Transcripts For CNBC Squawk On The Street 20140318

But its a mostly positive picture in europe and the roadmap today starts with what else but the markets set to open higher yet again after comments from russian president Vladimir Putin but with the fed meeting kicking off today will stocks go back to trading on news from this country. After a long wait one of microsofts flagship programs is coming to your i pad, well tell you which one in just a moment. And theres a new player joining the used video game market and its the biggest retailer in this country. Find out if used games will boost walmarts stock a little later on this hour. Wow, we got a big day, jim, and most of the news today, the news flow, is coming out of russia. Yes. Putin is responsible for the futures being higher. Well, obviously took a big position at the close. Do you think that do you think facetious and here comes another facetious comment. I saw you said that norway and ireland are down. Dublin and oslo worried about putin coming in there. I love the idea that suddenly we say putin not going anywhere else. That said there was a great guest on squawk who said putin really had to do this. He didnt want nato in there. He didnt want to cut off the fleet. It was kind of rational. Im not defending putin. Obviously not a really great guy. But i do think that this moment is one of these moments where he gives us kind of like what happened in germany in 39. I know you are never supposed to analogize to nazi germany, but hitler claimed he wouldnt go to the next place after he went to the first place. Prague, im done and then warsaw, so lets be careful but lets understand that putin does allow you to go long here. This is a picture youre looking at from earlier this morning. Mr. Putin giving a News Conference in moscow today saying dont believe those who say we need more than crimea. The futures certainly moved on that. And i love your note this morning because you took that to mean putin is not taking over vienna, prague, warsaw, athens, bare riss, oslo, budapest, latvia, yet. There was a dot, dot, dot, yet. I thought i should get a little blueprint going. This is so funny every time we get off the off of anything involving russia, bingo, what happens is, hey, do you know what, Housing Starts are okay. Do you know what happened . Inflations okay. So, we keep it forces us to look at our own country for a minute and i always like that. You like it enough, again, i love the tweet that you put out some, what, two hours ago. I still hope a day will come when we take a cue from our own countrys strength. Wow, the netherlands is off. Im freaking out here. I remember the whole periods, like, from, you know, like, the beginning of the previous century to the end of the previous century when we took our cue from ourselves. And by the way, had you just done that ever the course of this bull market, you would have done a lot more money than if you were taking it from cypress or turkey or argentina. But the emerging people present themselves as big or a hedge fund manager, you want to sound big and have gravitas and look at this ukraine. Theres probably people dont know where ukraine is, but all of a sudden they do, they have google maps. Google maps, look at this, wow, kiev. We should be focusing on our numbers. Our numbers are good. Our country is stronger than we thought. Which is why our markets go higher theres still risk, though, geopolitically, right . Yes. Maybe it subsided a little bit. Look, i know better than to say that i shouldnt worry about an earthquake in japan and i know that i should worry about what putins doing but i also think that in the mix simultaneously should be u. S. As opposed to some sort of flowchart where we go, okay, first we check off putin and then we check off ukraine and then we get to Housing Starts. I would like to reverse that process because of Housing Starts and permits are good, that says good things about retail which is what ive been worried about. Im concerned about retail. Obviously we always have to talk about tesla. Teslas the new apple. The goldman piece, its hilarious, the recommendation, nonrecommendation. This was the best piece i have read. I got to go right to it because i havent mentioned Goldman Sachs says the auto business is worth 180 and the store business is worth 20 but if you value it in the steve jobs analysis you get 442 and if you evaluate elon musk as henry ford you get 478. Elon musk is the may tag repair man you get 329 and a loser, 366. Tesla is the new apple and we have to focus on tesla. Even though apple did something today. I dont care. Lets hope hes not the loser at 66. The actual valuation and this is all people will be talking about, auto business 180, and storage business 220 and target price 200. Well have to focus on whats taking place in washington. Where is secretary kerry . Did he have a Big Press Conference detailing what he would do . Where is kerry . Wheres kerry . I know it sounds like i pronounce it with curry, im from philadelphia and excuse me. Hell forgive you. The fed is kicking off this twoday meeting and yellen will meet the press for the first time. That matters. As fed chairman. Thats big. Yes. Shell likely continue on the road of tapering. Right. I would assume you think its good, too, it goes back to your tweet. The tenyear 2. 6. The tenyear is marching to the beat of actual Economic Activity where there are some people i think the bonds a little too bearish. Remember the Interest Rates did not go up after we had a good employment number but the bonds are divorcing themselves from yellen. You want to get back to the model actually pre1998 when the fed was oh, whats the fed up to. This will be a period where i think that its an era of good feelings still. I think yellens still very honeymoon. I think there will be people that blast the futures down. As soon as she comes to the podium. Thats kind of, like, a test, you know, like, lets throw a few shots at her and the futures go down and theres no followthrough and then they go back and you are okay. There are probably some people out there who are still hanging their hat on the belief that the fed is going to at some point stop its tapering process and that is going to be good for the market. Theres got to be some people out there who are still hoping for lack of a better word on that. The people who are taking nova. Theyre taking nova to win it all. I mean, theres always people who are taking baylor to take it all. These are peopling going for long shots its not paying off right now. It might pay off. Maybe these are people taking a 16 seed against a 1 seed. Hows that worked for you . Not good. Yeah. Not good. Exactly. We want to focus it may bee good at some point. Doesnt have to happen at some point . I think people have to recognize as important as we think the fed may be, its less important given the fact that the ten years doing nothing. We have to stay the course knowing that the fed is not our enemy. The f enemy and remains not our enemy. Did you see the china numbers that were not as good as we thought . No, i just made that up. Thats something you say every day, too. Thats what people are looking for. Can i just tell you if i were part of this people the people who were polled about china, i would come in with these minus five baselines, suddenly wed be saying, wow, its better than we thought. I would skew the whole thing down. Have you ever thought about how wrong theyve been for months . Why dont they lower their estimates if china were my crone, if china were intel. Cutting numbers the estimate are starting to come down on what the expected growth is going to be. Soon i was going to say soon six is going to be acceptable because well be conditioned about it. And then we dont care about china. You need to this get to where the estimates can be beaten and we take china off the table. Why dont we talk about venezuela . Ill throw that in the mix. I didnt realize venezuela after saudi arabia and canada has the biggest untapped reserve of oil. Some people think its the second biggest. We never talk about that and i throw that in the mix of another baylor to take the final four. We can make scenarios. I like housing doing well. I like the fed being our friends. Those are the scenarios im focused to make money. Lets talk a little microsoft. May unveil an ipad version of the companys Office Software on march 27th that according to reuters. Satya nadella who replaced Steve Ballmer will address the media and industry executives in San Francisco. Investors have urged microsoft for years to adapt office for mobile devices from apple and google rather than shackling it to windows as pc sales have declined. Theyve been sacrificing about 2. 5 billion in revenue as a result of all this, so if you cant beat them, join them. Yeah. I think this could be a glasnost period of microsoft. Theres great stuff in the steves jobs biography about how they feel about microsoft and they are hopeless. Do i think its hopeless . A new guy comes in and a new broom sweeps clean. If thats true why isnt mark ballmer exiting . And i can say that because i was a ballmer buddy crony from college. This may have happened sooner if not for some reported internal divisions over, you know, whether this was the right way to go or not. And that tells you that even though theres a new ceo, theres still some of the old in microsoft. Very much. People are not willing to take that big leap forward yet. No. Thats why the stock goes up incrementally. The stocks not a bad stock of the cohort of yesteryear companies that people care far too much about. Its done better than the rest of the cohort. Its interesting the cloud plays have done quite poorly although the cloud ipos have been done quite well. Theres a mix between old and new tech. People dont know where to place the bets. People are quietly putting money toward microsoft because they feel theres kind of an activist approach to turning it upside down. Dont get too excited. Its a big day for old tech. You got oracle and adobe from the cloud play with earnings after the bell. Adobe has reinvented itself. Hp upgraded, a downgrade for cisco, its old tech that is taking center stage. I saw someone say buy my crone off a japanese earthquake from march 13th. People want to talk about these names and i think that, do you know what, i dont see any of the old techs really moving up that much. Hewlettpackard has done quietly well over time. Ciscos done poorly. Hp the stock up, you know, 30 plus percent over a year. Ever since meg came in. Ive had the debate with some of the traders on the halftime show as to whether the ship is really turned or its just the street views the captain as more credible so that maybe its heading in the right direction but its not fully turned yet. Installed base is good. Dell has been quietly telling people that the business has gotten a little bit better. I think that she has credibility. Yes. She is a credible ceo. In what was an incredibly ridiculous situation. All right. Well, coming up next, or coming up, yukar kane is the author of a new book. Lets look at future future dow an implied up open and the Dow Jones Jones is up 40 and the nasdaq up over 5. More squawk on the street live from post nine on the New York Stock Exchange when we return. Welcome back. In an address to russias parliament the countrys president Vladimir Putin defying western sanctions by signing a treaty to make crimea part of russia but he said he has no plans to seize other regions of youve crane. Steve sedgwick is live with more details. Reporter its the last line that has got everybody a little bit calmer in this crisis in ukraine. We have no intention of splitting ukraine. He told the people of ukraine directly in that address he said dont believe those in kiev and elsewhere who say that is our intention, of course, that is what a whole series of politicians have been telling us on cnbc and the world that they are concerned that there is a greater extent to russian ambitions in the ukraine and its that latter point which is the absolute key. He also added, though, that theres no one to talk to legitimately in kiev saying that the government was full of antisemites, of radicals, of ultranationalists as well and he said the west had overstepped the mark, we had behaved irrationally in the west and had lost its original sense. He said the original agreement to khrushchev to hand crimea to ukraine had violated norms as well. Very adamant it was crimea was russ russias and it was theirs all along. This is getting less airtime in the west so far, but theyve made the admission that nato membership is not on the agenda. That could be quite good to calm russian nerves as well and may be part of a diplomatic process as well. They said ukraine does not regard relations with either eu or russia. It could be obviously a commonality. It doesnt have to be a all or none principle and adding to build relations with russia is the key point. One thing i want to tell viewers i understand the Prime Minister yatsenyuk will be speaking by satellite to armed forces in the crimea, to Ukrainian Armed forces in the crimea in the next hour. I think its absolutely fascinating what yatsenyuk, what the russians dont recognize and what the west does recognize what he says to his troops in crimea could be absolutely amazing and quite fascinating and could be the next level in this whole hopefully diplomacy and hopefully not aggravating the crisis. But the take away line from putin, we respect the rest of ukraine. Back to you. Right now the market the great report. The no nato initiative. I am concerned about certain factors factions within ukraine being provoked which would then give the russians a chance. That would be kind of what would the Worst Nightmare would be that ukraines not in control ukraine. And that would cause the russians to take action. There was a feeling i think late last week that it would get worse before it got better and maybe thats off the table. Yes. At least at the present time. They come in nato and the west pays billions of dollars i think thats a quid pro quo that seems to be taken off the table now. Watch ukraine to see if it does provoke russia. That would be bad. Its cramers mad dash as we count down to the opening bell. Lets look at futures as well. It looks like this tuesday on the street will start out a pretty good one ask a green one at that. The dow implied open 43. More squawk on the street live from the New York Stock Exchange is straight ahead. K is the most sound way to go. Lets talk asset allocation. Sure. You seem knowledgeable, professional. Im actually a dj. [ dance music plays ] woman [laughs] no way that really is you . If theyre not a cfp pro, you just dont know. Cfp work with the highest standard. 