Transcripts For CNBC Squawk Box 20150407

Including duke mba tim cook. He was snapping many pictures with fans. All right. I didnt stay up. I didnt either. Did you. No i was gone before this. Were you . Really. I didnt want to try to watch it because i didnt want to turn it off. The schedule this is not your normal schedule. To be here with us you. I sacrificed the National Championship game to be here with you joe. You had nothing left in your pool. Your brackets. It meant zero. Exactly. I think i could win the bracket out right before i could spell it. Who did you have winning . Next year. I was just as bad. Im embarrassed. I read too many articles. Its not like you the bearcats or anything like that. I wish i had. I wish i would have taken the musketeers just for the heck of it. Instead of blowing my chance on villanova. Thats who i picked too. Why . Because i didnt want to pick kentucky because everybody picked kentucky. It was 49 chance they would win which they didnt but 80 of the people picked them. Do you know who had duke and wisconsin . My son . Wow. He was like 60,000 out of i dont know how many million. He just liked the names. Nothing to do with it. Its great skill. Something going around that romney i was going to say 99. 8 . And then the president he had villanova too which i cant blame him for that. He won the more important contest. What. The president ial that was awhile ago. Here are the other big stories were watching today. Fed ex buying dutch delivery rival tnt express. It was blocked by competition regulators two years ago. Fedex and tnt dont expect similar opposition. They already had a Strong Network and fred smith will join squawk on the street this morning at 9 45 a. M. Eastern time. On the economical lan calendar today, thats at 10 eastern. And then at 3 00 this afternoon Consumer Credit also worth watching an auction of 3 year notes at 1 00 p. M. Eastern and two notable political stories today. Senator rand paul officially announcing his White House Run at a rally down in louisville in a video release this week he describes himself as a different kind of republican. Meantime in chicago voters head to the polls for the citys first ever mayoral run off. The incumbent fighting for his political life after failing to win a majority of the votes in the election six weeks ago. Hes up by 20 points at this point. You think . Its been widening. There was a point there. But i know what was rich was he was getting a taste of what its like to get it from the Progressive Side of things because hes done a lot of it was common sense. A lot of the things that he did. But if you do things based on common sense youll hear from the progressive left. You are. Among our stocks to watch today, viacom announcing restructuring. The company is going to cut jobs and abandon required titles and reorganize three Domestic Network groups into two new organizations. Theyre halting the 20 billion dollar Share Buy Back program as a result. And shares are down sharply and the company says its lead eye drug failed to meet one of the main goals in a second late stage study and thats down 32 . Shares of Clovis Oncology getting a boost. Granting break through designation for an Ovarian Cancer treatment and dyax with a Public Offering of its common stock. Lets check on the markets this morning. Well show you the futures even though yesterdays experience makes me wonder why do we bother. But the dow opens higher up by 14 points if everything stays the same. S p would open flat and the nasdaq would open higher by a little more than two points. Lets show you whats going on with europe. The unexpected rally yesterday where investors decided bad news was good news. We now see that continue in europe. France ftse germany, even greece higher today across the board. France and the u. K. And germany higher. Well show you the spanish tbill. Investors agreed to pay the Spanish State to hold six month treasury bills. Yes youre giving your money to the government and get less of it back at the end. The yield came out at negative 0. 002. Negative yield. So as we continue to see the effects of quantitative easing across europe. Higher across the board sang high was higher. The price of oil is lower, wti is lower. A decline of 21. The ten year yield. Lets see. Surging. Surging back. 1. 8 . The dollar is stronger across the board against the euro the yen and the pound. Is that what we think it was . Bad news is good news . I said that wasnt going to happen. I said you know never underestimate the ability for more, you know easy money to cause traders to stay in. The economy can be going to hell in a hand basket. It will be the 6th year of Economic Growth but were not going up a quarter. To me i dont get it but nothing more powerful. Never fight the fed. Youve heard that a lot and i guess you cant. But dudly what do you say . You look in the journal and he was pretty dovish. But they say this was weather related and the economy is still pretty good but others saw him saying were walking on egg shells. Well so so slow. It may not be 4 . We started a quarter in establish and we go slow and slow and they didnt take it dovish and that caused the market to go up. There was another economic report. It was the Services Report in line and maybe after the jobs report and the disappointing manufacturing report that it was a relief that okay o, maybe economy is not as bad as some people think by virtue of a jobs report. I dont know. The markets can go up if rates go up as long as its for good reason. So rates go up. What if rates go up and we stay tepid . If they go in june. So its going up for the wrong reason. Theres absolutely thought out there that says it would be the worst thing ever. But were flat for the year. Who knows where we really are. But now were up. But basically flat. Even 170 points. Stocks are hoping for another day following the triple digit climb on the dow. Here to dpif us the first read is the chief u. S. Market strategist with Rbc Capital Markets and i havent talked to you in awhile. Can you defend the notion that as long as youre at zero you visit whats that . Nothing else. There is nothing there is no other alternative. Is that what this is . Margaret thatcher made it. She said . Yeah. Well i like it. I look at it a little bit differently. If you took the discount rate on your cash flows, a stock is worth a lot more than theyre currently tading at. This is the old yeah. Easy fed so youre going to stay along. But heres the reason why the fed is is going to you know the market is basically telling you that the fed is not going to be able to get more than 150 basis points on fed funds at the end of 17 and if the fed tries the dollar starts to rise and puts pressure on the u. S. Economy and the fed runs away and people basically project and arent able to pull it off. Id love to see the fed be able to move toward 2 but with free money in europe its hard for them to get tighter. Its weird because i dont remember them i never remember us just constantly looking over there. But the market is. If you have 20 Central Banks and the fed is moving toward tightening you get a better thats 20 stronger and you start to see its not just the ism report and jobs report. For the last four or five months we had Economic Data coming in consistently weaker than estimates and thats what happened. If you have all of this competition for the long end of the curve and everybody is so desperate for yield and it goes lower and lower because the u. S. Looks good and if the fed lowers on the short end you end up perhaps with an inverted yield curve at some point, right . Its hard to think youre going to get a zero u. S. Yield but people have been wrong for a long time saying Interest Rates are going to rise and you talk about what is germany now,. 2 . Its crazy. Fedexis paying 5 billion for tnt. Theres plenty of Financial Engineering available at zero. Very soon next week well start looking at earnings and what is going to fuel this thing to keep moving certainings are going to come in way better than people think. The Energy Sector is going to be a dog and Everybody Knows that. The rest of the market is is going to look much better than people think. People said yesterday the dollar weakness spurred the markets. Yeah and that was why gold was up so much also. The dollar has run too much too fast and its already doing damage. Heres the problem. That Dollar Strength which we had since last june it has a lag effect. It Takes Companies a long time to change contracts and hedges and stuff and so the dollar gets stronger it really is bad for the whole economy and its taking a break. What is it telling us . Its flattened out over the last couple of months relatively speaking. Maybe this isnt necessarily the case. This strong dollar forever . Do i think the u. S. Economy is better than the rest of the world . Absolutely yes. Our demographics are better. Our Banking System is better. If you look at the innovation that happens here in bio tech and technology theres no place if you look at the global indices theres no place in the world that has this kind of innovation. That said you cant have your currency move 20 in 8 months and have it not be extremely disruptive and thats what that is telling you. I would figure if the dollar looks like its pickeeked that would give them some cover too. Are we back at 110 . We are. I just read it. I cant remember. If you think about how strong the dollar has gotten isnt that like the fed tightening . Im not an economist. Is that 100 basis points or 200 basis points . But this Dollar Strength is no different than if the fed did a big tightening cycle. So the dollar did the work for the fed. I certainly dont think theres no way you can call zero tight. I dont care where it is. Of course its not tight. But youre talking about im going to talk im not talking about the Interest Rate. Im talking about what the dollar has done. It makes it harder for u. S. Companies to compete. Theres no benefit to normalizing maybe they were right. Maybe its a new normal. Theres no way that zero is normalizing rates. No. Youre asking for trouble. We would be way better off off of zero but with the rest of the World Printing money and with ten year paper in switzerland, negative Interest Rates its hard for the fed to move without causing the dollar to skyrocket. Are we asking the permission of the europeans for our Central Bank Policy im not sure but the market saying it is. So you would say long you figure, what do we do high Single Digits this year so were back to that. Here we are in april. I have a really bullish call with like a 12 to 14 return. Youre a 12 to 14. I think this lower for longer slower for longer environment is pretty good for stocks and i think the surprise is that the earnings story is going to be really robust. Thats a 12 return including dividends. No we have a 2325. If you look at the average year you dont have recession the market is up 18 . As long as recession nary risk is away theres no reason you wont get double digit price returns on the market and people are way too bearish. All right. Jonathan, thank you. Thanks for stopping by at 6 00 a. M. Now. You have the rest of your day to do productive things as well. I appreciate you though getting me up early for this. He was smart. He was really smart. Early to bed, early to rise. That may be the smartest thing anyone pause you lead a clean life. Thats why you didnt get to watch last night. Early to rise. Its a good way to live. You cant be an alcoholic or drug addict. You need to go to bed early and be here. Its a good way to manage your affair. Dont you think . I feel great. Scores is probably open 24 hours. Or you can go to one of those worse places that are open at like do people go at 9 00 i feel bad for people. Maybe they work the night shift. 