Transcripts For CNBC Squawk On The Street 20140314

The crimean referendum, of course, is this weekend. The roadmap begins with continuing Global Concerns led by china and ukraine. Have the markets looking at a modestly higher open this after the major averages logged their worst day since february 3 period. General motors is firing back that air bag failure in recalled vehicles resulted in more than 300 deaths. Target admitting it did not take immediate action after Security Software originally alerted the company to malicious activity after the data breach. And Mark Zuckerberg calls president obama to complain about the governments surveillance programs. First up, though, thursday, the 13, was bad luck for the bulls as worries about a slowdown in china and rising tension between ukraine and russia helped spark a market selloff. All 30 components finishing in the red. And the s p has fallen to negative territory for the year and the nasdaq posting a decline for the fifth time in six sessions. The s p has only had a yeartodate gain nine days this entire year. And were in the red once again. Well, were taking our cue, i saw when i got up early it looked like europe was stabilizing, you know, our futures were up and things looked fine and then europe flips as the redder it gets worse and the next thing you know you have markets down 2 . Germany is down 0. 6 when i last looked and germany should be down the most but we also keep hearing if russia market keeps going down, that putin will rethink because hes a capitalist after all. Hes not acting very capitalistic and thats partly of what were worried about. So, ukraine continues to be a concern or even more so programs the primary concern for the market . Well, i think Nothing Happened in china last night. I think that china is just this ongoing deceleration theme, how theyre spending their money, theyre not obviously not buying a lot of stuff because we watch copper and coppers bad. I always come back to what happened in 39. In 1939. Well, thats because the europeans even when everyone thought the euro was going to break up. They heard about peace. They never want to go back to theres a plebiscite, they never want to go back to the free city of danzig. They regard what russia is doing is very similar to what hitler did. Not to analogize to hitler although Hillary Clinton basically said the same thing from last week. These people are not going to stand by, but what are they going to do . What did they do in 1938 . They said, okay, listen, czechoslovakia is all yours and then danzig, no, they stood up to that. The russian army is not going to roll through western europe. Thats my point, maybe we are overdoing it to a certain point the russian army is not going to roll through europe. Amassing Russian Troops ahead of this weekend is trying to demonstrate how easy it would be to move into ukraine if he wanted to. I just dont think that this is the next site. Not the crimean war either. But the europeans are uniquely worried about the 1932 to 1939 period. And how fascism came about and youll hear putins a fascist. And a much bigger trading partner with china than certainly we are. They are getting on both sides to some degree. Listen to Warren Buffett and he had more to say other than creighton is going to go all the way. He said, look, you have to stay the course and sometimes i find when i listen to him and he says stay the course, and you just kind of say, stay the course. I dont like arguing with him . Maybe the ibm buy wasnt so good, but this arguing with Warren Buffett thing, its just never gotten you anywhere. Buffett was asked, by the way, whether he sold any assets because of the ukraine and chinese concerns. Heres what he said on squawk not warranted in terms of the market. I didnt sell my farm yesterday. I didnt sell my property down there at nyu, so why should i sell my businesses . The most he said was getting out of catastrophic insurance because the rates are so low. Right. I know thats been the cat insurance. You have to do it in bonds. Hes talking about wells fargo. Lets use wells fargo as an example. The Interest Rates have done down. A lot of people are worried about mortgage originaloriginor. Hes taking a longerterm view and we cant do that, but maybe we can. Hedge funds want to sell, theyre worried. Maybe there is action because of the plebiscite, and you immediately think about the plebiscite that was supposed to happen and then there was vienna. And i only point this out because you dont want to be that historical when it comes to the stock markets. Europeans. Right. Its always september 1st of 1939 over there. I suppose. Although back then nobody actually had a nuclear weapon. No. Now france does. The uk does. And remember how chamberlin said ill go over there. They dont want to deal with putin. The hedge funds figure why dont we get sure. The worse that happens is nothing happens this weekend and ill cover on monday. Its an easy s p trade. Was there any s p stock up yesterday . There was the worst breadth sense the february 3rd low. Do we think that every company is really deeply hurt by what is happening . No. Someone was tweeting me, how about rite aid, do i buy rite aid . You dont sit there and say this is the time for rite aid but we might look back and say why didnt cramer say it isnt the time with rite aid . You are praying in the church of buffett this morning. Im just saying that everybody else is praying in the other church so maybe its time to go across the street. Makes sense for me. He hasnt sold his farm and the property by nyu. He likes to talk about them. March madness, win the bracket . Its exciting. Would you take the lump sum or the 25 what is it 25 million . Let me tell you the way i feel about it. When nova went down to seton hall and they were going to be first seed, my world turned upside down. And now se ba they should do 2 million its so hard to pick this year. Before we move on to gm and i want to. We talked a lot of geopolitics here. Its not our area of expertise necessarily. Lets assume the rush een army not going to roll through anything but if theres higher hostilities for a longer period of time, it would be a negative. The peace dividend and winding down our operations and, of course, the generals are saying that were the weakest since 1939 completely untrue. But i just think that, look, this is not an environment where you want to stick your neck out and say i want to be Long International stocks that have a lot of business in europe and china. But is that cvs, for instance . Is that cbs . You could mention lots of stocks and say is that dominion. Do you buy southern . Kinda. Yeah, buy aep. Its fine. By southern. Right. Those are really what you buy when uf think that there could be a march on kiev. But i think theres a lot more stocks to like than dislike but no one wants to hear that because the world is coming to an end. It only takes eight shuts on the electricity grid to wipe out the whole thing. Tesla hasnt reinvented wait until they can reinvent the grid. Wait until they can sell cars in new york. Lets get to General Motors, it is battling claims that the air bag failure in recalled vehicles resulted in 303 deaths. It was part of the ignition switch recall and gm said it was based on raw data from safety regulators without what they call rigorous analysis. The company is under heavy criticism for dragging its feet on taking action on the defective switches which it has apparently known about for upwards of ten years. Yeah. Stocks been getting hit. At a certain point. Clearly. My Charitable Trust owns it and i sit there and say is there a level, how about 4 . The headlines are so bad. And you got the mt. Everest chart, holy cow, head and shoulders. The government made a really good sale here. Government looking good. Tim masset, nice sale. You think he was talking to maybe the department of transportation . Department of transportation might be short the stock. Kind of like the fdic knew about fannie and freddie. And it might affect the restructuring to begin with. It could get very messy. One thing is for certain when you have a headline every day like this, a lot of people just say get me out of it. Thats been a mistake. But think how long it took for bp to get back to the gulf. Today four years. Four years later. And bp was at 70 and then it was at 60 and then 50 and how bad could it be and then 39 and the answer is the dividends in trouble. I understand. I dont think the dividend is in trouble at gm. Remember merck . 27 with vioxx. Right. By the way the ceos wife was taking vioxx, if it was so bad why was she taking it. They fought through it extremely well, it took a while. It took a while. I dont know if youve ever taken vioxx. You ever taken it . No. What a fabulous drug. Better than celebrex. Celebrex is in the news. Yeah, celebrex. Geez. I dont know. Speaking companies that have a legal trouble ahead, retailer target has acknowledged that its Security Software did warn it of potentially malicious activity during the december data breach but decided not to take action at that time. Earlier reports said the type of alert received by target is often received and may have been tough to single out as being particularly harmful. Big piece in business week last night. Basically said fireeye did their job beautifully. But target for whatever reason did not react. They got the initial notice, im trying to see here, on november 30. And then justice came along on december 12th and said, hey, you got a problem. Fireeye is really good. I was thinking that, well, did the question was did they have what did they know, when did they know it. Obviously this is going to be the big sea change. Reading the verifone Conference Call. And theyre talking about, look, we need to get a whole new generation. But it seems like all you really needed to do was bring in someone who understood and had to realize the threat assessment was the issue, the targets threat assessment of what fireeye said. But it is nice to know that theres someone who was able to at least read this. Yes. Fireeyes been on telling you, we can read this stuff. Weve been talking for some time now how general breaches whether they be data breaches of this type, designed to steal credit card numbers for profit or the chinese engaging in significant espionage to gain corporate secrets essentially, this is a boardlevel problem now. No doubt about it, throughout the s p. Right. And has to be a boardlevel issue at all times where when youre in there, theyve got to be saying to the ceo, where are we on all this stuff. How confident are you . What are the systems . What are the checks . Where are you . How are you going to know . How quickly can we get on top of something when we do learn about it . I was at a Board Meeting yesterday for the street. Which i found a long time ago. Someone set up a bogus Hr Department online and pretended to be the Hr Department of the street. We nailed them in time. But you are thinking this happened to be a small company. But can you imagine why did they target the street . They are probably targeting a lot of people. Setting up a bogus Hr Department. What are they doing . This money get your resume to somebody. Still one more i cant thats a good scam. They were skyping with people claiming it was the street. Im thinking holy cow. It was a boardlevel discussion. The bad guys are brilliant. And they just never stop. And to a large degree they are just getting started. I know. Because technology is coming their way. Yes, it is. Youre right, its a boardlevel discussion and everyone will have to have one, palo alto net has been my and Mark Zuckerberg sounded off about the nsa spy program and vents about it on facebook. Well tell you what he wrote coming up. And well take the pulse of the consumer with staples ceo tom stem berg, stronger online sales have been a blessing and a curse for the Office Supply chain. One more look at futures having trouble getting out of the red here. A lot more squawk on the street live from post nine in just a moment. Tall the building is, or how ornate the halls are. It doesnt matter if there are granite statues, or big mahogany desks. When working with an investment firm, whats really important is whether the people behind the desks actually stand behind what they say. Introducing the schwab accountability guarantee. If youre not happy with one of our participating Investment Advisory services, well refund your program fee from the previous quarter. Its no guarantee against loss and other fees and expenses may still apply. Chuck vo standing by your word, thats what matters the most. Feeling right got to shake it facebook ceo Mark Zuckerberg said he phoned the president to complain about the nsa spy program, its effect on the internet and the damage the government is creating for all of our future. In a Facebook Post yesterday he wrote, ive been so confused and frustrated by the repeated reports of the behavior of the u. S. Government. When our engineers work tirelessly to improve security, we imagine were protecting you against criminals, not our own government. Strong words. A lot of discussion about just calling up the president. How you get that number and how you get the nerve to make the call. And then others saying, you know, facebook on privacy is kind of the kettle calling the the pot calling the kettle black to some degree. I would weigh in on that as well. I think often about i did a documentary many years ago called big brother big business for our network. That was in the infancy of the surveillance age if you will. And yet even there with facial recognition and a number of Different Things there were real questions about it and the data brokers such as axiom. Now, i mean, youre privacy, forget about it. We talked about it a number of times. I quoted Scott Mcneeley a few weeks ago on this very subject. But facebook knows, i mean, the amount of information that they have or amazon has or google has you go on and on for these and the ability to manipulate that information in a way that was not available to them even a few years ago were talking big data, were talking what they can do with it, is extraordinary. And so, sure, the nsa is worthy of criticism, but, man, you should be worried about what they all know about you, too. Thats an expectation of privacy, and i went to law school, the one thing i really studied. Theres an expectation of privacy for the country. Thats obviously out the window. We used to be, well, even crooks have privacy and now nobody does. Everything you email you should expect to see on the front page of the New York Times. Every time you give your credit card you should expect that someone can compromise you and i just find myself saying, okay, listen, this is now the new normal. You got to respect the fact that someone has there are people out there and companies out there and governments out there that know far more about us unless you want to be in a cash society. Facebook can figure out if youre a man or woman based on your cell phone. Every time you order something, i looked at salesforce. Com coming mark benioff and i called salesforce i just basically called the salesperson, say im interested. Every time i look i got a salesforce. Com ad comes up everywhere. You know they know more about me than i know about me. It will help them deliver ads to you that youll click on. Do we have anything to hide. I know thats not the issue either. Nixon often thought this was the right thing and now nixon would have the tools to really go to town. Oh, yeah. When we come back, well get cramers mad dash as we get closer to the opening bell. One more look at the premarket on this friday morning. Were back in a minute. No two people have the same financial goals. Pnc investments works with you to understand yours and helps plan for your retirement. Talk to a pnc investments Financial Advisor today. Story about a man a simple man a man with a dream to do the world some good we have eight minutes before the opening bell here on a friday. Of course, not a great week for the market thus far. No. If you are long at least stocks. What do we got for the mad dash . The key to the market is facetious something david and i used to talk about, alta salons, herb green is marveling heres a company that guided down somewhat substantially and you would expect any guidedown to continue this decline. No. Why . Because they said Comp Store Sales could be 5 to 7 up. When anybody sees aam could. Store that is above five they love the stock. So, this is this new world where we just are focused only on Comp Store Sales. Aeropostale, i all that aero post stale. Down 50 . What happens . The universe is saying if we can find retail growth well buy it. Williamssonoma but it broke down toward the end of the year. I know. Because they guided. It was 20 . This was a soft 20 and they guided to 15 and people are happy for 15 . Its regained its mantle. People will gravitate toward domestic retailers with a five plus comp because they have nothing to do with the ukraine and they have nothing to do with im sorry, ukraine. Get rid of the the. And you are looking to see theres going to be a Bristol Meyers cohort that is going to bottom here today i believe and might test bottom again on monday and theyre going to start coming to the domestic retailers with a good numbers because they can isolate them from china and the ukraine. Watch that action happen late this afternoon maybe again on monday if theres nothing more than sanctions put on china, sanctions meaning typically meaningless. Yep. Thats what people are gravitating toward. You want to see what will bounce. Domestic retail with good numbers and drug stocks. Well keep an eye on activism, pepsi, ebay, sothebies. The fights keep going on. Nasty, theyre not nice anymore, david. Keep your decorum activists. And kyle bass will join us to talk about a Mortgage Servicing company that he loves a lot. Opening bell coming up after this. Is. Are you still sleeping . Just wanted to check and make sure that we were on schedule. The First Technology of its kind. Mom and dad, i have great news. Is now providing answers families need. Siemens. Answers. Lemme just get this out of here. To go. Unlike some places, we dont just change your oil. Our oil offer comes with a fourtire rotation and a 27point inspection. And everything looked great. Actually, could you leave those in . Sure. Want me to run him through the car wash for you, too . No, no, i cant. And right now get acdelco professional durastop brake pads installed for only 99. 