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. Eight minutes or so before the opening bell, time now for cramers mad dash ahead of that market open and we are starting with amazon. Yes. Now, this is a classic sign of the times piece. Im going to read the headline. Underperformance creates buying opportunity with catalyst. The stock has underperformed for five nanoseconds here, opco says ged behind it. They are raising estimates. They are saying this, i love it, valuation remains compelling. In that world where you dont need to earn anything if you want to stack all the companies that dont earn anything together, this is the cheapest of the companies that dont earn anything. Theres a report that amazon will come out with the video streaming device, the longawaited product. I would probably try it out. One of the things about amazon if you like this, youll like that. I mean, i like a lot of things i dont even like because amazon told me to like them because theyre able to anticipate my corporate intelligence. Maybe not an accident, too, that they come out with the price increase for prime and they give you something on the back end, hey, were coming out with a device, too. I think this works. I think this is a timely push. Lets talk Luxury Retails. This is a shattering of the idols. Barclays goes to an absolute sell on kors. This was a gigantic short geez and the stock has maintained this valuation for a long time. This will take the street by surprise because this is the momentum retailer that everyone has been behind. This is dare i say the chipotle of handbags. It makes you wonder, though, what it means for the overall Luxury Retail sector which a lot of people are bullish on. They are. And tiffany reports this week. They raised the estimates. I think tiffany will report a good number. Kors this stock has moved too much for me. I feel like, yes, its a great story but were just paying too much for a great story because you only have a lot of 20 , 30 comp situations out there. I feel better buying a philip vanheusen. But im not a momentum player when it comes to apparel because ive been burned too often. They were more positive on pvh. I thought that was an interesting call. People are saying that Manny Chirico and pvh are not going to deliver. I think they are basically saying its in the stock. The best is g3 Holdings People dont realize it as being a terrific apparel play because it just doesnt capture the fancy of investors. Michael kors stock will be heavy. Well take a look at that. The opening bell minutes away. Squawk on the street will be right back. [ male announcer ] a car that is able to see, to calculate, to think and can respond to what it encounters. Even if that means completely stopping itself. Its the stuff of science fiction. Minus the fiction. The 2014 eclass. See your authorized dealer for exceptional offers through mercedesbenz financial services. [ bell ringing, applause ] five tech stocks with more than a 10 . Change in aftermarket trading. All the tech stocks with a market cap. Of at least 50 billion. Are up on the day. 12 lowvolume stocks. Breaking into 52week highs. Six upcoming earnings plays. That recently gapped up. [ male announcer ] now the world is your trading floor. Get realtime market scanning wherever you are with the mobile trader app. From td ameritrade. You are watching cnbc squawk on the street live from the Financial Capital of the world. Where the opening bell is set to ring in about 2 30. Theres a guy on a boflex, jim. If you like that story, you should like the life fitness line of brunswick, i think its a much better story. I want to own the stock. Hes making us look bad. I had a danish this morning. I feel bad. Why did you do that, man . If i knew there was a dude behind us. You ought to eat quinoa granola. Its incredible. It has no taste whatsoever but that should not play a role at all. Walmart will let buyers trade in video games starting on march 26th. Can i return the groceries . Walmart this is a headline risk story. Game stop has just beaten the redheaded stepchild its become. I think game will come back from this but mostly because you have a series of good games coming up. Still, this is the hardware side. We like the software side. Have you seen the action in take two. Have you seen the action in Electronic Arts . These have been remarkable performers ap e a has been really strong. Taketwo broke through the 20 level. E a had a little management issue for a while and now its back. Is there any risk in best buy as a result of this . Not really. Best buys been down in the dumps. That was another one like hewlettpackard, it was down so much it looked up to people. And i think best buy, people really soured on best buy because the whole hard goods line didnt work out. But if you circle back to the williamssonoma quarter that was a picture perfect quarter. 50 of theirs is direct to the consumer. That is the a play on pinterest. I thought it was really interesting. Got to go over the Conference Call its a play on pinterest and instagram. These are the two channels that williamssonoma uses. Very forwardlooking company . Look at the stock. Its a winner. And i get one of their 40,000 catalogs every 37 seconds. All right. The clapping has started. That means the opening bell will start ringing as well. Theres another look at williamssonoma for you. What a year. Theres a look at the s p 500 real Time Exchange at cnbc. And here at the big board, theres the bell. Nautilus highlighting the bo trainer m5 machine and at the nasd nasdaq, exact sciences. And thats a very interesting and exciting story for those who looked at it. Initially not acceptance and come roaring back and a lot of the biotech stocks are doing well. Some deserve it, some dont. Look at the stocks we were just talking about. Walmarts about to open. What is hpq doing this morning . We mentioned the upgrade at barcl barclays. That getting a nice bump of better than 2 . Im focused on this cisco call which is shares could be range bound. Move to equal weight to buy from barclays. When havent they been range bound . Thats a very good point. Theyre completely range bound. This is cisco onetime first seat, now fourth seed. Its a fourth seed. Im taking louisville over cisco, though. You are . Yeah. Are they really a four . Criscos a four seed name and they used to have great seniors and they used to play defense and theyre not playing defense anymore and as far as im concerned they wont come out. Georgetown used to be a lock for the final four. Today they are lucky if you make the tournament. Give me a requiem to the big east. We should be relating the stocks to the seeds. Cisco is no longer a first seed. They could be in the n. I. T. . Oh, my god. Heaven forbid. Secular headwinds is the note. Equal demand trends. Is that a refer rem dumb on cisco itself or concern over tech spending . Weve been hearing about capx picking up. I think there is maybe its too big. Maybe its just not being run aggressively enough by john cha chambers but its a poor stock in a group that has some momentum. I remember the days, when i wrote get rich carefully juniper couldnt shoot straight. Junipers shooting straight. Af 5 is shooting straight. Maybe its stating the obvious, scott. Maybe this is stating the obvious. Whats your view on where oracle goes from here, jim, since were on the topic of old tech and theyll report earnings after the bell. Candidly ov lly oracle has b inching up. And this time its run ahead of the quarter. The last few big moves oracle had made it went down ahead of the quarter. I hate the runs ahead of the quarter. I think oracle is doing okay. Abo bob adobe is doing much better. They act well because their businesses have firmed. Oracle versus cisco is an interesting study. Same management in a long time. Oracle has since been delivering and im proud of the oracle guys who i misjudged them. I didnt think they would have this much game. Third seed goes to second seed. What do you think of the tone overall of the market . Lets just say from, you know, the beginning of trade yesterday largely because of russia, theres been little to worry about, say, in the last 36 hours. Well, i think the shorts overplayed their hand, scott. I think they felt they had a winning hand because they figured there would be a vote and the vote would come out obviously prorussian and secretary kerry would come in and put in some sanctions that might cause russians to sell their assets all over the world and might cause u. S. Companies to do less and emerging markets to take the bond money out of russia. None of that happened because the response from the west was so muted. Like, the shorts were banking on a much more aggressive response from the west and they didnt get it. Do you believe in the move weve had in the market yesterday and thus far . I think the short cover yesterday was pretty outrageous and the shorts got beaten around the head again with putin. Listen, im not doing anything. I think you have to be very careful about what the ukraine will do. Its a wild card. Because the ukraine is not necessarily a country where they speak with one voice. Remember, there are Many Russians in ukraine, not just crimea. We forget that. Ukraine its not clear to me that youre dealing with a stable situation. It could be the worst of all possible worlds where they provoke and at the same time the u. S. Has to pay off ukraine. Look for that. Look for germany and the u. S. To be funneling billions to ukraine. It seems like the balls clearly now in president obamas court now that president putin has spoken this morning said, you know, dont believe the reports that we need anything more than crimea or that our intentions go beyond that. Were waiting for kerry. Waiting for galifianakis, waiting for anyone. Galifianakis. Id like to see that interview. Galifianakis. I got you on that. That was funny, wasnt it . Brad cooper would have been very good. Hes helpful in Foreign Policy as well as many philadelphia teams and is a nova fan. Bob pisani, you on the floor . Well, bobs getting ready. I think a couple things we didnt talk. About. Look at hertz. This is a Company Bringing out value. Why isnt it up a lot . Because it leaked. We talked about the notion of leaking. The Andrew Ross Sorkin piece, this very good piece, einhorn someone leaking its micron. This was an ft story, people are saying they are bringing all the value, front ran the new valuations. Its exactly right that it would only be up 23 cents. The quarter wasnt that good and you bring out value because the companies wasnt doing that good. Not to mention the fact there were so many hedge funds that had piled in the name. That had already run up a bit. Your show is uniquely, uniquely showing what stocks are overowned by hedge funds one of the things i love that you do. And youll hear the stories was General Motors gm is a hedge fund darling. A Hedge Fund Hotel as some say. You check in and you never check out, roach motel . Aig this morning burns i thought it was hotel california, you check in, you can never leave. Aig bernstein says its time. Aig was a heavy Hedge Fund Name and therefore it was the kiss of death. I think they are doing a good job. Its good to see the stock recharging. Maybe thats one of the problems since were on the topic of whats perhaps aili ii apple. Maybe some of the hedge funds that had been in that name 12 months ago have moved on to other things whether its General Motors or aig or hertz. Public is still in apple. Public keeps hoping theyre just, like, apple, apple, apple, apple and apple has to do some things and its not just the change in ipad. Theres no reason to be distressed if you own it, its got a good yield and buyback but uniquely you probably do want stocks that go higher as just a kind of reason to own. Well talk to the author later on in the program, jim, yukari kane who wrote the book about apple after steve jobs and what the innovation path looks like what the company path looks like. Theres only so much you can do. The software is really good. They dont get credit for the really terrific software. Its almost like unless you issue a new device it doesnt get picked up and noticed but the software is so superior year over year. They dont have revenue growth. We value work day because it grows at 40 , okay. We value viva because it values very fast. We value cornerstone, csod, its a 50 grower. We want growth and were willing to not have earnings if we can get growth and thats apples problem. It is hamstrung by the idea that what you care about is growth and, therefore, it doesnt have great revenue growth, doesnt have great earnings growth. People always say why isnt apple going up, its not going up because the market loves growth. Youve got to give the market growth. Its not just going to sit there and say its going to go higher because its cheap. The question is whether johnny ive is getting the credit he deserves the guy who has been there a couple of decades. Didnt just show up on the scene after jobs passed away. He had been for all intents and purposes righthand man on all of these new products that have come down the pike over the last several years. I love the products but you need in a surge in revenue. You can get revenues going that stock goes higher. People when i was signing books this weekend at costco, people saying, jim, what will move apple . I said higher revenues and earnings. No, i mean, i want something different. Well, you know, you cant there isnt something different. Revenues and earnings. You know, break up the company . What are you going to break it up into . Snacks and soda . I love pepsi. Well get to pisani in a second. I want to highlight one more stock, castlight, the big ipo of last week the one that ripped up 100 in one day. Raised all sorts of froth questions about ipos and 16 million in sales at the present time. The stock is up 4 after i believe it closed down yesterday as well. I cant remember. The new pattern, they open really high. Even twitter opens high, trades higher and then comes down. There are a series of cloud plays that are coming this week and you just have to be really attuned to watching how 12 they do. Because if one of them breaks print, one doesnt go up big this one goes down. This is a great opportunity to take profits in Castlight Health when you go on jim cramer twitter i love Castlight Health. What does it do . Thats kind of a question that people thats the subtext. They are fabulous. Theyre in the cloud, you know, no, i mean, know what they do so when it goes down you dont panic. Or get out. And take your gain. And bob pisanny its important to watch the ipos the day after the pop. I know youve written blogs about this and other ipos about how the stone is down here on the floor the last couple of days. A lot of the ipo depends upon what sectors youre in, if youre in the right sector, if you are in certain biotech areas that are hot, they generally do well. Ipos are sector driven. Software as a service, that will be hot. Well see a lot of the Software Services in the next several weeks. Youre right, scottie, Vladimir Putin, market maker, thats what his new title should be. He has several titles. Look at the s p futures before 8 00 as mr. Putin came out and saying russia wanted more than the crimea was not correct. In other words, we just want part of the country and not all of the country. There you see the big jump on the right side of your screen. Generally risk on the day. I dont like the word but thats what it is. Industrials, financials, material stocks are all on the up side. But health care always is still up there even on risk on days. Consumer staples a little bit lower. Notable gainers and losers this morning. Coach is up a bit. They were initiated equal weight weight hewlett is up and the Home Builders are up on good Housing Starts and permits numbers particularly the revisions. Game stops a big loser. You were talking about walmart entering the video game business