9 00 in the morning how did we get on this. Good to have you here. You took us there. Youre going back to the office now right. Im in the Office Every Day like you guys. Rand paul is set to become the latest republican to throw a hat into the 2016 president ial ring. First take a look at shares of target. Trading at the highest level since going public in 1967. As we head to break heres a look back at this date in history. Hello. I am here to offer sophisticated investing strategies. My technology can help you choose the right portfolio. Monitor it. And automatically rebalance it. All without charging advisory fees, account service fees or commissions. That may be hard to compute. But im a computer. So trust me. It computes. Say hello at intelligent. Schwab. Com welcome back. The ceo says the company will now cover the entire cost of getting an online bachelors degree. Starbucks announced the College Achievement plan with arrests State University last june. His Company Expects to spend 250 murder in the Second Degree or more over a decade on tuition reimbursement. Senator rand paul expected to laufshlg his bid later today the washington correspondent has not announced kwet. Announced yet. Do you think coach k should run. I wanted to show you. We are ready. Can you spell it john without looking down . I can but i wont. You could . No. He doesnt want to show off. Theres a double meaning here of course because rand paul went to medical school at duke. I dont know if he stayed up late to watch the game. If he got his beauty sleep or whatever but everybody connected with the school has reason to feel good this morning and rand paul has reason to feel good because hes the second guy to center this race. It was ted cruz at Liberty University. Now rand paul is announcing at the hotel. He is a key character so where ted cruz sent a message by announcing his Liberty University rand paul is doing the same thing here and marco rubio announced that the Freedom Tower in miami rand paul starts this race in the middle of the pack if you look at our nbc wall street journal poll 49 of republicans said theyre open to supporting him. 40 dont. Thats slightly better than jeb bush considered the front runner. Not as good as scott walker but better than ted cruz and rand paul is trying to inherit his Fathers Coalition as a candidate but also break out of it and expand. So you see here that he is now running third in the state of iowa and third in the state of New Hampshire. Ron paul ended up finishing 2nd in New Hampshire and 3rd in iowa. Doing worse in South Carolina which is more of a evangelical state. Theyre attacking him on the National Foreign policy. The idea that he would be more congenial to negotiations with iran as opposed to a muscular solution. He has his work cut out for him. This race is accelerating. Were soon going to have a whole bevy of candidates and rand paul will be right in the mix. Kind of weird that the first two, i guess they needed them cruz and paul are fringe candidates. News bussers is going to see me say that and theyre going to say cnbc calls paul and cruz fringe candidates but theyre much further right than what some people think the party needs to appeal to enough people to win a majority. In different ways but theyre trying to break from the fringe into the mainstream. Ted cruz has done very well in polls since he announced and rand paul with the reach out to young people to minority voters which republicans need to do better with is trying to make the case that hes a more modern republican and therefore ought to be in the republican mainstream and well see if he can pull it off but he has marco rubio, Jeb Bush Scott walker all more traditional republican candidates in terms of their fiscal social and economic and Foreign Policy approaches and thats what rand pauls challenge is going to be. I was wondering the other day whether he was named after ron then i was saying shes a big atheist. I dont know if you go to a religious place. He went by randy when he was a kid but he has shortened that to rand and i think you can read the symbolism in there as many people will. No kidding. Sure. To your point. Ron paul has said he is not named after him. His name is randall. His name is randall. But the choice to go with rand youre suggesting he doesnt yes, i mean i dont think its escaped his mind that he is going by a shortened version of his first name which happens to match the author who is a libertarian hero. I saw yesterday a lot of the nightly News Coverage last night this is great for hilary. Great person to bring on board but then they did the bush story about how embarrassing it was for him to have checked off hispanic hispanic. If i were applying to medical school i dont know, if it wasnt just an honest mistake where he hit the wrong thing people didnt think he was hispanic. There could be any reason to do that why would the media make it like he was trying to do something i dont think that anyone could think george h. W. Bushs son is hispanic. Its interesting. He checked the wrong box. Its an interesting mistake but it doesnt mean a thing and doesnt confer any advantage on him and its the kind of thing that, look not in the race yet. We have to cover something about what he is doing and its not important important. It reminds me of Elizabeth Warren being a native american. Thats different. She was trying to accrue some benefit from that. Im saying why dont they make a bigger deal out of that relative to this is my point. That was made a plenty big deal when she ran michelle that was a plenty big deal when she ran for the senate in massachusetts. That was a big problem for her and it will be a problem if she chooses to run for president in the future. So i said ron is a what do you think, up 20 now . What are your numbers, john . Im sorry, who . Rom emanuel. Have you seen the poll numbers . Most people expected that he was going to grind down garcia at the end. He is appealing in many ways but doesnt have as fleshed out a program as rom emanuel has and some of the debates are underscored. Certainly the coach makes a big difference. Its recruiting and the way you put the Team Together and it plays and all of that and this guy is Something Special i guess. Five of them. Bo ryan is also a specific coach. Wisconsin is a great, great program. Youre being very gracious. It looks Like College Basketball used to be and we all wish it could be where you have kids that stay in college for four years and Grow Together as a team. But to get his championship shows the resilience and competitiveness and adapt blt and to the benefit of all of us that love duke university. Did you watch the game . Are you kidding me . I watched the whole postgame. How much sleep did you get . Not very much. But under the circumstances its enough. All right john. Congratulations. I dont know how they he do things like that where they kind of they dont really show up. A lot of teams dont show up full force until the fournment i think tournament i think. Coach k builds his team for the ncaa tournament and we saw that again. All right. Michigan state, i mean what were they . 7th seed or something . Anyway thank you. You bet. From basketball to baseball. Coming up baseball is officially open for the season. Well tell you what labor can learn from the leagues players union. Thats next. First as we head to break, check out shares of dr horton. The home builder is trading at levels since seen since 2007 and now here are more of yesterdays biggest winners and a few losers. Welcome back. Time for the squawk planner. I guess that means were doing it. No i dont think so. Im not sure what that is. I think were doing chair. Well were in the chairs. Exactly. Lets do chairs. Just read the rest. And thats todays squawk planner. Good. Everybody is now up to speed on exactly what we have planned. You got that . Hopefully people have pen and paper in hand and have planned accordingly based on that great if thats what theyre planning on sure i guess. Good job. Lets go. Chairs, thank you. Good squawk planner. Lets two. So theres baseball season started yesterday, day before. Theres this kid that plays in the chicago cubs system he is a young kid and he had a tremendous spring training and everybody said the cubs have been using it and they sent him to the Minor Leagues it gives the cubs an extra year of his services before he could become a free agent. So his agent is the high profile sports agent. Hes like its unbelievable. Its exactly why the cubs are losers. Theyre saying now wait a minute were just doing what everybody single team has done in the past if you look throughout baseball history almost every great player from the last decade has gone through the same thing. The team sends him down and brings him back up. I dont get why they did that but that makes sense. New york times has a story how its a lesson in labor. How its they are mad about it. How its an effort to pit the star players against the professional sports. Theyre against free markets in everything except this case. And theyre totally against any conversation over the mean conversation of the average work worker its weird because like labor unions where theyre baseball players. They dont know whether to be on their side or not. They make 4 million a year so were not on their side. So you should divide it among everyone so the times doesnt know what to do. Mike trout is arguably the best player in the game. He was down in the minors. I cant remember samome of the names but almost every player minimum has done it this way. Thats good. Youre going to talk about another labor union. No you can. Theres brazil now. Different batista. Remember used to be the 7th richest man in the world. If you get to roll your rs you will show off. No one does it better. She even rolls rs at the greek guys. Its a habit. So theyre on trial for insider trader. They have to redo the trial completely because the judge in his case is now charged with embezzlement from a separate Drug Trafficking case he was presiding over. This comes after the judge had already borrowed his porche to drive around after it was seized. This is oil. Right. Like a couple of years ago were talking hes the richest in the world. They claimed he would be richer than carlos slim. Yeah took a wrong turn. He did. So theres some graph down there going on. The irony is that latin america . Brazil is trying to prove that its finally into the modern age, good corporate governments et cetera et cetera. You have batista going down and his judge going down and then of course hes just in the midst. Im going to alienate the left one more time for the heck of it. Rom emanuel knows what its like as does president obama and as done Hillary Clinton to be a pact see the left gets a little traction the last six years. Theyre not satisfied so they want to take it all the way to the he liz belgElizabeth Warren left. When you take it too far, you know its not going to work. So with rom he got he was chief of staff for president obama. He lead the democrats to victory in congress and hes being attacked by progressives for being in the pocket of corporations. He is with the Chicago Business community. Hes the mayor. It would be good if businesses flourished in chicago. Futures union. Of course. He got five million from the american including support from the American Federation of teachers and the chicagos Teachers Union but it is a little bit rich watching when they get a taste of their own when you try to do something right by children they squash it. And were talking about mostly the Union Leaders that are i dont know more about it theres a reason it was the First Episode of house of cards. Hes up 18 . No im sorry. 28 . 5830. Had to escape by the skin of his teeth or something. Im not sure. But still to come this morning, mark grant on what he is paying most attention to right now and then later the results of the exclusive cnbc all america survey. Are americans more confident than the Government Data might suggest . Plus a man that pays a lot of attention to the numbers, mohammed elerian thinks the market is overvalued because of the fed. Hell join us. Stay tuned for much more squawk ahead. I care deeply about the gulf. I grew up in louisiana. I went to school here. Ive been with bp ever since. Today, i lead a team that sets our Global Safety standards. After the spill we made two commitments. To help the gulf recover and become a safer company. Weve worked hard to honor both. Bp has spent nearly 28 billion dollars so far to help the gulf economy and environment. And five years of Research Shows that the gulf is coming back faster than predicted. Weve toughened Safety Standards too. Including enhanced training. And 24 7 on shore monitoring of our wells drilling in the gulf. And everyone has the power to stop a job at any time if they consider it unsafe. What happened here five years ago changed us. Im proud of the progress weve made both in the gulf and inside bp. Xco0 european equities are higher on the heels of wall streets rally yesterday and the euro zone accelerating at the fastest pace in a year. Is there more Growth Potential ahead of the continent. Good to have you here. Good to be here with you michelle. Whats the case for european equities . Theyll be doing quantitative easing and wind is going to be at the back of equities there . Well thats exactly whats happened. Weve seen in the treasury market for example 1 trillion leave the treasury market to front run whats going on with the ecb and in the equity market its also been a vast and everybody is just front running the ecb. When i look at the notes that they sent for your interview, it sounds like youre upset at the possibility that the fed may raise Interest Rates. Is that true . Thats true. I think it would be a huge mistake for the fed and for america for the fed to raise Interest Rates. Look theyre 5 trillion of bonds globally with negative Interest Rates. 23 Central Banks lowered rates in the last six months and the Biggest Issue is the dollar has depreciated or you can look at it as ravaged by the ecb and for us to raise Interest Rates in this environment would be really the wrong, wrong thing. Even with run employment at the levels were seeing in the united states. Even with the levels youve got the deflation being exported out of europe. Deflation being exported out of oil. The economy is in okay shape but youre also going to see because of the dollar following earnings as weve seen so far. James grant will be on later. If he heard you there would be smoke coming out of his ears. So whats your recommendation in term of what people should be doing with investing right now and considering a u. S. Based investor has to do it based on the dollar. I want to avoid anything to do with europe. The dow jones is down. The treasury is up 2. 