Transcripts For CNBC Squawk Box 20150410

Of the force. Starting today you can watch all six films in digital hd through itunes amazon and google play. Well talk about all the media stories with legendary tv producer tom werner is going to join us at the top of the next hour but in the meantime lets get you you to speed. Heres how the markets look. Dow up about 17 points higher. Nasdaq up about 3 points and the s p 500 a little over two points. What are you looking at me like that for . I mean do i sound this is how people felt with me here last week. Do you know what you look like . Do you remember pig pen when he would walk all the stuff it was dirt. With you its like i feel fine. You have mucus. A little froggy in the throat. Thats how it sounds to you . How does it sound to you. Like i want to lean way over here. Is this a drug resistant you brought this from the other side of the world. Its a cold. Thats all it is. And im supposed to sit here and not be scared. How did you do last week . How did it sound. Let me read this. How many tish queues did you have. Have these. A couple of boxes. I do it through the nose. I was doing all of that stuff. Outside i do the i dont need a kleenex outside. I remember once having to read the prompter and it was starting to come down a little bit and i didnt know if i should stop or not because the viewer sees a little bit of thats fine do you remember the greatest actor of all time and why he was the greatest actor of all time. Who was that. Brando. If you feel something do it. If you blow your nose just go with it. Dont be afraid. People are people. Theyll like you more. Im afraid of you. Here are the big stories that were watching. Two economic reports of note. March import export prices at 8 30 eastern and then this afternoon an update on the federal jujt. Budget. European stocks are hitting the highest level since 2000. A lot of people are saying thats where you should be. People on our side of the pond are taking a note. U. S. Investors poured 1. 5 billion into funds that specialize in european shares. Thats the most in several weeks. Make sure that your head is against currency risk. President obama is in panama for the summit of the americas today. While no former meeting is planned he could talk to you can president castro on the sidelines of that gathering. He went to the bob marly i would like to go to the bob marley museum. That could be a cool thing. I can only imagine whats there. Thats interesting, right . I he know curse words and all kiensd of stuff. The buzz story of the morning well get to the apple watch. As of today you can try it on in stores with an appointment or order online. Seema mody joins us from london where apple fans are already excited and five hours a head of us. Thats right. Its the strategic location that highlights the push into the market. This is a High End Department store with all the top brands. You name it theyve got it. In fact andrew inside the apple watch is being displayed steps away from rowlex, tag and other high end watches. This is the attempt to make it a Luxury Fashion piece as opposed to a tech product. Will it be able to play a meaningful role in this tech market . There are three collections. Starts at 349. 549 and the high end one at 10,000 which can go up to 17,000. We have been getting reaction from different customers on what they think about the apple watch. So far mixed reviews. I was impressed with the quality. Looks like its jewelry rather than being just a smart watch that can do exactly what your phone can do. I have a fit bit now that i wear and i think that would replace that with the apple watch. Do you wear a luxury watch right now . I do. But this is different. Thats why im not sure. This comes from a grandpa so its a sentimental watch so its a big step. Now jeffrey expects 300,000 apple watches to be preorders over the weekend. In terms of sales analysts expecting 3. 4 million in sales. That number is expected to increase to about 8 billion in 2016. Ill just mention there are reports right now that the apple watch, some versions are sold out online but so far no confirmation from apple. Back to you. Seema, thank you for that. We should also tell you some fake apple watches are popping up guess where, in china, in the he electronic district in southern chinas city. You can get what hooks to be an apple watch for only 55. Despite being fakes they promise messaging, phone calls and video. But unlike the real deal these phones cant download the new apps and the authentic apple watches dont hit shelves in china until april 24th. In the meantime a very new apple macbook laptop. Christina warren is senior tech analyst and brought with her a new macbook to show off. Yes. You asked the question joe, is that an ipad. It looks like an ipad. It looks like an ipad i have one with a keyboard hooked up into it. Its about the same size and thickness. A little bit bigger screen. But this is not the exciting thing that people he are going to apple stores this weekend for. Some people are. This has been getting a lot of excitement but the big thing is the watch. Are you wearing one or no . No they wouldnt give me one. But i have used it. Better or worse than you thought. Better. Ive used a lot of different smart watches. You know i wore pebble for a long time. Ive gone through the various wear devices. Its the first one that actually feels like jewelry and like a real watch. So would you go out and get the First Edition or do you wait until 2 or 3. 0. This is the tough thing. If youre an early adopter and somebody that hasnt used the devices and you like the feel of the watch its not a bad product. If you have the gist of what the wearables are like the next version will be better looking. Probably thinner and less expensive. Better. Im thinking i want to wait for 2. 0. Youre going to get 1. 0 for the kids or no. Yes. But not for yourself. No. Because. Hard to imagine as big an early adopter as i am im looking at getting one of these things for the blackberry at some point. Apparently you can send messages like the people and get Business Information and stuff. I heard samsung makes a phone now. And it has the hemorrhoid operating system. What is it . Go ahead. Please go ahead. I cant go on. You know have to be nice to you today. You are so youre very vulnerable. He is. Im glad youre here. Hes like a buffer. No and im now going to get all the germs. You are. Picked a great day for this too. The watch has a price point of down 359 all the way to 17,000. Right. How many 17,000 do you hi they sale . In the United States maybe to the kardashians. Thats about it. But overseas in china, dubai, people in really high growth markets, you might be surprised. I mean you look at what the luxury market in china is like its really really big. They might do pretty well. Is this a high margin product for them . Yeah. But at 359 how much does it cost to make the thing . Do we know . No we dont know what the come poenlt component is. The 349 is not the huge margin items but then you look at the accessories. Is it where you buy the watch and then buy multiple bands. Yes. Thats what theyre hoping to do. You can imagine they might partner with some designers and come out with their bands down the line. So the thing i want to buy is the thing thats right here. Tell us about what this is. I have a macbook air. A lot of people do. A lot of people have macbook airs. This is a new version. Its a macbook but similar to what the macbook air was like. Its the thinnest lightest laptop you can get. It has no fans. Totally silent. It weighs 2 pounds. At its thickest point its half an inch thick. But it has no plugs. One plug. Thats the one down side. It has one plug, usbc. Do you know about that joe . Have no idea what that is. Theres a cream for it isnt there . There is a cream for it. If youre always connected to wireless and have your documents and things in the cloud maybe you dont use thing as often. This plug will work to go to your monitor. Battery is all i care about. Ten hours. A whole day. You can get through a whole day of work on this. How about the keys. I love apple keys normally. The keyboard is bigger but theres very little travel meaning theres little space. It takes a little getting kwuzused to. Its almost like tapping on an ipad. You brought this as a presen for me today. I wish. If the apple store is too busy for you today theres another retail location getting some attention. Sprint is going to open more than 1400 new sprint radioshack locations around the country today more than doubling its footprint in retail. Theyll exclusively sell sprint noble devices. Radioshack filed for bankruptcy in february. Amazon winning approval from federal regulators to test the delivery drone outdoors. Last month the faa gave the green light to an amazon prototype but blasted them for being so slow. The company waited more than six months for the agencys permission and amazon must keep test flights at an at tuldltitude of no more than 400 feet. Pretty cool. Among todays stocks to watch check out gap with stronger than expected march sales but cautioning the early timing of easter month results and hurt april sales. Also citrix warning it will fall short of efforts and baker hughes is suspending its online publication. It will continue to watch its weekly rig county. Andrew coming up the dow and the s p are youve never had any acting classes at all. No at this point someone once told me in fact it was the late great nina do you remember her . I read for her and she told me my emotional instrument was clogged. And do you think my emotional instrument is clogged today. Youre definitely more clogged than normal but in general i think your emotional instrument is clogged. Too guarded. I think because i might be physically clogged that maybe emotionally i might open up more. Maybe that will. Be free to be me this morning. Never heard of them. Generational thing. No its not generational. These are famous. Famous people. Anyway coming up the dow but this is what you feel the experiences in life let them come through. Coming up the dow and s p are looking for their first back to back weekly gains since february. Well talk markets next but first here is a look back at this date in history. Im not sure what day it s. April. Is it april . Its april. 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. Check on the markets this morning. The futures so far were okay yesterday. Session went on and on and kind of moved around and finally had a pretty descent close today. Were looking up a little on the open. Dow jones up 28 points and s p up just under 3 and the nasdaq up just under 5. Well take a quick look at around the world. See if we can get an indication. Although green now in france and on the ftse and germanys dax. Greece is up a full percent. Here are the asian marks which were mixed. 50. 42 can be on crude. Its a little above. This should be fascinating to watch. The dollar is going to be fascinating. People saying were still going to par. You just saw the ten year and here we are 106 today so were testing the lows. Got down to 105 at one point euro dollar. Stocks are on track to turn in a positive week. They have been up four out of the last pooif sessions. Joining us now with more on the markets, ed from quantitative management associations. Youre sticking to your longterm outlook but you point out things that werent quite as positive as in the past. For the u. S. Market Earnings Growth looks like it will be zero and we have a drop in earnings this year. I still like u. S. Stocks. We will see an earnings rebound eventually but theres better opportunities as theyre trying to find the best opportunities in the world and european stocks represents a better place to be for your money right now. You go as far as to say that this is a highly unusual market cycle and at the very end you point out, you know growth is slow but thats not necessarily the worst backdrop for stocks. Rates stay low. You get what you get with the earnings per share growth. Its not the worst thing in the world but maybe not as good as the last six years. The good thing is that we really havent had the excesses build up. The high leverage of great risk taking that leads to the end of an economic cycle. People are still cautious. Well probably have an extended cycle for Economic Growth and the market. Well not see the returns in the next five years as in the last five or six years but you can get positive returns out of your stock portfolio and despite low Interest Rates might get positive returns out of your bond portfolio as well. Slow and steady probably. Thats correct. Do you agree with that . Everybody says europe and now i see flows into europe. Do you feel the same way about europe and the u. S. . Small cap european stocks right now, im not sure currency hedging is the way to do it because there will be weakness around the us. Dollar as we maybe take a step back from fed policy intervention sooner than prooef warehousely thought. Thats something to consider when investing in europe but over the longer term were kind of more happy to be in u. S. Equities and we think were going to continue to climb walls of worry. You think theres going to be a pause in the tightening. You have to start something before you pause. No a pause in the pair tightening. When will they go up . September. So even when they start theyll go slow. Slow at this point. Could we get down to the dollar in parity thats a possibility. Theres been a huge influx of money into European Assets that are hedged. You might want to switch out of that into something thats european. Then just stay with buy european stocks in euros and take your chances. Is that right. Do you have something to say pig pen. No i have nothing to say. Im trying to save my voice. You are. I am. When i have something brilliant to say i will speak. Theres been days the past couple of years where i wish you had saved your voice so many different times on certain subjects. Im sure. But now you are going to. If we talk about income inequality or something. That might get me excited. Ceo compensation or monopolies. Tax day is coming up. Independence days for you people down the street at the New York Times. Favorite day of the year. By far. I dont know why you people dont just send in checks year around. Almost like a charity. I try. I actually pay quarterly for that reason. We should take this on the road. This is pretty good. Ed is over there going im in sarasota. I could be and i came in for this. Why are you in sarasota. We have a place down here. Who is we . My wife and i. Hes part of the problem. 