and transocean up a little bit but there were negative comments on deep water drillers in the journa journal. The new York Attorney general Eric Schneiderman gave a speeching about the High Frequency trading and commenting about it and saying he wanted to look at several things he wasnt happy about, specifically he wanted to talk about Collocation Services and supported a bead bump, thats what he called it. Collocation services allows subscribers to locate their servers by the exchanges servers, an interesting question and nobody should be given unfair advantage. How many of these clients actually access the collocation . I think youll find if you look at it that even people that use discount brokerages, charles schwab, for example, and td ameritrade, people that execute their trids use collocation. In other words, almost everybody who is anybody and important in the business actually uses collocation. Its not just the High Frequency traders although if its an unfair advantage i think it should be eliminated. Im not sure it is, however. About the speed bump theres proposals about High Frequency trading for years that one of the ways to stop it is to say you cant trade below, say, 50 milliseconds. If you make everything one second, for example, the minute you turn on the machines at that point if they are trading faster than everybody else then after one second they still have the same advantage. In other words, nothing changes. You want to kill High Frequency trading, put a tax on Financial Transactions like trading. The industrys going to scream like murder and i bet you the volume will drop in half i bet if that happens. If thats a good way to do it, again, even if you do it below one second youll still have the same problems. Machines turn on off one second. Not an easy problem. That with outrage people. I have often felt the s. E. C. Should be looking more aggressively at this. I mentioned earlier they should be looking more aggressively at the people who slam stocks without any sort of disclosure that something they used to care about. The Arthur Leavitt s. E. C. I believe would be Holding Hearings about this idea because this is not leveling the Playing Field its unleveling. You call them in and say, listen, guys, were not going to allow this and i think you get results. I think the people have been beaten by this. The Retail Investors say, i cant play any more. They hear the word algorithm and they freak out but we know we cant win so lets not play. Thats part of the problem. This issue of collocation has been everything for some exchanges. I think the attorney general is spot on. I think its really important. I think hes doing the job that the s. E. C. Should be doing congratulations to him. Its a very good call. Lets go the chicago bond pits and Rick Santelli. All you have to do is look at your screen about 7 30 eastern. Look at the headlines coming from russia and you see moves against many sectors all basically the same move. So, whether you look at the dax whether you look at the euro, whether you look at the bund, whether you look at the ten year, you see how all those intraday charts basically look the same. I know we had data but that didnt really seem to be the huge focus. Lets switch gears and hold on to that ten year. Open the chart up year to date. See that pattern there. Were pretty darn comfortable here under 2 3 4 and above 2 1 2 but that seems to be the range. The spreads tell you it is a comfortable area. Look at tens minus twos and fives minus tens all year to date. When we think the currency market one thing i notice right now is that the dollar yen, the yen is moving in positive territory. For the positive numbers i see on equities were going to have to correlate those two and see how it emerges over the next hour or two. And the last chart, you know, going back to april we havent seen the dollar at these levels against the chinese yuan and this continues to be important as we look towards weakness and try to handicap what china will do to try to prevent both overheating and not turning the screws too tight. They have a lot of people to feed. Judge, back to you. All right, rick, thanks so much, Rick Santelli in chicago. Coming up, yukari kane the author of the new book haunted empire. And also ahead what do you think, how about fuel cell . You just gave me the thumbsup fuel cell, ill have to take that higher. You like fuel cell, right . He is shaking his head. He loves fuel cell, yes holy cow. What do you think of tesla . Tesla . Loves tesla. Got to be careful with the hand signals here. There are many questions for kermit. We want to know who he has in the final four. Hes apparently miffed that the horned frogs of tcu were not chosen for the tournament. Hes on the right side of history. Well talk to kermit about that. And see who he has in the buffett challenge. That interview is coming up. Squawk on the street will be right back. I dunno, i just ah woke up today and i said i need something sportier. Annnd done. Ok maxwell, just need to ah contact your Insurance Company with the vin number. Oh, i just did it. With my geico app. Vin is up to the loaded. Ok well then jerry here will take you through all of the features then. Why dont weeeeeeeeeeee go out to the car. Ok, ill just be outside. Ok, yeah. His dad is my boss. Yeah. Vin scanning to add a car. Just a tap away on the geico app. Sometimes they just drop in. Always obvious. Cme group can help you navigate risks and capture opportunities. We enable you to reach Global Markets and drive forward with broader possibilities. Cme group how the world advances. Somethings brewing in seattle as starbucks shareholders from around the world gather for the iconic coffee companys annual meeting. Cramers taking you behind the scenes with its chairman and ceo. Is there more caffeine left in its stocks after a 600 run over the past five years . Find out if it can percolate your portfolio, a mad money special from seattle. Invest in america brewing innovation, tomorrow. Thats going to be an extravaganza. Yes, i think starbucks is kind of trying to outdo Warren Buffett perhaps and regular people going that and talking to jw nordstroms and they never do tv. Quite timely given the barclays talk today, too. Well do aisle by aisle. Zillow which has been taking real estate by storm and Seattle Genetics one of the great biotech performers and starbucks will be talking to Howard Schultz in the morning, im doing that part of our show from seattle and, of course, be back thursday because im the bionic man and i intend to have a lot of starbucks between now and then. Nobody works higher. Triple venti chappuccino wil get me there. Sort of figuring out where it will go. Traded down 69 on the big short saying, listen, coffee matter. Hes always said dont worry about coffee and the pricing. It is a china and india play. Not just a u. S. Play. It did 7 comp u. S. And only chipotle did better with large restaurant chains large cap. And Howard Schultz moved over to digital, people are concerned what does it mean . He didnt move to digital he brought it up. Digital made it worth ill try to come up with some valuation how much of the digital situation i want them to merge with verifone and take over the world but kermit wanted to take over the world yesterday so i dont. Well ask kermit if he drinks starbucks what his drink of choice is. Kermit likes starbucks under 73. He told me that personally. The hand signals. I cant wait for that. Up next its stop trading with jim. Na, change engineering in dubai, aluminum production in south africa, and the Aerospace Industry 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. [ 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. At a company thats bringing media and technology together. Next is every second of nbcuniversals coverage 0f the 2014 olympic winter games. Its connecting over one million lowincome americans to Broadband Internet at home. Its a place named one americas most veteran friendly employers. Next is information and entertainment in ways you never thought possible. Welcome to whats next. Comcastnbcuniversal. Its time now for stop trading with jim. Ipos . The bracketology, these are the final four, these are the ipos that must succeed for the castlight juggernaut to continue. Three clouds, the first one is pcty, cloud based payroll and the next one is global force. Works for morale within a company. And qtwo, Banking Software on the cloud and the ipo is metawound, mdwd these are the ones that must go up, the bracketologist say these are the best of the week and if they dont make the final four and hold print price youll see the whole group come down because it means saturation has been reached. How much do you want them to go up . Froth versus wanting to make money for people at home. I want money for people at home but i want them to not be greedy. If they start breaking print, the market will go down. Lets do a quick industrial. Nue is barely down. Bullish for the industries. Whats coming up on mad . I have Charles River labs when you raise money for biotech, go to the catalog, they have more mice that you can do things to than anything anyplace on earth and theres also a page for guinea pigs. You can do things to these mice and guinea pig. We cant wait for the extravaganza. Well be doing it. Howard schultz and a whole bub bunch of other great guests. Coming up, the tim cook era under the microscope, well talk with yukari kane and shes the author of a new book. And kermit the frog is here. Yeah. Talking about his new movie. And much, much more. He was not shaken up by ukraine. Ill tell you that much. Keep it here for kermit. I take prilosec otc each morning for my frequent heartburn. Because you cant beat zero heartburn. Woo hoo [ male announcer ] prilosec otc is the number one doctor recommended frequent heartburn medicine for 8 straight years. One pill each morning. 24 hours. Zero heartburn. 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. A 401 k is the most sound way to go. Lets talk asset allocation. Sure. You seem knowledgeable, professional. Would you trust me as your Financial Advisor . I would. I would indeed. Well, lets be clear here. Im actually a dj. [ dance music plays ] [laughs] no way i have no Financial Experience at all. That really is you . If theyre not a cfp pro, you just dont know. Find a certified Financial Planner professional whos thoroughly vetted at letsmakeaplan. Org. Cfp work with the highest standard. Good morning to you. We start off this hour with breaking news on General Motors. Phil lebeau is live in chicago with the details. Phil, good morning. Another move by General Motors as it is dealing with this wave of recalls and the recall crisis thats gone on for the last month. Today the company is naming jeff boyer as the new vp of Global Vehicle safety. Mr. Boyer has been with General Motors for more than 40 years in a number of engineering and safetyrelated positions. He will be in charge of Global Responsibility for Safety Development of gm vehicles including recalls. And heres the most interesting thing, simon, he will provide regular and frequent updates on recalls, recall activities to gm Ceo Mary Barra and the gm board of directors. Appointing a vp of Global Vehicle safety the latest move from a company trying to get in front of this story in terms of making it clear to the public and shareholders they understand the severity of the crisis and are taking steps to correct the situation. Sim simon, back to you. Thank you very much, phil. Thanks so much, phil, and simon, thanks you to as well. To the fed a cnbc exclusive survey of the Top Economists shows fed watchers are lowering their outlook for Interest Rates and see a meager 4 of gain in stocks for the entire year and Steve Liesman has more on that. Its always interesting when it comes out of the survey especially a day before well hear from yellen. For sure, scott. I always find it amusing to bring you this segment of the fed survey which we do every time on squawk on the street which is the Market Outlook of these guys and let me tell you its no a pretty one. I dont know how much you should make this an investable proposition. Lets me show you the lower outlook for Interest Rates, the green line is december of 2014 and they came down five or six basis points and under 3 for june and 2. 95 this is where we are right now. Not looking for too much but still somewhat higher rates. You can see they backed off their expectation it would be above 3 . Heres the outlook for stocks. I dont know what to say about this, theyve been continuously downbeat on the market. 1858 was the close and already were up to 1865 and they are saying we only get to 1866 in june and 1924 or 4 on the s p for the full year by the end of december. So, thats their outlook. Some of the comments as to why this is out there. Lets see whats next here. There we go. This is the fed unemployment threshold and whether or not thats going to change. Some disagreement over what happens today. 46 say they will change the unemployment threshold and 49 say theyll drop the rate and offer only qualitative guidance. The markets looking for a change but its not sure where to go. Heres the commentary, data continues to build up could trigger a selloff in the belly of the Treasury Curve and equities are in a tricky spot. Moving on we can see here, lets move on to the next one here, guys, theres growing evidence says guy laboss that credit creation in china and other emerging markets is at best slowing and at worst contracting and thats a major impediment to global and u. S. Economic growth is there one more . I think there is. The Financial Markets are too complacent over a tail risk that could turn into a cold economic and financial war. Thats one of the reasons they are downbeat. Expectations, 98 see a taper at this meeting and 81 expect a taper at all other meetings this year, pretty good agreement but looking at next year you can see theres a sense there could be quantitative uneasing. 39 look for a reduction in the feds Balance Sheet, 61 say its unchanged. Of those that say a reduction looking for minus 109, not a lot, guys on the 4. 1 trillion Balance Sheet but something worth thinking about that next year could be a time when the fed Balance Sheet actually contracts, back to you. Thank you very much for that. If youre just tuning in, of course, the feds twoday meeting starts today under janet yellen for the first time and tomorrow well get the News Conference from her. Lets bring in alice rivlin, shes now a senior fellow with the brookings institution. Miss rivlin, welcome to the program. Its great to see you again. Thank you. Good to be here. Is the fed vindicated on the taper . Is the data Strong Enough to justify them ordering another 10 billion less of cash printing this month . I think so. Although the data as you know are very hard to interpret because weve had a lot of bad weather. The labor market data didnt come in as strong as many had hoped. But some of thats got to be you cant build buildings in a snowstorm. So, i think that pretty much were on track. And most people think that the situation will strengthen a bit looking forward in the next quarter. The big question as you know is that theyre going to try to deal with today how do they change the way they talk to the market and indicate where Interest Rates are going to go without spooking everybody . Some are suggesting actually more or less leave it out altogether. What do you think . Well, i think it might be smart not to have a number like 6. 