95 or less per axle. Chevy certified service. Became big business overnight . Like, really big. Then expanded . Or their new product tanked . Or not . What if they embrace new technology instead . Imagine a companys future with the future of trading. Company profile. A Research Tool on thinkorswim. From td ameritrade. Im jim cramer and welcome to my world. We call my world mad money. Jim cramers first mad money show nine years ago today. Still going strong. Thank you. Did you ever age, man . I was about 195 pounds then. No kidding. Now you are what, 196 . No. I dropped about 17 1 2 pounds. And oit muscle, too. Yes. Sixpack. I mean, its corona. All we need is a guy to stretch us for two hours at our age. Get up at 3 00 and stretch for two hours and youll feel better. Thats great. Thats what happens when you get older. I have a 50yearold nearby. Fabers hair is better than cramers shirt, ill tell you that much. Congratulations on nine years. Thank you very much. Do you remember the first show, do you remember the environment . It was a period of euphoria and small cap stocks that would look good. That period has not returned. The skepticism is back to where it was post2001. 2005 was really this kind of period where people said, hey, go buy Toll Brothers and lennar and buy everything, lazboy, oit come back. Interesting cheap stock. Really . Yep. Did not know that. This will be about the nine. Make a big deal at ten. Well have a cake that will be fattening and i wont be able to eat until sunday but im signing books at costco on saturday at east hanover and im not having any samples. Good. There it is, get rich carefully. In the time weve got left before the opening bell, a lot of activity and activism. Sothebys has two people for its board that it nominates to go up against dan loeb, wants three board seats. Nelson peltz brigwrites a very letter to pepsi and its board of directors. Executive session without injury. I want to understand where your real expenses are. I want to understand your excessive overhead costs, i want to understand your advertising declines. Be transparent and tell us whats going on and then, of course, continuing battle between carl icahn and john donahoe over at ebay. This is the season but isnt this unusual . This like teldar. These are fights. These are fights whereas in activism as weve often pointed out you sometimes have conversations that then lead to amicable resolution. These are fights. Yes. These are bigname people really going at it and saying, you know, at wone point in peltzs letters he said cut the headquarters to two. How much money are you spending on the palaces. 17page letter and they make the point we arent normally this public about it. I know. And kind of saying that theres a little sedition going on. Maybe a little breaking of the ranks and implying that the top Shareholder Base wants a move. Executive session. Its nasty. It is nasty. 240 million. Why was it better to spend that on the old headquarters as opposed to perhaps upgrading your bottling capacity. These are the questions being asked. The board comes back very quickly and says weve considered everything. Right. Everything under your plan, we know keeping everything together at pepsi is the way to go. Theres the opening bell, by the way, and a look at the s p at the top of your screen. The big board celebrating its ipo Cast Light Health a Cloudbased Software provider that helps selfinsured employers control their Health Care Costs. Well talk to the ceo. And the fabulist on e celebrating on the nasdaq. And the big dividend boost and ken powell a lot of people feel hes a terrific executive, ceo, but a lot of people are feeling this wassio pl iyoplait. Meaning its been discouraging and yoplait is now three straight quarters of business here from a really Great American company. And the supermarket segment those are not doing well. Anything in the supermarket. Youve seen the valuations on chibani 5 billion where a Company Whose distribution is nowhere near what yoplait is. You want to own General Mills. If you sell into the supermarket and you are not all organic and natural you are struggling. Compare General Mills to white wave. White wave is the plantbased drinks and horizon milk, horizon brands, that stock doesnt give up a penny. Its the best performer of the group, why . Because its natural and organic and thats what people want. Thats one of your big themes. Yes, thank you. Youre welcome. I listen. I do. I Pay Attention. I try. Attention to detail. A steel trap. Rigorous, baby. It goes in and never goes out. Would you expect the distribution toward defensive names to continue today . It should. Thats been the strategy that this day you go in and start buying the defensive names with good yield and you try to get the accidental high yielders and you stay away from higherrisk stuff. The first ones that bounce back are the names like cast light. They get hammered and then they kind of spring back to life. Biotech, the high growth biotech getting hurt. And netflix is amazing, isnt it . Netflix and amazon. Amazon took almost a percent and a half. Prime raising the price, i felt it would be the costco card, you just pay it. Who cares. I think they are up 20 bucks. Yes. They certainly know their Customer Base extraordinarily well and their behavior, they measure everything and amazons ahead of everybody when it comes to big data by the way. They dont come to that price easily, but, listen, there are plenty of people who that theyll say forget it, another 20 bucks not worth it to me. I know well talk about sirius but thats another bill i pay. Pay it. I dont look theres a lot of bills that i dont know about you guys, i kind of pay it every month and i dont even think about it and something goes up 20 and amazon after all the shipping costs its such a bargain anyway. And netflix is one of those. Another one i just pay. I wouldnt focus on how much i pay for it. I just wouldnt. How about hbo, do you focus what you pay for that . I think i pay 150 to espn or is it 280 a month. What are you going to do not eat . Exactly. Not eat, hey, world hunger, espn, these are things were trying to cure, our espn bill. But im not being look, there are bills that people regard and clubs that people regard as being great value and they can sneak a price increase. Whereas most people like General Mills raise the price of cereal so much that they price people out, ones perceived as a bargain and one is perceived as too expensive and they go to the private label. And thats why kroger has done so well, they have the most private label of any supermarket. The netflix is almost the cost of a big box of cereal. I dont know if you use gogo when you are flying. Viosoft you can watch netflix. Jetblue did that, people want netflix, there are bargains out there people want this netflix no matter what. You got to pry netflix from my cold dead hands, david. Okay. Second amendment and netflix. I hope i dont have to do that anytime soon. Me, too. And it will be hard to pry from your hands. There are stocks that are bouncing and i dont trust the market yet. Its too early to bounce. Too much crosscurrent in europe. I cant ignore europe. Were back in that mode. Yeah. Although you made the point that people would start to look for domestically centered companies. Lowes up there. Surprisingly coach is the best performing s p component right now. Really. Take a look at kate spade. Lowes was upgraded today, smart and meaningful upgrade. I look at lowes. And the undercurrent there has to get warmer because planting season is coming up and planting season is their holiday season, so i watch lowes, if it gets warmer that one is going to work. Coach up 85 cents. Very interesting. Macro story, Producer Prices which were minus one. To the core minus two. It was a little bit worse than expected. More talk about inventories being so fat right now that producers have no choice but to cut prices. In all the years ive been in business ive never feared lower Interest Rates that i fear now because lower Interest Rates means theres no demand at this point. Warren buffett talking about how wells fargo would like to lend more money. Theres not enough demand in the system. Thats what the wholesale number said. Two eight to two six in five days. Way too quickly. And rates supposed to go higher and a lot of people were short bonds and that turned out to the be a real bad bet so far. So far. Last year it worked out. Worked out fine. I look at bonds and copper and say, geez, you know, this is not going the right way. We need a little demand. That number was bad. And retail hasnt really come back yet. And i dont know, i just say theres a lot of things that are not right right now. Last friday we had an unemployment number that made it look right today. We had an unemployment number that made us feel better about the economy. That was five trading days ago and its all gone. We bring lots of strategists on here with the 10 and the 11 and a lot come back and say were positive, well get higher gdp growth in the second half and well start to see Capital Expenditures in a way we havent in the last five years well finally start to see Corporate America spend money on things other than buying back stock. United rentals are the highest level of optimism in years and huge orders for nonresidential construction which is a giant employer. Thats a big employer. The crosscurrents of so hard, let it go down, ill revisit it later. With that in mind dows down eight. Lets get to bob pisani who is in a very large crowd of people on the floor, bob . And Castlight Health the first indications are going up right now 25 to 27. They priced 11. 1 million shares at 16 well above the price range. 13 to 15 was the price talk and that 13 to 15 was elevated from prior numbers earlier in the week. Bottom line this is going to definitely open with a nice little pop. This is about helping companies analyze Health Care Costs and they crunch massive amounts of data and they present it to the company and the individual and supposedly this helps individuals make choices about the best kind of health care and about cast options that are available to them. People are watching it carefully because todd park was one of the cofounders, he founded Athena Health and hes well thought of it. Hes the chief Technology Officer for the United States a lot of attention for this company right now. We are down right now, but it was a very rough night overall, the nikkei down 3. 3 and its down 12 for the year right now the nikkei. The worst performing of any of the asian boards. And russia was down 3 . Shanghai was down 3 . Germany was down fractionally. The dax is down 4. 1 so far for the week. Close to its biggest drop in about two years right now, its been a rough week overall in all their emerging markets are down as well. Bear in mind turkey is heating up again. I know its been on the back burner but demonstrations at turkish s isish cities for seve now. Lets move on and talk about the retailers. Take a look at whats going on here. Another rough day, aeropostale, the guidance for the First Quarter is incredible. They are talking about 75 cents loss. The consensus was a loss of 17 cents. Enormous numbers for them. Zumiez had good earnings but expecting a loss and there was a gain expected. This was the guidance for them for the First Quarter. Does anybody have anything positive . I thought ann had good earnings. And the revenue guidance is close to consensus. In this world thats actually pretty good news. Mattress firm also said their 2014 guidance would be above expectations and i know, guys, im stretching a little bit on that one. By the way, one final point, china has ordered a halt to mobile phone Payment Systems and Virtual Credit cards. This caught everybody by surprise. Nobody i knew thought this was coming. The Chinese Central Bank said it was too risky. Apparently theyre trying to maybe protect their own state Payment System but Pay Attention to some companies out there right now, china mobile, youku, lightinthebox and 500. Com involved in mobile china ecommerce. Trying to parse what it means. Thanks very much, bob. Lets talk about liberty, we got news late yesterday about a significant change in its approach to majority owned sirius subsidiary if you want to call it that. Sirius satellite radio, 53 owned by liberty. They had made an offer to acquire the remainder of the company in in liberty stock. It was during a point at which if you recall both they were trying to take advantage of programs what was a lack of a discount to Net Asset Value at liberty which they were using to try to acquire the 47 of sirius they didnt already own. They also were doing it at the time where if they brought sirius on into the overall, its cash flow into the Balance Sheet of liberty, it would have helped them conceivably with the opportunity before them of trying to acquire time warner. Well, we know thats no longer a likely reality, but they havent gotten rid of their slate and, in fact, they completely change things up and go a route theyve often gone at liberty namely tracking stocks. Yes, a favorite of john malone for many years. In fact, in this case there will be two tracking stocks that theyre going to be creating at the Liberty Media corporation. One will track the companys socalled media assets. And theres a look at john malone. Which will be comprised largely of that 53 stake in sirius that were talking about. Will also include livenation, the Atlanta Braves and the stakes in barnes noble and youll have another tracker theres a look at that that theyll call Liberty Broadband and will have the 27 of Charter Communications that liberty owns. Also a small stake in time warner and then an active business true position. Interesting to note the presence in both of these of what we call active traders. Why is that important . Well, if at some point in the future liberty wanted to i know this gets somewhat complex, pursue a reverse trust with its stake in sirius, in other words take its tracker and make it a hard spin, it could actually pursue a reverse trust where it would spin it into existing sirius. Thats something shareholders have thought about for a long time. That is a possibility. Nearer term, though, lets focus on the positives and potential negatives. One positive is you had a buyback that had been halted at sirius, it will resume. The company is considered under livered at 3. 