5 . If you include the coupon its 3 . So for individual investor id want to look very carefully at the big liquid closed in funds where you can get 8 or 9 on your money and be very happy to get a check every month. These are bond funds. I dont think thats a word is it . Miniculy. I try to invent things for you. And youre a grant and hes a grant. Thats right. I didnt think of that. No you didnt. You think rates should be lower. Remember those magazines you saw . No. You say one thing and the other guy is related. Hes probably a land grant. You had a drink. No no drinks. No. Thats up for him. Can you believe this . Youre disappointing me. 5. 5 unemployment but dont go up a quarter, mark . Thats not like you. Were living in a global world and you have to take into account what the ecb is doing. I dont remember them looking around saying we werent going to mess something up over in some other country. Thailand doesnt make so much difference but europe does. Greece is a whole other story. Europe suddenly matters that much more. We dont export that much to them. Yes joe. 40 or for instance the Technology Companies 40 of American Technology earnings come from the national business. Were more porn to them but i understand what youre saying but i cant believe that were were were almost at full on employment and that doesnt bother you. Answer. No im just surprised he said avoid anything connected to europe. If youre a u. S. Dollar based individual investor. Am i right, mark . Thats correct. Thats the question you asked me. The inability to hedge so costly if you buy a german stock its so costly. Etfs. They hedge, sure. I just dont know. I cant remember many people saying avoid europe. As an individual its super we actually did a whole story about it. Its very expensive. Money is pouring into the etfs. Theyre so different. You dont remember it. I will google it right now. Tell him i said hello. What . Yeah. Thank you, mark. I do. I thought you said gallen. 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Its a brighter day in detroit. People can see better when theyre out doing their tasks, young people are moving back in town the kids are feeling safer while they walk to school. And folks are making investments and the community is moving forward. 40 of the lights were out, but theyre not out for long. Theyre coming back. Cnbc. Com looking for the most loved beer label and the voters have spoken. Cream ale beer label has been crowned the winner. The founder is a former banker who left his career at jpmorgan to begin a brewery in 2012. He joins us now on set. Congratulations with this phenomenal honor. Thank you very much. Good morning everybody. Hows everybody doing . Doing well. Its good. Give us the story behind just from newburgh new york. Upstate an hour and 20 minutes on the hudson river. Thats not upstate. Everything in manhattan is upstate. Theres a way upstate seven hours away. And the label . The label is made by modern good. Its anchored on betsy the cow which is our purple cow we love so much. And we also have icons and images that mean a lot to us and the city of newburgh. Its busy for your average beer label. Thank you. And the point of that was to catch the consumers eye. When you walk in now where theres thousands of skews and options, its important to catch someones eye quickly. This is a cream ale. What will it remind me of . Jenny cream ale. Its one of the few styles of beers that indigenous to new york state. Really . Who knew . Youre the actual money behind the brand, right . Im the money guy, yeah. That makes sense. Your good buddy is the brewer. Theres only four. But its 16 ounce. Its 4. 2 alcohol. So you want more of it. Sessionable . You can go to a pub and have ten beers and youre not stumbling out the door. But its a very popular style of packaging now for craft beer, 16 ounces. You did the Business Model in 2009. That times was related to the financial crisis . Who wants to be a banker . No. It was my main partner who started the business plan. He decided he wanted to strike on his own. I came on and then our third Business Partner came on as well. Hes also a former wall street guy. You used to be at jpmorgan. Thats correct, yes. You dont want to getting out, probably. I was proud of my time there. Loved the people i worked for and with. Have you sent any to jamie dimon . I have not. Im not sure if hes a craft beer guy. He strikes me more as a red wine guy. Its impossible to start a brewery like in greece, for example. I see ads for new york state all the time now about no taxes for seven years or something. Was it advantageous place to start a business in newburgh . New burg has the largest Historic District in the state of new york. Our brewery is in the Historic District. Weve got very large property tax credits for rehabbing that building there which was important to us. Newburgh is a great place to open a business. Especially manufacturing because youre at the intersection of 84 and 87. Theres an airport there. There is an airport and also a train. Its very easy for tourism. And craft beer is all about tourism. In 2013 you had 450 million in tourism generated by craft beer. Where do you sell this stuff . We sell it throughout the state of new york and new jersey. Keep your eye out for betsy the cow. Thank you. Coming up were going straight to the source today. The allamerica survey results are next. Optimism about the u. S. Economy hitting an eight year high. Steve leisman has the exclusive survey data that paints a picture of growth. A 4. 8 billion deal in delivery. An explosive deal with eye on expansion in europe. Well have the details. Lane bryant taking a shot at victorias secret with a new ad campaign im no angel. The ceo of the plus size retailer joins us on set. The second hour of squawk box begins right now. Live from the beating heart of business, new york city, this is squawk box. Welcome back to squawk box here on cnbc first in business worldwide. Im joe kernen along with Michelle Carusocabrera and scott wapner. Becky and andrew are off today. And there is an acquisition deal from fedex in the transportation arena. Fedex is buying dutch delivery rival tnt express for 4. 8 billion. The deal would give fedex access to the bids. Blocked to buy tnt to buy two years ago. But fedex and tnt say they dont expect similar opposition because unlike fedex, u. P. S. Already had a strong european network. Fred smith will join squawk on the street today at 9 45 eastern. Among the other stories were watching this morning, children and advocacy groups to investigate the youtube kids app. The app blends video programming and ads in a way that deceive children and parents. Spokeswoman for youtube disputed the complaints and said they hadnt been contacted by concerned groups. On the Economic Calendar today, the jolts report on job openings and Labor Turnover. Get it jolt . Then in Corporate News samsung out with guidance. The profit likely dropped 30. 5 between january and march. That guidance is better than wall street analysts expected. Saying revenue likely fell 12. 4 . Americans are feeling more optimistic about the economy. That according to cnbcs allamerica survey. Steve leisman joins us now with those results. Good news for a change here. A string of bad Economic Data. Weve had our quarterly poll of 800 americans around the country. Lets look at their view of the current state of the economy. This is the percentage that says its excellent and good. 27 . Putting together two decent quart ners a row. We had that bump up and for a change, we sustained it. You can see we have to go all the way back to december of 2007 before the recession which was 26 . Of course, 28 of the public still thinks the economy is fair or poor. But were making some headway here. And then also you take a look on the views of the future. Will the economy get better. And what you see here we put that together. Americans kind of maintain their optimism throughout the recession which was curious to pollsters. We put together two positive quarters in a row. And the reason we do this all the time we look at peoples outlooks for your home values and their wage outlook. We do this net number which is the percentage that says its going to increase minus decrease. Again, lets go back and take a look here. In 2007 before the recession, 54 of the public thought their wages were going to go up. During the depths of the recession, we hit 17 . And now were at 33 . So further back towards the top than we are towards the bottom, but still a ways to go. Some decent views on the economy. At least for the postrecession on peoples expectations for their home values and their wages. One other thing i want to show you, a very very early read. Whats the most important 2000 election issue . Economy, health care Foreign Policy taxes and government. And ill turn to the left here. Political gridlock coming off of the main issues here and environment and climate change. But i want to come back here to this issue of 23 . Our pollsters, the republican duo, they tell us that this is a sign that the economy is doing well and the reason is because other polls last year and before that put the economy up into the 40 range. So thats come off just a bit. A possible sign of the economy doing better that fewer people are mentioning it as the number one issue out there. Guys in the next hour well come back with what the poll said americans are doing with the gas windfall theyve had. Got the whole poll on cnbc. Com. Joe . Okay, steve. Thank you. For more insight into Investor Sentiment and attitudes towards growth in the u. S. , were joined on set this morning along with john riding chief economist. Well start with you. I dont know if ive have you been on with me before . Remotely i have. Good to see you. The reason i ask, i dont remember how what your basic stance is on fed involvement, fed exit. Whether we stayed too long or whether were not staying long enough. What do you think . I think the fed is in no hurry to tighten, but i think they will tighten this year. Just because we got a pretty weak jobs report we cant deny it was weak. Weak across the board. But it does put the fed on hold but it doesnt put the fed on hold indefinitely. I think were on hold for now pending better data. But i think we will get it. We were just talking about consumer confidence. If you look at the facts that are underpinning the u. S. Economy. Theyve not changed this month. Very solid because of the consumer. If it is solid, then what is it about staying zero that we think is the right thing to do. Is it because were global now and because of rates in europe . Normally i would think normal rates would be around 3 or 4 . Janet yellen and ben bernanke outlined that the the real rate of the economy should still be zero. Because if you look at some of the other indicators of weakness in the labor market you can still see them. For example, if we look at the number of long term unemployed its 30 versus 20 we saw in the last business cycle. Janet yellen believes if you let this go for a little bit longer even if you let the economy overheat for a little bit longer, thats the way to reduce the remaining slack from the remnants of the financial crisis. Riding thats weird. Because the people that sell the what weve been able to accomplish over the past six years sell the 5. 5 rate unless they need it to say its not really 5. 5 and its 20 . Never had this many people out of the workforce. Theres no wage growth. People have parttime jobs. Is it a good labor market or not . Its a fairly decent labor market. I think its a lot better certainly a lot better than europe. The idea we should have european style Interest Rates i find something of a its not a good idea. The inflation rate is not as low as european rates. And i think part of the problem here is if you look at Janet Yellens speeches shes mixed and matched. Shes taken some work by John Williams who replaced her at the San Francisco fed on how low rates should be. Then she takes a completely different measure of how much slack in the economy there is. Even though they have to be estimated to get the views. So shes mixing apples and oranges to get where she wants to be. And that feeds into your question about the unemployment rate. You have the 6. 5 unemployment rate. Until its within the distance. Then that number was taken away. Then its 5. 5 . We all willingly drink this koolaid. I see so many economists that seem to have been lulled into this notion that as long as zero isnt causing any harm we might as well stay there. But were assuming theres not something longterm that could be an issue with doing this. That its costless. Thats right. And the problem is its not just economists. Theres now Portfolio Managers Fund Managers who also drink the koolaid. There are fed officials who say zero inflation doesnt mean zero rates. What do people do with that money. Its 100 on average per household in the u. S. What is the cost of keeping Interest Rates down at these levels . Well, if you look back at the last expansion when rates were kept at 1 until 2004 and then raises very slowly, the cause was a financial crisis. We had financial instability. Other people say we dont need to wait for the costs. That were reaping the costs right now with the weak economy. Who say the reason money goes into financial sort of you know engineering rather than longterm plan and equipment, the reason theres no savers. Theres reason that right now the reason we had six years at 2 growth is because weve really misallocated where capital should have gone because of the fed being in the pricing of debt rather than managing it. I mean thats the whole mek mechanism me fed has been trying to accomplish. Trying to push savers into spending. I think i would agree the fed has succeeded in pushing people into investing. Whether you look at high yield flows, emerging market flows. We have managed to push ourselves into higher assets. But we have not pushed ourselves to spend quite as much as we have in the prior recovery. Going back to what is fundamental is supporting the economy, its now lower gas prices. All of the, i suspect, the longer it goes on the more it will show up in those numbers. Then we shouldnt be at zero. We shouldnt be at zero. But wait a minute. If you look at the 5. 