5 Unemployment Rate. Im perfectly comfortable with the 2 inflation. But the 6. 5 Unemployment Rate can be seen as misleadingly indicating that labor markets are stronger than they really are. And i think plenty of fed people including chairman yellen have said we dont just look at the Unemployment Rate. And they shouldnt. They should look at other things like the Labor Force Participation rate, the number of people who would like to be working full time but they cant find a fulltime job. And so forth. So, i think they may make that point in the statement and possibly even take the 6. 5 out. I mean, given the questions that we still have hanging over the labor market, alice, which you just referenced some of them, is the current prescription working . Is the current fed policy actually effective in helping boost the economy to some sort of escape velocity growth and creating jobs . Well, i think it has been effective. Now theyre tapering down just because they think it has been effective. Despite the drag of fiscal policy. Fiscal policy has been a negative for quite a while now. Its a little less negative than it was, but that deficit coming down which has some positive aspects but its a drag on the economy. So, theres a question how stimulative should the fed be. And their answer, and i think its the right one, well, not quite as sometime mu ltimulativ to be, but were still buying bonds. What are your real expectations to come out of the meeting . Nothing dramatic is going to happen. Youre going to hear from yellen for the very first time, so shes going to have to communicate to the market in a way that gives the market some sort of understanding as to where fed policy is going to go from here. If they continue to taper its not going to upset you, is it . No, not at all. Really ultimately the big question is when are they going to start raising rates. And due to the fact that the inflation rate is so low, we dont see them doing that until late 2015 and possibly 2016. When it comes to the u. S. Economy, growth roughly about 3 for 2014. Yes, we havent hit escape velocity, but nonetheless we think that earnings over the course of 2014 could be somewhat more robust. Alice, do you ever wonder about whether theres the ability to reach through what we have at the moment to try and affect really more people in the economy and make them more optimistic . You know, the wall street journa journal nbc poll that came out last week indicated that only a quarter of people believe the economys going to improve next year. 57 of people still think that we are in a recession. How do you as one of the brightest in washington, i mean, what can we do about that . Is that about leadership . Can the president say to people, look, actually next year will be better than this year, believe, this country is improving or do we just get stuck in this mire . What do we do . Well, i think he can say that and hes been saying that. But there is kind of a gloomy mood. Now, part of that is that the opposition who want to derail the president and his program are saying nothings working, its terrible. And most average people dont actually look at the data. If you look at the data, what you find is its better than last year. Its a lot better than the year before, but its not back to what most of us would like to consider normal. Which is a higher employment rate. And easiertofind jobs. Just before you go, alice, what is your personal reaction to the fact that janet yellen is now driving the fomc . I mean, this is only the fourth chairman weve had in 35 years. You know, this country changes its president s far more often than it changes the head of the Federal Reserve. How do you feel about today . I feel glad that janet is there. Ive known janet a long time. Shes a very competent person. Im surprised that the Financial Press is making a big deal that shes a female. Yeah, right. A lot of us females have run thins. No big deal. Good to see you again, alice. Alice rivlin senior fellow with the brookings institution. Have a great day. Maybe its better that way. Lets continue on the markets, were in rally mode day two, the dow jones up 62 points with tensions in ukraine ahead of the Federal Reserve meeting as well. Lets get more from chad morgan and hes here with us on set at post nine. Its good to see you, chad, as we were getting your thoughts on fed policy youre telling me youre bullish on the stock market. There are plenty of reasons to be bearish and for the rally to be tripped up right now . What reinforces it right now . We think youll have a modicum of credit creation that will accelerate in 2014 and youll see Capital Spending improve as well as the employment picture not get out of its still stuck in the mud but improve gradually going into 2015. So, the monthly jobs numbers are coming in sub200,000 we think it can go to 250 or perhaps even 300. Credit growth growing at less than 2 on the household side. Potentially that grows by 4 by year end and then you look at earnings growth. Earnings we think is going to be up roughly 6 to 7 so the market at this Inflection Point is fairly valued or up maybe 6 to 8 over the course of 2014. Youre talking a lot about the domestic economy. It sounds very optimistic. Weve seen the vulnerabilities created by this fed policy by tapering with the markets in adjustment mode if it is on autopilot, do you have to stay away from emerging markets . Were not invested in emerging markets. Weve taken that chip off the table. We are invested in developed markets. We like the euro zone section as well as we believe that the euro zone will start to reaccelerate. The growth there will go from 0. 75 on the up side to perhaps 1. 2 for 2014. What happens if the fed stops and i hope that youre right, i really do, what happens when the fed starts waking up to that and has to adjust Interest Rates expectations towards this buoyant scenario that you have . Does the market sail through that unaffected . Lets focus on a couple of things. If the fed tapers and gets down to zero quantitative easing, the market may adjust by 5 to 10 . Thats just one of those things that could happen. Thats two separate things. I asked you about short interests. The yield curve hang on. Youre saying something very important if i under. Irrespective of what they do with Interest Rates theres still a risk with the taper as it stands, it is not totally factored into the market, is that correct . You may get a shortterm adjustment of 5 to 10 . Big deal. We always get those over the course of the last 10 to 20 years. When it comes to the short end of the yield curve the fed isnt going to raise rates anytime soon. Anyone that thinks that is delusional. A come of reasons, look at the new home Sales Numbers 900,000 thats horrendous, okay . That has to get to be 1. 3 million to 1. 2 before they do that. And the expectations are not muted. That has to glide higher before the fed kicks in. Our point of view theyll keep the short end of the yield curve real low, okay, theyre not going to move and scare the market and not going to want to create this dislocation within the credit markets which theyve been effective in trying to at least calm the credit markets down which leads into the overall economy, leads into corporate growth. All right. And you should see the liquidity. Thats probably why you like consumer discretionary. Great to see you, chad. Walmart the Worlds Largest retailer announcing it will accept used video games in stores exchange for store credit. To now the company had been accepting tradeins online in a much much more limited basis. That brings us to the squawk on the tweet. What other used product do you want to sell back to walmart . Could it be almost used or kind of new . Used product. Tweet us squawkstreet well air your responses throughout the morning. Simeen . Lets send it over to dom chu for a market flash. I dont know what i would sell used to walmart, but thats just me. Lets talk about shares of americas big equities exchange, this is u. S. Attorney general Eric Schneiderman called curbs on services to High Frequency traders. The New York Stock Exchange which is owned by intercontin t Intercontinental Exchange and omx group are toward session lows. Nasdaq is one of the worst perform areasvers in the s p 500. Exchanges allow faster access to data for a fee so call High Frequency trading firms use the services to try to trade with enough speed to get ahead of other Market Participants but the exchanges are very much in focus. Dom, thanks so much. Vladimir putin slamming the u. S. And its allies calling for an end what he calls cold war rhetoric, well get a live report from kiev and well find out what the words mean to the Global Markets. Op 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. Welcome back. Russian president Vladimir Putin slamming the United States this morning in a joint session of parliament criticizing western exceptionalism. Cnbcs Steve Sedgwick is live in kiev with the very latest there. Its not the first time weve heard president putin say that phrase. Whats the very latest . Reporter yeah, the west got it in the neck today. It was the west has overstepped the mark and has lost its political sense. Also the kiev government getting it as well saying actually dont trust people in the kiev government who say we have designs on other regions as well. Clearly he said theres no legitimate power in kiev and he said its full of ulty nationalists and antisemites and impostors as well but the key message which could be the first olive branch from russia in this whole crisis is they do not have territorial designs according to mr. Putin on the rest of the country. He has full de facto control of the crimea within 48 hours to the rest of this week im hearing different time frames it could well be that the crimea is part of the russian fed ration as far as russia is concerned and the rest of the world is i sai in saying this referendum was illegal. There is one olive branch by the fact that there might not be more military action. Yatsenyuk here in the ukraine has been speaking to southern and eastern regions in russian today. He spoke to them in russian and said we do not want to have immediate nato joining. Thats not on the agenda and thats very significant as well because if hes saying that nato will not be on the boarder of russia and the russians are saying they dont want territorial gains in the rest of ukraine that could be something said. We want to pick owp that point because certainly investors are concerned about that. For more on the market implications lets bring in cnbcs chief International Correspondent Michelle Caruso cabrera, so far it does seem like things are calmer in Global Markets but there are still major uncertainties. Were waiting to hear from the white house and whether or not theyll respond immediately to the fact that right after Vladimir Putin finished his speech, the signing ceremony happened right away. The white house implied yesterday and Senior Administration officials implied yesterday that if indeed the annexation was announced today there would be another round of sanctions and well wait to see what comes out of washington today. But lets roll the video because the signing ceremony happened immediately afterwards. This is the beginning of the ceremony. Three crimean officials sat on the stage, beautiful white desk, the mayor was there as well. When it was all said and done. It was extremely rapid. The u. S. Markets climbed at a very particular moment when Vladimir Putin during his speech said that he did not want more than crimea. Dont trust those who say we want more than crimea. We dont need it. We saw an immediate improvement in the u. S. Futures and then lets show you what happened with the russian markets as well. The russian market and this is an intraday and reflects the time zone in russia, in moscow. This is the one year. Rallied pretty sharply at that moment and then the ruble as well improved and that has struggled for a long time. I want to tell you the other headlines this morning. Mikhail gorbachev, the whcalled referendum a happy event. The ukraine Prime Minister said we dont seek to join nato that will be important for the russians and for the Financial Markets reuters reporting the central bank has no plan to introduce capital controls to defend the ruble. The minute youre saying that kind of thing you know that theres a problem with capital flight. Lady and gentleman, back to you. Michelle, thank you. Michelle caruso cabrera. Up next more details trickling out now about the missing Malaysian Airlines jet. Was the flight diverted deliberately . Some experts are starting to think so as youre aware. Well have more on that after this break. Does it end after youve expanded your business . . After your companys gone public . And the capitals been invested . Or when your companys bought another . Is it over after youve given back . You never stop achieving. Thats why, at barclays, our ambition is to always realize yours. New details emerging about Malaysian Airlines flight 370. Authorities now confirming that the first turn of the flight was made using the jets Computer System rather than its manual controls. Nbcs kier simmons is live with the very latest, kier . Reporter hey, scott, good morning. Thats some of the news here. And also the news that the authorities are saying that they do not believe there was anyone else on the flight who would have the capability to fly a 777 other than the pilot and the copilot, so increasingly the focus on the pilot and the coby light. While they are still saying they are investigating everybody on the plane, the crew and the passengers and the mystery seems to deepen every day. Weve spent time today at the pilots house or near the pilots house because he actually lives in an jawp scale neighborhood, a gated community, so you cant get past the security guards, thats the kind of lifestyle he has. He has three children, one grandchild and friends are saying, look, this is just implausible. Why would a man with all of that want to commandeer his own plane as he appears to be investigated for and do Something Like this. They just say it isnt likely. It doesnt fit with his personality which is friendly, warm towards people they say. The copilot also reports that he has a girlfriend, possibly a fiancee, and his friends, too, saying it doesnt make sense, he was a happy guy. So, we continue to have this mystery. We still dont know after all this time what happened to the plane, who exactly was flying it and why. Back to you, sara. Yeah. And the motive. Plenty of questions remain, kier simmons, thanks for the update well continue to go to you live in kuala lumpur. Ahead, Kenneth Rogoff joins us live to talk about the fed meeting and Janet Yellens first News Conference and more and the author of the highly anticipated book about apple after steve jobs join us live here at post nine for a first on cnbc interview. Squawk on the street will be right back. 