there and see how the customer opts. Its good for the consumer. The consumer seems to like it very much. From our standpoint, you know, the subsidy levels go down in exchange for lower pricing and its just a change in the business model. Still to come this morning, we will bring you stephensons thoughts on the economy. Issues of nsa surveillance and at ts critique of russias antigay laws. This is the first time hes commented. At t was the first major advertiser to come out strongly against russias policies against gay people. This is the first time hes talked about it. Im a little out of it. When is the start . Its coming. The opening ceremonies are what . What is it, next week . Who knows. Tonight . Tonight. Yeah, thats what i mean. You see, youre more out of it than you are. Than i am. Im like a golf announcer. Did you notice this . Andrew, you have no jacket and im like dan hicks or something. Did you see this has like a pattern in it . I did, i did. Just feeling very i dont know. Coming up, much more on the i feel like i need to talk a little bit quiet now. Will the weather keep us in california for a couple of extra days . Man, crazy weather getting out here. Man, lets get the weekend Weather Forecast from the weather channels alex wallace. Good morning to you, guys. Well, were watching things in the east where we have more wintry weather to deal with for saturday and sunday. The good news is the wintry weather is expected to be fairley light out there. Were going to track a rather weak disturbance moving its way from the west to the northeast. Tomorrow brings us light know snow from des moines towards chicago. And sliding east for tomorrow, cleveland seeing some of that. Eventually well see it move into portions of the northeast, as well. So for stoem, midatlantic. Weve got snow around d. C. Mixed to the south and then on sunday, creeping north into new england. But again, the key word is its all going to be light impact, major travelers out there for us at all. Meanwhile, the west coast, though, this is a bit of a mess here. More rain in california. Great news for the drought. Again for travels with the snow coming down through the interior, should be a little difficult. That will continue into tomorrow as well as sunday. The rain train, it continues. Thats your national forecast. More squawk box coming up next. Welcome back. We got a chance to sit down with at ts chairman and ceo Randle Stephenson. We got a chance to talk to him about possible deals, particularly between rivals tmobile and sprint. He talked about the impact of the fed tapering and the state of the Global Economy right now. Oh, weve been in a in the u. S. A sideways motion now for three or four years. Slight growth, nothing exciting. I think as people look out over the near horizon, i dont think many of us are seeing things were going to change kind of our thinking on investment and hiring and so forth. As you look overseas at the emerging markets, i think some of the fed action is having an effect on that and its influencing how companies are thinking about investment and so forth. But there hasnt been any great cat lit clis mick effect, right . I think our response is more to the fed than anything else. You said around the globe, you have some companies that may be having changes in Investment Strategies based on what the fed is doing. Has at t changed knit Investment Strategies as a result of the fed tightening . No. Were investing heavily in the mobile internet. We have been now for five years and weve basically told the street that weve got another 21 billion investment and were going to make this year, in 2014. And i dont see that changing anything were doing right now. What would change your behavior . Is there anything that you can see from Consumer Spending or is this all about the longterm game plan . From our standpoint, its a longterm game plan. We made a really big bet back in 200 6 time frame on the mobile internet. We began investing aggressively. Acquiring spectrum in our industry, thats capacity. And weve invested literally billions of dollars. If you put spectrum and Capital Investment altogether over that time frame, we spent 150 billion building out this technology. And so were going to finish the deal, as we like to say, and then complete this. It makes a lot of sense and particularly seeing how much activity consumer activity has grown and how much i use my own cell phone. How fast are those metrics growing at this point . You being an average subscriber or user of at ts mobile technology, your data consumption, which is whats driving this, average data consumption per subscriber is still growing 50 year over year. Were putting a ton of capacity into these Networks Every year and we dont see that really slowing down. As we look over the next couple of years, what were seeing now is video consumption on these devices. People watching squawk box on their ipads and on their iphones and you guys are streaming content, video content. That is now really driving a whole other way of capacity requirements. You know, theres a lot of talk of consolidation in the industry at this print, too. Youre either going to buy more spectrum or you can buy more spectrum by buying a company that has that. Theres been speculation that at t would be interested in vodafone. Are you . Im not going to comment on any specific m a activity. We have talked a lot about other markets around the world that we believe the u. S. Market, what has happened in the mobile internet, is going to be replicated around the world. It will be replicated in lat latin america. It will be replicated in europe, it will be replicated in asia. So we just are always looking out around the globe and seeing where the is this scenario going to play itself out next. We think europe is one of those, so its one of those we like to watch. But we think its going to happen everywhere. There was the talk in the market yesterday that sprint would potentially be buying tmobile, both of their stocks were up on that news. They turned and dropped again today on that. But would that surprise you to see a deal like that be able to go through . Yeah. I would be surprised to see the regulators allow it to happen. The doj, i think recently, has addressed it openly as they didnt see it feasible. The doj, they made it abundantly clear that they believe four National Competitors is the right number. If you look at whats happening in the marketplace today, you know, you see a really intense competitive environment. Were all competing on price, were all competing on service. And most importantly, i think is were all competing on Network Quality and network capability. And you see something happening in the u. S. Thats very unique around the globe. That is all four competitors here in the United States are investing aggressively in 4g, lge technology for wireless technology. And so my guess is this is exactly the environment the department of justice envisioned and when they shot down our opportunity to acquire tmobile. So i would be surprised but, you know, well see what happens. Joe, thats been a huge issue this week. The idea that sprint and tmobile would actually team up after regulators shut down at ts attempt to purchase them. Randle at this point im at a loss for tmobile. I figure it should go to somewhere. Theres so much competition, so much other things going on. I think at t should have been able to buy it, tmobile, its like worrying about sirius and xm when theres pandora and all this other stuff. So many Different Things happening. Are you there, andrew . Whats the name of that stupid for ewe la, begins with an h or something and it worked like 50 years ago to decide if theres so much market and it still works. Your dad is an antitrust lawyer. Its in your genes. You want competition. You dont want tmobile to just die. Theyve got spectrum. We wanted to build out the 99 . 99 of the company covered. Absolutely right. Of the country covered. And because of tmobile, and because of sprint, prices have remained lower than they might ultimately been you dont know whether they have gone up. Randle has changed his mind. Yeah, its been good for the consumer. Look how much your airplane ticket cost to probably go out there. Thats not a function of competition. Thats a function of the fact that all these airlines are now two or three. You think either sprint or tmobile are going to be here in five years . Maybe not called tmobile or sprint, but i imagine they will be, together, but i imagine those two probably will be together. They could have done better. At t could have used that spectrum in a way that wouldnt have been too expensive for everyone. I trust these people. No, im trusting. I think it would have helped from a technology perspective, not necessarily from a price perspective. And then when you talk about reaching all the people and making it available youre worried about you think netgear tried you think Network Neutrality is going to be a problem. The only reason i believe Long Distance problems. The only reason i believe in neutrality is because theres no competition for the water that gets 234 your home. Theres only one or two providers. Premarket. An iphone costs 400. Its more powerful than that Defense Department super computer from 1970 that cost 800 million. It costs 400. Does it seem to you that things arent going to right way in terms of pricing . Let it happen. Let the markets work, sorkin. We will is there a balcony there i can throw you over . Oh, boy. We can talk to the congressman about that. Coming up, making some last minute threats in sochi. We are getting ready for the jobs olympics coming up at 8 30 eastern time. And about an hour from now, we are former fed chairman alan greensp greenspan. He will be our special guest. 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Only at your ford dealer. Some Brokerage Firms are but way too many arent. Why . Because selling their funds makes them more money. Which makes you wonder. Isnt that a conflict . Search proprietary mutual funds. Yikes then go to e trade. Weve got over 8,000 mutual funds and not one of them has our name on it. Were in the business of finding the right investments for you. E trade. Less for us, more for you. The funds prospectus contains its investment objectives, risks, charges, expenses and other Important Information and should be read and considered carefully before investing. For a current prospectus visit www. Etrade. Com mutualfunds. Good morning. Welcome back to squawk box here on cnbc. Can you hear that . I dont know if you guys can hear that. Its raining. Its kind of cool. Theres part of the tent where it collects, too, that looks like its going to blow. Anyway, we feel like were kind of were roughing it. Its cool. Were in a tent. Its really raining, but its going to stop, im sure, before around like 12 hours, i think. Anyway, im joe kernen along with becky quick reporting live from davos no, ats at pebble beach. Somewhere and its sometime. Andrew ross sorkin is our eyes and our back at headquarters this morning. Todays top stories, the january nonfarms payroll report. Due at 8 30 eastern. Polled forecasters say the economy likely added 189,000 jobs last month. Many say that oh, i love northern california. You know, they need rain really badly. Really badly. This is good news here. Anyway, december, remember that number . It threw a chill into everyones idea about our big growth this year. The surprisingly low count of 74,000 net new jobs may be raised sharply. The Unemployment Rate is seen falling to 6. 6 , which is confounding to a lot of on people. Were at i dont know what the Participation Rate is. A 40year low. A lot of this you can count. They can say 4. 2 or 0. 3 is probably because of the end of the Unemployment Benefits. They attribute much of it to that, too. And most people go into the 62 of not even looking. Not participating, not even looking, right. And, of course, there was weather blamed for the low number in december. Well see if that happens in january, too. Experiencing a lot of that here. Average Hourly Earnings are expected to rise by 0. 2 . The futures this morning arent doing a lot. But, you know, after monday, i feel a lot better about that. I was worried that when things get out of hand. We dont know whether it is over. We set a High Water Mark december 31st for where and we havent been back since in 2014. But were about 4 below those levels and im talking about the s p. Andrew. Okay. You can hear the rain. Thats something. We can hear it. We can hear it. Were in a tent. I can tell. It sounds like youre under an umbrella. Among the other stories were following in the paper this morning, former Portfolio Manager Matthew Martoma was found guilty of Insider Trading yesterday afternoon. A federal jury in new york found that he was guilty on all three of the conspiracy and security fraud charges that he faced. The verdict was the eighth Insider Trading conviction of a current or former employee of steve cohens sac capital and raised questions about whether prosecutors will eventually go after mr. Cohen himself. And what a report. 