1 ers. I bet he pays quarterly too just because he enjoys it. How much do you think about what he we just talked about . June September Quarter here quarter there . Thats not even your thing is is it . Another reason im down here is jeffrey lacquer is giving a speech in an hour or so. Exciting. If you look at janet yellen assist last speech a few weeks ago in San Francisco she laid out what theyre thinking and looking at and my guess is when you net it all out were looking at sometime in september. The fed really does want to raise rates and get off zero but theyll have to go slow because the market clearing rate of interest in the u. S. And world remains low. Theres a great deal of money seeking a safe secure home and Interest Rates will rise a little bit but i dont think theyll raise a great deal in the u. S. Or anywhere around the world over ever over the next year or so. How do you characterize this Global Environment . Yesterday Larry Sommers was on and he echoed global savings or something that even the pimlico, new normal environment, the reason i ask is people are saying that the fed hasnt orchestrated low rates. The fed just followed where they would be anyway. They kept them here because globally thats where they are and other people say central bankers around the world caused this. Just because everybody is doing this doesnt mean that it had to happen. In other words maybe it wouldnt have been like this if the fed and central bankers hadnt been so easy. Thats an aurlt you cant know for sure. Jon williams has a model that suggests that the natural rate is still close to zero. Others suggest 1 or higher than that. I think the fed could go up. But theres a great deal of money looking for a return and in the meantime theres a lot of caution and overhang for the financial crisis that rate of interest is low and will continue for awhile longer. Because its so hard to get a return the notion that people have gone out and maybe some people shouldnt have. Is that a concern or not. Its a systemic concern but if you look at investing today and you look at what were going to face over the next lets say couple of week which is is maybe a little bit of an earnings season additional u. S. Weakness, we think volatility is an asset class at this level. Thats a weird notion. Move m one way or the other here. Well it looks to be quite attractive into this earnings season. Anybody thats just im going to buy some vicks. You should have so vicks. You put it on your chest when you were a kid. Do you need help with that . You know im here. I almost said eyes wide shut. Play some of that music for you while im doing that. Coming up we have a strong dollar likely to be a major theme this earning season. Well talk to a top earnings strategist and take a look at yesterdays is 500 winners and losers. Were back in a moment with a little bit of vicks rub. Doug, we have the results, but first, we have a very special guest. Come on out, flo [house band playing] you have anything to say to flo . Nah, ill just let the results do the talking. [crowd booing] well, he can do that. We show our progressive direct rate and the rates of our competitors even if progressive isnt the lowest. It looks like progressive is not the lowest ohhhh when we return well find out whether doug is the father. Wait, what . 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. We got some breaking news right now. General electric is sharing most of its ge Capital Assets. They are going to be sold to blackstone and wells fargo. Also authorizing a 50 billion buy back. Also 36 billion in cash. 6 billion tax bill. David is here to join us on the set and he sat down last night to talk about this deal. May not be able to talk now. No i can talk. Joe he is sharing interesting information along the way with me as well. Theyre basically getting out of ge capital. The disposition of it is going to take quite sometime given the various businesses there. All the different portfolios of assets but other than the finance companies that go along with the different businesses, equipment finances and leasing of aircraft those are still and theyre still significant but youre talking about a company thats going to transform itself into an Industrial Company in 2018. Were talking about a company that 90 of its earnings will come from in the industrial businesses. Finance will no longer be an porn part of it. I did ask yesterday why and why now. Ge capital, i mean first question is a simple one, why. Why and why now. Yeah so david i would say the Business Model certainly changed. We have a fantastic Industrial Portfolio but we are a large wholesale funded finance company. The wholesale funding model is tougher. We felt like were disadvantaged versus banks and at the end of the day the Way Investors view it is starkly different and we felt from an investors standpoint that this was the right time to make the move. Weve been working this way since the financial crisis and i think two things have happened just recently. One is you really have a perfect market to be selling assets slow gloeth lots of liquidity, people searching for yield and recently the financial Oversight Board said theres an off ramp for companies that were systemically significant to kind of get off as they shrunk and this is good for the system and regulatory world and investors. Thats been more or less recent and now is the time to do it. A lot of the proceeds are going to go toward a share buy back. 50 billion. The company talking about returning 90 billion through 2018. That inlewds the current dividend and also includes the 85 that the company owns that will be spun to shareholders. That was a very Successful Offering from the company from its ge capital business and that 50 billion buy back. Those are the key parts of this. And it was that transaction. It was the deal that actually inspire. Analysts had it pegged at 26 billion. Its worth 10 and yes he said the same to me during our interview as well and during conversations with other people involved and trying to get this done. The thing you havent mentioned yet is this whole issue which is part of what theyre doing and its to be out of being an institution. Which they fully expect will be the case they will no longer be significant in that regard they talk about wholesale funding and the model having changed. So you think this is going to inspire banks and others to do the same. Do you think a jp morgan or anybody else looks at what theyre doing. They get through their finance arm what would they have . Its a little different thing. I dont think so. But you know joe and i have sat with jack welch, so many times and you have as well. Why dont you split it up. Cant you create values . They have been thinking about this for years. Now they feel this is the proper time. Im hearing from people off the record. Cant speak to it. One o of the greatest investors of all time so must be time to buy real estate. I dont know if you noticed but they did an auction, no auction, they sold it straight to blackstone. Now i see that the question i had when i heard it was going to happen was the whole rational was we finance the sale of all the stuff we make. But when you ask why are you holding on to this because not valued has gotten you in trouble in the financial crisis and we want to finance the stuff we make. They can keep those things to finance. But the other thing is they wanted to keep a aaa rating. Can they keep the aaa rating to get rid of all of this. I dont know the answer to that question. Do you remember how they always said that . Thats why we keep this. I do. Didnt the aaa go away a long time ago. It did. I dont believe its going to change its. So that wont change. They didnt need the size. Ge capital for a long tomb was an extraordinarily profitable business. Helped contribute to enormous growth. Talk about a company that stock. Its black box. If you wanted to smooth earnings. It was a place where you had the drawers and needed a couple of pennies a share. Theres a reason the stock traded at 35 tiles earnings in 2001. Welch got very prickly if youre saying youre managing your earnings. But he said no im managing the businesses. It gives you a lot of flexibility in terms of in terms of multiple now what do you think of . Honeywell . Caterpillar . You think there was an analyst about six months agatha said there should be baby ges. Take health care and put it over here and break up the core. These are questions certainly that i put to him and were going to have his answers i think more on this show and certainly throughout the morning. To your point it gets about a 16. 5 multiple right now. Theres a feeling that theres a diskounlt discounted multiple included in its finance and that that will change. They think they can be valued more highly. As for whether it belongs together now he says firmly absolutely yes. There are cinergies. I used to like it but i dont think it compares at this point. Keep it and give me symphony. Hold on. I would have thought do they think this is worth five of ten dollars in the stock . Its not even worth a dollar yet. Its not going to get back to its 52 week high. How much is what did you say the buy back was going to be . 50 billion over the next few years. How much for the dividend . Well the dividend does not move and. This is all the proceeds. First of all 12 billion of that is noncash. They have to pay taxes. That part is fascinating to me. Theres a company thats always been very good about keeping tax rates low. They were going to repatriate the cash. Thats hurting them and part of the charge taking place right now. People are going to wait for tax reform in washington. I dont understand that either but its up 65 cents. One would expect i think they certainly expected it to be up more than that. Today you think . Im just saying i think theres an expectation. This is complex and will take place over years. Were not talking about it selling these huge portfolios and selling things like their middle market secured lending business. Theyll sell certain businesses on a multiple or price to book and then theyll sell portfolios with the real estate deal. Theres execution risk that they actually cant do it or cant do it as quickly as they want to do it. Theres people people lined up ready to buy. They started to lineup then. People saying this is going to be a timing issue. Theyre going to go back because they love to criticize and then theyll say look at these other buys or real estate before the financial crisis or oil and gas before the drop off in oil and theyll say this is an indication of not a top thats what theyre saying. The sell of cnbc. If we get it racked up we can listen to the answers. Youre going to stick around. Youre staying. Its nice to be here. He gets a comp day for coming in here. He needs to. I have no voice. Dan needs to be here. Did you see the spread in the green room for him . Its unbelievable. I like him here. This way i can talk about the whole thing. David right. It is. Look at you guys next to each other again. He thinks i look old now. Do you know what i say to you, i cant wait until youre my age and you have to get wrinkles and stuff like that. Youre young and everything wait until you start falling apart. Ill still be around. Youre never going anywhere. Youre living forever. Yes i am. I have no doubt. Only the good die young. Youll keep going. Just hang out. You can be like guest host. Okay. Ill be guest host. Just hang out here. Sure. At least he comes in here and wears his jacket. His head is well, i dont know, anyway. Coming up much more on the big news from General Electric. Plus the strong dollar likely to be a major theme this earnings season. Every Single Person that sells something abroad youll hear about it probably. Well talk to a top currency strategist from bank of America Merrill lynch next. And later legendary tv producer tom werner going to be here. He launched unbelievable careers. Mork and mindy. Saw a comedian and said happy days we immediate a spin off. How about an alien. Do you know who else . Cosby. Oh okay. You love the stuff that could make news. The stuff that makes news. Its a news show supposedly. Plus our news maker of the morning, rob manfred will step up at 7 30 and you know what im going to ask him about. I saw pete run into ray. Oh hi. Welcome back. If youre just waking up this morning, big news out of dow component General Electric. Ge is selling most of its ge Capital Assets. Assets of ge capital sold to blackstone. Also authorizing a 50 billion share buy back. 26. 20, to 26. 27 but by the end of the day it could be up. It moved up yesterday because you had the story on the black stone deal coming out. Up 75 cents or so. How many shares are still outstanding. Theyre talking about the buy back shrinking into as little as 8 billion shares. Thats important because youre eliminating an important source of profit from the company but youre going to make up for that so your earns per share number will stay largely the same. Theyre talking about going between 8 and 8. 