1 times and could go up as much as 4, and theyll start buying back stock rather quickly. Liberty will sell into the buyback its high basis stock. So it may be selling down to closer to 50 . Nonetheless, that is seen as a positive. Then youve also got bulls, jim, who say, do you know what, youve got a used car market that is now being enabled for sirius. This is the bull case. Dont forget this is the company that did tell us it guided below the street for this year. But the bull case said you could do 30 cents a share in Free Cash Flow by 2016. But a 20 multiple on that 30 cents of Free Cash Flow 16 two years out, you still get a stock thats well ahead of where we are here. And then you got the clean charter on the other side of this, which may enable them to do some other things tax efficiently. Thats at least for the investors ive talked to coming in on this. The Merrill Lynch upgrade is terrific. And we also have a little better tapes so people are a little more enthusiastic and sell a lot of cars. A lot of cars have sirius. People like the service. And people felt they stole it. They were trying to, of course, the special committee was not going to let them when they couldnt actually and then the stocks traded off from nav, liberty, and Time Warner Cable fell by the wayside, so this is the other route they are going back to trackers which has always, of course, been a longtime favorite of mr. Malone. Lets go to the bond commits and Rick Santelli at the cme group. Rick . This is definitely the epicenter of some activity. Thats the understatement of the year. The twoday chart of tens you see all you want to see. Momentum continues to build to the downside. What i find fascinating is open the chart up year to date, a couple of things jump at you. Here we hover at 264 and weve challenged 260 so were hovering to the lows close since early march but really the key is february 3rd, 257. You want to Pay Attention to that. Lets look at another area that is important. The yield curve gives you all the clues you need. Weve been talking about it. Many say how steep it is. But steepness isnt the issue, its really about flattening. Look at twos to tens and look at fives to tens and they are the flattest since basically early july of last year. July is the wild date right now. Look at bund yields theyre at the lowest level since basically early july of last year. Lets look at gilts ten year, the uk ten year. Theyre very close, a few basis points from being the lowest yields on a closing basis since november. All right, lets not stop there because i think especially the european sector specifically germany. Bob mentioned the dax, certainly whether its the dax, dollar, yen, all these are giving you great correlations. But look at this chart of deutsche bank. I think deutsche banks pretty expressive of whats going on in the Banking System in europe especially, quoteunquote, the better banks. This is hovering at the lowest price since august of 2013. Now, dollar yen i referenced earlier. Once again it keeps you out of trouble because when you see the currencies like the euro and the dollar weakening against the yen, its about what they borrow and what they buy. Maybe equities. Yes. We see that correlation is alive and well. Lower yields. Lower cross trades against the yen and, of course, lower yields. Theyre all holding hands. Back to you. Rick, thank you so much. Good stuff. Rick santelli in chicago. When we come back, get ready for an exclusively as we talk to kyle bass. And also ahead hitting the slopes theres a Winter Weather effect on vail slopes that might surprise you. The dow hanging on to a 40point gain as we get this friday started. Were back in a moment. Come to the geico motorcycle. See how much you could save. Bill gates saying most people dont realize that in 20 years many jobs will be replaced by bots, tech slang for automated software. Gates made those comments in a talk before the American Enterprise institute. And he gave an interview to Rolling Stone said the company would have been willing to buy whatsapp but not for the 16 billion that facebook paid for it. Actually some pretty chilling remarks about the future of labor in the country because of the technology and what its going to do to folks on the lower end of the skill set as he says. Thats why hes worried about the minimum wage law what that will do to employment. The two countries issue, i go back to louisiana and i think, listen, theres some jobs that will not be automated. A lot of the actual drilling is just on computer. People just press a button and it goes down. But Natural Resources are a place where they are hiring. Just keep it in mind because that is fossil fuel, but fossil fuel produces a lot of jobs. Biggest job generator. Yeah, right now. Dows still up 27. When we come back stop trading with jim and news on university of michigan when squawk on the street continues. Continues. [ girl ] my mom, she makes underwater fans that are powered by the moon. She can print amazing things, right from her computer. [ whirring ] [ train whistle blows ] she makes trains that are friends with trees. My mom works at ge. Move your feet but stop trading jim cramer is up with this. Look at this piece of research saying alcoa could be broken up, sum of the parts. Clause cli they are against it. The a150 are lightweighting that and alcoa is going the lowest cost structure. Its been creeping up all year, remember it was at 7, and 8 i think alcoa can go up on aerospace which has been very good and the coke bottle which is really cool. The truck orders that have been very strong. Possible is United Rentals said return of nonresidential construction. I think its a real interesting buy into this weakness. They have a big russian operation that people are concerned about. I dont want the sum of the parts but this is still one more reason its time to buy alcoa. Lets get to Rick Santelli in chicago for consumer sentiment. March preliminary read on university of michigans Sentiment Survey is 79. 9. We dropped a handle. Obviously we were all expecting an eight handle, looking for 82, 82. 5, the last read for february was 81. 6. 79. 9 takes you back to november of last year when you had a read of 75. 1. Of course, all the excessive reads have been in the 80s. Im not sure that this is a surprise considering many of the issues that are confronting investors. But nonetheless, we do see yields dropping back down maybe potentially testing some of the lowest yields since the beginning of march. Carl, back to you. All right, rick, thank you very much. Rick santelli. Jim, mad money tonight, youve said markets trying to make a stand here. Yeah. Its a little early. I like the fact that aerospace is finally going up. I see some bids, you know, being underneath in the drug stocks. I think there are people who will say, i want to take profits on the short side. Other people say, listen, lets step aside and only buy companies that have a good domestic story. Ive got a company on tonight. A spec company. And its had in mind big data. Big data, we see this, big data, cloud, these buzzwords mean a lot to the growth managers. Take a look at that. The cloud group that is publicly traded right now has not been holding up well. Castlight indicated 29 to 31. This will be a ripper today . Well, theres three more Cloud Companies next week if you miss this one. Three more coming public. I know we dont like to see that kind of heavy concentration especially when the workdays have been sluggish and salesforce. Com the granddaddy. Have a good weekend. Lets get to simon to see whats coming up. Target is admitting that it knew about the data breach earlier than we thought. Were going to have the cofounder of staples tom stemberg on the show and no snow in tahoe. Vail resorts in an exclusive interview on why they are cutting their Earnings Guidance because of the weather. Well have more after this break. music defiance is in our bones. Defiance never grows old. Citracal maximum. Calcium citrate plus d. Highly soluble, easily absorbed. Welcome back to squawk on the street. Our roadmap this morning begins with the markets. Stocks trying to recover from their worst day since the beginning of february. Will Global Concerns continue to weigh on the market. The east coast may have covered with snow but out west they are dealing with a serious drought and that means big trouble for ski resorts and well talk to the ceo of vail how they are dealing with warm weather. And kyle bass will join us live for an exclusive interview. Well talk about what hes watching right now. We want to mention were waiting on castlight to open at the nyse. Originally priced 11 million shares at 16 raising about 177 million. Indications went 27 to 29 and 29 to 31 and now 33 to 35 and when it does open, of course, well bring it to you. They do some Enterprise Health care Cloud Business trying to help employers manage their Health Care Costs. Almost perfectly positioned for the debate that were in right now. In the meantime the big event this weekend is, of course, the crimea referendum. We have some breaking news. Secretary of state john kerry meeting with his russian counterpart earlier today in london to discuss the events that were expecting over the weekend in ukraine. Secretary kerry will hold a News Conference in just a few minutes. A lot of investors eyes will be on that. For many its about the sanctions. What does london do, what does washington do and what happens to capital flight in moscow. In the meantime ukraines interim Prime Minister was in new york after meeting with the president this week addressing the u. N. Security council. Our chief International Correspondent Michelle Caruso cabrera spoke with him exclusively and joins us with details. Were here to speak to him because the big vote in crimea begins on sunday. We ran in to him or we were waiting for him when he arrived last night at a midtown restaurant in new york city, this is what Arseniy Yatsenyuk said to us as we approached. What does ukraine do on monday . On monday . Yeah, after the results come out. Preserve its territorial integrity. How . In all possible means. Using all leverage from the International Community, from our international obligations, and pressing on russia to stop this. Do you use your military . Thank you. He obviously didnt want to answer the question about military intervention and obviously the big concern, ladies and gentlemen, is whether or not were going to see shots fired or whats going to happen next week. Simon mentioned capital flight so lets get to it because it is happening a lot. Were seeing you the micex the 15 most liquid russian stocks in rubles. I want you to look to the right of the screen to see whats going on there. The top number shows you a decline 2 but it was down as much as 5 and the oneyear performance is a decline of 19 . If you bought this index in dollars, take a look at the rts because its the same exact index in 50 stocks except its in dollars. Its down one year 32 . So, theres been dramatic capital flight and you can see it happened literally within the last two or three weeks. Lets show you the ruble one week. This is managed so were showing you the dollars versus the ruble, so every time this rises you are seeing the dollar getting stronger and the ruble getting weaker and the day by day by day we see the weakening there. Lets show you whats going on with russian bonds as well. Some of their yields hitting record highs. You can see here, i dont believe its unchanged. I think thats incorrect or its probably reflecting the fact that that market is closed however weve seen yields rise sharply there as well as once again it appears to be that investors are saying, you want to deal you want to invade cry m mia, you want to want to invade eastern ukraine, it wont be on our dime. Clearly investors are paying close attention to sundays vote between ukraine and whats going on in china. This morning Warren Buffett told squawk box china and ukraine doesnt sway his investment decisions. He said the fears over china and ukraine are not wanted. Have a listen. You are talking about income. I would bet a lot of money that income from a diversified group of stocks will increase significantly over the next 20 years so the headlines will not make any difference in that. Stocks can go up and down. They always will go up and down, but American Business is going to move forward over time. Lets bring in mark vittner managing director and senior economist with Wells Fargo Securities and Michael Jones with us as well chief Investment Officer and chairman with riverfront investment group. Lets start there, michael, volatility is supposed to be part of the natural process here with the stock market. So, there is three reason to be concerned about the sharp swings weve seen, yesterday the 200point swing on the dow, worst day in a month. The markets have had to absorb pretty big disappointments in 2014. We expected the u. S. To accelerate and we got snow. We expected europe to accelerate and we got putin and we expected china to stabilize and thus far the data has been terrible. So, when you think about the magnitude of the disappointments thus far this year, the markets actually holding up pretty well and i think thats because it expects two of those three to be resolved in the next few weeks. Lets talk about the worstCase Scenarios here just to get investors prepared in case they have to be, mark, if we did see an escalation. Were going into this vote on sunday. If we did see russian sanctions, for instance, from the west, from other nations as had been threatened, what does that mean for u. S. Investors . Well, for u. S. Investors, it probably means more volatility in the very near term. For the u. S. Economy, it probably doesnt mean that much of a change. Domestic economic growth, u. S. Economic growth is going to be stronger in 2014 than it was in 2013. Even though we got off to a slower start. Part of the reason we were feeling 2014 would be better is we were expecting europe to be stronger. Its still going to be stronger but this uncertainty brought on by russia is going to cut into that somewhat. You know, michael, as we approach the end of the First Quarter, the market has not made gains and you can say actually thats quite good given what was up against it. But what is happening is the volatility in the market is obviously beginning to expand as the amount of money that the fed prints each month is gradually reduced. Where does that take us moving forward . Do you still think that the market theyre now showing me a years chart. But if you looked at the First Quarter youll see its perhaps not quite so spectacular. Where do you think we go during the course of the year, michael . Well, obviously it critically depends on how do we resolve the crimean situation. Really . Oh, absolutely. Hang on. Lets be clear about the crimea situation. Were not going to get the results my information for ten days. I mean, do we really care what happens in a former soviet union . You mean just to the end of the quarter. Just to the end of the quarter were going to stay probably under pressure because i think youre right. The crimea situation doesnt resolve itself too terribly quickly. If you believe as i do putin is playing another masterful game of poker like he did in syria and hell throw out a facesaving compromise at the end, then you expect the market to recover as we move into the second quarter. On the other hand, if this time hes going to overplay his hand, if this actually does become a tit for tat sanctions war, then i think we all have to reassess our longterm economic and Market Forecast because europes going back into recession. You know, mark, i found it quite amusing yesterday to see everybody scrabble around as to pinpoint the reason why the market might have fallen and inevitably they seemed to look externally to foreign factors, truth is this is a market that some would say was overextended and might you wait for a correction whatever is happening elsewhere . You are absolutely right there. I think theres a lot of anxiousness across the markets, across the economy right now, and in some sense people cant believe that things have actually gotten better. Is there any way on earth that we could justify the rebound in market given the little bit of improvement that weve seen in the overall economy . And i think theres actually a better case to be made. The u. S. Economys not only likely to grow at a stronger pace in 2014 than it did in 2013, but that growth is going to be much broader than weve seen in the past. Single family Home Construction is going to improve this year. It got off to a rough start because of the snow but its clearly going to improve this year in a way that we havent seen so far in this recovery and thats got some legs to the rest of the economy. Michael, quickly, when you talk about the anxiety out there, what is your litmus paper . Sit the tenyear yield . Is it gold . Is it the japanese yen . I think if you see the tenyear treasury break below 250 thats a fairly important signal that they think things are getting out of control in the international environment. I think gold is probably also a good indicator of anxiety because, remember, one of the things that putin has threatened as a part of the tit for tat retr retaliation to duchl longterm treasuries. You may so gold as a better clear signal of the level of anxiety in financial markets. Again, our view is, is that this is another wonderful game of poker on putins part. Hes going to get what he wants but hes going to deescalate like he did in syria. Well see how it plays out. Finally, mark, its a weird day to ask given what we got out of Producer Prices today but people are still looking back at wage growth from last week and saying theres no way that the fed is going to let wage growth get to 2 1 2 or 3 without pulling the Interest Rate trigger. Are you are you in that camp . And how would they begin making that giant reversal . Im not really in that camp. One of the reasons why the average Hourly Earnings increased so much is that we had this bad weather. And people didnt work as many hours. But Many Companies continued to pay them as if they did work. And thats why average Hourly Earnings increased as much as they have. Wed expect that to come down. That said, i think inflations going to surprise us a little bit to the upside this year. Mainly in the second half of the year. And i dont think that that has many implications for fed policy. I think it definitely means that theyre more likely to raise rates in 2015 than to put off the first rate hike into 2016 but that doesnt change anything for the markets currently believe the feds going to move. Well, well see. Next week is going to be a big one. Janet yellens first press conference. Mark and michael, thanks for the perspective here on this bumpy ride through the markets this week. Were waiting for castlight to open, lets get over to post five and check in with bob pisani. The crowd is still here. New indications 36 to 37. They are pricing 11. 