it is jobs friday, the bulls are betting that this morning's employment report will add fuel to the market's report run. but there's always that risk that the numbers could rerail the rally. we want to talk about this. plus, cash back. u.s. companies are showing investors are love with the windfall of dividendes and share buybacks. plus, stress tests. the major banks get a passing grade. i think 18 out of 19 from the federal reserve. still, critics say questions about the health of the financial system remain. it's friday, march 8th, 2013 and "squawk box" begins right now. good morning, everybody. welcome to "squawk box" here on cnbc. i'm barack obama along with joe kernen and andrew ross sorkin. happy jobs friday, everybody. double whamny today, not only is it friday, it's also a jobs friday. the full forecast says 160,000 jobs were added last month. i can't believe the which is fer numbers aren't higher than that. i've looked at a lot of numbers that say it's above 200,000. the unemployment rate is expected to fall to 7.8%. average hourly earnings are expected to rise by 0.2%. that's always a good indicator of whether or not you're going to see highing down the road. as we look at all this, u.s. equity futures are higher this morning. indicated up by about 60 points, ahead of this after gaining yesterday, after gaining the day before that, after hit ago record high the day before that. so it has been a steady increase. stocks have been marching deeper into record territory. the major asian markets overnight actually looked like at least the nikkei was up by about 2.6%. the hang seng was higher by 1 is.4%, as well. in europe in the early trade there, you can see that there are some green arrows, as well. the biggest gains come in france where the cac is up by 0.9%. we're assembled this morning for a great lineup of strat gives to get us ready for this morning's 8:30 eastern report. we're going to start that gain in just few minutes. citigroup's u.s. economist steven whiting is going to be joining us. >> let's get you through some of the corporate news this morning. the fed saying that the biggest u.s. banks have enough capital to with stand a severe economic downturn. get this, only allied financial didn't pass this round of stress tests. the lender didn't mean the minimum hurdle of a 5% capital buffer. next week, regulators are going to announce whether banks can start returning mope to shareholders in the form of dividends and buybacks. kayla tausche will join us with more on the details of the stress tests in just a couple of minutes. ally criticized the fed. how do you criticize your regulator? you don't understand how that works. >> they feel like they have to tas say something. this is allied, which is the old gm. >> it's all the ads. >> you've seen the ads with the kids saying we're the brand new one. where they don't treat the kids fairly. one gets an ice cream and the other doesn't. >> cdw has reportedly hired banks for an ipo later this year. the company was taken private by equity partners for $7.3 billion in 2007 been we're going to see how that ipo is openly valid. and finally, texas instruments has good news this morning. it's raising its q1 target to the upper ranges of its sighting forecast. shares of at this have risen 5% since january 22nd as investors have been betting on improvement in demand. >> i'm going to talk about google and motorola and all that. but today, do you think about things in the shower? you're in the dark in the shower, right? >> in the dark. >> do you have a place where you can go where the light doesn't bother you? oh, that's right. it's in that dish forgot. it's in that other wing. where you've knocked down the wall. >> usually i'm talking to the footman. >> exactly. do you let him -- i mean, you walk right out of the shower into a robe that he's -- are you comfortable with? >> that's a valet. >> here is what i'm thinking. here is what i was thinking this morning. big jobs number and all of a sudden it's like 240 or something and the market takes off again and all the people that said, would be, it just can't hitting new highs, that's the perfect scenario. but then i can argue from the other side. the devil on my other shoulder says, what if the market doesn't know what it's doing and it -- usually the market i think we do think it has this mystical sense of looking ahead and discounting things into the future and it's the efficient market and it knows it takes all the stuff into account and it moves where it should. but sometimes it doesn't. but the claims numbers have been better and everything else -- >> but, you know, the thing i will say is that i think the expectations are for a better than expected 160 done census. >> so do i. if i was much better -- >> but i also think that the expectation is there's already a lot riding on this. >> there is. >> now that the adp reports have been updated with its methodology -- >> and that was better. >> the last four years, bls has been better than the adp indicator for this month. but i think because everything is setting up -- >> the new guy, januaridy is closer to the people making up the numbers. so he's indicating the whisper number. >> i'm going to give him some credit. >> he is doing well. and i think it doesn't have to be way above 200, it just has to justify -- even 210 says, wow, it is. >> but it has to be above 200. >> but the momentum in the market is already there. and as long as it's not something awful -- but it could be something awful. >> but that gets back to the idea that this is an important number. >> but the market -- because i still think the market could recover from that because it's a lagging, it's the last month. but then again, we are worried about sequester and payroll taxes. he was one of the great 36 -- >> i think he was interviewing with ross westgate this morning. >> in that great insider piece, they call them buffoons and idiots -- >> they call the rally the idiotmaker. >> and i said why don't we do that and go back and get the archives of all the people that have been wrong here? and i said, because we would have no more guests. it will be the three of us talking for three hours a day. did you see the names on that list? >> i did. >> but you one that you just mentioned, he was at 6.66. we're going much neither down on the s&p. it's 15,4 44. think about being negative. why would anyone listen to anything he says at this point? it's sad. and throw the other 35 in there, too. if you haven't seen it, business insider. it's a list of idiots. >> it's a list of people the rally has made look like idiots that have been wrong. >> what did i say? >> you said it's a list of idiots. >> and what did you say? >> i said a list of people who have been made to look like idiots -- >> so they may not be, but they're made to look like -- they look like idiots until next time. >> if you're going to say something on tv to try to get it out there, can't you say a list of idiots? chk it out, though. you'll see some people, people that we know and love. >> in our news this morning, google says its motorola mobility unit will shed another 1200 jobs or 10% of its workforce. the move comes as the smartphonemaker tries to return the profitability. the company says the cuts are a continuation of cuts made last summer. and ubs quit the panel last month in the wake of a libor rate rigging scandal and a hefty libor fine. and fidelity investments is facing more accusations it improperly used so-called float income to pay its own operating expenses. who has experience with this? ef hutton. with the whole check cutting thing. we need so much money with checks. we had like 2,000 counts of fraud. that really messes up. hi, this is joe kernen from e.f. hutton. >> you're the company with the 2,000 counts of fraud just for keeping it are a float, andrew. bob fullman lost his job. bob briterizer came back in. anyway, customer money earned an overnight account and three massachusetts companies accused the company using income generated from retirement asset toes offset fidelity's own operating expenses. they filed a lawsuit seeking class action expenses. think of the cash balances. a little bit of float overnight. what has fidelity got under management? it starts with a "t," probably. >> it's all money. >> starts with a "t." so a basis point of float if you keep it is a lot of money. >> in our headlines this morning, pandora peat ya ceo joseph kennedy is stepping down. this comes as a surprise to investors. a search for replacement has begun. the internet service reported stronger than expected results before the close and stronger and upbeat forecast. july ya boorstin will be joining us with that conversation is in the next hour. jcpenney is going to hold off with its plan to sell certain martha stewart products in its stores at least until an april 8th court date. a new york state supreme court judge adjourned the trial until april because of attorney scheduling conflicts. he ordered the companies to try and resolve their differences in the meantime. jcpenney will hold off on some of those sales. take a look at the markets this morning because futures are indicated sharply higher, up about 6 4 points. yesterday was another record number for the dow. and the nasdaq was down. it was its first decline in four days. the dow, s&p and fass dak have had four-day winning streaks. take a look at where things stand at least in items of the energy markets fairly budging. we did see gains yesterday in crude oil. back up at 91.57. it's up another penny this morning. the ten-year note ahead of the jobs report is yielding back 2.009%. and the dollar, which was stronger against the euro yesterday is a little lower at 1.3119, dollar is up gerns the yen. gold prices, if we take a quick look, they're up, but just barely. >> it's now time for the global markets report. kelly evans is standing by in london. good morning, kelly. >> andrew, good morning. i'm here in london, but once again, the story is happening in tokyo overnight. look at the nikkei adding 2.6%. the yen is now at a 3 1/2 year low against the dollar. we were talking to dennis gartman earlier who pointed out in gold terms -- in yen terms, actually, gold is at a nominal high. well put on twitter practically everything is at a nominal high because of the weakness we've seen. the positive move is carrying over into the u.s. session and into the futures. the ftse 100 is rallying up almost 10% this year. we're up 0.3% building on that rally. the cac 40 in paris is up 0.9%. the strongest performers, frankly, have been utley and spain up is%. italy and spanish debt continues to rally. fascinating because of what we've seen in italy where there's still no sense of a government forming, where there's still questions about a new election being called in a kump months' time, maintaining that spread that we saw over there. we're going on 2 1/2 year lows for the yield on spanish debts. despite the macro concerns there, not much of a response. i mentioned the dollar/yen, 3 1/2 lows for the yen against the u.s. dollar. 95.6 in trade this morning. elsewhere, the euro is firmer, back above the 1.231 level. staple with sterling, back above 1.50 level. it is the bank of japan today making the big waves on speculation about more moves coming ahead. we talked to richard koo this morning. he's among those that think kite work. gartman said he sees us going to 1.25 in the next couple of years. so on that note, back over to you. >> okay. kelly, thank you very much. now back to the latest rouvend of fed stress tests. kayla touchy joins us now with more. we've got you in here early almost every day. >> and i thank you for that. >> you're young, you're eager. we thank you for that. what have you got? >> yesterday was the third annual dodd frank act stress tests. 17 out of 18 banks passed, which is a pretty good number. they were placed into hypothetical economic crisis. all bun one made it through and as well capitalized as the fed standard mandated. citigroup, the best position of the big six banks, which is interesting and quite a role reversal there. citigroup hosting 8.3% tier one common capital ratio. that's the highest of any of the big banks. wells fargo is the next closest with 7% and morgan stanley and goldman sachs towards the bottom with 5.7% and 5.8% respectively. remember, the fed has basically put up a bar of 5% here. each bank has to clear that 5% bar and you can see citigroup is well above it there. the interesting thing about citigroup is that last year the bank was one of the only banks to protest the way that these tests were carried out because they were in one part. you had to pass the stress test with the capital levels, but you also had to submit a plan to return capital to shareholders. while citi was well enough capitalized, st citi wasn't comfortable enough with its plan. categorically, it failed citigroup this year with one of the banks that was basically asking the fed to do this in two parts. next week we're supposed to get the capital levels. last night, citigroup disclosed in one of the filings that it had requested a $1.2 billion share buyback. the only bank to make such a disclosure, we can imply that they will have that request accepted this year, but definitely stepping out ahead of the pack where that number is concerned. you guys mentioned allied financial a little earlier, which is interesting because, obviously, the former financing arm of gmac came out with a harsh statement criticizing the way the fed kaert out these tests. they believed that ally would be sufficiently capitalized because of the way some of these auto financing securities and instruments would convert to actual equity in the kies of a crisis. i just want to show you quickly, if we have this graphic, what this hypothetical crisis would look like. a senior fed official told me this is worse than any two-year period in u.s. history except for the great depression. it would factor in a u.s. gdp drop of 5%. stock prices falling by 50% and home prices down by 20%. among other things, but that's the biggest situations that they place these banks under. and so pretty amazing giving given those conditions that at this point three years after these tests were introduced that all but one here is passing. >> kayla, thank you very much and we appreciate you getting up early for us, too. when we come back, the game of expectations. today we've got stocks at record highs. the stakes are even higher. we're going to turn to two well known economists for guidance. welcome back, everybody. u.s. equity futures are indicated up higher this morning. dow futures up about 62 points above fair value. china's exports surging nearly 22% in february, that was more than expected. this could be a sign of stronger global demand. imports fell by 15% during the month. china's draid trade growth has been rebounding in recent months. right now, let's get the national forecast from the weather channel's jen carfagno. all that snow we expected yesterday, well, it's coming down this morning. >> it's such an interesting system. it's spinning around out here and snowing back all the moisture today. it's retrograding. it's moving from east to west, the opposite of what you would spec'd. today really happens to be the worst day now from what's happening in new england, anyway, from that perspective from this winter storm. now, we go into boston where we've had now 5 inches of snow. we've had more than a foot of snow in mansfield which is near foxborough. you can see the brighter colors indicating more snow falling. juflt saw a report that the power is out on the tobin bridge up in boston. that's causing major issues for the commute this morning. i can't imagine that the commute is good, either, for new york city. you can see snow coming in from connecticut, long island and new jersey, all a light to moderate snowfall. not heavy snow. the temperatures right about 32, the 3 33 degrees. if the roads issed and clear, they're fine. but you could get accumulation on the roadways, which could cause havoc this morning. on top of what we have, we'll get 3 to 5 inches of snow in new haven, boston, northern jersey about 1 to 3, southeast new york about 1 to 3. so the wind will be a big factor all across the area. winds are going to be gusty today. i love this graphic to show how strong the winds are going to be this afternoon. power outages, becky, a real concern right through this evening all across this region. back to you. >> jen, thank you very much. >> all right. we are -- welcome. we're counting down to the jobs report. joining us is dickcoy ask steven whiting, managing director and u.s. economist at citi investment research. steven, i want you to get a chance to say something, so i'm going to start with you. >> was that directed to anybody in particular? >> no, no, i'm not saying anything, but, steven, use your time well. pretend you're not going to get another chance. >> okay. >> even though we're going to 7:00 a.m. what do you -- >> you're one of our oldest guests. >> thank you. and i don't think i'm on that list you cited this morning. >> no, you're not. but you've been coming on for over 20 years and we love you. so do you expect this number to confirm what we've been seeing in most hoof the markets or cou it throw us, do a ted head fake on us? >> employment data always can. you try to apply that to any other statistic, and you've had a hard time with employment data. >> people don't realize it's lost and -- >> just think of what happened in the fourth quarter. we had 11 151,000 jobs. those were just the annual revisions, not the monthly revisions or the multiple annual revisions that you accumulate over time. employment is strengthening and this is in a period where growth hasn't fully accelerated yet. so we think we'll see stronger employment over time. >> the claims number, that's got to go under your thinking, right? >> absolutely. >> 4, 5 or 6. >> absolutely. and adp and private payrolls and the bos data, the government data are a bit different. there's more weather impact in the government ta data. so today, if we get 150,000 w, e other stronger expect ages, we still expect accelerating employment gains. >> do you think we'll have a spring swoon this year? >> that has been statistically the case in each of the last three years. there's potential for that, but i think it's diminishing what is. i think the seasonals are earn willing a bit from the pattern. you don't hire a million people to do construction in april. but i think we're going to fit into a more normal pattern than we have. >> do you think the improvement -- i mean, it's come with the payroll tax being gone and worries about -- i don't know if we still worry about what the government does, the sequester and everything else. but is housing recovering? is that overwhelming everything in terms of making these numbers better that we are seeing better numbers? >> not yet. not yet. >> why is it better, then? why are jobs being added all of a sudden when we can't tie it to anything in the economy? >> well, for one thing, consumer demand has been fine all through -- >> the consumer. >> yeah. all through this. businesses held down inventories as much as they could. they held down investment in the second half of the year because of concerns that we were going to have a new recession by the fiscal cliff. >> sequester, $42 billion if it outlays cuts this year is nothing full to the fiscal cliff, the threat that we faced at the turn of the year. we've got 2% employment growth over 12 years. adult population growth has been close to 12%. so we're very, very lean, particularly on unemployment. >> pretty good, this young whippersnapper, don't you think? father time, you look at him, you were nodding. >> i read his material, i think it's very -- >> i try to get in as much as i can. >> but now you're going to get graded. anything that you disagree with? >> i think we may do 170,000. but i think my view is the actual payroll report today is of most interest to short-term traders. >> whoa, whoa -- >> it's really -- >> dick, dick, we want people to be glued to their sets today. this report is huge. what are you saying? >> it's krurp crucial for poem like cnbc to get the answers. >> unbelievably important report. >> legitimate mtdly for the immediate action for the market, it is, right? it's after outliar. >> a series of new highs, dick. >> we'll probably be making a series of new highs because we're in a bull market no matter what the number is today. because the market is extending out its time horizon. when it was so afraid, it was looking at what's going to happen today, next week, one month from now. because it's got confidence, we're fought going to break into a recession, it's start to go think about what happens to profits in to 134, 2015 and trankly, i don't think the next recession is until after the next presidential election. we've had such a slow recovery, we're not building up inflationary overshoot which would make the fed be real tight. so we may not have another recession for the next several years. so you can think about what will the profits be in 2013, '14, '15 and the market is stretching out its time horizon and kind of trading through the short-term information as it comes out. the reason the economy has been sustainable is the private sector that is sensitive to interest rates has been doing well. housing sensitive to interest rate, it's strong. autos sensitive to interest rates, it's strong. core capital spending orders are sensitive to interest rates, it's strong. and so you're hitting it with a tax cut hike and is you're hitting it with a sequester. but the good news about the sequester is it's of defined magnitude. and when the republicans change to fighting on the sequester, which is about 0.5% instead of the debt ceiling or shutting the government down, which are unimaginably big if they were to be a problem, that shift is something that was definable meant that you could lower your estimate of a disaster because you're not going to have a debt ceiling mess. you're fought going to have a big government shutdown. you have a 0.5% drag from the sequester and that's about it and you know wa you're dealing with. >> what made me feel a little bit better about what you just said, so many people are saying this is a fed fueled stock market rally. and that is true to some extent. but you just talked about all of the underpinnings of the economy that are benefiting from the fed policy which justify the move in march. so it's not just like some -- something that only affects the wealth effect in stock markets. the underlying economy is reflecting the low rates, which is helping underpin the market. >> the fed easying policy is inefficient, but it's working. they're kind of, okay, it doesn't work that efficiently, so we're going to do a lot of it and is it's actually working to help the interest sensitive sectors. the household net worth just came in for the end of december and the flow of funds. we almost got back to the old highs. as of this morning, i think we've just made new highs. this morning, today, in house hold net worth in the wealth of americans. now, they own more stocks. it's not as great for the median person because they own the house and that's gone up a little. not as much as -- but we've just made, as of today i think new highs in the net worth of the american household. >> we were at december 31st. today is march. >> quickly -- >> i'm marking it based on to what the stock market is -- what the housing is -- >> you know, we're driving 11-year-old cars and trucks in the united states. we were selling one new home to thousands of americans annually. >> but it's strong enough to keep us at a 2% growth rate with the tax hike and with the sequest we shall so, therefore, we're not cracking into recession. so positive change even from a low level in housing and autos is helping us a lot. >> things excellent, gentlemen. thank you. coming up, what does the job reports mean for the fed? we're going to watch greg iff. but first, as we head to a break, take a look at yesterday's winners and losers. this is america. we don't let frequent heartburn come between us and what we love. so if you're one of them people who gets heartburn and then treats day after day... block the acid with prilosec otc and don't get heartburn in the first place! [ male announcer ] one pill each morning. 24 hours. zero heartburn. welcome back, everyone. among the headlines that we're talking about, a front page story on the "wall street journal" says companies are driving higher by returning cash to shareholders. s&p 500 companies are expecting to drive more than 2012, $282 billion in dividends this year. during the last two years, funds that invest in high dividend paying stocks have been watching money flow into this. in the meantime, money has exited some of the broader funds. these are big, big dollars in terms of the dividends that they're paying and the stocks that they're buying back. >> the dow setting a record high for a third straight day, but plenty of skeptics say it's the fed's money easing policies and not fundamentals driving the market rally. is there more to the story? joining us now is greg iff, one of our favorite fed warm watchers on the hill. >> good morning within joe. >> unfortunately i'm not joe, i'm and ru. >> i'll participate, greg, if that will help. >> sorry about that. >> you have no monitor, it's not your fault. >> he can't see. >> is ben bernanke ultimately happy with what he's done? does he look at what's going on in the markets and maybe the broader economy and think this is working? >> no. i think he sort of sees it like half full. this is part of what is supposed to happen. you ease money, you make people take on a little bit more risk, get money into the stock market, get a wealth effect. but the end part of that process is a sustainable recovery. that's the part we haven't got strong proof of. let's take a look at today's employment numbers. let's say it comes in around consensus. 150,000, 170,000. that's decent, but it's a deceleration from the fourth quarter of last year. in absolute terms, it does not reach the level of 175,000 to 200,000. that's what the fed has talked about as represent ago sustainable recovery. >> let me ask you a different question. joe, you may give me a hard time for this, but i'm going to try. >> all right. i want to hear it. >> is there an argument to be made that the conversation about inequality is going to come up all over again and be even worse? i look at the "wall street journal" and record cash back to investors. that's a great thing new mexico respects because hopefully that money trickles down. but i know the argument is going to be made by others on the other side of the aisle in some respects that this is clearly benefitting the top 1%. >> they're getting that all the time. in fact, you hear questions like that raised in some of the press conferences that bernanke holds. and i kind of sort of feel for them because i think they actually agree with that, that this is not exactly the most democratic way of stimulating the economy. but i think the response to that is what else are we supposed to do? in fairness to them, it's not really just the stock market. there's great numbers on wealth that dick and steve were talking about a few minutes ago. it's not just stock market wealth, it's housing wealth. that's much more democratically distributed. that's much more important in house prices that we're seeing. that's good because maybe one day -- maybe not just yet, they'll start to be able to borrow against those thousands again. it will be easy to refinance those markets and just as important, it's going to make banks more enthusiastic about lending. >> i don't know what the statistics are, who benefits indirectly from holding stocks and corporate pension plans. it's above 50%, i think. 1%, it's not -- that's not a totally speechless number to use. who benefits from the stock market? >> 20%, 15%. >> it's much higher, it's probably 50 in terms of pensions. and a rising stock market, you will not see the obama administration run from a rising stock market. i thought you might. >> no way. >> because it doesn't necessarily trickle down. but it's a barometer of how the economy is doing, how the country is doing. i think anyone that makes that argument is a total straw man that is so easily put down. don't you think? that is ludicrous. >> but i think that -- >> i'm embarrassed for people that ask that question. that's not what i'm saying. not for you, but the people you're talking about that are saying, the stock market doesn't measure what's happening to the average -- number one, most americans at some point are -- >> although admittedly have some of have small exposure to it. >> right puni. but whatever the market cap, the trillions and trillions of market cap -- >> it is the best barometer. >> becky is exactly right. for all its down side, it's still the most impartial voting machine that we have on the state of the economy. that's why any president is going to look at that and look at how they're doing well. especially a president like this who is getting beat up by business saying you're making things so hard for us. look at the wealth effect for a move and look at the stock market. the transports made a new high before industrials did. its companies like united technologies and caterpillar that led the way up, those are cyclical. so the signal from the market, i think, is that they think the cycle is getting stronger, not weaker. i mean, are they right? i don't know. but to the extent that the stock market is still a decent forward looking profit of the economy, that has to give the fed a little bit of comfort. we'll see in the hard numbers whether the stock market is riding a sugar high. >> even those hardenne anti-corporatists can eventually see that as corporate profits rise, eventually there's more hiring and is we bring down the unemployment rate. they can connect those dots. even if they try to resist that and stick to their guns on the anti-quark purchase, even the most anti- -- and is i've had a lot of my democrat friends around here or wherever leading up to the election, well, that stock market is doing pretty well. if he's doing such a bad job, what about the stock market? they always talk about the stock market. they're always selling that. just yesterday, chanos. so, you know, you like it or not? are you embracing it or not? >> oh, no, i'm embracing it, but i'm asking the question because he's a fed watcher. >> how else -- what else can he do? that's the only thing we have. >> no, wait, i have one more question for greg before he has to go. greg, very quickly, the expectations for today's job number, i know the consensus is like 160,000. i've seen numbers that came in higher than that. doug cass brought numbers lower than that. barclay's at 150. goldman sachs at 150. what is the number that you're expecting that you think we should be looking for? >> the guys who are sort of saying it's going to come in below consensus i think are putting a lot of emphasis on the possibility of the weather effect, the snowstorm. but a couple of times in the last few months, people have looked for a big weather effect and we didn't get it. so if those folks are wrong, i would look for a bit of an upside surprise. the claims came in stronger. the employment indexes in the ism indexes stronger. so i've got my fingers crossed that maybe if we escape that storm-related damage, we'll have perhaps a mildly positive surprise. >> great. >> greg ip, thank you so much. >> do you guys know what day it is? i hope. >> jobs friday. >> no. yes, but that's not -- >> what? >> international wednesday. and this is not some new thing that just happened. this has been since -- since the beginning of the 20th century, there has been a celebration of -- >> are you going to shower me with affection today? >> no, no, i'm going to showering with your leadership qualities. we're going the to lean in because we have cheryl sandberg. i thought it was only women who were supposed to do that, to lean in and -- >> we get a pass. we get to heaven quicker by going there. arianna was there. >> there you are. >> there are our two bffs, me and you. and that's penelope's beautiful hair from behind right there on the left. but that was good. and, you know what? i agree. 14% are in, you know, senior positions and it's been static for the past ten years. >> and it's 511% of the population. >> right. >> and, you know wab you're still called -- you do get bossy at times. >> talking about -- >> no, i'm kidding. >> no, i do get bossy. >> but the next time you meet a 5-year-old girl and you want to say you're being bossy, you're supposed to say great executive. >> great executive mind. i almost brought my daughter to this. everything i look at in the prism of the world, it's getting better. and this is a good -- it's lean in. i don't like using lean. i don't know. that's already been done. but the idea of it. it's very cool. >> it was interesting. >> but i knew you'd be there. the whole new york -- senator schumer, mark bloomberg, caroline kennedy. >> and then you walked in. >> and i was sitting next to that -- >> and the music stopped? >> no. people went -- no. meredith whitney, sallie krawcheck. i was standing next to roger altman and said, you know what snm people are going to think i've turned and he walked away. coming up, the 8:30 jobs report. the other other guy like me was steve forbes was there. stock market expectations next. 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[ male announcer ] at edward jones, try running four.ning a restaurant is hard, fortunately we've got ink. it gives us 5x the rewards on our internet, phone charges and cable, plus at office supply stores. rewards we put right back into our business. this is the only thing we've ever wanted to do and ink helps us do it. make your mark with ink from chase. a talking car. but i'll tell you what impresses me. a talking train. this ge locomotive can tell you exactly where it is, what it's carrying, while using less fuel. delivering whatever the world needs, when it needs it. ♪ after all, what's the point of talking if you don't have something important to say? ♪ ♪ [ male announcer ] help brazil reduce its overall reliance on foreign imports with the launch of the country's largest petrochemical operation. ♪ when emerson takes up the challenge, "it's never been done before" simply becomes consider it solved. emerson. ♪ joining us the morning is bob iaccino. bob, we've got the big jobs number coming up and we've been trying to figure out how important it is, what the market is expecting. i know 160 is the consensus. what are you guys expecting down there, there? >> it's extremely important as always, becky. i think considering what the market has been doing over the last few days, making higher highs, which is going the happen every single day that we make a higher high it's all-time highs. so it seems a bit repetitive. but i think that the upside surprise is going to be difficult. i think that's what the market is looking for. >> because you guys are looking for a higher number already? >> yeah. i think that's why. the higher lows are outpacing the higher highs right now. so you can see some caution in the long. so i think that that upside surprise is -- it's going to be a little bit difficult. i think with the consensus being around 165, you have to be above 175, 180 in order for that to power the rally with volume. and i'm not sure that that is going to happen. it's interesting because the adp survey is not showing that. the jobless claims is not showing that. but i think that number has been adjusted in the market, not necessarily in the expectations of the jobs number. >> so we know that it's going the be a little trickier. it's going to have to be a stronger number to get the market excited. but already you're looking at futures up this morning. this is after several days of continuing to push to new highs for the dow. is this a market you go into short? >> you know, we talked about this last week. i have no position in the equity indices. not at all. i'm bullish for 2013. i'm bullish right now and i'm also flat. that's because, again, the higher lows are outpacing the higher highs and the volume is not there. so i need a correction. i need a 3% to 5% correction. the last down move didn't quite get there. got to about 15.5%, 2%. if i can get that 5% correction, i haven't missed any of the rally from about a week or two ago. it comes back down the that 1500, 1300 level where i'm going to be comfortable once we get that. i have a long lower trend that's upward sloping starting december 31st of last year. and i need to test that trend line and to bring volume in at that trend line. if that happens, then i'm going to be long and bullish as opposed to flat and bullish. >> bob, thank you very much for joining us. good tie combination, by the way. >> i appreciate that. >> tie and shirt. i like it. coming up, want a morning pick me up? give the cup of joe, how a stick of gum could be the answer. i'm going to start chewing some of it. that story after the break. zap technology. arrival. with hertz gold plus rewards, you skip the counters, the lines, and the paperwork. zap. it's our fastest and easiest way to get you into your car. it's just another way you'll be traveling at the speed of hertz. transit fares! as in the 37 billion transit fares we help collect each year. no? oh, right. you're thinking of the 1.6 million daily customer care interactions xerox handles. or the 900 million health insurance claims we process. so, it's no surprise to you that companies depend on today's xerox for services that simplify how work gets done. which is...pretty much what we've always stood for. with xerox, you're ready for real business. [ construction sounds ] ♪ [ watch ticking ] [ engine revs ] come in. ♪ got the coffee. that was fast. we're outta here. ♪ [ engine revs ] ♪ welcome back to "squawk." we're in the chairs looking at some of the sometimes offbeat stories that are in the paper. this one caught my attention this morning. i don't know if you can see it here in "the wall street journal." wrigley's adds caffeine to wake up its gum in this crazy world of energy drinks and red bull and monster and all that -- >> caffeine -- >> now they're putting it in the gum. they're going to actually put it into a brand called alert energy. it's going to have 40 milligrams of caffeine. that is about half of a cup of coffee. but again, you might take two pieces pretty quick, right? >> right. >> so they said -- >> don't give it to your kids. >> they say it's not for kids. but are kids not going to try -- >> that's going to be -- >> viagra gum. >> what? i'm going to slip you some laxative gum. >> you know what? i appreciate that. >> i need some right now? >> no, you'll see. eventually. it doesn't hurt to do a little -- >> got to be $2.99 for only eight pi does that seem like a great deal? >> i guess if you're looking at it like a cup of coffee. >> seems like a good deal to me. yeah, good deal. >> wow, we -- you see what we did yesterday, did you watch chairs? i was there. you were -- talking to all your friends down there at the wharton economic -- >> talking -- >> chanos was here. >> that's what we do when you're interviewing people. we're talking. >> listening very intently. >> check out this chanos. man, "the post" went wild on this. jim is a big, well-known short seller, and "the post" is basically saying that chanos had ackman's back on the whole herbalife, whatever, bill's best friend they called him. chanos yesterday said i'm not crazy for this multilevel marketing business. i said yesterday that i thought a lot of the products were just the best you could say about them is that they won't hurt you, probably. but that there's never been any effectiveness proven. i said same with half of the gnc stuff. you can throw whole foods there there as far as i'm concerned. the big high market stuff that doesn't have preservatives to keep it fresh. anyway, herbalife got mad at me. but, fair enough. julian is the -- julian is the vice president of worldwide corporate communications, i think he's been like recently had a lot of stuff to do, you know, being head of corporate communications. >> he's a little stressed. >> he's mad. he said i was dismissive of the product in terms of science and effectiveness. but given my prominence -- i didn't realize this, my prominent role as an anchor of a major business program i was hackneyed and ill-informed comments. so they're going to send me some. i said great, fair enough. send me some. and also provide you with some of the science. i said send me some peer-reviewed science on your biggest selling product and i'm going to lose weight now and maybe people will ask me how. if it works -- i'll try it. julian, fair enough. send it to me. send me peer-reviewed science because i want to look at that. and your best product whatever it is, and if it works then i will update our ow veers on that i was totally wrong about herbalife. >> are you going to come a marketer of the stock? >> depends -- think if it really works. you don't need to lose weight. >> i have to the mitt i don't know much about the product so i am interested to see what they send along. >> we'll send along. maybe we'll share it. have a -- >> medication. >> check that out. >> compare notes. >> i'm sure but that's what we for 4,000 years that's what we tried. tiger stuff, grinding stuff. you know. and then -- solved everything. >> when we come back we've got the countdown to the february jobs report. we will talk expectations and more. ahead of that report the u.s. equity futures have been indicated higher. they're up by about 67 points. dow futures. ♪music plays thank you orville and wilbur... ...amelia... neil and buzz: for proving there's nowhere we can't go. but, at some point... giant leaps gave way to baby steps... and with all due respect, you're history. if you taught us anything, it's that you can't cling to the past... if you want to create the future. that's why, instead of looking behind... delta is looking beyond. pushing u.s. aviation to new heights. all 80 thousand of us. busy investing billions in the industry's boldest moves. it's biggest advances in technology. bringing our passengers the best, the most spacious fleet in the sky. and earning more awards than any other airline... to show for it. so rather than simply saluting history... we're out there making it. it's not what you think. it's a phoenix with 4 wheels. it's a hawk with night vision goggles. it's marching to the beat of a different drum. and where beauty meets brains. it's big ideas with smaller footprints. and knowing there's always more in the world to see. it's the all-new lincoln mkz. >> >> the market rally continues. but today is jobs friday, and everything could change when the numbers are released at 8:30 eastern. barclays had a research larry kantor and s&p equity strategist alec young join us with their market perspective. >> when they speak markets listen. which fomc member has the most clout? former fed head larry meyers tells us who deserves the most of your attention. >> an internet shocker. pandora's big quarter overshadowed by the sudden departure of ceo joe kennedy. julia boorstin's exclusive interview is just ahead as the second hour of "squawk box" begins right now. good morning and welcome back to "squawk box" here on cnbc, i'm andrew ross sorkin along with joe kernen and becky quick. take a look at the futures this morning. of course this all may change. right now dow looks like it will open up 67 points higher. s&p 500 will open up higher, as well, up seven points. 