Transcripts For CNBC Squawk Box 20140306

S p futures up by just over 3. 5. The nasdaq up by 6. 5 points. Also in europe this morning, Philadelphia Fed president Charles Plosser pointing at the weather for a blurry economic forecast. As you pointed out, it has been very noisy. Weve had storm after storm after storm, particularly on the east coast. Its been very difficult to get a decent reading on the economy. I think its important that we sort of take a step back, be patient here, and not overreact to whats going on because we just dont really know for sure yet. The fed beige book yesterday citing the weathers impact on the nations economic conditions. Well see if weather is a factor in todays collection of economic reports. At k8 30 a. M. , we get weekly jobless claims. The economy is expecting a reading of 338,000 to 348,000 we saw the week before. And at 10 00 eastern time, the january factory orders report will be released. Thats a decline of 0. 3 is what economists are looking for there. Treasury secretary jack lew will be on the hill today testifying on president obamas new budget. Thats coming at 9 30 a. M. Eastern time. Right now, lets get to andrew with some of todays top corporate mornings. What do they say, becky, you cant take the girl out of the city, but you cant take the city out of the girl. I guess im the girl here. I said he had too much fun there yesterday. Hes not coming back. One of these days i will. Im doing a little bit of work this morning. Not tomorrow, right . No. Ill be in d. C. Tomorrow. So youre not coming back out here . Nope, hes done. Take a stand, man. Take a stand. Im with you on this. Thank you. Where are you . Im at 30 rock this morning. Oh, youre even going right to today show type quality. You deserve that. Lets get you caught up on the headlines this morning. Looks like the same suit. Uhoh. Did you do the walk of shame this morning . Its a different suit. Its a different suit. I know where andrew was last night. I saw him last night. Now youre going to start rumors. Really . After the show, you guys just never wow. Lets get you caught up on the headlines this morning. We did speak with the king of activist investor carl icahn about his battle with ebay now linking cofounder reed hoffman. He helped engineer the ebay paypal deal. The senior vp of payments had this to say, if we assume that icahn really does care about creating longterm stockholder value, as he insists, then the true issue isnt what sort of shortterm pop he can engineer for ebays stock price or what size premiums paypal might fetch from auto company. The true issue is what conditions are most conducive to paypal growing increasingly valuable over, say, a tenyear time frame. When you think about a tenyear time horizon, then you think about our friend, carl icahn. I dont think that carl thinks in tenyear time horizons. Its just a different thinking process from sort of a valley versus where we are here a little bit. Well, well ask him if he you know, like i told him, if you just even if you wake up, just, you know, do what people like carl or do what he does. Just call in. Just say, oh, im up for a second, let me just call in, right . We would always take calls. He always has something that hes thinking about, probably. Remember that king farm suit yams deal, that he literally told that was years ago. It was the old squawk or something. But he said he was shaving and he had the tv on and he heard something about they were selling. He goes, what . Thats where he got the idea, watching squawk box in the morning. But i dont know what he was doing up that he must have had a meeting that morning, too. Squawk used to be on later, too. But if he gets up early, there must be a deal or something. His managers are saying, shhh. You know, the chair is so empty. Im right here. Youve got your jacket on and the thing. The pocket. Yes. Darden canceling an investor meeting slated for march 28th. The company is instead going to meet with analysts and investors individually. The Company Believes oneonone group will be more productive. The Company Recently reiterated its plan to spin off or sell reasonable doubt red lobster. Both have pressured the company to rethink those plans for red lobster. Isnt the one called seasons 52 . I dont know. Its a big they have healthy, local food that they look up. Pretty good. Earlier this morning, warehouse operator coastco prorted a 15 decline in quarterly of thes. The company was hurt by some of the weaker growth margins. The companys profit fell to 463 million. Analysts were looking for 1. 17 a share. Sales rose, but that fell short of estimates. Shares of costco are trading around 115 a share, just off of its alltime high. Its very unusual to see a miss like this for costco. U. S. Safety regulators are demanding General Motors turn over documents and other data showing what the company knew and when about dangerous ignition problems that were linked to this 13car crash or 13car crash death that we were talking about. The national Highway Traffic Safety Administration is investigating how gm handled the problem which triggered we were talking about the recall of 1. 6 million older compact cars, gsomething from pontiac. But it was worldwide. Gm acknowledged it knew the troubles a decade ago, but didnt recall until last month. A decade ago . Yeah. You wouldnt think ignition problems would cause fatal crashes. The data is due on april 3rd. Gm is cooperating with that investigation. Andrew. And the eu holding an emergency summit on the crisis in ukraine. Julia chatterley joins us now with brussels on this story. Good morning to you. Good morning. This is all a sense of urgency here for the eu leaders in brussels. I just spoke to the lithuanian president. This as from the former soviet block. And their president said to me that russia today is unpredictable and its dangerous. And theyre trying to reshape their boundaries. And quite frankly, europe arent taking this seriously enough. What kind of sanctions are we looking at . A symbolic embargo on arms, suspending trade talks. How much does Vladimir Putin really care about these things . Not at all. Why arent we talking about more stringent sanctions . Because europe is reliance on russian independent energy. A third of our gas comes from russia. And the bottom line here is its actually easitory give money to the ukraine than it is to hit russia where it hurts. In the last few minutes, actually, here the game has changed again. The Crimean Parliament over in the ukraine has voted to join the russian federation. What does that mean for the eu powers as far as russia is concerned . We dont know. The leaders here discussing what thats going to mean for the ukraine and for russia, too. On that note, guys, back to you. Julia, thank you for that report. Guys, i dont know if you saw this last night, but you have to see in this morning. Weve got a piece of video to show you. This is an anchor for governmentsponsored russia today, known as rt, quitting live on the air. Her naz is liz while. She announced her resition naz following recent comments from a fellow anchor who denounced the russian government for taking in ukraine. That is why personally i cannot be part of network funded by the russian government. That whitewashes the actions of putin. Im proud to be an american and believe in disseminating the truth and that is why, after this news cast, i am resigning. Wow. Wow and her name is wow. She is a washingtonbased anchor, american anchor. She noted her grandparents came to america as refugees escaping soviet forces during the hungarian revolution in 1946. But one of the on questions this raises for me, larry king happens to have a show on rt. And im wondering if hes going to comment on all of this or stay with the network, for that matter. Larry king might be interviewing her at 9 00 on cnn if things go as planned here or if they bring him back. Im shocked, shocked that theres whitewashing going on with this company that ive been working for for, you know that looked like a publicity stunt. A publicity stunt for her. Yes. And i saw that yesterday. I was not she didnt know that she was disseminating propaganda . How long does she work there . No, im sure she did, but at some point, it probably got too far, right . I dont know. I dont know. When putin is the ceo of your company, i guess thats thats the way its been for a while. She knew exactly what she was doing and she knew it would go viral and here we are talking about it. Looking for a job, so, there you go. I saw it yesterday and i wondered where it was. And i thought it was here and then it was over there and its like cable access over there, anyway, isnt it . Yeah. Although if youre still in the country its more risky of a proposition to be doing rather than doing here. But this is rt america that she was on. Right. But i dont even know what thats where larry king does that once a week or so, right . I think its a weekly slow and its rebroadcast online. Hes an inspiration, larry. He is the energizer bunny. He is. Hes an inspiration. And hes still in demand. Thats classic, yeah. Lets get a check on the markets this morning. As we showed you, the futures are looking more positive. They are back up 38 points for the dow futures after modest declines yesterday. Take a look at whats been happening with oil prices this morning. Right now, wti down by just 11 cents. But back at 101. 34. This is off the highest levels that weve seen since tensions started heating up in ukraine. If you take a look at the tenyear notoriety now, the yield is unchanged at 2. 707 . This is similar to what we saw yesterday. The tenyear was hanging right around 2. 69 all day. Its caused steady issues for both the dollar and gold yesterday after some of the volatility that weve seen recently. This morning, the dollar is down against the euro at 1. 3745. It is up against the ruble once again and gold price these morning down by just about 4 bucks. 1,336. 40 an ounce. Coming up, making millions on ebay by shoplifting. Its kind of a touching story of a Family Business. Plus, nike about to unveil big news about the world cup in brazil this summer. Ceo mark parker is going to talk about that exclusively during squawk on the street today. Ameriprise asked people a simple question can you keep your lifestyle in retirement . I dont want to think about the alternative. I dont even know how to answer that. I mean, no one knows how long their money is going to last. I try not to worry, but you worry. What happens when your paychecks stop . Because everyone has retirement questions. Ameriprise created the exclusive confident retirement approach. To get the real answers you need. Start building your confident retirement today. Welcome back, everybody. Right now, its time for the executive edge. The law and order edition. A california businessman was convicked of stealing trade secrets to help a company. A jury found waulter lou gmt on over 20 counts, including conspiracy to commit economic espionage and trade secret theft. U. S. Prosecutors contended lou revealed trade secrets to help a Chinese Company create a pigment known as ti02. That pigment is used to make a variety of white products including paper, pigment and paint. My question is this a story that is reflective of china and what goes on in china in terms of all the issues in terms of stealing our intellectual property or is this a sorry about one incident of this and business trying to figure out what the other person is doing . Whats worse, do you think, to think . How much money would you make doing that . I wonder what china paid him. A lot, probably, because this is very valuable. Yeah. Wasnt this a situation where this was happening in the United States . Because we have heard of a few situations where i believe there was an Agricultural Company this happened to about a year or two ago. My guess is over in china, its much easier and it happens all the time if youre an American Company or a Foreign Company operating in china. These are a little more intriguing because these couple of cases, auto the idea that its happening on our soil. I also wonder if its a gray area where, yeah, i knew how to make this. Its not proprietary. But werent they paying off these other people . Well, paying off, thats a in one mans look, if youre going to protect the cocacola recipe for 82 years or whatever, i think any of these things are trade secrets and intellectual property. This is pretty boring, right . What does it make, white paper . Its arent important way of getting ahead. If its worth paying for, you have to figure its valuable information. A Family Business gets busted. A couple and their daughter were charged with operating a multi Million Dollar shaft lifting ring that involves stealing items from Retail Stores and turning around and selling them on ebay. The trio were charged with transportation of stolen property. According to investigators, they stole more than 7 million worth of American Girl dolls, ferby toys, baby monitories, steak knives, all kinds of things from an array of retailers over the last decade. They were napped after a Theft Prevention group tried to figure out where the items were stolen from and traced it back. Everybody needs a family activities to do on the weekend. She had a skirt, a long, black skirt with lining. And they would work together. The husband and the daughter would create a diverse. Its a bonding thing. Its a mother daughter bonding thing. Sgldz 7 million . How can you carry 7 million worth of stuff in your skirt . They shop lifted that stuff and made 4. 