1 million shares. The price talk two days ago was 13 to 15 and that had been raised from previous indications, 36 to 37 what is it all about . Several things going on. Number one, its a relatively small float. They are selling about 12 of the company. Thats not unusual. I see many ipos where they are selling 10 . Thats been the strategy and sell a small amount and if its successful sell more later on in secondaries. Number two, this is the intersection of biotech and big data as well as health care, this company crunches massive amounts of data and presents it into an easy format allowing people to make health care choices. And todd parker founded Athena Health a wellknown company and hes the chief Technology Officer of the United States. Its getting closer hoo er here, 36 to 37. Back to you. Did target ignore warnings about the data breach . Target said it did and that choice eventually led to one of the biggest data breaches ever recorded. Well talk to retail vet and staples ceo tom stemberg. And kyle bass will join us live. And the dow holding on to a 42point gain here. Ent, will you outlive your money . Uhhh. No, that cant happen. Thats the thing, you dont know how long it has to last. Everyone has retirement questions. So ameriprise created the exclusive. Confident retirement approach. Now you and your ameripise advisor can get the real answers you need. Well, knowing gives you confidence. Start building your confident retirement today. Welcome back to squawk on the street. Check out share of keurig, Green Mountain, the stock is moving higher after signing a new deal with starbucks. Keurig and Green Mountain will give starbucks a wider selection of diskcups. This does amend a fiveyear deal the two signed last year. For its part starbucks you can see there trading just a little bit to the upside here but nothing crazy. To the upside, simon. The retail giant target is admitting that its Security Software may have detected the massive data breach but the staff decided not to act essentially confirm business weeks reports earlier. Lets bring in tom stemberg the cofounder and former ceo of staples. Tom, good morning to you. Thank you for joining us. Good morning, simon, how are you . Im okay. I mean, the business week article basically said that the team in bangalore got notification from fireeye one of the Security Consultants that they use that there was some sort of breach. But ceos like you know that i. T. Departments get hundreds of those sorts of warnings possibly every day. What is a retailer to do when they are faced with those sort of odds . And on the other side, customers will say, actually 40 million credit card details were lost and another 70 million individuals data was lost. What does a retailer do . Theres not many good things with dodd frank and sarbanes oxley, but one of the things is they force you to assess your risks as an enterprise, when you assess your risks the confidentiality of Credit Information is probably near the very, very top of your risk factors and therefore you have to have extremely heightened sensitivity to those areas and you have to instruct your staff, when something comes up here, we have to treat every threat as real and clearly somebody dropped the ball at target. Are you saying, forgive me if i am put words in your mouth, are you saying that dodd frank may drive retailers to not store details . Its a major nuisance in many ways but one of the big benefits you have to identify the enterprise risks that face your business and clearly address those in various board sessions or committees. And by having that kind of laserlike focus and seeing what can really, really hurt you, you then put priority on preventing risk in those areas and, therefore, every time a yellow light goes off, having to do with personal Credit Information, you have to overreact. Tom, i remember we had you on right when this whole thing broke and you basically said that target has the best back Office Operations of any major retailer. I think it surprised you like it surprised everybody else. Whats the point of getting bringing a fireeye kind of Service Online if you are going to ignore some of the warnings . Well, obviously you shouldnt ignore the warnings particularly in something thats as important as this particular area is obviously. Hey, tom, let me ask you whilst we got you here about the business importantly that you founded, of course, which is staples. You told us that potentially it was going to cut stores and then how do you feel last friday when you read that actually, yes, 225 stores were going to go in an attempt to save 500 million, how do you as a founder of staples feel about the need to do that and the action . Well, its obviously painful to see something that you built begin to shrink. And they face some tremendous headwinds, having to do with secular declines in paper and cartridges as people do more and more things on ipads. Having said that, i think the real challenge here, and its a real problem, is youre facing amazon who is pricing things on a way thats not sustainable over time. However, the prices are very low. So, if youre the ceo, you are faced with a choice of giving up your billion dollar or so cash flow and trying to fight with amazon to maintain your market share, or to relinquish market share and try to maintain profitability. Its a horrible choice to have to make and as long as amazon gets a free pass on wall street, i guess that challenge will continue. What does it mean for the staples and the office maxes and Office Depots of the world . The working environment is different . They just started stocking apple pr products and if its too hard to compete with amazon, what is their future . The fact of the matter is amazon i dont think over time can continue to price things and run Gross Margins at 5 and 7 when it costs them more for the credit card and the shipping. The enterprise is not making material profits. Theyre pricing for market share and wall streets letting them keep their stock price up and i think at some point theres a day of reckoning coming. Tom, im working on a large documentary on amazon, this is david faber, of course, i hear that frustration from a lot of retailers but mr. Bezos has them believing, that being his Shareholder Base. Is it naive to think that end is going to come anytime soon if you are a retailer out there trying to compete with amazon . I think my prediction what will happen is theyre going to have a quarter where their Revenue Growth is 19 not 25 . At which point people will start looking and saying, wait a minute, as the Financial Times pointed out a few weeks ago, even if they grew at 25 per year and raised their operating profits to a more normal 6 to 7 level the stock is still selling for an incredible multiple. And the Revenue Growth slows and the things unravel very, very quickly. Are you glad to be out of it, tom . I imagine you are, arent you . Im having a lot of fun working with small businesses. Sure. And, you know, they are still growing despite all the headwinds we face as retailers and thats a lot of fun. Hey, its good on see you again, sir, thank you for sparing the time. Tom stemberg and foe counseleder and former ceo, of course, as well of staples. Have a great weekend. Thank you. Were on ipo watch here at the New York Stock Exchange waiting for castlight to open. Lets go down to the floor a big crowd gathering around bob pisani waiting for this one to hit the floor. Hey, bob. Were about to order lunch. Its 10 21 here and castlight has indicated 37 to 38 which is remarkable because the price talk was 13 to 15 a day ago. Why is it taking so long . Were in twitter territory. Twitter was the longest it ever took to open a stock i can remember. Ive been here 17 years. That was 10 47 as i recall when it opened. Were at 10 21 right now and the simple is theres a lot of orders to buy and sell and they keep changing so this is really an open outcry process. Its the beauty of it, it combines technology and human beings. The mm, the designated market maker youll hear him cry out every once in a while new indications and nothing happens until that man and the book runner which happens to be Goldman Sachs here, says everything is together and paired off. Theyll open the whole stock at one price and right now theres been continually new orders coming in to either buy or sell, so as the price changes some people will get in, some people will drop out. This is what happens when you get a big stock with a lot of people interested in it as well as a relatively small float. A lot of people want to get in. Well see if we get towards twitter ill definitely give you a shout. Back to you. Yeah, could be a big day. Well check back with you. Bob, thanks for the update. The cofounder and ceo of castlight will be joining us right here at post nine as soon as the stock opens. Well be right back. [ male announcer ] how can power consumption in china, impact wool exports from new zealand, textile production in spain, and the use of medical technology in the u. S. . At t. Rowe price, we understand the connections of a complex, global economy. Its just one reason over 75 of our mutual funds beat their 10year lipper average. T. Rowe price. Invest with confidence. Request a prospectus or summary prospectus with investment information, risks, fees and expenses to read and consider carefully before investing. With investment information, risks, fees and expenses. Return on investment wall isnt a street. Isnt the only return im looking forward to. For some, every dollar is earned with sweat, sacrifice, courage. Which is why usaa is honored to help our members with everything from investing for retirement to saving for college. Our commitment to current and former military members and their families is without equal. We are the thinkers. The job jugglers. The up allnighters. And the ones who turn ideas into action. Weve made our passions our lifes work. We strive for the moments where we can say, i did it we are entrepreneurs who started it all. With a signature. Legalzoom has helped start over 1 million businesses, turning dreamers into business owners. And were here to help start yours. Turning dreamers into business owners. So ally bank really has no hthats right, no hidden fees. S . Its just that im worried about, you know, hidden things. Ok, whys that . Well uhhh. Surprise um. Well, its true. At ally there are no hidden fees. Not one. Thats nice. No hidden fees, no worries. Ally bank. Your money needs an ally. We are still waiting on Castlight Health to open. Looks like its going to open at least up 100 . Bob pisani is down by post five. Bob . Were passing around menus for lunch. Ill take your order in a minute, carl. 37 to 38 is the indications. 13 to 15 was the price talk a few days ago. Again, the key point about whats happening is the float is very small here. Were talking about 11 million shares. Thats only about 12 of the company. Now, i dont know how many stock what number of stocks going to actually open, but ill bet you its probably not more than 2 million at the open. 2 million is probably 88 million, 89 million shares outstanding, its a very small amount. Theres a lot of demand because its a hot stock in health care. Its got technology, its got big data in it. It intersects a lot of hot sectors a high profile counder founder and a small float and you have intense demand for very little stock. This strategy, carl, has been very successful for ipo companies, all the Companies Know dont go with the big float, go with a small float. And the stock holds up six month, eight months, ten months down the line and thats why we are getting the huge secondaries that have been coming through for almost the last year because the ipos are small. They do big followons. And were still at delev 37 to 38. And want to draw your attention to pepsico, and it was a dramatic night for nelson peltz and pepsico. Peltz wants pepsi to split businesses beverages versus snacks and has been rejected multiple times by management fired back last night sending a letter to the board calling on directors to meet shareholders without management. He has more than a billion dollars in this stock. A 0. 8 stake in the stock. Hes questioning all sorts of things, the cost structure and innovati innovation, and the culture of pepsi, the competitiveness factor. He asked pepsi frito explain wh they spent more than 200 million renovating headquarters when they could be spending it toward innovation and trying to go up against coke. He called out the director ian cook and his response to previous peltz letters for the dismissive tone in that. Pepsico was quick to respond as it has been this entire saga defending its board, defending its strategy saying here our independent presiding director and other independent Board Members have already met with trion without management present. The board has thoroughly reviewed the proposals and has concluded that they would not maximize shareholder value. Bottom line here, guys, both sides are very much digging in their heels. Nelson peltz is going to increasingly try to get shareholder support. Hes going to be meeting with some of the big gies and trying to gather support for his plan which hes been studying extensively that its a good idea to split the businesses. There are clues as to what shareholders actually think, right . Interestingly enough Bernstein Research put out a poll, they surveyed 100 investors, slight majority in favor of splitting the businesses. 55 agree with nelson peltz, but heres the kicker, they dont believe its actually going to happen within the next one or two years and the reason they gave is better focus when you have the fritolay snack business on one and the Beverage Business in the other. The concern, of course, dissynergies, basically the costs of actually splitting the business and how much it would cost. Another example of an activist with a relatively small stake in a megacap company trying to influence shareholder because your economic ownership is not going to be nearly enough to really make a difference. But peltz has a very strong reputation particularly in this area. Its a tough battle, though, for him and theyve been firing back strongly. When he sends the letters and proposals out they are getting increasingly specific on what questions it needs to answer relating to its cost structure. We need to take a break because we need to get to davids interview with kyle bass on the show. Kyle bass exclusively on cnbc. As that are powered by the moon. She can print amazing things, right from her computer. [ whirring ] [ train whistle blows ] she makes trains that are friends with trees. My mom works at ge. My mom works at ge. Phone your account is already paid in full. Oh, well in that case, back to vacation mode. Boots and pants and boots and pants and boots and pants and boots and pants and boots and pants. Voiceenabled bill pay. Just a tap away on the geico app. Huh, 15 minutes could save you 15 or more on car insurance. Yup, Everybody Knows that. Well, did you know that some owls arent that wise. Dont forget about im having brunch with meagan tomorrow. Who . Seriously, you met her like three times. Who . Geic lets go to castlight. Well come to kyle bass in just a minute. Castlight has opened at 37. 50, the indications two days ago 13. 15 and early indications were in the low 20s and crept up and opening essentially right near the highs where the indications were. Right now trading at 38. 75. Back to you. Wow. That is quite a move there. All right, bob, well be watching that, of course, speaking to the ceo shortly. Hayman capital has increased its stake in nation star, a Mortgage Services company to 5. 3 . This is the mortgage servicer comes under scrutiny by new york regulator ben lawski who is concerned they grew too big to fast. Joining us on the phone is hayman capital founder and managing partner kyle bass. Hayman owned about 1 roughly of this company shares. Why have you decided to markedly increase your stake in a roughly 3 billion Market Cap Company . Hi, david. You know, i think its really important to look at whats going on in this model between the effective mortgage balances of the United States of roughly 10 trillion about 1. 