5 billion so that gives you a sense of the size of the buy back. The only 50 billion buy back weve seen is apple. This was over half a trillion. This is one of those companies weve talked about. They get bogged down. Cisco, microsoft. Maybe apple is different. But ge it was about 600 million. It had a 45 multiple. It did. If you did that now youd be above that. Joining us on the squawk newsline, Ivan Feinseth with with tigress Asset Management. Its named tigress because were a woman earned firm. Awesome. Tell me viewing this right now is this the time to do it . Is this something that will realize shareholder value which i think is something he probably thinks about occasionally . Well, overall, you know there was a time where you wanted to own ge because of the Financial Services business and then there was a time where nobody wanted to own ge because of the Financial Services business. Now theyre exiting that. Now it is important to focus on key core businesses where you have strengths like in Power Generation airline engines and things like that but a lot of things that in my view he has done i think he sold universal nbc at the bottom. Comcast has done phenomenally well with it. So its almost looking like a lot of Companies Like this tend to pull the flowers and water the weeds. If this does move the company to key areas to be in in the future its piez tif move and then taking the excess cash and returning it to shareholders in increased dividends or stock buy backs is good. Right. Theres been a lot of the company is totally different than it was before september 11th wasnt it . The week before september 11th. Its a totally Different Company at this point. Its been hard to move the stock obviously but is this finally something to say were going to totally restructure the old ge model built by i guess jones did some of this. Theyre finally saying that were going to change the model that no longer works in 2015. You want to cancel it in the business of the future. It seems they get out of things at the bottom and into things at the top. Almost when its fashionable to do it it shall oil i dont know. Thats going to be the question here. I want to know why everyone is so happy about a buy back for dividend which means they don have anything better to do with the cash . Is there nothing they can do with the core business or expand the acquisition by investing in some kind of development . Thats the case when a company starts to buy back stock. Theyre saying theres no place to get a greater return in their invested capital than in their own stock. Theyre not finding things to add on our acquire. You want to see a balance of that but also buy backs and increased dividends have shortterm appeasement and try to lift the stock. The one interesting thing is that there are woman standing key competitors, utx and honeywell are trading at all time historic highs honeywell. Yet ge is below. Weve got to run. Coming up the almighty dollar. Why the Biggest Companies are taking note as they prepare to close quarterly results. Were back in just a moment. 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 help brazil reduce its overall reliance on foreign imports with the launch of the countrys largest petrochemical operations. When emerson takes up the challenge its never been done before simply becomes consider it solved. Emerson. The dollars become a major driver of the broader markets. And here with us on set is david woo, head of global rates and Currency Research at bank of America Merrill lynch global research. We just had a guy on and ive heard it twice in the last week that dollars seen its run. And europes going to improve. Were going to go slow on rate increases until you see the dollar rebound. You think we still see parity and this is a longterm move. I think so. I think parity with the bull right now. Parity is only 5 away. I think the bigger question is whether the dollar has 20 to go. Im not in that camp. I think 5 is nothing and i think ultimately this is not about dollar strength. Its more about euro weakness. The bottom line is the ecb is going to be embarking on 19 months of qe. While theyre driving down bond yields, i think the fact managers around the world say im not buying negative yielding bonds. What were seeing now is reserve allocation away from the euro into the dollar and yen. That would make a difference obviously, for whether you buy stocks here, for example. Whether you stay domestic whether you go to europe. This is a stiff headwind is it now . Theres been 70 trading days of which the dollar went up. S p has gone down. Theres no question you look at the correlation of the s p 500 with the dollar is now falling into negative minus 60 territory. Nearly the lowest level in 15 years. Its telling you the u. S. Stock market is waking up to the reality a strong dollar is not good for u. S. Stocks or the u. S. Economy. Its also interesting that meanwhile europe which has the best performing stock market year to date also has the worst performing currency year to date. What does that tell you . That tells me at least currency war is very much the business today. I was going to ask you about i was going to pretend this is your show. Really . You want me to participate . Youre the brains here. You could put us anywhere, we could do a show. No matter what. Now make him feel bad. Him too. Come on. But this takes me back. Have you seen our hair when we were young . Beautiful hair. Thank you for being here. Coming up ge unveiling a massive andrew . Yes, sir. Take it easy. This is where i get worried about you. I was going to ask him something else. But no. Were out of time. Well have a conversation with mr. Immult in just a moment. 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. Do not drink alcohol in excess. Side effects may include headache, upset stomach, delayed backache or muscle ache. To avoid longterm injury, get medical help right away for an erection lasting more than four hours. If you have any sudden decrease or loss in hearing or vision or any symptoms of an allergic reaction stop taking cialis and get medical help right away. Why pause the moment . Ask your doctor about cialis for daily use. For a free 30tablet trial go to cialis. Com welcome back to squawk box here on cnbc first in business worldwide. Im Andrew Ross Sorkin with joe kernen. Becky quick will be back on monday. Here this morning david faber is here. The brain. Bringing back the brain and kahuna together again. And hes here in part because there is big news this morning. General electric selling most of its ge Capital Assets. Ges board also authorizing a 50 billion buyback. David is with us. He spoke with ges chairman and ceo. Put a lot of tough questions to him. And mr. Faber is here with more. Mr. Faber . Yeah. We were speaking of course in the last half hour and joe certainly was talking about the change in this company. And when you go back to the 2001 annual report and you look at it and see what was this company then, the appliances are gone. Nbc universal is gone. A lot of other businesses are gone. And oil and gas has become a much larger business. Power generation water. Insurance units are gone. Insurance, capital, a lot of things. Of course part of that was spun. The point joe made is theres been a mixed record of the sales in terms of the timing of those sales. Yes. In fact, that is a question i did put to mr. Immel in terms of his buying and his selling. I think this gives us a chance to give reward our investors that are in it far better mix. But i go back dave. You know we invest a lot of rnd every year. Weve got good organic growth problems. This is not a company starving itself for lack of growth capital. Right. But when you make a decision to use the bulk of the proceeds coming up for share repurpose, they could be used for other things. Again, i think the base plan is to do the buyback. We always look at Different Things. But i think this is an Important Message to investors. And the fact the board has authorized a 50 million buyback, that says were quite serious. Its a large number. Its a good number. Im still getting the hang of this tv thing. That was his comments on the buyback which is an enormous one. To your question earlier, the idea of hey, you can do other things with that money. Why is it the best use of capital to buy your own stock because thats the bulk of their proceeds. Its the trend right now across corporate america. It is. And apparently in discussing it with their investors, they decided that is what they want. They want to see an enormous buyback. To your question joe, i did ask it. Heres what he said. Some would say you sold them at the wrong time and bought some other assets at the wrong time. They look back. Theres always a critic. You know what . Nbc, it makes sense for the sale, but they sold right after the crisis. Got a low multiple. Look what comcast is doing. They redeployed some of that which has not performed well. But i think id go for the history, right . Weve exited insurance, plastics, nbc universal, appliances Financial Services. I think our batting average is pretty damn good. When you look at all those transactions over time. I think when you look at nbc in particular, we had a 15 return on the 25 years that we owned it. It did what we needed in that transaction. Theres always going to be people that say it was too late it was too early. But that transaction gave everything our investors needed at that time. On the buy side david, i think weve got a great oil and gas business. Weve got a diversified power business. We acquired enrons business for 200 million. Its generated 7 billion of cash since we bought it. Went on to discuss one of the large deals they did early in his tenure having been a big winner because people criticized back then the price that was paid. Right. So i havent followed that closely the that would have been with the imaging business. The 2003 deal i believe. Did it end up working out better than the company said . Mr. Immelt said theyve got a very strong return despite what e the critics have said. So we can see these things in terms of the e headlines. Siemens acts like their the king at this point. They contend its even. I dont know. I havent looked closely at who the Market Leader is at this point. But that was the first big one. When was that . 2003 i believe, is when that deal took place. About 9. 5 billion if i recall. Right. Lets bring in someone else a Senior Analyst at bernstein. Steven winniker. Your take on this . Did you have any inkling this was in the works stephenven . Well the answer is yes but not now. I think the big news here is this is all of it and all at once in terms of the intention. I had buys and sells in the stock over the last seven or so years and had last upgraded it to a buy in august on this point. There are all sorts of things i can criticize about the company. But this is the big point that its basically less general and more electric. I just didnt think they would go this far this fast. To really take out the rest of ge capital without and leave in the most attractive parts of the industrial business which are the verticals i think is really the right and great strategic choice. And then the question of just how do you get there efficiently for investors. Thats a big deal. 50 billion. 20 of the market cap on a buyback program. Thats a big deal too. So i think theyve really i think theyre addressing a lot of the criticism they havent been moving aggressively enough on this. And theyre clearly doing so. The stocks trading what . 80 cents higher. Should it be trading higher than that . Yes. I mean certainly, i think when you look at the value in the capital business versus the industrial business, you know, my prior valuation has been about 6 or so for ge capital. About 24 or 25 for ge industrials. Thats certainly over 30 target price on a 12month basis. I think this is not thats without consideration of really maximizing value, the way theyre doing it today. I think that would put more pressure on the upside on that. The question we keep hearing from who made the point, 50 billion, you can do fun stuff with that in terms of anything youre keeping. Steven any of the crown jewels that are left at ge. Arent there ways of adding to those businesses that could be done with you know a lot of people would love to get 50 billion and wouldnt use it just to buy back stock. You know i think theres always a question of tradeoffs. And they are taking a look at their share price. Im sure they think my 30 number is way too low. Right. And so i think that they are thinking that the return on that obviously is attractive and it hasnt moved for a very long period of time. And relative to other opportunities. So, okay so youre buying back the stock, obviously. But the flow gets reduced. But you also dont have the additive earnings from the sell as well, right . No question about that. Its not like theyre going to stop acquisitions. Again, youre talking about a very Large Company that already has spent a significant amount and will have its hands full at least one business unit. You could imagine them adding to several of those businesses over time. I think this is like anything not the only thing theyre going to do. This is going to be 50 billion and m a over the next 20 years. I dont think now might be the time to be buying. Now might be the time you ought to be buying assets with both hands right now. Theyve been marked down havent they . Now would be the time to probably find yeah. Oil and gas. You know certainly oil and gas assets are cheap, but you could say theyve already got some bit of a scale position. Frankly, theyve got to prove to investors that their existing m a is working. Right . And theres a lot of skepticism out there about whether alston will be successful. Certainly theres a lot of criticism as you guys brought up on the oil and gas, the 14 billion spent on oil and gas leading up to the oil crash and the timing of that. So, you know i think that theyre probably trying to prove themselves a little bit on what theyve done. I know what mr. Immelt said sounded constructive in his interview with you. But i think theres more skepticism. Whatd you make of the repatriation issue . 