2 million and they did it in all these different states. Did they line their clothes with tinfoil . No, a black dress that had lining and it was a long, black dress. Then the other two would create a diversion zsh would flee. Wow. Crime doesnt pay. Do they all get to go to jail as a family . No. They dont keep women and men together in the same places. Anyway, crime doesnt pay. Thats why you have to stay in school and to do that, you have to get good s. A. T. Scores to get there. The s. A. T. College Entrance Exam is getting its first makeover since 20505. The change is coming in 2016 include make the s. A. Optional and no longer penalizing students for wrong answers. These changes come as the s. A. T. Has been overtaken in popularity by the a. C. T. , which has long been considered more curriculum based. So theyre trying to bring things around. The s. A. Came after i took the s. A. T. S. Im glad theyre coming back to the 1500 number, because all of these kids who were telling me they would got these huge scores and then i would feel bad for myself. You need to know how you changed it. I didnt know they changed frit 1600. From 1600 to 2400. That entire group of kids was that 2005 to now . Like eight years of kids who theyre going to have scores that dont match with anybody before or after. Now we know which kids to really hate again, too. Right. The 800s. There are kids that get 1600. One of my good friends had an 800 in math. I dont like him to this day because of it. Apparently, by the way, harder to teach to the exam. Caplin, princeton review, all the courses out there that teach to this, this new test will be much harder to game the system, if you will. They also announced, yesterday i believe i heard this theyre going to be doing something in partnership with the khan academies, those classes taught online, that will make it available for all students to get access to the same information, which is great. I thought that was a great equalizer. You could make for an s. A. T. Prep course or something. That would cost money and not everybody will have the equal access. But if you can get access to khan academy and everybody has the same ability to study up on these things, i think that would be a great equalizer. But testing and getting personalized for wrong answers, its all so i mean, i see the way the entire country is going, so its also cruel to make people get things right and understand stuff. There is some tougher stuff, too. You have to back up why but its hard to get if you Start Testing to see what students are learning in schools, then youre going to have accountable with the teachers because the ones that arent teaching well, youre going to know who they are. You see the huge pushback for any type of accountability because it messes up tenure. But the whole thing is i dont know. There were times where you used to get a ruler across the knuckles if you didnt know something. But now you can graduate high school and not even read. I was never hit on my knuckles, my rear yebd, i never did any of that. You were a goody tooshoes. You didnt have sister mary they didnt hit me. Im kidding. You just wish they would have. Lets get to the weather. Is spring going to arrive on the east coast . Lets get the forecast from the weather channels alex wallace. Good morning to you. Weve got some spring rains to deal with here this Early Morning across parts of the south and showers leading through mississippi. That issing going to track across florida and up across parts of the southeast coast, slinging in some moisture, meaning wet weather, is and even some storms along our cold front which will be marching its way through the sunshine state. Some of those storms could pack a bit of a bunch. Meanwhile, looking for a bit of a warmup . I think well get it here into parts of the northeast for the weekend. Were not talking balmy 60s and 70s, but it will be much better than where we have been with those 20s and thirds. Heads up for the weekend. Things looking milder from boston down to d. C. Andrew, back to you. Thanks for that, alex. When squawk returns, the markets play the waiting game between the ecb today and the jobs report tomorrow. Plus, were going to dig into costcos earnings report, the retailer missing expectations. Weve got that story when we come back. As we head to the break, take a look at yesterdays winners losers. About Business Internet . Ok, how about thirty seconds . At comcast business our internet is fast. Up to 5x faster than slow dsl from the phone company. And our phones better too. Sign up for internet and voice and find out how to get four weeks of internet for free. Time to make the call. 8005016000 comcast business. Built for business. [ girl ] my mom, she makes underwater fans that are powered by the moon. She can print amazing things, right from her computer. [ whirring ] [ train whistle blows ] she makes trains that are friends with trees. My mom works at ge. My mom works at ge. Save you fifteen percent or more on car insurance. Ould yep, Everybody Knows that. Well, did you know the ancient pyramids were actually a mistake . Uhoh. Geico. Fifteen minutes could save you fifteen percent or more on car insurance. That will push the he next economy forward. Tion to preventing one more american child from wondering why their parent didnt come home. To International Drug cartels and the need to secure our borders. The future of this country, our country, is tied to immigration reform. No one debates we need to fix our broken immigration system. Republican leaders know it. Theyve even said so time and again. So why are House Republicans cooling. Retreating. And even privately saying theyd rather do nothing this year. Doing nothing puts jobs on ice. Forces us to lose out on revenue for roads and schools and infrastructure. And sends a message to millions of dreamers, who study hard and want to serve our country, they might as well dream on. No, nothing wont do. Call House Republicans today. Tell them weve waited long enough pass immigration reform. Good evening and welcome back to squawk box here on cnbc. Im joe kernen here along with becky quick and Andrew Ross Sorkin. Russian foreign minister Sergei Lavrov and u. S. Secretary of state john kerry are going to hold a second meeting in rome today after talking in paris yesterday. Thats not a bad gig old kerry has. Kerry tried to convince lavrov to meet his ukrainian counterpart yesterday, but was unsuccessful. So i said, hey, how about rome . Unsuccessful European Union leaders appear to be set to issue warnings to russian in ukraine, but to not impose any sanctions. And one of our friends and squawk guest hosts dallas fed president Richard Fisher is continuing his against the bondbuying program. He said the program is distorting markets and encouraging risk taking. And one of this mornings early losers, Office Supplies retailer staples reported quarterly profit at 33 cents a share, missing estimates. Staples was hurt by a 7 trop in samestore sales. You know what i got today . What . A Christmas Card. Did you, really . You complained about it enough that he from particular cook. He made sure he sent you one . He made sure he sent me one. Said he really did send you a this is from tim cook, by the way. Joe has been bitter that he didnt get a Christmas Card. Hes dealing with icahn, hes trying to figure out and you complaining and he took the time to do. Thats the sign of a good ceo to be able to keep all these you know the important things keep the all the dishes in the air at one time. Although, you know, if hes watching, my birthday was january 6th. And you sent him something for his birthday, im sure. And a Christmas Card. I think that he cant anyway, what what can you do for me . Yeah, exactly. But im just saying january 6th came and went and maybe thats lost in the mail, too. No, it was nice of him. Very nice of him. Anyway, lets get a check on the markets. We did show you the futures have been a little bit higher this morning. Yesterday, things were lower, but not by a whole lot. This morning, the dow 2350u6r7s liked like they would open up about 37 points above fair value. Yesterday within we got the adp private payroll numbers that showed a much smaller gain than had been expected and that is leading to concern as to what to expect with the big governments report coming friday. Today, well be getting jobless claims. Maybe that would give us some indication. It will show us more about whats been happening with the jobs and the weather situation. If you watch wag been happening in europe, youll see stock res slightly higher, picked up a little bit of ground. The cac is up by 0. 6 . The ftse is higher as is the dax and germany. In asia overnight, the nikkei is up by 1. 6 . The hang seng and the shanghai closed higher. Oil prices down by about 21 cents to 101. 24 for wti. And the tenyear note has been sitting right around about 2. 7 . Still there, 2. 71 . The dollar has been a little bit stronger, or it was earlier. You can see its stronger against the ruble, down against the euro. Its up against the yen at 102. 65. And gold prices have actually dropped by just about 5. 1,335. 20 an ounce. His birthday is not until november. So you missed it. No. He didnt send the Christmas Card we didnt start exchanging cards until christmas. And you sent a Christmas Card . Well, i didnt know he was going to send me one. But now i know. Now he will be on my list. All right. Hes a young guy. Unbelievable. How old is he . I dont know. Born in 1960. Anyway, the markets party of one. The market is coming off a mixed session. Which draws the s p 500 set another record interday high before finishing basically unchanged. Were just a day away from that big jobs report. Joining us now is mori harris, chief economist at ubs. For us, maury, if everything that we talk about, we just say its the weather, it doesnt make it that interesting to talk about it. Is anything rather than weather going on here in your view or can we just assume that the way the economy was sort of idling prior to all this weather were sort of in the same period right now . Is that what you think . Well, i think were in a growth pick up this year to around 3 gdp. The numbers right now, of course, are affected by the weather. So what you need to do is to look at some of the types of numbers that generally are not affected by weather. The most important ones are the confidence numbers. And the Consumer Confidence numbers have generally held up pretty well. To me, thats a critical sign. When you ask consumers how is the labor market, theyre telling you the jobs are getting easier to get. So these Public Perceptions arent i think are probably more important than statistics like these where the purchasing agents are telling you that theres a lot of weather effect there. Yeah. Confidence, whats the biggest boost of the day . I mean, i figure if you know your you know, if your house is not under water, that helps, right . If you know youre going to be able to keep your job, that helps. But what else . Well, i think one of the most important things is what you said about the real estate, that twothirds of American Families still own their hoemd homes, not as many are under water. That was such a Major Development to go four years with falling house prices to finally see those turn around. I think at the margin, that was a big plus for the consumer. Maybe we shouldnt underestimate that the fed has been exiting, at least starting to, and the tenyear has been very well behaved. I figure Mortgage Rates, they may have gone up a little from a year and a half ago, but they were all behaved. I mean, so far, so good with trying to get out of this, right . Well, the important thing to keep an eye on this month will be the Mortgage Applications. Were heading into the spring selling season. The margin rates are about one percentage point higher than they were a year ago. I think its going to be an okay spring selling season because confidence is up. I think the jobs are going to come back in the spring. But the jury is still out on that one. So these Mortgage Applications that are an indicator of sales are very important to watch over the next few weeks. They went up last week. I know theyre going to continue to go up. But keep an eye on that. These young people need a bit of a History Lesson for because theyre whats the mortgage right now, maury . The Mortgage Rate is around 4. 5 . They need to know that that my parents had a massive interest rate. I mean, if they think, well, it was 3. 5 , now its 4. 5 . And on the s. A. T. , theyre making that easy now. To have 18 Mortgage Rates . I want them to know that 8 and 9 , that used to be the norm and we got scared at 15 . Thats right. And whats important so look at is affordability. The houses, because prices have gone up and rates have gone up, Monthly Payments are up over the past year. But when you look at historically what the Monthly Payments are for new loans versus income, its still a pretty good bargain to buy a house. Yeah. I would think so, too. Do you have any fear that i mean, when is this shale revolution going to give us the tax break with Energy Prices that were all hoping for, do you know . Well, i think youre probably going to see it was, of course, away from the Natural Gas Prices when you head out into the spring weather. But weve seen a tremendous amount of, you know, exploration activities and discovery. I think youre probably going to see some downward pressure on west texas intermediate and your Natural Gas Prices over the summer. Partly because youre turning on a lot of what they call the tight oil that comes from the shale boom, these shale deposits. All that sets us up for what i mean, theres a lot of you would think more tailwinds than headwinds to get to the 3 number. Unless theres something were not thinking about and we just wouldnt know at this point because of the weather. Well, i look, if you say what do i worry about the most, ill get back to those Mortgage Applications because they have been very weak. I think theyre going to pick up. They picked up last week. But in the next month or so, if something was to go wrong, it would be that we start to get indications that the spring selling season for housing is not going to be a good one. I think it will be a good one, but thats what i worry about that could go wrong in the near term. And i guess external things, like over in europe and ukraine and whether, you know, the low inflation or deflation in europe, those things are also something to watch. But theyre you know, theyre not paramount in your mind right now. Well, look, your european pmis, you know, suggested that, you know, europe is really starting to, you know, snap out of this recession. And that if anything, the low inflation in europe has helped out because its helped peoples purchasing power. In terms of the event in ukraine, this certainly imparts from volatility to the stock market, but it doesnt have any basic effects of the u. S. Economy other than to gives some wild days in the stock market. Maury, thanks. We appreciate it. See you later. Coming up, weve got an analyst reviewing coastcos quarterly results. Plus a check up on obamacares enrollme enrollment. Find out where james dinan of York Capital Management is making his money in a very exclusive interview. Thats coming up in the 8 00 hour. Were back in just a moment. Tdd 18886486021 there are Trading Opportunities tdd 18886486021 just waiting to be found. Tdd 18886486021 at schwab, were here to help tdd 18886486021 bring what inspires you tdd 18886486021 out there. In here. 