8 trillion has moved to the nonbank serv e servicers more of the hightouch servicers to the banks because of base lcl iii. But more importantly these companies are much more effective with the hightouch model at services these types of loans versus the banks. And when you think about how effective they are another we think theyre the most Effective Companies out there as opposed to the banks and we think that this Market Opportunity will grow from 10 trillion to 11 trillion or 10 trillion over the next 5 years. And theyre servicing profitability will increase annually as the number of delinquent loans drops. Ben lawski who runs new york States Department of Financial Services on march 5th sent a letter to president and ceo of nation star who was on our air on cnbc, saying, listen, weve received hundreds of complaints about your companys mortgage practices, including modifications and fees and lost paperwork and he points out how quickly the company has grown, kyle, and has undertaken an investigation in terms of the explosive growth and whether its coming at the expense of dealing with all of these modifications effectively. Whats your response . Yeah, i think its interesting. Look, their ben lawski while new york is important, its one state. Theyre real regulators are the Consumer Financial protection bureau. When we think about how effective servicers are, we look at the ratio of complaints to the number of loans that are seriously delinquent. Nation star is the best in the business at 1. 9 . Ocwen is second best. When you look at the banks, u. S. Bancorp, citi, jpmorgan chase, the average is 7 . The average between nation star and ocwen is around 2. 2 . The banks are almost three times worse at doing this and yet the regulatory inquiry is in the nonbank sector. I think ben lawski should focus on who the worst players are and not who the best are. But, again, more importantly when your provincial regulator is sitting in Good Standing. The nonbank services sit in pretty Good Standing with their kind of nationwide regulators as opposed to the state regulator that might have kind of political aspirations. But your decision for increasing significantly your stake here is also simply based on this bigger trend, i guess. What are we talking about still, Mortgage Servicing rights for the banks are still at 80 even though ocwen and station star split a lot of the market here . Yes. How much of that is going to move over over the next couple of years . We think so today its about 1. 8 trillion of 10 trillion sits in the nonbank servicing side. When you think about ocwen and nation star together and ocwen is about 455 billion and nation star is less than 400 billion, we think another trillion moves from banks to nonbanks over the next 12 months. As basel iii gets implemented the banks will push more and more seriously delinquent and maybe the paying balances to the nonbank servicers and thats a huge opportunity. But can nation star handle the to lawskis point, can it handle this kind of growth not to mention now having to comply with all of his request for documents and everything that will entail . Look, i mean, i hate to be cynical here, but, look, when lawski had an interview scheduled with your very tv station before he even sent a request to nation star, i mean, i think some of this has to do with his political positioning in the state of new york. And i think that when you look at how effective the nonbank servicers are when you look at the number of complaints to the number of delinquencies, theyre the best in the business. The banks are the worst in the business. So, the answers yes. They seem to have built the infrastructure to handle this. And, look, when you think about new york, you have nation star 2. 3 million Mortgage Loans that they service of which 90,000 are in new york. Of which roughly 11,000 are seriously delinquent and lawski claims in his letter that hes received hundreds of complaints. Well, what hes saying is hes received 2 or 3 of the people that are seriously delinquent or complaining that someone is trying to collect on their Mortgage Loans. This is a business where there are always going to be complaints if people arent paying their loans. If the numbers are in the low, low, low single digits, then thats just a fact of life. Kyle, while weve got you, i think the last time we spoke certainly on the phone here was when you put out a thesis on your purchase of shares in gm at hayman. Suffice to say it hasnt gone particularly well. Im curious as to your response, of course, to the latest difficulties faced by gm with the significant recall and investigation. Does that perhaps bring you to say, hey, maybe i got to get out of this thing . No. You know, again, i think there are a lot of politics behind whats going on at gm. I think its really important to look back at whats happened with, you know, first reporting, engines shutting down in 2004. The national highway national Highway Transportation Safety Administration investigated accidents in 2007 and couldnt find any correlations. Look, when members of congress including barney frank have previously written to the nhpsa about constituent concerns about the chevy cobalt, the national Transportation Safety board replied to barney frank in 2010 at this time theres insufficient evidence to warrant opening a direct safety investigation. Look, when i look at this, all right, this was not a bankruptcy. It was a government takeover of gm. It may very well be the government who is going to be liable for the claims that the governments looking into. I mean, a lot of these claims were discharged in bankruptcy and the government ran the company for a while. I kind of find it silly. Whats interesting, of course, is the republicans are trying to embarrass the Obama Administration in my opinion with regard to this investigation, so its this is interesting because it has bipartisan support, both sides are throwing bombs. But in the end what really happened here is theres been a failure of the government to investigate whats gone on in the past and the governments investigating the government here so, you know although gm is also investigating itself, new Ceo Mary Barra has undertaken an investigation to understand why exactly this was known but not acted on for quite some time. Has to be a management distraction at the very least, doesnt it . Look, its an investment distraction for the very least. Its sold off from lets call it high 30s to low 30s. Its moved, you know, 15 on kind of the headlines. But when you look at gms enterprise value and what theyre going to earn this year, its trading less than 2. 8 times ebita. Its one of the Cheapest Companies in the dow and in the s p. And as the u. S. Recovers, which i think nominal gdp should grow at 3. 5 this year in the u. S. And sars will be back at 16. 5 million to 17 million and gm will take back some of its market shares, gm should tried in the high 40s and maybe 50 in the next 12 to 18 months. Under three times yeah, enterprise value to ebita. Appreciate your insights on nation star and General Motors. Kyle bass joining us from hayman capital management. All right. Coming up on the show, castlight just opened for trading. It doubled in its opening minutes. The stock is on a tear. It is a huge day for the founder, for the ceo. Hes going to be joining us. The founder and ceo of castlight Giovanni Colella here on squawk on the street. Well be right back. Back. You can separate runway ridiculousness. From fashion that flies off the shelves. And you. Rent from national. Because only national lets you choose any car in the aisle. And go. And only national is ranked highest in car rental Customer Satisfaction by j. D. Power. natalie ooooh, i like your style. vo so do we, business pro. So do we. Go national. Go like a pro. Customizable charts, powerful screening tools, and guaranteed onesecond trades. And at the center of it all is a surprisingly low price just 7. 95. In fact, fidelity gives you lower trade commissions than schwab, td ameritrade, and etrade. Im monica santiago of fidelity investments, and low fees and commissions are another reason serious investors are choosing fidelity. Call or click to open your fidelity account today. No two people have the same financial goals. Pnc investments works with you to understand yours and helps plan for your retirement. Talk to a pnc investments Financial Advisor today. Fresh from the opening bell first on cnbc, celebrating its ipo today and we do mean celebrating. Castlight health a provider of Cloudbased Software that helps selfinsured employers control their Health Care Costs. Shares of cslt just crossed the 40 mark and 41. 27 priced at 16. That above the expected range of 13 to 15 and want to welcome dr. Giovanni colella who joins us here at post nine. Great to have you. Good morning. Good morning. Thank you for having me. Congratulations. Thank you very much. I think looking at your expression as you are watching post five i am watching you. Thats a number. I think has taken even you by surprise, am i right . I am so proud of what were doing and what weve built and what were doing for American Health care, nothing takes me by surprised. I stay focused on what were doing. From 13 million in sales last year, you are essentially trading at 300 times sales. People are beginning to wonder is this a sign of overenthusiasm, froth, speculation. How do you push back on all of those charges . Independently to where we are in the market, we are focused on solving the biggest problem for the American Enterprise which is Health Care Costs. And we are laser focused on doing that. If we do that well, we create a ton of value for everybody. I keep rereading the notes for this interview and i dont really understand what you do. You ration you are trying to ration the employee costs for those companies that are selfinsuring, so theyre not correct. Outside to how you keep dressing it up saying its about options and analysis and knowledge, if i work for a company that selfinsures and youre put in charge of my health care, what will you deny me . Im not actually you are not putting me in charge. We are an enterprise platform that is empowering you for the first time in the history of American Health care to actually own your Health Care Costs. Let me ask you a question. When you see a doctor and buy drugs, do you have any idea what youll be paying out of pocket . Do you have any idea of the quality . Presumably youll be telling me this drug is expensive and may, therefore, not be the option for me . No, i dont tell you about the option. I give you complete transparency of what your cost is going to be, the alternative, the quality of what youre going to be buying and if there are options that are the same product at a lower price to the employer and they make the decisions as to what i receive, is that correct . No, i tell you employee. Because the employer bought our platform and its sitting in the middle of his enterprise. Do you have an estimate of when youre going to be profitable . Excuse me . Estimate on when you will be profitable . Were know cussing on this financing to break even. A small float relatively speaking today. How much more supply will come online down the road . I dont know. I like it when you people just you have no idea. Dont know. So, you do have you have some interesting partnerships with corporations, safeway, microsoft, honeywell, do you have more in the works . We are focused on working with all the corporations of Corporate America and were working with a lot of them today. Well, doctor, enjoy today, regardless. And thank you for coming by. Thank you so much, im honored to be here. Giovanni colella, ceo of castlight. And many parts of the u. S. Saw record amounts of snow, but the west, tahoe, actually has not had so much snow and thats causing a big trouble for vail resorts. Well talk to them exclusively next on the show. announcer scottrade knows our clients trade and invest their own way. With scottrades smart text, i can quickly understand my charts, and spend more time trading. Their quick trade bar lets my account follow me online so i can react in realtime. Plus, my local scottrade office is there to help. Because they know i dont trade like everybody. I trade like me. Im with scottrade. announcer ranked highest in Investor Satisfaction with selfdirected services by j. D. Power and associates. Aflac, aflac, aflac [ both sigh ] ugh you told me he was good, dude. Yeah he stinks at golf. But he was great at getting my claim paid fast. How fast . Mine got paid in 4 days. Wow. Thats awesome. Is that legal . Big fat no. [ male announcer ] find out how fast aflac can pay you at aflac. Com. [ male announcer ] find out how fast aflac can pay you predibut, manufacturings a prettin the United States do. Means advanced technology. We learned that Technology Allows us to be craft oriented. No ones losing their job. Theres no beer robot that has suddenly chased them out. The technology is actually creating new jobs. Siemens designed and built the right tools and resources to get the job done. No snow in tahoe. It may have been one of the snowiest winters here on the east coast but a distinct lack of snow on the west drove ski traffic down 27 at the three resorts operated by vail at lake tahoe. Thats led to nts ceo to cut the Earnings Guidance. And here for an exclusive, the chairman and ceo of vail resorts. Welcome to the program again, robert. Thank you so much. Great to be here. So what was the deal . You got decent snow before president s day, didnt you . We did. But that was a pretty far into the season, so this was really a historic drought for california that effected not only the ski market but obviously so many other businesses in the state. It definitely took a little bit of a toll on us. The good news is were still growing 6 to 8 this year despite this historic low snowfall in tahoe because of double digit growth in colorado and utah resorts. People should recognize youre a new york guy, a wall street guy. Youve been expanding this business from private equity for 22 years. The big contribution you make now with ten resorts is the epic past. Thats tep pick sale to the country to saying that skiing is not too expensive. What is the announcement this year, are we there yet . Absolutely. I think we have a variety of passes that range from 279 to 700. Its absolutely the best deal in the entire industry. Its the greatest resorts out the lowest price. Thats one of the reasons why despite the low snowfall in tahoe we were able to drive such strong growth across so many of our properties. And so it works for the consumers and works for us. You will be aware that Court Hearings are about to start on the 25 million a year deal that you have to run park city in utah, which of course is home to s sundance. Do you have any sympathy for the previous lessees who said we technically didnt get the renewal of our lease out in time three years ago . There are so many different opportunities for us to Work Together with the existing folks and come up with a solution that thats terrific for skierses and the community. You think there might be on out of Court Settlement then as we go into the hearings . Were always looking for the right solution for the community and for skiers, for guests. But its hard for me to know whats going to transpire. Okay. In the meantime youve raised your dividend. Doubled your dividend to an annualized yield of 2. 3 . I read from the Conference Call the Great Innovation now across the group is the sixperson chair lift. Is that right . Yes, because what it does is allows us many of our resorts. We have five of the top six most visited resorts in the country so we are very popular. How do we create more capacity, how do you make the Guest Experience better . Its by taking fourperson lifts and taking the sixperson lifts huge reductions in lines. Thats one of the things pour guests are always asking us for. May it snow on your slopes, robert. Robert katz, chairman and ceo of vail resorts. Lets go to chicago and link in with mr. Rick santelli. Thanks, simon. You know, this little Santelli Exchange is going to have a title. Im not sure what it is though. Debt countrys walking, debt beats, debt end . Id like to welcome my guest for debt friday chuck biederman, biederman, biederman. Thanks for taking the time today, charles. Good to be here. Okay. We were going to talk about debt. The bank of International Settlements came out with a report. Everybody jumped on it. From mid 07 to mid 13 increase of 40 , something closer to home. Yesterday, every thursday late we all look for the fed emails to see what the Balance Sheet did so it moved up to 4. 18 trillion. Embedded in that the custodial home of foreign Central Banks treasury positions dropped 104 billion a huge drop. Do you want to weigh in on that . Thats the watercooler topic of the day. Well, the dollar has been down. The yens been up. So my guess is is that somebody decided they would rather have less money t in the u. S. And more money elsewhere. It looked like it went to japan. Now, you know, some were speculating it might have to do with the russian sanctions. Others are saying its simple, maybe chinas selling. I dont know which it is but that brings the level down lowest since december 2012. Charles, what happens wehen countries see this increase in a short period of time, of deb, is it something we should worry about, shouldnt worry about . Is it explain to the rise in equities based on that . What do you see . I see the Global Stock Markets have gone from 29d trillion at the bottom in 09 to 64 trillion today according to the Worldwide Federation exchanges, if thats the exact name. They track this. So weve seen 18 annualized gain in stock prices. 