36 billion to bring back from abroad 6 billion tax hit in terms of the leakage. Yeah. So, you know this is something thats always been a barrier historically in talking about this. Thats a real cost. Thats a concern. You know that is just lost value. On the other hand, you know they obviously think that theres a good use of that. I think thats in the clear and negative of the deal. And of our tax policy as a country. In any case theyre willing to pay it. One question about the cash in terms of buybacks. Im always criticizing buybacks. But i recognize this investors want the money and they want toe money back in their pocket. If, for example, they announced today that they were going to use some of that money or portion of that money for m a, how would the market react . Much more skeptically for them. It would have to be an obvious deal with a great price. That sort of you know low skepticism. And for that obvious price it wouldnt be that great. So i think this will be more favorably received. Steven is it going to help get the multiple up . I mean they wont say it outright, but their expectation is when they talk about the portfolio business contributing 90 of eps and they talk about them being highreturn businesses, does ge deserve a higher erer multiple than whatever it is . Well mathematically just yes simply because ge capital which is effectively a bank and trades at a bank lower multiple would be mostly gone. And youre left with all the industrials and verticals. Purely on a weighted average basis, yes. Now, beyond that does the industrial business get an even higher multiple . I think only with that business actually performing with the m a working, with their ability to grow. I think thats how that works. So the answer is yes. All right. Steven we appreciate it. And, you know, beckys not here michelles not here today. What time whats that other show . Squawk on the street. 9 00. So im going go and change. Youre leaving us . Really . Its 7 00. You can make it down. Its 7 00. Im saying you can make it down after 8 00. Easily. Theres only two of us here. Come on. You guys have been handle it just fine. I am very touched you would at least feign this is an act. Youve always been good at that. People dont know you considered acting once. They do now because i was talking about his emotional instrument being clogged. He could use a little method actings. When theres snot coming down his nose should he wipe it or act like its not there . Shouldnt he wipe it . Always wipe. Method acting. Remember the godfather, he goes like this. I dont think theres any acting. People do say im just like this. Coming up the wait is over. The appleonians. Havent talked to you about that . Do you think it goes up . I find that hard to imagine. But they added to the dow. Anyway, the watch. Were on apple watch. But were on apple watch watch. Okay. Available for preorders. Well bring you reports from coast to coast we should just go down the block ourselves to the apple store. Why dont you go out in the rain with that cold of yours . Plus our guest host this morning, david faber. No. Tom werner executive of the red sox and producer of shows like rosanne, that 70s show. And then rob manfred. 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. So, how do you feel about cash back . I would not say im into it. But lets see where this goes. [ buzzer ] do you like to travel . Im all about free travel, babe. Thats what i do. [ buzzer ] balance transfers you up for that . Well unh. Too soon . [ female announcer ] fortunately, theres an easier way, with creditcards. Com. Compare hundreds of cards from every major bank and find the one thats right for you. Creditcards. Com. Its simple. Search, compare, and apply. [ ice rattles ] welcome back to squawk box. The apple watch available for preorders this morning. We have reporters covering the launch coast to coast. Jon fortt just down the street at the apple store in new york city. But first to josh lipton in palo alto, california, this morning. Josh . Well andrew it is still dark outside this apple store here in palo alto california. No lines of fans just yet. Of course, its still very early here. I was just emailing with pipers gene munster. He thinks they will see 1 Million Units over the next couple weeks. If youre home and you want to test drive that watch, you can make an appointment or head to your local apple store. Of course if you do want to order it youre going to have to do so online. The doors of this store behind me here will open at 10 00 a. M. Pacific. And remember this is the store where tim cook often does make a gust appearance. He did so after that iphone 6 launch. So were going to be here all day and on the lookout for the ceo. Jon fortt, over to you in new york. Thanks josh. You could use some of the moisture we got here over there in california. No line here either but we have seen several people over the last hour or so going up to the doors, asking whether they can go in. Getting told no. Asking when the doors will hepopen and they can see the watch. So no line to see the watch. But interesting, if you count back to the iphone 5 and you need at least an iphone 5 to be compatible with the iphone watch, they have sold 50 Million Units of the iphone since then. If just 1 or half of 1 of those people who already have a phone want a patch, youre talking more than 2 million, up to 4. 5 million preorders for the watch now. If you look online since this went live the preorders went live around 3 00 a. M. Eastern time, in about half an hour to an hour all of the initial allotment, we dont know how many, sold out. Now youre waiting until june or july to get your hands on any of those units. Of course, we dont know exactly how many apple had available, but we do know apple wants a gauge on which configurations people want and how that varies by geography. That will give them a sense of how many of these they should make and where they should plan to ship them. We also know that the stores themselves once the doors open are a key tool for apple to figure out what questions people are asking. These stores report back to headquarters every day. Sometimes multiple times during the day. Not just about sales, but also about customer feedback. This is a key gauge for apple that comes in hundreds of different configurations. The most complicated product apple has put out logistically. Now they get a flavor of what they should make and when they should ship it. Back to you. Jon fortt and josh lipton on two sides of the country. Thanks so much for that. You have a big guest. I cant believe it. I know. Can you believe hes here . Beyond the watch, apple is moving into tv streaming. Whap does this say about the new wave of media . I think hes going to school you a bit. Im ready to be schooled. We are joined by tom werner, chairman of the boston red sox. Where to start here. And we have manfred on later today. A few minutes. Yeah. You knew opening day was this week. Yeah i know. Red sox playing well right now. You noticed. Playing the yankees tonight. Oh thats such a thats one of the great rivalries, suspect isnt it . It is. I went to school in boston. Its tough as a reds being in cincinnati. You remember 1975 . Why does everybody remember this when you lost . Why does everybody remember this . Like thats the only thing. They remember david ortiz now. They remember bench and rose and the bottom of the i forgot which. It was great. Okay. Heres where hes going to school you. Here it comes. Even though hbo is going, you know whatever its called. Over the top. And you got all these little you think everybody is going to buy some skinny little bundle for like 15. You say hbo, the majority of revenues is going to come from places like comcast. Its going to be carried on comcast, probably and other operates like that. The world doesnt change that quickly. Im going to talk to andrew. I think theres a lot of him, right . Youve seen him. He does chatter. Theres been a lot of chatter about this being a revolution. The fact is you can go out now if youre a comcast customer and for 80 a month you get hbo, you get a skinny bundle you get highspeed internet access. And if im a consumer sure ki get hbo. But theres always been an hbo over the top. Theres always been a group of people who are the cord cutters who dont want subscription television. But if you want to buy a few things and want to be part of the water cooler conversation i think youre going to continue to sign up for your Cable Company or your satellite company. Maybe i dont watch like you. He loves oxygen by the way, which you founded. That and lifetime. Basically 50 50. Oxygen is owned by nbc universal. Im selling it am i not . Im selling it. You love it. But there are times when maybe i dont use all i dont know how many channels. 1500. Maybe i dont use them all, but every once in awhile i need tru tv. Suddenly during march madness i need it or something i want to see if i want to see it. If i add up the a la carte, its going to cost more than this. Im with joe. For the next ten years, i dont think this world is going to change. But ten years from now, there might be a generation that buy more a la carte. Maybe you buy netflix, hbo go and a slim package. Then what happens . I think the networks are going to be challenged. Perhaps if you have unimportant on syndicated content. Im not talking about that. Im talking about real networks. Tbs has some baseball and ncaa. But beyond that they make so much money compared to a network. Beyond that they have reruns. But in the end it comes back to Quality Content. If joe wants to see something on tru tv he doesnt want to just have hbo or netflix. I do think, of course the millennials everybody talks about the millennials. They are consuming content in a different way. But thats a do you think as a content creator that you are going to still have right now were in this golden age where youre able to sell it first to the network. Then youre able to get the video on demand. Then at the same time maybe get the syndication market. Do all of those continue to exist in the same way . I think the syndication market will be challenged. I think if youre programming a Niche Network like esquire, for example, it will be challenging. But in the end, Quality Content has more opportunity then to find an audience. Its very encouraging to content producers that amazon and netflix are spending the money they are. Do you think its going to get better or worse for you over the next ten years . I think theyll get better. Content will be marked up. Remember we said that. Who was that that was also agreeing with me that was in that day . Just to say one thing, wearing my sports hat, you can see the explosion of rights fees. The premier league made a deal in the uk 70 higher than the deal just three years ago. The focus is on Quality Content. And you saw mlbs digital presence is up 80 or something. How much was that up . Like a sick number. My question goes when you create a drama, network tv and or cable, not premium, that relies on advertising. At a time when Procter Gamble saying theyre going to pull back 14 , 15 of their budget. I dont think in the last two or three years ive actually watched a commercial during some form of drama because i watch it on a dvr. What does that do to the economics of that business . You know, were going to have to adjust. But drama is now selling globally. So there are markets now the Chinese Market is going to be an expanding market. By the way, just got Better Call Saul which is available and im paying 25 for the service. Sometimes on demand the fast forward is paired back or some of the commercials you have to watch. I mentioned during the final four, i saw some of those commercials 30 and 40 times because i hadnt taped any of it. And the streaming in mlb, its not internet streaming. Its streamed through cable, right . You have to have the cable anyway, dont you . Im sure i was going to talk about inmarket streaming. But you can get your baseball game out of market on your iphone, on your ipad. Through cable, though right . No. You can also get it over the top. Oh. I thought it was coming through. My point and i know i work for comcast, but the system i have right now. I hit the thing on my yeen ver sall remote. Ive got on demand all the channels netflix there, and the internet. I dont know what im paying but one thing, you know i saw i wouldnt want to change anything. Over the weekend dish came out with that skinny bundle. There was a lot of pushback from consumers. Because bam, for example, is exactly brilliant about technological back of the Office Getting the information to the consumer. And the consumer was very unhappy because the streaming was bad, the quality wasnt good. You know people want ease of they dont theyre not only worried about cost. Theyre worried about getting a quality product in an easy way. All right. Weve always got to go. We have commercials. I think people watch our commercials. You know why . Because were live. And were going to come back and talk to rob, right . Yeah. He knows how to tease. What about rose . You have an opinion . Pete rose we can ask rob that. Its higher than my pay grade. Is the all star going back to cincinnati . Its in cincinnati this year. Is that the time you do this . That might be the time you do it. I was at the one in river front in 1970. Anyway much more from tom werner. I was at the field, you ever go to the old ones . Those are fun. Anyway much for still ahead. Andrew, whats coming up . We already told you. We have more on the ge story and more reaction from the street ahead. Talk about that and a lot more when squawk box returns. Eeep breath in. And. Exhale. Aflac and a gentle wavelike motion. Ahhh ahhhhhh. Liberate your spine. Ahhhahhhhhh. Aflac and reach, toes blossoming. Not that great at yoga. Yeah, but when i slipped a disk he paid my claim in just one day. Ahh so he had your back . Yep. In just one day, we approve and pay. One day pay, only from aflac. [duck snoring]. News breaking early this morning. Ge unveiling a big restructuring. The announcement including an immediate real estate sale worth 26 billion. A 50 billion Share Buyback program over the