17 of 18 banks have passed the federal reserve's stress test. meaning they're sufficiently capitalized under a worst case scenario. only banks not getting a passing grade, allied financial. also h&r block reporting fiscal third quarter loss of six cents per share. that's twice what the street was expecting. the largest tax preparation firm blaming a delayed start to the u.s. taxation filing season because of the fiscal cliff negotiations. and kkr has reportedly reached a deal to buy industrial pumps maker gardner denver for $76 a share. that would be $1 per share above the original offer made back in february. "the wall street journal" saying that that deal could be announced as soon as today. >> it's jobs friday. love those. love these futures. up another 67 -- i love that. >> it's been there all morning. >> that's great. and then people say, what? another -- it can't hit a new high every day. really? all right the numbers will be out in less than 90 minutes. senior economics reporter steve liesman joins us now with the latest estimates, and we were talking earlier a lot about it, steve. i think you say we got to do 200. i think if we just did 200, that's just the markets -- >> i said 200 yesterday. maybe for the private sector. i think that may be a little hot. i'm more in the 180, 190. >> you're a little hot today. >> thanks. >> i like your tie. >> you saw that. you didn't -- >> no, i do. i dig it. it jumped right out at me. i said hot. anyway, you don't think -- what are you downplaying it now? >> just downplay it sometimes. >> come in at 7:00 in the morning with only a single cup of coffee and sit across from joe kernen. >> i've had no coffee. >> you need that -- >> you need the new viagra gum. >> should i read this thing? >> what's your number? >> i'm in the 180, 190. here's the thing. i'm so sure of the futures being 67, 68. >> love it. >> really just a trim like report. we're looking for, you know, it's neither exceptionally strong nor weak. just right in that 150 to 175 zone where we've been. here are the numbers. adp was 198. nonfarm payrolls, that's private and government expected at 160. maybe that's a little steal. maybe there were some upgrades over the adp report. unemployment rate, which is absolutely unforecastable, right? there's two moving variables in that. there are the numbers, 157. two of the past four months were around -- expected today. not that hot. adp was 198, that was for the private sector. pretty broad stretch, factory services all up. the ism services was good. claims have been good. the forward average not too bad. the nfib a slight rise. here are the negatives. some expectations the snowstorm could reduce by 50,000. the government expecting five to ten but over time that is going to be on the way. the ism manufacturing still well above 50 at 52 but down from where it had been. my big question mark is retail. payroll tax cut all the other things we heard we really don't know what's happening in the retail sector of the economy right now. we've had some decent stuff reports but there's some expectation that it's going to show off february and march. i don't know what's been happening to retail employment. those are things i'll be looking for today. obviously the wages number, going to tell us if you have the payroll cut on the one hand, do you have an offset in wages out there. something very important to watch. and then i know my good friend and colleague, from chicago, rick santelli is going to point us to the participate rate which figures heavily in the fed's favor. >> stay with us. let's bring in our guest host, alec young is global equity strategist at s&p capital iq. larry kantor is managing director and head of research at barclays. and alec you were saying that you think the number could be a little higher than 162. maybe that's before the adp report? >> yeah, i think the consensus has been trending up to 170. and i think given the upbeat da data that we've been getting pretty much across the board especially on the housing, employment, i think people want to be, markets aacting well, they're expecting one. may be a little hard to impress the market. i think the overriding theme is even though guidance from corporate america is pretty lousy, in terms of earnings this year, i think people are saying, look, as long as the economic data keeps surprising, the earnings are going to take care of themselves and that's keeping a nice bid under this market. people that are aattributing ths entire rally to the fed, it's important. there's an improving fundamental story and i think people that are too quick to dismiss the rally is fed induced may continue to be on the losing side. >> larry, we talk to traders who are down at the cme and several of them have pointed out again and again, look, it's been very light volume. is that something that gives you pause for any of this, or do you buy in, i think momentum is really here, it's hard to fight the rally? >> i think there's no question there's tremendous momentum here. the ma shrugs off bad news. i mean, you had a crazy election in italy, a comedian getting a huge percentage of the vote. anti-austerity, anti-establishment, and market just keeps going. the fundamentals, i question that. i mean fourth quarter growth was zero. first quarter running 1.5. we're just getting more cuts on the fiscal side. isn't a great growth environment. europe still in a recession. you know, i look at commodity prices, they're not doing very much. this tells me the fed has a lot to do with this rally. i think the employment reports, yeah, we're all going to look at this. i can't remember the last employment report that's really shocked and moved markets. i think people are more worried about the fed reaction as long as the fed keeps pumping the money in there. >> really interesting, the market has shown an ability to separate what's going on in the private sector versus what's going on in the private sector plus the government. i don't know that it continues to be able to do. and i don't know that the private sector continues to be, you know, sort of immune from what's been happening in the government -- >> what sit that will happen where the market wakes up one day, they have to and says, if this doesn't -- the fundamentals don't equal what's happened. >> first of all, i think we have a ways to run here. i mean the best thing you can say about stocks is how good they look relative to bonds or cash. i mean, you know, i mean, you're almost guaranteed a negative after-inflation return if you're in cash or bonds -- >> but that's not nothing. that's a big -- >> i think that's huge. >> that's one of the things the fed has done, reasons why is push down interest rates. >> no question about it. i'm not fighting it. we've been super bullish. but the thing is that one reason why we were bullish a few months ago is because we thought stocks were still climbing the so-called wall of worry. they're not anymore. that worry is gone. in other words -- >> expressing the worry right now. you're -- >> you're adding bricks to the wall. another brick to the wall. >> people out there, so i think the lower risk, you know, europe, and fiscal cliff and all this stuff, that's -- >> i got to tell you, when you were talking right now, just listening, it's like, wow, you got to, when you're saying it, i know you can hear yourself saying, ooh, god, i'm saying things for why the market shouldn't be going higher. going higher every day and here i am saying it doesn't make sense. in the past when people do that they finally just stop saying it. >> at one point -- >> i'm not fighting it. >> larry questions fundamentals and he mentions gep. we're not investing in the onomnvesting in stocks. the equity fundamentals are better than gdp. the low bar an gdp is bullish because it's easy to exceed and we continue to see that. the other thing is the negative 0.1 on q4 is a misnomer it's going to be revised up, and -- >> but look, growth has been where -- >> 1.5 -- >> is anybody saying that's a great -- >> what's impressive is how well the economy's absorbing this fiscal tightening. we're now -- >> let's just be clear. it hasn't had the fiscal tightening that's coming yet. the sequester is coming -- >> latter months -- >> the payroll tax cut was big. i do think that -- >> we don't know that. it's the one thing that's kept me from being 100% bullish here is that i don't know what those retail sales are going to be in february. i don't know what they're going to be in march. there's a negative number in there. if that happens i think the market's going to say, wait a second -- >> who's gotten rich underestimating -- >> i actually -- >> i actually think february is going to be weak in the markets. >> is it negative? >> market's not going to care. >> here's why. the cpi is going to rise about 0.7% because of gasoline prices. they're already falling so people will just look through this. so you know, you consider that payroll tax hike, that was 120 billion that's a huge -- that's biggest than the sequester which is 85 -- >> but you had late tax returns so refunds that was another factor out there. that's something that ultimately -- >> i think there's a fair amount of pentup enterprise, too, so people look at the payroll tax increase in a vac umg and say it's going to kill the economy. there are a lot of other things that are happening that are doing better than people expect. so in the aggregate, i think the economy can continue to, you know, conservative economists are an investors best friend. the consensus every day and the bar just keeps getting beat. >> the theory the past three or four years has been that the economy would do okay if we could get rid of some of these crises that were out there. those are kind of gone. and the idea that the itallian election became almost like a day and a half story. we sent michelle over there, and i don't think after her great reporting, i don't think people really were that concerned after that. it doesn't have any long -- >> they were. but they didn't. they didn't go back to 8%. so when you look around the world for fires, for smoke, i'm not sure there's fire. any particular place right now. the question is this, in that environment can the economy prosper and get back its legs and have a better than expected returns? that's the question i have, and i think there's some possibility there. >> we haven't even thought that we'd all talk about the $600 billion tax increase but it was on people of 400 and above. and the middle class, that the lion's share, the republicans said we just locked in the bush tax cuts for 98% -- >> i'm amazed they didn't say that. >> i know. >> how good is that for people that want to keep money in the private sector? >> and it's not temporary anymore. it's permanent. >> no, not temporary anymore. >> that was 2003, right? >> you know what else? you're not tying a big, ugly knot anymore. >> not with this tie. because this tie is -- >> so you can tie a good knot. the larry kantor knot. >> this is a windsor knot. >> you look so much more dapper. >> but the thing is, when your dad teaches you the knot when you're 12 -- >> i'm not saying larry's -- i'm saying liesman's coming along. that's a great -- >> and i complained about the affordable care act yesterday. that and the knot -- >> i did an imitation of you asking that question. mr. emmanuel, the facebook says that maybe some jobs -- >> he doesn't want to hear it. >> maybe some jobs have been lost because of that. i mean, raised the possibility obama care might be hurting jobs. i know what you think that -- >> that is not what he sounded like -- >> can you imagine asking whether it's possible the obama care -- >> that was yesterday! that wasn't what he sounded like. >> now would be a good time for me to exit stage right. >> now that you stirred it up -- >> big story coming up. larry myers coming up with his annual who moved markets from the fed. >> all right. we'll -- that's actually -- >> very exciting story. >> you think it's only possible -- >> comments, questions about anything you see here on "squawk" e-mail us at squawk@cnbc.com you can also follow us on twitter. >> still reading these things? @squawkcnbc. that's our handle. >> up next a fresh face to "squawk" after what we've been going through already this morning. we welcome -- really. larry and steve. . ♪ [ cows moo ] [ sizzling ] more rain... [ thunder rumbles ] ♪ [ male announcer ] when the world moves... futures move first. learn futures from experienced pros with dedicated chats and daily live webinars. and trade with papermoney to test-drive the market. ♪ all on thinkorswim. from td ameritrade. all on thinkorswim. investor. yeah, ibut i'm a busy guy.or it used to be easier but now there are more choices than ever. i want to know exactly what i am investing in. i want to know exactly how much i'm paying. i want to use the same stuff the big guys use. find out why nine out of ten large professional investors choose ishares for their etfs. ishares by blackrock. call 1-800-ishares for a prospectus which includes investment objectives, risks, charges and expenses. read and consider it carefully before investing. risk includes possible loss of principal. all right, everybody, welcome back. you can see that there are some pretty significant green arrows. dow futures up by about 63 points. s&p futures up by just over six points as well. all comes as we await that jobs number that is less than an hour and 15 minutes away. >> the dow reaching another all-time high. but is buying in the equity market still the right strategy in this low interest rate environment? that might explain it. joining us now bruce richards, also part of -- good morning. >> good morning. >> so answer the question. still time to buy? >> equities were in a multiyear trend so i think will go higher. cash has been going to equities but look at the etf numbers, the mutual fund numbers, the bond flows that's been relatively steady. >> why is that? >> because fed's buying $85 billion a month, a trillion a year, building the balance sheet from 3 trillion to 4 trillion -- >> why moving out of bonds? >> because the fed is buying keeping rates low. fed fund is zero and the government buying as much as they're buying a natural bid on the bonds. bonds aren't moving low end price so people are naturally comfortable investing in bonds. >> earlier this week he said if you're going to government bonds going into treasuries that's like walking in front of a steam roller to pick up a dime. >> 100% agreed. here's the difference. when money really starts to flow out of bonds and that will come a little later in the stage, then every market is going to be propelled even higher. >> so it's the next kind of -- >> how much are treasuries overvalued? take a look at the ten-year note. i thinks extent of the bubble, put a number on it, 22 points. that's how much it's overvalued. if you woke me up from this long slumber and told me gdp is growing at 2%, inflation is growing at 2%, what should interest rates be? i'd say fed funds would be free, ten year notes 4.5. >> you're the first person who would put a number on this. >> ten year notes from 197 to 2.4.5% that's 253 basis point move 22 points. mortgages overvalued by 20 points, high rate corporate bonds overvalued by 20 points. that's the bubble. >> but give me through the '80s and '90s, a 4.5% ten year i'll stay in stocks all day long. i know the rate of change would be different and it would scare the heck out of people but we never thought we'd have a 4.5% ten year right? >> wait still rates start to creep and ratchet a bit higher. >> you think that hurts equities? >> i think when rates start to gap higher equities will go down. interest rate stocks will be clobbered. especially financial reits. >> -- the recovery? >> no because it will be with faster growth. the initial knee jerk reaction is equities will go down. but then the equity market will scream after that. >> scream after that. >> our work shows that the move in ten year bnds of 2 to 4 is supportive of stocks because it indicates better growth you have to get rates up about 4% for it to -- >> -- it's going to depend why the rates go up. if it's an inflation shock it's going to be very bad for stocks. if it's growth, it's not going to hurt that much. and it's also going to depend on the speed. >> 4.5% ten year indicate on inflation. >> yeah, but -- >> what's the number in >> right now if rates start to rise it's probably because growth's picking up rather than inflation. >> wait till bonds fall 30 points ten years fall 20 points and ask that question. people are going to be shocked by that. retail investors, institutional investors -- >> after waiting for it for four years and every weekend -- >> they're not prepared. yeah that's the point. no one wants to lose money but it's retail institutional hedge funds, leverage reits, they're going to get hurt. >> you know you were asking becky before why are investors sticking with corporate -- there's one other factor. there's a dearth of safe assets today. but you think about all of the assets people thought were safe five or six years ago. there's very few. investment grade corporate funds have actually become for investors a safe asset. and i think that's one reason you're seeing such a strong bid. >> another area that's hot is this floating rate stuff. so you're getting a competitive yield but people feel like they're protected from rising rates, and that seems to be the really hot thing now. your thoughts on that? >> buyers like leverage loans, big discount distressed. where we do have duration risk in our book we want that who's shorting cash instruments. >> what's your number today? >> 185. >> okay. >> you look like you're -- you go with the unbuttoned top button which means you're working your ass off, right? your clients see that, they think this guy -- >> i just tightened this knot for you. >> but you don't sleep, you don't rest, you don't go to the bathroom. your clients are getting their money's worth. look at that. >> i'm so glad i don't have to wear a tie. appreciate it. when we come back we're going to talk about which fed heads move the markets the most. larry myers' annual list of news makers many of whom you can see on "squawk." we'll talk about who you need to listen to the most when it comes to making decisions. the patient, presented with a hairline fracture to the mandible and contusions to the metacarpus. what do you see? um, i see a duck. be more specific. i see the aflac duck. i see the aflac duck out of work and not making any money. i see him moving in with his parents and selling bootleg dvds out of the back of a van. dude, that's your life. remember, aflac will give him cash to help cover his rent, car payments and keep everything as normal as possible. i see lunch. 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[ construction sounds ] ♪ [ watch ticking ] [ engine revs ] come in. ♪ got the coffee. that was fast. we're outta here. ♪ [ engine revs ] ♪ welcome back to "squawk." a hopeful sign for the battered economy. new figures show that tourism in greece is bouncing back this year. bookings for greek vacations came from britain, germany, and the netherlands. the coming summer they are up 10% over a year ago. the biggest slice of tourists coming to greece these days from germany. those bookings were down about 20% last year but have now rebounded about 30% this year. >> currency floater. there's the -- up 50% if the drachma was half of what it used to be if you go there. they can't do it. >> take a nice vacation. >> island of mikonos. they're all great. the worst greek island -- >> santorini. >> rhodes. doesn't get better. >> italy. there's always italy. >> or paris. >> you guys do talk a lot of paris together. >> we do. >> when we come back. play it again, sam. the mayor of newark, new jersey cory booker getting some high marks. but can he do it on the federal level, as well? we're going to ask him for his possible bid for senate and much more. and pandora's ceo stepping down from the internet music service marking the end of an era for the company. a closer look at why his exit comes as a surprise and what it means for investors who saw a nice pop in the stock yesterday. i know what you're thinking... transit fares! as in the 37 billion transit fares we help collect each year. no? oh, right. you're thinking of the 1.6 million daily customer care interactions xerox handles. or the 900 million health insurance claims we process. so, it's no surprise to you that companies depend on today's xerox for services that simplify how work gets done. which is...pretty much what we've always stood for. with xerox, you're ready for real business. a talking car. but i'll tell you what impresses me. a talking train. this ge locomotive can tell you exactly where it is, what it's carrying, while using less fuel. delivering whatever the world needs, when it needs it. ♪ after all, what's the point of talking if you don't have something important to say? ♪ welcome back to "squawk box" this morning. in the headlines we're an hour away from the february employment report. congress think the u.s. added about 160,000 nonfarm jobs last month. the unemployment rate ticking down to 7.8%. we'll see whether that holds up. also macy's, martha stewart, and jcpenney are going to be taking their dispute to mediation. a court case involving the three parties has been adjourned until early next month to try to work this out and find a solution. the case centers on stewart's decision to sell housewares at jcpenney which macy's said reached a prior agreement to only sell stuff at macy's. cdw reportedly set to go public later this year. reuters reporting they've hired banks for potential offering. cdw was taken private for $7.3 billion back in 2007. joe? >> thanks, andrew. the private sector is teaming up with first lady michelle obama in a partnership for a healthier america. joining us with more on this special summit, newark new jersey mayor cory booker i begged to come on the show like two years ago and finally had to have a summit for him to be here. whatever it took, just really glad you're here, mr. mayor the vice chairman of the partnership for the healthier america and you know, we're supposed to ask people hard questions -- there's no way i can challenge you on this whole initiative. it's just what we need to do for like i mentioned probably 100 reasons. >> yeah, well look, first and most important reason is the impact it's having on the lives of our children, undermining their potential. you know, four times the medical cost if you're an obese child. we've seen obesity in the united states for kids 6 to 11 increase three-fold in the last three years. growing epidemic problem. so much so that now if we had kids ages 17 to 24 at least 25%, maybe more than 25% wouldn't qualify to serve in the united states military right now. so it's undermining our society in so many different ways. most importantly, the children that we're going to be relying on to be the producers, to be the inventors, to be the poets, to be the teachers, those kids' lives are really being eroded by this problem. >> and i think about ways to do it. i've been a critic of mayor -- not of mayor bloomberg, the nanny state that 16.9 ounces, you can have it, if it's under 16 you can buy two of them. i can almost see the government getting involved in an alliance with the private sector at least for public schools and the like and diets in that case. i don't know about legislating behavior in adults. that i have a problem with that. do you have thoughts on that on where you draw the line? >> well, first of all, let me just say that the first lady, the partnership for healthy america, this really about pulling everybody together. this summit you can have a foundation, nonprofits, community activists, corporations, all coming together to say, hey, we can change this. we can solve this epidemic. so in that sense this is the right way to do it. i'm very excited about it. look, my brother mayor bloomberg who is really the obi-wan kenobi of american mayors and pulled us together to deal with climb ed change, illegal guns, infrastructure investments, he is being powerfully provocative. and whatever you want to say, we do have a history in america of saying that the government can step up and do things, whether it's cigarette smoking, whether it's seat belts, there are things that right now society pays a tremendous cost because we do not do. so as mayor i didn't follow some of the things that he's done but i give him a lot of prize because at least you and i are talking about these issues that we should be talking about. he's chief provocateur, it's a good thing. here in d.c. we're talking about bringing people together in a collaborative sense, not a government telling people what to do, but challenging them and folks are stepping up. reebok today, big announcement, has said you know what? we're involving 200 schools. we're going to increase that to 1,000 schools across the country. we're going to put our money where our mouth is. put up $30 million over the next three years increasing youth activities. we see great hotels like hyatt saying when kids come in they get these fried chicken fingers and french fries. we're going to change our kid's meal. you have other folks pledging to open up more supermarkets in food deserts. it's an incredible coalition of people saying if we don't deal with this problem now we're all going to suffer. >> exercise. i can imagine exercise -- with the food thing, in the '80s we were absolutely sure there's a cascade of science that said red meat was i don't know caused everything. and it was basically disproven. so there's just certain times where i wonder -- >> look it, kids -- >> you can look at the calories and things like that. for kids i certainly see it. for adults, we -- you had warren on the other day said look i do 2700 calories, and how i get to 2700 calories per day is my business and if 200 of them are going to be drinking a cherry coke then i'm going to drink a cherry coke. that's -- that's the only point. >> mr. mayor, i -- >> well look at the -- >> i'm sorry go ahead. >> at the end of the day that's the thing about america. we enjoy our freedom, we enjoy our options and i completely support that. i'm a vegetarian. it's a personal choice. it's what works best for me. but the reality is we all have to get up and recognize we have a health care crisis. we as a country cannot continue 18% of our gdp, 70% of our gdp and climbing being spent on health care costs. we are a yes that's driving our economy, dragging it down with the cost of health care. and that's being driven by the fact that we're such an overweight population. so we have to do something. we've got to be -- >> exercise, too. i mean, so many sedentary. and then you throw it, you know, social networking. you don't even have to leave the house now, cory. you can sit at your house on facebook all day long and make friends, lose friends, whatever you're going to do. i mean there's a lot of things that go into it. exercise is just key. >> you're not going to get that far with a guy who started a social media company way wire who is tweeting and facebooking a lot. that does not mean that we shouldn't be out there being active. one does not necessarily connote the other. the truth is, as we're seeing with reebok's commitment, we've got to get our kids back engaged, physical activity, going outside the house. as i've seen as a mayor, we have the largest parks extension in over a isn'try. policymakers like me have a responsibility to provide safe, good, parks and recreational facilities for our kids that's got to be a priority. new york city did it years back with a big effort the private sector joining the city government doing something called take the field. they opened up many fields in places in new york where they didn't have them. we've got to commit to it. i really believe in america after seven years of being mayor it is no longer of can we deal with problems, the issue is never a question of can, it's always a question of will. will we do it? do we have the collective will as a country to deal with the challenges that are undermining our potential, undermining gdp growth, undermining our hopes and dreams for our kids. >> mr. mayor this is an incredibly important effort i'm very glad to see you making such a big point of bringing it up today. a lot of people are wondering what your next step will be. will you run for governor in new jersey? will you run for senate in new jersey? have you focused in on what your next plan may be? >> yeah, i have. i've got 478 days left as the mayor of the city of newark. we are booming in our city right now. we have the largest economic development growth period sinces 1950s and '60s. in fact, 30% in the end of 2012, 30% of all the development for commercial and multifamily going on in the entire state of new jersey was going on in newark. newark was responsible for that lion's share. but i'm going to really focus for these next 400 70 plus days to continue to drive newark's biggest growth period. we're out of our budget woes, extending tax base and job opportunities for my residents. that is the platform i'm going to stand on. after that i've made no formal announcements or decisions but i'm exploring and looking and running for the united states senate because job creation, balancing budgets, dealing with violence in america, these are things i've been doing on the local level and i believe on the national level i can make a big contribution to tackle being some of these enduring problems in our country. >> cory i know you it's andrew sorkin here i know you want to potentially get to washington but given how screwed up washington seems to be do you think you can actually get anything, is there more to be done in washington than there is as being the mayor or being the governor? >> yeah. >> well, look, i love being the mayor. it's a job of my dreams. and back in the 1990s people said the same thing to me. why would you want to go to city government in newark, new jersey. it's so screwed up. it was. we had the federal government taking back grant money, threatening to take over our housing authority. we've turned all of these around, become more efficient, more effective, streamlined ourselves. newark city government we cut about 25% of the jobs, make it leaner and meaner, we did 58% in the housing authority. created more efficiencies, management systems. and so what people told me not to do or was impossible to do, we've now done, creating more opportunity for our residents. for taxpayers. and so we keep saying things are impossible, they will always be that way. but we have people starting to step up and lead not just from washington but really democracy is not a spectator sport. all of us getting into the game. all of us doing a little bit more. having that same sense of urgency we as a nation had when we faced down totalitarian regimes, when we faced down jim crow by people in the northeast and all around the country getting into doing freedom rides this is the kind of urgency we need because our country is underperforming. we could be doing so much better but we just desperately need a good people to stand up and do something about it. and never accept the impossible. because the testimony of america is anything, the testimony of america is a perpetual achievement of the impossible. >> i don't know, govern ever. governor. might be an opening in new jersey coming up in a couple of years i think, cory, don't you think? i just think of the senate, the last time the senate got anything done was i don't want to bring up corzine but he went there. he came back to be governor. such a better, you know, you actually get something done. >> well, let me give you an example. i've been fighting crime now for seven years from the streets. >> we'll talk. >> guns that are being used are not coming from my state they're coming from out of my state. >> maybe in that regard. yeah, it's just frustrating to watch the senate work, you know, compared to state governors. anyway, cory, we got to run. i know that you got stuff to do. it's been great having you on, mr. mayor. good luck. >> i look forward to coming back. thanks for having me. >> good, thanks. >> when we come back, when they speak the markets move. so which fed head has the most influence? larry meyers' scientific findings are next. and later the number of the morning surveys economists are expecting nonfarm payrolls to rise 160,000. we've got an expert panel ready to break down the numbers for what they mean for the markets. first a stock to watch this morning. smithfield foods confirms that it has received a letter from shareholder continental grain company and says it will review the memo in due course. continental grain is urging smithfield to consider splitting into three units, and consider initiating regular cash dividends. : 1-800-345-2550 seems like etfs are everywhere these days. tdd#: 1-800-345-2550 but there is one source with a wealth of etf knowledge tdd#: 1-800-345-2550 all in one place. tdd#: 1-800-345-2550 introducing schwab etf onesource™. tdd#: 1-800-345-2550 it's one source with the most commission-free etfs. tdd#: 1-800-345-2550 tdd#: 1-800-345-2550 one source with etfs from leading providers tdd#: 1-800-345-2550 and extensive coverage of major asset classes... tdd#: 1-800-345-2550 all brought to you by one firm tdd#: 1-800-345-2550 with comprehensive education, tools and personal guidance tdd#: 1-800-345-2550 to help you find etfs that may be right for you. tdd#: 1-800-345-2550 schwab etf onesource-- tdd#: 1-800-345-2550 for the most tdd#: 1-800-345-2550 commission-free etfs, tdd#: 1-800-345-2550 you only need one source and one place. tdd#: 1-800-345-2550 start trading commission-free with schwab etf onesource. tdd#: 1-800-345-2550 call, click or visit today. tdd#: 1-800-345-2550 investors should carefully consider tdd#: 1-800-345-2550 information contained in the prospectus, tdd#: 1-800-345-2550 including investment objectives, risks, tdd#: 1-800-345-2550 charges, and expenses. tdd#: 1-800-345-2550 you can request a prospectus by calling schwab tdd#: 1-800-345-2550 at 800-435-4000. tdd#: 1-800-345-2550 please read the prospectus carefully before investing. but that doesn't mean i don't want to make money.stor. i love making money. i try to be smart with my investments. i also try to keep my costs down. what's your plan? ishares. low cost and tax efficient. find out why nine out of ten large professional investors choose ishares for their etfs. ishares by blackrock. call 1-800-ishares for a prospectus which includes investment objectives, risks, charges and expenses. read and consider it carefully before investing. risk includes possible loss of principal. welcome back to "squawk box." last night was a big one for the hedge fund industry. time to give back to the community. more than 1,000 people gathered for the 15th annual hedge fund cares new york event. cipriani was an evening of cocktails and entertainment but the gathering raised funds to help prevent child abuse and treat its victims. among the attendees, the founding partner who received a lifetime achievement award. we caught up with some of the people in attendance. >> give the industry a chance to come together as one group, to be with each other and do something great. >> we have now moved to 12 cities in five countries, where we raise money and we give it out in the city where we're raising the money. >> and all the money we raise in the local community stays in the community. tonight we'll raise over $2 million. >> i think coming over there and seeing the art and the voice of the kids and the art and what they're going through, a lot of people were like, wow. >> lots of fed talk out there. but who should you really be listening to? steve liesman joins us right now with larry meyers annual fed power player awards. these are biggies because there is a lot of fed speak. >> that's right. you may think i'm into the fed minutia. larry meyer brings it to a whole new level looking at every speech on monetary policy given by one of the fomc members and chronicling how much it moves the ten year. used to be the two year but because it doesn't move anymore he had to move it to the ten year. richard fisher from dallas, 22 speeches. almost off the charts if we stopped it here relative to everybody else. bernanke at just 12. this does not include his press conferences in there. williams from san francisco, dudley, 11 and leff lacquer who seems to make a lot of news but only giving ten speeches. let's look at the next award that larry meyer gives. the total absolute chance, bernanke moves it 18 basis points over the course of his 12 speeches. dennis lockhart from atlanta coming in second. doesn't strike me as one of the more influential guys but apparently the market is really listening. richard fisher next. dudley, bullard, lacker and williams. now this is the most important award i think. we call this the power player award. this is moves per speech. bernanke at the top, followed by our good friend from atlanta dennis lockhart. jeff lacker second, like i said, he's pretty impactful when he does speak. bill dudley and kocherlakota. one more thing. how do they move markets? are they hawkish, do they move the yield up or down? bullard here tends to move it up. lockhart but there's bill dudley a known dove moving it up. williams, and plosser a known hawk moves it down. bernanke moves it down which is what you'd expect. joining me now larry meyer to explain this conundrum. how is it that hawks are dovish and doves are hawkish here? >> what matters, steve, is not whether they're a hawk or a dove but whether the speech is more hawkish or dovish than the markets expected. so it's not entirely surprising. >> let's talk about why would plosser, for example, have a negative six total impact on the market? >> i think that's the case because he was generally less hawkish than the markets expected. okay? and that meant that he was lower in interest rates over the course of the year. >> larry, statistically significant, how much does the placebo move -- i bet we can get steve liesman. we can watch the ten-year and i bet you we can build the same chart for steve liesman when he talks -- have you run statistical analysis -- >> absolutely not. wait a second. i can't even move the markets like that. >> it's a two-hour window, right? >> this is, you know, quite significant. i think it's important that the chairman is the power player of the year, and moves the markets. he'ses messenger, indeed i call him the decider. it would be very disappointing if that weren't the case. >> larry, did you look at all the sustainability and remind you, look, you were a governor. i used to work at the fed. i think all of us know the chairman runs the show there. unless it's somebody sort of in the inner circle like a dudley, shouldn't you fade most of these moves from just about anybody else with maybe the exception of yellen these days? >> well, you're absolutely right. and this is the disappointment in some sense, right? that there's so much influence by other members of the committee, other than the chairman, and other than yellen, and sometimes these speeches are interesting. but they're basically noise. and so, you know, i really hi that, as you know, i think that the markets overreact. there's not moves here -- >> let's be clear about something here, which is that the markets react to these speeches but they are not the most impactful of all the things the fed does. the statements are the most important. followed by the minutes and then if i'm not mistaken, larry, followed by the speeches. so the market is smart this way. they do react to the speeches but it's not the thing they react to the most. >> again, that's -- that's a very fortunate and desirable result. the official communications move the markets, then any -- any member of the committee. >> larry, does it matter whether they speak a lot? and i know there's a percentage basis, but those that speak more, or more publicly, do they have more of a sway, less of a sway. >> well, you know, obviously that adds to their ability to move the markets overall. and we see that with president fisher. on the other hand, if you look at impact per speech president fisher is like 12th. okay? so you know, it's probably more important here where you are in terms of power player of the year. i sometimes think of that as the most important award and we have to adjust for the number of speeches. that's why we look at that award. >> larry, steve, guys, thank you very much. steve you're going to be back here in just a few minutes. >> yeah, the final countdown. >> here we come. when we come back the surprise exit of pandora ceo joe kennedy overshadowing the quarterly results leaving investors asking why now. cnbc's julia boorstin will have more did tails after the break. zap technology. departure. hertz gold plus rewards also offers ereturn-- our fastest way to return your car. just note your mileage and zap ! you're outta there ! we'll e-mail your receipt in a flash, too. it's just another way you'll be traveling at the speed of hertz. you name it...i've hooked it. but there's one... one that's always eluded me. thought i had it in the blizzard of '93. ha! never even came close. sometimes, i actually think it's mocking me. [ engine revs ] what?! quattro!!!!! ♪ welcome back to "squawk." pandora ceo joseph kennedy stepping down after the company reported upbeat results after the bell. the search for a replacement has begun. julia boorstin joins us now with her exclusive interview. zblulo julia? >> that's right. i sat down with joe kennedy right after the surprise announcement that he's leaving. kennedy told the board of his decision on tuesday night and stressed that he is committed to stay until successor is found, which could take months. the announcement comes on the heels of better than expected results, and a couple of bold moves that will boost the bottom line. so i asked him why, after nine years leading pandora, he's leaving. >> my envision had always been to create an enduring, great company. and there's no perfect time for someone in my position to leave but i think this is a good time. we have tremendous forward momentum on all parts of the business. we turned the corner on mobile monetization. we have a great team. great plan for this year and i think it's the right time for a very orderly transition to someone who can take the company to the next level and beyond. >> so, guys, that was kind of a nonanswer. when i asked if i was fired he laughed