5 annualized gain in Government Debt after an Economic Contraction. What hasnt been happening is incomes havent been growing. We had an Economic Contraction and instead of debt going down from 70 trillion to 60 trillion the debt has gone up. So weve leveraged our way out of the Economic Contraction instead of deleveraging our way out. And so that has limited our growth to 2 a year in incomes after inflation since 09 and we have dogooders in charge of our government who is making it harder to get anything done in business. All right. Charles, we only have a half a minute left so i want you to go fast. Are there any other examples that youre aware of of countries that have big debt problems and still have really good equity markets . Well, all of them. The Central Banks have been inflating asset prices. Theres no food inflation. Theres asset inflation. This is the Central Banks have been pumping up the debt markets to leverage up the equity markets. But the economies are not moving. Theres a gap thats growing wider and wider between the two. Charles, thank you. I hope you have a terrific weekend and join news a couple of weeks. Well see if we know any more about this mysterious 104 billion drop. Back to carl. Thanks, Rick Santelli. Welcome to the top of the 11 00. Heres what weve got for you. Mark zuckerberg says the government is a threat to the internet, according to his Facebook Post. Zuckerberg called president obama to express frustration over the governments surveillance program. Exactly what was discussed, kara swisher of re code helps us with that story. Airbags failed to deploy. Gm is dispute that claim. Well talk to the centers executive director first here on cnbc. And Southern California running dry. The drought is a big threat to the napa crop. Well go live to wine country. Castlight shares are surging after the big debut. Notable names behind the Company Including the chief Technology Officer of the u. S. , tom park. We just spoke to the ceo. Well give you all the latest on that name later this hour. And actually continues to be a huge story. Off of the highs of the session. The castlight priced 11. 1 million shares at 16. That in itself was above the range of 13 to 15. Was indicated in the high 20s. Then the low 30s. 33 to 35, now 40. Was actually 41 and change not long ago. The Company Helps employers manage their Health Care Costs but with 13 million, not billion, million in sales last year, its trading at some would argue ridiculous multiple. The ceo on with us just now, kayla tried to argue theyre breaking into a new market we dont even understand quite yet. No doubt thats the growth that is more than doubling the shares today but it makes you wonder, are these markets getting frothy. We talked about this a lot but when you see people putting money to work in an asset class like ipos when the revenue is that low, it does make you wonder why investors are finding value there. Looking for growth at any cost and then on top of that, as pisani pointed out in the last hour, the float, 12 , very small sliver. We asked the ceo if more supply would be coming online and his answer was, to quote, i dont know. So well have to just keep that in mind if youre thinking into getting into cslt today. Kara swisher joins us today, coexecutive editor of re code and, of course, our own jon fortt. Guys, good morning to you. Well start with the first one here. Mark zuckerberg, as we said, of facebook frustrated over the u. S. Government spying program. Calling the president calling it a threat to the internet. Hes taken to his Facebook Page to vent to president obama saying the u. S. Government should be the champion for the internet, not a threat. They need to be much more transparent about what theyre doing or otherwise people will believe the worse. He noted that he did call the president to express his frustration. Kara, whats the thinking over there about all of this today . Well, you know, this is just the frustration of whats happened with the government spying and the impact abroad. All these companies are global companies. I think what the problem is now a lot of european countries, Asian Countries are thinking do we want to use u. S. Technologies given the level of government spying that keeps coming out through these documents. Hes expressing a frustration a lot of companies have. Its not just them, its google, its amazon, apple, its all of them. Kara, you know, facebook is now learning that it is being used as a front for some of the spying, according to reports. Think about Silicon Valley, huge employers, also big supporters of the president in the prior election. Do you think that washington is losing a lot of support in Silicon Valley . You know, no. Probably not eventually. But i think what the they were just having dinner with him or a meeting with him so its this dance. Its this twostep everybody does. I think they a lot of people find it ironic that Mark Zuckerberg who collects all of this that was is complaining about the collection of information. The fact of the matter is it is impinging on their ability to grow globally once this starts going and people dont trust American Companies which are in the lead of all companies around the world in technology. It seems like were really kind of the new china here. U. S. Tech companies. I think thats the challenge, protecting against u. S. Government surveillance. And the issue, which i think is interesting that Mark Zuckerberg also are bringing up, its not so much that they expect zero spying. Its the issue of transparent si and checks on exactly whats happened so at least theres a feeling that everybody at least knows the boundaries of whats going on. Bill gates touched on this as well in the Rolling Stone interview. Its an important nuance that i think is coming out after the snowden appearance at south by southwest saying were not going as far as hes going but there needs to be some clear lines here so trust gets reestablished. To what degree, though, does all the criticism about privacy aimed at facebook dilute their credibility when they attack the administration . I think what facebook would say, despite the fact its an n obvious thing to say, they are transparent about the boundaries of what theyre doing. If you dig in and realize the amount of information that facebook can collect about you as you travel across the web, it might freak you out. But i think Mark Zuckerberg can say, but we tell you that if you stay logged into facebook, we track you, how we track you. We give you the ability to limit that if you want. I guess that is a key difference. It does bring us to this mornings squawk on the tweet. We want to know what Mark Zuckerberg had to say about how the white house handles affairs but what was obamas biggest complaint about facebook . Tweet us squawkstreet and well get you responses later on in the morning. We also want to talk about bill gates. He made headlines saying people dont realize many jobs will soon be replace bid software box. Gates discussed that microsoft looked at whatsapp but the 19 billion price tag zuckerberg paid was, quote, higher than he would have expected. Kara, when you read the Rolling Stone interview, it feels like its a song of sorts. Talks about being named Technology Adviser to nadella. He will help lead the company in the right direction. What do you get the sense he will be doing there . Theres a lot of debate within microsoft about his role and how much impact hes going to have on nadella or if he can be his own man, his own ceo. I think one of the difficulties is gates is not been deeply involved in the internet space for several years. Hes been very busy doing this philanthropic stuff. The question is is he up to speed at what needs to happen at microsoft and how much impact will he have on that change. I think thats really whats going on at microsoft, is where he does fit because he is bill gates and, you know, even doing this media tour is what hes doing, its like bill is back kind of thing. Its still he sucks up all the oxygen in the room away from the real leader in the microsoft which is presume difficult Satya Nadella. I read Something Different in this interview. He put Mark Zuckerberg in the company of himself and steve jobs when talking about innovati innovation, saying zuckerberg is a product guy, steve was an aesthetics guy, gates put himself as an architecture guy. Some people would take that as slam on steve jobs. I dont take it that way. The other thing is he implied that office and windows or has beens and its the job of microsoft to take risks and push for new innovation. That was the slam on ballmer, he put too much wood behind the windows, bet too heavily on that. He seems to be kind of doing the blocking. Hes the tight end for Satya Nadella here so that he can run strategically. Except these are all the same people running microsoft before. So he was on the board, you know, ballmer was there. He approved these things. Satyas been there since the early 90s. Its not the Previous Administration. This is the Previous Administration talking change which i think microsoft has to do but it is the same people who put all the wood behind windows. So its just you know, you got to listen carefully about these things. There was the added nugget about microsoft having considered buying whatsapp. No, no. Your thoughts on that, kara . If its true. He didnt say that. He said he would have, we would have. It didnt mean they were in the talks. They were not in the talks in any significant way. I assume they did some Due Diligence on it . I guess. They would not have bought it. They have skype, by the way. They have a great underleveraged property, skype, which could be a similar property and should have been. Another thing they have left fallow. Skype is this very underleveraged property that was very popular globally, by the way. Do you have any other ideas about what they might still want to buy . Is dropbox. Yes, i think probably box and dropbox would be things i would be looking at favorites of the Satya Nadella. Even linkedin would be an interesting purchase for microsoft, if theyre going to do a big one. If not they will probably do a lot of small purchases. I think the box, dropbox, linkedin would be where i would be looking. Kara, what about that whaif already bought . You mentioned skype but the big looming question of what they would do with nokia. Do you think that they need to do much more work to start integrating or do you think they can just keep rolling up a lot of new technology to try and inknow vatd the way that gates is saying they should . You know, i think nokia is a big problem. Its going to be a big question if they can continue to innovate in the phone space. I think a lot of people at microsoft is a morning after kind of thing, what are we going to do with this now which is classic when you buy the big purchases, is what do you do now and who is going to run them. I think theyre going to have a tough time integrating nokia and getting traction in the phone business. Are we going to get to talk to you on fridays from now on . Yes, indeed. Im going to come every friday and give you the news from tech. Thats like tuesdays with morrie, only different. Of course, a reminder, Nbc News Group is a minority stakeholder with re code. Also coming up, another blow for gm. Consumer Watchdog Group has tracked 303 deaths related to airbag failure. But first, we want to get over to Rick Santelli who has got his eye on something in the markets today. Rick, what are you watching . It was so fas narcinatinfasc. Like many, we all watched warren buffe buffett. Talk about Timothy Geithners book and how the government saved the world. Im not going to debate that but i will show viewers something that predicted that mortgages would lead to big problems, very fascinating because a lot of these predictions were made before the crisis. All in about 45 minutes from right now. Right now. In todays market, a lot can happen in a second. With fidelitys guaranteed onesecond trade execution, we route your order to up to 75 Market Centers to look for the best possible price, maybe even better than you expected. Its all part of our goal to execute your trade in one second. Im derrick chan of fidelity investments. Our onesecond trade execution is one more innovative reason serious investors are choosing fidelity. Call or click to open your fidelity account today. Return on investment wall isnt a street. Isnt the only return im looking forward to. For some, every dollar is earned with sweat, sacrifice, courage. Which is why usaa is honored to help our members with everything from investing for retirement to saving for college. Our commitment to current and former military members and their families is without equal. Female announcer what will you man with your new im getting a camera . Im getting an espresso maker im getting a new smart phone female announcer during sleep trains big gift event get a 200 best buy gift card with purchase of selected beautyrest, posturepedic or tempurpedic mattresses. Or, get 24months interestfree financing. A new tv. A laptop. A game console female announcer what will you get during the big gift event . Sleep train your ticket to a better nights sleep welcome back to squawk on the street. Check out shares of cooper tire an rubber, the nations fourth biggest tire maker posting better than Fourth Quarter earnings. Higher than industry norms. That stock is currently up 7 right now, carl, in trading. Thank you so much. General motors taking another hit this morning. A consumer Watchdog Group tracked 303 deaths after airbags failed to deploy in vehicles recently recalled. Joining us this morning, center from auto safety and our own phil lebeau. Clarence joining us from washington. Claren clarence, the letter you sent today to the New York Times as well as to the national highway traffic Safety Administration, you basically say that General Motors had an obligation to realize that there were these 303 deaths that were linked with airbags not deploying. What is it your actually saying here . Are you saying that General Motors knew about these incidents and either covered it up or ignored it . Both General Motors and the government knew about these incidents because theyre in a publicly available database, maintained by the national Highway Traffic Administration of every single fatal crash in this country. Right. But clarence, the argument from General Motors is this is raw data. If you look up the raw data for airbag deaths for any other model where airbags were not deployed, you would find airbag deaths for almost every single model out there and this is taking raw data and blowing it up essentially yelling fire in a theater when, in fact, its not as your portraying it. Now, what were portraying it as evidence that there was a wide spread problem, that no one searched and what we called on the government to do is what they have done in prior investigations. Go into this database, send out special investigators to look at each and every crash, and find the ones that are related to tig in addition switch. If they had done that when this database was being built in the 200345 model years, what they would have found was an increasing incidents of front seat occupant death wheres the airbag didnt deploy and no one asked the question, why are these airbags not deploying. Lets look at the individual crashes. If they had done that, we would have had a recall years ago and we wouldnt have the controversy we have today. Clarence, we reached out to the national highway traffic Safety Administration and it says it did three separate crash investigations regarding incidents where the airbags did not deploy. The conclusions were that it was inconclusive. And as a result, their argument is, look, weve looked into this. This is not like were ignoring the possibilities that were there. It has been investigated are you saying that nhtsa did a gloss over . Nhtsa closed their eyes to this defect. This crash database, if it had been linked up with the reports that gm was filing with the government on deaths in cobalts and ions they would have found the airbags werent deploying. In addition, the special crash investigations that nhtsa cited, they have all the evidence in those individual crash investigations identifying this defect and it should have been a red light to them to lets go look at database and find other incidences. The government blew it. Gm is responsible for not doing a recall in 2001 to 2003. But the American Public depends upon nhtsa to order a recall when the manufacturer doesnt voluntarily recall. Both gm and nhtsa failed. Clarence, obviously this is hugely sensitive. I mean, especially when you Start Talking about the potential for criminal charges. Is it your allegation that there was some engineer at gm who knew of these troubles and executive at gm who said, were t not going to recall them anyway . Well, until we get the depositions of those gm officials we dont know for sure, but when we look at what we have to date, gm itself