790. Amazing. Insider trading, it really is. Lets get a check on markets as we count down to the allimportant jobs report. We are seeing futures rising a bit on yesterdays gains. Joining us, mark vitner. Mike hansson, Merrill Lynch global research. Yesterday i was at the New York Stock Exchange. Big rally. Dows best day of the year. Traders were talking about optimism on the jobs report. Is that justified . Theres some expectation with the weather story supposedly playing out in december that we get a bounceback. Historically, that tends to happen. Whether you get basically the jobs replacement. I think there is optimism. The data has been kind of mixed. Its a tough call. You get that crazy report. Not only do you have the weather, but you have the seasonal adjustment that usually comes with january from december and you had the Unemployment Benefits which ran out at the end of december. Thats right. That will affect the Unemployment Rate. The Unemployment Rate is even more volatile than usual. Everyone who was on employment insurance left, you would have Something Like 5. 8 , 6 Unemployment Rate. Do you care about the well, we should. The fed probably does. The fed is backing away from focusing on the percentage at this point. Mark, youve raised your forecasts going into this number. I know youre sort of on the high end of estimates. Whats making you more optimistic . Well, we saw the data in the ism nonmanufacturing survey. The employment component in there was a little bit stronger. And we had a higher number to begin with. I think we go from 185 to 195. We dont think the weather was as much of a factor in january as it was in december. So were looking for a bounceback. There was a lot of unusual stuff in that december report, just some very odd one off declines in employment categories. So does that mean that december gets revised higher . Perhaps that will be something to trade on. I think it does. Were going to get revisions for the entire year. So were going to see all of the data revised with this report. So i think the december number will turn out to be somewhere around 125. It will still be impacted by the weather, but it wont be that horrendous 100,000 number that we had before. And the other thing everyone is pointing to, mike, is the survey week is one of the more mild weeks in the month of january. Thats right. Polar vortex missed the week of the survey, yes. And i wonder, the revisions to 2013, what are you expecting there . It was a pretty solid month, 180 plus jobs averaged per month. Pretty solid year, i think. You tend to get upwards revisions in a growing environment, right . I think the risk is to see some up side revisions, as well. I wonder what is really the best indicator here. I think its ridiculous. My question is a slightly different one. How much does the obamacare conversation going to come into play with this estimate . Theres a lot of anecdotalal discussion about obamacare having a big impact. You havent seen it very much in the data. Parttime, unemployment is trending lower. And if you were seeing a big shift from full time to parttime, you would see average cbs said earlier this week about the numbers and i just wonder it was longer term. But i wonder whether youre going to see the exact conversation to become part of this. It will become part of the discussion, for sure. But i think the hard data support ago fullback because of obamacare is not yet in the numbers. What do we have to look for, mark, to see whether it was the weather. I know construction is one category of jobs. How do you break it down . Well, construction has a couple of things. If you had a snow removal, you might actually see an increase in construction. That would be one thing to look at. Theres waste Remediation Services and things like that. Theres a couple components you can look at for the weather. Retail can sometimes be tricky. If retailers didnt here as many people for the holiday season, although we did see a big pick up in layoffs. One of the things related to the Affordable Care act, though, is it seems Small Businesses feel better about the economy. If you look at the nifb survey, they put out their employment component ahead of their overall survey. It picked up. Our own survey showed a big pick up in hiring intentions. And it seems to me that Small Businesses, which are a big generator of jobs, have really breathed a sigh of relief since the start of the year that maybe the Affordable Care act wasnt as bad as they thought it would be. We saw that in the adp report. Thank you so much for joining once mark and mike. Becky, back to you at pebble beach. The jobs number is always a mystery. It sounds like this january report will be even crazier because of the weather seasonal adjustments and Everything Else. Theres going to be a lot of questions, no matter how that number comes out. But, again, were talking about a number thats coming up in just about two hours time. So when we come back, well talk a little bit more about that. Also, let the games begin. We will go live to sochi with an update on all the action leading up to tonights opening ceremonies. Plus, at ts Randle Stephenson explained the companys move to denounce russias antigay policies. More squawk right after this. Welcome back, everybody. Theres not a lot of activity at this hour, although the dow futures have turned negative. Theyre now down about 7. 5 below fair value. S p up by over 1. 5 points and the nasdaq futures are up by 10. 5. A lot of people are waiting to see what happens with this all important jobs number. That coming out at 8 30 eastern time. At t is the first major advertiser to open only condemn russias antigay policies. Randle stephenson explained why this was an easy call. Weve always been big supporters of our olympic athletes, of the olympics in general. Weve always also been big starters of equality in all regards. Our policies have always been very strong in that regard. And so when you see our athleteses going overseas to compete in an environment that has laws that are discriminatory and it cause uses some concerns, it was very important for us to come out and take a stand on it. How long did you spend talking about it, with the conversations at the board level, conversations you were having in your office . We didnt talk about it very long. This is a pretty easy call. Whats the feedback youve gotten to this point . Its been positive. Is there any other statement that you can or would make in russia that you havent heard from anybody in russia i take it on this . No. Our statement, i think, stands on its own. Its very clear, i think. That is a nobrainer, you know . Its just as surprising that other big advertisers have been reluctant to come out and say it and completely straightforward out there terms. This is what they think about it. Russia, you know, they got i dont know. Its insecretble. Crazy over there in general. You read that as just heartfelt. The laws. I think theres still some states here that have some crazy laws on the books. Anyway, the opening ceremonies are just hours away. Cnbc is there for the entire games and carl. The famous man quintanilla is joining us from sochi with more. Looking good. I dont get to talk to you enough any more, carl. Its good to see you. We all remember we tweet once in a while in reference to one another and do a little of that, but youll never forget how many years has it been . You and rovell, too. No one was allowed to see the fireworks because it was on taped delay. And you guys were doing a shot and they started behind you. That was like us with the rain here. We were having our discussion was so interesting, there was no point at looking behind us. As i always say, when you go to tv anchor school, they dont teach you to conduct an interview with fireworks going off wind you that youre not supposed to talk about. But in general, anything theyre fireworks, carl. You just have to say, whenever theres fireworks, i think the fireworks win, unfortunately, right . Maybe not with rovell. Absolutely. Thats right. You guys mentioned the at t stuff. Its great to see you both of you and andrew, too. I dont know if youve seen the home gauge of google today which is a rainbow colored series of boxes about the olympics. If you click on it, illustrate takes you to part of the olympic charter that talks about athl e athletes and participatans rights to participate without bias. So you talk about at t taking a stand, google, this may be one of the most interesting stands yet. Thats obviously the google home page today. You mentioned tonight is the big night, the Opening Ceremony, the torch, which is bog to be lit over my right shoulder here has now made its way to sochi. It went around the port of sochi today. Making its way to an undisclosed location. Before the sayceremony tonight. Thats a map, 35,000 miles. It had to be resit 44 separate times, including one after putin lit it outside the kremlin. A lot of whispers about who is going to light the cauldron tonight. The ceremony is at 20 14 military time, if you get it, and a couple secrets that came out. A couple secret thats came out from the press Conference Today with the ceremonies producer, president putin will attend, were told, and it will include a gay band, a gay russian band called tattoo. That might be part of russias response to things like what at t and google with talking about. Carl, i have a question for you. Have you been showering in your swimsuit . No. I read a story yesterday this is funny. I read a story yet in the wall street journal that suggested theyre watching you in your hotel rooms. There was a russian official who made a comment saying yeah, we know some of these people have been turning on the shower, pointing it to the wall and you can wag out for the day. Yes. Some of the officials tried to walk that statement back yesterday. Our accommodations are fine, by the way. I know everybody wants to know how is the hotel . Were a lot of lucky. Those may be completed first. But although im not showering in my bathing suit, beck, i hate to disappoint anyone, you do think about who may be watching. What can you say, right . Its basically enjoy the view, hope you like it. I dont think youre disappointing anyone, carl. No. Im be disappointed if you were in a bathing suit, q. No, who were they thinking would be you know, ive got one guy who is probably going to come running out with the torch. Who . Putin himself. Im doing it. Some people are whispering, you know, the cover of the journal today talks about a defightant russia. What if its snowden . Im just throwing it out there. But if you really wanted to sort of twist oh, come on. Nobody has any clue. Thats andrews true hero. Ive got my dvr set. Im waiting to say ed run this morning. What i really want to talk about is that 18foot birdie on seven which has now gone viral. Congratulations. Nice shot. At that other network that will go unmentioned. But they dont put the bad stuff on. So lets just pretend that that was there was a lot of those shots yesterday. You had a great shot, too, put on and they caught it. Luckily. Thats a fun hole to have it on. Joe. Fun hole to have it on, carl. Thank you. Afterwards youre so calm and collected. Like i do that all the time. I was in shock. And my wife and kids both said why dont you smile when something good happens like that . Make it look like youre having some fun. Im trying to fool people. Be safe, carl. We didnt talk to you about security. It must be everywhere, right . Theres a lot of security but thats par for the course here. Well run you through some of the new toys they have, maybe later in the day. Well, its not new for you either. I remember you reminded me of the scud stud, remember . Thats right, in israel. What were those rockets called . You didnt flinch. They were going over your head. Youve done this before. Well see you guys soon. All right. See you. Carl, thank you. 7 30 tonight. 7 30 tonight on nbc. What network. Nbc. Awesome. And i want to see what carl was talking about. I want to see who lights the torch. I thought you were talking about the bathing suit again. No, who lights the torch. Sarah in the studio. Aol chief Tim Armstrong generating controversy right here on squawk box. Its a great interview. Plus, Alan Greenspan is coming up, 7 30 a. M. Eastern time ahead of the monthly jobs report. You dont want to miss it. Welcome back to squawk box. A lot of buzz about comments from aol ceo Tim Armstrong. He joned us on squawk box yesterday after the companys Earnings Report. We asked him about changes to aols 401 k plan. As a ceo and Management Team we had to decide do we pass the 7. 1 million of obamacare cost to our employees or do we try to eat as much of that as possible and cut other benefits. For employees that are leaving to go to other employers, not matching those program was probably the last thing on the list for us in terms of Employee Benefits that we wanted to keep. I have a town hall meeting today with all the employees. Im going to bring this subject up and talk about it. Now, after he came on squawk, then came reports of armstrongs comments on an internal Conference Call related to this issue. He said he is said to have blamed part of this change on this 401 k match in terms of costs associated with what he said was obamacare. The company spent 2 million for two employees with distressed babies. There was a Million Dollars spent on each. And that that was what he was citing a spokesman gave us a statement about that. Before i read the statement, the issue here is instead of matching month by month by month, theyre matching at the end of the year. As a result of that if youre an aol employee and you happen to get fired or leave before the end of the year he was giving an example. Of why he was doing it. Thats what the costs were. Really quick, heres what his statement said, in part, i discussed the increase we and many other companies are seeing in health care cost. I mentioned highrisk pregnancy as one of many examples of how our Company Supports families when they are in need. We want to be open and transparent about the choices we make and why we are making them. Coming up, the countdown to the jobs report. Well talk expectations and what the number could mean for the markets. Well get back to pebble beach with joe and beck can i as well. And the big one, Alan Greenspan. Back in a moment. Helps you be Ready Anytime the moments right. You can be more confident in your ability to be ready. And the same cialis is the only daily ed tablet approved to treat ed and symptoms of bph, like needing to go frequently or urgently. 