next couple of years. David faber discussing the move with ge chairman and ceo jeff immelt. Jeff ge capital, the first question is a simple one. Why and why now . Yeah. So david, i would say the Business Model of Financial Services has certainly changed. Weve got a fantastic Industrial Portfolio. But were a large wholesale funded finance company. You know the wholesale funding model is tougher. We felt like were disadvantaged versus banks. At the end of the day, the Way Investors view Financial Services versus Industrial Assets is just starkly different. We felt from an investor standpoint this was the right time to make the move. Weve been working this way since the financial crisis. And, you know why now . I think two things have happened just recently. You know one is you really have a perfect market to be selling Financial Service assets. Youve got slow growth low Interest Rates, lots of liquidity. People searching for yield. And i think recently the final Oversight Board has really said theres an offramp for companies that were systemically different to kind of get off as they shrunk. You know, this is really good for the system. Its good for the regulatory world. Its good for investors. Thats been more or less recent. Now is the time to do it. And this did happen i asked david about this at the time. I dont know whether this probably was expected though. Going to be a Different Company. Different company. Moodys reacting quickly to the announcement downgrading the company to single a. To a1 from aa3. I think thats just one notch, isnt it . It is. But i dont think it was a negative. I think they knew this going in. Im sure they did. However, it calls the downsizing of ge capital a positive development and says its Rating Outlook remains stable. And theres all the other debt unsecured, all that. I dont think moves were made on those. Just made on this one. Got it. I believe that is the case so far. We got some other stories that were watching this morning. U. S. Officials in cuba held highlevel meetings. John kerry met with his cuban counterpart last night. President obama is at a summit in panama. Hes expected to cross paths with the cuban president. The two are at least expected to shake hand. Amazon winning approval from federal regulators to test a drone outdoors. They blasted saying the drone had already become obsolete while the agency waited more than six months. Amazon must keep test flights at an altitude of no more than 400 feet and no faster than 100 miles per hour. I think they also said that you couldnt do it out of eyesight. How are you going to deliver stuff far away from you . It makes no sense. We have im going to break. I dont get to talk to you. I have a lot of questions. What was that guy with tom hanks on bosom buddies . Peter scolari. What happened . Hes still acting. One becomes tom hanks. One is like joe and one is like andrew. Exactly. Wont say which. The other question, what about brian dunkelman. Remember that . You remember who he is . I dont. Ryan seacrest is like on top of the world. There were two guys doing American Idol at the beginning. You dont remember. Oh yes. That was the first season. Wheres he . Hes like peter sotera or whatever his name is scolari. Coming up were bringing you baseballs top ticket for free. Red sox chairman tom werner still with us ahead. Plus mlb commissioner rob man, manfred. He was on meet the press with chuck this weekend. And hell join us. Before heading to break, look at u. S. Ek we fi tuchs. Financial noise financial noise financial noise why do we do it . Why do we spend every waking moment, thinking about people . 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. Theres one big corporate story this morning. Ges financial unit restructuring. Weve heard from ceo jack welsh. And he says instead of saying quote again and again, i said he said in his words, i like the package. It looks like a smart move and right for the changing financial landscape. Which is pretty nice. Different world. Hes saying its a different world. He is. Hes very tactful and almost like a former president which doesnt want to president s dont like to trash current president s. When i talked to immelt last night, he didnt trash jack. I said was it a question to put it all together in the past 20 30 years you were there. He said it was a different market then. Its a different market now. Summers said yesterday looking at Interest Rates every 10 to 15 years it can change based on now were in a totally different situation. We may have low Interest Rates and inflation for years to come. Whats coming up . Coming up weve got an Awesome Player a tech innovator. Were talking baseball mlb commissioner rob manfred whos going to join us on the squawk set after a quick break. Baseball defining its reputation as an Old School Game and breaking into the stream online. Showed an increase of 60 from last year. 50 Million People tuned in via video streams. Here to talk about the revival of baseballs brand and focus on streaming content, rob manfred, mlb commissioner. Its great to have you on to meet you, and wish you luck. Great to be here. I was kidding a bit that all the hard stuff has already been decided in baseball. Because past commissioners have had some huge issues. Obviously to deal with. But i think some things will probably come up with you that maybe you dont know about. I suspect thats the case. You know right now i feel great about where the game is. We have great competitive balance which is what we sell at the end of the day. As you alluded to bob bowman at mlb advanced media has done a great job for us in the tech space. We feel great about our business. Its a great obviously a lot of the money is local. And you can see it in any place like im from cincinnati. You can see it there. The whole town bleeds red. I guess everybody bleeds red. But in this case its a big deal in local markets. If i was there i used to listen with my dad to the radio every day. Who was the youngest pitcher ever andrew did you know that . He was 15 years old. Id love to watch every game. An i would watch commercials in the local market. Its the biggest change in the last couple of decades how much product we have available locally. You know it used to be only some games were televised. Now everythings available on television. And i think its one thing that confuses people about our business. Its hard to take a sport like ours that plays every day 162 times in 183 days and say how do you compare to a sport where you play once a week twice a week or three times a week. Its different than football. People say football has taken over, but its different. Theres ways of making it great again. But one of them is you guys have to figure out the length. Its a half hour longer than it was just ten years ago. You always want offense. Although i love a great pitching duel too. Were working hard on the pace of game this year. Tom was on a committee that we started last fall. We experimented with some really radical ideas in our Arizona Fall League but we put in a set of changes at the Major League Level this year that we feel are important and were only half a week in but weve had pretty good returns already. Youre seeing like have you averaged how much quicker it is yet . Weve been about ten minutes down from where we were last year. Its not so much 3 02 was average game time last year. When we talked about it it was not we wanted to go from 3. 02 to 2 50 or so it was we wanted the fans to say it moved along at a good pace. And the slow moments of the game were shorter. What was the main problems . Pitchers are good. I think theres a couple of things. I think we had gotten a little sloppy, frankly, about inning breaks. Obviously our partners either 2 45 or 2 50. Those slipped to the 3s somewhere. If youre a fan watching it on tv or in the ballpark. And player habits are an issue. Guys habit of stepping out of the box. It becoming part of their routine. Were doing retraining on that front. I noticed the players have really complied with that. I used to say that velcro is one of the biggest enemies of baseball. Players would come out and play with a batting glove. But i noticed in the first few games they really adopted the program. I do think the game is crisper. All right. So we could spend the rest of the time talking about this but we cant. I said i saw pete rose run into f fosse. I dont know how to gauge steroids and juice. And guys that are known juicers are not just still in baseball but theyre still playing baseball. And yet rose who wasnt the most talented guy. That was pure heart and hustle. And im not sure i want him in. I dont know. How are we supposed to think about this . Heres how i think about it. I think its a question of notice and rules. The most fundamental rule in baseball is rule 21. It prohibits anybody on the field from betting on baseball or betting on any sport. And in fact the rule is clear that if you bet on baseball, you will be banished for life. We know all that though. Isnt there a rule like that with steroids . No there isnt. Thats the difference. The rule on steroids is and its a rule that was bargained with the players association. It is, you know if youre caught there are penalties. Its now 80 games, one year and then life. And so its a different so you think the rules should be as strict as the gambling rule . I think that the rule on steroids probably should not be quite as strict. And the reason for that is steroids should be less strict than it is . Less strict than the rule on gambling. I think the gambling rule is so fundamental to the integrity of the game that it should stay where it is. Rob, when you bet on baseball, it takes another step to actually cheat. Just because youre betting doesnt mean youre cheating. When you juice, youre cheating the minute you start doing it youre cheating. So theres not even a its gambling is a step removed from cheating. I think the difficulty with the steroid issue is that there is a continuum of products out there that can cause players problems. You know its one of those areas that every sport struggles with. I think that commissioner selig did a fantastic job of taking a sport that had a huge problem, working through the collective Bargaining Agreement and he got to rbemember that. We have a bargaining situation there to get to a program that the World Antidoping Agency believes is the best in sports. Should pete rose be in the hall of fame . I cant tell you that. Hes applied for reenstatement. Hes allowed to do that. Is there anything different this time . Look the passage of time if nothing else changes, i think, the situation somewhat. And, you know mr. Rose has suggested to me he has things he wants me to understand about the situation. Ill give him a full opportunity. Thats the rule you see when you walk into every clubhouse. It sounds like you already answered it. Look i think that it is important to remember how faculty our gambling policy is to the integrity of the game. And you think letting somebody like pete rose in changes that . You know its important to draw a distinction between two issues, in my view. On the one hand my job is to protect the integrity of the game on the field. If youre on the permanently ineligible list, you cant work in the game. Whether or not youre eligible for the hall of fame is a product of the hall of fames decision to follow our ineligibility list. Theres two different you dont have to let him back into baseball to put him in the hall of fame. Thats right. I dont control the hall of fame rule. The hall of fame is an independent organization. They have their own rules. You know, im going to make a decision about the institution that im charged with protecting. Whats the timeline for that . I dont have a timeline. Were talking to mr. Roses representatives about what the process will look like. Theres a factual record here. Ive been around baseball for a long time i was not involved in that particular incident i need to understand all those facts. And i do need to give mr. Rose a chance to come in and do whatever he wants to do. So its not gambling in your view. Its not just my view. Theres a line in the law. And, you know we understand that line very carefully. You know, before we did the deal with draft kings we looked at all the games on their site. Had them analyzed. We think the fantasy space is really, really important to us in terms of engaging young people. Adam silver in ofin the nba believes there should be gambling. What do you think . Sthast not what he said he said i do agree with a uniformed federal scheme on gambling would be good for the country. Its very difficult when you have different laws on gam lbleing in 50 states. We operate in a lot of them. I think that can be confusing and not really a good policy. Im sure you measured this. In terms of engagement how does fantasy change it . Fantasy is really important to engagement. And the significance of fantasy particularly daily fantasy is big in the younger demographic that were focused on. You i remember some great players in cuba. They probably still have some, dont they . Whos hows that going to work . How long will it take. What does it happen . Theres an interest in signing cuban players. 