has said there were recommendations from engineers to modify this ignition switch. It wasnt done. They said it wasnt done because of cost and lead time considerations. So its sure looks like its a responsible executive and what were doing is calling on the government to do a full investigation. And if they find someone is criminally liable, lets put them in jail. Those are strong allegations, clarence. What would you say to mary barra if you were sitting across from her right now, aside from the you do the full investigation, what would you say to her . Well, one of the things i would say to her is, look, for the individuals whose claims were wiped out by the bankruptcy, where the taxpayer bailed out General Motors, pick up the lie abiliability for tho claims. In addition, what i would say is put in place an on budsman safety at General Motors. Someone who has the authority to look into anything, not just in the case of this investigation but all futures investigations at gm and if they see something wrong, call them out. Clarence ditlow joining us today. Carl, these are, you know, the letter from clarence ditlow, strong language, basically saying the government closed its eyes and basically saying to general motor, youve got an obligation to look into this as we mentioned there, both sgrks m and nhtsa say this is raw data and you can take raw data and twist it any way you want it. Phil, clarence, a developing story. Thank you for bringing us the latest. We want to make a turn from michigan to california which sells over 20 billion in wine a year. But this year that number might be a lot lower thanks to the weather. Jane wells explains in napa valley, california. That story coming up next. T. Opportunities arent always obvious. Sometimes they just drop in. Cme group can help you navigate risks and capture opportunities. We enable you to reach Global Markets and drive forward with broader possibilities. Cme group how the world advances. On my journey across america, ive learned that when you ask someone in texas if they want big savings on car insurance, its a bit like asking if they want a big hat. scuse me. Or a big steak. Or big hair. I think we have our answer. Geico. Fifteen minutes could save you fifteen percent or more on car insurance. State of california produces more than half the wine sold in the u. S. , but an ongoing doubt is a big threat to this years crop. Jane wells is live in napa, california, with more on that for us. Jane . Hey, kayla. These are cabernet vines behind me. While napa has had some rain it remains woefully dry. Temperatures are warm. 80 today and the vines are starting to show it. This chardonnay is actually starting to grow. Probably about ten day earlier than we would normally see it. Napas rainfall is still maybe only 30 of normal so growers are planning things like telling over more ground cover as usual to retain moisture and keep the grass from competing with the vines for water. Fortunately this area has adequate ground t water right now, unless everyone starts ove overpumping. When theres too many straw in the soda can it goes away fast. How are you compensating for the lack of water . Are you doing anything different . Well, were going to church a lot, spend a little bit more time praying and thats probably the most important thing. Weve put in these remote weather stations to basically monitor our conditions via webbased software throughout the county. Paul goldberg uses technology to monitor moisture, all transmitted wirelessly to his ipad through solar powered weather stations on his ten ranches. Its a significant investment which saves water and wineries like silver oak are doing the same thing. The old days of farmers went out and kicked on the valve for 12 hours and woke up in the morning and turned it off. Now well go out and do four or sixhour sets, might do that a couple of times a week, depending on the time of year. Theres a lot of technology. Now, there is a lot of change in the air. I just dont mean the climate. Napa county is thinking of investing a pipeline to bring in recycled water, growers are upping their Crop Insurance for the vineyards. As they replace vines thinking of how to space them for future mechanized harvesting which will handle potential labor shortages. 2013 was a great year. Were t not going to run out of wine. Later, guys, were going the talk about things like, would you like your wine out of a keg, cork versus screw cap, and merlot back from the dead ten years after sideways. Back to you. Jane, dont tell that to the writers of sideways who did not do any favors of the merlot business. I was in napa two years ago this time of year. It rained the entire time and all the growers said dont be mad, we needed this. Is this becoming the new normal out there . I think the new normal are more extremes. We could end up with an el nino later this year. If that happens, well end up with cooler, wet temperatures. So i think the new normal is not necessarily warm and dry, its just different. Its more of a beta weather play out here. The intrepid jane wells reporting live from napa. Jane, well stay tuned to your reports throughout the day. Thank you. Meanwhile, check out shares of Castlight Health. Weve been watching it all morning. It surged in the big doerd debut. 142 rise. Box its been a good year for ipos. What is the floor saying about this . The important thing is huge demand for the product. This whole area was covered with traders earlier here. Jason, the dmm, did a great job opening the stock, keeping it open. I want to put the chart back up. Remember something. The price talk was 13 to 15 two days ago. It priced at 16. It opened at 37. 50 and now trading 38. 80. Kaylas right, talking about 150 increase. Why . People are asking me, what is this all about that it would open so much . Number one. This is a trend, folks. Smallfloat, about 12 of the company, this is very typical recently. Companies have figured out, keep the float small, secondary later. Its the intersection of several hot sectors. Software as a service here, cloud computing, big data, health care. Its all about haeming Companies Control Health Care Costs but intersection of hot sectors. And highprofile cofounders founded Athena Health care and now is the chief Technology Officer of the United States. So lets see what ceo had to say about what his company is all about. Independently to where we are in the market we are focused in solving the biggest problem for the American Enterprise which is Health Care Costs. We are laser focused on doing that. If we do that well, we create a ton of value for everybody. Important thing here, 150 . I know thats a little odd but its not unprecedented. This year, kayla, weve had three companies that have what we call moon shots. Moon shots over 100 on the close. Closing numbers that are dicerna pharma, ultragenyx. Varonis system, big data. Software is a service. Those are the hot button sectors that moves ipos today. We are waiting for secretary kerry to address the media on ukraine. Stocks moving lower. We have some midmorning gains. Lost those. Down 39 points. S p is down almost 5. Almost are china, ukraine, and others weighing on the markets . Well talk about that in just a couple of minutes. [ male announcer ] here at optionsxpress, our clients really seem to appreciate our powerful, easytouse platform. No, thank you. We know youre always looking for the best fill price. And walk limit automatically tries to find it for you. Just set your start and end price. And let it do its thing. Wow, more fan mail. Hey ray, my uncle wanted to say thanks for idea hub. O well tell him i said youre welcome. He loves how he can click on it and get specific actionable trade ideas with their probabilities throughout the day. Yea, and these ideas are across the board bullish, bearish and neutral. I think you need a bigger desk, pal. Another one . Traders love our trading patterns, now with options patterns. Whats not to love . They see what others are trading like the days top 10 options trades by volume and get ideas yea i have an idea how about trading that in for a salad . [ male announcer ] so come trade at the place thats all about options and futures. Optionsxpress. Open an account today and get a 150 amazon. Com gift card when you call 18882800154 now. Optionsxpress by charles schwab. Lets get over to the cme and check in with Rick Santelli. Hey, rick. Hi, carl. What a wild week. Before i get into my main topic, as i look at the board and see a tenyear note yield hovering in the low 260s, keep in mind that if we look at the key day for all maturities, 5s, 10s, 30s, you want to be benchmarking february 3rd. What was that low yield on february 3rd, for 5s it was 144. Were at 151. So only about seven basis points away. In 10s, it was 257. Were at 263. Six basis points away. For 30s, were currently at 357. It was at 353 in the closing yield on the third. Were only four basis points away. Should any of those maturities close below those levels even if this is driven in part or half these drops have been geopolitical, that will be technically significant. Pay attention. All right. We are anxiously awaiting, remember when i had senator crapo on yesterday about actually seeing the text of this reform bill, the reform the gses. One thing, and i havent read it, nobody has, the one issue that purportedly is going to be in there is some form of a government guarantee of the securities but the private sector on hook maybe for the first traunch. But it really harkens back to a book, okay, that ive been reading. Its called economics in one lesson by economics. The neat thing is and kind of amazing if you read it, that this book was written in 1946. He died in 1993. Why is that important . Because this morning Warren Buffett, maybe the smartest investor t in the world, was talking about reading Timothy Geithners book and how the u. S. Government maybe saved the world. Thats a debate for another day. But could it have been avoid sd the real issue. Now, in chapter six of this book there are some interesting material that mr. Haz lrk et wrote. That it, being the government, will make loans to people who could not get them from private lenders. This is only another way of saying that the government lenders will take the risk with other peoples money, the taxpayers, that private lender also not take with their observe money. Let me think. Subprime, housing, affordability, its all there. Whats even more impressive is how he goes through the issues in chapter six that will be destroyed or thrown into chaos. What it really talked about are market signals. In other words, if the government, through guarantees or out right loans you have to remember a lot of to analogy is spoken about farmers because it was written in 1946. What he says is if you make loans for farmers to buy either farms or mortgages, that they really cant afford, that the private sector really wont lend them, what you also do is you build signals in that are wrong. Youre going to over forgive me, rick, the president making some comments here after meeting with e irelands Prime Minister. And selfdetermination. And a strong message to russia that it should not violate the integrity and the sovereignty of its neighbor. We continue to hope that theres a diplomatic solution to be found, but the United States and europe stand united not only in its message about ukrainian sovereignty but also there will be consequences if, in fact, sovereignty continues to be violated. We had an opportunity to discuss the fact that ireland does tremendous work around the world on a whole range of and that is that. Rick, well let you finish your thought. Apologies. All right. Basically finishing the thought to make it simple that all the ills when you give loans to entities that cant afford them is the signals in the marketplace. You overbilled. Basically what he was talking about is you create leverage. The final thought he had thattic is so great, its simple, all credit is debt. Think about that. Carl, back to you. Have a good weekend. Talk to you soon. Rick santelli. As the president suggested, we are awaiting for the secretary of state john kerry to hold his News Conference in london. Just finished meeting with russias foreign minister lavrov. In the meantime, our chief International Correspondent Michelle Carusocabrera has the latest of what is expected after the referendum on sunday. As we wait for secretary of state john kerry were already actually hearing from the Russian Foreign ministry via social media. Their twitter account has pictures of russias foreign minister lavrov and john kerry walking the grass of the house today including one with kerry kicking a soccer ball as he walks. The twitter it reads, break is over. Match continues. Of course, we await to see what happens on monday after the much disputed referendum occurs. Our colleague at cnbc europe asked him what is going to happen on monday, the day after that referendum in the disputed peninsula of crimea . Its hard to see the change that can be in 24 hours. What is important on monday, though, is the reaction of International Community on what is happening in crimea because that that actually would be the key to the further development sdpls there are increasing reports of violence in the eastern part of ukraine outside of crimea. Clashes between prorussia demonstrators and supporters of the Ukrainian Government left at least one person dead last night. The home city of the deposed president victor yanukovich, has seen the most consistent promoscow support since Russian Troops occupied crimea. Bank branch necessary crimea are running short of cash, there are long lines at many atms and the lines started when the Prime Minister said it would shift to the russian ruble within the next two weeks. I just got off the phone with the first Deputy Governor of the Ukrainian Bank and told me that while at times it is difficult to deliver cash, quote, we are trying to do Everything Possible to supply all the branches in the country including crimea. Ladies and gentlemen, back to you. All right, michelle, certainly a tense situation. Thank you for bringing us the latest. Thats not lost on the markets. The dow near session lows, down nearly 23 points. Speaking of ukraine, Warren Buffett was on squawk box this morning commenting on whether the markets International Worries are warranted. Heres what he had to say. Theyre not warranted in terms of the market. I mean, i didnt sell my farm yesterday. I didnt sell my property down there nyu, why should i sell my businesses . Dan greenhouse is chief global strategist at btig, cnbc contributor. Buffett is not flinching. The vix is barely budgeing. How do we size up the market jitters . Our basic view is ultimately there are two things that drive stock prices. Theres some combination of valuation and earnings potential. On the earnings potential, the s p is still going to earn 28 bucks and change in the First Quarter, 29 and change in the second quarter, 8 or so for the year. Valuation might come in a little bit as people get skittish here. Generally speaking whats going on in t ukraine doesnt affect investors more generally. The point that Warren Buffett was making. Meanwhile, you do have russia flexing its muscle. Deutsche bank said the best Case Scenario envesters should expect is for crimea to join russia. Is that the great stabilizer the market has been waiting for, at least for now . Im no geopolitical strategist but richard who irans our International Desk and is the second smartest person on that desk after me does bring up an important point which is that after the 2008 war between georgia, russia, and whats going on now with crimea, investors around the world obviously,er isly in the United States but more generally around the world, might see this as a series of steps of aggression, if you will. And the prospect that perhaps the u. S. Will have to take a more assertive stance to defend the peninsula is something thats not being discounted right now. Now, which is i dont want to say expert on russia but a pretty smart guy and i think thats an interesting way of viewing things. Thats not necessarily my view now but something to consider. You know, we want to move for further afield of china, too. New growth expectations coming down there. Moved the markets yesterday. Thats this idea of china shadow banking sector, the ft calls it a lehman moment if it potentially defaults. What happens in that case . Well, certainly in that case things would be terrible but i dont think that at least in terms of their clients, anybody is working assumption is that the chinese authorities, lee kaching is going to allow it to take place. Lets be clear. Its been one corporate default. Reining in loans to certain sectors. The news stories out there are concerning but i think your operative view on china right now still has to be the floor for ddp is 7 and not any longer. Meantime, what is wrong with the strategy of starting to look at the bristolmyers and verizons of the world, stocks of companies almost exclusively domestic, that dont have exposure to china or the ukraine. Why is it given the volatility right now . Im attempted