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The bank of england and the ecb, theyre both going to announce decisions on Interest Rates. Thats going to happen during the 7 00 a. M. Hour. The economic calendar, weekly jobless claims and the latest numbers on productivity, thats coming at 8 30 a. M. Eastern time. Well bring that to you, as well. And then the factory orders report for january is is going to be released at 10 00 a. M. Eastern time and that is your squawk planner. Becky. When squawk comes back, were going to head to coastco. Did sales get a case of frostbite . Margins were also hit. Well talk more about that after this. Announcer tomorrow on squawk box, its jobs friday. Expert analysis before and after the data hits the wires. Plus, former Federal Reserve chairman Alan Greenspan on the state of the economy. And the job janet yellen is doing since taking over for ben bernanke. A big friday for the markets, so tune in to squawk box. Ameriprise asked people a simple question can you keep your lifestyle in retirement . 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Welcome back, everybody. Coastco number costco numbers out this morning. Numbers on the top line and the bottom line hurt by a drop in Profit Margins in several categories. I have to say, jim, these numbers were pretty surprising. You dont normally see a miss like this from costco. What happens . Well, you know, every morning when i open up my browser, i look at the merriamwebster word of the day. Todays word was susayer and it didnt have my picture next to it pp nobody on the street was as low as what they reported. It was very tough. They talked about their margins, not only in fresh fruit, but some of the nonperrishable items, too. It caught a lot of retailers by surprise. Is that what happened here . I looked at that this morning and said wasnt this obvious that this was going away problem . Walmart was down and dirty on pricing. Target was tough on pricing. Costco does sell apparel. Macys was down and dirty. Everybody was tough on pricing. So i guess it shouldnt have been a surprise that it was tough on them, as well. We see their sales monthly. Their sales looked fine, but inside of those sales, the mix was obviously very tough. And february was okay on the release just now on sales. It wasnt great. And i guess they dont give stuff on these Monthly Sales releases. They just dont talk about the margins or what they have to do. What surprises me is the stock has not been hit very hard by this. Should it be . No, because as i tell you all the time, theyre the worlds greatest retailer. And when they have a miss, its a huge on opportunity for all those people that want to own it that couldnt buy it because its multiple was 25 times or 21 times or however you want to calculate it. And when you look at that, you say, okay, i cant buy it, its too expensive. But i know i love this company. I know theyre going used to sa walmart, that theyre the worlds best retailer. I said it about target since 06 and since ive been saying it about costco. All these people who look at it and go, i can buy it on sale, i should buy it now. What about the weather . That doesnt seem to be a huge problem, but it has been for a lot of retailers, including staples just this morning. When do we get to the point where you can measure companies other than by weather. Thank god they didnt mention the weather in their release. Every other retailer did. I think we all have to believe the weather kept people from shopping and it kept them from it allowed them to buy some things cheaper, right . Because other retailers had to promote. Anytime anything like that happens, it has to affect a company like costco. Im still surprised it affected them so much. In terms of weather overall, though, we heard from macys when they came out with their earnings release. I look to them because theyve been a stellar operator to this point. Terry lundgren talked about how 144 stores were closed for weather. What do you think in terms of the weather again . When can we get back to looking at these guys . Is it the economy underneath that going to be okay once we get through the winter . You know, i have contacts on the ground in asia i talk to all the time about whats going on in supply of retail. There have been lots of cancellations in asia for spring goods, current goods already. So retailers have looked at this and they said, man, i had a tough first two weeks of february. It got better at valentines day and for a little time thereafter, then it softened up again and its been soft right into march. We will get better weather. But i dont think until weather gets warm, i dont know about your house but if my house still has a foot of snow in the yard a foot . Something like that. We have five feet banks still. Drifts. The stuff that was shoveled. When we get to that 18 degrees this morning. You cant buy swimming suits. You dont buy spring shorts when you have five feet of snow in your yard. I think as that normalizes, around the country, because its not just here, well see normal selling. I think the normal selling for 2014 including the back half will be good. Back half of 2013 was of course hugely negatively affect by the weather. It had all the problems going on with the higher Social Security tax, all those sorts of things that have affected it. We should see the mirror image on the back end of 2014. If we see the mirror image you would think the back end absent something going wrong in the economy should be good. Aside from costco, what do you like . You dont see big discounts on some of the names. Im always a fan of macys. I think theyre a best in class retailer. Anytime you should buy them at a good price, you should buy them. I like costco. I dont think that will change. I dont think theres something fundamental that changes my view on that. Right now i like walmart. I believe they are fundamentally going back to what walmart has always been and always done well. Every day low pricing . Every day low price, have the thing you want in stock. Now theyre becoming an omni channel retailer. Macys perfected that, nordstroms perfected that. I like nordstroms as well. You have to be that to really be good today in those kind of categories. Walmart is doing 10 billion already online. Right. Theyre the biggest threat to amazon. And they can do that out of 3,000 stores now when it comes to distributing to you and being closer to you. And theyre very, very cheap. So can they win the battle . I dont know but they can make life miserable for everybody else when they do omni channel retailing. Jan, thank you very much for coming in today. Thank you. Andrew . Weve got a story coming up that you have to see. You can only see it right here first on cnbc. We talk about bitcoin around the table. How about the hunt for the man that actually started the Virtual Currency . We have that story next. And that man has been found. And a checkup on obamacare with dr. Zeke emanuel. Squawk box returns with all of that in just a moment. Predicting the future is a pretty difficult thing to do. But, manufacturing in the United States means advanced technology. We learned that Technology Allows us to be craft oriented. No ones losing their job. Theres no beer robot that has suddenly chased them out. The technology is actually creating new jobs. Siemens designed and built the right tools and resources to get the job done. Coach calls her a team player. Shes kind of special. She makes the whole team better. Hes the kind of player that puts the puck, horsehide, bullet. Right where it needs to be. Coach calls it logistics. Hes a great passer. Dependable. A winning team has to have one. Somebody you can count on. Somebody like my dad. This is my dad. Somebody like my mom. My grandfather. Im very pround of him. Her. Them. What is this place . Where are we . This is where we bring together the Fastest Internet and the best in entertainment. We call it the x1 entertainment operating system. It looks like the future we must have encountered a temporal vortex. Further analytics are necessary. Beam us up. Thats my phone. Hey. [ female announcer ] the x1 entertainment operating system, only from xfinity. Tv and internet together like never before. Waiting on the ecb. What kind of move will mario draghi make to fight inflation . Well find out. A checkup on obamacare. Dr. Zeke emanuel will give us his latest diagnosis. Plus, the man who invented bitcoin, newsweek tracked him down. Squawk box begins right now. Good morning, everybody. Welcome back to squawk box here on cnbc. Im becky quick along with joe kernen and Andrew Ross Sorkin. The futures have been indicated higher this morning. Dow futures up about i 33 points above fair value. Yesterday you said you saw the markets give back a little bit. That came after Massive Gains with the dow up 220 points. The tenyear note continues to yield to 2. 712. In our headlines this morning, we have a busy day for economic numbers. Even as investors look ahead to tomorrows february job report. We have initial jobless claims an revised Fourth Quarter gdp. Fourth quarter productivity i should say. Both out at 8 30 eastern time. Later in the morning, well be getting the january reading on factory orders. The crimeaen parliament approved a referendum to be held on march 16th on whether the region should become part of russia. No response yet from ukraines government. Yesterday, the Prime Minister said crimea would remain a part of ukraine. Directv is in talks with disney. They are seeking the right to offer disney con ten as part of an internetbased product that could be accessed on smartphones, tablets an other devices. Andrew. We spoke carl icahn just yesterday about the battle with ebay, now linked in cofounder reed hoffman is jumping into the debate. He helped engineer the ebay paypal deal. He had this to say. He said it on linked in. If we assume that icahn does care about creating longterm stockholder value, aas aa aas t insists then, the true issue here isnt what sort of shortterm pop he can engineer. The true issue is what conditions are most conducive. To paypal growing increasingly valuable over, say, a tenyear time frame. Also in the news this morning, Darden Restaurants cancelling an investor meeting slated for march 28th. The Company Behind olive garden, capital grill and red lobster. The Company Believes oneonone sessions will be more productive. Barrington Capital Group has been pushing darden to put more mature olive garden and red lobster into one company and its higher chains into another. Both have been pressuring the company to rethink plans for red lobster. Joe, over to you, because i wish i could be with you. I couldnt get the chopper in the air this morning. A poll his. I already explained to lea you would be doing this interview if you could pronounce the guys name. We didnt want to try that. Hes japanese. The story about bitcoin is a man named satoshi yakamoto. Lea Mcgrath Goodman joins us now. Even before i read this, theres a lot of intrigue even to get to this point, right . A lot of ground work. Well get to these quotes. This was like cia type stuff almost, right . Yes, the field of candidates was massive. It really was overwhelming. I had a team of forensic analysts helping me. Sharon sergeant and barbara matthews. He had written all these posts but nobody knew how to match up what he was saying. It reminded me. Before anyone knew that. Anyway, heres a couple of quotes from the story. He said im no longer involved in that. He wouldnt say what that was. He was referring to bitcoin. I cannot discuss it. He also said it has been turned over to other people. They are in charge of it now. I no longer have any connection and i guess you could put electirodes somewhere. He acknowledged it. He call the cops when i came to the house. And acknowledged it. We had a breakthrough moment. The dots were connecting but there were a couple of big voids. One of them was his career expertise. We could see clearly where family members his had a career path and yet we couldnt see what he had done. And his brother called me from out of the blue and said, hes been involved with major corporations and classified work and a lot of government classified work. And you will never get him to admit anything. Hell never admit. Why did his brother tell you that, though . Thats kind of shocking. If its classified stuff and i dont want anybody to know it, id be mad at it. Why does he need to be anonymous about this . The brother and him dont get along very well. He just called and ranted and hung up the phone. He didnt do an interview. As for why . People close to him have said that he has long had a mistrust of authority. He immigrated at a young age from japan. Not long after world war ii to be honest. Hes 64 years old. Theres a lot of distrust in the American Community in california, as you can imagine, after world war ii. He had other experiences that made him not trusting the authority. Is he a major holder of bitcoin, as the inventor of this stuff. We understand from the chief bitcoin scientist that he holds 800,000 bitcoins, a little more than that. Theyre estimating around 1 million. So he holds quite a bit of bitcoin. Whether he still holds it. Thats 400 million, right . Yes. It fluctuates so rapidly. Hes living in that house . What . And hes still living in that house with his 400 million in bitcoin . Yes. Hes still living he lives a humble life. Has really nice furniture. I guess whats weird to me, he said he turned it over to people. I thought the whole point of bitcoin is that nobody controlled it and its out there on its own at this point. What did you think . Would you buy bitcoin . Would i buy bitcoin . Even the Bitcoin Developers say they use bitcoin as more of a discretionary on the side, giving and saving and just, you know, more not for serious parts of their lives. Most all the Bitcoin Developers have bread winners elsewhere in the crowd. The chief scientist has a wife thats a professor. Did he actually write the code for bitcoin . You said scientists to help with this, right . Yes. He had a number of developers who stepped up and heard about the project. It was highlighted on cryptology blogs. People stepped up and offered to help when they heard about the idea. He was the leader of the project. At some point he decided to move on from it and he turned over more or less the master keys to just to five