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Cme group how the world advances. Fifteen minutes could save you fifteen percent or more on car insurance. Yeah. Everybody knows that. Did you know there is an oldest trick in the book . What . Trick number one. Lookest over there. Ha ha. Madeest thou look. So endeth the trick. Hey. Yes. Geico. Fifteen minutes could save you. Well, you know. Welcome back to squawk box, the countdown to the jobs report is on. What the numbers will mean for the markets and the feds taper plans. Who better to talk about the economy than cnbc first 25 contender, Alan Greenspan. The former fed chief talks to squawk at 7 30 a. M. Eastern time plus, the founder of sun microsystems, Scott Mcnealy gets ready to sound off on the future of tech, social media and creating jobs in america. Conquer the morning, conquer the day. Squawk box begins right now. Good morning and welcome to squawk box, right here on cnbc. Im andrew ross sorkin, along with sarah isaac whos in studio this morning. Among the guests, randall stephenson, former sun microchief Scott Mcnealy, Kimberly Clark ceo tom faulk and Cnbc Caremark executive dave do dorman and Richard Fisher will be here as well. We should also say we have the maestro coming up. Alan greenspan. Market attention firmly focused on the january employment report. Thats coming at 8 30 eastern time. Economists expect 189,000 new nonfarm jobs. Thats the number to watch with the Unemployment Rate dropping to 1. 6 . Were not sure whether that rate will matter. Maybe mr. Fisher can enlighten us. We have green arrows after what was a good day with expectations getting higher and higher. Well see whether they will be met. Dow looks like it would open up 5. 5 points higher, s p 500 closer to 3 upons higher and the nasdaq looks like it would open up about 12 points higher. Once 8 30 hits, everything could change. Once it hit 270, ubs was telling us that was a buy signal, maybe things are looking up for the u. S. Economy. Lets get you through some of the other headlines. A little bit of corporate news, apple repurchasing 14 billion, thats a lot, over the past two weeks. It came after apples weaker than expected Earnings Report and ceo tim cook gave an interview. He said he was surprised by the subsequent drop in the stocks price. That buy back was part of apples previously disclosed buy back plan. 14 billion in two weeks. Short time period. Wonder how much thats propped that stock up over the past two weeks. And insurer cigna, reported quarterly profit of 1. 39 per share, 10 cents short of estimates. Its outlook falls short of street consensus, cigna saying the cost in its private medicare business have been higher than expected. Joining us now to talk about jobs and Everything Else thats going on in the market, joshua fineman. He is the chief global economist at deutsch asset and Wealth Management in new york. Here on the set, managing partner and chief investment strategist at strategist assets. Joe has been making fun of me for seven years. Why should it be different. Lets talk jobs. Do you have a number in mind. Our chief economist is using 175 and 6. 8 on the Unemployment Rate. Which do you actually care about. I care more about the nonfarm payroll numbers. Does the fed care about the rate . Well see this with miss yellen who she nuances this. The question is do you want the victory on the number or the victory in actually solving the problem of structural unemployment. I believe she believes we have a structural employment problem in the United States. I think shes right. It will be interesting. Josh, ahead of the number, explain what you think is going on in the markets right now. I think markets have been concerned that recent data flow out of the u. S. Has been softer, starting with last months jobs report. I think this mornings number, hopefully will allay some of the fears. There are a couple issues about it, one is still the weather. In the survey week was actually decent week for weather but right around that we had pretty bad weather. So that could affect the numbers. The other thing is, the expiration of the extended unemployment program. Has the potential to affect the Unemployment Rate. I agree the Unemployment Rate has been har to read and probably less important. I think its exaggerating the extent of improvement in the economy. I think this adds another layer of uncertainty. Whats the chance that everybody has overreacted these past two weeks . I think theres a good chance of that, frankly. I think the weather has made things harder to read. We probably borrowed growth from earlier this year. I think the fundamentals in the economy are improving. Its not just the u. S. , josh. Theyve been worried about emerging markets, china, possibility of deflation in europe. The list goes on. There are other things to worry about, no question. Emerging markets have vexed the markets recently. Thats probably not going to go away completely. I dont think that will turn into a fullblown crisis, the kind of thing that could blow back on to the u. S. In a major way. The activity will be driven more by the fundamentals here. Hopefully well start to see that, maybe not right away but gradually over the coming months. The s p 500 down 4 or so for the year thanks to yesterdays rally. Does it make you rethink the direction of this market for 2014. No. It really doesnt. The best leading indicators are corporate profits. The corporate profits look like theyll be up 9 . I think theres pentup demand for capital spending. As you pointed out broadly, Monetary Policy, at least in the developed world will remain quite accommodative. Im not particularly worried. I think this is a pause that refreshes. Youre not going to get the type of multiple expansion you got last year. Thats 80 of the move last year was multiple expansion, only 6. A lot less. Let me ask you one question. What happens if the number comes in at 100,000 . Lets even suggest its weather related. Some people have suggested youre not going to get a real number thats clear of weather until sometime in march. I will say, i found just being out talking to institutional investors, people are of the view that fed tapering is something you can set your watch to, that its just going to be theyre not going to change it. It will be linear every meeting. I think the surprise, just in my life and the markets, very few things are linear. I think well see with janet yellen but i think if shes going to make a mistake, shes going to make a mistake on easing. You dont think a terrible number would at least make them rethink the taper. I think it would. My point is, this may not be, again, as linears apeople think. There may be a meeting where they skip it. Well see. Jason, thank you for being here. Thank you. Well see whether the numbers turn out to be correct. That comes at 8 30 a. M. Our jobs still to come this morning. We have special guests to talk about it ahead of the numbers. Former Federal Reserve chairman Alan Greenspan himself, his take on what todays employment numbers mean for the taper, for the broader economy. Later, market permable. Jeremy siegel, hes bullish, he says dow 18,000. Hell be hear to tell us whether the data could give stocks the boost they need. Coming up, we tee off on the economy, washington and Silicon Valley with guest host Scott Mcnealy. He joins joe and becky live from pebble beach. Right after the break. Our guest host this morning, tech visionary, Scott Mcnealy, cofounder of weigh in, which is an innovative social platform. We love having you on. I love, you know, when we talk politics and stuff. I enjoy that. Watching you last night, we had a panel on technology and i dont understand everything youre saying but you really are a tech visionary. I just want to know, my first question is, youre going through college. What was your pager . You said there was no Computer Science major back then. What was your major. Captain of the harvard golf team which was my primary focus, sort of like being the Florida State snow ski captain. I majored in economics and wrote an honors thesis on antitrust. You dont know how to write code. I dont write code. I never have. Youre not an engineer. Im not an engineer, no. You understand technology and where were headed so well after listening to you last night, i dont know how you do that. It must be from reading. I lived through a lot of product cycles. The product life cycles in technology are very short. Technology has the shelf life of a banana, especially in the hardware space. Every 18 months at sun we had to redo our entire product line. We couldnt launch new coke, decide a couple years later it wasnt working and relaunch old coke. Nobody wants a 15yearold pc. Are we allowed to talk about who was there. Thats off the record. There were really smart guys there. The one thing that struck me, i like talking about 25 years. Just really, i guess thats science fiction. Because nobody knows. We have no idea. You guys are uncomfortable at the fiveyear mark. At two and three years from now, given whats happened in the last two or three years, its even hard to do two or three years. It really is. Its hard to know whats going to happen. Or when its going to happen. We have the flip phone, now its the smartphone. Someone tweeted the second back to the future. Why didnt they know everyone would be Walking Around like this . Because no one had a smartphone in back to the future. We didnt know that. So at sun we talked about the internet of things and actually came out with a lot of tell me what is the internet of things. The internet of people are people getting on the web. The internet of things are the sensors and machines. That will be on something similar to the internet. I dont want all my stuff on the internet. I dont want all my stuff taking care of things automatically. When i pull the last diet coke out of my refrigerator thats a sensor. Somebody sends me diet coke and it just shows up at my door step knowing. I didnt have to get on the internet and order it. My refrigerator knew it was out and ordered it. Thats when the internet of things is happening. It will send you more lipitor if your Blood Pressure changes. Exactly. A long time ago, was on the cover of fortune wearing a java ring. The whole idea is that youll wear your computers. We were way early on that one. We actually did google glass with heads up display, computer displays and im not so sure Larry Ellison doesnt own patents that he doesnt know about from buying us. From buying us. He probably should look through his portfolio and talk to google about that one. Who knows. I dont remember. We did that 15, 20 years ago. We said network is the computer which is now called cloud. It seems real now, though. It seems like its on the verge of things that not only for your home that can help you but for your body that help you and for health. It really is. It really is. Then that creates the creepy security issue. How much does who know about me . Yes, but then thats another thing we talked about last night. Theres so much damn data, it gets to the point theres so much no one really is watching because they cant watch and what youre doing is not that interesting. I cant speak for you. What im doing is not that interesting, ill tell you that much. Really interesting app is, i think spectacular with uber. Its not just hail a cab. Its a powerful app that tells you what the new technology can do. It doesnt just change the cab industry. It also changes logistics. You think about what could be the impact on fedex or u. P. S. Or whatever if all of a sudden we can hail a messenger, a bike messenger or whatever, that simply. Its going to change everything. It also now takes the anonymity of hopping in a cab and going somewhere totally out. Because uber knows exactly where i was picked up, when and where i went and where i was dropped off. I can think of a new york governor that would have been in all kinds of problems before it even came out. Absolutely. I only go to those places with my wife so im not in trouble, right . Your point is privacy, something you werent concerned about 15 years ago, now you are. I was concerned about it but i wasnt terrified by it. My most famous quote ever is you have no privacy, get over it. Im not really worried if cocacola knows what im doing or even google knows what im doing. But when my health care provider, the government knows what im doing or how im feeling or whatever, if they know where im spending my time, what organizations im conservative organizations im supporting. What you said on squawk box in the past . You are not that far from that at this point. Do you get audited . Absolutely. Within rightly so with the stuff you say on here. Were going to get you. So far, having gotten audited, the only problem they founded is that a won a raffle at a Charity Event and it was worth 3,000 of nothing we exercised and used. It was an overnature in milpedes, california or some terrible place like that. Sorry, milpedes. My wife didnt realize we needed to submit that as income to us. They audited us and holy mackerel, it was terrible. About 12,000 worth of accounting fees. Ill never do another Charity Raffle again for as long as i live. Well get you on apple, a bunch of stuff, google, microsoft and obamacare maybe at some point. Or just the euro entitlement state. Stay healthy. Scott is with us for the rest of the hour. Well talk more with him. Also, other things are coming up from pebble beach, including at ts chief executive and chairman, randall stephensons take on the nsa surveillance controversy. Its jobs friday. No one understands the jobs picture better than Alan Greenspan. The former fed chairman will join us live at 7 30 eastern. Stick around. Well be right back. Time now for todays aflac trivia question. Athletes from which south asian country won be waving a flag during tonights Opening Ceremony . Yeah, hes clean, boss. Now listen to me, duck. I have an associate that met with, uh, an unfortunate accident. While hes been incapacitated, somebodys been paying him cash. Now, is this your doing . Aflac . Now, if i met with some such accident, would aflac pay me . Nice. This is your stop. [ male announcer ] find out what aflac can do for you and your family. Aflac . [ male announcer ]. At aflac. Com. For you and your family. Aflac . So i can reach ally bank 24 7, but there ar24 7. Branches . Im sorry, im just really reluctant to try new things. Really . Whats wrong with trying new things . Look mommys new vacuum cat screech you feel that in your muscles . I do. Drink water. Its a long story. 