to pronounce bristolmyers the same way jim does. Do it. Ly not. Theres a strategy for that or that strategy has been in place for years as people have looked at the u. S. As being as the saying goes, the cleanest shirt in the dirty laundry. But taking that argument one step further, its important to remember that viewed solely through that standpoint, s p 500 Companies Get almost no revenues, if any, from crimea or the ukraine more generally, certainly china is a concern but for a lot of these companies, its developed economies that you want to focus on, its europe, latin america to a lesser degree. Again, not that china doesnt matter but to the extent that russia takes over crimea, which at this point you kind of have to assume is going to happen, i dont know that i would change the path of earnings expectations, at least it doesnt for us, for s p 500 companies. Dan, theres no denying that strategy has paid off. Here in the u. S. , though, bad Consumer Confidence number this morning. Fed meeting next week. What Smoke Signals are you watching . For the fed meeting, everybody that we speak with, theres no concern at all that the fed is going to do anything other than reduce asset purchases by another 10 billion. That is the overwhelming consensus and appropriately so. Thats something that people have dreaded for some time. There are people who thought that nearly the announcement of the taper would be the top for u. S. And Global Stock Markets. Thats proven to be inaccurate. To the extent the fed walks this back your personal views on what the fed is doing or should be doing, correct or incorrect aside, the fact is that the fed has now scaled back twice, is likely to do a third time, and it hasnt been market disruppive. Dan greenhaus, the smartest guy at btig, thanks. When we come back, your house is getting smarter. Its not just google thermostats, why you will never be locked out of your house again. With the founder of a Smart Lock Company when we come back. And this will be your premium right here. Sorry to interrupt, i just want to say, i combined home and auto with state farm, saved 760 bucks. Love this guy. Okay, does it bother anybody else that the mime is talking . Frrreeeeaky [ male announcer ] bundle home and auto and you could save 760 bucks. Alright, mama, lets get going. [ yawns ] naptime is calling my name. [ male announcer ] get to a better state. State farm. And youll see just how much it has to offer, especially if youre thinking of moving an old 401 k to a fidelity ira. It gives you a wide range of investment options. And the free help you need to make sure your investments fit your goals and what youre really investing for. Tap into the full power of your fidelity green line. Call today and well make it easy to move that old 401 k to a fidelity rollover ira. Coming up, from china to russia, identifying the Global Threats to this bull run and now you can steer clear. Then will the shorts be vindicated . Were going to reveal the most short eed stocks and find out i theyre going to underperform. Well find out what Mark Zuckerbergs call to president obama is about facebooks mojo. Carl, see you in 15. Scott, thanks. August is reimagining Home Security with the smart lock. Using a lock that retrofits to your existing lock. They gain access through their smartphones and can give or take away access to whomever they would like to invite in. Jason johnson is the cofounder and ceo joining us from out west. And jon fortt is here at post 9. Good morning. Good morning. Jason, walk us through the news. What is it . So we have been developing the august smart lock, a device that allows you to use your smartphone to access your home. And issue keys to your family members, friends, maybe housekeeper or a dog walker. Were in production of the product right now. Today what were announcing is a compatibility assistant were sending out to all of our preorder customers to help them get ready for august. The ways this assistant works is august is designed to go on the inside of your door. Just on the inside of your door. Attaches to your existing dead bolt lock. What this tool does is allows you to take pictures of your existing lock on your door, spend them to our data center where our Customer Service ats can we view the pictures and determine whether your door is ready for the August Smartlock or if there are some things that have to be adjusted to get it ready. Interesting. Jason, thermostats are one thing. It just controls how hot or cold your house gets. The lock is kind of the mother lode when it comes to home automation. People are concerned about this security of this. Do you have an argument about whether this is more or less secure than a physical key . Not in terms of giving it out to other people, but in terms of using it ourselves . Can it be hacked . Its a very good question. With keys, these metal keys weve use fod for more than 150 years. Last year in new york city 2 Million People were locked out of their homes because they lost their key, left their keys somewhere. Would you believe theres an app that allow yos tou take a picture of a key and within three days they will send you a copy of that key. Thats how easy these keys are. Add an electronic lock to your home you have the power of Encryption Technology that you can give a key to one person at a time and you define it for that person, say, for a particular day, say that plumber coming on monday between 2 00 and 4 00, they have a key that is encrypted on their phone and that you can remove at any time. And beyond the security of having an encryption with blue tooth and additional encryption layer you have the convenience to easily remove that access, say, maybe you have a relationship ending, a girlfriend or boyfriend, you have to traditionally ask for that key back, you dont know did they make a copy, awkward situation. But with the August Smartlock go to the app and click delete and the key is removed and no awkward conversation or concerns. Im thinking as a homeowner, jason, i mean, theres only a certain number of apps you ought to have to control all of your home. Jon mentions the thermostat. Adt has a security app as well. It seems like something that would eventually be rolled up into another company perhaps . Is that possible . Were focused on developing magical experiences in the home. The August Smartlock is our first product. And were all full steam ahead developing the product and very excited to believe make what we believe is going to be the most intelligent and sophisticated door lock for your home. For our cars today, most new carses, Keyless Entry system for your car. Many offices have Keyless Entry. Were bringing Keyless Entry to the home. We think its going to be very popular. To me, it seems like it might be a play not so much on new home sales but to the degree homeowners want to invest in their home, we do see some renovation figures, but is there a macro demographic play that determines how much youre going to do . Well, you know, theres roughly 100 million homes in america. Most of those homes have what we call a dead bolt, its that lock above your door handle. And we made this so it takes about ten minutes for the average person to install it. Its just going on the inside of the door. About ten minutes installation and youre issuing keys to your family members, to your friends, whoever you want to give a key to. And making it really simple we think all of those homes would benefit from the convenience and the security of having electronic door lock. One of the things i like about this is the ease of installation as you mention. You dont have to mess with electronic wiring. How do you think this market is going to play out . Is the ease and speed of installation going to be key for whoever game share in home automation or Something Else . Well, you know, you mentioned earlier that another company that makes smart thermostats. One of their successes was, in fact, making it very simple to self install. And we spent a lot of times over the past year and a half working on that installation process and making it really simple so you can walk into a retail store, you can buy august. It comes in four different colors so you can have it match your existing door hardware, your existing lock. Remember, it doesnt replace your lock. It attach toes to your lock. Silver one, dark gray one, champagne colored and fun red one. This is the august red. This is our Company Color and a little more exciting for those people who want to be more expressive and decorative. Pick it up at retail. 199. When it ships later this year. And we think its something that many consumers will be excited about using. Jason, theres certainly something for everyone there. Jason johnson, ceo of august. Thanks for joining us. Thanks for having me. Meanwhile, coming up, fire eye is in the news for detecting targets massive data breach. We look at fireeye and the Cyber Security space next on squawk on the street. Were awaiting secretary kerry to address the media on ukraine. The stocks are flirting with the positive. The nasdaq had been on tract for the first weak performance. The dow moved to the upside by 31. More on the markets when squawk on the street comes right backt [ cows moo ] [ sizzling ] more rain. [ thunder rumbles ] [ male announcer ] when the world moves. Futures move first. Learn futures from experienced pros with dedicated chats and daily live webinars. And trade with papermoney to testdrive the market. All on thinkorswim from td ameritrade. All on thinkorswim iwe dont back down. We only know one direction up so were up early. Up late. Thinking up gamechanging ideas, like this dozens of tax free zones across new york state. Move here. Expand here. Or start a new business here. And pay no taxes for 10 years. With new jobs, new opportunities and a new tax free plan. Theres only one way for your business to go. Up. Find out if your business can qualify at startupny. Com female announcer what will you man with your new im getting a camera . Im getting an espresso maker im getting a new smart phone female announcer during sleep trains big gift event get a 200 best buy gift card with purchase of selected beautyrest, posturepedic or tempurpedic mattresses. Or, get 24months interestfree financing. A new tv. A laptop. A game console female announcer what will you get during the big gift event . Sleep train your ticket to a better nights sleep a little katy perry on this friday morning. Its a tale of two stocks in the market. Its a favorite strategy at long short funds and today were looking at a pair trade. Dom chu is at hk picking a winner and loser in cyber Supreme Court by. Thats right. A pair trade, picking one stock youre going to sell short using the proceeds of cash to buy shares of another one. In a Perfect World that stock would go down in value in the stock you bought would go up in value. Theres a winner, winner, Chicken Dinner trade for a lot of people. One such trade in the tech sector. Cyber security. Look at fireeye versus symantec. Fireeye is up 77 in 2014 despite todays drop. Meanwhile, symantec shares were down 14 in 2014. So had you sold shares of symantec short, used the cash to buy fireeye at the beginning of the year, 2014, nice home run trade. How about things Going Forward . Analysts have six buys, nine holds and one sell on the stock for fireeye. Again, maybe a little bit of a hung jury there. The price target 78 bucks where its trading right now. Now, fbr Cyber Security says fireeye is going to continue to out perform and believes its the only pure play next generation cyber player out there. He thinks the sophistication level of Cyber Threats are only getting more complex. That could lead to, get this, 40 plus percent sales growth over the next three to five years. Symantec, he acknowledges the turn around story is happening but thinks its facing stiff headwinds, the consumer antivirus is still a big part of the business agent symantec. The jury is out on the future but you cant argue with the results of this pair trade. Down 14 for the other, carl. Again, this one looks like its working out well for the time being. Well see if it goes back to mean reversion at some point. When we come back, tweet time. Mark zuckerberg is frustrated over u. S. Governments spying and hacking programs calling it a threat to the internet. Hes taken to his Facebook Page to vent at president obama and that brings us to this mornings squawk on the tweet. We know what zuckerberg had to say about how the white house handles affairs but what was the president s biggest complaint about facebook . Facebo ok . For tapping into a wealth of experience. For access to one of the top Wealth Management firms in the country. For a team of Financial Professionals who provide customized solutions. For all of your Wealth Management and retirement goals, discover how pnc Wealth Management can help you achieve. Visit pnc. Com wealthsolutions to find out more. But with less energy, moodiness, and a low sex drive, i had to do something. I saw my doctor. A blood test showed it was low testosterone, not age. We talked about axiron the only underarm low t treatment that can restore t levels to normal in about two weeks in most men. Axiron is not for use in women or anyone younger than 18 or men with prostate or breast cancer. Women, especially those who are or who may become pregnant, and children should avoid contact where axiron is applied as unexpected signs of puberty in children or changes in body hair or increased acne in women may occur. Report these symptoms to your doctor. Tell your doctor about all medical conditions and medications. Serious side effects could include increased risk of prostate cancer, worsening prostate symptoms, decreased sperm count, ankle, feet or body swelling, enlarged or painful breasts, problems breathing while sleeping and blood clots in the legs. Common side effects include skin redness or irritation where applied, increased red blood cell count, headache, diarrhea, vomiting, and increase in psa. Ask your doctor about axiron. Anbe a name and not a number . Tor scottrade. Ron im never alone with scottrade. I can always call or stop by my local office. Theyre nearby and ready to help. So when i have questions, i can talk to someone who knows exactly how i trade. Because i dont trade like everybody. I trade like me. Thats why im with scottrade. Announcer ranked highest in Investor Satisfaction with selfdirected services by j. D. Power and associates. Welcome back to squawk on the street. Gravity is taking hold of plug power this morning. Know, the reason why valuation, what else, it did say fiscal 2014 still has potential for the company. Right now though shares trading down about 4 on the day. The stock is up more than double on this month alone. Carl, back over to you. Thanks. Lets get to squawk on the fwe tweet for friday. Mark zuckerberg is frustrated over the u. S. Hacking programs calling it a threat to the internet and has taken to the Facebook Page to vent at the president. We want to know what Mark Zuckerberg had to say about how the white house handles affairs but what was the president s big complaint about facebook . Craig writes, president obama wanted to be able to opt out of all these mandated programs, or ads. Rick writes, president obamas biggest complaint, the lack of a frememy category. And mike writes, obamas biggest complaint, too many cat photos. You can never have too many cat photos. Youre a cat person. S p, 18. 50 and change, a point and half off the intraday high. 50day moving average on the s p, 1846. We had been waffling on both sides. Referendum on crimea is expected to be a move to stabilize the market once we get a direction on that. Were still waiting for secretary kerry to speak to media in ukraine on what his next move there is. But certainly russias flexing its muscle. Yeah. Waiting for secretary of state, as kayla says, to come to the microphone. Weve heard from the russian side as they did meet in london. Some reports said for not for very long. 10 or 15 minutes. Technicians starting to look at of the past corrections on the s p, how many intraday lows came on a friday. One of the of the last dozen or so suggest that the lows of the day today were probably not the lows were going to see in the near future sglerch though the market has turned positive it is still in negative territory for the week. The dow would be down just shy of 2 on the week. We havent seen that since january but, of course, weve had a lot of upswing this year. S p began the week at 1877. That does give you a sense of how far weve come off in the past five sessions. So with all that, scott wapner is going to have material to work with for the next hour. Right, scott . No doubt. Thanks. China certainly still on every traders mind and then the developing situation or the on g gongoing situation in ukraine. Bubblelicious as castlight. Get shorty after a year long wait. Some of the most dissed names on the street finally ready to break down . In your face, Mark Zuckerberg calls out the president over the spying program. What does it say about the social media moguls mojo . And were going to speak to a professional d