people. It is a lot of peoples project. It makes sense if you think of the guy who would come up with an idea like this, it would probably be somebody who is just like this who doesnt want to be on the grid who was nervous about a lot of things and thinks you need a different currency than the one manipulated by governments. I hadnt thought about it but it made sense. Dirty word, manipulated, that you just used. If thats your view of the world. Do we know why he got out of bitcoin, not so much as a holder but just being part of it and why he wanted to be anonymous . He never considered this was going to be as big as it became for one thing. If you look in the article, in newsweek today, theres a list of all the Government Agencies involved. I can see why anyone whos, you know, looking to relax, hes a great lover of technology, nature, engineering and he has a lot of other hobbies. I dont think he wants to get involved in all that. As you said he had an aversion to government and authority. Now they own it all. Its almost like backfired that now hes even closer to government. Is this his fake name that were using or real name. Thats another good point. He changed his name at the age of 23 to dorian. To what . Dorian prentis. He goes by dorian nakamoto. Do we know the genesis of dorian . There must be a literary reference or Something Like that. It would be interesting if it was dorian gray. Does he have a picture in his attic . He looks pretty young. You know, hard to imagine hes 64. Crazy story. Another story just coming out this morning about this american ceo autumn i want to say redkin. Committed suicide in singapore back in february. To me, between mt. Gox going out of business, between this suicide, between a couple of these other exchanges, and then you meeting the head it just seems like were in this sort of bizarreo secret society. If youre not going to step up, sorkin, im going to call ben mezritz. Someone should write this book. This is a ben thing. He gets all these offers. What about that. You have an author sitting next to you to write this book. My hunt for the bitcoin founder. Yes. Yes, it looks like bitcoin has claimed its first victim in singapore. I believe i dont know if andrew you want to let me know was she found in her bathtub . Excuse me. It said she was found hadder in bathtub on the 28th of february. Yes, im reading the same story. On february 26th she was found. They said it was an unnatural death. They havent said much more than that. But they also say no foul play is suspected. Im assuming that means that it wasnt a murder, it was a suicide of some sort. Unclear the company itself saying that there werent problems with the exchange but other people saying there might have been problems with the exchange. It just seems that were in some kind of i feel like im in a movie of some sort. A novel. It does sound like a novel. It does sound like a movie. Imagine a man saying im going to invent a currency, go to my office and do that now and pretty soon banks and hedge funds and the Financial Times and cnbc will all be talking about it and investing in it. You would call that person crazy. Yet this is exactly what happened. This is much more than a Science Fiction novel. You wouldnt believe it if you read it. Is there a sense of what the inspiration was for him . Finding him unto himself is the story. Is there a back story in terms of how you think he got to that point . He did it because he could. He seemed to enjoy the problem solving aspect of it. I dont know if he thought that he would be pulled into the politics of it. I know that he definitely has some very strong views about politics. And i read a number of things that hes written, not just under both names. His world view is very unique. He marches to the beat of his own drum. What do you mean . Hes a practical, curist philosophy. He definitely has thought about money and secrecy for a very long time. And what was your you said there were a lot of dots. What was your first dot . How did you start . What was the first thing you did to try to find him. The first big thing is when we found in the archives when there was a nakamoto that changed his name. We found other posts from him, not just under Satoshi Nakamoto but the name he used now. From there it was does he have expertise in something that would allow him to make bitcoin. That was a big void for a while. Then we found an Unclaimed Bank account from an American Express Nortel Networks account. That made it seem like he worked at nortel at one point. Seemed like a good lead. His brother called that was a big breakthrough. So on and so forth. Just these series of events. I dont think he would have admitted to anything if the cops hadnt been at his house. They asked me, what do you want to say to this man . He thinks he may be in trouble, he doesnt want to talk and hes worried. This sounds like true detective. Exactly two weeks ago i was in temple city. Were you up nights, poring over weird stuff . Yes. Its an obsessive project until its done. Even until the moment we met i didnt know what to think i was ready for anything or for a cold lead to be honest. Everything was leading to him. Are you sure it was his brother who called you . Yes. Yes. He said you had the number . I talked to a large number of those close to him. They all sort of corroborated each other. I just want to say im really glad to mark the newsweek relaunch. Yes, congratulations. Finally back out in print. This is the first time im seeing it. I grew up in newsweek in my house. I read it obsessively. It had all this politics its back in print. Im amazed. Im still amazed. Jim, i think hes still blown away, hes our editor in chief and he led this whole effort. Congratulations on the story and being back in print, too. Thank you. Thanks for having us. Great to have you. Andrew . Awesome story. Congratulations to jim, who was my former editor at the new york times. And also helped with two chapters on too big to fail. Next, less than 30 days to sign up for obamacare. Up next, dr. Zeke emanuel who advised the white house on that legislation when we return. Welcome become, everybody. Lets take a look at the futures right now. So far this morning, things have been in the green. The dow is up over 40 points. The nasdaq is up by close to 6 points. Andrew, ill send it over to you. Thank you for that. So far, more than 3. 5 Million People have signed up for private Health Insurance plans through federal and state exchanges since the affordable scare act was passed. Dr. Zeke emanuel has a new book out on health care in america. It includes a behind the scenes look at drafting the Affordable Care act legislation. Zeke joins us now. Were thrilled to have him. Good morning to you, zeke. Nice to be here. Thank you. Lots of questions from this book and in the news. Lets start with the news and i want to get to some of the issues in the book, very provocative views about what the future will look like. On the merits of where we are today, given we just had this announcement yesterday, at least parts of obamacare will be delayed again through 2016. I think its a minor part. This is private insurance plans. People who have been on them continuously can hold them for a couple of more years. It affects, according to the rand think tank less than 500,000 people in america. I just dont think this is a major part of the bill. We get wound up in a few very important stories and some people who find that they cant afford new insurance or dont have havent explored the exchange. Lets talk about that transformation. One of the predictions you make in this book is the end of employersponsored Health Insurance. You say that could happen by 2025. Fewer than 20 of workers in the private sector will receive traditional employer sponsored Health Insurance. It seems to me we are suggesting to either a single payor or government sponsored medical care. No, andrew, dont were still going to have the market. Look, right now, private employers like mine at the university of pennsylvania, theres no law requiring them to give Health Insurance. They give Health Insurance because i would have a hard time individually getting Health Insurance and its much cheaper for them to provide it because of the pooling effect. Now you have an exchange which will have Good Health Care plans, allow people to choose at various tiers and for people who cant afford it youll have subsidies. That allows big employers to say, look, ill give my workers a wage increase or a voucher. Theyll go into the exchange. Theyll decide which Insurance Company they want, how much they want to pay and theyll do it themselves. Now, for those of us who are older, this is a little awkward. Weve been used to our employer doing it. Take my 30yearold daughter for her, she buys everything on the exchange, whether its computers, clothes, shoes. This is going to actually allow her to decide which Insurance Company she wants, what combination of price, deductibles, network and i think people are going to like it. Remember, most people who have employerbased coverage dont have a choice. Their employer tells you this is the plan youre getting. On the exchange theyll have a lot more choice. I think people are actually going to like that. Zeke, i just thought of something. I saw your interview with one of our competitors. You have competitors . You are the chiefs. Thats true. In terms of saying, you know, youre quoted as saying you dont need a doctor for everything. I agree with you on that. If you cant swab the back of a throat and send it to someone and figure out whether you have strep, theres a lot of things where you dont need a really highpriced athome pregnancy tests, we have athome hiv tests. I got you on that but would you concede overall if many of these things are taken over by Nurse Practitioners, there will be a rare case where maybe a doctor would have picked up something that would have been important to know. Isnt the quality even though its going to be cheaper and we need to do that, bring down the cost of all this, wouldnt you say the quality will go down a little bit from replacing doctors with Nurse Practitioners wherever possible . No. Absolutely not. Really . I think what youll do is free up doctors instead of doing a lot of paperwork and a lot of stuff that could actually be done better by other people, to focus on really important cases and the complex ones that dont fit right into the box, that take more time and thinking. Remember, part of the important thing is were going to shift what doctors are doing to the high end where theyre really valuable. I would also say, you know, the data actually at the moment, after four years of the Affordable Care act is, weve had a dramatic improvement in hospital acquired infections. In other mistakes that show that when you actually involve the whole team and really focus on improving the quality, we can do dramatic things in this country. One of your predictions is you say this 2025 you say threeyear medical schools and shorter residencies. Half of medical School Clinical training will be outside of hospitals. Which also goes to the quality issue, though. I went to medical school. I see the medical schools today. Im a faculty at one. We can train people in the preclinical work in a year and a half or a year. They do a year at yale and duke today. Does anyone think a yale and duke graduate is not competent . Then two years of the clinical rotation where you get to know patient care. We can graduate people like that now and theyre perfectly competent. And the residencies, look, more than half of care is going to move out of the hospital. Right. We need to train our doctors in that kind of care so they understand how to provide it. Right now, theyre only trained in hospitalbased care when they leave a residency. They dont do well in the office setting. We need to improve that. My scheme actually improves it much better. Okay. Zeke, thank you for that. The book, reinventing American Health care. We appreciate you coming on. Congratulations on the book. Thank you very much. Joe . Bank of england left rates unchanged. Now were waiting on the ecbs decision. Plus, a squawk box exclusive, jamie dinan of york capital, find out what hes doing right now. Thats at 8 00 a. M. Eastern. Opportunities arent always obvious. Sometimes they just drop in. 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. So our business can be on at ts network for 175 a month . Yup. All 5 of you for 175. Our clients need a lot of attention. Theres unlimited talk and text. Were working deals all day. You get 10 gigabytes of data to share. What about expansion potential . Add a line, anytime, for 15 a month. Low dues, great terms. Lets close new at t mobile share value plans our best value plans ever for business. Coming up, fresh data on layoffs. And robert frank has his hands on a new report detailing the hottest cities for the richest real estate buyers. The answer to all that when squawk box returns. [ indistinct shouting ] [ indistinct shouting ] [ male announcer ] time and sales data. Splitsecond stats. [ indistinct shouting ] its so close to the options floor. [ indistinct shouting, bell dinging ]. Youll bust your brain box. All on thinkorswim from td ameritrade. Where we e ntntertainment. Wealit the x1 entertainment operating st beams my one. Y. Y one. My one. Er1 entertainment opating stem beams tv andnet ontogether li. Y. Y one. Welcome back to squawk box this morning. Im Andrew Ross Sorkin in new york. Lets get you through some of the morning headlines. Darden has canceled investor annan lift meeting slated for later this month. The company says it will be meeting individually instead with analyst investors. Darden has been under pressure from activist shareholders who want the company to take bolder steps to improve performance at its chain of eateries like olive garden and red lobster. Also, take a look at shares of staples. The retailer missed estimates with its latest earnings. It also unveiled a 500 million Cost Cutting Program which will involve closing 225 stores by the end of next year. Ebay ceo, john donahoe, is telling reuters that the most activity shareholders have assured him they support his effort to resist demands by carl icahn for a spinoff the paypal unipit donahoe says 16 of the 20 most active shareholders in ebay favor hanging on to the fastgrowing unit. Yesterday on squawk box, carl icahn giving us his reasons for his push to split the company. You dont need to be a tech genius to understand that ebay