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. Youd do that for me . Really . Yeah, id like that. Who are you talking to . Uh, its jake from state farm. Sounds like a really good deal. Jake from state farm at three in the morning. Who is this . Its jake from state farm. What are you wearing, jake from state farm . [ jake ] uh. Khakis. She sounds hideous. Well shes a guy, so. [ male announcer ] another reason more people stay with state farm. Get to a better state. [ male announcer ] another reason more people stay with state farm. At a company thats bringing media and technology together. Next is every second of nbcuniversals coverage 0f the 2014 olympic winter games. Its connecting over one million lowincome americans to Broadband Internet at home. Its a place named one americas most veteran friendly employers. Next is information and entertainment in ways you never thought possible. Welcome to whats next. Comcastnbcuniversal. One hour into trading and here are the stories were talking about at 7 30 on the west coast and 10 30 on wall street. Satya nadella may unveil a microsoft Office Software suite. Video Game Retailer gamestop the biggest decliner on the s p 500 down 4 this on nups that walmart will allow shoppers to trade in used video games from anything from groceries to gadgets across its 3,100 Stores Starting on march 26th. And General Motors naming jeff boyer of vp of Global Vehicle safety a newly created position this in the wake of the recall of 1. 6 million vehicles for faulty ignition switches leaded to 12 deaths. The Federal Reserve begins its newday meeting the first for janet yellen and many are expecting a shift of communications, and excited about this one. Lets get to Rick Santelli in chicago. Hey, rick. Hi, sara, and thank you. Id like to welcome or special guest professor ken rogoff, thank you for taking the time today, sir. Thank you for having me. You encompass two areas that are going to flow with the topics i want to us and and that is education and economics. Ro if you have ten kids in your class and they all get a 67 on an exam you would probably have to grade on the curve 67 if its the high score is the a. And theres another school of thought 67 isnt a passing grade alone. Many evaluate the u. S. Economy relative to other advanced or developed economies. Do you find that a just way to handicap the growth and the status of the u. S. Economy . Well, i think the status of the u. S. Economy looks pretty good if you are comparing it to other advanced economies. Weve, you know, been growing faster. We have population growth. If youre going to compare it to china, its another matter, but obviously theyre catching up. No, i think we look pretty good on scores like that. The question is we carry a lot of burdens. The defense of the world. Were the leader of the world and will we continue to have that leadership. Thats something i think we should. But that requires a lot of youre right with me. Okay. Now, lets veer off down a path, okay . Lets forget all the rest of the economies and look at the standalone u. S. Economy. I know that debt is a topic youre familiar with and i dont want to parse details, but if you have debt youre not going to grow quite as fast as if you dont. I guess what im getting at things like entitlements and Social Security and medicare, health care, the population, some of the metrics we see on jobs and demographics, forgetting relative value is there enough horsepower in the economy as it is now to take care of the revenues were going to need for the next 15 years . Well, the as it is now is the big qualifier, rick. I mean, there are things we need to do to make our tax system more efficient, more rational, to invest in infrastructure and education. If we do those things, yes, absolutely. On the other hand, if we sit on our hands the way we have the last many years if we dont do the changes and reforms we need to do, i mean, well slow down and start facing more painful decisions sooner. All right. Well, on an election day in chicago, where were one of the worst cities with regard to things like ratings and potentially funding our underfunded liabilities, youre at the heart the epicenter, okay, if i look at the fact that we have a Democratic Administration for the past five, six years it doesnt seem like theres a willing ins to address some of the issues. As a matter of fact, shortterm fixes like, you know, 40 hours and beyond you get more pay, minimum wage i understand we need to slice the pie smaller if it cant grow. But do you see any will to address some of these issues by either party . Well, i think actually both parties have put out good ideas, but even when theyre the same they dont seem willing to agree on doing them together. Weve been in complete paralysis. I mean, the republicans have recently made tax proposals not that different than some president obamas put forward and yet i dont know if theyll come to an agreement because they dont want to be seen to be agreeing. I think if theres a political paralysis, there have been ideas, id like to see more action. Well, listen professor, we have about 30 seconds left. When the Federal Reserve looks to give us forward guidance, it looked to me like theyre changing their mind on the credentials and the horsepower of the u. S. Economy based on unemployment. Do you have any words of wisdom for janet yellen . Well, she certainly has a tough job convincing markets that when they see some inflation as they may, you know, a year from now, say, that the feds not go to start moving quickly. Thats the big concern as she gives her First Press Conference how does she assuage markets that she intended to stay the course, wait not tighten quickly so that Interest Rates dont go up ahead of her ahead of what she wants. Well, professor, thank you. Were out of time. But i think right now looking at the economy from a global perspective, maybe a rise in rates should be the thing she fears the least. Thank you for taking the time today. Simon, back to you. Thank you. Thank you very much, rick. Up next, the author of the highly anticipated book haunted empire, apple after steve jobs. Shell join us here at post nine. Find out why in her view she thinks the tech giants success cannot continue without jobs. Were back after a quick break. 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. 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. [ 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. [ indistinct shouting ] [ male announcer ] time and sales data. Splitsecond stats. [ indistinct shouting ] its so close to the options floor. [ indistinct shouting, bell dinging ]. Youll bust your brain box. All on thinkorswim from td ameritrade. One of the most anticipated new books about life at apple in the two years since steve jobs death is being released today. In haunted empire apple after steve jobs former wall street Journal Technology reporter yukari kane looks to answer the question can apple stay great without its iconic leader. Kane interviewed nearly 200 sources including current and former apple executives and employees in researching the book. Yukari kane joins us live on a first on cnbc. You broke the story about the ipad and the liver transplant that jobs was going through and you broke the story about the new iphone the cdma that would break at ts monopoly. I did. The did you want to do with this book . I wanted to explore what is going on now without steve jobs. Its a huge transition for apple and its a difficult one for any company that loses its founder but i thought that apple was particularly interesting because out so high profile. And you do contrast notably steve jobs against tim cook. You say that theyre polar opposites. If job was the star cook was the stage manager. And you say theres a healthier working environment and a more open environment internally. Yeah. But still you raise that central question. Is cook up to the job. Yeah. You know, steve was was a particularly huge force of personality and so when you lose that, especially when tim cook at the polar opposite, how do you how do you compensate for that . I think thats a big issue. Yukari, correct me if im wrong here, but your premise seems to be that apple is on decline because after steve jobs no one has the moral authority to take the risks that apple might need to take to drastically change direction. Moral authority is kind of a squishy concept. Are you saying that tim cook wouldnt have the support from the board, that shareholders would revolt, that employees or executives wouldnt back him . His glass door ranking is just two points below larry page, way higher than larry ellison. What do you mean . I just think that hes under more scrutiny from all of those people because he is a hired manager and its different from steve. Steve founded the company, saved it, and he can say, you know, lets bet the company on x, y, and z and whos going to argue with him . Whats the biggest you found from apple now poststeve jobs than when he was running the show . I think theres just much more process. Everything is logical. I mean, if youre talking about about the bigger visionary innovation issue, you know, who my question is who is the decider at apple now that steve is not around. I just cant imagine it being tim. Thats a perfect segue to where i wanted to go. Do you feel as though you give enough credit to johnny ive and where he wants to take this company . A gentleman who has been there for two decades and who ate lunch with steve jobs every day . If there was one person within apple who really could get inside of jobs brain and understand exactly where he wants to take the products and the company at large, that thats the guy . Do you give him enough credit . You know, i think i think its possible. I think its still too early to tell, you know, steve used to say that he stood on the intersection of technology and liberal reports and i dont think theres one person that embodies that today and can decide. And how well are troops following them. You know, i personally am not sure that jony has that where does the doubt i guess come in . I mean, if anybody is going to push the creative envelope poststeve jobs at apple presumably it would be jony ive, hes not going to let a single product out of that door unless it is to the utmost quality as if steve jobs had signed off on it himself. Well, you know, i think i think first of all, i dont think that jony im not sure that jony has the following inside the company that steve had. Steve says were going to go this way, and all the troops follow, right . Because its his company. And i think jony is theres jony certainly has a lot of authority at apple. But there are others that if i read what you have here, tim cook has authority. I mean, you can criticize him for being too steely, but he runs the meetings with an iron rod and people are trembling within them, so someone does have authority. Heres the question, people die within organizations, colleagues die, people die within families and it changes and its never, ever the same again and thats where your book seems to take us. Right, right. And the next question is i wonder if you have the access to the dna of the organization whether that family or that business can reinvent itself and become Something Else and become something as good as dare i suggest it better down the line . And im not sure, correct me if im wrong, that you have the access to, for example, jony ive who they put up with the sunday times and hes talking very freely about the products he expects. Theres a great quote that he suggests its new, theres a lot of new stuff in the pipeline to come. Did you interview him . No, i didnt. I tried. But i talked to dozens of people that worked closely with him as well as the other executives. In some ways it gives you a better view, it gives you a 60degree view not just of what they think of themselves. Jony and tim cook and others have spoken on the record in interviews and i had access to those, so i know what they think but i also want to know what people around them think about what they say. Do you think an issue would be more that theyre shell shocked by their success and afraid to fail or that theyre just not capable of creating hits at the level that they did before . You and i both covered apple years and years before. They had the cube under joes and the imac dv when they should have been doing music, mobile ping, they had failure under jobs. Arguably their batting average is higher now. Is the problem that theyre not taking the risks or that they cant create the hit product and could it be that theyre just waiting longer . You know, i think a big problem is perception. I think that steve jobs had this singular ability to persuade people that what apple made was insanely great. And without is that our problem or is that their problem . Without him apple is just less convincing. One of the things people are talking about out of your book a surprise revelation that perhaps apple wasnt going to make the next new tv or that steve jobs wasnt that enthusiastic about changing the television landscape. How did you get that anecdote and i wonder if it tells us what we can expect from apple . I started checking with other people there as well and people who had known steve in a long time took it in a more measured way and the message that steve wanted them to focus on whatever they were focusing on at the moment, you know, my takeaway is, you know, who knows what steve thought, but, you know, he canceled the ipad three times before he went ahead with it. So, you know to be clear hdtv, theyve grown past that. They would say apple tv is more software and more ecosystem theyve gone beyond the simple hdtv. It raises the question is it still sort of what would steve do mentality at the shop or are they able to get to a new place where they could do a television . I think there still is and i think what part of the challenge is that everybodys got different ideas about what would steve do. I saw that myself in my interviews and so the question is, whose version are they going to take and whether the troops will follow. What do you think steve jobs would have made of your book . Oh, he would have hated it im sure. Its good to see you. Thank you for coming in. All right, coming up next, squawk on the street is going to the frogs. Come on everybody later on squawk on the street sequel thats what we do in hollywood thats right, the muppets are back. When do i do the indoor running of the bulls . I cant watch. The one and only kermit the frog joins us next with an interview that will leave you wanting more. Yeah. No more. When squawk on the street returns. Theres a new form of innovation taking shape. At a company thats bringing media and technology together. Next is every second of nbcuniversals coverage 0f the 2014 olympic winter games. Its connecting over one million lowincome americans to Broadband Internet at home. Its a place named one americas most veteran friendly employers. Next is information and entertainment in ways you never thought possible. Welcome to whats next. Comcastnbcuniversal. Welcome back to squawk on the street. Game stop shares are under pressure as retail giant walmart plans to let shoppers trade in used video games in return for walmart gift cards. The games will be refurbished and made available or customers. What happens when the worlds biggest retailer wants a piece of your action . Shares certainly reacting to that. Up next on the show, legendary muppet and star of a new movie, kermit the frog will be joining us for a live interview you cannot miss. Interview you cannot