5 unemployment. But thats not the only thing that you or me or janet yellen is looking at here. You cant have it both ways. But im amazed that there can be i guess everything in this country now people argue were so far apart on every issue. But there are people that are just just cannot believe we are at zero still. And people think its insanity to consider raising any time this year. And were here in april and all of us after fridays jobs number and after the dovish tone from janet yellen have pushed when they think that first rate increase is coming from june just vaguely on the edge of the table right now to september. And thats another six months. You only need a couple of surprise noisy readings that could push that further out. The problem is the fed has told us the policies are data dependent. But they no longer told us how to determine data. Because they keep making adjustments to exactly where the goal posts are or what posts should be being used. I think one of the things the fed absolutely needs to see besides inflation is jobs and more jobs. Right . Its all about the jobs. I think youre right. That it puts sort of off the table. That is one thing b we did not see last month. If we see that for the next two or three months. Im not sure june is totally off the table. I dont think they should go in june. I agree with you. I still think they will. See, i ascribe to them like maybe im just transferring that they know. They keep saying this stuff. They dont want to royal the markets. Theyre going to go slow. And being patient doesnt mean were impatient. Whatever they say. But they know we should go to june. When we get to june well know. Theres an expression for when a Government Program is instituted during a crisis and then it becomes permanent. Its called the Government Program. Milton freeman said they never die. The excuse of the financial crisis to suddenly occupy this huge part of our lives. Where we dont even think an economy without training wheels can exist. Theres so much a part of our lives. What happened to an economy thats just able to exist . Not only do we have training wheels, we got the kid on the bike in bubble wrap. When did that happen . Social media . Who do i blame for this . Its happened in the aftermath of the financial crisis. Reverse the question. Say if back in december 2008 when the fed cut rates to 1 you had been told in april 2015 Interest Rates are still at zero and now the feds increased its Balance Sheet five times, what would the economy look like . What would unemployment look like . Im sure you wouldnt say well be at 5. 5 and north of 2,000 on the s p 500. Back in december 2008 those two numbers would have been viewed as irreconcilable with 0 Interest Rates. Things a changed. But then again, at the depth of the crisis would you have signed on to equity prices here unemployment here. Were all still okay. Maybe i would have said if they could somehow manage this then go for it. So you would have gone for the how do you got that . There are people that think they need to be canonized and start with the process soon. The pope is going to announce yellen. And then there are other people who think they have totally just ruined everything. So i dont know. Theres definitely risks of acting out versus not acting. The risk is that you act too soon. And the one thing that the fed worries about. Not that were taking sides here but the you take sides. Thats probably my job, right . But one of the things that janet yellen worries about is if you raise the rates prematurely, you dont have a whole lot of room to move lower if you need to stimulate the economy. But at the same time if the problem becomes inflation, you do have the policy rates to raise from zero to 2 4 whatever percent it needs to be. So the risks are asymmetric there. People say you need some dry powder for the next time the economy slows. We have no dry powder. You dont. But you dont want to cause the slowing. You dont want to start the fire that youre able to put out. An arsonist cant take credit for putting out the fire. So you dont want to start the slowdown that you need the dry powder for. What the problem is the greatest slowdown in the last recession came from the financial crisis. Which have root cause in extremely low Interest Rates for a very long time. And were repeating that recipe on steroids. You dont think youre going to youre not predicting another footballinancial crisis because of what the fed has done. The fed is trying to push people out on the risk curve and people are embedding leverage. We probably wont see it this time. The faith has been put on the Conference Last Week at the atlanta fed. And, you know they are the takers. Macrocredential regulation. And we had one speaker, former treasury secretary bob rubin. He said the reality is that there is no reality. And yet we are relying on that macrocredential regulation. Wow. The right will think thats rich because they think hes the king of bailouts going back. Yeah. Anyhow. It wasnt all the job in 2008. No, but they back to the bonds and all of that. Thank you both. You are on sort of opposing sides, i would say. Nuanced. If you look at the nuances. I guess i was. Remember haynes asked you about you were like the chief economist. Not the chief economist. You were an economist and he asked about the stock price. Haynes asked you what about that stock price. You were like seriously youre asking me . You remember that . You got so mad. Those were the good ole days. They were the bad ole days. They were the old days. Coming up, from flat tires to busted shocks. Potholes can cost you thousands of dollars. Up next Morgan Brennan tells you where to file damage claims. And its not your Insurance Company. Plus 7 30 a. M. Eastern time market watcher jim grant is here to talk about Interest Rates on the fed. Hes on joes side. Plus were going to talk about the jobs march report. Full figured fashion brand lane bryant taking aim at victorias secret in their new ad campaign. The ceo will join us on set. Welcome back to squawk box. The spring thaw uncovering an eyepopping number of potholes. The harsh winter taking a major toll on roads across america. Cnbcs Morgan Brennan joins us live from the street with more. Good morning, morgan. Good morning, scott. Well, take a look over here. You can see some of these potholes. These are just several of the nearly 205,000 potholes that have been reported in new york city just since the start of the year. And ill tell you, the problem goes far beyond just this area. After another cold wet winter, weve got roadways in the northeast and midwest that are just riddled with potholes. Theyre costing state and local governments millions of dollars in infrastructure repairs and racking up billions of dollars in consumer expenses. Aaa estimates potholes will cost drivers 6 billion in damages this season. Thats a similar sum to 2014 and about 20 more than in 2010. According to the independent Insurance Agents and brokers of america, about half of all drivers experience pothole damage to their cars at some point over the last five years. Costing u. S. Consumers and Insurance Companies a combined 27 billion over that time period. And its not just busted tiring and shocks were talking about. Drivers who file claims with this damage also run the risk of incurring higher premiums. They dont realize until their next renewal that the Insurance Company actually put a charge because they put that claim in because they treat it as an atfault accident. So if youre one of the many unfortunate drivers to have a bad situation, its better to bypass insurance and file with the Government Agency responsible for that roads maintenance. If you can prove they knew about that pothole prior to you hitting it, you should get reimbursed. Otherwise pay out of pocket. Over to you. Thanks so much morgan. Driving around the city lately awful. Its bad everywhere. Potholes are everywhere. Temporary Economic Crises was described by robert higgs. And youve seen it. This is definitely happening in this day and age. This crisis has been used to make a permanent anyway. Coming up thats in my book. I searched it in google. And you couldnt remember it. I couldnt remember his name. Coming up news out of two restaurant chains. The scoop and bojangles. And its National Beer day marking the anniversary that would legalize beer in 1933. Oh, my god. I dont want to live in a world where it was illegal. And help hasten the end of prohibition. Americas oldest brewery will join us at 8 40 a. M. National beer day. Lets celebrate. So open an account with schwab. And when a market move affects, say a Cloud Computing stock youre holding, we can help you decide what to do. With tools that help you see how market activity is affecting your positions. So when the time comes to decide whether to scale in or scale out. You can make your move wherever you are. And start working on your next big idea. Theres some facts about seaworld wed like you to know. We dont collect killer whales from the wild. And havent for 35 years. With the hightest standard of animal care in the world, our whales are healthy. Theyre thriving. I wouldnt work here if they werent. And government Research Shows they live just as long as whales in the wild. Caring for these whales, we have a great responsibility to get that right. And we take it very seriously. Because we love them. And we know you love them too. It took tennis legend serena williams, fencing champion Tim Morehouse and the rockettes years to master their craft. But only moments to master paying bills at chase. Com. Depositing checks at the atm and transferring funds on the mobile app. Technology designed for you. So you can easily master the way you bank. Welcome back. Restaurant chain bojangles hoping to raise up to 100 million in ipo. Backed by equity firm advent. They have 368 franchise locations. Were you around for that song . Yeah. Maybe we should play that. In other restaurant news u. S. Burger chain Johnny Rockets is betting big on china. The 1950sthemed restaurant announcing plans to open 100 restaurants in china. They want to capitalize on Strong Demand for American Brands in that country and a growing middle class population. All right. Up next market watcher jim grant is bringing together some of the most recognizable names for investing including jack vogel and bill gross. Before it kicks off, he joins us on set to talk about it. And as we head to break theres the song you requested. Take a look at the futures. Actually looking better than they were an hour ago. Implied open plus 55 on the dow after that big reversal yesterday. E financial noise financial noise financial noise financial noise welcome back to squawk box. Among the stocks front and center this morning, jpmorgan was upgraded at bernstein. The analyst says that the bank looks attractively valued and he points to a nearly 3 dividend yield. Shares of axalta coding systems, buying 20 million shares of this company from carlisle for 28 a share. And shire is rising day. Shares of shire. The company agreeing with regulators for a path for getting clearance on an adhd drug to treat hyperactivity in adults. All right. A judge in new york city is giving a woman to serve divorce papers to her husband via facebook. After the couple separated, facebook was the only way she could communicate with her estranged husband. The Attorney Says the facebook connection worked. The husband has messaged her back to say he will sign the divorce papers. Okay. Wall street wall street still digesting the jobs report. Jim grant joins us this morning ahead of his big spring conference at the plaza hotel this morning. Good to have you on. Thank you, michelle. Awfully nice to be here. All star crowd. It is an all star crowd. Looking forward to hearing from those guys we mentioned. The jobs report. Weve been having lots of debate whether or not it means the fed is going to push back an Interest Rate hike maybe even to next year. What do you think both on what they will do and what they should do . I think they will be as patient as possible. Uttering the word patient flexible. Flexible, yes. Shallow. It is my friend who says we now have the vocal cord dollar or the verbal dollar no longer a thing. It is a state of mind in a schematics game. I expect this timetable will be pushed back. As to what they should do im all in favor of a free market in this most critical price call of Interest Rates. And how would you achieve that . Oh by announcing that henceforth its going tobacco be a free market. In other words you would raise rates as soon as possible. I would allow the market to