and said no, that it's just time to recharge my batteries. now kennedy says the key to pandora's moving to the next level is mobile. saying its ability to make money from mobile streaming is the cornerstone of pandora's business, and the force behind this past quarters's upsize. a new system will allow the service to compete directly with radio stations for the roughly $15 billion radio ad market. >> fundamentally what we're trying do is make buying pandora as easy as buying your local radio stations or a group of radio stations across the country. that's what these systems enable. they put a side by side with the traditional alternatives in radio so that people who buy advertising can see our audience size, and can move forward, and transact with us again, with all the ease that they've historically been accustomed to. >> now, while that may be true, pandora does face growing competition from a number of forces, not just radio but services expected to launch from apple and youtube. as far as replacing kennedy, andrew you said it best, the search is on. >> thank you, julia. interesting story. are you on pandora, by the way? >> i don't know how to do that. >> julia, i bet is on pandora. >> you don't use it at all? the service is free up to 40 hours of mobile use a month. it's kind of a great free service. >> i was getting some surgery, the doctor asked me what do i want to hair, i told him, and he did something, and pandora and there you go. >> julia boorstin, thank you very much. larry, thank you for being with us. >> thank you. >> sorry you're over there. my brain is all over the place. coming up, the final countdown to the jobs report. our market pro panel is ready to rock. we have austan goolsbee, getting ready professor of chicago school of business former economic policy adviser to the vice president and cnbc contributor jared bernstein and oppenheimer funds brian leavitt. plus rick and steve getting into the mix. i remember the day my doctor said i had diabetes. there's a lot i had to do... watch my diet. stay active. start insulin... today, i learned there's something i don't have to do anymore. my doctor said that with novolog® flexpen, i don't have to use a syringe and a vial or carry a cooler. flexpen® comes prefilled with fast-acting insulin used to help control high blood sugar when you eat. dial the exact dose. inject by pushing a button. no drawing from a vial. you should eat a meal within 5 to 10 minutes after injecting novolog® (insulin aspart [rdna origin] injection). do not use if your blood sugar is too low, or if you are allergic to any of its ingredients. the most common side effect is low blood sugar, which may cause symptoms such as sweating shakiness, confusion, and 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dollars in accounts payables each year. helping thousands of companies simplify how work gets done. how's that for an encore? with xerox, you're ready for real business. this hour on "squawk box," economic data that could move the markets. we're counting down to the february employment report. our panel of experts is ready with final predictions, and instant analysis. and we'll continue our what's working series with stock picks for your portfolio. the third hour of "squawk box" starts right now. >> welcome back to "squawk box" here on cnbc, first in business worldwide. you can hear the music. you know what that means. jobs friday. i'm joe kernen along with becky quick and andrew ross sorkin. our guest host is alec young, global equity strategist for s&p capital iq. he has to memorize all the stats on 500 -- you know every s&p stock, don't you? you better you're with the s&p. we are counting up to 8:30 a.m. or counting down or up? there you can see there's our clock. that's based on -- it's an atomic clock we're using at the u.s. labor department. that is the official one? that's how long it will be. forecasters looking for 160,000 jobs. the unemployment rate is seen falling to 7.8%. we'll have more on the jobs report in just a minute, but there are other headlines today, as becky is poring over right now. >> we just got the same-store sales for mcdonald's. they look like they were a little better than the street was expecting. negative numbers but that in large part is because there was one less calendar day this year than there was a year earlier so you were expecting negative comps. overall they were looking -- the street was looking dunn 2.2% on a global basis. it was only down by 1.5%. if you exclude that negative calendar shift, global comps would have been up 1.7%. also, if you look at the u.s., it was down 3.3% versus the expectation of down 3.8%, then again that included that calendar shift. europe was down 0.5% versus drop of 1.7% that the street was expecting. acme is the one area, asia, pacific, middle east and africa down 1.6%. they were looking for slightly marrower loss but the ceo says they were looking through this. it was a difficult prior year comparisons but they did pretty well with them and they think they have the operating experience to manage through the current challenging environment. he is throwing the wortds challenging environment in there and the right strategies for the long term. >> are we happy or sad? >> we're happy. >> after that conversation we had with mayor backer? >> except if you look at mcdonald's, they've done a lot of things to try to get healthier choices brought into the mix. if you have a happy meal you get apples instead of french fries. >> you know how i would argue that. >> don't worry about it. it's the exercise. >> it's the number of calories you put in and the amount of exercise -- >> if once a week you go to taco bell or have mcnuggets once a week, people live to be 100 years old. >> my biggest concern is the amount of exercise. >> you can't just go once a week. you've seen me when we have dunkin' donuts here. you can't just take one. >> have a little personal control. yes you can just go once a week. i don't eat a fillet of fish. i would eat a lot of those. of course i don't even know what kind of fish that is. >> they said it's -- they've been -- >> is it the kind with two eyes looking up? >> you're thinking of flounder. >> they're supposed to have two eyes on the top of their head. >> i know! but doesn't mean you have to eat it. >> actually pretty good fish. among the other stories we're watching, 17 of the 18 banks have passed the federal reserve's stress test meaning that they are sufficiently capitalized even under worst case scenario. the only bank not getting a passing grade was allied financial. we'll have more on the story from kayla tausche in just a few minutes. in the meantime we have even the futures trading higher even ahead of this number. right now they're up about 56 points for the dow futures. s&p futures up just about five points above fair value again after several days of new record highs for the dow. overseas in asia, you did see a gain of 2.6% with the nikkei, and the hang seng, the index there was up by about 1.4%. in europe, green arrows there as well this morning the best performer right now among the ones we're looking at on the board is the cac in france which is up by 0.8%. >> and we're less than 30 minutes from the much-anticipated february employment report. we've had to wait a long time for this. second friday of the month. so we have our power panel. joining us jared bernstein, chief economic, and policy adviser to vice president biden and senior fellow over at the -- and a fine fellow senior and fine on the center from budget -- >> a jolly good fellow. >> he is a jolly good fellow and austan goolsbee, former chairman of president obama's council of economic advisers. and economic professor at the university of chicago's school of business. isn't wolf paying you, too? >> now i'm 32 advisers, i'm the economic intelligence officer. >> wow. that's the oxymoron of the morning, isn't it? sorry. brian levitt, senior economist at oppenheimer funds and our guest host alec young of s&p capital iq. go straight across the line. i -- you know, with the claims numbers, aren't you thinking maybe we're moving maybe into third gear or something here from second? >> i'd like to think that. but, in fact, my forecast is right where the consensus is 160. although when i made 160, the consensus was 170. and that was just a day or two ago so it must have come down. so i was actually a little bit less optimistic than the consensus. 160 on total. 170 on friday. unemployment rate stays about where it is probably. 79. maybe ticks down a tenth. >> austan is the one with quite the record and you're a little bit more optimistic, aren't you? >> let me just say that. i love austan goolsbee, he's like a brother to me. >> uh-oh something bad is coming. >> last month when we were on this very show i said 160. he said 155. it came in at 157. he was off by 2,000. i was off by 3,000. and it was all austan, austan, austan. >> so we gave him a lot more -- >> yeah, you gave him a lot more love based on 1,000. >> i was closer. >> true. on this one, joe, tell the truth, i had the same experience looking at the consensus, and comparing my number as jared had. i'm only looking optimistic because the consensus was coming down. even higher than where i was. i think i'm probably about, you know, if consensus has dropped to 160, i'm probably at or below the consensus. >> oh, you are? i thought you were above. i thought you were above. brian, where are you? >> there hasn't been a lot of intrigue into tease numbers. i think we're going to be in line with last year, which is around 180,000. so i'm a little bit higher. it's crazy to think we can get this down to within the 100s or 1,000s of an economy this size. but you know there's not a lot of intrigue. it's very consistent with post-financial crisis, slow growth, you know, probably a little bit better than 1% job growth gets us around 180,000. >> where were you, did you already tell us? my mind is mush. >> i focus more on, you know, what's the reaction. i think the numbers have been better lately. so, unless this number is a total train wreck i don't really see it moving the market that much. if it's between 150 and 2300 i think it's kind of a nonevent. we've got a big miss given that people have gotten conditioned for better numbers. i think it could be ugly. but i think the odds of a big miss today are very low. >> you know, the way the market acts, we talked about it right at the top of the show. i mean, upside surprise in the market's going to go, see, there's a reason i was doing what i'm doing and i'm just headed higher today. we could really, i mean we could really get going. once you get above high because no one believes. everybody's ready, oh, it's got to pull back. got to pull back. a lot of times, you know, it doesn't. and then people see the train leaving -- but we'll see. if it was disappointing i guess it could happen. why haven't you guys gotten more optimistic given that jared, housing, for example, the claims numbers, even consumer sentiment seems like it's head up pretty well. >> i know there are definitely reasons, if there's an upside surprise, come to me, i'll be able to explain why it is. >> see austan does it before the number. that's the thing. you know -- >> i've seen you -- >> that's -- >> in hindsight. >> i'm much better explaining things after they've happened. but, you know, i'm focused on the fourth quarter gdp, which was pretty flat. but also, just if you actually, i know anecdotes aren't data. but if you actually go out there and you look at employers hiring function, it just seems very tepid right now. i mean, again, a lot of this is just anecdote. but kind of the plural of anecdote is data. we have lots of employers saying i'm waiting and seeing. i'm waiting and seeing. so you know, i think when you factor in kind of the upside of the downside you're looking at numbers that aren't terrible, but, you know, are in the kind of realm that we've been citing. >> i would also say, i think the thing driving the markets is the unprecedented rise of corporate profits. >> i do, too. >> and it has been the case the past couple of years, we've had episodes where the corporate profits were going up, at the expense of labor costs. they were figuring out how to do more were less, and so you could still see the market going up and taking off, even though the job market is just kind of either stumbling or stagnating or just not improving that much faster. >> i think the reason that you don't get this big upside, i mean, to those points, what businesses do to defend corporate profit margins, of course we have the higher payroll tax, rising gasoline prices the looming sequester which probably won't figure into the february numbers so the private economy looks good. or looks decent. but there are some headwinds to this number that could prevent us from breakout. and actually for markets that seems to be okay. this sort of couple of percent gdp growth inflation has been quite good for markets. >> i've been very focussed on the consumer. and, real wages have been flat for most workers. that puts somionward pressure. on the other hand we've seen better consumption results than we -- we might have a right to expect. but austan's very much correct. the corporate profit 5b89 has been part been fueled by very low labor costs. those very wage results that i was just citing. so in an economy that's 70% consumption, it's ard to get a real boost. i mean that's why gdp has been so slogy and why we've been stuck in this kind of 1% year over year realm in terms of job creation. >> okay. all right. we're -- we're going to check back with you gentlemen. it's less than 20 minutes to go now. before the big jobs number. which is, you know, not a big deal. >> not a big deal. >> it is a big deal. >> huge deal. >> whether he's ever back on jobs friday. >> he changed his mind. >> after we slapped him around a little. >> coming up, all but one big bang passing the latest round of stress tests but the fed still has to approve any plans for share buyback or dividend increase kayla tausche is going to join us with more on the capital plan in just a moment. we are approaching 8:30 a.m. and the release of the february employment report. we're going to get some final predictions from our panel of experts as we head to a break take a look at u.s. equity futures we do have green arrows across the board. we'll see if they hold up. ♪ [ male announcer ] this is karen and jeremiah. they don't know it yet, but they're gonna fall in love, get married, have a couple of kids, [ children laughing ] move to the country, and live a long, happy life together where they almost never fight 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[ dog barks ] because right after they get married, they'll find some retirement people who are paid on salary, not commission. they'll get straightforward guidance and be able to focus on other things, like each other, which isn't rocket science. it's just common sense. from td ameritrade. welcome back to "squawk box." let's get back to the latest round of fed stress tests. the big issue, cnbc's kayla tausche joins us now with more. kayla? >> andrew, all but one bank clearing the federal reserve capital hurdle for those depression-like economic scenarios. the hurdle was a 5% tier one common capital ratio and the 18 banks tested average 7.7%. allied financial posting a 1.5% racial yo though its results perhaps skewed since its mortgage unit is in bankruptcy. performance overall is a slight positive. but it doesn't mean that banks are out of the woods. andrew markhart called the results a mixed bag noting that the core capital fell from last year. the telltale sign will be the capital plans. he believes all plans will be approved and they'll favor buybacks. some banks could run into roadblocks in returning capital. the fed uses a more conservative calculation for a leverage ratio. the bar to clear here is 3%. several banks saw this metric worsen in the last year. goldman sachs coming in the lowest at 3.9%. one investors are watching because after all, a chain is only as strong as its weakest link. andrew? >> so here's my -- here's the question that i have. should we be worried about the other -- the other banks that are going to i mean even though they passed the test, is there any -- i mean i was reading some other pieces that would suggest that they passed the test but there's a little whitewater -- not whitewater, but whitewash -- >> also are they going to be allowed will the guys that came in at the low end, the morgan stanleys, the goldman sachs, will they be allowed to give more dividends back? will they be allowed to give share buybacks or are they going to be restrained in what they're allowed to do? >> interesting this leverage ratio that i was just mentioning morgan stanley saw that level stay about the same, 4.5%. i think a lot of people are trying to read the tea leaves here and look at where the banks came in versus where the bar to clear is on that leverage ratio. it's not apples to apples, though. i think that a lot of people have been say being that maybe a lot of banks got an easy "a," to quote the dealbook headline on this but maybe that the requirements were a little bit too easy here. but in fact, senior fed official said yesterday when we spoke to them, that we haven't seen economic conditions like the ones in this test since the great depression. no other two-year period has there been such duress. so it's really hard to tell and the fed still isn't disclosing all that much about its model. so, you know, at this point we just have to go on what we know. >> what do we know in terms of how analysts have perceived this in terms of who's going to actually be able to come out with the -- bank of america. what's going to happen to bank of america? >> well, i think that bank of america, andrew, a lot of these companies have had some of these plans telegraphed whether on the record or off the record about what may be the market is expecting here. because bank of america hasn't been able to post a quarter of solid earnings in the last couple of years. because of their litigation. i think a lot of people expect that maybe bank of america, for instance, won't actually be increasing its capital. returns here, citigroup of course last night disclosing that it plans to or it requested, at least, to buy back 1.2 billion in common equity. for the others we don't exactly know. wells fargo and jpmorgan both have said on their conference calls that they expect their capital return plans to be bigger than they requested last year, if neighbor a little bit different when you look at buybacks, versus dividends, and how that is actually going to shake out. >> and by the way, what do you think of this statement that ally puts out basically criticizing -- criticizing the model and criticizing the fed? >> well, it's interesting, because if you look at ally's performance across the board on the stress test you see that it did come in very far below that tier 1 common capital ratio. it had 1.5% versus the fed bar or the dodd-frank bar which is 5%. but on all the other metrics including leverage ratio, including other capital ratios, it actually passed the test. it's better than some of the other banks. so you have to wonder what exact metrics are going into that one specific ratio, and of course, residential capital the subprime mortgage unit in bankruptcy so that's going to hurt its capital levels. >> it can't help your cause to criticize your regulators, right? >> right. >> that seems like a slightly crazy thing to be going if your goal is to somehow pass the test the next time. >> right. and i think that it's especially poignant, considering that ally is basically the only legacy asset that's still in t.a.r.p. the government still owns 74% of ally, it faded a little bit unclear whether it will be able to go public, whether it will end up getting sold. this is the one where it really matters. so it's obvious if they weren't going to pass this, there were going to be some bones that got thrown. >> kayla thank you for giving us that update. we'll see what happens. >> still ahead. 8:19 now. and that means 11 minutes till the february employment report up next we're going to get some final predictions from our panel of experts before the number comes out. and then they're going to stick around for some instant reaction at 8:30. can't catch "squawk box" on television, we're just a few keystrokes away. find the show online and on mobile on twitter hand handle @squawkcnbc. like us on facebook. and visit our show page squawk.cnbc.com. your investments and the information you need, at your fingertips. "squawk box" on cnbc. welcome back, everybody. let's get back to our panel for a quick round of final predictions. economist jared bernstein, austin gooltby and brian levitt. guest host is alec young. steve liesman is on set and rick santelli is standing by at the cme. jared, tell me because i need to write all this down so i know exactly who's right next time and i give proper credit to the proper place. >> this is the tough part. 160 on payrolls. total. 170 on payrolls private. unemployment sticking at 7.9. i think we're looking at basically a race between household balance sheets, which are deleveraging, and the consumer who's just not as strong and he and she needs to be. >> okay, austan? >> ail say 165. i think we've had modest progress getting a little better, unfortunately as the sequester starts kicking in i think this is likely to slow down in the coming months. >> and what about your unemployment rate? >> unemployment i think stays the same. >> okay. brian, how about you? >> i'm slightly more optimistic. i'm in line with last year's average. private 180,000. unemployment rate ticks down 7.8%. >> okay, steve. your official ones. i know you tried to stay out of this before. >> kind of like 187 is where i am. >> precise. >> because i think i like the adp number which has been doing a little better. and i think you take off something for government and maybe a little bit more for the snowstorm because there's a difference in how the weather is calculated. i don't know about the unemployment. i think it's an unforecastable number. >> you're at the high end. >> you're more optimistic based on everything -- >> i have. >> i just want it to be high. so that the market takes off and people that are going, can't keep going. they just feel even cirque. they just feel like it's leaving a training. that's all i want. >> rick, we haven't talked to you this morning. you want to wager a guess on this? >> i'll go 144,000 on the jobs. >> what does that mean unemployment or do you have a guess on that one? >> you know i'll lean towards 8%. but i know that none of us believe in conspiracies but change one number after the decimal on participation and make it anything you want. so, i'll go 8%. >> actually i heard that because of the sequestration, the bls is going to have to stop using decimal points, so we may have to be at 8 instead of 7.9. >> alec i know that you don't officially have a number on this. will you go on the low end or the high end? >> high end. >> closer to steve's number? >> i think the street's at 165. so i wouldn't be surprised to see a good number, something better than that. but i think most importantly, you know, the market's expecting a good number. we've been getting better numbers for awhile. i just think it's unlikely that we'll get a big miss. and other than that, i think stocks are going to react mutual to positively. >> you guys have dick on earlier talking so the long-term investor shouldn't really care about this number. it's sort of the way i look at it in the sense that i don't -- i think this number's going to be in a range that we've been in sort of the 150, maybe 180. i'm always on alert to see if we've broken out of our range. >> it's been awhile since we've had an outlier. >> we had a couple 240s i guess back in december or november something like that. and then we ticked down to 190. we didn't -- 160 to 200 range. and really, 30,000, 40,000 jobs at 16 trillion dollar economy not going to sway my opinion. >> we had a bad number, we'd have to throw all the stuff we said about zandi back there, that he doesn't have it. i mean adp had a really much better number right, and they had a better record recently. okay, ready -- >> very recently. all i did was calculate -- >> are they ready for a miss? >> it could happen any time. what i calculated was that adp had been in a 50,000 to 60,000 job difference, and then they ticked down to say a 20,000 to 30,000 difference. >> didn't adp -- >> for three months. >> adp revised january up to over 200,000 -- >> 215. that's right. >> austin very quickly. what's the your guess for average hours worked. i mean, i know that's a real important one to watch just in terms of hiring. >> i actually bet that ticked up a little bit. that that kind of absorbs what could have been job growth. but i'm not sure as we approach the deadline for instituting obama care you're going to see more movement to increasing the hours -- >> you're the only guy we ask for that. we can only ask one person that we wanted to ask you. >> our panel is going to stick around. our panel is going to stick around for the february employment report which is just a couple of minutes away. right now as we head to a break take a look at the futures. [ female announcer ] it's time for the annual shareholders meeting. ♪ there'll be the usual presentations on research. and development. some new members of the team will be introduced. the chairman emeritus will distribute his usual wisdom. and you? well, you're the chief life officer. you just need the right professional to help you take charge. ♪ at a hertz expressrent kiosk, you can rent a car without a reservation... and without a line. now that's a fast car. it's just another way you'll be traveling at the speed of hertz. let's get right to hampton because it's only four seconds from the number. hampton, give it to us. >> up 236,000. >> old ya! >> february, nonfarm payrolls increased by 236,000 jobs. the unemployment rate 7.7%. the biggest monthly gain in jobs since november of last year. the last time the unemployment rate was 7.7% you got to go all the way back to december of 2008, when it was 7.3%. average hourly earnings up 0.2%. revisions were a mixed bag. in december, we had upwards revisions of 23,000 jobs beyond what had been previously reported. january it was a negative 38, so the net revisions for the last two months down 15,000. private sector job growth in february, a whopping plus 246,000 jobs. job growth the big three. first of all we had professional and business services up. 000. construction 48,000. health care plus 32,000. retail trade 24,000. job losses government, mostly at the state level, down 10,000. how did the unemployment rate get to 7.7%. the number of employed increased by 170,000. the number of unemployed was down by 70,000. and about 130,000 people simply dropped out of the labor force. right now we've got 12 million total employed. a slight decrease. 4.8 million, 40.2% out of work six months or longer. that was a slight increase. okay, guys. have fun with all these numbers. >> wow. >> thank you, hampton. >> okay. so steve the revision was kind of -- that was just -- >> minus 15 on the revision. but that's all potatoes. >> yeah. >> who is that -- >> what are you looking for the worst thing in the report? that's a great report. >> because look at it. and you were above -- you were five above jared as i recall. the weekly hours -- >> hours -- >> 35 -- >> yeah, but -- >> 34.5. >> steve was -- >> 187 -- >> i was not going to make a prediction. i just wanted it above, so it does show -- >> you said i told you. when >> i was hoping for above 200. i wanted above 200, but now -- >> rick santelli has some explaining to do. >> why, why do i have any explaining to could? >> because you said 144 and you're off by 100,000. >> so what? so what? >> actually 100,000 is the interval. >> so what? >> this is a strong report. i mean, yes you can find the decline in the labor force. okay, that's not so good. everything else looks very good. >> the markets -- >> the markets to really hug this one. >> it's at least -- the thing is, jared, it shows that the market up to this point was like a thermos bottle, doing what it's supposed to do. keep cold things cold, warm things warm. how does its know? the market's been going up, now we see 230. hopefully, you know, i don't know whether it just justified the move that's already made or whether it keeps going. i almost think maybe a negative number of the market to shrug off a negative number sometimes it's better than getting what you want. we'll see. >> does this mean ben bernanke has to stop -- >> absolutely not. >> that's the other thing. if you want to wonder why, you know, the market's a little, you know, isn't surging, the first thing alec said was when does this mean we're -- >> give us a little -- >> let me give you some details here of what happened. the first most interesting thing is the increase in hours worked. and by the way, this goes both ways when it comes to the affordable care act. there is some discussion of increasing the hours worked rather than bringing on new people. i even talked about whether the affordable care act restrains hiring. we'll come back to that. i know jared probably has some thoughts. bottom line is you did increased hours worked. manufacturing hours went up to 40.9, 40.7. decent rise in earnings per hour, 0.2%. not terrific. and then in the private nonfarm was 0.3. so that's okay. we like the increase in temporary help. fascinating that a big part of the revision the prior month was government workers on this theme that we've been on for a long time. why can't the government count the government? they went from minus nine to minus 21. but i think the big story here is the private sector. 246,000 jobs created. hampton told us that the big decline in government was if the state level we can start to brace for perhaps some declines at the federal level in months ahead. >> look if you take all the hours, you sum them up, they got a nice bump this month up half a percent versus down 0.2 last month. all the industries just looking at the broad measures. all the industries accept which one is this. anyway, almost all the industries adding jobs except government, of course, and you know, manufacturing up 14. that's a little bit less than you might have expected. the ism kind of suggested that that might happen. this at least takes a little bit away from the people who say the market is just on bernanke steroids. >> construction is really interesting. it was up by 48,000 since september, construction employment has risen by 151,000. i mean, that tells you a little bit maybe about housing start. >> still like construction numbers have lagged the housing starts. kind of waiting for a little bit of catch-up. there's also in a little bit of sandy in the construction numbers. that kind of tailed off and maybe now it's coming back to more normal level. it's also these months it's very dependent upon whether the weather is above or below normal. can you put a construction worker out there to do that kind of work? >> the thing that's been bothering me, joe, is this gap between corporate profitability, which i agree with austan has been helping to inflate the market, and job growth. and what i want is to see is some of those corporate profits actually leading to more hiring. >> you know, we've been looking for a good liberal to ask the question earlier, jared -- >> you don't have to look far. >> wow. >> no, but jared we were talking earlier, andrew brought up the point, does the left really like a rising stock market? or is it only benefit the 1%, so, you know, you'll -- >> but maybe top 20%. >> you put up with it but it's really not the way you'd like to see it. >> that's partially correct. but people from -- the way i view it is that you know, there's actually a lot of people in the stock market who aren't just in the top 1%. >> exactly. >> pension funds. >> and also it's a proxy for how well the economy's going. >> so that part, that part we disagree with. i do think that there's been a real disconnect between the stock market and the middle class. what i like about this job report, if it sticks. remember this could be an outlier, if it sticks is that that gap may be closing a bit between corporate profitability and hiring. >> i don't know what affordable -- >> you mean obama care? >> the comments that have been in the beige book about the affordable care act. >> you won't even call it obama care. >> i rate it -- >> i brought it up the last two quarters of the beige book that specific comments for federal reserve districts, one where lacker is the president and one where evans is the president so there doesn't seem to be any bias there specifically saying that the affordable care act is restraining hiring. how do you respond to that? >> i'm a little nervous about that. austan made that point and i think there's something to it. >> what should obama be doing now in this regard? >> well i don't think you should be doing anything about the affordable care act. except trying to implement it -- >> why not, jared, if it's restraining jobs doesn't that call for an amendment to somehow go back and see -- >> i got a news flash for you. the affordable care act is not a jobs program. the affordable care act is not a jobs program. the affordable care act is -- >> it's a public benefit program right, and it's a public benefit cost to -- in terms of not getting people jobs then there's a health aspect to not -- >> austin jump in here. at the margin. at the margin austan will tell you at the margin that's where you're going to see perhaps some of these effects you're worrying about. but broadly speaking we have to get labor demand up and that has nothing to do with the affordable care act. >> look i think when you come to the end of the year it will be interesting to see the dynamic, if they start shifting full-time people to part-time you'll actually start seeing employment rise with hours work fall and you know what they say about the difference between a liberal democrat and a centrist democrat, is adding one or two zeros to the 401(k). so we're going to see over the next couple of months how this plays out. >> okay. >> hey, joe, joe, joe. >> yeah. >> earlier, earlier, let's get back to the markets. earlier you said so this proves that ben bernanke, it's not just juicing the economy. >> no, no, no -- >> it's not -- >> not just that he's juicing the market. maybe he's juicing the economy, too, which jeffs the market. >> this is the trickle down idea a little bit. >> if we monetize rates do you think everything stays where it is. if you start a business and i give you unlimited money to fund it are you going to hire more people or less people? >> why would you normalize rates? >> exactly. >> yeah, yeah. you see 3% of harmony, rick, do you see 6.5% unemployment? in that event you would normalize rates. there's no justification for normalizing rates. >> have we gotten that far down the hole that normalizing rates after this tremendous number the huge drop in the unemployment rate -- >> -- 7.7%. >> this is one piece of the road back. that's all it is. and i don't even believe the two ticks decline in unemployment which came with a decline in the workforce. what is in our future, two things -- >> wow, all things change. >> no, i have been honest the whole time -- >> two things are in our future -- >> let me explain what's going to happen. you're going to have a decline in government employment. which means an increase in slack in the labor market. you are going to, if you have a positive job market have people come back in to the workforce, and that will tend to put downward or upward pressure on the unemployment rate. >> you don't believe your own numbers? >> rick, rick, rick, this is very simple -- >> you're making it too complicated. rick it's really simple. bernanke says -- bernanke said 6.5%. >> i don't care what bernanke said. i don't care what bernanke said. what i'm asking you is whether the number at the markets -- >> while we're arguing about this, take a look at the equities futures. dow futures up by triple digits now. so it is starting to pick up a little bit. >> this is a bolddy locks number. strong enough, better than expe expected. good for corporate earnings but not enough to warrant taking away the -- >> jared. >> goldilocks but isn't goldilocks. >> jared one of these days the answer to your question about why corporate 3r069s are so strong and nobody else is participating you may need to look at obama care just at some point in the future you know just consider -- >> you're asking the question a lot. >> i agree that maybe there's a marginal effect, something at the edges, but -- >> well it's -- >> regulation, all this stuff that we talk about. all the stuff that you hear all the time. other than just a hangover from the financial crisis. there's other things going on. that's causing people to be, you know >> to look everything -- >> you always say that. >> it's not even -- >> it stays true every month. >> they're further down the path than we are. i mean -- >> new setup. i've never seen this before. >> i like that. >> the outlook -- >> joe is on top of the pyramid! >> given what's happened in the hours worked numbers does the outlook for growth change at all compared to the first quarter level here? >> yeah, it probably kicks it up a bit. >> i think the hours are one of the most important indicators in this. i mention the aggregate hours before. that's a predictor of gdp growth. >> so let me ask you this, then, given if the private sector is doing 246. and the hours worked ticked up and gdp is a little higher are we in a better position than we thought we were to withstand the sequester? >> why, we are already in a better position but the sequester -- the answer to thatsy think the sequester sucks half a percent off gdp growth. if gdp growth is 2% and you send up with 1.5 that's below trend and unemployment goes up. if gdp is 2.5 or 3 and you go back to 2.5 or 2 you hold steady on the unemployment rate. >> it's critical that half a point and whether it ticks below 2 or keeps us above 2. >> it was only up by 0.1 hour right? >> jared i think -- >> up 0.1. >> hours are up -- >> we're leaving -- >> i think reason people -- reasonable people see if we can cut 2.3% and republicans hold the line on revenue and that makes up for the half a percent that you think will do -- >> just because they're -- >> relieved. >> joe there's an economic study on that. >> that's what i -- >> in chicago, do that work. austan's colleague. >> jared bernstein, austan goolsbee, brian and steven our guest host will be with us for the rest of the -- >> when we come back we've got some portfolio picks that could make you some money. we'll continue with our what's working now with david steinberg. first a stock to watch today, it is finally a done deal, kkr is acquiring gardner denver for $76 a share. that's an increase from late october when the company said it was exploring a sale. why turbo? trust us. it's just better to be in front. the sonata turbo. from hyundai. i remember the day my doctor said i had diabetes. there's a lot i had to do... watch my diet. stay active. start insulin... today, i learned there's something i don't have to do anymore. my doctor said that with novolog® flexpen, i don't have to use a syringe and a vial or carry a cooler. flexpen® comes prefilled with fast-acting insulin used to help control high blood sugar when you eat. dial the exact dose. inject by pushing a button. no drawing from a vial. you should eat a meal within 5 to 10 minutes after injecting novolog® (insulin aspart [rdna origin] injection). do not use if your blood sugar is too low, or if you are allergic to any of its ingredients. the most common side effect is low blood sugar, which may cause symptoms such as sweating shakiness, confusion, and headache. severe low blood sugar can be serious and life-threatening. ask your health care provider about alcohol use, operating machinery, or driving. other possible side effects include injection site reactions and low potassium in your blood. tell your health care provider about all medicines you take and all of your medical conditions. get medical help right away if you experience serious allergic reactions such as body rash, trouble with breathing, fast heartbeat, or sweating. flexpen® is insulin delivery my way. covered by most insurance plans, including medicare. find your co-pay cost at myflexpen.com. ask your health care provider about novolog® flexpen today welcome back to "squawk." take a look at futures right now after that pretty good jobs report. better than expected pretty much across the board. dow looks like it would open up 90 points higher. >> what happened? >> it's come down just slightly. but still that's -- >> 105 -- this is not so bad. >> some of this was probably -- i'm not surprised we're not surging. >> you don't know where we'll be by the end of the session. >> we'll have to see. >> even with the broad-based equity rally, it's still a stock pickers market. let's take a lock at some long-term deep value plays that could make you some money this year. joining us now is david steinberg, he's the founder of dls capital management. whether the financial crisis back in 2008 and saw 12.7% annualized rate of return over the past ten years. good morning to you, david. >> good morning, guys. >> so, you saw the jobs number. i want to get some of your picks in a second. but you've also seen the run-up in the market. are you worried that we're, we're out too far here or no? >> not at all. there's no return in the bond markets. the de minimis returns, regardless of whether you think it's going down or not, you've got the best asset classes over long run are equities. because they're flexible and adaptable and changing economic conditions. whether it's inflation, you know, pricing, input costs, labor, what have you. >> you like tech in particular? >> well, tech is one of the big sectors. a lot would be old tech. you've had 14 years of apartment deprivation out of numerous semiconductor and technology areas of the market place. and i think you're getting a new cycle turn in here. >> let's go through some names including what i think has to be the most controversial. you like hewlett-packard. >> yes i do. >> explain yourself, sir. >> real simple the stock was priced for death. i would say in the -- in the fall. you've had every, you know, major institution or a vast number basically liquidate the position. this company is not a dead company. it's got, you know, three major divisions. been mismanaged from the board of directors level. it had, you know, a revolving door of ceos. you've got a great one in there now, meg whitman. and i think you just need some basic blocking and tackling. you've got a new cycle with microsoft 8 come on chromebook coming out a better criesing differential between apple's products which are much higher in value than the microsoft products in related things. and you've got somebody in there that's going to take control. you've also got the opportunity -- >> even with disappointing numbers, virtually every single quarter, even with meg whitman in the position? >> last quarter wasn't really disappointing. saw the stock jump pretty well. that was telling you they're making progress turning that business around. you've got a lot of alternatives here. you've got three major divisions whether it's the enterprise division, the personal division, or and software and so forth. in printing division, if you can't get those divisions turned around collectively which is what she wants to do you're either going to spin them off, you can sell them. there's a lot of alternatives. as the company trades at a four multiple enterprise. >> let's go through a couple other names. you like micron technology. >> if you really watch what's going on micron is primarily direct random access memory and that business has been an awful business. for years. you're down now to probably three or four major companies. samsung, and now micron. micron is going to be closing a transaction with the bankrupt company called elpida in asia. once that takes place you're going to begin to see pricing move up. in fact believe it or not since the beginning of the year, pricing has moved up about 25% to 30% in the last two, three months as that transaction has come closer to closing. this company has the capacity now to have incredible earnings growth. probably over the next 18 months from here. that stock could really turn on fire here. >> okay. david, we're going to leave it there. i know you also like alpha natural resources. hopefully we'll talk to you again soon. >> thank you. appreciate it. jim cramer's stocks to watch. plus his take on the strong employment numbers. we'll head down to new york stock exchange next. monday on "squawk box," reaction to today's employment report. a new forecast for economic growth. plus a long-time bear on facebook is turning bullish. find out what changed his mind. revolutionizing an industry can be a tough act to follow, but at xerox we've embraced a new role. working behind the scenes to provide companies with services... like helping hr departments manage benefits and pensions for over 11 million employees. reducing document costs by up to 30%... and processing $421 billion dollars in accounts payables each year. helping thousands of companies simplify how work gets done. how's that for an encore? with xerox, you're ready for real business. how do traders using technical analysis streamline their process? at fidelity, we do it by merging two tools into one. combining your customized charts with leading-edge analysis tools from recognia so you can quickly spot key trends and possible entry and exit points. we like this idea so much that we've applied for a patent. i'm colin beck of fidelity investments. our integrated technical analysis is one more innovative reason serious investors are choosing fidelity. now get 200 free trades when you open an account. welcome back, everyone. jim cramer joins us this morning from the new york stock exchange. jim, i know you were watching the jobs report like we were, much better than anticipated number. is this a goldilocks scenario or do you start to worry it's looking good and the fetd will take its foot off the gas? >> no, i think it's goldilocks. i think this is a post-cliff number. the country was on hold because of the government. now the freeze is over. and you're going to start seeing numbers that are more normal, that are better. but i don't think so good, i listened to all your panel, your panel is fabulous. if there are problems still in the economy, this is better than expected but it is not the end. we're still not getting the job to 6.5%. >> we've got till september. all we've ever gotten is two months. the market's gone up when it only had two months. now we've got nothing happening till september. this should work. >> when we finished with the cliff, the government gets out of the picture. look what happens. isn't it terrific? >> it's fun to watch. >> we'll deal with the sequester, you know. you can't take a tour of the white house, i guess. >> the national parks, there will be some days and we'll have to take our shoes off at the lines or whatever. this is what happens when there is not a civil war in washington. we hire, we start building things again. becky put it out, the construction number being really good. i think that's a longer term positive, not enough yet where we can raise rates, but certainly there's a sign there's a pulse without the government being involved. >> set new highs, and out of the blue, something comes out and you see why we've been setting new highs. >> exactly. >> you don't feel so stupid. >> right. >> hey, jim, i want to ask you a question. >> yes? >> do you think it's as bullish that i do that the economists have the bar so low? if they missed it by so much today? isn't that a good thing moving forward if they keep being rock-bottom conservative about the economy? >> i think they don't understand why retail spending goes up, and the answer is because jobs are better. they don't understand that the housing market is incredibly important to the u.s. economy. it's almost as if all they do is focus on the capital, and the white house. and because of that, they miss what happens when the capital and white house get out of the picture. we have a real economy going on here, with household formation. when you get your house to stop going down in value, you feel terrific. >> all right. jim, we're going to see you in a few minutes. i know people will be watching to hear your other thoughts on it. thank you. alec young is our guest host. we'll give him the last word on the markets right after the break. 