miss. Were back after a quick break. Well, he is no doubt americas most famous frog and head of disneys new muppets film, we are excited to welcome kermit the frog to squawk on the street. Kermit, this is a first. Good to have you. Oh, im sorry. Im sorry. I u. S. Adjusting my collar. How are you . Its good to see you. Ive been watching you since afs little kid. You dont look a day older. Whats your secret . Well, my secret is, i try to stay moist. Thats very important for a frog. I do a lot of travel. I discovered a great way to travel to get some rest. I usually fedex myself. You fedex yourself . Thats a good one. We want to talk about your new movie, kermit, thats out. Whats it like working with disney and being the star, almost too protagonist in the movie. This is an exciting one. Well, listen, its wonderful. I have three wonderful costars. Theres ricky gervais, tina fey and ty. But i mostly worked closely with tina because i end up being thrown into a russian prison in this particular story where tina is the sort of the war den of the goolog. Who is funnier, rick y gervas or tina fey . I would never choose a favorite but their styles of humor are different. Tina is broad in the movie and low key off camera. Ricky is more low key on camera and a lunatic off camera. You know, im wondering, kermit, are you and the other muppets using twitter or any forms of social media to spread the word about the movie . You really want people to see it, right . Well, i think piggy has been twittering and many others have been tweeting and doing all those wonderful things that you do. I personally am a lousy thumb typer. I very moist fingers. I keep dropping the phone in the swamp. So i have yeah, i havent gotten there yet. Thats funny you say that. I think i read that you use an iphone in the swamp which is, i dont know how that works, but im curious no, for me, i actually use a pad. I dont really use a phone. Yeah, i bet. Maybe a lilly pad. I want to ask you about something. Were down here on the floor of the New York Stock Exchange. Ooh. When you hear the word muppet, i know you were here yesterday ringing the opening bell. Yeah. When we talk about much mets down here they have a different connotation these days on wall street. Grig smith, a guy who left Goldman Sachs and wrote a book on it actually compared Goldman Sachs clients to muppets. I think we have the exact quote. Over the last civil months ive seen five different managing directors refer to their own clients as muppemuppets, sometin over internal email. What do you think about him using that in a derogatory bay . Im not sure its derogatory. I think he was saying that his clients are consummate professionals, very organized, some of them might have been green. They certainly deal with green. And they obviously would never say anything derogatory about miss piggy. Have you ever been inside Goldman Sachs headquarters, kermit . I have not. I have not. I would go there. I would go there. It sounds like a nice place. How us with it to ring the bell on the New York Stock Exchange . It was wonderful. And i should add that miss piggy thought that Goldman Sachs was a jewelry store. Shes a little out of touch. You guys are not married, correct . I know theres a lot of talk about that. Were not married. Thats a personal question. Its been a long relationship, kermit. I mean, does that mean theres no hope for a blond like me . Well, of course, of course, there is. And i will say that scott is right, it is a personal question but im happy to share it with the two of you. Kermit, lastly before we run, march madness and Warren Buffetts billion dollar bracket challenge is out there. Im curious as to who you have winning the whole thing, whether youre on the florida band going on they do have a lot of swamps in florida, by the way. I actually live north of there. Im afraid im on bliged to go with florida just because of the swamps. But ill tell you, its tough to do that sort of thing in the swamp because its all wet around your feet, you know . Yeah. All right. Kermit, it was great having you on the show. Stay moist. Thanks for joining us. Good luck with the movie. Hope you enjoy it. Ladies and gentlemen, kermit the frog on squawk on the street. Simon, over to you. Im so envious of you guys doing that interview. Career highlight. No miss piggy to premier the film, guys. Is there something we should know . We dont know. No . Thank you very much. Lets move on with the show. If youre just tuning in, good morning. Heres what you might have missed if youre just tuning in right now. Welcome to squawk on the street. Heres whats happened so far. We should be focusing on our numbers, our numbers are good. Our country is stronger than we thought, which is why our markets go higher. As important as we think the fed may be its less important given the fact the tenyear is doing nothing. We have to stay the course oh knowing the fed is not our enemy. The fed has not been our enemy and remains not our enemy. There is the bell. The labor market, david, didnt come in as strong as many had hoped. But some of thats got to be you cant build buildings in a snowstorm. When it comes to short end of the yield curve the fed isnt going to be raising rates any time soon. Anyone that thinks that is delusional. And good morning. It is 11 00 a. M. On the east coast, 8 00 a. M. Out west. Heres what were watching for you this morning. Microsoft office on your ipad . Yes. A new ceo potentially a new strategy. Why microsoft is planning to open its ward. More confident america. Ceos seeing increased sales, so why arent they hiring or increasing their spending . John engler will join us on. We have a winner, not in your bracket. The top chef master will join us on the highs and lows of his food empire. It just got a little harder to hail a ride on your phone in one city, at least. The ceo of sidecar is with us later this hour. Good morning. Im kelly evans here this morning with simon hobbs. And on microsoft strategy shift we begin this hour. Software giant may introduce Microsoft Office to apple ipad. Officials have yet to confirm reports out there but jon fortt is with us. Maybe he can. Jon, what do you think about all of this . I think that this is a really exciting potential announcement. Well have to see the details. Its subject that i raised with with Satya Nadella before, before he became ceo. Hes not as window centric as steve was. The key is how much they make available on the ifripad for fr. Theyre a bit late to the party. For free . Yeah. You expect to see some available for free and then theyre going to try to pull you into office 365 into upgrades to pay. They have to make something available for free for this to be much of an opportunity at all. Apples Productivity Software is already free on new ipads. Apples Productivity Software there is not excel, its not microsoft word, and granted microsoft missed a step here they should have done this years and years and years ago. That said, why would they, for these products that have huge following and huge usage still among much of the population make any of that available for free except on maybe a trial or intro or intermediate basis. You sound like Steve Ballmer. The issue here is these are huge products of the pc era. They were so much tied into windows and how you got productive on a pc. P mobile era is different. Some other folks, google, apple, and others have moved ahead with different kinds of product tv y ity suites. If microsoft wants to have share here,nd why else would you make this play, they need to do something exciting and break from that. Hasnt the whole story bowled . The competitors have come mod advertised this area, if what youre saying is correct. They cant charge. Well, i think they can charge something because microsofts Productivity Software is still better. For people who really want to be productive, theyve got long legacies in excel and other software. Use that on an iphone . I can barely type. Talking about ipads though, simon, much bigger and plenty of people who need that software within a lot of these communi communities. Google docks are a lot of competitors but no one has it quite the way microsoft excel does. Microsoft has done an admirable job defending its empire there in office. You think about how longing goal has been trying with dox. They have not taken microsofts market share. Office 365 is doing well. The cloud offering if they can extend that into mobile in a smart way, it will be huge for Satya Nadella. Lets bring in coexecutive director of re code. Walt, it great to see you. We want to get to a review of a new product out there with you. First, can you weigh in on this microsoft issue . Should they make any of this Software Free to use on the ipad and could this be transformative for microsofts business . Well, i absolutely agree with jon. I think they have to make some level of it free for two reasons. One is, remember, ipads are quite prevalent in business and in education. Those are areas they got to continue to solidify office in and bring office into a new touch era. They havent even made a full touch version of office for their own, you know, surface tablets so theyve really got to do this. But i would say Something Else. Theyve got to do a better job in the ipad version than any iphone version that they released last year, which was very bare bones compared to what apple has and not just apple but thirdparty companies that we mentioned. Their product was fairly fairly, you know, simplistic. And i think so they have to suck people in with some free level. They have to make it really a tablet thing, not just a stretched phone thing. Right. They have to have features. They really have to have features. Ill say one more thing. Success here doesnt just keep the Office Franchise going but it bolsters their whole new Cloud Initiative with one drive because these things are set up to automatically save to their cloud servers. So it locks people into their clouder is i haves. Jon fortt, you could argue in microsofts defense that maybe we just got now got point where have the Cloud Infrastructure available and devices like this ipad makes this the moment to do this even if perhaps a couple years ago would have been the wiser move to get ahead. Ive heard that argument but they could have done it two years ago. They should have done it two years ago. Walt is right, they need to change the way theyre doing engineering and commit the resourcesnd the createivity to doing an app that lives in the touch environment. Not one thats just kind of got some features scraped over from the desktop. Okay. Changing gears. We want to switch and do our re code review. Next app allowing you to text. Can it compare to whats app, google or skype . Its called people con neknect it lets you use your phone on any device. Looking at your review online i see it has dropped calls, three cents a minute. I cant figure out why i would have interest in using the product. Heres the problem its trying to solve. Its basically saying youve got a phone but youre sitting a t computer all day with a bigger keyboard and you may not want to constantly reach for your phone. So people with macs have experienced this imessage thing where its on your mac, its on your ipad, whatever you happen to have in your hand, you can do texting. Its limited to apple products. Theyre trying to say, lets let people have that experience on whatever pc they have prks whatever mac they have through the browser. And not only texting but phone calls. I can call you from this thing and it looks like youre getting the call from my phone number on my phone even though im on a computer. And son thats the problem theyre trying to solve. Theyre trying to take the pc and take the two key elements, texting, regular sms texting, not whatsapp or imessage or, you know, one of these services where you have to belong to the service and have some special app. But real texts and phone calls and put them on a computer. Jon fortt, do you see the appeal here . Well, this is the sort of service that the enterprise has offered for a while, cisco, microsoft have been trying this unified communication thing. I know it definitely has its uses within that environment. My question is, how much of a market there is for it in the Consumer World where there are so many other tools to piece to the and approximate this experience. Walt, what do you say about that . I just think you may be right, jon, but these people are betting on the appeal of universality. I dont have to have a second virtual voip phone number. Im using my real phone number. Secondly, i dont have to worry or hope the other person is in the same service as i am, that were using we both have whatsa whatsapp, lets say, or a group me or one of those things. And i can just i can just send a regular text, which is already universal. And it does come through on a phone as a regular sms text. Walt, i use google voice for this and i get pretty much that experience. I mean, i can sit at the computer, you know, log into google voice and send texts that way. Granted, i had to switch everybody over to that google voice number to get there. Whoa, whoa, whoa, jon, thats the point. These guys are trying to be different by saying nobody has to be switched over to a new number. If they know your number, it looks just like its coming from the phone. All right. So, walt they may fail, but i thought it was an interesting enough product to tell people act. Borrow on over used phrase, but in a world where we have so many different options, would you recommend that people spend their time using and getting to know this option over the others that are out there on the market . Final word. This thing needs work, but if they fix it, if theyve only been out of beta since december, yeah. Because you dont have to get used to anything. You dont have to change your friends or anyone else to any other thing. It just works. The other people dont have to have this software. Theres something to be said for that these days. Thats for sure. Walt mossberg, thank you. Microsoft shares was going to be to the point were raising earlier. Up almost 4 in trade today. Just a reminder, Nbc News Group is a minority stakeholder in re code and have a content sharing partnership. Simon . Ceos of ceos next, john engler will join us on reemerging corporate confident. Fu irs, Rick Santelli, what are you working on . Spring is just around corner. When you have springtime you have baseball. You know, theres an orphan that changed the game forever, his name was George Herman ruth, the babe. Theres another orphan thats changed things, its called the energy. And itting change has been dramatic. Were going to talk about orphan energy at the bottom of the energy at the bottom of the hour. Welcome become with breaking news. Lets get straight to mandy drury at the news desk back at headquarters. Mandy . Were just getting news in now and first pictures as well. News chopper has crashed. Its run by both king and komo. Its a few feet away from the Seattle Space needle on broad street. We are hearing that there are casualties reported and two dead are arrival. Were not entirely sure what happened to the crew of the helicopter at this stage. As you can see in the pictures there, there are some Emergency Personnel on the site there. There are apparently huge flames and also three cars on fire and black smoke pluming from the crash there. As i say, Emergency Personnel are on the scene and hopefully theyll be able to ascertain exactly what happened here. At this stage, were also hearing from the seattle fire department. They have tweeted out there is also a male in Critical Condition that is being transported to hospital. Obviously this is a developing story. Were not entirely sure what happened. Those are the first pictures of the news chopper run by king and komo. Kelly . Such a shame, mandy. Thank you very much. Well continue to watch headlines and update you with more on this story as it develops. Look at the health care sector. Its one of the biggest winners in the wp wp today. Dominic chu back at headquarters are more on this one. Health care is now the best performing sector right up there neck and neck with technology as the best performing s p 500 sector. The single best performing stock in the sector is a hospital operator, tenet health care, up over 3 on the day. Positive comments from analysts there. And Biotech Company Gilead Sciences is up as well. After losing 12 since this recent highs here. Activists up as well on positive comments from analysts at bernstein. Vertex pharmaceuticals and sure, wellpoint rounding out the top five. Nice a cross section, if you will, of the entire sector, simon. Back over to you. They have had a wonderful run. Thank you. Were getting a read on the economy from the nations top ceos this morning. Business roundtable survey from the First Quarter of this year showing 72 of ceos anticipate sales will increase in the next six months. Only 37 expect to add u. S. Employees. Here in a u. S. First on cnbc interview to sbrak down that data is john engler, president of the business roundtable. Hes also, of course, the former republican governor of michigan. Welcome to the program, governor. Simon, good to be back with you. What do you make of your survey . Well, i think we looked at the cap x number, that one jumped a little bit because i had a 9point bump. And the numbers about the best weve seen in three years. The index itself has been languishing the last year in the low 80s. Now 91. Thats better. What i would say is that theres modest optimism with gdp still quite up 2. 