has a company, paypal, that would do better without ebay. I said that with reynolds and nabisco. We saved motorola by splitting it up. I dont think donahoe should be the guy running or having anything to do with paypal. This will be some kind of drama watching it back and forth. The latest challenger report is out, it shows that the nations employers planned to slash 2,000 to 4,000 jobs last month. Join is us now, to parse through the numbers, john challenger, ceo of Challenger Gray and christmas. Lets walk through the highlights as you see them. We saw jobs drop in the month of february, very low totals. Down now for the year. First two months over 9 from what we saw in the first two months last year. The pace of downsizing low. Companies are not under pressure to cut jobs. We are seeing the cuts are in the kinds of areas where Companies Cut during periods of xmangs, not just because revenues are doing poorly. I want to get to the industries where were seeing to the extent we are seeing cuts where they are. Also more importantly we had just got adp numbers, 139,000 was the number. Well get the jobs number tomorrow. Given your report, how do you think that will play tomorrow . I do think we need to see a return to heavier job creation or there will be concerns that the economy is hitting some kind of slowdown period. We havent seen that 200,000 job month now for two consecutive months. When we expected it. Among the industries that will be concerning, an industry that much was this Program Every morning, the Financial Sector experiencing what you say is the heaviest job cut activity in the february, announcing close to 10,000 job losses. Whats going on . One of the most interesting things there, there were a lot of cuts in mortgages, the mortgage areas and banks, theyve been slowing down in that area for some time. The new most interesting cut or reason for cut was announced by jamie dimon. That was they were cutting their branch banking, theyre moving to an optimization rather than Branch Building scenario. Were seeing that in retail in a big way. We saw cuts from best buy and sony cutting stores. I think were entering this period now, its going to be increasing kind of theme over the next few years, the kinds of companies that Service Consumers have too much real estate, whether its banks, or retailers, theyre now coming to term terms in a new way with the how consumers buy goods and services. When you think of retail, for every job that gets lost in the store, you know, how many jobs get taken away or actually get gained on the flip side . Inside some warehouse somewhere . Because you know, amazon as advanced as it is and robots that are involved, there are human beings that have to pack these things, they have to get on a truck and get to your house. There still is a long line of potential employment opportunity. No question that the job shift from kind of the outside jobs, instore jobs, retailers, clerks, people in the store to jobs in the warehouse and in transportation. But once the websites are set up, once the technology is set up, you really dont need as many people. So no question these operations do need fewer people long term. You look at amazon versus walmart. They need fewer people in the economy. I never asked you this before. We talked about it on the show but im not sure with you. Theres this book out, the second age of the machine how well outinnovate ourselves in terms of jobs. Where do you stand on that idea. Every era changes the kinds of jobs where people work. Well move away from the kinds of jobs we saw it in the 80s and 90s with manufacturing, fewer people in the factories. Overall you dont think its going to decimate the work force or were at a paradigm shift. It used to be the tv would kill the radio. Everything managed to still continue. Longer term . Im not buying that. I think that well move more people to inservice jobs, more health care, more teaching and coaching. More personal kinds of Service Types of roles. I think the economy shifts to what Technology Takes over an area, people then provide their work, move into their work areas in new areas. I think it will be service in the future. John, thank you as always. Thanks. Joe . Never different this time, andrew. You should know that by now. Never different. Same with the weather. This has all happened before. The corporate buzz stories put into perspective, ebay, tesla, apple and more. And later, where do the super rich invest in in terms of property . We have a list of the top cities in just a bit. Squawk box will be right back. S could save you fifteen percent or more on car insurance. Everybody knows that. Well, did you know that when a tree falls in the forest and no ones around, it does make a sound . Ohhh. Ugh. Geico. Little help here. I needthats my geico Digital Insurance id card gots all my pertinents on it and such. Works for me. Turn to the camera. Ah, actually i think my eyes might ha. Next Digital Insurance id cards. 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[ whirring ] [ train whistle blows ] she makes trains that are friends with trees. My mom works at ge. Lets look at the futures, up 30 points right now. A flat session yesterday. About 1873 on the s p. We call that 23 s p points above the close. Were up for the year. Up another 2 today or so. Carl icahn called into the show yesterday. He had a lot to say about ebay. Rob cox, the global editor and cofounder of reuters breaking news. Carl icahns point is that paypal should be split off. He says its the worst Corporate Governance hes ever seen. What do you think . I think the Corporate Governance is a side show. I dont think thats the main people should be looking at. Would the companies be worth more if they were split up . In 2007 we wrote that paypal would be more valuable on its own. That argument still seems to me to cut a lot of weight. Thats where he should be focusing. John donahoe has been out and about talking to people. In fact to folks yesterday, was saying that it should be this is the question they ask themselves every year. They arent satisfied yet that splitting up would ye crate more value. I still think there is an argument for doing so. One of the things im thinking, why not create a tracking remember the tracking stocks. Those were screwy, though. They were terrible. They had bad governance. You got a virtual economic interest. If its about value, why not see what the market suggests. Rob, isnt part of what carl suggesting structurally, you could get real focus. If youre getting a tracking stock youre shuffling paper. Absolutely. One of the arguments they make, they say they get 30 of new customers to paypal from the ebay auctions business. That of course implies that 70 are coming from somewhere else. That 30 number is shrinking every year. I think thats true. You could do a 20 put 20 on the market. You then still have control. Because i think theres obviously a concern about this thing being bid for if they put it out there by a visa, mastercard or whoever. If they had sold it back in 2007 instead of splitting it into two separate stocks, they would have left a lot of value on the table. As a shareholder you would have gotten both stocks. You could have held the auctions business and if its split up its one thing. If they sell it, you have potential value. This is the argument a shareholder will make, i want to own the fast growing payments business. This is the hot stuff. Everyone wants to be in this business. Not that the auctions business is bad. Its ecommerce and actually a larger, by value, business at the moment. I think thats the other way to think about it, rather than splitting off paypal, isnt it actually paypal splitting off ebay. Interesting question. Lets talk about apple. Which was another target of icahns. He seems to have backed off, says tim cook is doing a great job. We did see the departure of the cfo this week. What does that mean . Its interesting. I pulled the camera back as it were and thought what does it mean that Peter Oppenheimer is leaving . Hes been there for a very long time. Hes been managing a treasury of 170 billion of cash, nearly 500 billion market cap. Hes going to the most conservative establishment board ever. This is all orchestrated. Hes going to goldman sachs. It just struck me this is the difficulty that apple has, one of my colleagues wrote a piece about this, which is that they are a big, big company. But they need to think small or they need to think nimble, need to think creative destruction. They are the destroyer, right . In the r d part of what they do. New products, iterations of their existing products, tv, wearable devices. Thats really hard to manage that big company feel when you are actually out there trying to be the disrupter. And i think thats why you look at the company. Weve been wrong a couple times. I think we once wrote that it was the first trillion dollar company. Because by all rights it should be. The p is like 12. You adjust that for the cash it may be lower. The market is on 16, 17, 18. But i think that the reason is, people arent sure theyre going to be able to innovate. Thats been a question dogging it for a while. Yes. I wouldnt get to that trillion. Weve gotten to a trillion a bunch of other times. Cisco. Yes. Ge i thought at one point. They were all supposed to go to a trillion. They took a left turn at albuquerque on the way there. Apple is exactly what youre saying. People think whats next . Is it a watch, a car, is it a what is it going to be . And how do you get that group of folks, you know, in that r d lab or whatever it is, how do you get them to think about disrupting and innovating. Who doesnt own apple that doesnt love it. Everyone loves it. Whos left to own it . Well a lot of people have to buy to from other people to get it to a trillion. The marginal buyers, the retail guy, isnt 100 sure that it should be any more than 12 or 15. Retail is not going to do it. How many institutions are already there . Theyre all there already. What person is trying to track the average that dont doesnt own apple. If they came out with something that blew everyones minds. Like what . I dont know, the wearable device that you connect to your tv that lets you fly. The ecb decision is just out. At 8 30 mario draghi will put on his press conference to talk more about what they may be doing. Tesla, thats a huge question. How do you value this . You may think apple is undervalued with this p e rashirash ratio. The gig are entering a whole realm. They need to produce and manufacture 500,000 cars by 2020 even just to sort of justify todays market price. Right . Thats a lot to do. But the big bottle neck will be batteries, right . Right. Coming out and basically saying theyre going to be like, this 5 billion factory is all about reducing that bottle neck and that cost which is critical to getting people to actually be able to afford 500,000 of these cars. At the same time, they come out in this annual report and say by the way youll be able to eventually potentially be able to have a Battery Storage center in your backyard so you candice connect from the grid. Elon musk. Its a binary option, either going up or down. Not exactly very useful. The point is, its gone up ten fold since. I have my money on comcast as the next trillion dollar first trillion dollar company. Did you see this . Look whos against this. Glenn beck is against the comcast. Guess who else, the Huffington Post. When have glenn beck and Huffington Post against the time Warner Comcast deal. Its about distribution, isnt it . The silent middle is probably going to happen, hopefully. I dont know. Yes, yes, whether its a trillion dollar stock well, just wait there young fellow. Thats the only stock i own. Were not allowed to own stocks. For your sake i hope it is the next trillion dollar stock. That would leave serious upside there. Dont count out those guys. Rob, thank you very much for coming in. Thanks for having me on. His fund is up 14 annually since 1991. Find out where jamie dinan of York Capital Management is making money in an exclusive interview. Up next, hot cities for real estate. Robert frank will join us to talk about where the super rich are looking to invest and why. Squawk box will be right back. Ameriprise asked people a simple question in retirement, will you outlive your money . Uhhh. No, that cant happen. Thats the thing, you dont know how long it has to last. Everyone has retirement questions. So ameriprise created the exclusive. Confident retirement approach. Now you and your ameripise advisor can get the real answers you need. 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Know better sleep with sleep number. What is this place . Where are we . This is where we bring together the Fastest Internet and the best in entertainment. We call it the x1 entertainment operating system. It looks like the future we must have encountered a temporal vortex. Further analytics are necessary. Beam us up. Thats my phone. Hey. [ female announcer ] the x1 entertainment operating system, only from xfinity. Tv and internet together like never before. Where are the super rich buying up real estate . Cnbcs wealth editor robert frank joins us with details from this report. Are you global. This is global. Tell me. This is interesting. The number of people in the world worth 30 million or more has grown by 59 since 2003. There are 167,000 people worth 30 million or more. All those millionaires have driven up real estate prices in their favorite cities. Knight frank, the London Real Estate firm brings you about what 1 million brings you around the world. 