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[ male announcer ] so come trade at the place thats all about options and futures. Optionsxpress. Open an account today and get a 150 amazon. Com gift card when you call 18882800154 now. Optionsxpress by charles schwab. Athletes from which south asian country wont be waving a flag during tonights opening ceremo ceremony . The answer, india. Because of the india olympic associations pending criminal charges. The nsa scannedle is something thats had Global Implications for a lot of Different Industries but also the telecom industry. We got the chance to sit down with at ts chairman and Ceo Randall Stephenson and asked him if other governments are having a negative reaction, if its impacted his company in terms of what theyre doing and what the implications are overseas . Listen in. I think there is a desire for the United States to clarify the the government to clarify the policies and positions in this regard. I think the president made a first run at that with the speech he made the week before davos, actually. I think thats a good beginning and the president has articulated that more is to come and so i think right now from our standpoint, we dont see negative reaction from governments per se. Have there been negative reactions from citizens, either in this country or other countries . From citizens, there have been competitive impacts overseas. There have been . Yes. Weve had legitimate competitive losses as a result of this where companies have made some decisions based on this. And its one area we think is important to bring clarity to this situation, what is being done and what is not being done. We think thats very important. Can you talk specifically about what some of those are. I cant talk about specific companies or countries but ill tell you, weve had impacts. When you say its important to clarify, you just need the government to come out and say what was happening and what wasnt to be more clear about it, so its not the leaks that are driving the news cycle . The government will have to disconcern whats the best way for them to deal with this. One thing they have done that will be very helpful is theyve Given Telecom companies and Internet Service providers freedom to give out information on how many Data Requests have been dealt with related to these matters. Youll be seeing some of that information come out. That will help people understand the imaginenymagnitudes were t about here. That implies that it was a much smaller number than the public has the perception at this point. I dont know exactly what the Public Perception is. My guess is, it will probably be smaller than people expect. But im guessing right now. Ive talked to some people here, other ceos and their perspective on it. Some of them who are in positions who would know, you have to understand the lu, theyre not listening to every persons conversation. Were not recording every persons conversation. If theres one degree of separation that they can tie you to a concerning cell phone number they could go and make the request to be able to do that. A court would have to sign off on it. This is not listening to every everybody all the time and taping every conversation. Theres an element of what you said that is important for people to understand. Anytime there is a request for the type of information were discussing, all three branches of government are involved. Its getting extensive oversight. Its obviously getting executive branch oversight. It obviously has been approved by congress and is getting oversight from congress and then its going to the courts and the fisa courts are reviewing it. Youre having the judiciary, all branches involved. Quick reaction. Your thoughts on whats happened with the nsa . I think randall says it very, very well. We need to know what theyre doing and we need to ensure that there is oversight and that there isnt one Single Branch or one single bureaucrat or one single elected official who is out working this. I think it makes everybody nervous when you see things like the ap reporter scandal or you see Something Like the irs scandal. I mean, i go back to watergate. And thats peanuts compared to what it feels like is going on in terms of stuff happening and lack of transparency. And the other thing thats peanuts back then compared to now is how much more the government is in our lives. Coming up, talk to scott some more but also, former fed chairman Alan Greenspan talks jobs, the economy and the taper. Much, much more coming on squawk. 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 ranked highest in Investor Satisfaction with selfdirected services by j. D. Power and associates. Welcome back to squawk box. We are just an hour away from the widely anticipated january jobs report. Just a reminder, economists are look for 189,000 new nonform payrolls for last month with the Unemployment Rate dropping to 6. 6 . Well also be looking for any revisions to decembers anticipated 74,000 new jobs. We want to check futures ahead of the jobs report. Looks like theyre pointing to a higher start. Dow futures up a little over 17 points. This will all completely change. Were coming off of a strong rally yesterday. In corporate earnings, moodys reporting Fourth Quarter profit of 85 cents per share, beating estimates by 9 cents. Revenue also topped estimates as the ratings agencies 2014 forecasted as well. Apollo Global Management beating on the top and bottom line, earning 3 cents per share, 11 cents above estimates. Chairmanen leon black calling 2013 a, quote, exceptional year, giving an optimistic forecast for 2014 as well. Those forecast have been all over the map. Cnbc continues its series of where the jobs are. Many companies are having trouble filling the jobs that are available. We find Mary Thompson in chicago, illinois. Mary . Good morning, andrew. Freedman seating is 120 years old. You know what, these days its growing like an adolescent. In each of the last ten years its averaged double digit growth and the president s company, craig fredman is expecting 2014 will be its best year ever. In the old days we were making the seats for the trucks, one or two seats per truck. When you can make multiple seats for a vehicle like we are now, it propelled our business. To me, demand for its seats, freedman hired 100 workers, bringing its payrolls to 600. 10 to 12 jobs are open now and another 15 to 20 are expected to be added by year end. Like a lot of manufacturers, it cant find the welders and workers trained to operate the computer guided machine and other hightech equipment found at most manufacturers these days. Its a common problem. A survey shows the skilled worker shortage is slowing expansion for 74 of u. S. Manufacturers. Though friedman says the labor shortage is hurting its bottom line more than its ability to grow. We have to use a lot of overtime to get the work done. We have to outsource a fair amount of work that we dont have the capacity to do because we dont have the Skilled Labor to do it. Even if friedman finds the skilled workers, hiring and retanning them can be difficult. There are bidding wars as other manufacturers in chicagoland wand to hire them, too. To fill its Skilled Labor gap, hes taking a twopronged approach, first working closely with an organization retraining adults in modern manufacturing skills and second, hiring from a local high school, working closely with businesses to train students for jobs that are out there. Ill have the second part of the story in power lunch. Its a great story. Also a great transition to our next guest. Were trying to understand the employment market. Our next guest was at the helm of the Federal Reserve for the last 20 years. He now advises some of the most powerful institutions in the economy. Hes a cnbc 25 contender. Alan greenspan, former federal chairman and head of greenspan and associates. I dont know if you had a chance to listen to marys report. I want a big picture on the employment picture this morning. 189,000 is the number. We can get into the number if you want. Looking at this report this morning, from breaking views that said if we went back to 2006, mr. Chairman, and looked at the work force involvement, the Unemployment Rate in this country today would actually be much closer to 11 and that we would have about 8 million more job seekers. Given that, where are we 5 1 2 years after the financial crisis . Well, i think thats a reasonably good description of what the problem is, but its a little bit exaggerated. Youre looking at an issue, really, of the working age population and employment. And the ratio of employment to the working age population has barely changed in recent years. A goodly part of that, however, are the opening the opening surge that is occurring in baby boomer retirements. So thats something to be expected. Nonetheless, there is no doubt that there is a very considerable number of people who are on the disabled list. Just the number of people who no longer can find work. This is a very distorted labor market, one ive never seen before in this context. And you know, it suggests to me, including the context of the previous discussion with craig friedman, the issue here is skills. And one of the things that we are missing in this particular work structure is a very large imbalance between skills. Ive argued strenuously for revising our h1b immigration quotas, because there is a huge number of people outside our borders who would love to come here. In fact, many of them come here, get well educated and then are required to leave. We can fill in the gaps that are appearing and are causing severe problems in our labor market if we would address this issue. I think it is one of the more distorted issues i know. I might say, as i often say with respect to this issue, this is a factor in income inequality. If you brought in a lot of people, especially in this high skilled level, they would compete with all the people that have been guests on your program, myself included, and would bring our wage levels down. Dr. Greenspan, do you have any real hope in any meaningful way over the next 12 or 18 months we will have Immigration Reform and youve seen what john boehner said this week. He doesnt have this. The wall street journal going after both democrats in this case and republicans, which makes you think that if you have both sides so far apart, its almost impossible to get there. It strikes me sort of absurd. Its a no brainer. We have a very serious economic problem. We have a very serious structural problem with respect to skills and we can solve them both with a simple act, which isnt all that significant. Its merely fundamentally changing the very minor allowance of the skilled work force into the United States. Weve got to stop that. Joe kernen is out at pebble beach. He has a question for you. Joe . Thanks, andrew. Good morning, joe, i understand you did pretty well yesterday. Thank god that one you know what, mr. Chairman, im going to live on that putt for a while, at least until next year and hopefully well be back. Whenever i get the privilege to talk to you, i love to bring up, you know, where we are in terms of five years into what has been a subpar recovery. And the debate still rages about whether the nature of the recession that we had since it wasnt an overheating and hyperinflation and then causing the fed to raise rates, it was a sort of a debt bubble. Because of the differences that we shouldnt be expecting much better than were getting here. That makes me sad that 1. 