4. Thats a little on the low side. But i think its a recovery, not as robust as we would like. Not what we think the economy has the potential to do. But all in all, moving ahead little by little. We should mention, of course, that actually theres quite a strong correlation between the work you do here t and gdp, morgan stanley, ubs, also, to quote the results of your survey. What do you think that were not doing better . What is the fundamental reason . Do you dare contemplate your own ceos and say we as a group are failing to invest properly . I think what stevens said on the Conference Call this morning is, look, we still think the tax reform, immigration, trade, all of those are important drivers and would lead to greater investment if we could make progress. The fiscal stability all helped. That got a lot of noise out of the background. But that positive momentum were still at a disadvantage in some areas and we need to step out strongly. And some of these are all pending here in washington. And the Congress Administration that can get together we can give the economy a boost. 3 1 2 , 4 is not unreasonable but its got to be built on confidence which comes from a set of positive actions that will lead to the investment. Governor, it strikes me as leading through your survey, youre almost underplaying the improvement here with regard to what your members are saying. The headline of this survey is slow gdp growth and modest increase in sales. If you look at the index level its a reading of 92 compared to longrun average of 79. Were talking about a 14point jump in the cap x Spending Plans from this your a year earller. Sixpoint increase in employment. Were not maybe where we want to be in all of those components but i think the message here certainly is weather was a passing phenomenon and there is strength that your numbers are telling you here in the u. S. Economy. That good point on the weather. Survey wrapped up in february. It was right in the middle. No question there were components that go into this survey that were probably really on ice, if you will, in that First Quarter. We think housing is an example where we dont break it out but i would think we see greater strength there in this quarter. Now, i do think though that we want to be not at all premature and so decliring some kind of victory of Mission Accomplished here. Look, theres a lot to be done in what is undone could be hugely important. We just complete a study on the implications of comprehensive tax reform and we think thats a huge probably the single most important thing we could do to really give this economy a shot in the arm. Governor, we had alice rivlen on in the last hour of the show and former vice chairman of the Federal Reserve. Im sure you know her well. I was asking her why in the recent nbc survey 57 of the public felt the economy was still in recession when technically its not. And she said one of the major problems that we have at the moment in her view was that republicans, or people with republican sympathies, are dead set on basically overplaying the difficulties that we have in the economy and not actually recognizing its strength and therefore misleading people and in itself perhaps creating less economic growth. Do you think you might be guilty of that . Do you think you might be guilty of that . I love sock of the work alice is doing trying to get this fiscal mess straightened out but i think the data, not the political answer, is 63 participation of the workforce is the lowest its been in decades. And to get people back into the workforce, millions that are in parttime jobs like fulltime jobs and millions more not working at all. Thats why people dont think theres a recovery and theyre not seeing the kind of robust hiring. And even in this survey, while the number stayed consistent with where its been there wasnt a big jump up in hiring. Id love to see that come because that will follow the investment and thats how you get millions of people back to work or in better jobs. Thats what we need. Although i see that its 64 of your ceos do think that might happen. Its good to see you, gov ver. Thank you for joining us. Thanks for the opportunity to talk about the survey. Thank you. Now coming up, were going to talk to the cofounder and ceo of a ride share startup and whether his business can survive the regulation coming out of seattle. Were now up 100 points on the dow. This partly, of course, because we havent had any military action in the ukraine. Sigh of relief yesterday and indeed again today. Can we hold up the headlines will probably determine that to some extent today. Were watching things like the dollar, simon, the tenyear Interest Rate to keep an eye on what traders are doing. Lets get straight out to the cme group now. Rick santelli with the santelli exchange. Good morning, rick. Good morning. And as we go into the first day of a twoday fed meeting ive written or excuse me, i have read so many articles handicapping the u. S. Economy. How the u. S. Economy relative to other economies, you heard professor today. Were just traunching the advance to economies and were keeping up with the advancing economies like china to developing economies and in the end, it really is all about the horsepower of an economy, whether its relative to other economy or in the big picture if you need revenues and you need expansion and you need a bigger pie, it isnt just benchmarking against others. Its growing on your own. Remember when your mom, you say, just because jimmys walking over the edge of a cliff doesnt mean you have to follow him. Sometimes you have to stand alone. And one stand alone area in this country really is energy. You know, yesterday wall street journal had a great piece. Didnt have anything to do with energy. But it did have something to do with drones and governments and they brought up something regarding the internet in the early days. Remember that Elizabeth Warren and president obama line, you didnt build that . Well, lets take a look. Lets show it on the screen. A handbook issued at m. I. T. In 1992 warned it is considered illegal to use the arpanet for anything which is not in direct support of government business. Sending electronic mail over the arpanet for commercial profit or political purposes is both antisocial and illegal. That was in the early days of the internet. When you have a killer app, the problem is you have to apply it. Now, when it comes to energy, everybody thats writing about the economy seems to say and the big spot is energy, energy, energy. But i went back. Whether its an analyst, economists, or pundit or reporter writing about a relatively good economy, they never were really for energy. As a matter of fact, many of them sided more with the Climate Change crowd. To me, there is nothing about an economy, theres not one thing about an economys output that doesnt resolve around energy. But fed programs, tarp, stimulus, these are all the things we concentrate on. Who is the champion . Who is the benefactor for energy . Politicians take credit for it. But in the end, whether its the renaissance in manufacturing or not, the one part of the economy nobody really cares about is the part thats working and where we expend all of our energy isnt. Gee, maybe a light bulb ought to go off, if theres enough energy to make it go off. Back to you. Rick, thank you. Coming up on the program, hes cooked at the white house. He was nominated for an emmy. A champion certainly of Members Company cuisine, chef rick bayless will join us on his cookbook and the guam molly that kelly evans so distraught. Were up 98 points on the dow. At the moment one of the major reasons fwor that is the ukraine. Russian president Vladimir Putin signing a treaty today officially annexing crimea and making it part of russia. He did go on to say that he has no plans to seize any other territory in the ukraine. Lets go live to kiev and to cnbcs very own Steve Sedgwick. Is that a sigh of relief where you are . A lot of politicians ive been speaking to, they will see. They want to wait and see whether there are more designs on yeaeastern ukraine. Theres been provocation, supporters in the east of the country. There are concerns there will be human rights excuse for Russian Troops to go into that part of the country at some stage in the future. For now president putin saying we have no designs on the rest of the country. We recognize in russia your territorial integrity. That is seen as a sign of relief. Having said that he was giving both barrels to the west saying you over stepped the mark. Saying the government in kiev was illegitimate. If he believes that still im not sure how were xwoog to get diplomacy between kiev and the kremlin as well. Whats interesting is he was talking on n. Russian on air today to the southern and eastern regions of this country offering them more autonomy, more federalism, and saying that nato membership is not on the agenda. And that may be an olive branch in the direction of the kremlin as well because, of course, russias concern is that nato would be on its borders as well. So potential good news there on the territories statement from the russians and the nato statement from the ukrainians as well. But, of course, the west is still smarting at this de facto annexation of the crimea after that. 97 vote by crimean as well which many in the west are concerned ability how strenuous that one was regulated. Joe biden has been talking in who poland as well. William hague has been talking about a g7 meeting in the hague next week. And thats very interesting. G7 as opposed to g8. It was supposed to be a big g8 meeting hosted by the russians in sochi in june. Now it looks really very much in doubt as well. And simon and kelly, as if we didnt have to learn enough about ukraine over the last couple weeks, try 24 one. Trans denista. Its a slither between moldova and ukraine. Apparently they have asked the russians if they can join the russian federation. It goes on. Back to you. Oh, maybe we could send you there next then, steve. Have fun. Steve sedgwick joining us right there. How about sending you, simon. No way. Those days are over. Thanks, steve. Move over, game stop. A grand new retailer. Plus, its a new version of the iphone potentially coming out a little sooner than we thought. More on that when squawk on the more on that when squawk on the street comes back. Coming up at the top of the hour, the new York Attorney general Eric Snyderman is pushing for major high prequincy trading reform calling it worse than gordon gecko. A new breed of predatory behavior. Hes going to be here live at noon first on cnbc to explain exactly what kind of refompl he wants. Plus, is there new hope for old tech . A new plan announced by microsoft and apple today might make you think so. Were going to find out how to play that. And much more straight ahead from right over there. Thats a great show, scott. Thank you. Walmart is the Worlds Largest retailer and now it has its sights set on a new venture. Video game tradeins. Courtney reagan is back at hq to explain why. This is interesting, courtney. It is on a number of levels. Its game on in the world of preowned video games as the Worlds Largest retailer enters the arena beginning a new tradein program. Later this year walmart will resell the refurbished games in store and online. 