determine Interest Rates which was the m. O. For many decades before the qe. One of the really terrific fed chairman of yesteryear William Martin gave a speech upon the liberation of Interest Rates from federal control, early 50s after the fed treasury accord. And he said that we have a free market because the manipulation of the Interest Rates by the government is not a part of american institutions. Whats the harm jim . Whats the harm of keeping Interest Rates down . Well price come she says sarcastically. Did you detect that . I read his stuff, so i know its a soft wall for him. To make it a slightly harder pitch, ben bernanke, the famous blogger said that Interest Rates are not determined by Central Banks but rather by the ebb and flow of Business Activity and by the real return on capital. And there is some truth in that assertion, but it is a little bit disingenuous in that in europe where they are implementing socalled qe german Interest Rates and tenyear moturety and sovereign bonds were down by more than 20 points on two consecutive days. Extraordinary. So that means, says mr. Bernanke it must mean that Business Activity in germany is throwing to a dead crawl. Well, no. The stock market was up more than 20 in the first quarter. Things are rather booming in germany. This is the fruit of heavy handed government manipulation of crisis. And i call it price control. But even that is not the full extent of federal intervention in the markets. I think the previous guest was talking about this macroprudential stuff. But which they mean the suppression of enterprise in banking. The government is all about managing these big institutions. If the regulator showed up for work one day and the bank manager stayed home you would not notice a difference nowadays from the nature of the assets they hold to the level of liquidity to the level of capital to the socalled risk all these things now determine from on high which introduces a new kind of risk in our affairs. The risk of rigidity. The misallocation of capital, you know in the good old days to perform so poorly that you were driven into liquidation was pretty easy. Now if you want to liquidate a company, youve got to put your back into it. Its hard to fail. And if capital stays in a company that shouldnt survive, its capital that isnt deployed to a much better enterprise. It is a much better settler than for example the level of junk bond yields. Its related to the junk bond yields this business of government intervention. Let me try to be a little bit more clear. If companies cant fail that means that somebody else cant start. Youre looking at a Petrified Forest rather than dynamic capitalism. That was the characteristic. If you cant fire anyone in europe, you cant fire anyone because youre stuck with them forever. Were you going to Say Something else or can i ask a question . Please. Is the negative effect of what the fed has done already here or is it in the future . Was it a there are most people right now, they would think they would disagree very strongly that the fed didnt save us. That the fed didnt help us manage the financial crisis. And without what they did, we could be in a much worse place right now. So its a big stretch to think theyve actually capped our growth at 2 by what they did. Both may be true by the way. Would you argue that it allowed businesses to stay shortterm and not make the hard decisions about do they just play around with zero money . We dont know so we cant be dogmatic. There was a depression in the early 20s in which the fed raised Interest Rates and there was nothing like stimulus. The concept of the macroeconomy has had not been invented. It lasted top to bottom 18 months. As it ended, the there were labor shortages in detroit. That was another era, but that to me is that was the last we think that government decisions totally exacerbated. I mean thats what ive been told. Hes talking about hes written a book called the forgotten depression which is later than the one we talk about all the time. So i happen to have great faith in the restorative mechanism. People seeking their own best interests through enterprise. So i think that the burden of proof ought to be on those who contend that the government through the success of interventions has done us net good. Yeah. So whether the cost is ahead of us or behind us or with us. And i think its with us to a degree. And it being with us would, for example, encompass those millions of people who are out of the labor force more or less permanently. Theres been a kind of a pall over the thats one cost. I think the perspective cost is the unmasking of the misallocations of capital that will have come about through the levitation of asset prices. Real estate among other things. We dont talk about real estate as much as we should because its not traded every day. That might be ahead of us you mean. Living with negative effects. We have many positive effects and theyre the ones of people cheering. Stock market is at an all time. And you know what . Even after its settled, people are going to be on both sides arguing one side or the other. Both things can be right. If the fed did not intervene, we could be much worse off. But at the same time if the fed stays too long, therein lies the potential issue. You were talking earlier about the that doesnt mean they shouldnt have gotten in in the first place. I was talking about robert higgs. Yeah. The permanent crisis. Well another name for that is kind of the office of homeland security. Right . Right. So a friend of mine who is a good Value Investor called up a few weeks after 9 11. And said whenever i die, the tsa will still be in business. And it will be. So now we have the office of Financial Research and we have the Financial Stability oversight council. We have the doddfrank stress test, the comprehensive analysis of review. Dont you feel better . And the large institutions supervision coordinating committee. All of these are outgrowths of doddfrank and they will be with us more or less forever. Those people have jobs. Be happy. Theyre the ones with jobs. But the fed has become a permanent. Theyre here. And part of my life every day. Have a great conference. Thanks. Good to see you. Im not angel. Thats what im going to read right now. Ki show you my tattoo . Lane bryant celebrating women of all shapes and sizes. The ad is called im no angel. The companys ceo joins us next. I care deeply about the gulf. I grew up in louisiana. I went to school here. Ive been with bp ever since. Today, i lead a team that sets our Global Safety standards. After the spill we made two commitments. To help the gulf recover and become a safer company. Weve worked hard to honor both. Bp has spent nearly 28 billion dollars so far to help the gulf economy and environment. And five years of Research Shows that the gulf is coming back faster than predicted. Weve toughened Safety Standards too. Including enhanced training. And 24 7 on shore monitoring of our wells drilling in the gulf. And everyone has the power to stop a job at any time if they consider it unsafe. What happened here five years ago changed us. Im proud of the progress weve made both in the gulf and inside bp. One word. Sexy. Our next campaign. Lane bryant the countrys largest plus size retailer has a new campaign dubbed im no angel. An attempt to appeal to the consumer and gain more of the plus size market. Linda hesley is the ceo of lane bryant and Ashley Grahams is a model in the campaign. Great to have you both here. Thank you. Do you cringe at the plus size thing at this point or no . What do you mean by cringe at the plus size . Do you mind when people say plus size . I feel we should lead with fashion, not size. Thats my point. Its about embracing who you are. It seems outdated based on what the typical American Woman is. Given the demographic stats, we would agree. Its about embracing who you are and being proud of that. This new campaign its a good shot at victorias secret. Well, it wasnt our intention to clip the wings of any brand. And were not trying to throw shade. Its a good shot though. The ads great. She looks hot. You do. And its about the girls. We wanted to celebrate these beautiful women who are beautiful, sexy and hot. Thank you. Youre welcome. Its okay so they youre clipping their wings. Its strong. You are going to war here. The ads are saying what you dont want to say here. Were saying arguably the definition of beauty defined by an angel that reflects perfection is unattainable for most of us. What were saying its about being more than that. Its about embracing that. How big is the lingerie market, do you think . Well the lingerie part of our business is very significant. And the numbers are hard to get on the total market. Victorias secrets is the number one player in total. But our what we respect is a very specialized portion of the market. In terms of the sizes that we offer. I mean we always talk about companies should not only just, you know employ people but they should do good for society. I think this qualifies. Because, you know, i have a daughter. And if she were to try to strive for victorias secrets type everything, weight height everything. What if you fall short . Its like its a weird and its been talked about in society a lot. We are setting some weird expectations by that. Thats what this campaign is for. To let women and girls know no body is perfect. You are perfect. Whatever you have is what you are. Thats the perfection. You can see from the eating disorders and all the things High School Girls go through, you can see its partly reflection from this. And body shaming. Not motivating. Would you go as far, theres talk in europe about dictating how much models can weigh. Literally weighins. Honestly i havent tapped into that whole realm. I think that honestly we should just have sample sizes for everybody. I think that runways should have they can have a size 2 and a size 14. Id love to do runway but they havent opened up that door for plus size models. So hello, im here. You were in the Sports Illustrated swim suit. I was. Thats opening a door that hadnt been opened in the past. A huge door. It was a complete honor and amazing. It got a great buzz. I was happy to be the poster girl for it. You think it will open the doors you really want to have opened . Oh, yeah. I agree 100 with what its doing. I plan on being on the cover of Sports Illustrated next year. Watch out. I love your raw ambition. Its fantastic. Thank you very much. We hope more retailers get behind what were trying to do and what were trying to show. Which is be more inexclusive about what we represent. Business is good overall . Business is good. And as you pointed out, its great when you have Good Business to be done. But its really good when a business can do good. Thats what we feel strongly about. Very good. Well stop on that. Coming up a special sneak peek of tonights episodes of secret lives of the super rich including unique trivia to john travolta. Robert franks takes us behind the scenes next. Tonight theres a new episode of cnbcs secret lives of the super rich. Our own robert frank is here to tell us how for just 25 million you can find nirvana. How . Well who said the spiritual and material well tell you. Who said the spiritual and material cant exist when youre looking for the road to enlightenment. You can start on south ocean boulevard just south of palm beach. Take a look. Welcome to nirvana. 25 million ocean front sanctuary. From the outside its a massive mediterranean villa. Inside its a 12,000 square foot zen inspired oasis. Its versailles meets the taj mahal mahal. What is this room . Well, i cant tell you all the uses for it on camera. But actually this particular dance floor was designed by the same designer that did saturday night fever the film. Thats right. The family hired the same guy that did the saturday night fever movie set to design an exact replica here at nirvana. The house also has a Meditation Garden a buddhist prayer room and all the doors were blessed by monks. This is an unusual house. We see how the increasingly International Wealth is changing the real estate. The outside looking palm beach. Inside its a buddhist you know a disco. Exactly. And it is an exact replica. When they turn on all the lights, it is made by the same guy who designed the set for saturday night fever. That is fantastic. Its really designed by that person . The same guy. And the guy, his father lived in the 1970s when it came out and became obsessed with the movie. He said if i ever make it im making an exact replica of this dance floor. Youve got palm beach and the manalapan. You were in the house . Yeah. Beautiful. Very interesting family. Again, indian family. Made their money in health care. One of those Great American stories. It looked how big was the piece of property . I mean you dont get a lot there. But looked like the house went up to the edge of the property almost. No no. I think its about a four acre property. Oh it is . Because 25 mil, it shouldnt be on an acre. Youve got property in the front. Plus you can see the intercoastal on one side where they have a yacht dock. And then they have the ocean. So its water to water. So they have enough property to go from water to water. Yes. Which is really really priceless in that area. Thats why its so much money. So the yacht then you can leave the boat there and go around and go out into the so its a lot of waterfront. That area is on fire right now. Paul jones just bought a place, 71 million last week. Were just seeing no end to prices down there. Thats north of palm beach. South. And years ago, its rare to see a price like this in man arc lapan, but now theyre getting it. There was a Chicago Bulls jersey on the wall. Also his second passion after saturday night fever is Chicago Bulls. Really . They had Scottie Pippen jordan, all of them signed jerseys on the wall. That whole area from jupiter all the way to basically all the way down to miami now. Youve got people moving north from miami because of the traffic. Its moving all the way up the coast. Crazy prices. Thank you. Thank you guys. Robert frank. Tune in tonight. The episode of secret lives of the super rich. 10 00 p. M. Eastern and pacific. Taxes too. Youre showing all of them. Its not secret. It was secret before you showed them. Exactly. Heretofore. That would be a great title. Coming up squawk master Mohamed Elerian. But before break, check out levels of conagra. Levels not seen since 1997. Theres nothing more romantic than a spontaneous moment. So why pause to take a pill . And why stop what youre doing to find a bathroom . With cialis for daily use, you dont have to plan around either. Its the only daily tablet approved to treat erectile dysfunction so you can be Ready Anytime the moment is right. Plus cialis treats the frustrating urinary symptoms of bph, like needing to go frequently, day or night. Tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex. Do not take cialis if you take nitrates for chest pain as it may cause an unsafe drop in blood pressure. 