162 million. Hes 19 years old, isnt he . You said you were going to try to do on exhibition in 2016. Wed like to play some exhibition games there in 2016. What were really doing is working closely with the federal government trying to figure exactly how the Legal Framework is going to change. We want to go when its consistent, obviously, with federal law and federal policy. But if we could be helpful in term os they have thawing, wed love to be part of pit. I think people want to sell some equipment in cuba too. Like the louisville slugger. Whats going to happen with the dodgers . Look the dodgers situation is unfortunate. I mean it any time we dont have full distribution of our games in the local market its a huge problem for us. And its a terrible problem for major league baseball. Because we dont have a seat at the table in those discussions. Im hopeful that when the merger situation is clarified one way or the other, that therell be some flexibility created and theyll get the distribution agreements done. Montreal. I didnt know they love baseball. Its interesting. Two years in a row theyve played two exhibition games on the weekend before the start of the season. Theyve drawn about 90,000 in excess of 90,000 people for each of the weekends. You know prior to the strike in 94, montreal was a good baseball market. I think with a major league facility, theres a lot of baseball interest up there. It could be a major League Market again. Anywhere else . The one that is interesting to me and i think its a longer term project is mexico. I think it would be great for the game. I think it would help us not only in terms of expanding our international footprint, the internationalization of the game but i think it would be helpful in our engagement with the hispanic market. Want to start a team down there . I think 20 Million People live in mexico city. So what a market. Would you bid on that team . The flights wouldnt even be that different. The challenge for us weve done some great things. Weve played openers in australia last year. Its great in terms of getting it going in those markets. What were working hard on in international is sustained activity. More persistent, prolonged activity. And the geographics of a place like mexico works well for us. Did we finally decide the balls are the same as theyve always been . Its got your signature on it. Its got a different name on it. Same baseball. How many takes . They came with a stack of index cards that thick. I thought i was back in grammar school. I wanted it to look like my actual signature. Which one did they pick . What actually happens is they take five. And then they actually make five baseballs and they bring them back to you and you get to pick the one that is going to go into production. It was kind of fun, actually. Like success tearecretary of the treasury. I think its better. It was really the first thing with i got back to the office the next day and it was the first thing they asked me to do. It took me aback a little bit. I wasnt quite ready to undertake it, but worked out okay. Okay. Weve got to go. Its kind of weird because guys that have the steroid rep, they dont get voted into the hall of fame. Its possible they can stay in the game but not in the hall of fame. Maybe pete cant get back in the game but can get in the hall of fame. Maybe its the opposite of the guys that are juicers. They are separate issues. Then i always heard from great players that in this day and age, we expect them to go out and do superhuman things that you cant fault them for trying to get an edge at times. So its understand bableableunderstandable. Its a huge and ongoing temptation. Great to have you on. Fun to be here. And you have a very envious people would kill to be commissioner of baseball or football. Anyway, thank you for bringing him on. I dont know what this mean ifs for the red sox. Coming up much more on the big news that broke this morning. Ge. Analysts from the street coming up next. I love my mileageplus® explorer card. Were saving our united miles. For a trip to hawaii. We love free checked bags. Ive saved 75 in checked bag fees. No foreign transaction fees means real savings. We can go to any country and spend money the way we would in the u. S. One of the best things about priority boarding is you can just get on the plane and relax. I put everything on the explorer card. I really want my united miles. Breaking news this morning. Ge sells most of its ge Capital Assets. And announcing a 50 billion buyback. How that will transform the conglomerate as it looks to focus on the industrial side of its business. Details and reaction just ahead. Economic data and earnings in focus. What you need to watch when earnings season kicks into gear next week. Apple watch makes its worldwide debut. Reaction from the street on the companys latest product and what it could mean for the bottom line as the final hour of squawk box begins right now. Welcome back to squawk box here on cnbc first in business worldwide. Im joe kennen along with Andrew Ross Sorkin. Becky will be back on monday. Were less than 90 minutes away from the opening bell on wall street. And the futures have been getting a little better. Up almost 50 points on the session today. General electric is obviously going to help the dow today. Maybe not as much as they wanted. But it should. Lets tell everybody the breaking news this morning. Ge selling off most of its ge Capital Assets also announcing a 50 billion buyback. I think two things have happened just recently. One is you really have a perfect market for it. So youve got slow growth low Interest Rates, lots of liquidity, people searching for yield. And i think recently the financial Oversight Board has really said theres an offramp for companies that were systemically significant to kind of get off as they shrunk and, you know we think this is good for the system. We think its good for the regulatory world. Its good for investors. Thats been more or less recent. Nows the time to do it. Lets see if nows the time to do it. Look at shares of ge this morning. They are up much higher than before. Theres a call at 8 30. We should tell you the stock now up almost 9 in the premarket. Well see after the call at 8 30. Thats a new high. 52week high. Thats for General Electric and much more started slow. Word was out. It totally blanketed the development. But premarket is always different than during the day. Lets get more reaction to this major announcement. Joining us on the news line nick haymann. Mary thompson joins us as well. Shes at the nyse. Nick, you were the analyst for a long time everyone went to. What was your first reaction . Pretty incredible huh . After all these years. Well they just pushed the fast forward button. This was something that was certainly, you know a long and windy road. Now its a straight and shorter route. You know this gets you to below 10 of the earnings for Financial Services. Their commitment is by the end of 18. And instead of below 25 but the end of 16. Is that definitely something that andrew mentioned the other concerns off that list and things like that. But do we know for a fact thats a business you dont want to be in anymore . We know the other businesses are going to be valued higher and make more money in the future . Well conceptually it should be. It make this company a lot cleaner. Okay . Were looking at a base Infrastructure Company instead of a hybrid. Even this year its 34 of ges Financial Services. Next year targeted to be down to about 25 . But this really puts Financial Services all that remain is the commercial Aircraft Leasing as well as the financing for health care and energy. Its about 90 billion down from 365 billion at the end of december. So it really you know streamlines things for investors to think about. They used to defend the model just for that reason. They could have a really good Credit Rating and then lend all their lend at low rates to all their customers buying industrial stuff. That was always the rationale for keeping it intact. The world has changed since 2008. Obviously today ge would like to terminate its designation. Thats quite constraining. You have definitely lower rates. Thest a good time to sell large transactions like this. Nick what kind of multiple do you put on this new ge if you will. And i start thinking about honeywell and gm and 3x. Ge is about 15 times right now. You know as you think about 18 as the industrial multiple and 12 as the financial multiple. So you have this hybrid blend. This year a third at 12 and twothirds at 18. And if you move towards 90. 10, the market should give the full multiple. I understand the logic of doing this but i do question the real estate selling one buyer no auction. Two or three years from now, is blackstone going to make a fortune off of this . Well say they shouldnt have sold shouldnt have sold so cheap . Good question. That 16 billion after tax or 12 billion noncash 4 billion cash. But the simplest way to think about it is youre going to basically exit what is 16 or about 30 cents of ges dollar in earnings next year. And in return youve had a commitment by the company to buy back up to about 19 of its current market cap over the next few years in buyback. Everybodys buying back their stock. And maybe we shouldnt complain about it. Would you be happy if they had said were going to devote some of this money towards either research and development or additional m a . No. I think ges done a lot of m a. And were looging to get to the point now where the company will be, if you will a constant portfolio. Jeffs made his commitment to basically help bring businesses into the portfolio that will allow twothirds of the worlds population to get into the 21st century. Thats what this company is all about now. Its not about, you know real estate cycles and its not about Consumer Finance and bringing that to international customers. Its about really lighting the light for twothirds of the world. And with this certainly theres going to be a significant capability broadening for ge on the base infrastructure front that should give it a significant market lead. So this is you know like i said a fast forward button. There is a little bit of a tax solution, you know in this. Because youre only getting 35 billion from the sub to the parent in return for the 50 billion youll buy back in the stock. But i think thats a tradeoff that investors are comfortable seeing done. Mary are you there . Yes im here. Youre so quiet. Well you know we were listening to nick. Just so add on his point, a number of people are talking about why not do to andrews point, use some of that money to do further acquisitions. Keep in mind they completed their first ever in alston that is expected to be transformative. It could be payback for disgruntled investors who held this stock for a long time hoping to see it probably not achieve its alltime high of 60 a share but certainly improve. Which it has been a source of frustration not only for investors but also for ge which felt it should be valued at a higher multiple. So this obviously,s is one way to get there. Again, what im hering is surprise at the speed of which they are doing that. A little bit of concern about what because of the speed and the timeline laid out, does that mean that maybe they wont sell at prices they could fetch . But that of course remains to be scene. And i do want to add to emphasize the whole idea, that it was an important institution. The Regulatory Burden that was going to bring to bear to the company, again, as jeff pointed out earlier is something they didnt want anything to do with. Maybe that accelerated the companys decision to go i a head and do this in a very large fashion, in a quick fashion. Nick . Is nick gone . Yeah still here. That makes sense, right . Right. Go ahead. No this think about simplification at accelerated pace. Yes, you could have done it over longer period of time and got a little better price, but we dont need to make any more acquisitions. Ge is billed on oil and gas. And i really think now what you see is what you get. Its been a long time since weve had that opportunity at ge. All right. Very good. Thank you. We appreciate it. And Mary Thompson i know youll be doing this throughout the day. Well be watching. Were also on apple watch. A strong turnout this morning so far for the worlds first glimpse of the apple watch. Jon fortt joins us from outside the apple store a couple blocks from here. Jon . Hey. Yeah, we got about a half dozen people who are waiting for the store to open at this point in just under an hour. Important to keep in mind this isnt a Product Launch in the sense theyve got Inventory People are in here looking to buy. This is just a day to look. There are two key things apple wants to establish on a day like this. One is gauge demand. This is the most complicated product apple has ever sold. Normally youve got two sizes of iphone and three colors. Here youve got different sizes of watch different materials its made in and all the bands that can be paired with it. Apple wants to see by geography and configuration what people want. So they can gauge demand. They hate carrying inventory. They want to figure how to sell this watch. What are the questions people are going to want answered in different locations that actually closed the sale. Once they figured all that out, theyll be ready for a broader rollout which we expect to see in the summer and into the fall. So now is a learning time for apple and apparently for apples customers. Well see them come in during the day. Back to you. Okay. Thank you, jon fortt. Coming up empowering young women in the board room. The key to business success. The numbers and the discussion next. As we head to break, heres a look at General Electric stock this morning after announcing a major restructuring. Announcing a 50 billion buyback. Those shares helping the dow to a nice open theoretically. Well be back. Recent report by Credit Suisse said the female boards outperformed the male boards worldwide. We have the author of a new book eyes wide open. Not joe. Eyes wide shut. You wish. Shes also a professor at the University College of london. Go out and get the book. But lets talk about it. 26 is the out performance, is that real . Yes. Theres such a strong business case. But hows that being measured based on women on the board . Cumulative excess returns. They looked over nine years Credit Suisse. And what they compared was companies which had at least one woman on the board versus companies with no women on the board. And in the u. S. They outperformed once with at least one outperformed by 26 . In asia pacific, outperformed by 55 . If youre a ceo or board member right now watching the show, youre thinking about how would you change the diversity mix. Do you do it as a mondayandatory quota . What do you do . In europe there have been quotas imposed in a number of countries. Norway finland, spain, germany. Thats one way of doing it. I dont think its the only way. In the uk what weve been doing is we have a very vocal kind of Campaigning Group called the 30 club which is a lot of support of highlevel chairman and ceos. And just by campaigning, they launched in 2010, they doubled the number of women on boards to 23. 