5 or 2 is all were entitled to. Is there any remedy for it at this point . And what do you think is really causing it . Well, first, as ive said before, you have to look at the Gross Domestic Product and ask where the problem is. Where is the short fall . I like to evaluate the gdp in a way that is not usually done, namely to restructure it in terms of the durability of what is being produced in goods and services. Software is three to five years. Corporate structures, maybe 30, 40 years. Haircuts, one month. What the data show are that the almost all of the shortfall, where wed expect growth to be occurring occurs in assets with life expectancies or duration of more than 20 years. And the question is, why is that happening . And i think dig into the data, it becomes fairly clear. I think that the best way of looking at a problem like this is to ask yourself, who are making the decisions that lead us to such a shortfall . The nonresidential structures area and residential structures, which are the two basic numbers which i really look at in this context. These are long lived assets in the economy. Both have come down and are stuck well below normal. And the question is, why not . In the corporate sector, what we see and have been seeing for the last number of quarters is the ratio of Capital Investment to Corporate Cash flow, which measures the extent to which corporate managers are willing to take their liquid cash flow and put it into illiquid longterm investments. They choose to do that and they will only do that if they are confident about whats going on in the future. So that what i see in the corporate sector is very clearly an issue of a major shortfall in the issue of what some people call confidence. Whatever you want to call it, clearly people are looking out in the distant future and they are saying that it is too complex and, in fact, how can we possibly know, for example, what the tax rates going to be 30 years from now. Doctor, given that, we saw the stock market go for a nice run 2013. Whats your take of whats happened now and given some of the concerns around a global slowdown, more broadly just here and then, obviously, in europe and asia. Lets remember that over the long term, theres been a remarkable, stable growth rate in the stock market. Its close to 7 a year. Were talking now about, well, were going to record highs. Well, thats not very impressive when youve had five or six years of zero net, zero growth in stock prices. Theyve lost all of that. The issue here is that the thing i tend to look at most in the market, which frankly is the critically positive force, potentially going at the moment, is the extent to which the market of socalled equity premiums which measure the extent to which the market requires the rate of return on equity, even though that has come down a significant amount obviously in the extraordinary rally from last year, from the bottom and before then, were still below average. In other words, stocks in a longterm sense are still undervalued by any objective measure. So thats a potential positive force, if we can open it up, but there is so much in the way as the data showed, that is suppressing the market, which is essentially from data i looked at and indeed i showed it in the book ive just written. Its two major forces which are driving us here. One is the socalled cyclically deficit, which is draining private savings, which is a major problem. It shows it strongly in the statistics as a cause of this problem and the second is a very unusual issue, which is the spread between the 30year treasury and the 5year treasury note. That is a measure of a degree of long term, very long term lack of confidence. That spread is at the widest level in american history. That to me, tells me a great deal. Theres where the problem is. Thats whats got to be solved. Okay. Dr. Greenspan, thank you for your insight this morning. Very helpful, a little anxiety producing but we appreciate seeing you and wed like to have you back very soon. Thank you. Becky . Andrew, thank you. We have a special fed guest thats coming up in the next hour. Another special fed guest, dallas fed president Richard Fisher will be joining us to talk about before and after the jobs report. Well get his take on whats happening, whether the jobs numbers are a real reflection of the economy. Up next, getting generation y on the golf course. Thats the challenge for our next guest. Coming up, dick sullivan. Good news. I got a new title. And a raise . Management couldnt make that happen. [ male announcer ] introducing fedex one rate. Simple, flat rate shipping with the reliability of fedex. [ male announcer ] introducing fedex one rate. Sometimes they just drop in. Always obvious. Cme group can help you navigate risks and capture opportunities. We enable you to reach Global Markets and drive forward with broader possibilities. Cme group how the world advances. Golf has a bit of a problem, losing young people 18 to 34 year olds. Dick sullivan is the ceo of the pga tour superstore and one of the other things, thank you for joining us, appreciate it. Another thing we talked about is that book, alone together . I love social media. It allows everyone to sit at home on their computer and facebook and not meet any of their friends and when they are with people at starbucks or at a bar theyre not listening to their friends. Theyre on their stupid smartphones. All these young people are not playing golf. The whole world has changed. Certainly as you said, weve seen a decline. Weve seen more beginners come into the game in the last 24 months. Our world is all about making equipment better and hopefully teaching the youngsters of america. We have a lot of programs that were working on between 6 and 17, that age group. The 18 to 34 has dropped off. The 6 to 17 is what we have to focus on. There are great commercials showing kids learning about never improving your lie, you could be out there alone and you still cant bend the rules. Its one of the oldest games around. It should stan for itself. You do need to bring it into the current we want to keep tradition. I get what youre saying. Do you need to do all these things, make balls that dont hook or slice . Theres a Big Initiative that was launched just last month at the pga show, the ceo of taylor made rallied everybody together, saying how do we fix this game . It has declined. Its hard. Its hard. Its embarrassing. Its humiliating. Opening ceremonies tonight, think about juan claude kili. Think about how snowboarding has brought back the industry of skiing. We just need to bring some fun back into the game. I dont want to do snowboarding in golf. We could play a different game. Faster, make it easier. Youve thought about this. I tried to drive this exact same initiative, we called it l flogton, which is not golf backwards. What can you do on a government course . Usga rules. We wanted to create rules to make it not so hard. If you lost your ball, you just hit another one. Wooden bats versus the aluminum bats. Youre white belt and you eventually graduate to black belt. We wanted to put a time limit on it. Just saying while were young, nobodys going to get it done. Nobody has the time. Its time, difficulty and expense. Those are the three barriers into the game. We need to make it easy and faster. Weather, in terms of total rounds last year, that had something to do with it. It was the worst in 20 years if you can believe it. It went back, as far back as we could. Even during the recessionary years, seven or eight. I dont want to say its discretionary. I think every parent ought to have their kids play because it teaches i agree. Personal responsibility. Personal responsibility is out right now, my friend. You call penalties on yourself in the sport of golf. Theres nobody to blame. Because it wasnt you played a better opponent. Its you versus the course. Its the sun, the wind. Personal responsibility. And we also have to be fair. We have handicaps. Did you get a stroke on 7 yesterday . I did not get a stroke on 7. I saw that putt. Pgatour. Com. You were the hero. The shot of the day. Theres tens of dozens of views on it already. Its viral. Thank you. Within we come back, a squawk lightning round, cnbc first 25 contender Scott Mcnealy on apple, microsoft, health care and anything else we can jam in. Stick around, well be right back. Lets say you pay your guy around 2 percent to manage your money. Thats not much, you think except its 2 percent every year. Go to e trade and find out how much our advice and guidance costs. Spoiler alert. Its low. Its guidance on your terms not ours. E trade. Less for us, more for you. Cozy or cool meow or woof . Exactly the way you want it. Until boom your mattress a battleground of thwarted desire. Enter the sleep number bed. An innovative design that lets couples sleep together in individualized comfort. Hes the softy his sleep number setting is 35. Youre the rock, at 60. As your needs change, you can adjust your sleep number bed, so you can sleep better together. The ultimate sleep number event is on now only at a sleep number store. With queen mattresses as low as 599. 99 know better sleep with sleep number. If your denture moves, it can irritate your gums. Try fixodent plus gum care. It helps stop denture movement and prevents gum irritation. Fixodent. And forget it. Scott mcnealy is the cofounder and former ceo of sun microsystems. Hes also the cofounder of weigh in and hes on our list of contenders for the cnbc 25. Lets try and run through a lot of things that are happening right now. You are incredibly involved in social media twitters had a very rough week. How do you look at the stocks disappointment this week . How do you read into that . Weigh in would love to have that kind of rough week. Any company that has weigh in is your company. We bring the media conversation to your own websites aopposed to having to go to facebook, instagram, twitter and the others. For cnbc, not an individual. You can do it if youre a celebrity, for an individual. You work with tv shows, too. On air and in venue. The broncos had us on the big screen. We worked with mark cuban. Seahawks didnt have you on the big screen. We wanted an all weigh in super bowl but didnt get there. If you see me on twitter, you can see the instances where we use this. Best buy used us at christmas and they had the top ten trending environments. Youd click on gifts. If you didnt know what to buy, you could click on whats trending and could see the media traffic around that particular camera, what people are saying. They got 24 clickthrough rates because it was much more credible to have the social media conversation behind the recommendation. You dont worry about twitter . I think twitter is right on. Could you monetize it . Were talking about making the social media conversation relevant and useful for enterprises. We love twitter. We love facebook. We love all of the social media conversations. Thats real, unfiltered some of it is gamed but most of it is real. Its kind of the wisdom of the crowds being brought tout brands. And brands are loving now that they finally see a way to use social media to their advantage. It is a slice of the population, though. I saw research from pugh that suggested that less than 20 of the Adult Population is on twitter. Of them only maybe a third or more of them are checking in frequently . Ive got buys 12, 14, 16 and 18. The emerging new and future big buck folks, they are all online. Theyre all tweeting. Is apple a dividend stock like p g now . I think apple is facing a very, very interesting challenge from android. And android is gaining share. I like open. I believe open wins, because its mankind its not mankind versus apple as it was mankind versus microsoft in my era. I think its always tough to battle and gain share when youve got this openness coming after you. Google will run the world, i guess. Theyll do no evil. Its cool. Be another google . There will be another google. How is that possible . There will always be something. Look how fast facebook came upon us and how fast twitter happened. There will always be a new, bigger deal. What will they do . If i knew, i wouldnt be here. I want to go out 2040. I want to download my brain on to a grid. If i just thought about doing spreadsheets a long time ago. Seems so simple. If i thought about what google did which is to auction off every word in the english language every day to the highest bidder. Page rank searching. Its a simple idea. What do you think is the biggest innovation or someone who should be on the list of the top 25 contributors when it comes to technology. Besides me. Besides you. The one thats not on list. I look at some of them, i think, innovation, are you kidding me . The guy who is the most underappreciated, he ought to be right there with steve jobs, they should be one and two. This guy should be number two, andy bechtelheim. He did arista. Hes done more startups and technology and equipment that runs in the back room that does all your email, web pages, all the rest of it, that guy has driven more internet traffic, commerce, analysis, whatever and and nobody knows about him. Hes a nice, quiet guy. What steve jobs was to Retail Consumer fashion computing, is he to industrial, commercial the real stuff. Tell us the ones you snickered at. I wouldnt do that. Give us one. Id have to look at the list. You snickered at three or four of them. I dont remember who is on the list. Ill tweet really . Tweet a really. Because theyre on the list . We dont want to put them on the 25 then. They only made the 200. Ill check the 25. Dont let us put thats a little snarky. Far be it for you or this show to ever be snarky. Its been a pleasure having you here. We really appreciate your take. Where are you, spy glass . One round, second prize is two rounds at spy glass, right. Go low, buddy. Every hole is uphill. Its physically impossible. They have two par 3s that go downhill. All the par 4s are 480 uphill. You helped my game by getting me up athe 3 15 california time. It worked for bill murray a few years ago. They didnt give me a bill murray handicap. Cinderella boy. We will be watching. The countdown to the jobs report, our newsmaker of the hour, Richard Fisher. Hell be joining us live when squawk box comes right back. Here in philadelphia you can access a philly cheesesteak anytime, day or night. Just like you can access geico anytime, day or night. There is only one way to celebrate this unique similarity. Witness the cheesesteak shuffle. Cheesesteak, cheesesteak its the cheesesteak shuffle huh every day, all day, cheesesteak, cheesesteak every night, all night cheesesteak, cheesesteak 9 a. M. Cheesesteak 2 p. M. Cheesesteak 4 a. M. Cheesesteak any time ruh geico. Fifteen minutes could save you fifteen percent or more on car insurance. Welcome back to squawk box, right here on cnbc, first in business worldwide. Im andrew ross sorkin. Joe and becky are reporting live there pebble beach. Well get to them in just a moment. Their special guest this jobs friday, dallas fed president Richard Fisher. An honor, pleasure. Its a treat. To have somebody like that on a day like today. First, lets talk a little bit of market expectations. Home forecasters say the economy likely added 189,000 jobs last month. That is the number two beat. Many also say december surprisingly low count of 74,000 net new jobs may also be raised sharply. Thats what everybody is hoping for. The Unemployment Rate seen falling to 6. 