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at the top of the show we asked you why are you awake? producer john tower has the answers, jt? >> more on the clothing line, ugg boots, made of sheeps skin, not cool. john, in illinois, my wife and i are taking care of our son's triplets. >> just park morning and they'll be asleep in no time. >> tuned in hoping to see bill karins hosting. >> frank thanks so much. apparently we're seeing other people. i like that. i'm very busy. clearly, we appreciate it. our friend in illinois, appreciate that kind e-mail. "morning joe" begins right now. our president, barack obama, took day or two off to go play golf in florida. i don't care, fine, go play golf, i don't care. played with a guy named tiger woods. this is our president playing golf this weekend. what do you think? >> i thought it was funny. >> good morning, everyone. it is tuesday, february 19th. welcome to "morning joe." with us on set, we have msnbc and "time" magazine senior political analyst, mark halperin. >> hey, mark halperin, how you doing? >> national affairs editor for "new york" magazine and msnbc political analyst, john heilemann. in nashville, we have -- >> look at that! >> pulitzer prize winning historian and author, jon meach meacham. >> it's dark down there. >> it is dark. >> shall we get right to the news? >> let's do it. >> there's a piece on rattner. >> sorkin, andrew sorkin. like aenaen -- an insider newsletter. >> none of us are quoted. >> i'm so tired of being an outsider, raging against the news. >> can we do news? >> yes, we can. >> msnbc news "morning joe." >> i ghosted this, man. >> let's move in. president obama will be joined by first responders at the white house this morning to deliver remarks on billions of dollars in automatic budget cuts set to kick in next friday. according to administration officials, the president will challenge republicans to make a quote simple choice between protecting working americans or protecting tax loopholes. but the very public display rather than personal outreach is the type of approach republicans say is hampering opportunities for compromise on capitol hill. a new article from "politico" today says a number of top gop srpts who could help pass the president's agenda are surprised they still haven't heard from him. one example is senator mark kirk, although the illinois republican is a leading voice for new gun legislation following the newtown massacre, he and the president have never spoke.about it. one senate aide says the president's repeated calls for gun control during the speech didn't make it any easier for republicans like senator tom coburn, who are interested in fi finding common ground. on fiscal issues, senator rob portman of ohio says he's open to working with democrats but says his interaction with the administration is limited to secretary treasury nominee, jack lew. senator marco rubio, who's been working on immigration reform was clearly frustrated when white house legislation on the issue was leaked before congress had its own version ready. republicans have never done that, by the way. a white house spokeswoman told "politico," the entire obama administration is in regular contact with members of congress and their staffs an the president has been very clear he is happy to work with any who wants to build the middle class. >> what do you think? >> i think some of it is fair and some of it is just piling on and the president could too a lot of good-bye walking over to capitol hill and saying, okay, let's go. >> he doesn't do that. why doesn't he do that at this point? >> they reach out, i think, more than the narrative says. they've invited people, they've been insulted, they've been lied to and i think there is a lack of trust and the question is how to rebuild that. >> again, we say it all the time but democrats complain as much as republicans. i have a democrat i've been talking to an awful lot behind the scenes, along with republicans on some of this gun legislation, john heilemann says he's been in washington a while and he's never gotten a phone call from the president, whether it's on gun legislation or whether it's on a lot of other things he's been working with. you would think mark kirk, tom coburn, these republicans that are really out there on this piece of legislation, which is just vital for gun safety would be getting calls but he doesn't do that. he's not your usual president, is he? >> he contestant doesn't do it. not done it for the last four years and not going to change. there are times being able to levitate above the earth would be a useful skill. we have gravity. that gravity won't change. the president won't suddenly become bill clinton the next four years. wasn't the last four years and won't be the next four years. either things will get done through more staff contact and cabinet secretaries and outreach and they won't get done and he won't change and become a different person. >> we're not asking him to call bill clinton. we have legislation in the balance. >> we've been talking about it this for four years. it's not going to change, not in his character. he doesn't like to do it, won't start doing it. >> after the president got elected again, made the joke my daughters don't really want to see me that much any more so i will have more time to call. >> there's still espn, there's still the duce. >> exactly. i'm flummoxed, i really am, why he can't pick up the phone, especially republicans on gun legislation, sticking their necks out and crossing the nra. doesn't look like he will change. >> the legislative theory of the case is maybe joe biden and jack mcdonagh, will produce overwh m overwhelming majorities in the senate for these projects and the pressure will be on the house for the house to pass tax cuts and they don't think they need the president to get those compromises either through regular order in the committees or big votes on the floor. >> let's go to pulitzer prize winning historian, jon meacham. can you -- i just can't think of a parallel. i'm sure calvin coolidge was remote. i really can't think of a parallel of a property obstinate of refusal to talk to republicans or democrats on the hill to move legislation along. >> the great coolidge story that this lady said, mr. president, i have a bet i can get you to say three words and he said, you lose. the coolidge humor is always good to start with. >> that's good. good morning nashville at seven after the hour. >> there were two words. just one short. george will wrote another coolidge joke, a little better. >> that's a good one. >> coolidge and his wife, jon, since you opened the door, i will plow through it. coolidge and his wife, while they were president, were tour a chicken plant. >> as one does. >> as one does and the tour guide told mrs. coolidge that chickens copy late as much as -- >> the rooster. >> the rooster 24 times a day. >> and we got the word "copy lated" in. >> all day long. >> mrs. coolidge said, could you tell that to the president. the tour guide told that to the president and the president said, do they do that all with one chicken? the tour guide said no, 24 different chickens. he said, could you please tell that to mrs. coolidge. >> that's funny. >> i see your coolidge joke and i raise you one. thank you, george will, put that in his column this weekend. >> your coolidge joke is better. >> the analogy comes to mind he had two democratic houses is president carter, who was not the most popular guy in town, tip o'neill used to express frustration about, i want to help this guy but he won't let me help him. i think there's that odd strain in american politics of introverts going into an extraverted business. it's nixon and i think president obama. i think carter is a good example of that. i think john heilemann is exactly right. it would be nice to levitate and we're not going to. >> it won't happen. >> it has to be on the margins. there are moderate republicans who want to help him and some red state democrats that want to help. it's self-defeating but i don't think it will change. >> let's go to jim van dehei. right now, it's not just senate democrats and republicans expressing frustration, you have the press up in arms and other "politico" stories yesterday up in arms feel like they're being shut out. >> a lot of them. we had four or five in the piece that went on the record with very critical comments on the white house. they're saying it is different this time. the obama white house is taking this predictive set of tools for media manipulation whether controlling where you're going or who you're talking to or limiting access the president has and with his staff and then putting it on steroids, using social media and taking their own photos and what gets released to the mass. the combination of this has made this white house much more controlling of his image than even george bush, who was accused of freezing out the press. >> for republicans complaining president obama is not working with them. how much of this goes back to the early days of his presidency where he feels he did reach out on stimulus and health care and didn't get anything back and said, these people aren't going to work with me, forget it. did he do into off feice thinki these people aren't going work with me? >> i think a little bit of both. this isn't the most gregarious president, doesn't like to kick it around with senators and talk about policy. and he thinks it's not worth his energy. what's different here is you put the house and senate in different categories. it is almost impossible to work with house republicans. i don't think there's a deal to be had on much issues with them. you think about the senate and rubio on immigration or portman on budget issues or kirk even on gun issues, there are republicans who want to get things done in the senate i do think if the president either did build now or had built a relationship with, it would make it a lot easier for him to get something out of the senate that would isolate house republicans. strategically, it would be in his interest to have some of those relationships. they don't exist and there's a level of it's awkward now because we haven't talked four or five years. why would we start now? you get to moments like this, makes it harder to get deals he wants to get done particularly on guns and immigration. >> what's so fascinating about the president. i know you spent one-on-one time with him, as have we. he's a very likable guy, unlike, let's say coolidge or nixon or carter, who were not intere interested -- who at times socially awkward. this president is a very likable charming guy. >> it leads you to wonder. >> it's not that he couldn't use his personality and his likability and his skills because he has such a winning personality one-on-one, it's just that he seems to refuse to. that's what makes it so fascinating because most presidents will use every weapon at their disposal. but he is not using, i think, one of his -- one of his more effective weapons politically. >> i think that's right. i will say, when i spent time with calvin coolidge, i thought there was an unusual kind of gei geist-like charm. >> unusual geist like charm. >> very geist-like. i was just talking to a very successful southern politician over the weekend about this issue. this politician made the point that he is not been around someone except the president who so clearly would have preferred to be respected than to be liked, which i thought was a really astute comment. i think that when you put that frame around it, there is something that tells you that begins to explain the behavior. he believes in his ideas, understandably. he now has the wind of a re-election and he feels vindicated and he does feel, to go back to what we're saying a second ago, that he did reach out, it wasn't very effective. some people wouldn't return his phone calls. so why put himself in that position again. this idea he would prefer to be respected than to be liked is an insight worth thinking about. >> mika, one of his very close friends and people that worked with him some time expressed frustration that he was more interested in being right than doing the deal. unlike most politicians go into it this is my world view and they have ha different world view, let's try to meet somewhere in the middle the frustration over the first four years is he's obsessed with convincing somebody else he's righ right and not as obsessed getting the deal. >> my point of view some of the things he's arguing are are so basic having said that, you're right, the deal gets done by giving a little and getting a little. nobody being entirely happy but getting something done. that hasn't happened and you do have to look to the white house and the president as to why that's not happened. it seems to me that both sides, if they want people to stop mocking washington and thinking washington can't get anything done and losing respect in what's going on in washington, they all need to press the reset button and meet. >> this comes with the background of guns, obviously something that's in the forefront certainly of my mind but also sequestration, where you have this train wreck coming. the president went off golfing and republicans scattered in the breeze and went off on vacation. we have some vital services that are going to be slashed with a meat ax instead of having a ration rational sane approach to cutting. >> i actually think it's a little bit different where you have this point he wants to convince people he's right. it's not quite that. that would have involved sitting down with people and trying to argue with them and try to get them to see your point of view. he seems to have an attitude, people should do things on the merits and figure out what the right course is and he does things in his mind, he figures out what he thinks the merits ofs the case is and makes a decision, not because somebody strong armed him and came to this conclusion in a logical fashion. he seem as to think people will get to the same place he does and see the right course of action and come together on the merits. kind of on the merits of the case that will be self-evident. there's an intellectual purity to it that's not like most politicians. >> actually, that's what this person was saying, more fi philosopher king. he thinks he's a philosopher. seriously, so unwed from the realities of washington d.c. which again there are things to respect about this unless you want a properly functioning washington. >> tell me about the rattles of washington d.c. where a republican leader doesn't go to state dinners when he's invited, where a republican leader maybe goes to one but doesn't shake the president's hand. tell me about those realities and tell me how he's supposed to function in that reality. that has happened, few. not just this guy is not calling any, he has been treated with great disrespect and even rudeness on the other side. >> george w. bush was insulted regularly by ted kennedy and george w. bush continued a relationship with ted kennedy. we impeached bill clinton and bill clinton continued to reach out to us. >> you don't think there's a new level of low here? >> no, absolutely not. keep hearing that and so sick of hearing that from people not around washington in 1993 and 1994 and 1995 and 1996, i have yet to sit here, maybe you have, mark halperin. >> fair. >> you were around, did you know of major conservative leaders that put out videotapes suggesting that barack obama was a murderer. people forget the level of hatred that went mainstream when bill clinton was president. i could come up with a lot of great examples when george w. bush was president. let's just stay with the democratic case right now. the crap that was put out about bill and hillary clinton from 1993 to 1996, '97, '98, i think makes what this president has had to endure, which has been ugly, like what george w. bush had to endure was ugly, look almost like child play. this collective amnesia about the clinton wars is absolutely staggering. people have no memory at all, this is the first time a president has been treated badly. no, we treated bill clinton worse. >> impeachment trumps everything else. we're in a different media environment and things are generally worse. bill clinton fought through that. i don't mean to slight the other senators. two people in the political story, rob portman and alexander, two guys that would work well. they're not people who d disrespected the president, that i know of. i think -- i think there's an opportunity on every issue the president cares about to work with those two guys and others and corker and others, senator corker and others, in a way that he didn't do in the first term. but it is going to require having the trust and personal relationships that don't exist. it is true, as jim said, it's a little awkward to start them now but it is in the beginning of a second term. if those guys got calls from the president, i don't think they'd react badly to it, i think quite the opposite. >> sequestration is a really good example here. the president today is going to go out and once again say i want a mix of tax increases and spending cuts to replace sequestration. he knows looking at this congress there he's zero percent chance republicans will agree to that. you could make the argument your energy would be better spent getting on the phone with those senators who want to replace sequestration with something that can get through congress but that doesn't happen and doesn't happen for all the reasons you just talked about. the president doesn't think republicans are on the level and doesn't think they will engage in a serious negotiations so he blows them off. republicans feel i've been blown off four years so whatever, i won't try to get into talks about sequestration so what do we get? you will get sequestration on things that should be undone. >> there's a machiavellian reason to call republicans. set them up. be the most reasonable guy in washington. >> show up, prepare. >> be mournful. i want to make this work. >> who was good at that? >> for the american people. why in the world won't they just meet me halfway? >> bill clinton. >> sounds like someone else. president clinton. >> it makes me sad. it works dar sworks -- >> it hurts. >> it hurts. i just want to be reasonable here. >> and i want to ask the historian about the facts of president obama and put them in a different context. we know going back to the times you study, ancient history, it's uglier than now but what about more recent history and people who say this has been more difficult for president obama than any president previous. >> mark makes the right point. the media environment has changed at least the pace with which attacks and the smallest of differences get magnified. having everything moving so constantly, there is no cycle, only a treadmill. so you have something where there's a constant war going on. the battle is always going on, you don't even get to wait for 6:30, which is the reagan example. the halcion era of the 1980s, people thought reagan's opponents thought he was a dott dottering king, that was a fer ro shot battle, the great story -- >> are you about to tell about the coolidge joke? >> i was going to move to harding. >> harding. wow! >> so, go ahead. >> richard vinegary story. how about that? the great lesley stahl story, she does a piece in 1984 how vacuous reagan's re-election campaign is and shows all the pictures of reagan with flags and monks in america and diever calls her up and thanks her. she says, mike, didn't you listen to the piece? he says, it doesn't matter, people will remember what they saw. is there a level of conflict there. what i think is different is that it's much more intimate in that the partisan debates and arguments between people come into people's phones and come into their pockets. there's no time to breathe. i do think that has a human magnifying effect on the velocity of what's going on. >> mika, despite that fact, since we've had cable news at primetime, heat and talk radio shows, isn't it stunning the three presidents in this era, this ugliest of political years, they've all been re-elected. clinton, bush and obama. which shows how irrelevant at the end of the day they are to the swing voters. i actually think all the hatred, with swing voters actually helps the sitting president. >> all right. jim vandehei, thank you very much. still ahead on "morning joe," former secretary of state, madeleine albright and frank bruni and "hardball's" chris matthews and the israeli ambassador to the u.s., michael oren, with the president's upcoming trip to israel. after a very cold stretch, new england is warming up. we will watch the clouds and rain moving in. you don't need the haveneaviest all coats today but you need an uchl brel la. rain in new england southward to new england and baltimore areas and watching rain from buffalo to cleveland to pittsburgh and just about done in south atlanta and you will get rain in your morning rush hour and mobile and pensacola and panama city. the only snowy weather is to the north behind the storm, breaking out from green bay, oshkosh to chicago. and behind that, it is extremely cold this morning from minneapolis through north dakota. that's a minus 45 windchill in north dakota this morning. that is not fun by any's standards. the next significant storm will arrive on the west coast, as we arrive throughout the day today and move to the middle of the country, especially wednesday night and thursday, potential m major winter storm in kansas and illinois and missouri and iowa. we leave you with a nice sunrise shot there, beautiful red hues. you're watching "morning joe" brewed by starbucks. mine was earned in djibouti, africa, 2004. the battle of bataan, 1942. [ all ] fort benning, georgia, in 1999. 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[ female announcer ] dermatologist recommended aveeno has an oat formula, now proven to build a moisture reserve, so skin can replenish itself. that's healthy skin for life. only from aveeno. welcome back to "morning joe." time for sports where lakers owner dr. jerry burkes srksbuss of cancer. he bought the team in 1979 and brought in greats like magic, kobe and shaq to southern california over the years. the lakers were the winningest franchise during buss's 34 years at the helm and inducted into the basketball hall of fame and he died at the age of 80. when he bought the lakers in 1979, the nba was the third sport. if we were lucky, the games were on tape delay. he put them on basic cable and invented naming rights for the arena and brought that glam and brought celebrities out for the game and was a celebrity himself and helped shape modern basketball as much as anybody. >> growing up in l.a., he was the consummate showman, marketer, media mogul and the most person he brought was phil jackson, not a superstar player and enshrined jackson as the great -- although he had great results in chicago it exalted him as a select coach in a way they had not been before. >> you can see in pictures, hollywood celebrity, how big an influence dr. buss had. he died at the age of 80. in college hoops, berkeley, california. head coach mike montgomery will not be suspended from the pac-12 for shoving his own player during the game. he won't face suspension for shoving allen crab in the press. after initially down playing the incident, he apologized yesterday saying he made a mistake, trying to fire up his star player. crab had to be restrained after being shoved. he said they had no hard feelings and he scored 24 point in this game to help cal to a victory. opening day, nearly a month away. angels josh hamilton is settling in with his new team and quakely blew off the fans of his old one. he signed a 25 million dollars deal in the off-season and said yesterday the fans in the dallas-fort worth area, quote, there are true baseball fans in texas but not a true baseball town. they are supportive but also got a little spoiled at the same time pretty quickly. >> a guy making how much money? >> $125 million. >> he can't run after a pop fly ball against the as. >> with the division on the line. >> with the hole season on the line. this guy is such a punk. you're right. it was the rangers that gave this guy a second chance. >> the rangers and their fans. not has the wh not -- that's what i meant, their fans. their fans embraced him. >> what he was saying it's a football town, they love the dallas cowboys more than rangers. as the manager of the team pointed out, 3.5 million fans at their baseball facility last year. clearly, they like their baseball. >> calling them spoiled, how many world series has this spoiled franchise won? that would be none. josh hamilton, what a punk. coming up next, does president obama have too much power when it comes to drone strikes. the president of for ren relations, richard haass, thinks so. and...done. did you just turn your ringer off so no one would interrupt us? oh no, i... just used my geico app to get a tow truck. it's gonna be 30 minutes. oh, so that means that we won't be stuck up here, for hours, with nothing to do. oh i get it, you wanna pass the time, huh. (holds up phone) fruit ninja!!! emergency roadside assistance. just a click away with the geico mobile app. otherworldly things. but there are some things i've never seen before. this ge jet engine can understand 5,000 data samples per second. which is good for business. because planes use less fuel, spend less time on the ground and more time in the air. suddenly, faraway places don't seem so...far away. ♪ >> that's pretty. >> i think i have a dress like that. >> going to show the best sunrise -- do you really think that's the best? >> that's pretty. >> beautiful. >> 45 minutes past the hour. >> don't blow past this moment. >> top five. >> it has to at least be top five. look at the cars going into work. >> if you're listening to xm sirius right now. >> it is so great. >> you don't think that's unbelievable? >> i think it plays really well. willie will explain this to all of you in xm sirius land. >> look at the colors. it is so nice it is getting light earlier. >> but at least you can start to see. >> april, of course, a lot of times is another month away. at least you feel better. >> here with us now, the president of the council on foreign relations, richard haass, author of the forthcoming book, foreign policy begins at home, the case for putting america's house in order. can't wait to see that. we will read actually what you write in the "wall street journal" today. the president has too much latitude to order drone strikes, you go on to write. u.s. drone strikes must be consonant with smart foreign policy. this means the strike is only when it is near certainty the target is a highly dangerous terrorist that the strike is likely to succeed and that collateral damage will be minimal and there is no viable alternative. such considerations should rule out signature strikes which target people who are behaving in ways that resemble how terrori terrorists tend to behave. the standards i am arguing for here would lead to fewer drone strikes. there is a danger that policy can be too restrictive makeing impanel what should be difficult but the process that currently exists for authorizing drone attacks lacks sufficient controls especially when the targets are u.s. citizens. >> we spent too much time twisting ourselves in knots saying the terrorists are about to attack the so-called imminent standard, honest answers we never know. we don't know when terrorists are about to strike. we have to have a whole different set of criteria. the department of justice memorandum is really shoddy work. we should do better things in our government and we have to be smart. we have to ask ourselves, are the likely gains going out weigh the costs. the whole idea is to discourage people from becoming terrorists, making a career choice and getting local governments to become our partners. before we shoot these things off, are we going to alienate more young men to become terrorists and ailient the governme governments that produce terrorism. we have to be smart and more thoughtful into what wore doing. >> jon meachem. >> dr. haass, you acknowledge there should be some role for this. is this a powell doctrine for drone strikes in a way? >> first of all, you're exactly right. you don't want to make it impossible, jon. you want to make it difficult. we want to ask ourselves really the same question you ask yourself before you do anything else in foreign policy are the li likely benefits going to out-weigh the likely cost. does it make sense to do this opposed to capturing them, let them be and letting the local government do something opposed to sending in a special forces team? you have to go through an analytical framework and cost-benefit analysis and seems to me we've been quick on the tricker because it's safe and easy to do compared to everything else. we don't want to create a world, quite honestly where drone strikes become common place. you have to think what we do and how we do it. what kind of message does that send around the world to other governments. we don't want to make this casual. we have to make it doable but exceptional. >> richard, if you, i guess discreetly is the word, for more sparingly or smartly, are drone strikes an effective tool disrupting and discouraging terrorists. the argument from the white house is, yes, we've taken some extreme measures, al qaeda is dispersed around the world and breaking up, they're on the run. if we use them right, is it a good approach against terrorism? >> absolutely. it's an important weapon in the toolbox and why you don't want to ban them or make them impossible. you want to be smart in how you use them. sometimes drones are the best thing to do and sometimes not. we have to be a little more discriminating thinking through and more publicly discriminating. it's important to send the message to american citizens and other governments, when we shoot a drone, it really does make sense, it was the least bad course of action available to the united states. it makes it's easier then for the host countries we're trying to get to partner with us to justify continuing to work with us. >> this story has been retold in america since the beginning of the republic, we are faced with a new threat from abroad, we respond and usually we respond aggressive aggressively, sometimes ov overaggressively and we have to pull back over time. the bush administration was taught that lesson and looks like now the obama administration is being taught that lesson. >> i think so. i wonder richard's reaction to this, to some extent, perhaps president obama's surprise if not vice president biden's there's been an enormous overlap in the anti-terrorism policies between the bush-cheney administration and obama-biden administration and i'm wondering what the debates inside and what the current vice president might think about the drone policy? >> the vice president has been an advocate of the so-called light footprint. drones have become popular opposed to doing new iraqis and afghanistan, seen as the least alternative to going in with boots on the ground and heavy footprints. once you put aside the debate you say the vice president has been right about and won, once you decide we will go light rather than heavy, then i think you start a new debate, what's the proper mix of drones and special forces and simply letting them be. the answer can't be on every occasion we shoot drones unless we're confident the target is all that important and we're all that likely to get them. >> does it surprise you the administration has gone this far? >> it doesn't because i think after iraq and afghanistan the whole idea was to pull back american involvement on a large scale overseas, this looked to be a relatively cheap and easy -- i don't really like using those words -- clearly a more economical alternative, so this was consistent pulling back from large came heavy footprint commitments. it doesn't surprise me. almost like regulatory policy, sometimes you go too far. i think the answer now is not to stop it but dial it back. >> thank you so etmuch. coming up, senator ted crews is called out of line for his comments about chuck hagel. are his antics doing more harm than good to the republican party? 