6 . So i think quotas is one way. But in the uk the uk government just to bear this in mind. The uk government was very clear. We support this initiative and if companies dont get their act together on this front, you are going to come with regulation. We are going to come and mandate it. Do you think itd ever be mandated in the United States . No i dont think. But were going to talk about her book. There is a point of view that a woman makes a better financial institution. You can talk a little bit about how decisions are made. Exactly. I think there are three real reasons why it makes sense to have women on boards. The first is as you say, groups that are more diverse make smarter decisions as a vast body of research that supports that. Which makes sense. If youre different, you bring different points of view different experiences. Im going to throw a counterexample at you which is a strange one. Okay. Silicon valley obviously the diversity is very very low. Look at apple. Under steve jobs was basically a bunch of white guys for a very long time. Huge success. Would they have had more success with women . Imagine how much more successful apple perhaps could have been. Perhaps could have been. Now, im on the board of warner music group. And you see the dynamics in a board room. Do you change when there are women in the room . When it comes to governance not only do women attend board meetings more regularly but men are more likely to attend if they know there are women directors. Its more fun. You heard that the financial crisis wouldnt have happened. Theyve actually i dont know. We dont know. There are some differences in the sexes. My wife is always right. So thats pretty much thats what i mean. I know how my house is run. I know its run very well and i know i have nothing to do with it. Im okay with it. Wouldnt it be more fun if there were more women at the table . I dont know how to answer any of these things. I find out these things theyre taping even though its live it lasts forever, isnt it weird that way . The other thing thats fascinating is that if you want to future proof your business i have a company that focuses on 13 to 25yearolds generation k. This generation is absolutely passionate about equality. And the thing that worries the most more than terrorism, more than getting a job, more than even being liked is inequality. So if you want to future proof your business inequality meaning the sort of financial inequality or in terms of diversity. Diversity. Its fascinating. From the female side or the male side . Both. Both. Its fascinating. This new generation they really care about this. If you want to think about your employees, if you want to think about your consumers, you need to be thinking about about diversity. Question for you. Red sox. You have a board of directors. We do. Do you have women on the board . We dont. You dont . And i think we should move towards that. But our board of directors is made up of partners more or less, who are investors. But, you know its clear that if 50 of our customers are women, you must listen to them. You must attract them. And we have to adjust to that. Is 50 of baseball women . Not quite, but certainly our focus on families and our focus on youth, we do have to expand our base of it. It is gender neutral. You just won one. Thank you. The book is eyes wide open. Check it out. When we return, is there too Much Technology in our lives . Tom werner will answer that. And the apple watch available for preorder. Well speak to an analyst about what it could mean for the companys bottom line. Will it be enough . Could it be more than enough . Squawk box will return. 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. Do not drink alcohol in excess. Side effects may include headache, upset stomach, delayed backache or muscle ache. To avoid longterm injury, get medical help right away for an erection lasting more than four hours. If you have any sudden decrease or loss in hearing or vision or any symptoms of an allergic reaction stop taking cialis and get medical help right away. Why pause the moment . Ask your doctor about cialis for daily use. For a free 30tablet trial go to cialis. Com i love my mileageplus® explorer card. Were saving our united miles. For a trip to hawaii. We love free checked bags. Ive saved 75 in checked bag fees. No foreign transaction fees means real savings. We can go to any country and spend money the way we would in the u. S. One of the best things about priority boarding is you can just get on the plane and relax. I put everything on the explorer card. I really want my united miles. I dont think theres any question. Are we addicted to technology. Lets hear from tom werner. Cofounder of carseywerner and chairman of the boston red sox. At times when my kids are at home messaging nonstop. They are missing a lot of what im trying to talk to them about. Its ubiquitous and constant. And as ive noticed. Even though Television Viewing is flat people are watching five hours a day. More and more are watching with a second screen. Theyre watching a sporting event or drama. Binge watching on an ipad. Theyre communicating socially at the same time. So its part of whats going to happen . Well you know what . As a consumer i think that there is hopefully going to be some point where you say, you know what . Maybe we should put this down and have a conversation. But you have to be impressed that the line continues to grow and more and more people are using their mobile phone. Thats now the most important device. I was talking to a millennial who was getting a new apartment and i said are you going to get a 60 or 70 inch screen tv. She said no i dont need to. Im just going to watch on my iphone. That i dont understand. Just a different way. You have to be impressed that thats the habit. My needs are i dont see how they can get any better. Got the 75 inch the high def. Got this infinity whatever it is. Like the masters today. Or a hockey game. You watch on a 75 inch. On the other hand the iwatch will be very interesting. Because its another way of consumering information. Small screen isnt it . I understand the New York Times is working with apple to have one sentence news bites youll be able to see on your watch. Going to be hard to slant the news in their direction with one sentence. Soccer. Should we talk about soccer . Is it really ever going to make it . A global phenomenon. Is it going to come in the u. S. . It is. Comcast has done a remarkable job televising these matches. People are getting up at 7 00 8 00 in the morning to watch it. I expect were going to go into a new negotiation with america networks. I expect the rights to continue to increase. I have a tough question for you. I dont know if its tough but i want to know. Bill cosby. What do you think . What do you know . I have so say, i was working with him on a project as you know when this all unravelled. I feel badly for all of the women who may have had this experience. I dont know the facts. Havent asked bill about that. I can just attest to the fact that in the nine years i worked with him, he was the most professional, the most talented the most kind actor ive ever worked with. I can only attest to my own experience. I mean even when youre talking about it you know you need to say you obviously want to express a lot of empathy. Theres a lot of women that have stepped up. But then again, other than his own experiences with bill cosby so i have even less. I never met him. Professionally do you think its over . Is there a way for him to i cant answer that. Im glad youre here. Why . Im just glad youre here. Im afraid to you know. Im curious. Its so uncomfortable. Inquiring minds want to know. I know you do. Youre good at this. Its been great to have you. Are you leaving . He is. Going back to boston. Hes got stuff to do. All right. Thank you for being here. Great to have you here. Squawks coming back in a moment. E financial noise financial noise financial noise financial noise z this is jim iuorio for squawk box from the floor of the cme. We have breaking data on import prices. They come out as down. 3 . So it was in the range of what was expected. Last time prevised from plus. 4 to plus. 2 . The fed twice in recent months has talked about the dollars strength. Theyre going to watch this keenly. Export prices are plus. 1 versus last time of negative. 2 . Last month was revised from negative 9. 4 to negative 9. 7 . The stocks came in up 3 . Theyre up 2. 5 now. Were not a real big market effect, but this is something that should be watched over time. Back to you, joe. Thank you, jim. Joining us with more cnbcs steve leisman. And jack whos one of our goto guys. Hes harvards chief investment officer. And strategist at Raymond James here. Do you want fill in a few, steve . Real quick on the import prices. Consumer goods and autos. Youre seeing the impact of the stronger dollar coming through. Also lower petroleum prices. They were actually up this time around. Everything else was negative. Year over year the thing that might feed in does so on a basis. But its exerts downward pressure. Motor vehicle imports down 1. 8 . Thats the key, joe. You have this modest impact on inflation. Its something the fed is watching. But they say repeatedly is not determining their policy. Jeff well get to you he was laughing. Well get to you in just second. But jack what are you this how long have you been a ge shareholder . At least a decade or more i would think, right . Two, joe. What do you think of this today . Thumbs up . Joe, this is the restructuring that the longsuffering ge shareholders like ourselves have been waiting for. This brings ge back to being an industrial who is simply there to finance the purchase of their products. Which theyre in great position to do. So that wont thats always been the rationale for ge capital. But youre implying at some point it existed for its own sake as a Profit Center not to just help finance the industrial sale. Well, it did, joe. And you remember the cash was coming in over the transform in the 90s. They decided to put a lot of it to work in financial assets. The real estate theyre proposing to sell to blackstone and wells fargo, those are assets that they own just because they had cash they needed to put to work and they looked attractive at the time. We had jeff long before the g e news. So i want to ask jeff. Youll let us know your bullish stance. Reading some of the stuff, it looks like youre saying expect more volatility but stay long. Is that basically it . Yeah joe. I think that secular bull markets tend to last 14 or 15 years. Were 6 years into this one. You will get pullbacks but its within the uptrend of the market according to dow theory. If you compound forward at the 16 per year youre talking about 4200plus in Something Like 2023 or 2024. In 2013 ge was designated a sifi. Ge capital the lending now is going to be sold to non. Correct. Is this a Good Development of regulation in that youve had essentially a big company thats going to be partialed out so its not all under one umbrella. Yes. So the company is less big to fail. Yes. On the other hand whats regulated lending is now going to underregulated lending. Yes. But in the real estate business for example goes to blackstone. Blackstone has become a big business. But these Asset Managers are not correct. The larger question i have is actually whether this development portends other transactions. So desifification. Yes. Youre looking at metlife is suing the government do get out. I want to know what you mean by you think its a good decision. Youre talking about some nebulous no. A world where too big to fail is still a concern, youre saying this is a Good Development for regulators to where now less worried about a systemic failure. Is that what youre saying . You asked that question. And youre only too willing to im suggesting that deversification is this good for income inequality . I dont know its related. What about for ceo compensation . I worry about one thing. I worry about the idea we create too much regulation in the regulated part and we shove this stuff outside of the system to a place where its less regulated and less overseen. However, the idea its less concentrated is potentially a positive. But theres definitely a process here by which we are bolstering the shadow banking world through doddfrank. Absolutely. I dont think i disagree with that. Its true. The question is are we going to see the same kind of concentration and then thats not going to be regulated. See, for people that maybe think regulation is already overshot too much look. Im also the same person to tell you i dont think jpmorgan is too big. Even steve is not monolithic in his love of all things government. In a lot of ways i think doddfrank did a lot of good raising capital standards and liquidity standards. They could raise dividends is like jack de gan, do you have more . At this point, the ultimate, what kind of bang for your buck do you ultimately get from this . You get 35 40 eventually . Become a more Nimble Company that starts to set a series of new highs . Well i think thats right. I think you when you got these Companies Break themselves apart. Youre going to see this in the banking complex as well. Theyve been regulated out and a lot of the holding companies, i think, are going to spin out. Maybe Asset Management or credit card divisions. Theyre going to get x times in the market. Rather than in the holding. So i think ge is doing the exact right thing. I think its going to enhance. Sorry, jack, you go ahead and answer now. Sorry, jeff. Didnt