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Why are we so committed to keeping you connected . Why combine performance with a conscience . Why innovate for a future without accidents . Why do any of it . Why do all of it . Because if it matters to you its everything to us. The xc60 crossover. From volvo. Lease the well equiped volvo xc60 today. Visit your local volvo showroom for details. Rand paul throwing his hat in the ring. But does the senator from kentucky have a shot at winning the overall republican nomination . Coming up, we ask one of his advisers if hes the right man for the job. Plus developing this morning. Fedex exploding to the International Delivery scene. Theyre looking to buy tnt. And happy National Beer day. We celebrate the day and talk the booming craft beer business with the coo of the nations oldest brewery. The final hour of squawk box begins right now. Live from the most powerful city in the world, new york, this is squawk box. Welcome back. Eric clapton just turned 70 the other day. Really . Wow. Make mes feel old. Dont worry about it. 70 is not the end of the world. Its the new 50. Welcome back to squawk box here on cnbc first in business worldwide. Im joe kernen along with scott wapner and Michelle Carusocabrera. Andrew and becky are off today. Just 90 minutes now from the opening bell on wall street. The futures are still up. Up about 43 points. Weird session yesterday. Looked like it was going to be a little ragged. Down 135. About two hours after the open was up 135. Bill Dudley William dudley saying i think your point, too, about the dollar weakness that helped. Later in the day, though you may have noticed that the euro dropped like a stone close to the close. Its a weird move. Yeah. We have an intraday chart . The dollar yesterday was as you said a pretty decent part of that story too. Definitely. You remember when oil was going down. The markets were having trouble. Higher oil prices and a weaker dollar there. Look at that move in the afternoon yesterday on the euro. It just falls off a cliff in the afternoon. Second time in as many months where you see huge moves in currencies which are supposed to be incredibly liquid markets. In theory a move like that doesnt necessarily happen without some kind of news. Like the fed announces, and bam. I think that sentiment in the currency market is still on the fact that the euro is going to go lower so when it hits certain levels, i think the biggest players and money leans hard on it. It needs to fall off a cliff around june 19th. When you get on the plane or a week before you get on the plane so it will ripple through . I mean you know until i do the conversion it wont matter. Are you going . Yeah eventually. This deal youre going to talk about, scott im trying to figure out more about it. Its like a 3 premium. Was it already sort of out or something . Check it out. Being acquired by the permira funds. And pension Plan Investment board. The deal is valued at 5. 3 billion. Close at 48 and change. So its up 2. Thats where its being acquired. I dont know. Just weird. Whether it was telegraphed or what went on. I dont know. And is it weird that a pension plan is buying the company out . I dont know about that. Informatica is a cool name. Hope they keep it. Easier to read than the other one which i blasted. I dont even remember. Also making headlines at this hour fedex buying tnt express for 4. 8 billion. That deal would give fedex access to their network. And ceo of fedex fred smith will join squawk on the street at 9 00 a. M. Eastern time. Reaching an eightyear high according to the allamerica survey. More findings from Steve Leisman in a bit. Were also watching oil prices today. Iranian officials visiting beijing to push for more crude sales. Meantime Goldman Sachs also getting attention. Saying prices need to remain low for months to slow u. S. Oil output. The big sports story of the morning, of course duke beating wisconsin 6863 to take home the schools fifth ncaa mens basketball title. Were joined now by one of the worlds biggest duke fans. Chief washington correspondent jon harwood. Hes in kentucky today. Is that by coincidence . They lost the other day. Rand paul is there. Thats why youre there. Its also my hometown. Hes going to announce his candidacy in louisville in my hometown where i was born. Rand paul brings some significant strengths to this race. In particular the base he inherits substantially from his father who ran for president multiple times. First of wall hes got a chance a bedside manner. He is not shown a great ability to connect one on one individually with voters on this stuff. He can be prickly in interviews in an interview is few months ago when he shushed her on television. Secondly hes got to show he can raise the kind of money to be more than a niche candidate to really break out and compete at the top tier with people like jeb bush. And finally hes got to overcome the skepticism of republican Foreign Policy hawk. He has a much more restrained view. Already those hawks are out with an ad this morning attacking rand paul. Take a listen. Rand paul supports obamas negotiations with iran. And he doesnt understand the threat. You know its ridiculous to think that theyre a threat to our national security. Rand paul is wrong and dangerous. Tell him to stop siding with obama. Because even one iranian bomb would be a disaster. Of course rand paul will have a chance to address those fears when he takes that stage about four hours from now. Has that one shining moment, if you know what i mean, guys. Yes. We do, in fact. Referring to last nights victory by the duke blue devils. Scott was you were not like duke again. John knows. Im from maryland. I mean im a maryland guy. I like the terps. Yeah. Tough for you then. You cant be a maryland fan and duke fan. Weve talked about it before. Actually no scott. I am both a maryland fan and a duke fan. I was a maryland fan before i was a duke fan because i grew up in maryland too. But, you know at some point youve got to you know, prioritize your emotions. I will say this. I have Great Respect and i actually like coach k a lot. I do. I do. You should have heard what he was saying about duke in the commercial break. I thought i would be more sort of feel more of a feeling of revulsion because of you, john, with duke. But i dont. Youve been pretty classy with this. Thank you. You havent really thrown it around. Coach k is pretty conservative politically. Oh, he is . Theres hope for you then. You said the magic word. That was part of the guide. You know dean smith, the great late North Carolina coach leaned left and Mike Krzyzewski leaned right, still does. But dean smith leaned left back in the 60s when there needed to be some left leaning. You know . Now its i dont know. Totally different time to be on the left. I was on the left in fact back then. Anyway thanks john. Joining us now with more on senator pauls announcement, steven moore Heritage Foundation distinguished fellow for the project for Economic Growth. You know what i mean. There was a time when the left it was awhile ago, but there was a time it all made sense to me. Not so much today. Its not your fathers Democratic Party anymore. Democrats have moved way, way, way to the left. There was a time a lot needed to be accomplished. Anyway. This is weird. Youve got ted cruz with the religious conservatives. Rand paul is almost more of a libertarian. He wants government out of everything, doesnt he . Its weird all the Little Pockets in the republican party. Because this is different a different niche than even ted cruz. It is. Let me correct one quick thing. I have been advising rand paul but ive been talking to a lot of candidates. Im not officially with this campaign. I call rand paul the libertarian plus. He obviously has this libertarian wing of the party which is significant. Maybe 20 to 25 of republican voters. But what he does which is so significant for republicans is he expands that base. And republicans cant win without an expanded base as they learned in 2008 and 2012. And he appeals not just the harder core libertarian who is want them out of the courtroom and bedroom, but hes also gone to the inner cities. He hasnt appealed to minorities. And where he is amazing and has real appeal is with young people. The kind of young voters who voted for barack obama. You know, you probably know this story. He was at the campus of berkeley. It doesnt get more left wing than that. Got a standing ovation because of his stance on the nsa and invasion of privacies by government. Hes like his dad in certain ways. And his dad had a lot of young ones too. An army of young people. I remember when his dad was running. Itd be a sunday afternoon i was watching a Football Game and thered be a knock on the door with young people saying do you have time to talk about rand paul. I never had young people ska sa iing do i have time to talk about mitt romney. He does have this army of volunteers. I would disagree with one thing john harwood said. I think rand paul is going to have plenty of money. He has this entire network thats been handed to him. Its not as big as jeb bushs network, but it is a Family Network that is extensive. I think hell have plenty of money. Youve got tentacles all through the republican party, stephen, and a good feel for everything. Yeah. I know you saw probably because i it made a huge impact on me. The piece in the journal. Sure. Looking at the demographics of what its going to take to win. Because the democrats would have won the last three our four elections given where demographics are right now with minority, the rise of minorities. Hispanics, gay voters et cetera. The coalition republicans need to put together its almost like you have to build some type of winning percentage of the popular vote. And in the past the argument is moderates havent won so go right of there. But i dont know if a rightleaning person thats too far right can do it at this point. Could rand paul do it or do you need jeb bush . I think rand paul sh definitely going to be one of the last two or three men standing. Or women for that matter. In other words, i think hes going to have a lot of durability in this race. The question for paul is can he take that base his father had and continue to expand that. And thats what hes doing. You know he actually had an amendment to increase the National Spending on the budget. He wanted to cut the domestic programs to pay for it. Hes pro life. He is antiabortion, pro life which is important in terms of republicans. Weird for libertarian. The latino voters and asian voters that should be voting republican, havent been for the last cycles. He should be appealing to them. He went to detroit and said what have democrats done for you. Im going to bring enterprise and clean up the streets. Im going to bring jobs here. Thats a message every republican should be saying in a resounding way. Pro life. Thats a litmus test to a lot of people, isnt it . Do pro life people do pro life candidates expect at some point expect to roll back roe v. Wade . And that opens up the argument that the left will rub all over themselves, right . Im advising on economics. You know what i mean. Social issues are important in that theyll be used by they are. I believe its a pro life country for the most part. Outside of new york and california, most americans are pro life. But i think that kind of economic message combined with keeping the government, you know out of your individual liberties with respect dont underscore how angry people are about the irs, the nsa, these agencies that are how about samesex marriage with rand paul. You would think the government would be hands off on imposing its morality on people too. Is he i have to confess. Ive never talked to him about that issue. I know one thing. Hes going to be in favor of some radical simplification of the tax system. Hes going to have the most ambitious downsizing of government agenda of any of the other candidates other than maybe ted cruz. On the Economic Limited government issues hes going to be highly appealing. But there have been several. Ted cruz and people like scott walker have also been sounding that message. My point has been i look at this field of the ten candidates or so that are running. Every candidate whos running in this election cycle is better than any of them that ran in 2012. Well, yeah. Thats not a high bar to hop. To are and great primary campaign and win the nomination and then have moved so far away from the mainstream you lose. Then you get what we just had for six years. You cant get much more left than Hillary Clinton and Elizabeth Warren. Right. All right. Thanks. See ya. See you guys. Up next its the latest cnbc allamerica survey. The details on what americans are actually doing with their money theyre saving thanks to lower gas prices. Also where do they see prices at the pump down the road. First as we head to break, a look at gasoline prices this morning. There you go. Down. 1. 