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[ female announcer ] people who choose more whole grain tend to weigh less than those who don't. multigrain cheerios transit fares! as in the 37 billion transit fares we help collect each year. no? oh, right. you're thinking of the 1.6 million daily customer care interactions xerox handles. or the 900 million health insurance claims we process. so, it's no surprise to you that companies depend on today's xerox for services that simplify how work gets done. which is...pretty much what we've always stood for. with xerox, you're ready for real business. ♪ ♪ ♪ i don't want any trouble. i don't want any trouble either. ♪ [ engine turns over ] [ siren wailing in distance ] you know you forgot to take your mask off, right? we should probably get out of here. ♪ [ male announcer ] introducing the all-new beetle convertible. now every day is a top-down day. that's the power of german engineering. coming up next, "new york times" columnist frank bruni is here squeals y here as well as eugene robinson, when we come back. about health care... i tuned it all out. with unitedhealthcare, i get information that matters... my individual health profile. not random statistics. they even reward me for addressing my health risks. so i'm doing fine... but she's still going to give me a heart attack. we're more than 78,000 people looking out for more than 70 million americans. that's health in numbers. unitedhealthcare. how do you keep an older car running like new? you ask a ford customer. when they tell you that you need your oil changed you got to bring it in. if your tires need to be rotated, you have to get that done as well. jackie, tell me why somebody should bring they're car here to the ford dealership for service instead of any one of those other places out there. they are going to take care of my car because this is where it came from. price is right no problem, they make you feel like you're a family. get a synthetic blend oil change, tire rotation and much more, $29.95 after $10.00 rebate. if you take care of your car your car will take care of you. i work for 47 different companies. well, technically i work for one. that company, the united states postal service® works for thousands of home businesses. because at usps.com® you can pay, print and have your packages picked up for free. i can even drop off free boxes. i wear a lot of hats. well, technically i wear one. the u.s. postal service®, no business too small. a beautiful shot of the white house, as the sun now finally comes up over washington. wake up, everyone! welcome back to "morning joe." >> i feel sorry for jon meachem in nashville. they must be having an eclipse. >> he's having dark thoughts, dark historic thoughts. joining the table, columnist, frank bruni. >> from washington, columnist for the "washington post" and msnbc political analyst, eugene robinson. good to have you on board this morning. >> you love frank's column with cruz. he's moved onto the pope but you want to stay with cruz. >> sure. i'll read it. all right. i will do it again because it's so good. i'm reading it. i want to. yes. when the soviets like john mccain tells you you belch too much, soak and spew too much fire, you know you've got a problem. >> she likes it. that's a bad day. that's a bad day. >> this is not painful for her. >> like three, four days later, she's still laughing. >> when someone says something about you, that's a bad day. ted cruz, a republican freshman in the senate out front and center in his republicans' efforts to josh chuck hagel has a problem. he's an honoree piece of work, just six weeks from arrival, he's already known for nay saying and his nitpicking and his itch to upbraid lawmakers who are vastly senior to him who have sacrificed more than he has and who deserve a measure of respect. or at least courtesy that isn't his me kirks er. he was head of the harvard debate team. >> princeton or harvard. >> a very bright guy. >> a little too big for his britches. >> people that knew him before said you would like him. >> he has been kicking shins, being comparely rude and i guess maybe it's all a marketing ploy to raise the most money among conservatives nationwide. >> it's getting him a lot of attention. he is in the news more than anybody else. i'm not sure it's a good long term strategy for the republican party or not a good long term strategy for him. this may play to the audience in texas. beyond texas, i don't know this plays so well. >> i don't know. the problem for texas and ted cruz and his style of politics is texas is changing. six years from now, when he runs for re-election, if he runs for re-election, it will be a vastly different state, more purple. people forget not so long ago, texas was a democratic state, back and forth. do you think, like mark thinks, maybe there's a national play here? >> it was pointed out to me yesterday he was born in canada. there's a problem -- i heard this argument yesterday thinking about the future. i think he's thinking about the future and putting his chips down on the tea party populous part of the part. i any hispanic in this part of the party will get a lot more attention. he decided he wants to play on the tea party side of the fence rather than mainstream. the national thing is problematic is the fact he was born outside the country so he's not constitutionally -- >> some people think he could run because his mother was an american citizen when he was born. >> i hope that's true because it would vindicate what i said yesterday. >> we could annex canada. >> is that the official policy? >> and another person was born out of the country and ran for president. >> there you go. we're not talking about ted cruz 2016. >> talking about 2020. >> i have to say, what surprises me, here's a guy, obviously very very bright guy, lawyer. he knows what the constitution says, he knows what the second amendment says, knows the decision in 2008 that defined the parameters of the second amendment. >> he has the background. >> then he goes out and intentionally misstates what the second amendment and what heller and anthony scalia and what the conservative court said about what the second amendment was, deliberately does it knowing he's lying to his audience. >> he's playing an ideological game. he has very far ideological beliefs and will bend everything to fit them. i remember people from the 2000 george w. bush campaign. i know a lot of people that worked with him then and know people who went to law school with him. i think his conservatism is genuine. this is not ginned up. what is odd you don't have to have the style he has. to be this 42-year-old whippersnapper, be one of three that votes against confirmation of john kerry and go in front of conservative audience and effectively dis-john kerry and others as military, is odd for someone who hasn't served. >> and that somehow he is an ally of iran. >> over the top. nobody is contesting his conservative positions aren't -- the substance of his positions aren't legitimate. he can debate them. that's fine. just the style of burning the village down. i don't like it. i don't care about ted cruz' political future and i do care about the political party right now and i don't think it's helpful. >> we've seen enough of these and your party has endured enough especially during the primary process people who don't fit the modern day republican party as it could be if it wants to win. >> again, for kenconservatives there listening, why is scarborough worried about it? i'm worried about it because it's about branding, babies, it's about winning, i like to win elections. if you have a conservative that doesn't burn down the village stylistically, i prefer that than somebody that goes out of their way to offend swing voters that elect presidents. >> i agree. but the way he's coming on is not helpful to the party and i don't think it's helpful to him in the short and medium term. the way to get power and influence in the senate is not to come in and immediately get in the face of john mccain and senior senators like that, because they have a ways of squashing whippersnappers. >> we're calling a 42-year-old a whippersnapper. secondly, ted cruz looks at barack obama, a guy that came in and from the day he got in the senate, he was bored. harry reid said, you don't like it here, you're bored here. why don't you run for president? >> he was considerably more politic about how he spent his short time in the senate. >> talking about barack obama's pathway he wasn't worried about that, he wasn't worried about building bridges, right? >> no, but he found a way to get along with his fellow senators as did hillary clinton who came along having greater ambitions, but careful to go step by step and not to seem bigger for her britches than she wanted to seem. >> this is an odd way to last in washington. we'll see how he does. >> lindsey graham said you get respect in the senate if you can throw a punch and you have to show you can make a deal. ted cruz has thrown lots of punches and hasn't shown he can legislate or endure. this remains to be seen. and at the white house to deliver remarks on billions of dollars on automatic budget cuts set to kick in next friday. according to administration officials, the president will challenge republicans to make a quote simple choice between protecting working americans or protecting tax loopholes. the very public display rather than personal outreach is the type of approach republicans say is hampering opportunities for compromise on capitol hill. a new article from "politico" today says a number of top gop senators who could help pass the president's agenda are surprised they still haven't heard from him. one example, senator mark kirk, the leading republican is a leader in new gun legislation following the massacre still hasn't heard from him. >> and the state of the union speech didn't make it's easier for senator tom coburn interested in finding common ground. on fiscal issues, senator rob portman of ohio says he's open to working with democrats but portman says his interaction with the administration is limited to treasury secretary jack lew. and senator marco rubio working on reform was clearly frustrated when the white house view on the issue was leaked before congress had its own version ready, a backup, guess. he told "politico" quote the entire administration is in contact with the entire obama administration and their staffs and made it clear he's happy to work with any who wants to build the middle class and sequester to make a deal. i did hear from the white house they had invited republicans over any time to cut a deal. >> what do you think? people like mark kirk or come coburn haven't talked to the president about gun legislation, lamar alexander or kirk, guys who actually seem like they're ready to make deal. >> i think it's hard not to worry about there's something to this complaint as you hear this has been the problem since the beginning and even democrats say there's much less communication between capitol hill and the white house than they'd like there to be. the white house says it's unfair and working to change it. it has been so consistent over the last 4 1/2 years, there has to be something to it. >> you almost wonder whether there's a change in strategy. the first term, attempt at deals that didn't go anywhere and now you have the president going over the head offense republicans trying to create a context he feels they have to fall in line. it's a risky way to govern because it's not direct governing or deal cutting so much as to create pressure. >> we asked a question whether the president made mistakes not reaching out to republicans enough. the response back we got was, no, but we have learned a valuable lesson. we will go out and campaign across america instead of dealing with the people across pennsylvania avenue. it seems to me, and he's president. he got re-elected, he can make that choice. it does seem to me he's decided he's going make a bet the democrats can take back the house in 2014 and maybe he can have at least two years of progress without having to deal with the republican house. >> it's certainly true he hopes that's the case. this complaint from the republican senator to me is totally phony. what republican senator is going to be seen publicly making a deal with president obama? they don't want that. it's very clear they'll go way out of their way not to be seen to be cooperating with the white house because the party spent so much time and effort into demonizing him and making him into a socialist, they really don't want that. i think this is a bogus complaint, even given that the president is not the most back slapping kind of politician you've ever met, i don't think it's true that he never picks up the phone or never tries to contact republican senators, they don't want to be seen in public with him. >> there is something else going on. you write in the "washington post" obama ruse. it's not that different from what rubio's group is talking about. but republicans can slam obama's plan as some sort of kenyan socialist inspired abdication of sovereignty. >> that's a good one. will laugh at that a week. >> they can blast the provisions on boarder security as laughable. they can describe the absence of a real plan for reforming the legal immigration process as slapdash or unserious or whatever they want to call it. so if the president really wants immigration reform to pass one of the most helpful things he could do is put out his own plan as decoy to draw republican fire while the senate works on bipartisan consensus, which looks suspiciously like what just happened. >> i said when rubio went on fox and other shows,it was a kabuki dance. marco rubio's plan is a great plan, look what he's doing and ignored he's doing it at 95% of what the president is doing. i'm fine. whatever gets you through the night, awesome. but let us not pretend that one of these plans is much different than others because it's just not. >> no, it's not. it's not much of a different. i thought it was very interesting the president and the white house is shock this plan leaked over the weekend, but if you look it a, there are little bills and pieces missing. issues nod dealt with, that seem to go far. there seems to be a target republicans can denounce and then say, well, look, marco's plan is so much better and we brought the president back to moderation with marco's proposals and we can go forward with this, it gives them cover because, again, the last thing they want to do is be seen agreeing with the president even though they basically do agree with the president because even if that gets 8 the senate, that kills it in the house. >> i thought this was a healthy sign yesterday. frank has covered this stuff a long time. when i saw this yesterday, marco rubio will be criticized attacking barack obama on immigration until the moment he signs it in the oval office and then brothers in arms. >> who will ultimately get credit, they aren't that different, it's who comes away from this, look what we accomplished. >> rubio cannot -- he has a balancing act. he cannot have people on his right think he's aligned with the president. as soon as he does that his plan is doa and until he is standing in the oval office together. >> many people would understand if marco rubio was seen as an ally of barack obama at this stage, it never gets through the house. >> that explains the response to the state of the union. he could have said the president and i agree on this and he chose not to. >> that would be very perilous. >> i think he will be laughing. >> that's so good. >> all right. your new column online at nytimes.come. eugene robinson, thanks. your new piece online as well. still ahead, former secretary of state madeleine albright and chris matthews and chuck todd. president obama makes his first trip to israel next month since taking office. how important will that be the public relations? israeli ambassador michael oren joins us. i know what you're thinking... transit fares! as in the 37 billion transit fares we help collect each year. no? oh, right. you're thinking of the 1.6 million daily customer care interactions xerox handles. or the 900 million health insurance claims we process. so, it's no surprise to you that companies depend on today's xerox for services that simplify how work gets done. which is...pretty much what we've always stood for. with xerox, you're ready for real business. the reason i'm still in this body feelin' so good isn't because i never go out and enjoy the extra large, extra cheese world we live in. it's because i do. introducing the new weight watchers 360 program. join for free and expect amazing. because it works. can your moisturizer do that? [ female announcer ] dermatologist recommended aveeno has an oat formula, now proven to build a moisture reserve, so skin can replenish itself. that's healthy skin for life. only from aveeno. humans. even when we cross our t's and dot our i's, we still run into problems. namely, other humans. which is why at liberty mutual insurance, auto policies come with new car replacement and accident forgiveness if you qualify. see what else comes standard at libertymutual.com. liberty mutual insurance. responsibility. what's your policy? you're looking at a missile on its way. you kacan't see the hamas rocke it's going after. watch how the missile will adjust its course to get close to the hamas rocket and blow it up. >> do you think that people in televiv and esskel lon feel saver today than six months ago? >> by far. >> a clip from 60 minutes. that was a report from the iron dome, israel's cutting edge rocket. israel's ambassador to the u.s. with us now, am babassador mich oren, thank you for being here. >> my pleasure. >> let's talk about the iron dome program we have seen over the past six months. it's been very successful, hasn't it? >> i think it's been historically successful, the first anti-ballistic missile that took down 85% of rockets that would have taken down cities and the fact they couldn't hit our cities gave us time and space and saved palestinian lines and didn't have to work out a cease-fire with then secretary of state clinton. gave us time and space. if you're cities are being hit by mission mission -- missiles, the prime minister, you don't have time to act. we had soldiers ready to go into gaza and didn't have to go into gaza because the iron dome took away the threat to hit civilians. >> there could be instability in area and uncertainty in egypt and unrest in jordan. iron dome may not be relevant to those things. when israelis get up in the morning and look at upheavals, they can say things are bad and getting worse. >> you've noticed. iron dome is a game changer, not ending. we're facing six or seven rockets in benghazi and syria has the largest arsenal in the world and looking carefully who is controlling that arsenal. the entire region is in turmoil. we have concerned and the united states allays some of concerns. at the end of the day we have to have our own security. >> a lot has been said about your relationship with the united states but lots said about the frayed relationship between this president and the prime minister. the proposal in the process of forming a new israeli government and presumably there will be a new government in israel. do you think it's possible there could be a reset to israel-u.s. relations? >> i don't want to give too much credence to what you read, don't want to shock you everything you read is true. they have had 11 meetings and he has spoken to the president more than any foreign leader. i have been present during these meetings, open, sometimes very fun funny, had differences in settlement issues and we both call for immediate resumption of direct talks with the palestinians without pre-conditions. i think it will be a great visit. i'm very excited about it. >> how tenuous is assad's hold on power and besides chemical weapons, what is the danger to your country if assad is forced out of power? >> it's always too early to say good-bye to mr. assad. the people at the beginning of the syria civil war said he's going to be gone in two weeks, two months, he has lifelines to keep himself in power. at the end of the day, we think he will go and the quicker the better. >> would the region be more stable if the united states stepped in a bit more aggressively and supplied weapons to assad's opponents? >> we're not going to get involved in making a policy recommendation to syria. we ourselves will not support the opposition. >> what about unnamed third countries, if unnamed third countries supplied weapons and support to assad's opponents, would that not make the region more stable? >> if unnamed countries supplied weapons to the wrong country, it would have a boomerang action. the longer this goes on the longer the islamist imprint will be there. we're aware there are dangers and whatever happens outside syria could bring in very unsavory people including people aligned with al qaeda but if he falls, if and when he falls, it will be a huge blow to iran and huge blow to is bas he bol la a the end, a net game. >> what do you want to do to hasten his departure? >> cut off funds to him, put pressure on those supplying and keeping him in power. you can do that. the case of the russians, convince the russians to get on board to be more productive easing him out and assuring the emergence of a peaceful and democratic syria, not just in israel's interest, the interest of the entire region and the entire world. >> how close do you belie believe -- does israel believe iran is to having a nuclear weapon. >> the question isn't how close to getting a nuclear weapon, how close that we can prevent it. >> what's the bottom line? >> it's a weaponization program, a fuse program, a missile program. one thing we can see is the enrichment cycle monitored by the un. we know where they are. we know at what point they have enough enriched uranium to have a nuclear weapon and they will go underground and we will no longer be able to see it and that is coming up early summer. >> that's what president netanyahu said. >> does israel need to move before this summer? >> israel needs to be in close cooperation with other allies. we see this just not as israel threat, national threat. if israel was completely uninvolved, the president said he would still view it as a threat against america. >> will israel still move along if they have to. >> israel has the right and duty to defend itself. president obama said israel has that right and called it publicly. we hope we can reach a diplomatic solution. nobody has a greater stake than we do. we have the most skin in the game. we're there, talking about annihilating us. the sanctions have taken a huge chunk out of the economy but unfortunately haven't stopped the enrichment of the nuclear program. we hope it can be stopped? >> this wasn't mentioned during the president's message in the state of the union. where is israel going internally now? >> israel is focused on social issues, some not so different than issues facing this country. livable middle class wage, affordable housing for this country. we have a citizen's army. universal subscription, exemptions for older orthodox jews and discussion about which exemptions have to be continued. we have to deal with peace between arabs in the world and we have a rambunctious democracy and coalition government and we're in the process of putting that coalition together now. prime minister netanyahu wants to primarily gather a coalition that can deal with all those issues at the same time. >> all right. thank you so much, mr. ambassador. thank you for being here. >> thank you. >> coming up next, former secretary of state madeleine ail bright and "gq" editor, michael haines and the mysterious circumstances surrounding his father's death. how do you keep an older car running like new? 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[ earl ] see for yourself. get a $50 walmart gift card when you buy any samsung smartphone on the sprint 4g lte network. now through march 2nd. walmart. 34 past the hour. president obama is face iing complaints from the press after they were barred from his golf outing with tiger woods saturday. >> reporter: when fdr died in warm springs, georgia, the white house reporters were in washington. when having his heart attack after playing golf in december in 1955, the press corps was told it was indigestion. ronald reagan rode his horse without press coverage and president clinton had to be carried into the helicopter after tearing his tendon. the traveling press corps miles away. most understand the presidency is 24/7. presidents deserve time off between weekends at camp david. there's also something at work here historians say. be prepared to see a different barack obama in the second term compared to the first term willing to do things that reflect negatively on him like playing golf with a controversial figure like tiger words. >> it's true if he had played golf with tiger woods during the campaign it might have been interpreted differently and anything was a source of controversy during the campaign. he feels more liberated to do something like that. >> reporter: the white house press channel only found out from the golf channel and on the air. >> seeing them drive off to the first tee, the president behind the wheel and tiger in the passenger's seat to play their first round of golf together and by all accounts they had a good time together. >> reporter: they're not ever able to see etch. the first president bush welcomed the press in kennebunkport and president bush called for a call against terror. >> i call upon all nations to do everything they can to stop these terrorist killers. thank you. now watch this drive. >> reporter: and the president was eager to show quality time between john boehner and president clinton. >> this is not a trivial issue like a golf game. we don't care about his score, what we care about is access to the president of the united states, whether democrat or republican. >> that was angela mitchell reporting. >> i will do this, you will do this. >> we will talk to chief house correspondent chuck todd, plus, we will take a pause at taking shots for him at his magazine's kate upton and rihanna obsession. they're always obsessed. today, "gq" deputy editor michael hanie brings us the real life story of his father's mysterious death and his own life journey. the topic of his own fas fating book. first, we turn to bill karins. >> thank you, mika. our next story is in the next two to three days and possibly impact the east coast by sunday. on the west coast, san francisco and l.a. will get rain. this is the snowfall map. the white is snow and the pink is more snow. it's possible new england especially southern new england could see its third snowstorm three weekends in a row. we had the two blizzards back to back. this shouldn't be as strong. right now, chicago to mouk key and the eastern seaboard and by 11:00, the rain is pushing in. and rain this morning in atlanta now clearing out and everyone will get much colder. look at the temperatures in the dakotas this morning. that this is windchill of minus 40. brutally cold around minneapolis, pushing into chicago, st. louis, kansas city, detroit. it will make it to the eastern seaboard tonight to tomorrow morning. if you're traveling today, showers and storms on the east coast this afternoon and west coast as we go through the afternoon hours. the big snowstorm in the middle of the country is wednesday night and all day thursday. you're watching "morning joe" brewed by starbucks. the patient, presented with a hairline fracture to the mandible and contusions to the metacarpus. what do you see? um, i see a duck. be more specific. i see the aflac duck. i see the aflac duck out of work and not making any money. i see him moving in with his parents and selling bootleg dvds out of the back of a van. dude, that's your life. remember, aflac will give him cash to help cover his rent, car payments and keep everything as normal as possible. i see lunch. 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[ male announcer ] find out what a hospital stay could really cost you at aflac.com. in the middle of the night it can be frustrating. it's hard to turn off and go back to sleep. intermezzo is the first and only prescription sleep aid approved for use as needed in the middle of the night when you can't get back to sleep. it's an effective sleep medicine you don't take before bedtime. take it in bed only when you need it and have at least four hours left for sleep. do not take intermezzo if you have had an allergic reaction to drugs containing zolpidem, such as ambien. allergic reactions such as shortness of breath or swelling of your tongue or throat may occur and may be fatal. intermezzo should not be taken if you have taken another sleep medicine at bedtime or in the middle of the night or drank alcohol that day. do not drive or operate machinery until at least 4 hours after taking intermezzo and you're fully awake. driving, eating, or engaging in other activities while not fully awake without remembering the event the next day have been reported. abnormal behaviors may include aggressiveness, agitation, hallucinations, or confusion. alcohol or taking other medicines that make you sleepy may increase these risks. in depressed patients, worsening of depression, including risk of suicide, may occur. intermezzo, like most sleep medicines, has some risk of dependency. common side effects are headache, nausea, and fatigue. so if you suffer from middle-of-the-night insomnia, ask your doctor about intermezzo and return to sleep again. ♪ we have "gq" magazine's deputy editor, michael hanie, the author of the memoir, after visit i visiting friends, a son's story. >> what an incredible story. i never knew. >> that's why we read a book, right? >> give us your background. >> tell us about your parents. >> willie and i were talking offset, both sons of newspaper men in chicago as well as my mother a newspaper woman. grew up in chicago, my father died when i was very young, he was 34. this personal story i heard but very universal about family and secrets. every family has secrets and inside those secrets are truths and if we can find those truth, that's what unites us. >> the story we've been told about how he died was not what i had always been led to believe and spent 10 years reporting this story. >> what did they tell you? how did your dad die? >> we were told he died by my uncle. he got off work late, the lobster shift, 2:00 in the morning and had a heart attack on the street. when i was in high school, this story never rang true to me. i searched the oh bit tuairies and said he died after visiting friends. having never met these friends, i went in search of them. >> what was it that made you think the story wasn't quite right? why did you think there was something suspicious about your father dying of a heart attack. >> what was most suspicious, who were these friends? i find them very curious, never met anybo with him that night. our absence is never greater than our presence, when we lose someone whether we lost a boy or sibling or spouse, we always want to know what happened and what were their last moments like? >> as you teased it out were people reluctant to speak with you? >> many people were reluctant, especially his old newspaper pals. more of sense of honor protecting a son and my mother as well. we want the truth. no one really wants to be the messenger. we know what happens to messengers. these people were acting out of a code of honor one can understand. >> what can you tell us about what you discovered without -- >> without giving away. willie, what would you say we can tell? >> it's very difficult not to give it away. >> it was a complex relationship, complicated story, perm very universal story as well because inside all these things are these truths. >> the story you got turned out not to be true? >> yes. the story my uncle devised, this cover story was a story he had written to protect us, a great last moment i see in the book the moment between the front page rare and information age when cops and reporters were still on the same side of the coin. >> was there any feeling you starred down this path wanted to know how your dad died, did you get to a point, i'm ability to blow up the myth of the story of my dad i had in my head all these years, you ever think about stopping, i don't want to know? >> there was also when i learn it, how do i go forward with this story? as i say in the book, there comes a point in all our lives, the great question is who am i? in order to know who we are we have to go in our past sometimes and family's past and with where we came from and i tell my mother what i learned, a very powerful moment. >> your mother was also told this story? >> yes. >> but she didn't believe it, did she? did she believe he died of a heart attack? >> she did. she was 33 at the time. she had two boys in 1980. it was a different era. >> did she want to know the truth? >> when i told her i knew the truth, yeah. in this book, i went looking for my father but found my mother. >> how did your mother respond? >> she's very proud of the book. >> she's here. she's seated right over there. >> my goodness. >> that must have been very difficult when here she is believing one thing all these years and you can see she a's stopped and welled up. it was very difficult for her to hear that. >> when you started out, did you conceive of it as a book from the beginning? >> i conceived it as the universality is. we long to search. our stories are intertwined with our parents stories, to know ourselves we have to know them. i need to solve this mystery. i believe there was a story here and the story became the journey and the journey became the book. >> are you glad you went on that journey at the end of it? >> sure. yeah. >> there are some things best left unknown. >> i used to think that, joe. ultimately i think there are secrets and inside those secrets are truths. we know in our own lives once that truth comes out, oh, now i have information and can go forward in my life. it's that fear of those things that holds us back and one of the things i talk about in the book. believe me, i had a great amount of fear going in search of this. having come out the other side, i hope this book will inspire people to think about this and even having conversations. >> so many people don't want to pursue truths that are in their family and everybody's family has a truth that through the years, through the generations, people decide to bury. >> right. i got an e-mail from a man who read my book, the man is 75 years old, i realized my father, what my mother told me, that he died of a heart attack, he said i finally looked up the hospital record. he had been beaten to death and died in the hospital after five days. this was in the '40s and said, i think my father was beaten to death because he was gay back then. i can't ask any about it. i talked to my cousins and they say, we don't want to talk about that. i'm 75 and i still want to know that story. that's again this book -- my book connects those -- makes people think about those conversations they want to have. >> after a decade of digging into the truth about your dad, how do you feel about him sitting here today? >> i feel like i see him as a man in full. i started this journey from looking at him from a son to father and now i see him man-to-man. i think that's the great -- when we take these journeys, that's the power of it. these people leave us but we never leave them behind and always carry them with us. joe, you lost your father. we think about these folks everyday, we always are wondering, how am i like them? how do they form me? whether you lose a spouse or someone, you're always looking to see what's left of them and how do i carry them forward. >> can you talk about this spectacular cover? >> this is done by a colleague of mine, taken of my parents the year before they were married. the architect director at "gq." you can tell a book by its cover. >> your mother is here. >> she's come in. today is >> she's come in. >> that has to be exciting. so what does your mother sympathy be the you putting kate upton -- >> i need to talk to her. >> i'm sure she's concerned. >> it all loops back. >> it all loops back, i know. >> i just have attorneys, this is a beautifully written book. it's heart-breaking. i'm not just saying that because he's a friend. >> i can't wait to read it. wow. the book is "after visiting friends, a son's story." michael hainey, thank you. up next, mayor michael bloomberg tests the limits of the nra's influence. that story's next. we'll be right back. weight watchers online worked for us. we don't argue much. we really don't. meg usually just gets her way, and i go along with it. i think it worked for matt because i did it for him. when i'm the one cooking, i'm the one calculating the points. i can microwave things. you get to eat real food. we still get to go out. we're just so much smarter about it. we can keep each other in check. going, "okay, i see you." we've lost about 110 pounds together. it helped our love life. happy wife, happy life, right? 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[ jennifer ] weight watchers online. the power of weight watchers completely online. join for free today. the power of weight watchers completely online. i've always had to keep my eye on her... but, i didn't always watch out for myself. with so much noise about health care... i tuned it all out. with unitedhealthcare, i get information that matters... my individual health profile. not random statistics. they even reward me for addressing my health risks. so i'm doing fine... but she's still going to give me a heart attack. we're more than 78,000 people looking out for more than 70 million americans. that's health in numbers. unitedhealthcare. 54 past the hour. there are signs of new movement on the issue of gun legislation on capitol hill. "the new york times" reports that some pro--gun members of congress are open to limits on magazine size. this comes as mayor michael bloomberg's super pac prepares to spend millions of dollars in the special election to replace jesse jackson jr. in chicago. bloomberg may commit as much as $2 million to ads to defeat congresswoman dean halvorson, a pro--gun advocate who once enjoyed a top nra rating. in an editorial out today, the chicago tribune wrights in part this. bloomberg is not interested merely in influencing a particular race. his spending is also about demonstrating to candidates across the country that the nra is not the only group prepared to make an issue out of gun control in political campaigns. it's about proving that being associated with the nra can be a liability, not an asset. it's about creating a different political climate that could make sensible gun restrictions more achievable. >> and mark, there was a development in the race yesterday. one of the democratic candidates dropped out, which actually consolidates power behind kelly, who is now in a good position to win this race. >> the mayor is using his vast resources to make a statement in this race. it's a democratic district and the one pro--gun democrat left in the race probably won't win although she was ahead. and if the mayor keeps her from winning through his spending, if he keeps her from winning, i think he's going to then try to take that example, go to other places in the country and say the nra money is not the only money that's at play. >> that's right. >> and by the way, michael bloomberg was successful. they selected a certain campaigns to target in 2012. they were successful. and if you are a moderate republican or a moderate democrat, god help those moderate democrats that decide to go south and go with wayne lapierre on universal gun background checks. because he's going to throw money into those races and he will beat them. >> the mayor is a dangerous guy on this. he's a guy with many billions of dollars, committed to spending it, committed to this cause with a team of very sharp political operatives around him. tough political operatives. committed to the cause. they can change the equation on this in a lot of districts. >> i have to say also the thing that surprises me is how clear eyed they are. know though exactly what's possible, they know what is not possible. they're not around to waste time. they are targeting these races, and they're going to go after moderate republicans and moderate democrats. bloomberg, worth $24 billion, will put in more, and he will win. so it changes the dynamics. >> and you really can't complain, if you're receiving support from the nra and you're riding on that, then you really can't accuse the mayor of buying anything because you're bought already. still ahead madeleine albright will be here. top republicans insist they're willing to work with the white house if president obama will only pick up the phone? that story's next when "morning joe" comes right back. revolutionizing an industry can be a tough act to follow, but at xerox we've embraced a new role. working behind the scenes to provide companies with services... like helping hr departments manage benefits and pensions for over 11 million employees. reducing document costs by up to 30%... and processing $421 billion dollars in accounts payables each year. helping thousands of companies simplify how work gets done. how's that for an encore? with xerox, you're ready for real business. a regular guy with an irregular heartbeat. the usual, bob? not today. 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[ male announcer ] progresso. you gotta taste this soup. good morning. it's 8:00 on the east coast, 5:00 a.m. on the west coast. it is time to wake up, everyone as you take a live look at new york city. come on now. back with us on set, we have mark halperin and john heilemann, and in nashville, john meacham. >> let's go. what do we got going? >> president obama will be joined by first responders at the white house this morning to deliver remarks on billions of dollars in automatic budget cuts set to kick in next friday. according to the administration officials the president will challenge republicans to make a choice between protecting working americans or protecting tax loopholes. but the very. display rather than personal outreach is the type of approach that republicans say is hampering opportunities for compromise on capitol hill. a new article from politico today says a number of top gop senators who could help pass the president's agenda are surprised they still haven't heard from him. one example is senator mark kirk. although the illinois republican is a leading voice for new june legislation following the newtown massacre, he and the president have never spoken about it. one senate aide said the president's repeated call for gun reform during the state of the union speech didn't make it easier for republicans like senator tom coburn who are interested in finding common ground. on fiscal issues, portman says his interaction with the administration is limited to treasury secretary nominee jack lew. and narrate marco rubio, who has been working on immigration reform, was clearly frustrated when white house legislation on the issue was leaked before congress had its own version ready. republicans have never done that, by the way. a white house spokeswoman told politico, quote, the entire obama administration is in regular contact with members of congress and their staffs, and the president has been very clear he is happy to work with anyone who wants to build the middle class. >> what do you think? >> i think some of it's fair. i think some of it is just piling on, and i think the president could do a lot of good by just walking over to capitol hill and saying, okay, let's go. >> but he doesn't do that. why doesn't he do that at this point? >> they reach out i think more than the narrative says. they've invited people. they've been insulted. they've been lied to, and i think it's a lack of trust. and the question is how to rebuild that. >> we say it all the time, but democrats complain as much as republicans. i have a democrat i've been talking to an awful lot behind the scenes, along with republicans on some of this gun legislation who john heilemann says that he's been in washington a while and he's never gotten a phone call from the president, whether it's on gun legislation or whether it's on a lot of other things he's been working with. and you would think kirk, tom coburn, these republicans who are really out there on this piece of legislation which is just violate for gun safety would be getting calls. but he doesn't do that. he's not your usual president, is he? >> he doesn't do. he's not done it for the last four years. there are times when being to levitate above the earth would be kind of a useful skill, but we have gravity. the president's not suddenly going to become bill clinton. so either things are going to get done through much more staff contact and through cabinet secretaries and other outreach. they're not going to get done because he's going to change and suddenly become a different person. >> we're not asking him to be bill clinton. we're asking him to pick up the phone. >> all i'm saying is we've been talking about this for four years. he's not going to change. he's not going to start doing. >> so mark, the president said after he got elected again, he made the joke, my daughters don't really want to see me that much anymore, so i'm going to have time to call. he doesn't like doing it. >> there's still espn. >> exactly, exactly. i'm flummoxed. i really am as to why he can't pick up the phone, especially on these republicans that are helping on gun legislation that are sticking their necks way out, that are crossing the nra, but it doesn't look like he's going to change. >> the legislative theory of the case is joe biden, maybe mcdonough, are going to produce overwhelming majority in the senate for these legislative projects and that the pressure will then be on the house as it was on the deal on the bush tax cuts to not be the hold-outs and to pass things. and they don't think they need the president to get those compromises, either through regular order in the committees or votes on the floor. >> let's go to putser prize winning historian john meacham. john, i just can't think of a parallel. i'm sure calvin coolidge was remote, but i really can't think of a parallel of a president who just is obstinate in his refusal to talk to democrats or republicans on the hill that could move legislation along. >> yeah. you know, the great coolidge story, the lady who came up to him and said, mr. president, i have a bet that i can get you to say three words, and he said, you lose. >> right. >> so the coolidge humor is always a good thing to start with. >> good morning, nashville. >> two words there, right? >> there were two words, yeah. just one short. george will wrote another coolidge joke which is a little better. >> oh, that's a good one. >> coolidge and his wife, john, since you opened the door, i'm going to plow through it. coolidge and his wife, while they were president, were touring a chicken plant. >> as one does. >> as one does, and the tour guide told mrs. coolidge that chickens copulate. >> as much as roosters. >> 24 times a day. >> they do. >> and mrs. coolidge said, can you tell that to the president? and so the tour guide told that to the president. and the president said, but do they do that all with one chicken? and the tour guide said no, usually with 24 chickens. he said can you go tell that to mrs. coolidge? >> that's funny. >> thank you george will. he put that this weekend in his column on calvin coolidge. >> we digress. >> your coolidge joke is better. you know, the analogy that comes to mind that he had two democratic houses is president carter who was not the most popular guy in town. they used to express frustration about i want to help this guy but he won't let me help him. so i think there's that odd strange in american politics of introverts going into an extroverted business. it's nixon and i think president obama. i think carter's a good example of that. and so i think john heilemann's exactly right. it'd be nice to levitate but we're not going to. he's going to have to be on the margins here. there are moderate republicans who want to help. it's self-defeating but i don't think it's going to change. >> jim vandahi, let's go to this politico editor, jim. >> there he is. >> jim, right now it's not just senate republicans expressing frustration. another politico story out yesterday, up in arms, that they feel like they're being shut out. >> yeah, a lot of them, and i think we have four or five in the piece that went on the record with very critical comments of the white house, and they say it's different this time, that the obama white house is taking this sort of predictable set of tools that you have for media manipulation, whether it's controlling where you're going and who you're talking to or limiting access that the press has to the president and his staff. and then they're putting it on steroids, taking their own photos, controlling what gets released to the masses and they say that the combination of this has made this white house much more controlling of its image than even bush who was criticized a lot for freezing out the press. >> jim, on the piece about the republicans, how much of this goes back to the early days of his presidency where he feels like he did reach out a little bit on stomach luis and healthcare and didn't get anything back and said, these people aren't going to work with me, forget it. did he go into office thinking i'm not going to work with these, or is this the result of experience he's had? >> i think a little bit of both. remember this isn't the most gregarious president we've had. he feels like it's just not worth his energy. but i think what's different here is to me you put the house and senate in different categories. this is almost impossible to work with the house republicans. i just don't think there's a deal to be had on most issues with them. but when you think about the senate and about rubio on immigration or portman or kirk on gun issues. there are republicans who want to get things done in the senate that i do think if the president either did build now or had built a relationship with, it would make it a lot easier for him to get something out of the senate that would then isolate house republicans. so strategically it would be in his interest to have some of these relationships but they just don't exist and there's probably a level of it's just awkward now because they haven't talked for four or five years. so i think when you get to moments like this, it makes it harder to get deals that he wants to get done, particularly guns and immigration. >> john, i know you've spent some one-on-one time with the president, as have we. he's a very likable guy, unlike, let's say coolidge or nixon or carter, who were not interested or who were at times socially awkward. this president is a very likable, charming guy. >> which leads you to wonder. >> it's not that he couldn't use his personality and his likability and his skills, because he has such a winning personality one-on-one. it's just that he seems to refuse to. and that's what makes it so fascinating because most presidents will use every weapon at their disposal, but he is not using, i think one of his more effective weapons politically. >> i think that's right. i think he -- although i will say, when i spent time with calvin coolidge, i thought there was a certain, an unusual charm. >> a quiet geist-like charm. >> it was very geist-like. one of the things, i was just talking to a very successful southern politician over the weekend about this issue, and this politician made the point that he'd not been around someone, except the president, who so clearly would have preferred to be respected than to be liked, which i thought was a really astute comment. and i think that when you put that frame around it, there is something that tells you that it begins to explain the behavior. he believes in his ideas, understandably. he now has the wind of a re-election, and he feels vindicated, and he does feel, to go back to what we were saying a second ago, that he did reach out. it wasn't very effective. some people wouldn't return his phone calls, and so why put himself in that position again? >> still ahead on "morning joe," former u.s. secretary of state madeleine albright will join us here. what advice does she have for the new secretary of state john kerry? and up next, chuck todd joins us here on set along with chris matthews from washington. but first, bill karins. >> not so great. >> it's not. bill. >> well, good morning, everywhere. we have a very exciting period of weather coming your way. three or four winter storms, one on the california west coasts, another in the great lakes. this is the beginning 6 our stormy pattern and it's cold in the northern planes. first things first, though, travel trouble, slippery, light know, milwaukee down to chicago. just a coating on the roads. and i was mentioning how cold it is. the windchill just went into the negative numbers in chicago. wlook the your friends up in north dakota. minus 42 is how it feels on your skin if you head out this morning. so this is bitterly cold down through the northern planes. for our friends in california waking up early today, it's going to rain, in l.a., looks like san francisco, the tail end of the rush hour towards the lunch hour is your timing. hasn't rained a lot in l.a. this winter. so east coast, just light rain showers. but we have the cold, the storm on the woes coast. those are going to combine into a pretty good sized snowstorm, for all our friends from illinois, nebraska, iowa, that'll be wednesday night to thursday. it's going to be especially during the day on thursday. leave you with a shot of new york city. finally a little bit warmer. don't get used to it. much colder tomorrow. you're watching "morning joe" brewed by starbucks. with the spark cash card from capital one... boris earns unlimited rewards for his small business. can i get the smith contract, please? 