1 million gets you 430 square feet, around 2,300 square foot. Geneva ranked five. Hong kong was the second most expensive market in the world where 1 million gets you 226 square feet. The number one most expensive market in the world, monaco, 1 million gets you one bedroom. But no taxes. This is based on economic activity, political power, knowledge and influence. London ranked first with new york ranking a close second. The study says in 20 years new york will be first. The favorite city among the superrich, hong kong will be third behind london. How do they know that . Theyre assuming de blasio does not get reelected. Well see. The people i talked to, they say new york is a bargain. Thats hard for most people to understand. Again, theyre looking at theyre not looking at just one city. Theyre looking at london, singapore, theyre looking at hong kong. Its cheap. You can combine it with a rule of law where the head of the country is not going to take your money. With great culture here and you know, a lot of people say that is why new york prices will go much further and will get closer to what were seeing in hong kong and monaco. When you first said what does a Million Dollars buy you, to do it in square feet is the way to do it. In the cities you mentioned it doesnt buy you much, doesnt really buy an apartment. Certainly not in monaco and hong kong its like you cant live in 230 square feet, can you . No. When i talk to the wealthy, theyre not talking about second or third homes anymore. Theyre talking about real estate portfolios. They want deverse ficti vediver diversification. People look at return on investment, you can rent an apartment much better in new york. A lot of these places except for once or two weeks a year or theyre getting income from it. They like that. Did you go to the 30 or 40. Are there other cities in the United States . San francisco . Yes, San Francisco is in the top 100 but very low. Again, most of these new millionaires are in the emerging markets. Its the chinese wealthy. No aspen anywhere . Aspen is also in the top 100. Thats not a big market for foreigners per square foot. The average price in aspen is over 6 million. The average sale price for a home. It has to be up there. I stopped looking at the top 100. Paris . Paris is up there. Got to be. In the top ten. Got to be in the top ten. Paris is a tough market. Theres a lot of people selling in paris. Because of their own de blasio. De blasio. Exactly. And to your point, when you look at the western markets, its tax driven. Taxes play a big part. All right. You are everything rich to us here. Everything expensive. You love doing this stuff. Yes. And you somehow youre not that bitter . No, no. I dont hate these people. All right, robert, thank you very much. Updates, new developments out of the white house. As it continues to monitor the situation in ukraine, the president has signed an executive order that authorizes sanctions on either individuals or institutions who threaten the sovereignty of ukraine. It also covers those who misappropriate state assets. In addition, the state Department Says it will deny visas to individuals who have threatened ukraines sovereignty. Things have gotten messier. Crimeas parliament voted to join russia on thursday. Its set a referendum within ten days on that decision an a dramatic escalation of events. The new Ukrainian Government in the meantime declared this referendum illegal. Its opened a criminal investigation into the Prime Minister of crimea, sergei askinov. Andrew has been reporting an assignment in new york city. Hell be leaving us now. In fact, i dont know he left us already. Supposed to leave at 8 00. I was going to say goodbye to him. We went to him. As you can see, its like i feel like clint eastwood. Talking to an empty chair. Anyway, we will see him tomorrow. Hes going to be in washington, d. C. Where he will be joined by Alan Greenspan and its jobs friday. Hopefully well have other movers and shakers in d. C. I want whatever shes got well go out with the tones of this song. This is the one youve been singing. When we return, our exclusive interview with jamie dinan founder and ceo of york capital. Lets look at the futures ahead of jobless claims and productivity data. Were up about 25 points. Well be right back. Opportunities arent always obvious. Sometimes they just drop in. 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. Mergers, acquisitions, an exclusive interview with jamie dinan of york capital. Why he thinks vodafone and at t could be the perfect connection. Everyone needs to look out, especially your smartphone. Meet the man helping protect your information from getting into the wrong hands. Everyone loves bacon but its even better in a bowl. Were turning bacon upside down. This sizzling story and the sweet smell of success are just ahead. Everything is better in a perfect bacon bowl. As the final hour of squawk box begins right now. Whoo whoo they sing that better than you. Did you know that was coming. No. No, you did not. Why dont they have on sirius examixm a pink floyd channel. I dont know. Maybe they havent authorized it yet. Make it happen. Welcome to squawk box, im joe kernen along with becky quick. Were up for 2014. Were just 30 minutes away from jobless claims data. Were also going to monitor Mario Draghis comments after the ecb left rates unchanged. That News Conference is expected to start in about 30 minutes. Almost exactly. A little bit less. In our headlines, secretary of state john kerry will be meeting with russians foreign minister for a second day today. He tried to encourage Sergey Lavrov to meet with his counterpart yesterday. Lavrov decleaned to do so. The courthouse has authorized sanctions against any institution or individual accused of interfering with ukraine and sovereignty. The new Ukrainian Government fought back and said crimea as a part of russia is illegal. Costco missed estimates as Profit Margins declined. This was a surprise. Weve been looking at the Monthly Sales figures the whole way along. Sales number were pretty good. It was really the Profit Margins that were the big concern. That was because there was so much discounting taking place after walmart slashed prices early and unexpectedly this holiday season. Manhattan District Attorney is expected to announce criminal charges against several top executives of dewey and labeouf. The firm once employed 1,300 people with 26 offices around the world. Our next guest is one of the hedge fund industrys biggest names. He joins us right now with an exclusive interview. Joining us is jamie dinan. York has 21 billion in assets under management and was up 21 last year. An an annualized basis, they came up 14 since its inception. Great to have you. Great to be here. You are somebody weve been wanting to talk to, wanting to sit down with, because you look at things in a great way. You have a phenomenal track record. Why dont you tell us about what youre seeing right now. People have been concerned about the situation in ukraine. Are you . Whenever you hear boots on the ground you have to be concerned obviously over the weekend we heard boots on the ground and you saw reactions worldwide monday. Hopefully we dodged a bullet, no pun intended on this one. It seems like things have calmed down a bit. I would caution, this is a very emotional thing. People are looking at this clinically. I think theres a lot of emotion. I think putin feels strongly about russias role in the world. Dont discount the what i would call the volatility of emotions. If we take geopolitics out of the situation for the moment because something could happen anytime anywhere, you have to realize that, if you were to take that out of it, wheat do yu think about where the market stands . I think what you saw last year in 2013 was a major move up. Most of the western economies markets. Most people look at that as kind of what i would call a bull market, a beta move. To us we saw less of a beta move and more of an engagement move. We saw not just investors reengage. Were seeing companies reengage. While last year you had a major market move, this year youre still getting enormous amounts of core productivity and deal flow. Individual stocks are performing quite well. The average may be roughly flat, slightly up for the year but you can have a lot of winners relative to the market thats what were seeing right now. So thats the fancy way of saying its a stock pickers market. 14 is unreal since 91. I wonder about the beta. Have you had down years . Thats after fees, too, right . Its after all the fees and expenses. Yes, we have had down years. Thats probably a good thing. No one would believe the numbers if you didnt have down years. Are you down 30 and up 60 or would i have to were much more i would call the tortoise versus the heir. Flat to down. Other than 2008 which was not a good year for most people. We lost about 25 . 25. Okay. Our typical year would be a single digit down year. I think weve only had two if i remember right. Only two down years . Tech bubble and september 11th, all that stuff. A typical year is going to be in the 20 , 30 type thing on the upside. Wow. Just dont give it back. I find the trick to investing is try not to give too much back. You always have winners. Okay . Every day you wake up and you dont go to work say i want to find losers in my portfolio. You want to try winners. The key is make sure your losers dont drag your winners down too much. When you start losing you sell them . You i dont have to have stop losses, discipline. Every market is different. Because you often times have to differentiate where the markets are telling you youre wrong versus just the market is repricing correctly. We have disciplined stop loss rules. We tend to add to our winners. We dont add to our losers. Over time its worked. I mean, thats five years for a double rule of 72. The power of compounding is phenomenal. If you can just hang in there, this is what everyone should try to do. We wouldnt need to worry about pensions. Or any of that stuff. You have to work your butt off. Money finds you, too. Whats the size now . Just over 21 billion today. Given we started with 3. 5 million, its a great country. Thats awesome. Great. Thank you. Lets talk more about the macro. Were going to talk to you about stocks that you like individually in a bit. Id like to hear more about your investment philosophy, too. Weve been talking to warren buffett. He talked about how individuals could put money in an s p Index Tracking Fund if they dont know thatch about it. If you do know more about it, where would you be looking, the areas, arenas that are some of the best investing areas right now. With all respect to warren buffett, when you look at on the averages, he probably is right. Theres a lot of leakage in fees. Theres a lot of average people in every industry, not just money management. The key, quite frankly, is to try to find the good ones. Hes one of the good ones if you invested in Berkshire Hathaway. Obviously he has all his money in Berkshire Hathaway because he believes in that. Myself, my partners, we have over a billion dollars of our own money invested in our own funds because we believe in that. Theres a lot of activity, corporate deal flow, Companies Taking advantage of debt. Debt is cheap, relative to equities. You see an enormous reengagement. Companies run by ceos who are like the proverbial generals where they are fighting the last war, the last war was the Global Financial crisis. Now five years later, yao youre realizing the world is not coming to an end. Europe is not going to blow up. I only have a finite amount of time to create value. Debt is cheap. Theres opportunities out there, lets invest, whether its buying other companies, investing in bricks and mortar and youre seeing that take place. Thats why youre seeing growth and the markets reacting so strongly to the upside over the last roughly 15 months. Is the u. S. Market your favorite place right now . You know, it is our favorite place if you looked at where our dollars are invested. Were majority invested in north america. If you look on the margin were increasingly moving into the european space. Originally it was a european credit. Keep in mind the european Banking System is nowhere near shall we say through the crisis. A lot of the Northern European banks are reluctant to ren to the southern peripherals, greece, spain and italy. We have a big office in europe and london. And theyre really, really busy. Theres a lot of stuff going on. Today i was on the way over here and i was on my blackberry looking at the bloomberg news. One of the big headlines is vivendis sfr, a mobile telecom unit, theres a multibillion dollar bidding war for it. There was they had a potential sale, weak telecom showed up with a 15 billion cash deal to compete with this other company it was trying to buy. Youre getting bidding wars in europe by european countries. Its not just u. S. Companies moving to europe to take advantage. We think european equities are apples to apples still less expensive than the north american counterparts. There is some growth there. Their existential crisis is behind them. We think europe is 6 to 12 months behind the u. S. In terms of corporate deal flow. You were on your iphone looking at cnbc. Com. You were on your iphone looking at cnbc. Com. Blackberry . All the kids gave me a hard time. Youre a dinosaur. The problem is every time i try to type on my iphone i keep missing the keys. Same problem . 2014 dictate. You can dictate. Its beautiful. Youll send funny messages to people. Ill show you the keyboard i got to put on to your iphone. Is that the typo thing . Theres a side one, too. Im upgrading to the new one. Well exchange Christmas Cards. Okay. Well continue this conversation. After the break, jamie dinan will talk more specifics. Later this morning, were going to talk bacon, bacon, bacon. How one mans love for salty meats have talked into a product that has made more than 2 million bacon bowls. Thats a lot of bacon. Have you seen these things . Blah . More bacon than i put on a blt. Jane wells will join us with that story. As we head to a break, check out the squawk box market indicator. The futures are indicated higher, dow and the s p in the green. Well be right back. Return on investment wall isnt a street. Isnt the only return im looking forward to. For some, every dollar is earned with sweat, sacrifice, courage. Which is why usaa is honored to help our members with everything from investing for retirement to saving for college. Our commitment to current and former military members and their families is without equal. Just one second. Lets get back to our special guest. I want to read this, dictate it to you. Hes teaching jamie and i together. James dinan, founder, chairman and ceo of york capital, were going to continue our interview now with jamie. My first question is how many really good people, better than you, at doing this do you have at your company where you sort of trust them to pick the situations that are going to deliver the 1 every year . Now read that. The nice thing about york is, i have a lot of partners. Well over a decade and the nice thing is, when the students pass to a teacher. The main reason i taught so many people what i know. Your own stuff . The stuff you learn by making mistakes, quite frankly. Whats the three top things that you would tell me if i wanted to try and do this . If in the big picture quite frankly it is focus on liquidity so you can get out when youre wrong. Be diversified for the simple reason you never know where the dangers will hit. Long and short, different countries, different Asset Classes . You just want to have no one position that can basically damage you or take you down. You always want to be in business tomorrow. How many positions would you need them . 