83 down slightly. Well be back in a moment on squawk. Financial noise financial noise financial noise [ male announcer ] your love for trading never stops. So if you get a trade idea about, say organic food stocks schwab can help. With a trading specialist just a tap away. Whats on your mind lisa . Id like to taabout a trade idea. Lets hear it. [ male announcer ] see how schwab can help light a way forward. So you can make your move wherever you are. And start working on your next big idea. Welcome back to squawk box. Viacom shares are under pressure this morning. The Company Announcing a restructuring. It will cut jobs abandon some acquired titles and reorganize three of its groups into two new organizations. Stock is off more than 1 . Viacom is halting its 20 Million Share Buyback Program as a result of all this. So what are americans doing sw the windfall from the lower gas prices . Steve leisman has more in the allamerica survey. This is why we ask questions twice or three times in a row. Because the answers change. This is a big change. I want to show you first when we asked people what are you doing with the extra money you get from lower gas prices. Back in december when we first asked this question 61 said they were doing nothing. And thats now changed to 42 . So theyre not doing nothing with it anymore. When you see the changes that are going to come up in the different categories its not from one to another. Its from doing nothing to something. Let me show you what the answers were. Paying down debt. One in four americans say they are paying down debt with that windfall from lower gas prices. Now, we did have bump up in spending. 17 say theyre spending. That compares with 8 back in december. You can see where that comes from. Not from one category or the other. But from those that did nothing to now doing something. That makes sense when you think about it. The story was what is this extra money and then its there after another month so they finally decide to deploy it. Savings bumped up. Lets look at the categories of who is doing what here. On the doing nothing, people 50 and older are likely to do nothing. Paying down debt the middle class. 50,000 to 75,000 income. Spending more. Professionals and managers. And saving more ages 18 to 34. And then finally driving more Blue Collar Workers ages 18 to 34. The entire survey on cnbc. Com. Ill be back in the 10 00 hour with what americans know and surprisingly dont know about the appreciation of the dollar. Guys . Were looking forward to that. Going to be great. Yeah. Itll be fun. Coming up yes . Please read. I will. When Mohamed Elerian is not watching cnbc hes probably watching the mets. Yes. We will ask him about both the mets and the markets in just a bit. Maybe about the jets too. Itll be jets season again soon. Plus its National Beer day. Lets drink in some of the staggering stats about our love of beer. Craft sales up 18 last year. The overall beer market is over 100 billion. Here to help us celebrate, the coo of the oldest brewery in the country. Not sure who that is . Its not budweiser. Its not miller. Stay tuned. New developments in the ongoing controversy over allegations of gang rape at the university of virginia. The now discredited Rolling Stone article which was officially retracted yesterday. Now the fraternity at the center of the controversy is planning legal action. In a statement, the fraternity says its members were ostracized and its house was vandalized. On sunday the Columbia School of journalism released a report blasting the Rolling Stone story for failures in reporting and editing. We dont like litigious societies. Would you be happy if you were part of that fraternity . No. But in this case do it. Go for it completely. Wouldnt you . Actually, i shouldnt be treading into this. But that was an inexcusable breach. And when you read all of the details about what they agree to with the primary person the story was too good to double check. The columbia review was pretty scathing. When there are damages to that extent maybe litigation should happen. There are times when maybe it rises to the level. Youre not going to say . Were you in a frat . No i was going to read i was in a frat. So was i. I wasnt. I would never have rushed. I went to some of their parties. In colorado in the 70s no way. You didnt want to be part of it but you wanted to go to the parties . Yes. Thats exactly right. That says a lot about you. Coming up Mohamed Elerian joins us to talk fed, the jobs data and what to expect this earnings season. Why does that surprise you . Yeah, exactly. This conversation is over. Plus street reaction to the were you in a sorority. No. There werent any. Reaction to the deal between fedex and tnt. See how im looking at you and reading the prompter. Thats amazing. What does it mean for rivals like u. P. S. . But first check out shares of clorox. Trading at levels not seen in over 40 years. Take a look at equity futures. After that big reversal one day ago, looks like well rebound. Dow plus 48. Welcome back to squawk box. Lets look at some of the stocks in the news this morning. Software company informatica to buy permira for 48. 75 per share in cash. On march 20th reuters reported others were considering a bid. I dont know whether you were reporting on that. Then also citing sources, reuters reported that advent permira were also considering a bid for so the stock had rallied already in anticipation of some kind of deal. So this was kind of out there. I still think its interesting a pension plan acting as a private equity firm directly. Normally they invest in a private equity firm. Axalta berkshire buying 20 from the affiliates of the carlisle group. General motors shares are lower in premarket trading. Canada is selling its remaining stake in the automaker to Goldman Sachs for an undisclosed amount. Among the other big movers this morning. Oculars drug missed in the main study. Clovis getting a breakthrough today. And drug maker diax offering 7 million shares. Fedex buying tnt express for 8 billion. Here with us now is managing director and Senior Analyst at avondale partners. Good morning. Welcome. Deal make sense to you . Zblit makes it makes all kinds of sense. U. P. S. Tried to buy this company for 6. 7 billion. For a 40 lower price, fedex is going to buy them and i think its going to be successful. Eu said it gave u. P. S. Too much of pricing power. And u. P. S. Actually ironically tried to sell off bits and pieces to fedex. And fedex said were not interested in helping you out here. U. P. S. Had to pay a breakup fee at their failure to buy this property. Fedex presence isnt as deep abroad as u. P. S. I think theyll be successful with this deal. No regulatory issues, then the likes of which u. P. S. Had, you clearly think. Yeah. And ironically, fedexs refusal to help break up that deal. And now fast forward the tape a few years. Youll be able to buy all the company for 40 less than u. P. S. Was willing to pay app and not sell any pieces off. Where were you on fedex stock for news of this deal broke. I had it rated buy. Would discontinue that outlook. Fedex has been good historically as buying companies. They expanded and blew into fedex ground. They bought American Freightways vikings and produced the largest lcl carrier in the world. Fedex is really good at buying fixer uppers and doing exactly that. Fixing them up. And this is definitely a fixer upper. What about u. P. S. . Where are we on u. P. S. And what do they do now . U. P. S. I continued really the entire time its been public ive had it rated whoeld or sell. Its a company that really just is not nearly as dynamic or entrepreneurial as fedex. Think about it. It became public at 75 a share in the fall of 1999. Were in the mid90s today. Not a whole lot of price appreciation in the stock. Right. Its one thing sort of to lose a deal and then when you lose the deal to your major competitor talk about hurting a lot worse. Yeah. They had to pay a breakup fee which is even worse. I mean many people have talked about tnt itself. No pun intended here that explosive of a company. It hasnt profit has been anything but good. Its been lackluster, losing money in many quarters. Revenue growth really hasnt been there. But when fed exex takes over it could be dynamite. Thank you. Fred smith on in an hour from now. 14 games in the major leagues yesterday as baseball season got into full swing. The new york mets making an impressive debut beating the nationals 31. You know this guy. Bartolo colon had eight strikeouts and one walk in six innings. Are you a mets fan . No. The nationals i keep an eye on. Huge expectations this year. You do. Thats right. In cincinnati, the 96th annual opening day parade was held. Thousands of people line this streets. They played baseball president it wasnt the greatest weather for opening day, but they tied it up in the top of the ninth. But the bottom of the bottom of the eighth, reds won 52. And we can all talk about this because someone yesterday had the nerve on a radio interview to tell me that the National League is behind the times because of the designated hitter. And i had to read him the riot act in terms of managers and strategy and knowing when to pinch hit. Knowing when to put it do we just have everyone just big guys that can hit, they dont even field. Just have nine guys . Have two teams. Have nine guys that hit, nine guys that play the field and pitch. Why not do it that way . It is lame when the pitcher hits, dont you think . No. You like it . Yes, i do. Anyway. I take the National League any day compared to the a. L. Joining us now, longtime mets fan Mohamed Elerian. Would you bring the dh to whats that . Oh, hes got the mets hat. You think we need a dh in the n. L. . A big no. Keep your orange baseballs and your Charlie Finley faux offense. Its ryidiculousridiculous. Why not make it illegal to pitch over 50 miles an hour. Let everyone get a hit. Stupid. Please dont bring the dh into the National League. Thank you. I totally agree with you. The strategy the thinking. I would like the American League to go back to real baseball. Me too. Hits runs steals Everything Else. No question. All right, mohamed. Unfortunately thats the last thing were going to agree on. Ill tell you what sort of got me. You talk about the employment report it did indicate the fed could delay, push it out from june, and its also going to go slow once it does start. And you figure that probably nailed it on friday that thats going to be the situation. Right . Yeah. I think that what the fed is likely to do which is different from what they should do what theyre likely to do is move at the september meeting. And theyre going to do this in the context of indicating very strongly that its going to be a to use dudleys word a relatively shallow path that is going to be conditional and that the terminal point will be lower than historical average. So theyre going to try to keep the market focused on the journey and stop the market from going to the terminal value that historically has been much higher than where they end up. Thats what theyre likely to do. What they should do is something different. Right . What they should do is be a little bit less timid and realize the main risk to the economy comes from mounting financial imbalances that could threaten instability down the road. Heres the next thing. The thing that irritates me. This has been something about our relationship for awhile. You say the report is a further reminder of how much more the u. S. Economy could have been doing if it wasnt for the do Little Congress that doesnt do Infrastructure Spending more responsive fiscal policy. So give all the activism weve had with the fed and with all this other stuff and not progrowth stuff, you want more cainsian stuff and did more stuff that the president proposed. You and i are on the same wavelength that weve had too much central bank activism. Not just here but around the world. Dig a hole and fill it back up . Do the stuff that we know . Little shovels. Little shovels. Employ a lot of people to dig the holes and