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i'm guessing it's a very small group of people. but then what they're asking for on social security and medicare is not far away from what the president asked for. this is a -- if the president doesn't embrace this, it's a political -- >> does the president have another chance to embrace it? >> how many more chances? i keep saying, do you know where to find the simpson-bowles. you have to go to white house.gov. that's where it lives. look, this is another opportunity, especially because they're petitioning, 3-1, but they're pitching the balanced approach. they're pitching the president's plan. they won't say it. they want a few more cuts, a little more on medicare, deal with age requirements, but they're pitching. it doesn't feel -- the difference are hard to find. they embrace cpi, all that business. >> chris matthews, as i continue talking about how the republican party needs to be dragged back to relevance so they can once again win the white house, i always talk about the suburbs of philly. you know that area better than anybody. tell us, where do people in the suburbs of philly sit on the debt, on the deficit, on simpson-bowles, on sequester? we know perot certainly ignited a movement in '92 but where are people in the suburbs of philly in 2013 on this irish? >> well, that's the reason they vote republican. not abortion or anything else. it's that issue concerning deficit spending by the democrats. suburbites are negative on that. that's why a lot left the city, to get away from the big city machines. they want it to be clean, they want it to be efficient, and if you feely responsible. that's why they're republicans. that's always been their winning ticket. and you and i know that's where they go to play their card, that card there. but i also think there's a fact of life we ought to look at. right now we're basically about 15%, 1 in $6 to pay for the federal government, and we're spending about $25, about a quarter of the g.d.p., so it's a huge differtial, we're not taxing enough, that's if you believe the government's spending should be 20% of the gdp. >> chris, who is the transformational leader who says, okay, americans, we understand you like the republican idea of taxation, but you like the democratic idea of spending. >> that's the problem, joe. >> these two together. so who gives them that news that we can't continue on this course forever? >> the problem is it's almost like a kid going to both parents, daddy, can i have the car tonight? sure. mom, can i have some money? it's like they go to democrats for more spending and republicans for lower taxes and they both say sure, kids. they get it both ways. there's a question i always ask to conservatives, are you willing to pay for the government you believe in? in other words, strong defense, pay off our debts, things like that, law and order, things like that. are you willing to do that at least? that's about 20%. all right let's raise taxes up to 20%. but neither side wants to reconcile. you've nailed it, neither side says i'm willing to live with 20%. nobody forces them to that. that's the problem. >> we were saying that 18, 19% of gdp feedback in the '90s. that number just keeps going higher and higher, 25 years from now. >> yeah, but i want to go back to, i think the other reason to stands in the way, because we're not far apart, right? when you look at it in grand scheme, you go, really, we couldn't get a bargain over a couple billion dollars, which isn't a lot of money in budget speak. with clinton and gingrich, the two of them sold compromise as a victory. in this day and age, maybe it's that obama and boehner don't know how to sell compromise as victory or our press corp will never allow that to happen. instead we find the conservative who doesn't like it, the liberal who doesn't like it, and then it forces the two players to say, i won. >> and then we invite lindsey graham on the sunday show. chuck todd, is there another republican allowed to speak on a sunday other than lindsey graham. nobody wants to talk. >> he's the front man. >> mccain and licensed. >> it's a problem. >> i think there are fewer and fewer republicans that will go on non-fox shows. >> why is that? >> i think that the mythology of the big, bad nonconservative media has gotten into some offices and so that there's this fear of we can't do anything that's not -- and i feel like it's a mythology that now younger staffers believe and it infuses these guys. they actually believe the spin that's out there, oh, my god, that's what the mainstream media does, anything to disrupt the conservative agenda. and so really only licensed, john mccain, you know, that's been my, i just fear that it's sort of like this whole, there's this whole sort of the mythology of that the media's out to get conservatives is believed among more and more actual staffers. >> so chuck and chris, take us through this gallup poll, the direction of the country. 72% are dissatisfied. >> plus or minus 20 points? sorry. >> 72% dissatisfied, and then look at it between the parties, 47% democrats and 9% of republicans are satisfied. >> so, chuck, you obviously make a very good point about gallup. >> i'm sorry. >> how far off is that? >> my point is that they need to go through a very public, when you had a, when you clearly, you're doing the wrong methodology in some form or another. look at what romney's pollsters have done. exactly what went right, what went wrong, for some reason gallup won't do. >> what's nbc's track right now? >> we're not that high, i think 38% was the last track. >> chris matthews. >> i just want to say that the most important iconic picture of the last election, which is still the only election we have to draw on, is the governor christie and the president walking along the beach in new jersey. that's what the public wants to see, parties behaving like grown-ups, operating like citizens, not their parties. it is still the most powerful picture. joe, i think you get to it almost every day, which is what they want. working together like grown-ups. like going to work in the morning. you got to get the job done. people know they have to do it. why don't they do it? i think that's the question. >> i said this past week, you always have these people on the far left or far right telling their congressmen or senators, you go to washington and give them hell, the more you act like ted cruz, they slap you on the back, that's the way to do it, don't be nice to those people. why don't they go over at work to the cubicle next to them and insult them and say your methodology is stupid, you hate america. it's insanity. >> okay, joe, you're a pro too and you've been in all these worlds of media. unlike so many people, you know both perspectives. how many people in your perspective, and you're a history buff. how many successful demigogs have there been. i keep thinking, sure it's great, they'll jump up and down, and say great, i love you. five years later, demigogs gets you nowhere. >> hughey long. >> louisiana statehouse. >> he ran the country of louisiana for quite some time. >> he was a disaster. >> i think we're in a different place. >> huey long. >> i'm just telling you, you want the last successful demigog, it's huey long. >> the reason we keep bringing him up is obviously the republican party has a branding issue. we are in the 20s. i don't really think it's about as much the positions that we've taken as it is over the past four years calling the president a racist, saying he hates all white people as glenn beck has done. having voices in conservativism sating he's not an american, that he was not born here. >> mark, is this your expression, obama derangement syndrome? who came up with that? there was clinton derangement syndrome, frankly, there was reagan derangement syndrome where there's, whatever it is, say it's 25, 30 percent of the opposition base that just has never believed in legitimate, you have liberals that never believed reagan intellectually was a legitimate president. never should have been in office. obviously there were people who felt bush never should have -- wasn't legitimate. so this -- it's funny to me that you look at the last three two-term presidents before this one, and there's a pattern here, and it's just like the opponents get so caught up in their hatred of the president that they lose their way and each party did lose their way for a while. >> and chris matthews, i'm saying this more and more every day because for republicans who think they're doing their party a favor by being engaged in the democratic version of bush derangement syndrome, a couple of facts that since we've had this 24/7 media news culture, talk radio and everything else that's gone with it, the presidents that have been undermined from day one, bill clinton, george w. bush, barack obama, they all get re-elected. you would have to go back a long time to find three presidents -- >> i think the founding, almost all the way back to the founding. monroe. >> three presidents, and this is exhibit one, that the haters only end up turning off swing voters who say, yeah, i may not love the president but he's not everything the opponents -- i need to say one other thing too, and i hate to give facts. i'm not making any suggestion other than -- >> you hate facts? >> no, i hate to give facts to defend a lot of people, but think about this, and i'm not blaming it on him, but just for conservatives that think they have to stay in their own little media world, since rush limbaugh went on the air and became a national figure, republicans have lost five out of the last six presidential elections in the popular vote. since fax news want on the air in 1996, republicans have lost four out of five. >> please keep doing what you're doing. >> let me finish. so when ronald reagan and richard nixon had to go up against a media culture that absolutely hated them, that despised them, that ran them into the ground every night and there was no conservative outlet, they won 49 states. listen, i'm a conservative. i like conservative outlets to go to when i get frustrated looking at the mainstream media. but for people that think, chris, they have to stay in this little box, i've got bad news for you. it's not working. >> well, rush limbaugh's a great example, guys, because he's enormously successful. he makes a lot of money and he deserves it because he's a great showman. but he basically place to a very narrow cast of republicans, usually middle aged white men. i'm not knocking him, but that's never going to be 51% of the country. he knows who his market is, guys driving around, marketing salesmen in car, he tells them they're the greatest guys in the world because they're carrying the load in this country and those -- he plays to them. it's brill. but it's not 51% of the country and that's why it disserves the republican party to listen to this guy for their guiding light. >> that's why i talk about the i-4 corridor, the suburbs of philadelphia, yes, these people help energize the republican base, but it's not enough to get you the 51% plus one that you need to win presidential elections. and at one point the republican party needs to start focusing on winning presidential elections. i've just stated some facts on the air here. >> it's going to be interesting at 12:01. >> there's certain websites that are going to go crazy and they're going to attack me and they're going to go crazy -- >> perhaps a talk radio show or two. >> 12:06. >> here's the point. they're going to do everything, they're going to do everything but reflect on the fact that since this media culture has been created that was supposed to give us a great balance to the liberal news media, we've lost five out of six elections in the popular vote. republicans need to start focusing on winning. and i don't begrudge anyone who makes $30 million a year. but i would love republicans to start winning again. >> maybe candidates ought to not be so afraid of them when they see the impact. >> we need to discuss two words, herman cain. it's like stunning roger ails, is that good for the country. >> we're going to finish this conversation. rajjer ails figured it out, and before everybody else figured it out, and that's why he was going to chris christie, trying to ask him to run for president, because roger els figured out some people jumped the shark. if you reward people, like herman cain's got a biggerer, is that going to encourage, what kind of presidential primary is that going to encourage? >> it's a cottage industry. >> chuck todd, we'll be watching your interview in just a few minutes. chris, thank you. coming up on "morning joe," former secretary of state madeleine albright joins the table, but first brian shactman joins us for business before the bell. we'll be right back. 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[ male announcer ] because whatever you need, we'll have it or find it, and get it to you fast. staples. that was easy. it's time for business before the bell. cnbc's brian isn't that correctman. we have the secretary of state here, madeleine albright, you have ten seconds to tell us. >> market's up, 20 points from 14,000. officemax, office depot might merge. and curt shilling's bloody sock up for auction could fetch $100,000 for auction this saturday. >> that's pretty good. >> coming up, who do we have? >> we have former secretary of state madeleine albright who paved the way for people like hillary clinton in the state department. up next, in her own words, the story behind secretary albright's remarkable journey. you're watching "morning joe." as your life and career change, fidelity is there for your personal economy, helping you readjust your retirement plan along the way. rethink how you're invested. and refocus as your career moves forward. wherever you are today, a fidelity ira has a wide range of investment choices to help you fine-tune your personal economy. call today and we'll make it easy to move that old 401(k) to a fidelity no-fee ira. if your a man with low testosterone, you should know that axiron is here. the only underarm treatment for low t. that's right, the one you apply to the underarm. axiron is not for use in women or anyone younger than 18. axiron can transfer to others through direct contact. women, especially those who are or who may become pregnant, and children should avoid contact where axiron is applied as unexpected signs of puberty in children or changes in body hair or increased acne in women may occur. report these signs and symptoms to your doctor if they occur. tell your doctor about all medical conditions and medications. do not use if you have prostate or breast cancer. serious side effects could include increased risk of prostate cancer; worsening prostate symptoms; decreased sperm count; ankle, feet, or body swelling; enlarged or painful breasts; problems breathing while sleeping; and blood clots in the legs. common side effects include skin redness or irritation where applied, increased red blood cell count, headache, diarrhea, vomiting, and increase in psa. see your doctor, and for a 30-day free trial, go to axiron.com. oh, that's a good one. >> oh, my goodness. >> that might have to come with us on the air. here with us is former secretary of state, madeleine albright, her book, a remembrance of war, 1937 to 194 is now out in paperback. the empress of research. she was the empress of research. >> he labeled you the empress of research. >> because at that stage i was helping him on research for his book, power and principle, so i needed a title and that's it. >> so prague winner, this is a remarkable story. could you tell me how, obviously dr. brizinski's family leaving poland, shaped your life. can you explain? >> no question. i was born in prague just before world war two, and when the nazis marched in, my father escaped with mother and me to england and i spent the war in england. and i think what makes me different from contemporaries, i actually lived through bombing. the part that i didn't know at that time. i did a lot of research for this book was about my own religious background. i was raised a catholic, married an episcopalian and found out i was judiciary. so this story is based on three levels. the inner story is my story, my parents' story. the second level is basically what happened during world war ii and the very complicated aspect of that and the third is probably the most difficult is the difficulty of making moral decisions. we all think everything's black and white but there's an awful lot of gray area. >> i've talked about this before, your experience like colin powell's experience shaped be. he'd gone to vietnam and his virs instinct was stay out. we were talking about the ball k kins. you grew up in this most horrific of times and what you learned from that. sometimes you just got to go in. >> part of the thing that happened is we can say we didn't know what was happening during world war ii. when we were in office in the clinton administration, we did know what was going. and the british and french tired from world war i did not do anything. didn't care about people in far away places with unpronounceable names. and so i think that we do care. that's what we did in the balkins, and the question is what is the right thing to do? >> she's speaking about czechoslovakia, reminds me of your uncle. >> i'd like to bring the issue of moral decisions to today, if we could, and ask you to weigh in on the president's use of drones and the debate that has now ensued. >> i think it's one of the most complicated and fascinating debates because one of the issues that actually came up during the balkins in kosovo, it was an air war and a lot of people said there's not moral, you should have boots on the ground, and i thought why should we get more people killed, when you can take care of the terrible things that are happening from the air? i do think that drones have been very effective in terms of getting rid of people that are bound and determined to attack us. but it has gotten to be a much more complicated issue and i think should be a public discussion about the appropriateness of them. >> talk about needing to go in, let's talk about syria, tens of thousands of civilians kills. assad killing the elderly. should the united states be more aggressive? >> i think we haven't talked enough about what the united states is doing. we've given like $5 million of aid. we've been instrumental in getting the opposition groups together. >> but the killing still continues. is there anything we can do to stop it? >> i think that we need to be more persuasive with those like the russians, for instance, that i think are not being particularlily helpful and keep pushing on having the opposition be able to be at the table with anybody that will talk on the other side. i think there's a real question as to whether there are enough arms or not 37 i don't think there's a lack of arms. i think there's a lack of international pushing and assad will go. so it's a tough issue. very tough. >> we have a new secretary of state. i noted the other day you said that he would be a great one despite his gender. what advice do you have for the new secretary kerry? >> well, i think that he is very, very well prepared to be secretary of state. i mean, he has traveled everywhere. he has done every single issue as chairman of the foreign relations committee. i think the best advice is to know that it is an essential job for the national security of the united states, that he has to state his views clearly, that we have a president who likes to hear a lot of different views and that secretary kerry is in an amazing position to present his views. >> all right, the book is "prague winter" now out in paperback. >> by the empress of research. >> we could go on and on with things that my father has named. >> more "morning joe" in just a moment. great to see you. thank you for coming in. 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what do you think? >> i thought it was funny. >> good morning, everyone. it is tuesday, february 19th. welcome to "morning joe." with us on set, we have msnbc and "time" magazine senior political analyst, mark halperin. >> hey, mark halperin, how you doing? >> national affairs editor for "new york" magazine and msnbc political analyst, john heilemann. in nashville, we have -- >> look at that! >> pulitzer prize winning historian and author, jon meach meacham. >> it's dark down there. >> it is dark. >> shall we get right to the news? >> let's do it. >> there's a piece on rattner. >> sorkin, andrew sorkin. like aenaen -- an insider newsletter. >> none of us are quoted. >> i'm so tired of being an outsider, raging against the news. >> can we do news? >> yes, we can. >> msnbc news "morning joe." >> i ghosted this, man. >> let's move in. president obama will be joined by first responders at the white house this morning to deliver remarks on billions of dollars in automatic budget cuts set to kick in next friday. according to administration officials, the president will challenge republicans to make a quote simple choice between protecting working americans or protecting tax loopholes. but the very public display rather than personal outreach is the type of approach republicans say is hampering opportunities for compromise on capitol hill. a new article from "politico" today says a number of top gop srpts who could help pass the president's agenda are surprised they still haven't heard from him. one example is senator mark kirk, although the illinois republican is a leading voice for new gun legislation following the newtown massacre, he and the president have never spoke.about it. one senate aide says the president's repeated calls for gun control during the speech didn't make it any easier for republicans like senator tom coburn, who are interested in fi finding common ground. on fiscal issues, senator rob portman of ohio says he's open to working with democrats but says his interaction with the administration is limited to secretary treasury nominee, jack lew. senator marco rubio, who's been working on immigration reform was clearly frustrated when white house legislation on the issue was leaked before congress had its own version ready. republicans have never done that, by the way. a white house spokeswoman told "politico," the entire obama administration is in regular contact with members of congress and their staffs an the president has been very clear he is happy to work with any who wants to build the middle class. >> what do you think? >> i think some of it is fair and some of it is just piling on and the president could too a lot of good-bye walking over to capitol hill and saying, okay, let's go. >> he doesn't do that. why doesn't he do that at this point? >> they reach out, i think, more than the narrative says. they've invited people, they've been insulted, they've been lied to and i think there is a lack of trust and the question is how to rebuild that. >> again, we say it all the time but democrats complain as much as republicans. i have a democrat i've been talking to an awful lot behind the scenes, along with republicans on some of this gun legislation, john heilemann says he's been in washington a while and he's never gotten a phone call from the president, whether it's on gun legislation or whether it's on a lot of other things he's been working with. you would think mark kirk, tom coburn, these republicans that are really out there on this piece of legislation, which is just vital for gun safety would be getting calls but he doesn't do that. he's not your usual president, is he? >> he contestant doesn't do it. not done it for the last four years and not going to change. there are times being able to levitate above the earth would be a useful skill. we have gravity. that gravity won't change. the president won't suddenly become bill clinton the next four years. wasn't the last four years and won't be the next four years. either things will get done through more staff contact and cabinet secretaries and outreach and they won't get done and he won't change and become a different person. >> we're not asking him to call bill clinton. we have legislation in the balance. >> we've been talking about it this for four years. it's not going to change, not in his character. he doesn't like to do it, won't start doing it. >> after the president got elected again, made the joke my daughters don't really want to see me that much any more so i will have more time to call. >> there's still espn, there's still the duce. >> exactly. i'm flummoxed, i really am, why he can't pick up the phone, especially republicans on gun legislation, sticking their necks out and crossing the nra. doesn't look like he will change. >> the legislative theory of the case is maybe joe biden and jack mcdonagh, will produce overwh m overwhelming majorities in the senate for these projects and the pressure will be on the house for the house to pass tax cuts and they don't think they need the president to get those compromises either through regular order in the committees or big votes on the floor. >> let's go to pulitzer prize winning historian, jon meacham. can you -- i just can't think of a parallel. i'm sure calvin coolidge was remote. i really can't think of a parallel of a property obstinate of refusal to talk to republicans or democrats on the hill to move legislation along. >> the great coolidge story that this lady said, mr. president, i have a bet i can get you to say three words and he said, you lose. the coolidge humor is always good to start with. >> that's good. good morning nashville at seven after the hour. >> there were two words. just one short. george will wrote another coolidge joke, a little better. >> that's a good one. >> coolidge and his wife, jon, since you opened the door, i will plow through it. coolidge and his wife, while they were president, were tour a chicken plant. >> as one does. >> as one does and the tour guide told mrs. coolidge that chickens copy late as much as -- >> the rooster. >> the rooster 24 times a day. >> and we got the word "copy lated" in. >> all day long. >> mrs. coolidge said, could you tell that to the president. the tour guide told that to the president and the president said, do they do that all with one chicken? the tour guide said no, 24 different chickens. he said, could you please tell that to mrs. coolidge. >> that's funny. >> i see your coolidge joke and i raise you one. thank you, george will, put that in his column this weekend. >> your coolidge joke is better. >> the analogy comes to mind he had two democratic houses is president carter, who was not the most popular guy in town, tip o'neill used to express frustration about, i want to help this guy but he won't let me help him. i think there's that odd strain in american politics of introverts going into an extraverted business. it's nixon and i think president obama. i think carter is a good example of that. i think john heilemann is exactly right. it would be nice to levitate and we're not going to. >> it won't happen. >> it has to be on the margins. there are moderate republicans who want to help him and some red state democrats that want to help. it's self-defeating but i don't think it will change. >> let's go to jim van dehei. right now, it's not just senate democrats and republicans expressing frustration, you have the press up in arms and other "politico" stories yesterday up in arms feel like they're being shut out. >> a lot of them. we had four or five in the piece that went on the record with very critical comments on the white house. they're saying it is different this time. the obama white house is taking this predictive set of tools for media manipulation whether controlling where you're going or who you're talking to or limiting access the president has and with his staff and then putting it on steroids, using social media and taking their own photos and what gets released to the mass. the combination of this has made this white house much more controlling of his image than even george bush, who was accused of freezing out the press. >> for republicans complaining president obama is not working with them. how much of this goes back to the early days of his presidency where he feels he did reach out on stimulus and health care and didn't get anything back and said, these people aren't going to work with me, forget it. did he do into off feice thinki these people aren't going work with me? >> i think a little bit of both. this isn't the most gregarious president, doesn't like to kick it around with senators and talk about policy. and he thinks it's not worth his energy. what's different here is you put the house and senate in different categories. it is almost impossible to work with house republicans. i don't think there's a deal to be had on much issues with them. you think about the senate and rubio on immigration or portman on budget issues or kirk even on gun issues, there are republicans who want to get things done in the senate i do think if the president either did build now or had built a relationship with, it would make it a lot easier for him to get something out of the senate that would isolate house republicans. strategically, it would be in his interest to have some of those relationships. they don't exist and there's a level of it's awkward now because we haven't talked four or five years. why would we start now? you get to moments like this, makes it harder to get deals he wants to get done particularly on guns and immigration. >> what's so fascinating about the president. i know you spent one-on-one time with him, as have we. he's a very likable guy, unlike, let's say coolidge or nixon or carter, who were not intere interested -- who at times socially awkward. this president is a very likable charming guy. >> it leads you to wonder. >> it's not that he couldn't use his personality and his likability and his skills because he has such a winning personality one-on-one, it's just that he seems to refuse to. that's what makes it so fascinating because most presidents will use every weapon at their disposal. but he is not using, i think, one of his -- one of his more effective weapons politically. >> i think that's right. i will say, when i spent time with calvin coolidge, i thought there was an unusual kind of gei geist-like charm. >> unusual geist like charm. >> very geist-like. i was just talking to a very successful southern politician over the weekend about this issue. this politician made the point that he is not been around someone except the president who so clearly would have preferred to be respected than to be liked, which i thought was a really astute comment. i think that when you put that frame around it, there is something that tells you that begins to explain the behavior. he believes in his ideas, understandably. he now has the wind of a re-election and he feels vindicated and he does feel, to go back to what we're saying a second ago, that he did reach out, it wasn't very effective. some people wouldn't return his phone calls. so why put himself in that position again. this idea he would prefer to be respected than to be liked is an insight worth thinking about. >> mika, one of his very close friends and people that worked with him some time expressed frustration that he was more interested in being right than doing the deal. unlike most politicians go into it this is my world view and they have ha different world view, let's try to meet somewhere in the middle the frustration over the first four years is he's obsessed with convincing somebody else he's righ right and not as obsessed getting the deal. >> my point of view some of the things he's arguing are are so basic having said that, you're right, the deal gets done by giving a little and getting a little. nobody being entirely happy but getting something done. that hasn't happened and you do have to look to the white house and the president as to why that's not happened. it seems to me that both sides, if they want people to stop mocking washington and thinking washington can't get anything done and losing respect in what's going on in washington, they all need to press the reset button and meet. >> this comes with the background of guns, obviously something that's in the forefront certainly of my mind but also sequestration, where you have this train wreck coming. the president went off golfing and republicans scattered in the breeze and went off on vacation. we have some vital services that are going to be slashed with a meat ax instead of having a ration rational sane approach to cutting. >> i actually think it's a little bit different where you have this point he wants to convince people he's right. it's not quite that. that would have involved sitting down with people and trying to argue with them and try to get them to see your point of view. he seems to have an attitude, people should do things on the merits and figure out what the right course is and he does things in his mind, he figures out what he thinks the merits ofs the case is and makes a decision, not because somebody strong armed him and came to this conclusion in a logical fashion. he seem as to think people will get to the same place he does and see the right course of action and come together on the merits. kind of on the merits of the case that will be self-evident. there's an intellectual purity to it that's not like most politicians. >> actually, that's what this person was saying, more fi philosopher king. he thinks he's a philosopher. seriously, so unwed from the realities of washington d.c. which again there are things to respect about this unless you want a properly functioning washington. >> tell me about the rattles of washington d.c. where a republican leader doesn't go to state dinners when he's invited, where a republican leader maybe goes to one but doesn't shake the president's hand. tell me about those realities and tell me how he's supposed to function in that reality. that has happened, few. not just this guy is not calling any, he has been treated with great disrespect and even rudeness on the other side. >> george w. bush was insulted regularly by ted kennedy and george w. bush continued a relationship with ted kennedy. we impeached bill clinton and bill clinton continued to reach out to us. >> you don't think there's a new level of low here? >> no, absolutely not. keep hearing that and so sick of hearing that from people not around washington in 1993 and 1994 and 1995 and 1996, i have yet to sit here, maybe you have, mark halperin. >> fair. >> you were around, did you know of major conservative leaders that put out videotapes suggesting that barack obama was a murderer. people forget the level of hatred that went mainstream when bill clinton was president. i could come up with a lot of great examples when george w. bush was president. let's just stay with the democratic case right now. the crap that was put out about bill and hillary clinton from 1993 to 1996, '97, '98, i think makes what this president has had to endure, which has been ugly, like what george w. bush had to endure was ugly, look almost like child play. this collective amnesia about the clinton wars is absolutely staggering. people have no memory at all, this is the first time a president has been treated badly. no, we treated bill clinton worse. >> impeachment trumps everything else. we're in a different media environment and things are generally worse. bill clinton fought through that. i don't mean to slight the other senators. two people in the political story, rob portman and alexander, two guys that would work well. they're not people who d disrespected the president, that i know of. i think -- i think there's an opportunity on every issue the president cares about to work with those two guys and others and corker and others, senator corker and others, in a way that he didn't do in the first term. but it is going to require having the trust and personal relationships that don't exist. it is true, as jim said, it's a little awkward to start them now but it is in the beginning of a second term. if those guys got calls from the president, i don't think they'd react badly to it, i think quite the opposite. >> sequestration is a really good example here. the president today is going to go out and once again say i want a mix of tax increases and spending cuts to replace sequestration. he knows looking at this congress there he's zero percent chance republicans will agree to that. you could make the argument your energy would be better spent getting on the phone with those senators who want to replace sequestration with something that can get through congress but that doesn't happen and doesn't happen for all the reasons you just talked about. the president doesn't think republicans are on the level and doesn't think they will engage in a serious negotiations so he blows them off. republicans feel i've been blown off four years so whatever, i won't try to get into talks about sequestration so what do we get? you will get sequestration on things that should be undone. >> there's a machiavellian