100 probably. No. Less than that. 50 to 60. Make your position size more a function of not how much you can make but how much you can lose. Manage the size based on downward loss perspective, not upward potential. Its the losses that will hurt you. As i said at the beginning, everything has upward bias. Thats what you do and thats what youre looking for. You can get hurt and you cant get out. Leverage, if you have too much of it, quite frankly you lose control of your destiny. You have to sell. More importantly, somebody is elle it telling you youre telling the numbers you actually mention that youve done, weve done on average with no leverage, which i personally think im most proud of. If things went right you could do done 25 . The down side is up 3 . You never know what tomorrow will bring. Combined with this you probably Want Companies that are in unique positions that have great management . Then you do all the other normal stuff after those three overriding principles. But then you look at the fundamentals of the company. You do. We tend to be specialized. We specialize in inventdriven investing which includes equity and credit. Try to spend more on the equities side on this particular, you know, program. And basically what were looking for is companies undergoing extraordinary change. Think of what we call in play. And were looking to predict whats going to happen tomorrow, is there a value gap . Is the market going to close that gap . Its very much investing, not looking at your socalled proverbial dashboard but through the wind shield, where is this company going, knowing there will be a series of events that will prove you right or prove you wrong. You dont have inventory that does nothing. You can hedge that out or specific alpha shorts. Are you comfortable giving us some of your favorite positions . Sure. Maybe ill talk a little bit about whats going on in europe quickly. A couple european positions running out of our london office. We like activism, were not activists, we are active investors and we actually look at what investors do and particularly activist investors to get companies to focus on shareholder returns. Ideally sometimes we can be in these names even before activists surface. Denmark, theres a big danish bank called donskabank. This bank moved a lot. But last year, an activist scandinavian player in europe, removed the ceo, brought in a new guy. The new mandates are get the profitability of the bank up. This stock trades about back value. Its up 0. 8 times book when he took the job. Getting along with noncore markets, places like ireland, to focus on the home office, denmark. The Scandinavian Bank will trade 1. 3 to 2 times book. They get up, this is a mandate into the 13 to 14 range, which we think they can do. Youre going to be looking at a bank trading 4 or 5 times trade book in the next few years. A similar bank in holland, ing, you may know the old ing direct here. Theyve sold all that. All they have left is a dutch bank, Insurance Company. Theyre spinning off that Insurance Business this summer. Pro forma, we think theyre setting the bank up for less than book. This is easy, we see 20 , 30 really this year. Almost everything basically. Can we do some numbers . Do you have to be anywhere . Can you hang out . Sure, sure. You dragged me out to new jersey, i can definitely stay. I saw the line to the gw bridge back. No rush. If you make any comment i wonder if christie was blocking it. Dont say anything about armpits or dove soap or any of that either. Coming up, another piece of the jobs puzzle before tomorrows big number. Jobless claims as well as revised productivity. How many mistakes were on siri . None except you said the whole thing into the address part. Every word was perfect. You can dictate. He can teach us how to do this. You can dictate. The whole thing he said wasa in general people say that about me. Thank you. Later well talk thats about the last thing they say. Mobile security and phone hacking with the founder of lookout, a disrupter is fighting to keep the information on your smartphone start and out of the wrong hands. Well be right back. Humans even when we cross our ts and dot our is, we still run into problems. Thats why Liberty Mutual insurance offers accident forgiveness with our auto policies. If you qualify, your rates wont go up due to your first accident. Because making mistakes is only human, and so are we. We also offer new car replacement, so if you total your new car, we give you the money for a new one. Call Liberty Mutual insurance at. And ask us all about our auto features, like guaranteed repairs, where if you get into an accident and use one of our certified repair shops, your repairs are guaranteed for life. So call. To talk with an Insurance Expert about everything that comes standard with our base auto policy. And if you switch, you could save up to 423. Liberty mutual insurance. Responsibility. Whats your policy . When we come back, we have key economic numbers that could move the markets. We have jobless claims and productivity numbers that will be out, plus, jamie dinan stayed here. Hes with us and hell talk about some of the top picks right after we give you though numbers. Take a look at where the u. S. Equity numbers stan. Dow up by 41 points, s p up by 4. 5. Squawk box will be right back. Tdd 18003452550 trading inspires your life. Tdd 18003452550 life inspires your trading. Tdd 18003452550 where others see fads. Tdd 18003452550. You see opportunities. Tdd 18003452550 at schwab, were here to help tdd 18003452550 turn inspiration into action. Tdd 18003452550 we have intuitive platforms tdd 18003452550 to help you discover whats trending. Tdd 18003452550 and seasoned market experts to help sharpen your instincts. Tdd 18003452550 so you can take charge tdd 18003452550 of your trading. Welcome back to squawk box, everybody. Were about a minute and a half away from weekly jobless claims and productivity and cost numbers. Well be waiting for those number. In the meantime, we have an extended period of time with jamie dinan. Well talk about specifics right after the numbers. Beforehand, what do you think about whats been happening with the jobs picture, the weather, the economy, how do you try and figure it all out . Its tough with the weather. I really thought we would have a much morrow bust economy january, february, most numbers. Most of the numbers are coming lower than expected. At some point its not the weather. I think theres going to be a degree of deference that the weather has a huge impact. Things will catch up. Im still updata, though. I think everything is looking more and more we growing the economy, engage economy and jobs should follow. If we get a lousy jobs number tomorrow, a government jobs report wouldnt surprise you . I think people are expecting an okay number. If its lousy, people will start asking is there more to it . Then there will be a view that janet yellen, the fed will come to the rescue, bonds will go down, in other words, Interest Rates will drop. People are looking longer term. Id be surprised if it was a lousy number. Adp was worse than expected but ism was the disastrous number. We get the jobless claims in 15 seconds. Rick santelli is standing by at the cme in chicago. Steve liesman is in studio, ahead of these numbers, the market again, looks like its fairly upbeat. Dow futures are indicated up above fair value right now. Lets get to rick right now. Fourth quarter final productivity nonfarm, of course, is 1. 8 . That is not the 2 plus were looking for. Its close, close, to half of the 3. 2 that we had on our last read of the last quarter. This is a dispoiting number. Unit labor costs dropped 0. 1 . Jobless claims, for the most recent week, they dropped a lot. Because we revised last week 348 to 34. That isnt huge. Then we take it down to 323,000. So were down 26,000. Thats rather significant. And of course, thats never bad news. The real issue is whether we actually create jobs and we put the unemployed back to work. Continuing claims, 2. 9 million. On the chart right now, one of the issues that many are paying attention to is if you look at average productivity, starting in early 2011 to our last read not including what we just put on the screen today, that averages a little over 1 . The historic average going back two or three generations is closer to 2. 5 . This is an issue to Pay Attention to. And we will continue to monitor how the new read, of course, may slightly lift that somewhat soft longterm average. Back to you. All right. Rick, thank you. Checking the markets on this news, weve been up most of the session. We continue to look a little bit better for this morning. Steve liesman has been its hard to do you see what youre doing . Im pouring, pouring. Youre pouring. Im interested pouring through. Dont you pour over . Its the wrong preposition there. Go ahead. I mentioned what rick talked about, the difference in productivity compared to what its been. I think, rick, its a little high. It was 2. 5. Youre definitely right, things have stepped down. Theres a big debate out there. I dont know if our guest host has thoughts on this. The longrun productivity will be lower than it had been in the past, which is a little weird. Think about wheres the devices . We have all the devices, spending all the money on this stuff, all the money on connectivity and this. Wheres the productivity . It should show up in a couple places in wages. It doesnt show up there. It doesnt show up also in gross Domestic National product. So our guest host here, jamie, do you have thoughts on that . Is the long run outlook for the u. S. Economy in your opinion less than it had been . Thats a tough one. Okay. You know, you have to be at the end of the day, despite though, i recall nuances, you have to be bullish, on a relative context on the u. S. Economy. Its still the most vibrant, most dynamic, Creative Economy committee world. I i also think productivity is hard to measure. You have to keep in mind, its hard to measure. Productivity on the service side of the economy, the majority of this country now, is much more difficult to grow as opposed to classic manufacturing side. But when you look at take becky and i were talking about cars, blue tooth, sirius xm radio and stuff, today whats really happening, though, is this productivity, the things you can do, you can do so much more, i dont think you measure. The quality of life is improving. You cant measure it. I dont think you measure it. Theres an email chain going on between the guys that wrote the book second age of the machine and Robert Gordon at northwestern. Gordon is a k thats going to mean lower growth in the United States they thinks thats the investment thesis he thinks people ought to follow. You know the guys, we are them on from second age of the machine, sometime in the future the machines will make the machines that make the machines. Their collective knowledge will be more than a billion times all of human knowledge. Its not showing up in the data, though. All this grade advancement, jamie has an interesting concept. Its 2014. This is 2040. If i can add, one thing, listening to you, everybody who went to college and studied economics, they all learned about the reverend thomas malthis who had a beautiful plan that man was doomed because the population was going to grow faster than food. It was not a nice picture. In fact, it was pretty bleak. Obviously ricardo had a different view. Productivity kicks in, things happen. Look at the United States today. Okay . Were looking at having a deficit this year of like roughly 3 of gdp. A couple of years ago it was 10 plus. Everybody thought we would never get out of those deficits. Things are not static. Maybe even you two i never thought wed be where we are today. Things are not static. Great point. Very quickly, guys, the model i ran this morning, it may be a double digit number, the model that i ran. Which is not the most reliable number out there. The one i ran is a double digit. High double digits. How did the market react to that . Double digit gains. A double digit number, not even 100,000 on the jobs report tomorrow. Less than 100,000 . Yes. I think the mark set expecting probably less than 100,000, expecting high double digits versus low double digits. Rick, whats up . Id like you to ask our guest, i didnt find his explanation for the lack of productivity very good. I think if you dont get a good answer to it, you end up like japan. Some of the new research i see, everybody trying to explain the 25 years of malaise, it really is a compounded lack of productivity ultimately playing out in the real time. And the second issue is, as far as the deficit hes talking about, i agree, its smaller but only because it was so much bigger. Were now finally getting in the range of a budget deficit, 450 to 600 billion. Thats in line with previous administrations prior to 08 and the cbo doesnt have it ever going into surplus. The real issue is, youre adding smaller amounts to the National Debt. Id like to know from our guest why thats a good thing. Even though it has improved. Because of mostly energy which is outside the realm of policy anyway. Okay. I mean, thats the National Debt continues to grow, right. Its going to always continue to grow. Unless we have a surplus. Unless you get bill clinton president again. We may have a different clinton. The key number, though, really, is debt relative to gdp and debt relative to the growth of gdp. If you look at the numbers that came out just i think earlier this week, that theyre talking about, this going down to by like 2018, 2019 if obama gets his policies it would go down to 1. 