mean to step on you. Yeah. I think this will bring the stock to new near term highs. Our target was 28 to 30. Were pretty much there. The stock is relatively fully valued here on earnings. Earnings are going to struggle for awhile where you lose the benefit of the financial earnings. And the industrial earnings grow a little bit slower because of the oil and gas slowdown. So i think the shares are reasonably fully valued. But, joe, one thing i want to say, i want to shout out. Back in 08 and 09, he was rolled out and did his deep dive analysis for investors and analysts. Gave us confidence that the company would survive liquidity crisis. And i think he was moved over by jeff to run ge capital to come up with a restructuring like this. And i think hes done a great job. I believe hes the unsung hero at ge. All right. Jack de gan, thank you. Steve, youre so good at this we have to thank you twice. Like a fine running watch. And then also jeff saut. When we return the ge parade continues. Larry bossidy, were going to ask him what he thinks of the reorganization announcement. Well do that when we return. Then a strong turnout as shoppers try to get the apple watch. Were going to find out what sales could mean for the bottom line. When squawk box returns in just moment. Organic food stocks schwab can help. With a trading specialist just a tap away. Whats on your mind lisa . Id like to talk about 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. E financial noise financial noise financial noise financial noise welcome back to squawk box. The futures right now indicated to be up about 40 points on the session. Nasdaq indicated up just less than 3. And the s p just under 4. The top story of the morning is General Electric selling most of its ge Capital Assets. Former ceo jack welch seems pleased. He says i like the package. It looks like a smart move and right for the changing financial landscape. And joining us now on the squawk news line is honeywell ceo larry bossidy. Actually the term larry legend was not first with larry bird. This man. First in reference to larry bossidy. Larry, you remember there have been days and periods in the past. Remember itt, youve got to have a conglomerate. Then there were days that doesnt work anymore. So times do change. In your view was there a time when it made sense to have a huge financial arm for ge that doesnt make sense now . Well you know joe, the news this morning with mixed emotions. I remember all the hard work that went into building a huge risk contained financial colossus. I think subsequently the Balance Sheet was extended to excess and liability side in terms of too much shortterm borrowing. So they were vulnerable to the financial meltdown and as a consequence they took the company to the point of disaster when the commercial paper market became liquid. And then upon survival they were guinn the sifi designation which they found encumbering. I think what they announced today is the right thing to do in these times. Whether or not it had to be this way, ill let historians decide. Thats an interesting take, larry. So there are some people that are saying look. You needed the finance arm and the rationale was you finance a lot of the equipment that you make on the industrial side. And then they kind of imply that having all the you know they started making some money. Not just doing what it was designed to do but by sort of this black box idea of all these Different Things that the company got and even subprime at some point the company got into. You dont think it got out of control at that sense . You think its fine for the company to be half industrial half financial. Thats not necessarily a bad thing . I dont think its a bad thing necessarily. When welch and i were around we maintained it to a certain percentage of ges total earnings. So recognizing it had a lower multiple than the rest of the industrial businesses. Nonetheless, of the mind there could be a significant contributor if contained and managed appropriately. It worked well for years. It didnt in this decade and so what they announced today is appropriate for the times, but nonetheless i look at the history with mixed emotion. How about the use of the proceeds from it . Would you you think there are things that as an Industrial Company that ge should be, you know scouring beating the bushes for things to add to its number one or number two positions in the markets that it wants to be in . Or does the buyback is that a good thing, do you think, for the future . No i mean theyve done a lot of acquisitions. The most recent being alston as everybody knows. So theyve done enough of that for awhile. They certainly bustered their oil and gas properties. I think doing the buyback in the face of this is the right thing to do. I think it will be beneficial to the ge investor. There you have it. He likes the deal. Like this deal but theres read between the lines. Larrys saying Different Things. Let me ask you a different question larry. Longterm do you see the Company Breaking up even further . No. I think as they have stated i think they want to be an industrial franchise. I wouldnt be surprised if do you think that health care, for example, do you put health care in that same space . I think Health Care Service business is a great business and b its going to only expand in light of whats happened in the country and around the world. I think they may add another leg some day to the industrial franchise down the road but nonetheless, i think the strategy now is clear that they want to be an Industrial Company and i think theyll invest to be as good as possible. All right, larry. This is big news. Weve got to run. But, i mean is spieth going to play like that for three more days you think . No hes not. But he played great yesterday. I think justin rose is the guy to put your money on. Wow. But you know jordan last year had his meltdown at augusta. Maybe he learned from last year. That yesterday was like i heard nanana from caddy shack. It almost looked like it was coming from above, didnt it . It did. Hes very good for a young fellow. Very composed. Itll be interesting to see how he does over the weekend. And tiger is not bad. Its just watching him grind like that makes me uncomfortable. He seems to have to work a lot harder to shoot the same score some of these young kids are able to do fearlessly. When you cant put your driver in the fareway, it makes it tough. I wouldnt know about that larry. Great having you on. Okay. When we return apple getting a downgrade on launch day for its watch. Among the reasons, the analysts say early reviews on the watch suggest it will fall far short of what he calls the insanely great benchmarks that some other analysts have put on sales. We will talk to another one, a different guy, collin gillis, about what he sees 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. Apple watch available for preorders foxes lining up outside stores around the world joining one on for size. Colin gillis, Senior Technology analyst. We saw a downgrade. Youre not a fan of the watch . Look lets put in perspective, theyre going to sell millions of these out of the gate right . Its going to be a multibillion dollar revenue stream and its first quarter. So what happens the problem. For any Product Launch thats a success. But longer term did thats apple, thats the apple phenomenon phenomenon, early adopters. We want to see whats the sustain ability for the watch . Right. Three things i point out. One firstgeneration device, report . By the nature of that theres going to be kinks that have to get worked out. Two, unsubsidized device youre paying a hefty price tag. Whats the margin on the watch . Its a nice margin, right . This is what apples positioning, upscale product. Youre going to see margins around 40 or so, its between the iphone and the ipad. 40 , is that on thats on the 359. Of course blended. Factor in accessories and extra bands. What percentage of people buying the low end versus the 700 versus the 1200 versus 17,000 . Weve got to see that. Well see that unfold over time. I think the skew may be towards the low end. This is one of the issues with the watch, right . Look at it theres 20 different versions of the stainless steel, ten model ofs the sport. Theres a lot of various combinations to factor in. All of this right, when you factor in the best case sell 5 Million Units, 500 a. S. P. 200 billion of revenue on sale in the first quarter, thats 5 . Its all noise. If youre apple investor you have to be more concerned about iphone channel inventory, iphone in china and capital return program, right . We can talk all we want about the watch but its not going to move the stock, not in thor in material. Great for apple to be in wearables but this is not the savior for the income statement. All things would be the same that you talked about even if they hadnt introduced the watch . Wed be worried about that. All right. Thats a given. But this watch, i dont know i the kids are going to want them, i can tell you that much. It may be initially its just that the margin i think theres a hidden story. A whole new the laptop on the 6 00 hour. Theyre bucking the trend. They are selling more that was like ipad with a key with an attached keyboard inhe stead of the belkin keyboard its and the same size and light. Pretty nice. Were saying at the break, its more relevant news theyre gaining share in the pc market than the watch launch today. Thats big news. Think further out, is the big, big news whatever they do in tv in the fall if they do something in the fall . So what i like about the television concept is its a high a. S. P. As well the problem is what youre seeing for most tv solutions. A. S. P. Average selling price. If youre to buy a highend 4k screen you can sell a product for a couple of thousand of dollars, right . But most tv solutions that have come out now, training the consumer to expect them to be 99 or below, right . Chrome cast rokus below 100 price point. The business for them in all 0 the content that were buy, the third of everything that tear taking and the icloud apple where are you on apple pay . Its a great feature to help sell the phone, right . But its not a revenue driver. 15 bips. I like the feature. Why do you think the company the companys very big on the watch and excited about. They are going to do that on any rollout . They seem to think its more of a big deal than you do. Well i think wearables is a big category. Will they own that . I point out theyre not breaking out watch. Right. Theyre rolling it into you know the other are you buying the stock or no. No. Id see it its underperforming in the s p since midfebruary. Price target . 115. Looking for a pullback. We will watch for that. Colin, thanks for joining us. Large numbers, too. Pete rose looking for baseball reinstatement. The new baseball commissioner weighed in on the controversial ballplayer earlier on squaxsquawk box and generating buzz on twitter. Highlights when we return. Jacks heart attack didnt come with a warning. Today, his doctor has him on a bayer aspirin regimen to help reduce the risk of another one. If youve had a heart attack be sure to talk to your doctor before your begin an aspirin regimen. Woman its been a journey to get where i am. And i didnt get here alone. There were people who listened along the way. People who gave me options. Kept me on track. And through it all my retirement never got left behind. So today, im prepared for anything we may want tomorrow to be. Every someday needs a plan. Lets talk about your old 401 k today. Regulators want you to wash your car, message coming from the national highway Traffic Safety administration, just closed fiveyear investigation into rusty brake lines. Thats why. Agency blamed that problem on road salt and lack of washing. So it can be a safety issue. Their message if you live in cold weather states which obviously you get fewer and fewer as time goes by they get the undercarriage of your car washed several times during and after winter if we still have winter. It is one of the most controversial stories in baseball and its been go on for more than 25 years. Pete rose banned from the sport after allegations that he gambled on baseball games while playing for and managing the cincinnati reds. That makes him ineligible for the hall of fame. Hes applied for reinstatement from new commissioner rob manfred. We asked the commissioner about it in the last hour. The rule is clear, if you bet on baseball, you will be banished for life. I think gambling rule is so fundamental to the integrity of the game that it should always stay where it is. What i can tell you about pete rose is that hes applied for reinstatement. He has right to do that. Im going to take a full and fresh look. Anything different this time around . Well look time the passage of time if nothing else changes, i think, the situation somewhat. You know mr. Rose has suggested to me he has things that he wants me to understand about the situation. Ill give him a full opportunity. This is going on for a while. You have an opinion on pete rose because its controversial. No, my sense is i its the steroid thing. That threw a wrench in. Every current statistic, every Current Record is tainted by his 4300 whatever it was, thats we know thats not tainted by juice. But i also want to its a line in the sanden i think there should be a better line on steroids. I want to see you gambling while broadcasting. Thank you for indulgeing my voice. Get rid of that other stuff from bangkok, too, that you got. Join us on monday. Squawk on street begins right now. Come on show me what you got live shot of the apple store in new york city as preorders for the watch go live online. Customers can try them on at least in stores. Well gauge the response both in the United States and overseas. Good friday morning. Welcome to squawk on the street, im Carl Quintanilla with david faber sara eisen, simon hobbs. Cramer is off. Futures in a tight range. Chatter around ges move to