6 , average Hourly Earnings are expected to rise by 0. 2 . Economists say the big wild card in all of this is the weather. And the winters relentless freezing temperatures across much of the country ahead of this 8 30 eastern report which we will bring you live. U. S. Equity futures are up. Dow looks like it would open up about 25 points, the s p up 5 and the nasdaq up 14 points in hopes that this all works out. We will see. Building on yesterdays rally, which was strong going into this jobs day friday, its time for our panel, jeremy siegel, mark zandi, Kevin Hassett and austan goolsbee. Pleasure to have you all. The power panel on jobs day friday. Austan, everybody has different models. You take kevins number and subtract a few thousand. Hes always wrong. I have to understate him. What you have here is kevin has been right that the economy has been speeding up a bit, but i think this bit with the weather is a more serious factor, even than a lot of people have been anticipating. So thats why i think its going to be on the negative side. Were going to get to kevin and some of the numbers in a bit. Jeremy, want to bring you in here on the markets, it really that weve seen. Are you predicting 18,000 for the dow . Are you Still Holding to your bullish guns despite the volatility weve seen. Its worked in the past. You know, this is still a correction mode. No market moves up in a straight line. There was everyone was on the bullish side at the end of last year. It was a crowded trade. This shakes off some of the excess bulls there. I dont think this changes the long run picture, even long run earnings are the same, long run gdp are the same. I dont see any substantial change in the forecast for the real economy. So im sticking to 18,000 for the dow for the end of the year. It never gets there in a straight line. What if we see a bad number today and it would cause you to rethink the outlook for the u. S. . Maybe not. You just blame it on the weather. Theres been talk that the weather, the week they did the survey wasnt bad. If weather is bad, construction does go down, theres a big wild card here. Ive never seen so much anticipation for the revision of decembers number as i do this year. One thing is true. If the data really gets bad, the fed will slow down or maybe even suspend the tapering operation. And everyone will be looking towards that. You know, in a way we do have an offset, if suddenly the economy does sink downward. And i think that thats positive and supportive in the long run for the market. I want to ask the rest of the panel if everybody agrees with jeremy on that particular issue. We heard in the last hour you could set your clock on the taper and its going to keep going month by month by month by month and this cant stop. Kevin, you agree with that . Right. The way i think about it is, the fed cant change its policy now unless something really radical happens. Because of that, i think well be in that rare space where good news is good news and bad news is bad news for a little while. Bad news is bad news for the markets. Do you agree . Do you think a number could be so bad that it would cause the fed to rethink the amount or when it tapers . I doubt it. I have to say, im glad im not in austins formula. It makes me feel good that im not there. Youre in most other peoples i think the bar is high. I think austan, kevin is right, that the bar is awfully high for the fed to change its tapering policy. Theyve got a script, i think they want to stick to it. It would have to be a series of bad numbers, i think, before they change policy. The other thing to recognize is theres one more employment report before the next fed meeting. Even if this one is bad, well get another number and see how that looks. I think austan is right. I think the weather is creating havoc. We have big benchmark revisions. It happens once a year. That can change the numbers. Of course, the emergency Unemployment Insurance program expired in january. Thats could potentially affect labor force and unemployment. The volatility in the data is not only going to be in payrolls but unemployment. You may start seeing an even bigger divergence between the two surveys. Because now on the Unemployment Rate is going to get influenced as mark said, by this change to the Unemployment Benefits was going to affect longterm unemployed. Then youve seen all of this discussion about health care, Labor Force Participation. I actually think the fed might be looking at those aspects, Labor Force Participation and things like that even more than just what the headline jobs numbers are today. Kevin, ill ask you this. The broader context here going into this jobs report for the economy, its been sort of iffy. Perhaps its the weather. Durable goods disappointed, the ism manufacturing disappointed. Is this something to worry about, perhaps a softer patch coming off of the momentum at the end of 2013 for the economy . Right. Thats why todays such a big day. Because i think that we were talking, even mark and austan were saying kevins been right. For a minute i thought it might be the power of the hypnotic aei logo behind me. I was optimistic last year for a lot of these shows then we had a big negative surprise. Fortunately it was on a day you didnt ask numbers ahead of time. I was at 200 or something. Theres a lot of weak data. There is softening going on. The ui benefit, just to reiterate, a lot of people are probably going out of the labor force. That means that the Unemployment Rate pretty much has to drop more than expected today. But also some more people are going to get jobs. Folks often when they lose benefits will take a job they dont really like. You have to take a job way below your talent level and youre reluctant to do that while you have benefits. When the benefits are gone you tend to do that. Clearly no the just the headline, how many jobs were created and the Unemployment Rate, there are so many other gems traders focus on in this report. What else will you be watching . You watch the hours worked. Thattive goods you a better idea of whats going on in gdp. We hope earnings, Hourly Earnings begins to rise. Thats barely been above inflation over the last 12 months. Let me say, i agree with the panel. This one figure will not change the tapering decision. It will take a number of figures. Theres another jobs report. And what goes on in the emerging market world, the rest of the world. This one report wont change the fed, but it will add to their inventory of data for their Decision Making in the important march, meaning the first one of janet yellen. When the bad weather finally subsides. Good to see you, austan, mark and kevin will be back for instant reaction after the jobs report. Just getting started. We have three major newsmakers ready to talk about jobs in the economy. Richard fisher, Kimberly Clark c ceo, tom falk and dave dorman. Coming back in just a moment. Theres a saying around here, you stand behind what you say. Around here you dont make excuses. You make commitments. And when you cant live up to them, you own up, and make it right. Some people think the kind of accountability that thrives on so many streets in this country has gone missing in the places where its needed most. But i know youll still find it when you know where to look. In a we believe outshining the competition tomorrow quires challenging your Business Inside and out today. At cognizant, we help forwardlooking Companies Run better and run different to give your customers every reason to keep looking for you. So if youre ready to see opportunities and see them through, we say lets get to work. Because the future belongs to those who challenge the present. Welcome back to squawk box, everyone. The countdown is on. We are awaiting the jobs number be with the jobs report. In the meantime, the futures have picked up a little bit of steam. The Dow Jones Futures are up by just over 29, the s p up by just over 5 points and the nasdaq up just over 15 points. We are just a short while from getting the january jobs numbers. Our next guests have their fingers on the pulse of hiring and the consumer. Joining us right now to talk is tom falk, ceo of Kimberly Clark. And also with us is Richard Fisher. Hes head of the fed in dallas. Good morning, beck did i. Based on what you know about the consumer and the economy, wa do you expect to see from this number . Is it going to be in line with expectations or do you think there could be weakness from the weather . Richard . Lets start with the real operator. Tom. The consumer is still going sideways. Youre not seeing big changes in the birth rate. Youre not seeing big changes in category demand. So we had a solid Fourth Quarter in the u. S. The diaper category continued to grow reasonably for us, which is a bit of an uptick from where its been. Wed say its going to be slow and steady growth going forward, nothing out of the ordinary. A growth in the typer arina, is that because people are willing to spend more for the diapers . The universal insight is mom wants the best for her baby. Buying a few more baby wipes or buying some of those more upscale products is what shes thinking about. And richard, you talk were going to broaden from diapers. Yes. You want to go into depen now . Thats for joe. Sorry, joe. Dont look at me. Im not the oldest one here. You might be, both of them. You talked to tom and you talk to a lot of different Business Leaders. You have a good idea tom told you that, i never told you that. Yes, hes one of the people i talked to, along with 35 other ceos from around the country. The answer to your question is literally, the consumer has been frezen in december and january. Three of the four siene ses distri census districts in the United States have been under ice or snow. To me whether the number holds back is significantly affected by weather in these two months. December doesnt have as much weight by the way in the Fourth Quarter gdp calculations. January will have a significant weight. Well have to take that into account. Monetary policy offset is mother nature. Its been a lousy start to february in a lot of places in the country, too. We had a big rush at the end of december. Big numbers on the order of 15 . Weve seen the numbers. There was a big rush in there. Things always slow down at the beginning of the year. Well have to see. The weather has been lousy. If we hget a bad number youe convinced its because the weather. We have to think through how the weather has impacted this. The real question is momentum and the economy. Youll have a step back every now and then. Well have to see. What would it take for a pause in tapering . It would take something in your mind, i would imagine, for you to vote that way, it would take something really away from the standard deviation away from what could be considered normal variability would have to be huge for you continuing along this course. I think were on the right course. The sign is right. I wanted to do more the first time. I was happy with the administration vote we have. I believe we need to continue this process. The efficacy of it, the effect of it is wearing very, very thin. Weve gone from a 2 trillion Balance Sheet, the markets rallied to well over 4 trillion now. The question is whats enough . Its there. We have to get the consumer and businesses like tom to use it. When you see the ten year 271 this morning. Remember, the first head fake that we got, i dont know, you werent part of that, i know, where we were sure there was going to be a taper and there wasnt, part of that was the angst that the tenyear was going up too fast. This time around its gone the other way. Its gone the other way. Is that good or does it signal that maybe the idea that the economy was better than we thought, maybe that was a mirage. There are also crosscurrents here because weve seen obviously a change in the vision of emerging countries, the way People Discount whats going on. Weve seen inflows in the United States. But in general, you love 2. 