reason to call republicans. set them up. be the most reasonable guy in washington. >> show up, prepare. >> be mournful. i want to make this work. >> who was good at that? >> for the american people. why in the world won't they just meet me halfway? >> bill clinton. >> sounds like someone else. president clinton. >> it makes me sad. it works dar sworks -- >> it hurts. >> it hurts. i just want to be reasonable here. >> and i want to ask the historian about the facts of president obama and put them in a different context. we know going back to the times you study, ancient history, it's uglier than now but what about more recent history and people who say this has been more difficult for president obama than any president previous. >> mark makes the right point. the media environment has changed at least the pace with which attacks and the smallest of differences get magnified. having everything moving so constantly, there is no cycle, only a treadmill. so you have something where there's a constant war going on. the battle is always going on, you don't even get to wait for 6:30, which is the reagan example. the halcion era of the 1980s, people thought reagan's opponents thought he was a dott dottering king, that was a fer ro shot battle, the great story -- >> are you about to tell about the coolidge joke? >> i was going to move to harding. >> harding. wow! >> so, go ahead. >> richard vinegary story. how about that? the great lesley stahl story, she does a piece in 1984 how vacuous reagan's re-election campaign is and shows all the pictures of reagan with flags and monks in america and diever calls her up and thanks her. she says, mike, didn't you listen to the piece? he says, it doesn't matter, people will remember what they saw. is there a level of conflict there. what i think is different is that it's much more intimate in that the partisan debates and arguments between people come into people's phones and come into their pockets. there's no time to breathe. i do think that has a human magnifying effect on the velocity of what's going on. >> mika, despite that fact, since we've had cable news at primetime, heat and talk radio shows, isn't it stunning the three presidents in this era, this ugliest of political years, they've all been re-elected. clinton, bush and obama. which shows how irrelevant at the end of the day they are to the swing voters. i actually think all the hatred, with swing voters actually helps the sitting president. >> all right. jim vandehei, thank you very much. still ahead on "morning joe," former secretary of state, madeleine albright and frank bruni and "hardball's" chris matthews and the israeli ambassador to the u.s., michael oren, with the president's upcoming trip to israel. after a very cold stretch, new england is warming up. we will watch the clouds and rain moving in. you don't need the haveneaviest all coats today but you need an uchl brel la. rain in new england southward to new england and baltimore areas and watching rain from buffalo to cleveland to pittsburgh and just about done in south atlanta and you will get rain in your morning rush hour and mobile and pensacola and panama city. the only snowy weather is to the north behind the storm, breaking out from green bay, oshkosh to chicago. and behind that, it is extremely cold this morning from minneapolis through north dakota. that's a minus 45 windchill in north dakota this morning. that is not fun by any's standards. the next significant storm will arrive on the west coast, as we arrive throughout the day today and move to the middle of the country, especially wednesday night and thursday, potential m major winter storm in kansas and illinois and missouri and iowa. we leave you with a nice sunrise shot there, beautiful red hues. you're watching "morning joe" brewed by starbucks. mine was earned in djibouti, africa, 2004. the battle of bataan, 1942. [ all ] fort benning, georgia, in 1999. [ male announcer ] usaa auto insurance is often handed down from generation to generation because it offers a superior level of protection and because usaa's commitment to serve the military, veterans, and their families is without equal. begin your legacy. get an auto-insurance quote. usaa. we know what it means to serve. i'm here to pick up some cacti. it should be under stephens. the verizon share everything plan for small business. get a shareable pool of data... got enough joshua trees? ... on up to 25 devices. so you can spend less time... yea, the golden barrels... managing wireless costs and technology and more time driving your business potential. looks like we're going to need to order more agaves... ah! oh! ow! ... and more bandages. that's powerful. shareable data plus unlimited talk and text. now save $50 on a droid razr maxx hd by motorola. the top 10 things you don't want to hear from a guy dressed as abraham lincoln. number 10. >> how about you and i form a more perfect union. number 6. >> damn, girl, you make mary todd look like yulysses s. gran. >> easy, easy. number 5. >> does the 5 dollar bill make me look fat? >> number 4. >> wow, i thought my clothing was out-dated. >> the number one thing you don't want to hear from a guy dressed as abraham lincoln. >> hey, jass, you going to thank me for the dayoff? >> pretty good. >> time to look at the morning papers. we'll start with the "wall street journal." according to aaa, gas prices have jumped 43 cents over the past month putting the national average at $3.73. in fact, fuel prices have climbed for 32 straight days. experts blame an increase in demand and several refineries shutting down as two of the contributing factors. the "new york times," a computer security firm says there's little doubt a unity within the chinese army is behind a series os of hacking attacks in the united states. the unit is increasing its focus on u.s. infrastructure including power grids, gas lines and waterworks. officials at the chinese embassy are refuting that claim. at the "new york times" in a move aimed at shaking up wall street, the justice department is aimed at a strategy to take on big banks and prevent another crisis hitting the u.s. economy and focus on pursuing guilty pleas for those who break the law instead of settling for fines and reforms. the lawyers say they're already making changes to their defense strategies. the washingt"washington pos united arab emirates spreading gifts throughout the world. it gave 5 million dollars to build a neonative intensive care hospital in joplin, missouri devastated two years ago. they also donated $1 million to buy laptop computers for the town's students in joplin, among several gifts given by the uae, a country that works to raise its profile as a pro-western country. >> what they've been doing in joplin is amazing. and mississippi has officially ratified the 13th amendment that abolishes slavery. >> that must have been a heck of a clerical error. what's the luck, seriously, that the clerical error would prevent them from ratifying the 13th amendment, could have been the 23rd. >> they ratified it and forget to send it. >> it was passed in 1864 and not formally ratified by mississippi until 1995 making it the last state to do so. the error was apparently noticed by a pair of mississippians looking into the state's past after seeing the film "lincoln." >> it's 2013. officially ratified. >> the point is it wasn't officially ratified until 1995, the real story, in 1995, hey, maybe we should do this. >> they were busy until then. >> this story keeps getting worse. olympic sprint er oscar pistoris back in court charged with the murder of his former girlfriend, reeva steencamp. he put on his prosthetic legs and walked to his bathroom and shot her through his locked door in south africa. >> on the back page of the "boston globe." more women become bread winners and the article looks at a huge jump, the best increase in nearly a quarter century in 2008 and 2009. working wives now account for 47% of household earnings up from 38% in 1988, while husband's contributions have dropped. the piece goes on to talk about why it's important women are paid more and more fairly because they are often the bred winners. >> that trend will only continue. >> absolutely. willie, what's coming up? >> a little sports, josh hamilton signed a contract with the l.a. angels in the off-season and now talking about the former fans of his team calling them spoiled and not really fans of baseball. >> that is really classy. an ok guy that watched a pop fl fall at his feet, this guy is a punk. >> he's been given a second chance. 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[ female announcer ] dermatologist recommended aveeno has an oat formula, now proven to build a moisture reserve, so skin can replenish itself. that's healthy skin for life. only from aveeno. welcome back to "morning joe." time for sports where lakers owner dr. jerry burkes srksbuss of cancer. he bought the team in 1979 and brought in greats like magic, kobe and shaq to southern california over the years. the lakers were the winningest franchise during buss's 34 years at the helm and inducted into the basketball hall of fame and he died at the age of 80. when he bought the lakers in 1979, the nba was the third sport. if we were lucky, the games were on tape delay. he put them on basic cable and invented naming rights for the arena and brought that glam and brought celebrities out for the game and was a celebrity himself and helped shape modern basketball as much as anybody. >> growing up in l.a., he was the consummate showman, marketer, media mogul and the most person he brought was phil jackson, not a superstar player and enshrined jackson as the great -- although he had great results in chicago it exalted him as a select coach in a way they had not been before. >> you can see in pictures, hollywood celebrity, how big an influence dr. buss had. he died at the age of 80. in college hoops, berkeley, california. head coach mike montgomery will not be suspended from the pac-12 for shoving his own player during the game. he won't face suspension for shoving allen crab in the press. after initially down playing the incident, he apologized yesterday saying he made a mistake, trying to fire up his star player. crab had to be restrained after being shoved. he said they had no hard feelings and he scored 24 point in this game to help cal to a victory. opening day, nearly a month away. angels josh hamilton is settling in with his new team and quakely blew off the fans of his old one. he signed a 25 million dollars deal in the off-season and said yesterday the fans in the dallas-fort worth area, quote, there are true baseball fans in texas but not a true baseball town. they are supportive but also got a little spoiled at the same time pretty quickly. >> a guy making how much money? >> $125 million. >> he can't run after a pop fly ball against the as. >> with the division on the line. >> with the hole season on the line. this guy is such a punk. you're right. it was the rangers that gave this guy a second chance. >> the rangers and their fans. not has the wh not -- that's what i meant, their fans. their fans embraced him. >> what he was saying it's a football town, they love the dallas cowboys more than rangers. as the manager of the team pointed out, 3.5 million fans at their baseball facility last year. clearly, they like their baseball. >> calling them spoiled, how many world series has this spoiled franchise won? that would be none. josh hamilton, what a punk. coming up next, does president obama have too much power when it comes to drone strikes. the president of for ren relations, richard haass, thinks so. and...done. did you just turn your ringer off so no one would interrupt us? oh no, i... just used my geico app to get a tow truck. it's gonna be 30 minutes. oh, so that means that we won't be stuck up here, for hours, with nothing to do. oh i get it, you wanna pass the time, huh. (holds up phone) fruit ninja!!! emergency roadside assistance. just a click away with the geico mobile app. otherworldly things. but there are some things i've never seen before. this ge jet engine can understand 5,000 data samples per second. which is good for business. because planes use less fuel, spend less time on the ground and more time in the air. suddenly, faraway places don't seem so...far away. ♪ >> that's pretty. >> i think i have a dress like that. >> going to show the best sunrise -- do you really think that's the best? >> that's pretty. >> beautiful. >> 45 minutes past the hour. >> don't blow past this moment. >> top five. >> it has to at least be top five. look at the cars going into work. >> if you're listening to xm sirius right now. >> it is so great. >> you don't think that's unbelievable? >> i think it plays really well. willie will explain this to all of you in xm sirius land. >> look at the colors. it is so nice it is getting light earlier. >> but at least you can start to see. >> april, of course, a lot of times is another month away. at least you feel better. >> here with us now, the president of the council on foreign relations, richard haass, author of the forthcoming book, foreign policy begins at home, the case for putting america's house in order. can't wait to see that. we will read actually what you write in the "wall street journal" today. the president has too much latitude to order drone strikes, you go on to write. u.s. drone strikes must be consonant with smart foreign policy. this means the strike is only when it is near certainty the target is a highly dangerous terrorist that the strike is likely to succeed and that collateral damage will be minimal and there is no viable alternative. such considerations should rule out signature strikes which target people who are behaving in ways that resemble how terrori terrorists tend to behave. the standards i am arguing for here would lead to fewer drone strikes. there is a danger that policy can be too restrictive makeing impanel what should be difficult but the process that currently exists for authorizing drone attacks lacks sufficient controls especially when the targets are u.s. citizens. >> we spent too much time twisting ourselves in knots saying the terrorists are about to attack the so-called imminent standard, honest answers we never know. we don't know when terrorists are about to strike. we have to have a whole different set of criteria. the department of justice memorandum is really shoddy work. we should do better things in our government and we have to be smart. we have to ask ourselves, are the likely gains going out weigh the costs. the whole idea is to discourage people from becoming terrorists, making a career choice and getting local governments to become our partners. before we shoot these things off, are we going to alienate more young men to become terrorists and ailient the governme governments that produce terrorism. we have to be smart and more thoughtful into what wore doing. >> jon meachem. >> dr. haass, you acknowledge there should be some role for this. is this a powell doctrine for drone strikes in a way? >> first of all, you're exactly right. you don't want to make it impossible, jon. you want to make it difficult. we want to ask ourselves really the same question you ask yourself before you do anything else in foreign policy are the li likely benefits going to out-weigh the likely cost. does it make sense to do this opposed to capturing them, let them be and letting the local government do something opposed to sending in a special forces team? you have to go through an analytical framework and cost-benefit analysis and seems to me we've been quick on the tricker because it's safe and easy to do compared to everything else. we don't want to create a world, quite honestly where drone strikes become common place. you have to think what we do and how we do it. what kind of message does that send around the world to other governments. we don't want to make this casual. we have to make it doable but exceptional. >> richard, if you, i guess discreetly is the word, for more sparingly or smartly, are drone strikes an effective tool disrupting and discouraging terrorists. the argument from the white house is, yes, we've taken some extreme measures, al qaeda is dispersed around the world and breaking up, they're on the run. if we use them right, is it a good approach against terrorism? >> absolutely. it's an important weapon in the toolbox and why you don't want to ban them or make them impossible. you want to be smart in how you use them. sometimes drones are the best thing to do and sometimes not. we have to be a little more discriminating thinking through and more publicly discriminating. it's important to send the message to american citizens and other governments, when we shoot a drone, it really does make sense, it was the least bad course of action available to the united states. it makes it's easier then for the host countries we're trying to get to partner with us to justify continuing to work with us. >> this story has been retold in america since the beginning of the republic, we are faced with a new threat from abroad, we respond and usually we respond aggressive aggressively, sometimes ov overaggressively and we have to pull back over time. the bush administration was taught that lesson and looks like now the obama administration is being taught that lesson. >> i think so. i wonder richard's reaction to this, to some extent, perhaps president obama's surprise if not vice president biden's there's been an enormous overlap in the anti-terrorism policies between the bush-cheney administration and obama-biden administration and i'm wondering what the debates inside and what the current vice president might think about the drone policy? >> the vice president has been an advocate of the so-called light footprint. drones have become popular opposed to doing new iraqis and afghanistan, seen as the least alternative to going in with boots on the ground and heavy footprints. once you put aside the debate you say the vice president has been right about and won, once you decide we will go light rather than heavy, then i think you start a new debate, what's the proper mix of drones and special forces and simply letting them be. the answer can't be on every occasion we shoot drones unless we're confident the target is all that important and we're all that likely to get them. >> does it surprise you the administration has gone this far? >> it doesn't because i think after iraq and afghanistan the whole idea was to pull back american involvement on a large scale overseas, this looked to be a relatively cheap and easy -- i don't really like using those words -- clearly a more economical alternative, so this was consistent pulling back from large came heavy footprint commitments. it doesn't surprise me. almost like regulatory policy, sometimes you go too far. i think the answer now is not to stop it but dial it back. >> thank you so etmuch. coming up, senator ted crews is called out of line for his comments about chuck hagel. are his antics doing more harm than good to the republican party? 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[ female announcer ] people who choose more whole grain tend to weigh less than those who don't. multigrain cheerios transit fares! as in the 37 billion transit fares we help collect each year. no? oh, right. you're thinking of the 1.6 million daily customer care interactions xerox handles. or the 900 million health insurance claims we process. so, it's no surprise to you that companies depend on today's xerox for services that simplify how work gets done. which is...pretty much what we've always stood for. with xerox, you're ready for real business. ♪ ♪ ♪ i don't want any trouble. i don't want any trouble either. ♪ [ engine turns over ] [ siren wailing in distance ] you know you forgot to take your mask off, right? we should probably get out of here. ♪ [ male announcer ] introducing the all-new beetle convertible. now every day is a top-down day. that's the power of german engineering. coming up next, "new york times" columnist frank bruni is here squeals y here as well as eugene robinson, when we come back. about health care... i tuned it all out. with unitedhealthcare, i get information that matters... my individual health profile. not random statistics. they even reward me for addressing my health risks. so i'm doing fine... but she's still going to give me a heart attack. we're more than 78,000 people looking out for more than 70 million americans. that's health in numbers. unitedhealthcare. how do you keep an older car running like new? you ask a ford customer. when they tell you that you need your oil changed you got to bring it in. if your tires need to be rotated, you have to get that done as well. jackie, tell me why somebody should bring they're car here to the ford dealership for service instead of any one of those other places out there. they are going to take care of my car because this is where it came from. price is right no problem, they make you feel like you're a family. get a synthetic blend oil change, tire rotation and much more, $29.95 after $10.00 rebate. if you take care of your car your car will take care of you. i work for 47 different companies. well, technically i work for one. that company, the united states postal service® works for thousands of home businesses. because at usps.com® you can pay, print and have your packages picked up for free. i can even drop off free boxes. i wear a lot of hats. well, technically i wear one. the u.s. postal service®, no business too small. a beautiful shot of the white house, as the sun now finally comes up over washington. wake up, everyone! welcome back to "morning joe." >> i feel sorry for jon meachem in nashville. they must be having an eclipse. >> he's having dark thoughts, dark historic thoughts. joining the table, columnist, frank bruni. >> from washington, columnist for the "washington post" and msnbc political analyst, eugene robinson. good to have you on board this morning. >> you love frank's column with cruz. he's moved onto the pope but you want to stay with cruz. >> sure. i'll read it. all right. i will do it again because it's so good. i'm reading it. i want to. yes. when the soviets like john mccain tells you you belch too much, soak and spew too much fire, you know you've got a problem. >> she likes it. that's a bad day. that's a bad day. >> this is not painful for her. >> like three, four days later, she's still laughing. >> when someone says something about you, that's a bad day. ted cruz, a republican freshman in the senate out front and center in his republicans' efforts to josh chuck hagel has a problem. he's an honoree piece of work, just six weeks from arrival, he's already known for nay saying and his nitpicking and his itch to upbraid lawmakers who are vastly senior to him who have sacrificed more than he has and who deserve a measure of respect. or at least courtesy that isn't his me kirks er. he was head of the harvard debate team. >> princeton or harvard. >> a very bright guy. >> a little too big for his britches. >> people that knew him before said you would like him. >> he has been kicking shins, being comparely rude and i guess maybe it's all a marketing ploy to raise the most money among conservatives nationwide. >> it's getting him a lot of attention. he is in the news more than anybody else. i'm not sure it's a good long term strategy for the republican party or not a good long term strategy for him. this may play to the audience in texas. beyond texas, i don't know this plays so well. >> i don't know. the problem for texas and ted cruz and his style of politics is texas is changing. six years from now, when he runs for re-election, if he runs for re-election, it will be a vastly different state, more purple. people forget not so long ago, texas was a democratic state, back and forth. do you think, like mark thinks, maybe there's a national play here? >> it was pointed out to me yesterday he was born in canada. there's a problem -- i heard this argument yesterday thinking about the future. i think he's thinking about the future and putting his chips down on the tea party populous part of the part. i any hispanic in this part of the party will get a lot more attention. he decided he wants to play on the tea party side of the fence rather than mainstream. the national thing is problematic is the fact he was born outside the country so he's not constitutionally -- >> some people think he could run because his mother was an american citizen when he was born. >> i hope that's true because it would vindicate what i said yesterday. >> we could annex canada. >> is that the official policy? >> and another person was born out of the country and ran for president. >> there you go. we're not talking about ted cruz 2016. >> talking about 2020. >> i have to say, what surprises me, here's a guy, obviously very very bright guy, lawyer. he knows what the constitution says, he knows what the second amendment says, knows the decision in 2008 that defined the parameters of the second amendment. >> he has the background. >> then he goes out and intentionally misstates what the second amendment and what heller and anthony scalia and what the conservative court said about what the second amendment was, deliberately does it knowing he's lying to his audience. >> he's playing an ideological game. he has very far ideological beliefs and will bend everything to fit them. i remember people from the 2000 george w. bush campaign. i know a lot of people that worked with him then and know people who went to law school with him. i think his conservatism is genuine. this is not ginned up. what is odd you don't have to have the style he has. to be this 42-year-old whippersnapper, be one of three that votes against confirmation of john kerry and go in front of conservative audience and effectively dis-john kerry and others as military, is odd for someone who hasn't served. >> and that somehow he is an ally of iran. >> over the top. nobody is contesting his conservative positions aren't -- the substance of his positions aren't legitimate. he can debate them. that's fine. just the style of burning the village down. i don't like it. i don't care about ted cruz' political future and i do care about the political party right now and i don't think it's helpful. >> we've seen enough of these and your party has endured enough especially during the primary process people who don't fit the modern day republican party as it could be if it wants to win. >> again, for kenconservatives there listening, why is scarborough worried about it? i'm worried about it because it's about branding, babies, it's about winning, i like to win elections. if you have a conservative that doesn't burn down the village stylistically, i prefer that than somebody that goes out of their way to offend swing voters that elect presidents. >> i agree. but the way he's coming on is not helpful to the party and i don't think it's helpful to him in the short and medium term. the way to get power and influence in the senate is not to come in and immediately get in the face of john mccain and senior senators like that, because they have a ways of squashing whippersnappers. >> we're calling a 42-year-old a whippersnapper. secondly, ted cruz looks at barack obama, a guy that came in and from the day he got in the senate, he was bored. harry reid said, you don't like it here, you're bored here. why don't you run for president? >> he was considerably more politic about how he spent his short time in the senate. >> talking about barack obama's pathway he wasn't worried about that, he wasn't worried about building bridges, right? >> no, but he found a way to get along with his fellow senators as did hillary clinton who came along having greater ambitions, but careful to go step by step and not to seem bigger for her britches than she wanted to seem. >> this is an odd way to last in washington. we'll see how he does. >> lindsey graham said you get respect in the senate if you can throw a punch and you have to show you can make a deal. ted cruz has thrown lots of punches and hasn't shown he can legislate or endure. this remains to be seen. and at the white house to deliver remarks on billions of dollars on automatic budget cuts set to kick in next friday. according to administration officials, the president will challenge republicans to make a quote simple choice between protecting working americans or protecting tax loopholes. the very public display rather than personal outreach is the type of approach republicans say is hampering opportunities for compromise on capitol hill. a new article from "politico" today says a number of top gop senators who could help pass the president's agenda are surprised they still haven't heard from him. one example, senator mark kirk, the leading republican is a leader in new gun legislation following the massacre still hasn't heard from him. >> and the state of the union speech didn't make it's easier for senator tom coburn interested in finding common ground. on fiscal issues, senator rob portman of ohio says he's open to working with democrats but portman says his interaction with the administration is limited to treasury secretary jack lew. and senator marco rubio working on reform was clearly frustrated when the white house view on the issue was leaked before congress had its own version ready, a backup, guess. he told "politico" quote the entire administration is in contact with the entire obama administration and their staffs and made it clear he's happy to work with any who wants to build the middle class and sequester to make a deal. i did hear from the white house they had invited republicans over any time to cut a deal. >> what do you think? people like mark kirk or come coburn haven't talked to the president about gun legislation, lamar alexander or kirk, guys who actually seem like they're ready to make deal. >> i think it's hard not to worry about there's something to this complaint as you hear this has been the problem since the beginning and even democrats say there's much less communication between capitol hill and the white house than they'd like there to be. the white house says it's unfair and working to change it. it has been so consistent over the last 4 1/2 years, there has to be something to it. >> you almost wonder whether there's a change in strategy. the first term, attempt at deals that didn't go anywhere and now you have the president going over the head offense republicans trying to create a context he feels they have to fall in line. it's a risky way to govern because it's not direct governing or deal cutting so much as to create pressure. >> we asked a question whether the president made mistakes not reaching out to republicans enough. the response back we got was, no, but we have learned a valuable lesson. we will go out and campaign across america instead of dealing with the people across pennsylvania avenue. it seems to me, and he's president. he got re-elected, he can make that choice. it does seem to me he's decided he's going make a bet the democrats can take back the house in 2014 and maybe he can have at least two years of progress without having to deal with the republican house. >> it's certainly true he hopes that's the case. this complaint from the republican senator to me is totally phony. what republican senator is going to be seen publicly making a deal with president obama? they don't want that. it's very clear they'll go way out of their way not to be seen to be cooperating with the white house because the party spent so much time and effort into demonizing him and making him into a socialist, they really don't want that. i think this is a bogus complaint, even given that the president is not the most back slapping kind of politician you've ever met, i don't think it's true that he never picks up the phone or never tries to contact republican senators, they don't want to be seen in public with him. >> there is something else going on. you write in the "washington post" obama ruse. it's not that different from what rubio's group is talking about. but republicans can slam obama's plan as some sort of kenyan socialist inspired abdication of sovereignty. >> that's a good one. will laugh at that a week. >> they can blast the provisions on boarder security as laughable. they can describe the absence of a real plan for reforming the legal immigration process as slapdash or unserious or whatever they want to call it. so if the president really wants immigration reform to pass one of the most helpful things he could do is put out his own plan as decoy to draw republican fire while the senate works on bipartisan consensus, which looks suspiciously like what just happened. >> i said when rubio went on fox and other shows,it was a kabuki dance. marco rubio's plan is a great plan, look what he's doing and ignored he's doing it at 95% of what the president is doing. i'm fine. whatever gets you through the night, awesome. but let us not pretend that one of these plans is much different than others because it's just not. >> no, it's not. it's not much of a different. i thought it was very interesting the president and the white house is shock this plan leaked over the weekend, but if you look it a, there are little bills and pieces missing. issues nod dealt with, that seem to go far. there seems to be a target republicans can denounce and then say, well, look, marco's plan is so much better and we brought the president back to moderation with marco's proposals and we can go forward with this, it gives them cover because, again, the last thing they want to do is be seen agreeing with the president even though they basically do agree with the president because even if that gets 8 the senate, that kills it in the house. >> i thought this was a healthy sign yesterday. frank has covered this stuff a long time. when i saw this yesterday, marco rubio will be criticized attacking barack obama on immigration until the moment he signs it in the oval office and then brothers in arms. >> who will ultimately get credit, they aren't that different, it's who comes away from this, look what we accomplished. >> rubio cannot -- he has a balancing act. he cannot have people on his right think he's aligned with the president. as soon as he does that his plan is doa and until he is standing in the oval office together. >> many people would understand if marco rubio was seen as an ally of barack obama at this stage, it never gets through the house. >> that explains the response to the state of the union. he could have said the president and i agree on this and he chose not to. >> that would be very perilous. >> i think he will be laughing. >> that's so good. >> all right. your new column online at nytimes.come. eugene robinson, thanks. your new piece online as well. still ahead, former secretary of state madeleine albright and chris matthews and chuck todd. president obama makes his first trip to israel next month since taking office. how important will that be the public relations? israeli ambassador michael oren joins us. i know what you're thinking... transit fares! as in the 37 billion transit fares we help collect each year. no? oh, right. you're thinking of the 1.6 million daily customer care interactions xerox handles. or the 900 million health insurance claims we process. so, it's no surprise to you that companies depend on today's xerox for services that simplify how work gets done. which is...pretty much what we've always stood for. with xerox, you're ready for real business. the reason i'm still in this body feelin' so good isn't because i never go out and enjoy the extra large, extra cheese world we live in. it's because i do. introducing the new weight watchers 360 program. join for free and expect amazing. because it works. can your moisturizer do that? [ female announcer ] dermatologist recommended aveeno has an oat formula, now proven to build a moisture reserve, so skin can replenish itself. that's healthy skin for life. only from aveeno. humans. even when we cross our t's and dot our i's, we still run into problems. namely, other humans. which is why at liberty mutual insurance, auto policies come with new car replacement and accident forgiveness if you qualify. see what else comes standard at libertymutual.com. liberty mutual insurance. responsibility. what's your policy? you're looking at a missile on its way. you kacan't see the hamas rocke it's going after. watch how the missile will adjust its course to get close to the hamas rocket and blow it up. >> do you think that people in televiv and esskel lon feel saver today than six months ago? >> by far. >> a clip from 60 minutes. that was a report from the iron dome, israel's cutting edge rocket. israel's ambassador to the u.s. with us now, am babassador mich oren, thank you for being here. >> my pleasure. >> let's talk about the iron dome program we have seen over the past six months. it's been very successful, hasn't it? >> i think it's been historically successful, the first anti-ballistic missile that took down 85% of rockets that would have taken down cities and the fact they couldn't hit our cities gave us time and space and saved palestinian lines and didn't have to work out a cease-fire with then secretary of state clinton. gave us time and space. if you're cities are being hit by mission mission -- missiles, the prime minister, you don't have time to act. we had soldiers ready to go into gaza and didn't have to go into gaza because the iron dome took away the threat to hit civilians. >> there could be instability in area and uncertainty in egypt and unrest in jordan. iron dome may not be relevant to those things. when israelis get up in the morning and look at upheavals, they can say things are bad and getting worse. >> you've noticed. iron dome is a game changer, not ending. we're facing six or seven rockets in benghazi and syria has the largest arsenal in the world and looking carefully who is controlling that arsenal. the entire region is in turmoil. we have concerned and the united states allays some of concerns. at the end of the day we have to have our own security. >> a lot has been said about your relationship with the united states but lots said about the frayed relationship between this president and the prime minister. the proposal in the process of forming a new israeli government and presumably there will be a new government in israel. do you think it's possible there could be a reset to israel-u.s. relations? >> i don't want to give too much credence to what you read, don't want to shock you everything you read is true. they have had 11 meetings and he has spoken to the president more than any foreign leader. i have been present during these meetings, open, sometimes very fun funny, had differences in settlement issues and we both call for immediate resumption of direct talks with the palestinians without pre-conditions. i think it will be a great visit. i'm very excited about it. >> how tenuous is assad's hold on power and besides chemical weapons, what is the danger to your country if assad is forced out of power? >> it's always too early to say good-bye to mr. assad. the people at the beginning of the syria civil war said he's going to be gone in two weeks, two months, he has lifelines to keep himself in power. at the end of the day, we think he will go and the quicker the better. >> would the region be more stable if the united states stepped in a bit more aggressively and supplied weapons to assad's opponents? >> we're not going to get involved in making a policy recommendation to syria. we ourselves will not support the opposition. >> what about unnamed third countries, if unnamed third countries supplied weapons and support to assad's opponents, would that not make the region more stable? >> if unnamed countries supplied weapons to the wrong country, it would have a boomerang action. the longer this goes on the longer the islamist imprint will be there. we're aware there are dangers and whatever happens outside syria could bring in very unsavory people including people aligned with al qaeda but if he falls, if and when he falls, it will be a huge blow to iran and huge blow to is bas he bol la a the end, a net game. >> what do you want to do to hasten his departure? >> cut off funds to him, put pressure on those supplying and keeping him in power. you can do that. the case of the russians, convince the russians to get on board to be more productive easing him out and assuring the emergence of a peaceful and democratic syria, not just in israel's interest, the interest of the entire region and the entire world. >> how close do you belie believe -- does israel believe iran is to having a nuclear weapon. >> the question isn't how close to getting a nuclear weapon, how close that we can prevent it. >> what's the bottom line? >> it's a weaponization program, a fuse program, a missile program. one thing we can see is the enrichment cycle monitored by the un. we know where they are. we know at what point they have enough enriched uranium to have a nuclear weapon and they will go underground and we will no longer be able to see it and that is coming up early summer. >> that's what president netanyahu said. >> does israel need to move before this summer? >> israel needs to be in close cooperation with other allies. we see this just not as israel threat, national threat. if israel was completely uninvolved, the president said he would still view it as a threat against america. >> will israel still move along if they have to. >> israel has the right and duty to defend itself. president obama said israel has that right and called it publicly. we hope we can reach a diplomatic solution. nobody has a greater stake than we do. we have the most skin in the game. we're there, talking about annihilating us. the sanctions have taken a huge chunk out of the economy but unfortunately haven't stopped the enrichment of the nuclear program. we hope it can be stopped? >> this wasn't mentioned during the president's message in the state of the union. where is israel going internally now? >> israel is focused on social issues, some not so different than issues facing this country. livable middle class wage, affordable housing for this country. we have a citizen's army. universal subscription, exemptions for older orthodox jews and discussion about which exemptions have to be continued. we have to deal with peace between arabs in the world and we have a rambunctious democracy and coalition government and we're in the process of putting that coalition together now. prime minister netanyahu wants to primarily gather a coalition that can deal with all those issues at the same time. >> all right. thank you so much, mr. ambassador. thank you for being here. >> thank you. >> coming up next, former secretary of state madeleine ail bright and "gq" editor, michael haines and the mysterious circumstances surrounding his father's death. how do you keep an older car running like new? 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[ earl ] see for yourself. get a $50 walmart gift card when you buy any samsung smartphone on the sprint 4g lte network. now through march 2nd. walmart. 