6. Nobody believes those policies would be enacted. They head back up. Thats somewhat worrisome. Very quickly, the issue, though, is i think the ability of the country to pay. And that we have to wrap up. Okay. A debate for another day. Steve, thank you. Rick, thank you. Lets get back to jamie and talk more about specific stocks. Weve been promming people this. One of the themes you see is continued industry consolidation. You think there will be clear winners as a result of that. You want to talk about that . Sure. I was here on the show right before christmas. I talked about american airlines, u. S. Airways who just bought american. I was upbeat with the prospects, four Major Airlines controlling basically 85 of the industry. Since american stock has gone up about 50 . You know, the stock is now in the high 30s. Its in the mid20s back in december. Quite frankly, we see an industry thats rationale, basically running it like a business. You see americans margins continuing to improve. This company could easily run 6 plus next year. We think its 60 plus potential stock. Once of the things we do every day at york, should we keep it, should we sell it . If we didnt own it today, would we buy it today . In american, the answer is a resounding yes, which is why we continue to own it and were still upbeat. One more interesting consolidation play thats taking place right now is a hostile takeover deal when mens warehouse and jos. A. Banks. This is a . 5 million market cap. The remarkable thing is the amount of cost savings that could potentially come from this transaction. 100 million to the 150 million of the socalled synergies from this merger. Back that in context to what jos. A. Banks makesp this their ebitda is about 130 million. You can almost double the profitability. To look at where mens warehouse is, its up 20 since they launched their bid for the takeover. Hopefully there will be a transaction that will benefit both shareholders. Do you end up some of the inherent value by the hostility . After the fact everybody makes up and you know, its a new boom, new sweep, new set of rules. And people usually fall in. Plus, youll have the same leadership at mens warehouse running the combined company. If you believe that the deal really has huge synergies, which we do believe, even mens warehouse at 55 now, up from 45 when this started, mens warehouse can easily earn 5, 6 a share over the next two, three years. Put a 15 type multiple on that, youre looking at 75, 90 type stock. Theres real, you know, value in even like Midsize Companies where these consolidations offer enormous amount of cost cutting and synergies. How come hertz is event driven. Hertz is event driven initially, as you may or may not know so to speak. They bought dollar thrifty. Yes. At the end of 2012. Huge benefits from the consolidation, namely taking going from four to three players. Last year, revenues, rates went up in the industry in six to eight years. They rationalized the fleet, sold off excess fleet. Today we still like hertz because in addition to we think the leisure part of the economy is still doing well. Yes. You have three major players, revenue synergies, cost synergies are still being played out. They have a very good Equipment Rental business. We think this could be spun off at some point. It would make a lot of sense for United Rentals to own it. We think theres ability to buy back more stock. These are the events we kind of like. We think the fundamental business is good as well. Thank you. Thank you very much for having me on. We really appreciate it. When we come back on squawk box, staying connected to the world has its risks. The founder of lookout will join us after this. Youve seen the commercials, now meat the creator of the bacon bowl. That story just ahead. Squawk box will be right back. [ girl ] my mom, she makes underwater fans that are powered by the moon. She can print amazing things, right from her computer. [ whirring ] [ train whistle blows ] she makes trains that are friends with trees. My mom works at ge. My mom works at ge. So our business can be on at ts network for 175 a month . Yup. All 5 of you for 175. Our clients need a lot of attention. Theres unlimited talk and text. Were working deals all day. You get 10 gigabytes of data to share. What about expansion potential . Add a line, anytime, for 15 a month. Low dues, great terms. Lets close new at t mobile share value plans our best value plans ever for business. What can your fidelity green line do for you . Just take a closer look. It works how you want to work on your own. Or with a Fidelity Investment professional, helping you find new ways to plan for retirement and save on taxes where you can so you can invest in the life that you want today. Tap into the full power of your fidelity green line. Call or come in today for a free oneonone review. Welcome back, everybody. As target struggles to manage its cybertheft crisis, ceo greg steinhoffel says we are undertaking an overhaul of our Information Security and compliance structure will be conducting an external search for an interim cio who can help guide tarring ut through this. Tell us what lookout does. Lookout is focused on taking information and making the world more secure as it becomes more connected. If we look at the pcbased security, we think of leverage big data to get ahead of threats before they are pervasive. How do you do it . When you think about our approach, were living in a world of mobile and Cloud Technologies being the new normal for usage for consumers and enterprises. We leverage the power of our collective 50 million users to aggregate information globally. We leverage that big data and predictively analyze when and where the threats will occur and use that information to stop those threats. So who are you working with . So lookouts to over 50 Million People around the globe use are our products, that ranges from end consumers to mobile Network Operators and some of the Largest Enterprises in the world. Can you tell us names . When you think about the types of enterprises, at t, sprint, tmobile, are all deploying this rapidly and at scale from the smallest businesses to the largest businesses in the world. And that ranks from companies in north america, western europe as well. We launched a partnership with Deutsch Telecom in germany, most notably. How do you stay ahead of the bad guys . Do you consider yourself a hacker . It depends on your definition of a hacker. By my definition, yes. Most people that work at lookout think that. Hackers are people who think about systems and are innately curious and do something with the system that the creator may not have intended to be possible or imagined. By that definition, absolutely so. How do you make money . When you think about lookout, what weve built is a join the network of users around the globe. We have a subscriptionbased model where theres a monthly recurring revenue thats associated with the protection of our users. That ranges from 3 to 7 a month, depending on the product and the service. Thats delivered both through enduser subscriptions and end users as well. Are you profitable yet . Were a private company and dont disclose that but our profits are off the charts these days. Coming up, jim cramer from the New York Stock Exchange and then well fry up some bacon bowls with jane wells. Its just a coincidence that pork is at an alltime high after smithfield sold that company to the chinese. Well see. I think its the bacon bowl. Maybe its bacon bowl. Well talk about it. Dream has been turned into reality for me. I dont even know how to answer that. I mean, no one knows how long their money is going to last. I try not to worry, but you worry. What happens when your paychecks stop . Because everyone has retirement questions. Ameriprise created the exclusive confident retirement approach. To get the real answers you need. Start building your confident retirement today. [ crunching, rumbling ]. It were possible. [ lowpitched scraping, thud ] to capture. [ trilling ] the precision. [ sloshing ] passion. [ lowpitched scraping, thud ] [ whoosh ]. And beauty. That goes into what you do . [ camera shutter clicks ] a better web starts with your website. Create yours at squarespace. Create yours at squarespace. Predibut, manufacturings a prettin the United States do. Means advanced technology. We learned that Technology Allows us to be craft oriented. No ones losing their job. Theres no beer robot that has suddenly chased them out. The technology is actually creating new jobs. Siemens designed and built the right tools and resources to get the job done. Let us get down to the New York Stock Exchange where jim cramer joins us now. Jimmy ran a hedge fund. You listened to jamie dimon. Did you run it the same way, jim . Its fun you say that, we would come in every morning and they would say, look, lets just whiteout the basis, what would you buy right now . We still liked it, then it stayed. What would you buy right now was the quintessential question, dimon, youre really good, man. That is incredible. The same way of looking at it. As a stockbroker it used to be, jim, i wouldal say, normally it would be if im writing the ticket and if im supposed to write buy, im supposed to write sell. And if i would do it, seriously the hardest thing to do, for example, you buy a stock it goes up 60 , the hardest thing to do sell it. No, is to buy more. Its so easy to say, hey, nobody nobody ever went broke taking a profit, you know, you always say that. The hardest thing to do if you are up 60 is to buy more, isnt it . Well, i think that yes. When united air reported a number that was weather impaired and for just a brief moment american did go down. Id like to ask jamie whether that would be a moment 6 number and buy up. It seems like maybe you should sell a little bit of a position if it doubles. But remember amgen went from 1 to 1,000 in the 80s, people that held on or anyone that bought berkshires in the 60s, some things you should just hold forever. Once youve taken out the houses money, you can never lose. You took out your houses money and you let the rest run and you dont even have to think about it. Its never going to turn into a loss again thats what you do with american or any one of these. Well have to ask him next time, he just left. Man, hes terrific. Productivity im not sure hes on we didnt realize he didnt have an ifb so he didnt hear ricks question. That was a mistake. I was thinking he was thinking it was an attack or something. He was here for a couple of blocks and he didnt have an ifb and he stayed longer than we were going to keep him. I thought the silence was deafening. It was our mistake, we figured it out after he left. Thanks for asking. We were able to clear it up. Well see you in a few minutes. Be sure to catch a special interview on squawk on the street, nike Ceo Mark Parker will be joining the gang at post nine to talk about the business and the launch of the world cup, it will be phenomenal. Make sure you stay tuned for it. Up next jane wells is talking bacon. Right now nothing is more expensive than bacon. You know who is happier than a pig in the guy that came up with these. But is he bringing home the bacon . We meet him after the break. For access to one of the top Wealth Management firms in the country. For a team of Financial Professionals who provide customized solutions. For all of your Wealth Management and retirement goals, discover how pnc Wealth Management can help you achieve. Visit pnc. Com wealthsolutions to find out more. 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. Ive noticed this, welcome back. The price of lean hogs has spiked over the past couple of months over fears of a new swine flu virus and bacon is really expensive because you dont have pork bellies anymore. Or is it the sale of bacon bowls or is it that jane wells discovered bacon bowls and they are flying off the shelves . She joins us with more on this product that has fat profits it says, jane. Well, joe, if its about bacon, im all over it. Me, too. You want to know why bacon is up 18 in a year . This. Eggs and hash browns for breakfast, its better in a bacon bowl. The perfect bacon bowl is the most porktastic products. Do they actually turn bacon into a bowl . That was kind of pretty. I bought a set and put them to the test. You can use both the oven and the microwave, they work, though i recommend you spray the bowls with pam because the bacon though its greasy can sometimes stick. Who came up with this ingenious product . A research histotologist named tom jensen liked to tinker and couldnt believe no one thought of this product already. And Edison Nation developed it with the folks from as seen on tv. How many money have you made off this yet . Actually, i get my first check within the next month, but its only for Fourth Quarter of last year which is a small time. And in january it went into walmart and now its in targets and walgreens and everywhere and so i wont get another check in another year and it will be a waterfall coming at me i hope. Do you think you can stom to be a research histologist after that . I think so. What do you think of all this . Its surreal. I dont know how to i cant comprehend it yet. You know, its exciting. Im here. I mean, ive never its cool Walking Around the nbc lot and i hang out with you for a while. Thats really cool. It is very cool. Its the highlight of your life. What a aha moment that led to this brilliant idea and does he think hes making america fatter . Our indepth report on cnbc. Com. Guys . I want to wrap a krispy kreme around the thing and wrap the bacon around the krispy kreme and take a shot of tequila and is it five or six pieces of bacon you use to make that bowl . Its three per bowl, so i had four bowls and you got a dozen pieces. I have to say i thought it was more bacon than i would have put on a blt when i first saw it. Three pieces not so bad. Is there ever too much bacon. I like bake been, but too much of a good thing, anything. Everything bacon with cream cheese and bacon. Have you ever tried that . No. Its good, too. Bacon and tequila, i like it. Bacon and tequila with whipped cream. What . I like bacon, but, man, you guys are off the deep end with it. No. Jane, thank you. Bacon. I wondered about this guy and what happened to him. Great to see you. Right now its time for squawk on the street. I got to testify pick a spot looking extra fly for the day i die im the toughest guy good thursday morning. Welcome to squawk on the street. Im Carl Quintanilla with jim cramer at the New York Stock Exchange. David is off again today. Got a lot to walk you through this morning including some news on retail, on restaurants. Futures relatively steady after the mild declines yesterday. The ten year, jobless claims lowest since january. The bank of england and the ecb also held steady. Europes having a decent session and the nikkei above 15k. The roadmap begins with three big