3100 Walmart Stores will accept used games on all the may jr. Gaming systems giving consumers a walmart gift card in exchange. Shoppers can use the gift card at walmart or sams club allowing them to buy almost anything from groceries to pillowcases. Walmart hopes the program will generate foot traffic, help it capture a larger share of new release games staels, too. But the bigger question may be the impact on competitors that currently offer them like gamestop, best buy, amazon, and eb ebay. No surprise, gamestop shares getting hit today. Twothirds are used games which significant margin boosters as well account for half of the gross profit. Even though the video Game Industry saw total sales fall 17 over the holiday season, gamestops used game sales increased 7 over that period. When i asked walmarts u. S. Chief merchandising officer why theyre getting in now as Online Gaming continues to take share, look, walmart currently isnt taking any share of the 2 billion used video market right now. They arent surprised game stop is getting hurt, but to execute a buy, sell, and tradein video game program for big retailer like walmart is notoriously difficult. When they did a trial in 2009 with kiosks it didnt work so well, at least not in that model format. Courtney, that may explain why not much of a reaction in walmart shares this morning. Only up a quarter of a percent. Thank you. We have jon fortt here as well to share thought. Gamestop shares get hammered. Down 5 . Walmart is not really bulging. Why . Bull mart is huge. This isnt that big of a deal for them to move the needle. The timing is impeccable because there are new consoles out. People of thinking of switching to the new consoles are going to buy the new or buy some diapers. Isnt this really about walmart trying to drive store traffic because the pitch is basically, theyre t not giving you cash, theyre giving a gift card to spend in the store. Theyve been struggling with store traffic with sales declines. From their point of view why not try and lure people in. Weve seen it work for the cellphone carriers with trading in smartphones. Didnt move the needle that much for them either but the storm traffic helped. Is there enough for everybody in this market . Could it be possibly if walmart moves in it just increases demand and supd ply across the entire industry . And its not eating somebody elses lunch ultimately . Its possible, simon. But because walmart has such a diverse product assortment i think it is dangerous for those other retailers baz because theyre more likely to pull people in with the value they can create there. Thanks, jon. Now i want to pivot and look at apple this morning. Earlier on the program haunted empire, apple after steve jobs, joined us on squawk on the street, heres what she had to say about the shift in the company from steve jobs to tim cook as ceo. I think theres just much more process. Everything is logical. If youre talking about about the bigger visionary innovation issue, you know, who my question is who is the decider at apple now that steve is not around . By cant imagine it being tim. The tech giant announcing today it will discontinue the ipad 2 as rumors of production of iphone 6 is under way. Iphone 6, jon. Whats this going to look like . Everybody expects a bigger screen out of the iphone 6. Questions about the timing of it. You know, i would be sure priced to see it arrive too much off cycle because apple found out with the iphone 5s launch that the carriers were not going to let people upgrade early. That really slowed down sales. Whats the cycle . Forget the Business Cycle and housing cycle, lets talk about the smartphone cycle. Every two years, if youre on contract, your contract is up. You can afford to get a subsidized phone. Even though lots of carriers are experiencing with other models that has a big influence on people buying something new. They interrupted that with the 5s . No. But what happened was normally when people have an older phone, maybe only a year and a half into the contract in the past. The carriers were eager for those new subscribers. They would let people upgrade early. Extra people would jump in. The carriers not so eager to take the losses so they backed off. If you introduce a phone earlier off cycle youre not going to get the same pop. What do you think of kane on her book that haunted a until. She did not convince me. She asked the question, who is the decider. Tell me. You wrote the book. Maybe its just a tease for you to read the book. Its a good tease then. Is it needed . Its not the point. Its whether they have the creator energy within it. I dont think shes answered that question. Hasnt apple answered it though . Steve jobs did decide for better and for worse when something was ready to go out in the market. They worked on plenty of products that never see the light of day. You want to pull the trigger at the right time. Well have to see at the next big launch whether it was fully baked. Its called haunted empire. You called it haunted apple. Nice phrase to use. Anyway, haunted empire, kane on the show earlier this morning. Apple shares are up 1 . Lets update on the Malaysian Airlines flight 370. The search area expanding to 2 million miles. So far there are still no sign of the missing plane. Nbc simmons joins us live from kuala lumpur with new details for us. K keir . Thats right. Here in this Briefing Room they told us more today. They told us that the plane they think now was preprogrammed for some of the maneuvers as this incident developed. And at the same time they say that they believe there was no one else on the plane who had the capability to do what was done, to fly this 777 other than the two pilots. That doesnt necessarily of course discount the possibility of a hijacking. But the pilots are increasingly the focus and its fascinating because ive been down at the captains, place where he lives. You cant get by his house because its a gated community, upscale residential area. And he clearly had a relatively good life. He had two homes, actually, we believe. He has three children. One grandchild. His friends are saying, look, it just doesnt make sense. Why is the inquiry focusing here when this is a man who had a good life. He had no reason to do anything in relation to a plane that he loved flying and he loved being a pilot. And at the same time, with the copilots, he, too, is being talked about as having a girlfriend, possibly a fiance. Friends of his saying, again, he was a happy guy. Theres no reason that he should be involved in the disappearance of flight 370. So it continues here to be a mystery. We still dont know where the plane is. We still dont know who exactly was flying it or why. And keir, just how personally frustrating has it been for you to get information corroborated from the malaysian authorities . It is a little, i guess, in the certain sense of being a journalist, but at the same time, a note of caution. This is now a criminal investigation. So they often in investigations like that have reasons to hold back information. So it may well be that that is the case and at the same time of course they are learning new things. This is unprecedented. Good point. Thanks very much as that story continues town fold. Day ten, maybe day 11 now. Coming up, you might have seen our next guests on top chef or his cookbooks on the New York Times bestseller list. Hes here to talk the Restaurant Business and address that socalled guacamole shortage. Stay with us. Welcome back to squawk on the street. Im phil lebeau with breaking news from General Motors. Ceo mary barra just wrapped up a roundtable answering questions from reporters regarding the recall investigation. The first time shes answered questions, by the way. She says that the recall she admits the problems brought up over the last ten years took too long to identify for a recall. She wont discuss details about what went into the decisions for the recall while this investigation goes on. And in regards to that investigation, she said, i asked for your patience. I know you want to know what happened. And so do i. So does mark. Talking about mark royce who is the head of gm north america. This is the subject of mur internal investigation as well as some inquiries. There may be a time that i am there may be time i am limited in what i say but i do commit to you that as we have results along way we will share what is appropriate and more importantly, we will take action. Mary barra also went on to say that she had no knowledge whatsoever of the problems involving the ignition switches before the recall was announced in early february. And she also defended the safety of gm vehicles. Dont forget today they also announced a new vp of Global Vehicle safety for General Motors. Those are the first comments from mary barra. Back to you. Phil, thank you. Gm shares up 1. 2 . Got to say ford up 1. 6 today as the dow adds 75 points here. Ride sharing Companies Like uber lift and sidecar have been sold by lawmakers in several municipalities. Just last night Seattle City Council voted to allow only 150 of these types of cars on the road at any given time. Sidecar is a ride sharing startup with operations in San Francisco, los angeles, seattle, boston, washington, d. C. Among other cities. Cofounder and ceo of the company is joining us now with more. Thank you for being here. Good morning. Good to be here. Very several of these, you could call it ride sharing. Its actually kind of private taxiing sister viss in seattle. The city council has said that each company can have no more than 150 cars on the road at any xwif ven time. Is that correct . Thats right. Theyve limited the number of these new what theyre calling tncs. But these are not taxis. These are the ability for individuals to connect with one another through a smartphone to give one another rides. Definitely do not consider these to be taxis though thats kind of the way the Taxi Companies would like to see this because they like to see competition controlled. They dont want to see expansion. Im not familiar with sidecar but i have used uber a ton here in new york city. What im doing is not necessarily bor reing a ride from jon fortt here. Im paying someone actually little bit more than a taxi to take me from place a to place b. Sidecar and even some of the other services that you mentioned like uber, theyre very different than uber experience in new york. These are everyday people in their own cars and youre connecting with them through the ridesharing app. It is not a taxi. Its typically cheaper than a ta taxi. And the only way you interact with them is through a smartphone. Some of the criticism that you guys got at this meeting is interesting. Someone saying youre doing so many things right. If you only communicate and collaborate better with regulators noting that you and others have raised doubledigit, even tripledigit millions of dollars and yet youre growing maybe too fast in cities, regulators are putting the brakes on you. What do you say to that criticism . Should you have done better at communicating with regulators to prevent Something Like this from happening . Well, i think whats actually going on is innovation has lost innovation lost yesterday compared to the power of taxi lobby to be able to influence regulators. Weve seen these bottles before with copper wine telephones, were able to convince them to clamp down. Every time i get into an uber or other service i ask the driver has business is. In the San Francisco area im told there are too many in San Francisco. Theyre having to go farther and farther afield to make money. There are some issues here for the companies, for the drivers trying to make money. Are there not . The drivers make out great with this new set of innovations. The folks who are armed are the folks who own the taxi medall n medallions. Just because there has been a monopoly granted to you by the government does not make it a ta ticket for life to have that monopoly. The same thing happened with telephone companies. I mean, they were granted a monopoly by government but that does not mean they get that monopolier to ever and voiceover ip cant happen and cable voice cant happen. Those are the innovations brought down the cost, made it better for consumers and regulators were not able to stop it and we hope the same thing is going to happen. We have to go. I would just mention that some of the members of the city council said that they actually saw this as an expression of support saying they were recognizing the industry and they just wanted it to start off in a more limited way. Weve seen regulators have worked cooperative like in california to create a t better system that does not introduce caps. Its pretty clear in the legislation that they are trying to protect the taxi industry. If you lead the regulation it says that explicitly. Thank you for context here and for teaching us more about sidecar and other companies. Appreciate it. It was a pleasure. The biggest hide line released today is that food prices surged by 0. 4 . Its the largest increase since september of 2011. Consumer food prices are con expected to make further incrosses in the back half of the year as the impact of droughts and bad weather in the u. S. Takes its toll. What does this mean for the Restaurant Business and consumer, joining us now is acclaimed chef and Pbs Television host and winner of top chef masters, raick bayless. Good morning. Good morning. Good morning for some in the Restaurant Business. What happens as all of these food prices go up and we hear some manhattan restauranteurs are going to take the hit from profits from passing it along to consumers. Its going a very difficult point right now for a lot of rest rants, mine included. As we feel the pressure from the consumer to keep the prices down and yet we have to sustain all those prins crease on all the ingredients it really makes a squeeze. Its a struggle, struggle, struggle for us pretty much by day. What is the situation with leases . This is just anecdotal. In my part of the admittedly manhattan there are an awful lot of restaurants that are shutting down because their leases are coming up for renewal and jacking up the prices and people just cant afford it. Particularly the bottom of the range that you operate is that a wide spread phenomenon in your view . It kind of is because i think that people have to realize that in restaurants where people are actually cooking, were not talking at Quick Service places that are using prepared ingredients, that all of those ingredients that we bring in and we prepare and we craft individually for each of the guests in the restaurant, thats a very expensive thing to do. If you add on to that the price of a really high lease, it just makes it kind of unsustainable for a lot of people. And, rick, thats what people will be wondering here. I mean, restaurant margins, Profit Margins historically are not all that wide. So what do you do to offset it . Theyre not. You know what we do is we try to pack our restaurants all the time. Okay . We do that by offering really great food, way maamazing servi because everybody wants to be taken care of. Thats what that they remember the most. We try to make it so that we have Something Special for people that come early in the evening, Something Special for people that come late in the evening, so that we can fill our places all the time. Thats the only way we can really make a living these days. Look, coffee up 70 . Hogs up 42 . Oats, 29, wheat 11. You know, the consumer has to know whats. Coming and what you guys do and how you deal with it will be interesting as the year progresses. Thank you for being here. Its a pleasure to be with you. Thats chef rick bayless. Up next, the best of our interview with the worlds most famous frog, as he would say, keep it moist. Something of a monumental day here. The worlds most famous frog, the one and only kermit joined us live earlier on cnbc. We asked him what he thought about Goldman Sachs using the term allege idly muppets to refer to its own clients. Im not sure its derogatory. I think i think he was saying that his clients are consummate professionals, very organized, some of them might have been green. They certainly deal with green. And they obviously would never say anything derogatory about miss piggy. Of course. I didnt know kermit was so organized. I didnt know he traveled without miss piggy. We do have to wonder where he was and get his important views with the dow up 90. The nasdaq is up almost 1 as the gains yesterday are continuing today. A lot rf relief over the ukraine. Dont forget the fed meeting is under way. Thats all for squawk on the street this morning as we hit noon. Lets get to the halftime. All right, guys, thanks so much. Welcome to the Halftime Report here at post 9. Here is a game plan. Free markets, new yorks attorney general new probe into High Frequency trading. Eric schneiderman is here live. Old tech, new hope. As microsoft looks to launch office for ipad, will the stocks be winners for your money . Public offerings with so many new ipos soaring, is there a bubble brew that could soon burst . Todays starting lineup, joe