7. Do you rub that all over you . Within i take off my depends, i remember it all over me. Its really nice for you guys that that has stayed. It also indicates the money is coming back here. This is where its at. Heres the point. The equity markets present mechanisms, most markets are. What we focus on is the real economy. To me, the best indicator of whats going on is in the fixed income markets. Thats where the fed, in my opinion and the opinion of my colleagues is where it should be focused, not whether theres a blip up. Earnings are discounted, cash flows are discounted at a different rate, depending on what rates are. Were out there on theyearold curve in terms of our own portfolio have been relatively stable. They have not spike. Ask a real business guy. The dollar will probably strengthen. That will not help you, is it. No question some of the foreign currencies have been under pressure, particularly in latin america. When you run a Global Business youll have things that swing both directions from time to time. I think were encouraged that most economies seem to be making slow and steady progress. Over the long term i think that will be good for our business and middle class. With the turmoil weve seen in the emerging markets, has that impacted Consumer Spending . Particularly when youre trying to bring people into buying goods that they havent bought in the past. When argentina did the three for one devaluation a number of years ago, youd see categories disappear. Youd buy laundry detergent but not fabric softener because you couldnt afford it. Were not seeing purchasing shifts. Youre seeing more and more people come into the middle class. We project in the next ten years there will be a billion consumers coming into the middle class in brazil russia and china alo alone. Are there we had greenspan on talking about ceos not doing longterm investment because of not knowing where taxes will be or uncertainty. Do you feel tepid as a ceo . Do you build places outside of this country because of, you know, its a better way to do it where the tax policy is . Are there things for you to do that need to be more positive about your future . Theres absolutely Corporate Tax reform would be a huge boost to business in this country. If we could get the rate down to be competitive with the other industrialized nations, get it down to a 25 rate. Combine it with cheap energy. It would be a much more level playing field, no question about that. Key Monetary Policy. Monetary policy has nothing to do with what our issues are. But youre the only game weve got. Youre uncomfortable with everything. I dont want to speak for you but everything is on your shoulders when we cant the Federal Reserve, the fomc where policy is made, actually does something. Unusual in washington. You have to, though. We have to. I asked Business Leaders all the time and the ones that are not mentioned, whats driving your reluctance . The answer is never a lack of access to capital or cheap capital. Theres plenty of liquidity out there. The issue is what is it . It has to do with physical regulatory. Were hiring to replace vacancies in the u. S. We have just under 20,000 u. S. Employees. We probably had high single digit turnover. We hired about 1,300 employees. Most of our hiring is college grads, entry level. So, again, its pretty stable and not expected to uptick. What are you going to do with health care . We have a terrific health care plan. Why would you keep it . You want to make sure you compete for talent as well. You have to have the best people. Even people that are not current employees joe, theres no question if at some point everyone is in the exchanges, then thats ultimately where business will likely head as well in the near term, i dont think that will be the case. Just in terms of richard, going back to this conversation about potential tools, the reason you want to get out of qe is because you think its not effective anymore. Is there another tool you could use if there was a shock to the system . If there was something that you thought merited the fed stepping back in . You could always adjust the rate of largescale asset purchases. We have been adjust ing ing it. You cant push rates lower than they are. That would be the key operating tool. We have forward guidance, what we say were going to do longer term. How long well hold rates, yell beyond 6. 5 unemployment. I think we have some tools. I dont see the economy going that direction. I was interested to hear draghi say i do not see a risk of deflation in the United States. The dallas feds calculation, which i think is the best single indicator, its ticked up a teeny bit to 1. 4 to 1. 3 . You have to ask the business operators, do they see pressure on the down side or up side . Or are things fairly steady . Thats the key. Tom . I would echo richards point. Were seeing positive upward pressure on price. Theres a report a week or so ago that we made in one category, were getting a diaper price increase in the First Quarter thats rolling over. It will be a mid single digit count change, tissue price increase through desheeting and things like that. We are seeing the ability to take small, positive price moves at this point. Which is another sign of strength in the economy overall. Becky has a 2yearold. Youre very interested in diapers. I listened to everything you say about the diapers. Were here for you. I appreciate it. Richard is staking around with us. Well talk more about whats been happening to the jobs number. Great conversation, guys. Coming up, well go around the horn with our pan toll get their final predictions on the jobs report before we get the numbers. Ahead of the numbers, dow looks like it would open up about 25 points higher. Welcome back. How is everything . Theres nothing like being your own boss and my customers are really liking your flat rate shipping. Fedex one rate. Really makes my life easier. Maybe a promotion is in order. Good news. I got a new title. And a raise . Management couldnt make that happen. [ male announcer ] introducing fedex one rate. Simple, flat rate shipping with the reliability of fedex. Okay, everybody. Were going to go around the horn really quick. We want two numbers, the nonfarm payroll and Unemployment Rate prediction. Lets start with mark. 170k, and 6. 6. Due to the Emergency Program expiring. Kevin . 150 and 6. 5. And austan . 146 and 6. 5. See what he does there . He subtracts from kevin. Price is right rules. Thats not fair. I have to subtract the bias out of kevin. Hampton pierson joins up. Up 113,000. Up 113,000 january nonfarm payrolls increasing by 113,000 jobs, 6. 6 is the Unemployment Rate. 0. 2 average Hourly Earnings in the month of january. The revisions an additional 33,000 jobs added to payrolls in november. Making that revised number 274,000. 74,000 was revised upward by just 1,000 jobs for december. The new number 75. The twomonth total plus 34,000. Increases in january, construction, up 48,000. Manufacturing, plus 21,000. Professional and business services, up 36,000. Job losses in january, retail down 13, federal, state and local government, down 29,000. The 6. 6 Unemployment Rate was derived by the number of unemployed, declining by 117,000. Employed increase by 638,000. We did have a slight uptick in the labor force Participation Rate to 63 . The benchmark revisions for march and for all of last year, the net effect to the Establishment Survey, an additional 136,000 jobs created in all of 2013, more than had been previously reported. Weather effects in january and december, the Labor Department telling us that in january, there are about 262,000 people, of those with jobs but not at work. Thats pretty much in line with the average yearoveryear. However, due to bad weather there were 694,000 working part time in january versus 338,000 a year ago. But the big spike as far as weather effects was in december when there, 1. 7 million fulltime folks basically not working or working part time versus 165,000 in 2012. Those out of work we had a slight decline in the number of those out of work six months or longer, 3. 6 million, 35. 8 , a decline of 232,000. Back to you. Youre seeing the futures which were up by 25 points on the dow turn itself around. Probably down 75. Now were down sharply lower, about 100 points lower. Lets get back to the pan toll break down the numbers. Steve rick, mark zandi, Kevin Hassett and austan goolsbee. Its a weak report, no doubt about it. Theres a disappointment in the revisions to the lack of december. The number for january was not very large and that may be the result of the idea that one survey week, that was the one mild week i think you are talking about that this morning. Im looking in this report, im not seeing anything that stands out as being a sign of stronger or weaker than the number. For example, the weaker hours is unchanged. Average weekly hours, both sides of it, the earnings are not up 0. 2, not a big deal. Retail, you had some of the layoffs that were announced. Minus 13,000, not surprising. Temporary help, no sign of imminent hiring here. The big story is minus 29,000. My model had 148 for the private sector which it came in at 142. Thats okay. The minus 30,000, the idea that theres still government cutbacks going on is significant and whether or not thats holdover from the shutdown, unclear. And the jobless rate, whats interesting about that is minus 117 on the unemployed, plus 600,000 on the employed. Okay. Theres been talk about which way which survey is leading the way here and i think austan said earlier about the divergence between the two, maybe for a different reason. You had 500,000 come into the work force. Mark, did you have the high number on the way into this . I did. I had 170. I was high. What do you think went wrong here . Well, you know, the way i think its a lot of weather still in this number. And 30,000 decline in government. Something odd is going on there. So take the 113, add in the 29 for the lost government, upward revisions, well get more upward revisions for the december number when its all said and done. We have a number of revisions coming in. The bottom line in my view is that the trend in the job market has not changed. Nothing fundamental is going on here. Were still in the 175, 200k per month. That will become evident in the spring. That rings hollow on a day like this when we get a weak number. Thats the reality. The Market Reaction is fast and furious. The tenpoint treasury yield, 10. 64. You are seeing this flight to quality in the market. Does anybody want to claim that bad news is good news . We can go back to mr. Fisher in pebble beach who may have views on this. I think the market understands that growth is better than qe. And i have long offered a trade for somebody that gives me a dollar of growth in exchange for ten bucks of qe. I will take that anytime. I think the market feels that way. I think that people want the if ed to continue the taper. They dont want reasons for them to come back in. Im pretty sure the fed doesnt want to pause or taper its taper at all. I think what the market wants is growth in some sense in all. Jobs are not critical to growth. Maybe zandi wants to talk about this. Jobs are critical to sustaining growth. Theyre not what starts the growth. Rick, now you can make the number up if you want. Where are you before 8 30. I was going to go 144,000. I was on the high side. We could argue about weather or jobs arent important to growth. Ill give you a dollar for 10 for a dollar of growth. Boy, these are all boy, Francois Hollande is probably grinning ear to ear. All i see is we dropped yields down to basically unchanged on the week. Actually low are. We closed last week. We dropped a couple basis points. Thats where we hover. We had an 80point swing in dow futures basically from up 40 to down 40. The dollar index is a bit lower. I know that everybody wants to say flight to safety. I still think its more of an eviction notice out of equities personally. I find it fascinating as we start to get the early information on flows, how much went out equities, how much did go into the fixed income markets and how all the fundamental studies that will be done on the weather and everything, keep it really simple. If the equities, for example, drop 10 are 15 from here, well be testing 2 1 4 to 2 3 8. Mr. Goolsbee, the few from the white house, theyre watching this. What do you think theyre thinking . What are they going to do . I think the white house will be disappointed on the payroll numbers. I think the thing to keep in mind, this divergence when youre getting plus 600,000 on employment on the Household Survey and getting only plus 100,000 on the Establishment Survey is going to be a big problem, is going to be a big deal. Its going to increasingly diverge as we get changes in Labor Force Participation. But i think the white house is also asking the question, when joe goes to pebble beach, does he count as somebody whos not doing his job because of the weather . Or does the fact that beckys doing two peoples job now count against that and just net it out . Do joe and becky have their mikes on right now . I hope not. I have no idea what that meant. That means youre not doing any work, joe. Means youre a slacker. I think it means youre trying to ontr trying to get out of this crappy number. Thats really good. You keep predicting how crappy things are. You would know. Im curious how the fed will spin this number. Janet yellen has her first, really, public appearance. Shes going before Congress Next week in testimony. How is she going to talk about the labor market . Obviously as steve was saying, the bar is very high to change policy but she has to come out and defend the feds actions and what theyre doing to do. Austan, do you think the fed and janet yellen will want rates lower or