fill them back up. You talked about the potholes. The infrastructure in this country undermines private sector activity. What about all the uncertainty from the stuff we passed, obamacare and regulations that are holding back Business Activity . Do you think the private sector is really being greased in terms of tax reform and Everything Else . Wouldnt that be better than growing government even more . So wonderful to be with you. Theres a difference between no government, smart government, and silly government. Silly government and no government doesnt help. What were looking for is smart government. Thats an oxy moron. Weve had a do nothing congress. They wont do things. Theyve stopped doing things. How do you know nay havent stopped from doing some really asinine things. Let me go down the list. Immigration reform Corporate Tax reform. What about the list of all the things they didnt do . I mean under president obamas first term they did massive amounts of legislation. Youd have to go back to fdr to see such a legislative history. Health care reform. That was tremendous. We got yet another round of financial reform. Above and beyond what george w. Bush had already done. Not to mention the stimulus money. Not to mention complete revamping of education spending in what he calls education reform, this president. Lot done and this congress got a lot done and this is what weve got to show for it. Michelle let me give you one fact. The basic element of economic governance is the passing of a budget every year. Okay . Thats the basic element of economic governance. We havent had an active budget for over five years. Because of harry reid. That is an issue. That the congress cant even totally get on the basic element of governance. Michelle said it. Thanks to the democrats. Right . He cant disagree so he cant say anything. Its two parties that are being pulled further and further apart by whats happening to the extreme of their party. You had that talk about the tea party earlier on. Thats whats happening. I think its a real issue. Because this is a country on the verge of liftoff. It has tremendous entrepreneurialism lots of cash sitting on the sideline. Theres a ton of innovations going from being Firm Specific going macro. And if we can unleash all this it will make a huge difference. Most importantly for the markets, it would validate the asset prices. Speaking of having cash on the sidelines, why are you personally in mostly cash . I think i read that. Is that true . Ive got a very barbell strategy. And its similar to michelle saying a pension fund is now going to private equity directly. So cash and then high risk more liquid exposures to start up hedge funds. Why . The most heavily trafficked part of the risk return is the public markets. Why . Because the fed has been pushing everybody into the public markets. Pushing up asset prices. So if you look at longterm valuation, it makes more sense to become more barbelled and reduce your exposure to the most heavily trafficked and most artificially lifted asset prices. Thats why theres barbelled more cash and more up here in terms of startups, hedge funds. Thats what a lot of investors are starting to do by the way. But as far as your overall view of valuations and things for quite a while youve thought theres ban wedge between fundamentals from the economy and where the market is in terms of valuation based on the accommodative fed. Its just gotten more so in your view, i guess. Yeah, the market is in love with the central bank trade because it has paid off. Yesterday perfect example. You said it earlier. We started down 135 points. Why . Because we were worried about the economy. Bill dudley says the fed is going to be accommodating, went up 135 points. So we are in the midst of the Qe Central Bank trade. It will be good as long as its last. It reminds me a bit of 07 and 08. Saying theres a turn coming but im confident that i can get out as i see the turn. Im not so confident i will see the turn coming. Turns happen quite quickly. We are in the midst of this central bank trade. It has been incredibly filling. If youre going to play it right now, play it abroad where Central Banks are much more active than the united states. Play for the currency and through relative beta exposures opposed to outright beta exposures. All right, mohamed, thank you. Your two best friends are me and michelle. Thats opposites attract, isnt it . He likes me too. Its weird that youre closest to the two of us and yet were so far apart on philosophy. Except the National League and the designated hitter. Right. Exactly. He agrees with you. And i feel your pain with the jets and you feel my pain with the bungels. Thank you. He agrees with you on the fed. Thats what you were saying yesterday about the stones. I dont want to agree with people though. Still to come hey, the truth. Its important. Jim cramer from the Stock Exchange coming up next. Its National Beer day. Today we celebrate beer being legal to sell buy, and of course drink. The man running the nations Oldest Brewery Joins us after the break. I care deeply about the gulf. I grew up in louisiana. I went to school here. Ive been with bp ever since. Today, i lead a team that sets our Global Safety standards. After the spill we made two commitments. To help the gulf recover and become a safer company. Weve worked hard to honor both. Bp has spent nearly 28 billion dollars so far to help the gulf economy and environment. And five years of Research Shows that the gulf is coming back faster than predicted. Weve toughened Safety Standards too. Including enhanced training. And 24 7 on shore monitoring of our wells drilling in the gulf. And everyone has the power to stop a job at any time if they consider it unsafe. What happened here five years ago changed us. Im proud of the progress weve made both in the gulf and inside bp. All right. Its National Beer day and we are celebrating with americas oldest brewery. Yuengling just last week the brewer topped sam adams as the countrys top craft brewer. Joining us now is yuenglings chief operating officer. David, welcome. Thanks for sending along the beer as well. Thank you. Youre quite welcome. Its great to be here. Still independent as well which is saying something in this day and age. It is. Were now in our 186th year of operation. Were family owned and operating which is very unusual. Once you get past three generations, its very difficult as you know to continue. But the current president Dick Yuengling is actually the fifth generation of father son. He has daughters in the wings working in the company and ready to take over for the sixth generation. Can you stay that way . I mean, as people are looking to consolidate, as you have two major Global Brands driving most of the action. Its difficult. But i think theres a passion and a history and authenticity at yuengling theyre in it for the beer. Weve gone through very very difficult time in our 186 years of operation. But right now its about legacy its about continuation its about giving the next generation and maybe the seventh generation an opportunity. Dick is focused on that. Its a great story, but if i had to bet money, i would bet that many many have come calling trying to buy this brand. The brazilians were they there . Im sure. Did they come looking . They all do. In fact, we have an inside joke at the brewery. Any time a limousine pulls up, we wake up and people think the brewery is for sale again. Whats the signature of yuengling . Youre trying to stand out in a craft market. Its one of the reasons that a lot of the big boys have been buying a lot of the big beers. How do you set yourself apart . What is the signature of this beer . Well i think first and foremost, we believe we make great products. We have a diversified portfolio. We offer a variety for every consumer type out there. We embody the family owned company. Weve been around for 186 years as i mentioned. You know the authenticity the legacy is there. I think thats important to people today. Were american owned and family operated. Its very important. Its a part of our dna. You know with the combination of having good products and being family owns we think its the right combination for continued success. Seems like brown spirits have certainly stolen some of the thunder from beer bourbon and the like. Weve seen maybe some of the results show that on wall street. Its been a roller coaster ride. I mean you know going back when i started with dick almost 25 years ago, it was a challenging time, the brewery was struggling to survive, and dick made a lot of commitments to keep that place alive. Were going through best of times now but over 186 years of family ownership, most probably more lean than good. But its a competitive landscape, no question. Its not only the spirits industry, the wine industry, but a lot of Consumer Choices today, whether waters, juices sweet drinks teas. Its a competitive landscape. Huge fluctuation, commodity costs, energy prices, et cetera. How do you handle that . It is a challenge. Certainly, you know, as you get bigger you have more scale, you can try to control some cost but was for startups, thats a daunting challenge for them. Getting access to Raw Materials making sure that they can afford it, its a capital intensive business if you want to continue to grow and get bigger outside your local market. Which youve been doing just fine, for more than 100 years. Well, we have. But you know most of our business is local. Weve been a pennsylvaniabased company for since our inception and most of our volume is sold in the small geography in the east coast. We are in 17 states. Theres an opportunity to get bigger but were content and happy with our regional footprint. Thanks for sending summer wheat. My favorite. We have a few more coming. Thank you. When we return jim cramer from the new york Stock Exchange. Then tomorrow on squawk box, market master russ koesterich, the market the fed, what hes expecting the earnings season. Grand slam mast somewhere course developer, gary player. Ben koffman, founder and ceo of quirky will be our guest. Well be right back today. New york Stock Exchange. Jim cramer joins us now. While you were watching the markets yesterday, you were pretty i guess you sort of saw that coming that it probably wasnt going to end sharply lower. But did you feel that it was the dollar weakening. Yes. Why is that such a why is that a big help for us . Why does that turn things around. I tell you, were going into earnings season and analysts havent cut their numbers yet ahead of what are we going to see are just huge swing because the dollar so anything that modulates that look remember only about 30 of the analysts cut number as head of international companies. So anything that indicates the dollar could go a little bit lower makes them feel more confident they dont have to hack the numbers, also makes the ceos more confident they dont have to lower forecast that much. So it makes the whole commentary narrative more positive. You got fred on. Look i just think when you listen to what freds going to say, fred is going to say that europes back. Its a fantastic call and i love the deal obviously the market loves the deal. Its a nobrainer giving how much u. P. S. Will pay. Your analyst talked about u. P. S. Flat versus fedex. Wow is that right. Fedex is aggressive, i love them. Great american fred smith. Yes. Economist, Great American. Used to come home with larry on kudlow and cramer and i just enjoy the guy. A great vision. He does. Thanks jim. When we return a look at what you need to be watching when trading opens on wall street. Here are futures at this hour and they suggest a positive open well, sir. After some serious consideration id like to put in my 15year notice. Youre quitting . Technically retiring, sir. With a little help from my state farm agent i plan to retire in 15 years. Wow youre totally blindsiding me here. Whos gonna manage your accounts . This is a devastating blow i was not prepared for. Well, im gonna finish packing my things. 15 years will really sneak up on you. Jennifer with do your exit interview and adam made you a cake. Red velvet. Oh, thank you. I made this. Take charge of your retirement. Talk to a state farm agent today. O. Check out todays watch list. Look for the latest snapshot on the job market with the jolts or jobs opening and Labor Turnover survey. The number of opened position rose to 5 million in january, the highest level in 14 years. Also, a look at consumers borrowing patterns monthly Consumer Credit numbers are out, credit expected to have increased slightly in february. National beer day. International beaver day around the world, april 7th. Theyre builders and theyre amazing at what they do. Big deal in canada. Architects behind national beavers day. Its an International Day known around the world. International beaver day. Its National Beer day and beaver day. Beavers should not drink. On beer day. Right. However any other days fine. Make sure you join us tomorrow. Squawk on the street is next. You can feel it all over you can feel it all over congratulations to coach k. And the duke blue devils on their fifth ncaa basketball championship. And to wisconsin on a stellar season as well. Good tuesday morning. Welcome to squawk on the street. Im Carl Quintanilla with Jim Cramer David Faber at the new york Stock Exchange. Futures