higher . Just a quick answer, nothing complicated. In their heart theyll want it lower. All they have to do is have janet yellen say were done with qe. Any doubts whether rates would be lower after that statement. Yes, i have some doubts. Stocks would drop 10 . Rates would be lower. It starts to get dicey from here. What they do gets confusing, truly. Ill have you answer that. What janet yellen should do, how she should characterize this. I think we got a lot of clarity on what the market is thinking right now. As a group were nerds that look at the data. We were way below expectation. Even mark was a little bit below. Then we said bad news would be bad news for market. Were in a world where the data are getting slower. Yellen will have to talk about that next week. The fed isnt going to change the tapering strategy because it would look crazy to do that. Crazier. I think fisher gave you the sense right there that the fed is looking at whether the feds going to be thinking about that and its going to take some time, i think, to figure out what the right trend of the economy is. Our special thanks to mark, kevin, austan, rick and steve. Ill send it back to becky. One quick note, the futures were down 100. Now theyve come back, down about 30. I dont know what you want to make of that. Becky, over to you. Andrew, thank you. Well talk more about that in a moment. Thats a swing of probably 80 points. We were looking at the dow futures up by 40 points, now it looks like theyre down by 40 points. We have the head of dallas fed. Well talk about that. We also have david dorman. Squawk box will be right back. In todays market, a lot can happen in a second. With fidelitys guaranteed onesecond trade execution, we route your order to up to 75 Market Centers to look for the best possible price, maybe even better than you expected. Its all part of our goal to execute your trade in one second. Im derrick chan of fidelity investments. Our onesecond trade execution is one more innovative reason serious investors are choosing fidelity. Call or click to open your fidelity account today. Welcome back to squawk box. Have a look at u. S. Equity futures. Theyve been very volatile after the release of the jobs report. Lower but certainly off the lows. Plunging earlier when we got the headline 113,000 jobs created in the month of january. Economists were looking for a number more like 189,000 new jobs. The Unemployment Rate falling to 6. 6 . From 6. 7 . And another headline here, remember that lousy report back in december when only 74,000 jobs were added . The revision, only 1,000 jobs added, perhaps if you look at futures, andrew, youre seeing people just blaming it on the weather. What i cant figure out, the first swing, was that computers . Such a low number. The low number. You have to factor that in obviously. Were seeing sharply lower u. S. Treasury yield, a sign of weaker growth, weaker dollar, stronger japanese yen. Joe, watching the markets here on that lousy jobs report. Over to you. Yep. Join is us now is david dorman, former chairman of at t and Cnbc Caremark nonexecutive chairman, foundeding partner at center view capital technology. Well be with you in a second. We have Richard Fisher, the Federal Reserve president of the bank of dallas to weigh in on the job numbers as well. You talked about weather already. Right. In your view, no one at the fed is going to panic and change whats happening with the taper. My question, then ill let you speak to that, then im going to ask you my question to you, you didnt like any of the qes. Maybe you liked qe 1 but you didnt like qe 3. How much of that is due to you not liking it the all in the first place . And if yellen decides this isnt going the unemployment is not going to come down quickly enough and this is what our mandate is, it doesnt matter what you think. Can you really say the taper will be interrupted if this continues . Again, i can only speak for myself. I will say this. Theyre not swayed by a single number. These are thoughtful people. Well have a big upward revision. It went from 74 to 75. By 1,000 jobs. I saw that. Look, the issue is, is this effective . I have argued that qe3 in particular would have a greater cost than benefit. But thats water under the bridge. The issue is now what do we do with an over 4 trillion Balance Sheet when were way out there with 30 of the outstanding stock in u. S. Treasuries and were buying the full amount of net new issuance of mortgagebacked securities and how are we going to get out of this later on . You asked real Business People like you had on the show before or this great Business Leader here, is the issue money, cheaper rate or is there Something Else holding them back from employing people . I listened to austan and others being interviewed earlier. How much can Monetary Policy do . This has to be considered. All i can tell you, the vote was unanimous. Business people have been saying this they would have been telling you this for a year and a half that theres enough liquidity. Other people in the fed they have been telling everybody has their own judgment. You listened. Not only me. We had a majority opinion. I would ask the Business People that you talked to, what is holding them back from committing to greater cap ex here in the United States and from employing more people . Im skeptical that its monetary poli policy. Youre a guest host. Sort of. Put on my badden. I look at two things. We have no track record for unwinding whats been done. So as far as im concerned this is completely unchartered waters. If youre a business person and worried about government intervention, government vomit, pulling the control rods out, youre best to keep your powder dry until we understand better whats going to happen. Do we have a snapback in Interest Rates . This is not like fine tuning little bitty knobs. This is kramcranking a big whee. Richard, even if thats what Business Leaders say, if this is whats been happening along the way, the feds position is the fed can only do what the fed can do. They cant change the tax structure, do a lot of those other things. Should the fed pull back and do nothing and wait to see what happens . What you can do is you can delay the tough decisions that have to be made because you made money so easy. If youre a congresswoman or congressman or senator, the feds carrying the load for you right now. I dont want to carry this argument too far. The point is theres a lot of liquidity out there. Its high octane fuel, it is dirt cheap. What incents people like dave and his colleagues, big, small, public, private, to use it . Thats something we cannot do. The other thing we cannot do by the way, which is very important here, we cannot affect anything but cyclical employment. Structural employment has to do with the way the laws are made. We dont deal with that. We dont deal with immigration issues and so on as Alan Greenspan was talking about earlier. Theres a limit as to what the tool of Monetary Policy can effect. Let me do this way. Whenever we report the drugstores, theres the front of the drugstore, theres the prescription stuff and you even have caremark. How many different parts the economy can you tell us about . Two pretty good windows, yum brand on the board. That, too. At the Retail Consumer level. You can tell bus china. In the u. S. , weather did have an effect on january. We had such bad weather and so much big markets, people clearly, even if they wanted to go, couldnt get to the store, couldnt get to a taco bell if they wanted to as easily as they would have. Cnbc the same thing, weather does affect retail traffic. Its going to affect it for the month of february, too. Three monthshappening. Three months in a row of pretty lousy numbers. When i look at the numbers im not surprised and im not at this point ready to say, gee, theres something going on different than the weather. I do think the weather affected it when i look at other markets, when we can have unaffected, californias been beautiful until the at t which is kind of standard. It was nice yesterday. Just the morning. We got lucky. Yeah, we did. But i do think were up all night to get lucky. What about so how is cvs caremark and is bloomburg on your board now . Youve done cigarettes, you cant buy cigarettes, what about a big gulp, cant buy a 24ounce coke at cvs . Why are you deciding for me i cant buy a cigarette at your store . Were deciding we wont sell them to you. I think the issue is where do you take it from here . Whats after this . Candy . Sugar . I like this move. I know. You like the nanny state. Further on you than me. Only the most cynical are trying to make a bad face on this. Thats why you came to me. Were a Retail Company in our roots. Added pharmacy, people forget this was Consumer Value stores and now were more of a Health Care Company. We have minute clinics and the prescription benefit caremark business and we see ourselves in the future growing more and its consistent for a company that calls itself a Health Care Company to sell cigarettes. Its a principled decision and the management brought it to the board and the board agrees. I like it. Herb callaher is 82 years old. What if you want to smoke two cigarettes a week. Go somewhere else. I can still get a big gulp . Youre sure . What about a snickers bar . No twinkies god forbid. Theres probably twinkies there. You better get on that, dave. Better get right on that. Herb was chairman of the Federal Reserve bank in dallas. Isnt he great . I think theres some bourbon in there, too. A little wild turkey. That hasnt killed him either. I want to ask one question. Thanks for playing along, david, i appreciate it. You bet. Richard, great having you here . Are you leaving . Yes. Sorry. Man, i got more for you. All right. I want some more. Take it away from me. Thats not beating up thats just like, you know, bloomberg set the standard. I have to bring all my friends from the company. Gentlemen, thank you both, have a great day. See you soon. When we come back well have more squawk Box Including the markets reaction to the jobs report. Check out the squawk box blog and aols boss trying to explain the 401 k changes because of obamacare and gms cfo appears to be in denial and cramers take on the Green Mountain coke deal. Weve got that and more on the latest squawk blog. When you order the works you want everything. An expert ford technician knows your cars Health Depends on a full, complete checkup. The works. Because when it comes to feeling safe behind the wheel, going the distance and saving at the pump you want it all. Get our multipoint inspection with a a Synthetic Blend Oil change, tire rotation, Brake Inspection and more for 29. 95 or less. Get a complete vehicle checkup. Only at your ford dealer. Phone your account is already paid in full. Oh, well in that case, back to vacation mode. Boots and pants and boots and pants and boots and pants and boots and pants and boots and pants. Voiceenabled bill pay. Just a tap away on the geico app. Huh, 15 minutes could save you 15 or more on car insurance. Yup, Everybody Knows that. Well, did you know that some owls arent that wise. Dont forget about im having brunch with meagan tomorrow. Who . Seriously, you met her like three times. Who . Geico. Welcome back to squawk box. Take a look at the futures which have been oscillating all over the place this morning. This is amazing because we had these jobs numbers at 8 30, futures looked down. They tanked. Tanked 100 points. And now were up. And the dow jones looks like it will open up 37 higher and the s p eight points higher and the nasdaq 18 points higher. Almost 20 now. I dont really even understand what to make of that. You can dig into the report and show signs that came in better, the Household Survey wasnt as bad and its pretty strong and theres the weather. Well continue to watch the Market Reaction. Of course, it is all about jobs day. Coming up on squawk on the street, the chairman of the council of economic advisers jason furman will be commenting on the latest report. 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Because it offers a superior level of protection. And because usaas commitment to serve current and former military members and their families is without equal. Begin your legacy. Get an Auto Insurance quote. Usaa. We know what it means to serve. Welcome back to squawk box. We should say goodbye or hello to our friends across the way. Tell us, what do you think Richard Fisher really thinks of all this . Was there any kind of signals or hints . No, i think hes sticking with the weather. I think hes sticking with the weather at this point that he really thinks this is a problem with the water. Weve heard that from a lot of the Business Leaders we talked to at this point, too. I told him, you havent liked qe all along, whether you want to keep with the taper, thats one thing. Well see whether yellen and the rest of them stick to it after these lousy numbers. Well see. Good luck, joe, out there on the green zone. Thank you. Make sure you join us tomorrow. Well see you later. Be sure you join us on monday, squawk on the street begins right now. Good morning. And welcome to squawk on the street. Im david faber with jim cramer. Were live from the New York Stock Exchange well hear from Carl Quintanilla live from sochi. Weakerthanexpected job growth for a second consecutive month. January nonfarm payroll is up 113,000, well below forecasts. Decembers gain revised higher by only 1,000 jobs, that was up 1,000. The Unemployment Rate did tick lower last month it is now 6. 6 and the participation went up by aou