34 past the hour. president obama is face iing complaints from the press after they were barred from his golf outing with tiger woods saturday. >> reporter: when fdr died in warm springs, georgia, the white house reporters were in washington. when having his heart attack after playing golf in december in 1955, the press corps was told it was indigestion. ronald reagan rode his horse without press coverage and president clinton had to be carried into the helicopter after tearing his tendon. the traveling press corps miles away. most understand the presidency is 24/7. presidents deserve time off between weekends at camp david. there's also something at work here historians say. be prepared to see a different barack obama in the second term compared to the first term willing to do things that reflect negatively on him like playing golf with a controversial figure like tiger words. >> it's true if he had played golf with tiger woods during the campaign it might have been interpreted differently and anything was a source of controversy during the campaign. he feels more liberated to do something like that. >> reporter: the white house press channel only found out from the golf channel and on the air. >> seeing them drive off to the first tee, the president behind the wheel and tiger in the passenger's seat to play their first round of golf together and by all accounts they had a good time together. >> reporter: they're not ever able to see etch. the first president bush welcomed the press in kennebunkport and president bush called for a call against terror. >> i call upon all nations to do everything they can to stop these terrorist killers. thank you. now watch this drive. >> reporter: and the president was eager to show quality time between john boehner and president clinton. >> this is not a trivial issue like a golf game. we don't care about his score, what we care about is access to the president of the united states, whether democrat or republican. >> that was angela mitchell reporting. >> i will do this, you will do this. >> we will talk to chief house correspondent chuck todd, plus, we will take a pause at taking shots for him at his magazine's kate upton and rihanna obsession. they're always obsessed. today, "gq" deputy editor michael hanie brings us the real life story of his father's mysterious death and his own life journey. the topic of his own fas fating book. first, we turn to bill karins. >> thank you, mika. our next story is in the next two to three days andpossibly impact the east coast by sunday. on the west coast, san francisco and l.a. will get rain. this is the snowfall map. the white is snow and the pink is more snow. it's possible new england especially southern new england could see its third snowstorm three weekends in a row. we had the two blizzards back to back. this shouldn't be as strong. right now, chicago to mouk key and the eastern seaboard and by 11:00, the rain is pushing in. and rain this morning in atlanta now clearing out and everyone will get much colder. look at the temperatures in the dakotas this morning. that this is windchill of minus 40. brutally cold around minneapolis, pushing into chicago, st. louis, kansas city, detroit. it will make it to the eastern seaboard tonight to tomorrow morning. if you're traveling today, showers and storms on the east coast this afternoon and west coast as we go through the afternoon hours. the big snowstorm in the middle of the country is wednesday night and all day thursday. you're watching "morning joe" brewed by starbucks. the patient, presented with a hairline fracture to the mandible and contusions to the metacarpus. what do you see? um, i see a duck. be more specific. i see the aflac duck. i see the aflac duck out of work and not making any money. i see him moving in with his parents and selling bootleg dvds out of the back of a van. dude, that's your life. remember, aflac will give him cash to help cover his rent, car payments and keep everything as normal as possible. i see lunch. 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[ male announcer ] find out what a hospital stay could really cost you at aflac.com. in the middle of the night it can be frustrating. it's hard to turn off and go back to sleep. intermezzo is the first and only prescription sleep aid approved for use as needed in the middle of the night when you can't get back to sleep. it's an effective sleep medicine you don't take before bedtime. take it in bed only when you need it and have at least four hours left for sleep. do not take intermezzo if you have had an allergic reaction to drugs containing zolpidem, such as ambien. allergic reactions such as shortness of breath or swelling of your tongue or throat may occur and may be fatal. intermezzo should not be taken if you have taken another sleep medicine at bedtime or in the middle of the night or drank alcohol that day. do not drive or operate machinery until at least 4 hours after taking intermezzo and you're fully awake. driving, eating, or engaging in other activities while not fully awake without remembering the event the next day have been reported. abnormal behaviors may include aggressiveness, agitation, hallucinations, or confusion. alcohol or taking other medicines that make you sleepy may increase these risks. in depressed patients, worsening of depression, including risk of suicide, may occur. intermezzo, like most sleep medicines, has some risk of dependency. common side effects are headache, nausea, and fatigue. so if you suffer from middle-of-the-night insomnia, ask your doctor about intermezzo and return to sleep again. ♪ we have "gq" magazine's deputy editor, michael hanie, the author of the memoir, after visit i visiting friends, a son's story. >> what an incredible story. i never knew. >> that's why we read a book, right? >> give us your background. >> tell us about your parents. >> willie and i were talking offset, both sons of newspaper men in chicago as well as my mother a newspaper woman. grew up in chicago, my father died when i was very young, he was 34. this personal story i heard but very universal about family and secrets. every family has secrets and inside those secrets are truths and if we can find those truth, that's what unites us. >> the story we've been told about how he died was not what i had always been led to believe and spent 10 years reporting this story. >> what did they tell you? how did your dad die? >> we were told he died by my uncle. he got off work late, the lobster shift, 2:00 in the morning and had a heart attack on the street. when i was in high school, this story never rang true to me. i searched the oh bit tuairies and said he died after visiting friends. having never met these friends, i went in search of them. >> what was it that made you think the story wasn't quite right? why did you think there was something suspicious about your father dying of a heart attack. >> what was most suspicious, who were these friends? i find them very curious, never met anybo with him that night. our absence is never greater than our presence, when we lose someone whether we lost a boy or sibling or spouse, we always want to know what happened and what were their last moments like? >> as you teased it out were people reluctant to speak with you? >> many people were reluctant, especially his old newspaper pals. more of sense of honor protecting a son and my mother as well. we want the truth. no one really wants to be the messenger. we know what happens to messengers. these people were acting out of a code of honor one can understand. >> what can you tell us about what you discovered without -- >> without giving away. willie, what would you say we can tell? >> it's very difficult not to give it away. >> it was a complex relationship, complicated story, perm very universal story as well because inside all these things are these truths. >> the story you got turned out not to be true? >> yes. the story my uncle devised, this cover story was a story he had written to protect us, a great last moment i see in the book the moment between the front page rare and information age when cops and reporters were still on the same side of the coin. >> was there any feeling you starred down this path wanted to know how your dad died, did you get to a point, i'm ability to blow up the myth of the story of my dad i had in my head all these years, you ever think about stopping, i don't want to know? >> there was also when i learn it, how do i go forward with this story? as i say in the book, there comes a point in all our lives, the great question is who am i? in order to know who we are we have to go in our past sometimes and family's past and with where we came from and i tell my mother what i learned, a very powerful moment. >> your mother was also told this story? >> yes. >> but she didn't believe it, did she? did she believe he died of a heart attack? >> she did. she was 33 at the time. she had two boys in 1980. it was a different era. >> did she want to know the truth? >> when i told her i knew the truth, yeah. in this book, i went looking for my father but found my mother. >> how did your mother respond? >> she's very proud of the book. >> she's here. she's seated right over there. >> my goodness. >> that must have been very difficult when here she is believing one thing all these years and you can see she a's stopped and welled up. it was very difficult for her to hear that. >> when you started out, did you conceive of it as a book from the beginning? >> i conceived it as the universality is. we long to search. our stories are intertwined with our parents stories, to know ourselves we have to know them. i need to solve this mystery. i believe there was a story here and the story became the journey and the journey became the book. >> are you glad you went on that journey at the end of it? >> sure. yeah. >> there are some things best left unknown. >> i used to think that, joe. ultimately i think there are secrets and inside those secrets are truths. we know in our own lives once that truth comes out, oh, now i have information and can go forward in my life. it's that fear of those things that holds us back and one of the things i talk about in the book. believe me, i had a great amount of fear going in search of this. having come out the other side, i hope this book will inspire people to think about this and even having conversations. >> so many people don't want to pursue truths that are in their family and everybody's family has a truth that through the years, through the generations, people decide to bury. >> right. i got an e-mail from a man who read my book, the man is 75 years old, i realized my father, what my mother told me, that he died of a heart attack, he said i finally looked up the hospital record. he had been beaten to death and died in the hospital after five days. this was in the '40s and said, i think my father was beaten to death because he was gay back then. i can't ask any about it. i talked to my cousins and they say, we don't want to talk about that. i'm 75 and i still want to know that story. that's again this book -- my book connects those -- makes people think about those conversations they want to have. >> after a decade of digging into the truth about your dad, how do you feel about him sitting here today? >> i feel like i see him as a man in full. i started this journey from looking at him from a son to father and now i see him man-to-man. i think that's the great -- when we take these journeys, that's the power of it. these people leave us but we never leave them behind and always carry them with us. joe, you lost your father. we think about these folks everyday, we always are wondering, how am i like them? how do they form me? whether you lose a spouse or someone, you're always looking to see what's left of them and how do i carry them forward. >> can you talk about this spectacular cover? >> this is done by a colleague of mine, taken of my parents the year before they were married. the architect director at "gq." you can tell a book by its cover. >> your mother is here. >> she's come in. today is >> she's come in. >> that has to be exciting. so what does your mother sympathy be the you putting kate upton -- >> i need to talk to her. >> i'm sure she's concerned. >> it all loops back. >> it all loops back, i know. >> i just have attorneys, this is a beautifully written book. it's heart-breaking. i'm not just saying that because he's a friend. >> i can't wait to read it. wow. the book is "after visiting friends, a son's story." michael hainey, thank you. up next, mayor michael bloomberg tests the limits of the nra's influence. that story's next. we'll be right back. weight watchers online worked for us. we don't argue much. we really don't. meg usually just gets her way, and i go along with it. i think it worked for matt because i did it for him. when i'm the one cooking, i'm the one calculating the points. i can microwave things. you get to eat real food. we still get to go out. we're just so much smarter about it. we can keep each other in check. going, "okay, i see you." we've lost about 110 pounds together. it helped our love life. happy wife, happy life, right? 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"the new york times" reports that some pro--gun members of congress are open to limits on magazine size. this comes as mayor michael bloomberg's super pac prepares to spend millions of dollars in the special election to replace jesse jackson jr. in chicago. bloomberg may commit as much as $2 million to ads to defeat congresswoman dean halvorson, a pro--gun advocate who once enjoyed a top nra rating. in an editorial out today, the chicago tribune wrights in part this. bloomberg is not interested merely in influencing a particular race. his spending is also about demonstrating to candidates across the country that the nra is not the only group prepared to make an issue out of gun control in political campaigns. it's about proving that being associated with the nra can be a liability, not an asset. it's about creating a different political climate that could make sensible gun restrictions more achievable. >> and mark, there was a development in the race yesterday. one of the democratic candidates dropped out, which actually consolidates power behind kelly, who is now in a good position to win this race. >> the mayor is using his vast resources to make a statement in this race. it's a democratic district and the one pro--gun democrat left in the race probably won't win although she was ahead. and if the mayor keeps her from winning through his spending, if he keeps her from winning, i think he's going to then try to take that example, go to other places in the country and say the nra money is not the only money that's at play. >> that's right. >> and by the way, michael bloomberg was successful. they selected a certain campaigns to target in 2012. they were successful. and if you are a moderate republican or a moderate democrat, god help those moderate democrats that decide to go south and go with wayne lapierre on universal gun background checks. because he's going to throw money into those races and he will beat them. >> the mayor is a dangerous guy on this. he's a guy with many billions of dollars, committed to spending it, committed to this cause with a team of very sharp political operatives around him. tough political operatives. committed to the cause. they can change the equation on this in a lot of districts. >> i have to say also the thing that surprises me is how clear eyed they are. know though exactly what's possible, they know what is not possible. they're not around to waste time. they are targeting these races, and they're going to go after moderate republicans and moderate democrats. bloomberg, worth $24 billion, will put in more, and he will win. so it changes the dynamics. >> and you really can't complain, if you're receiving support from the nra and you're riding on that, then you really can't accuse the mayor of buying anything because you're bought already. still ahead madeleine albright will be here. top republicans insist they're willing to work with the white house if president obama will only pick up the phone? that story's next when "morning joe" comes right back. revolutionizing an industry can be a tough act to follow, but at xerox we've embraced a new role. working behind the scenes to provide companies with services... like helping hr departments manage benefits and pensions for over 11 million employees. reducing document costs by up to 30%... and processing $421 billion dollars in accounts payables each year. helping thousands of companies simplify how work gets done. how's that for an encore? with xerox, you're ready for real business. a regular guy with an irregular heartbeat. the usual, bob? not today. 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[ male announcer ] progresso. you gotta taste this soup. good morning. it's 8:00 on the east coast, 5:00 a.m. on the west coast. it is time to wake up, everyone as you take a live look at new york city. come on now. back with us on set, we have mark halperin and john heilemann, and in nashville, john meacham. >> let's go. what do we got going? >> president obama will be joined by first responders at the white house this morning to deliver remarks on billions of dollars in automatic budget cuts set to kick in next friday. according to the administration officials the president will challenge republicans to make a choice between protecting working americans or protecting tax loopholes. but the very. display rather than personal outreach is the type of approach that republicans say is hampering opportunities for compromise on capitol hill. a new article from politico today says a number of top gop senators who could help pass the president's agenda are surprised they still haven't heard from him. one example is senator mark kirk. although the illinois republican is a leading voice for new june legislation following the newtown massacre, he and the president have never spoken about it. one senate aide said the president's repeated call for gun reform during the state of the union speech didn't make it easier for republicans like senator tom coburn who are interested in finding common ground. on fiscal issues, portman says his interaction with the administration is limited to treasury secretary nominee jack lew. and narrate marco rubio, who has been working on immigration reform, was clearly frustrated when white house legislation on the issue was leaked before congress had its own version ready. republicans have never done that, by the way. a white house spokeswoman told politico, quote, the entire obama administration is in regular contact with members of congress and their staffs, and the president has been very clear he is happy to work with anyone who wants to build the middle class. >> what do you think? >> i think some of it's fair. i think some of it is just piling on, and i think the president could do a lot of good by just walking over to capitol hill and saying, okay, let's go. >> but he doesn't do that. why doesn't he do that at this point? >> they reach out i think more than the narrative says. they've invited people. they've been insulted. they've been lied to, and i think it's a lack of trust. and the question is how to rebuild that. >> we say it all the time, but democrats complain as much as republicans. i have a democrat i've been talking to an awful lot behind the scenes, along with republicans on some of this gun legislation who john heilemann says that he's been in washington a while and he's never gotten a phone call from the president, whether it's on gun legislation or whether it's on a lot of other things he's been working with. and you would think kirk, tom coburn, these republicans who are really out there on this piece of legislation which is just violate for gun safety would be getting calls. but he doesn't do that. he's not your usual president, is he? >> he doesn't do. he's not done it for the last four years. there are times when being to levitate above the earth would be kind of a useful skill, but we have gravity. the president's not suddenly going to become bill clinton. so either things are going to get done through much more staff contact and through cabinet secretaries and other outreach. they're not going to get done because he's going to change and suddenly become a different person. >> we're not asking him to be bill clinton. we're asking him to pick up the phone. >> all i'm saying is we've been talking about this for four years. he's not going to change. he's not going to start doing. >> so mark, the president said after he got elected again, he made the joke, my daughters don't really want to see me that much anymore, so i'm going to have time to call. he doesn't like doing it. >> there's still espn. >> exactly, exactly. i'm flummoxed. i really am as to why he can't pick up the phone, especially on these republicans that are helping on gun legislation that are sticking their necks way out, that are crossing the nra, but it doesn't look like he's going to change. >> the legislative theory of the case is joe biden, maybe mcdonough, are going to produce overwhelming majority in the senate for these legislative projects and that the pressure will then be on the house as it was on the deal on the bush tax cuts to not be the hold-outs and to pass things. and they don't think they need the president to get those compromises, either through regular order in the committees or votes on the floor. >> let's go to putser prize winning historian john meacham. john, i just can't think of a parallel. i'm sure calvin coolidge was remote, but i really can't think of a parallel of a president who just is obstinate in his refusal to talk to democrats or republicans on the hill that could move legislation along. >> yeah. you know, the great coolidge story, the lady who came up to him and said, mr. president, i have a bet that i can get you to say three words, and he said, you lose. >> right. >> so the coolidge humor is always a good thing to start with. >> good morning, nashville. >> two words there, right? >> there were two words, yeah. just one short. george will wrote another coolidge joke which is a little better. >> oh, that's a good one. >> coolidge and his wife, john, since you opened the door, i'm going to plow through it. coolidge and his wife, while they were president, were touring a chicken plant. >> as one does. >> as one does, and the tour guide told mrs. coolidge that chickens copulate. >> as much as roosters. >> 24 times a day. >> they do. >> and mrs. coolidge said, can you tell that to the president? and so the tour guide told that to the president. and the president said, but do they do that all with one chicken? and the tour guide said no, usually with 24 chickens. he said can you go tell that to mrs. coolidge? >> that's funny. >> thank you george will. he put that this weekend in his column on calvin coolidge. >> we digress. >> your coolidge joke is better. you know, the analogy that comes to mind that he had two democratic houses is president carter who was not the most popular guy in town. they used to express frustration about i want to help this guy but he won't let me help him. so i think there's that odd strange in american politics of introverts going into an extroverted business. it's nixon and i think president obama. i think carter's a good example of that. and so i think john heilemann's exactly right. it'd be nice to levitate but we're not going to. he's going to have to be on the margins here. there are moderate republicans who want to help. it's self-defeating but i don't think it's going to change. >> jim vandahi, let's go to this politico editor, jim. >> there he is. >> jim, right now it's not just senate republicans expressing frustration. another politico story out yesterday, up in arms, that they feel like they're being shut out. >> yeah, a lot of them, and i think we have four or five in the piece that went on the record with very critical comments of the white house, and they say it's different this time, that the obama white house is taking this sort of predictable set of tools that you have for media manipulation, whether it's controlling where you're going and who you're talking to or limiting access that the press has to the president and his staff. and then they're putting it on steroids, taking their own photos, controlling what gets released to the masses and they say that the combination of this has made this white house much more controlling of its image than even bush who was criticized a lot for freezing out the press. >> jim, on the piece about the republicans, how much of this goes back to the early days of his presidency where he feels like he did reach out a little bit on stomach luis and healthcare and didn't get anything back and said, these people aren't going to work with me, forget it. did he go into office thinking i'm not going to work with these, or is this the result of experience he's had? >> i think a little bit of both. remember this isn't the most gregarious president we've had. he feels like it's just not worth his energy. but i think what's different here is to me you put the house and senate in different categories. this is almost impossible to work with the house republicans. i just don't think there's a deal to be had on most issues with them. but when you think about the senate and about rubio on immigration or portman or kirk on gun issues. there are republicans who want to get things done in the senate that i do think if the president either did build now or had built a relationship with, it would make it a lot easier for him to get something out of the senate that would then isolate house republicans. so strategically it would be in his interest to have some of these relationships but they just don't exist and there's probably a level of it's just awkward now because they haven't talked for four or five years. so i think when you get to moments like this, it makes it harder to get deals that he wants to get done, particularly guns and immigration. >> john, i know you've spent some one-on-one time with the president, as have we. he's a very likable guy, unlike, let's say coolidge or nixon or carter, who were not interested or who were at times socially awkward. this president is a very likable, charming guy. >> which leads you to wonder. >> it's not that he couldn't use his personality and his likability and his skills, because he has such a winning personality one-on-one. it's just that he seems to refuse to. and that's what makes it so fascinating because most presidents will use every weapon at their disposal, but he is not using, i think one of his more effective weapons politically. >> i think that's right. i think he -- although i will say, when i spent time with calvin coolidge, i thought there was a certain, an unusual charm. >> a quiet geist-like charm. >> it was very geist-like. one of the things, i was just talking to a very successful southern politician over the weekend about this issue, and this politician made the point that he'd not been around someone, except the president, who so clearly would have preferred to be respected than to be liked, which i thought was a really astute comment. and i think that when you put that frame around it, there is something that tells you that it begins to explain the behavior. he believes in his ideas, understandably. he now has the wind of a re-election, and he feels vindicated, and he does feel, to go back to what we were saying a second ago, that he did reach out. it wasn't very effective. some people wouldn't return his phone calls, and so why put himself in that position again? >> still ahead on "morning joe," former u.s. secretary of state madeleine albright will join us here. what advice does she have for the new secretary of state john kerry? and up next, chuck todd joins us here on set along with chris matthews from washington. but first, bill karins. >> not so great. >> it's not. bill. >> well, good morning, everywhere. we have a very exciting period of weather coming your way. three or four winter storms, one on the california west coasts, another in the great lakes. this is the beginning 6 our stormy pattern and it's cold in the northern planes. first things first, though, travel trouble, slippery, light know, milwaukee down to chicago. just a coating on the roads. and i was mentioning how cold it is. the windchill just went into the negative numbers in chicago. wlook the your friends up in north dakota. minus 42 is how it feels on your skin if you head out this morning. so this is bitterly cold down through the northern planes. for our friends in california waking up early today, it's going to rain, in l.a., looks like san francisco, the tail end of the rush hour towards the lunch hour is your timing. hasn't rained a lot in l.a. this winter. so east coast, just light rain showers. but we have the cold, the storm on the woes coast. those are going to combine into a pretty good sized snowstorm, for all our friends from illinois, nebraska, iowa, that'll be wednesday night to thursday. it's going to be especially during the day on thursday. leave you with a shot of new york city. finally a little bit warmer. don't get used to it. much colder tomorrow. you're watching "morning joe" brewed by starbucks. with the spark cash card from capital one... boris earns unlimited rewards for his small business. can i get the smith contract, please? 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i'm guessing it's a very small group of people. but then what they're asking for on social security and medicare is not far away from what the president asked for. this is a -- if the president doesn't embrace this, it's a political -- >> does the president have another chance to embrace it? >> how many more chances? i keep saying, do you know where to find the simpson-bowles. you have to go to white house.gov. that's where it lives. look, this is another opportunity, especially because they're petitioning, 3-1, but they're pitching the balanced approach. they're pitching the president's plan. they won't say it. they want a few more cuts, a little more on medicare, deal with age requirements, but they're pitching. it doesn't feel -- the difference are hard to find. they embrace cpi, all that business. >> chris matthews, as i continue talking about how the republican party needs to be dragged back to relevance so they can once again win the white house, i always talk about the suburbs of philly. you know that area better than anybody. tell us, where do people in the suburbs of philly sit on the debt, on the deficit, on simpson-bowles, on sequester? we know perot certainly ignited a movement in '92 but where are people in the suburbs of philly in 2013 on this irish? >> well, that's the reason they vote republican. not abortion or anything else. it's that issue concerning deficit spending by the democrats. suburbites are negative on that. that's why a lot left the city, to get away from the big city machines. they want it to be clean, they want it to be efficient, and if you feely responsible. that's why they're republicans. that's always been their winning ticket. and you and i know that's where they go to play their card, that card there. but i also think there's a fact of life we ought to look at. right now we're basically about 15%, 1 in $6 to pay for the federal government, and we're spending about $25, about a quarter of the g.d.p., so it's a huge differtial, we're not taxing enough, that's if you believe the government's spending should be 20% of the gdp. >> chris, who is the transformational leader who says, okay, americans, we understand you like the republican idea of taxation, but you like the democratic idea of spending. >> that's the problem, joe. >> these two together. so who gives them that news that we can't continue on this course forever? >> the problem is it's almost like a kid going to both parents, daddy, can i have the car tonight? sure. mom, can i have some money? it's like they go to democrats for more spending and republicans for lower taxes and they both say sure, kids. they get it both ways. there's a question i always ask to conservatives, are you willing to pay for the government you believe in? in other words, strong defense, pay off our debts, things like that, law and order, things like that. are you willing to do that at least? that's about 20%. all right let's raise taxes up to 20%. but neither side wants to reconcile. you've nailed it, neither side says i'm willing to live with 20%. nobody forces them to that. that's the problem. >> we were saying that 18, 19% of gdp feedback in the '90s. that number just keeps going higher and higher, 25 years from now. >> yeah, but i want to go back to, i think the other reason to stands in the way, because we're not far apart, right? when you look at it in grand scheme, you go, really, we couldn't get a bargain over a couple billion dollars, which isn't a lot of money in budget speak. with clinton and gingrich, the two of them sold compromise as a victory. in this day and age, maybe it's that obama and boehner don't know how to sell compromise as victory or our press corp will never allow that to happen. instead we find the conservative who doesn't like it, the liberal who doesn't like it, and then it forces the two players to say, i won. >> and then we invite lindsey graham on the sunday show. chuck todd, is there another republican allowed to speak on a sunday other than lindsey graham. nobody wants to talk. >> he's the front man. >> mccain and licensed. >> it's a problem. >> i think there are fewer and fewer republicans that will go on non-fox shows. >> why is that? >> i think that the mythology of the big, bad nonconservative media has gotten into some offices and so that there's this fear of we can't do anything that's not -- and i feel like it's a mythology that now younger staffers believe and it infuses these guys. they actually believe the spin that's out there, oh, my god, that's what the mainstream media does, anything to disrupt the conservative agenda. and so really only licensed, john mccain, you know, that's been my, i just fear that it's sort of like this whole, there's this whole sort of the mythology of that the media's out to get conservatives is believed among more and more actual staffers. >> so chuck and chris, take us through this gallup poll, the direction of the country. 72% are dissatisfied. >> plus or minus 20 points? sorry. >> 72% dissatisfied, and then look at it between the parties, 47% democrats and 9% of republicans are satisfied. >> so, chuck, you obviously make a very good point about gallup. >> i'm sorry. >> how far off is that? >> my point is that they need to go through a very public, when you had a, when you clearly, you're doing the wrong methodology in some form or another. look at what romney's pollsters have done. exactly what went right, what went wrong, for some reason gallup won't do. >> what's nbc's track right now? >> we're not that high, i think 38% was the last track. >> chris matthews. >> i just want to say that the most important iconic picture of the last election, which is still the only election we have to draw on, is the governor christie and the president walking along the beach in new jersey. that's what the public wants to see, parties behaving like grown-ups, operating like citizens, not their parties. it is still the most powerful picture. joe, i think you get to it almost every day, which is what they want. working together like grown-ups. like going to work in the morning. you got to get the job done. people know they have to do it. why don't they do it? i think that's the question. >> i said this past week, you always have these people on the far left or far right telling their congressmen or senators, you go to washington and give them hell, the more you act like ted cruz, they slap you on the back, that's the way to do it, don't be nice to those people. why don't they go over at work to the cubicle next to them and insult them and say your methodology is stupid, you hate america. it's insanity. >> okay, joe, you're a pro too and you've been in all these worlds of media. unlike so many people, you know both perspectives. how many people in your perspective, and you're a history buff. how many successful demigogs have there been. i keep thinking, sure it's great, they'll jump up and down, and say great, i love you. five years later, demigogs gets you nowhere. >> hughey long. >> louisiana statehouse. >> he ran the country of louisiana for quite some time. >> he was a disaster. >> i think we're in a different place. >> huey long. >> i'm just telling you, you want the last successful demigog, it's huey long. >> the reason we keep bringing him up is obviously the republican party has a branding issue. we are in the 20s. i don't really think it's about as much the positions that we've taken as it is over the past four years calling the president a racist, saying he hates all white people as glenn beck has done. having voices in conservativism sating he's not an american, that he was not born here. >> mark, is this your expression, obama derangement syndrome? who came up with that? there was clinton derangement syndrome, frankly, there was reagan derangement syndrome where there's, whatever it is, say it's 25, 30 percent of the opposition base that just has never believed in legitimate, you have liberals that never believed reagan intellectually was a legitimate president. never should have been in office. obviously there were people who felt bush never should have -- wasn't legitimate. so this -- it's funny to me that you look at the last three two-term presidents before this one, and there's a pattern here, and it's just like the opponents get so caught up in their hatred of the president that they lose their way and each party did lose their way for a while. >> and chris matthews, i'm saying this more and more every day because for republicans who think they're doing their party a favor by being engaged in the democratic version of bush derangement syndrome, a couple of facts that since we've had this 24/7 media news culture, talk radio and everything else that's gone with it, the presidents that have been undermined from day one, bill clinton, george w. bush, barack obama, they all get re-elected. you would have to go back a long time to find three presidents -- >> i think the founding, almost all the way back to the founding. monroe. >> three presidents, and this is exhibit one, that the haters only end up turning off swing voters who say, yeah, i may not love the president but he's not everything the opponents -- i need to say one other thing too, and i hate to give facts. i'm not making any suggestion other than -- >> you hate facts? >> no, i hate to give facts to defend a lot of people, but think about this, and i'm not blaming it on him, but just for conservatives that think they have to stay in their own little media world, since rush limbaugh went on the air and became a national figure, republicans have lost five out of the last six presidential elections in the popular vote. since fax news want on the air in 1996, republicans have lost four out of five. >> please keep doing what you're doing. >> let me finish. so when ronald reagan and richard nixon had to go up against a media culture that absolutely hated them, that despised them, that ran them into the ground every night and there was no conservative outlet, they won 49 states. listen, i'm a conservative. i like conservative outlets to go to when i get frustrated looking at the mainstream media. but for people that think, chris, they have to stay in this little box, i've got bad news for you. it's not working. >> well, rush limbaugh's a great example, guys, because he's enormously successful. he makes a lot of money and he deserves it because he's a great showman. but he basically place to a very narrow cast of republicans, usually middle aged white men. i'm not knocking him, but that's never going to be 51% of the country. he knows who his market is, guys driving around, marketing salesmen in car, he tells them they're the greatest guys in the world because they're carrying the load in this country and those -- he plays to them. it's brill. but it's not 51% of the country and that's why it disserves the republican party to listen to this guy for their guiding light. >> that's why i talk about the i-4 corridor, the suburbs of philadelphia, yes, these people help energize the republican base, but it's not enough to get you the 51% plus one that you need to win presidential elections. and at one point the republican party needs to start focusing on winning presidential elections. i've just stated some facts on the air here. >> it's going to be interesting at 12:01. >> there's certain websites that are going to go crazy and they're going to attack me and they're going to go crazy -- >> perhaps a talk radio show or two. >> 12:06. >> here's the point. they're going to do everything, they're going to do everything but reflect on the fact that since this media culture has been created that was supposed to give us a great balance to the liberal news media, we've lost five out of six elections in the popular vote. republicans need to start focusing on winning. and i don't begrudge anyone who makes $30 million a year. but i would love republicans to start winning again. >> maybe candidates ought to not be so afraid of them when they see the impact. >> we need to discuss two words, herman cain. it's like stunning roger ails, is that good for the country. >> we're going to finish this conversation. rajjer ails figured it out, and before everybody else figured it out, and that's why he was going to chris christie, trying to ask him to run for president, because roger els figured out some people jumped the shark. if you reward people, like herman cain's got a biggerer, is that going to encourage, what kind of presidential primary is that going to encourage? >> it's a cottage industry. >> chuck todd, we'll be watching your interview in just a few minutes. chris, thank you. coming up on "morning joe," former secretary of state madeleine albright joins the table, but first brian shactman joins us for business before the bell. we'll be right back. 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[ male announcer ] because whatever you need, we'll have it or find it, and get it to you fast. staples. that was easy. let's see what you got. rv -- covered. why would you pay for a hotel? i never do. motorcycles -- check. atv. i ride those. do you? no. boat. house. hello, dear. hello. hello. oh! check it -- [ loud r&b on car radio ] i'm going on break! the more you bundle, the more you save. now, that's progressive. it's time for business before the bell. cnbc's brian isn't that correctman. we have the secretary of state here, madeleine albright, you have ten seconds to tell us. >> market's up, 20 points from 14,000. officemax, office depot might merge. and curt shilling's bloody sock up for auction could fetch $100,000 for auction this saturday. >> that's pretty good. >> coming up, who do we have? >> we have former secretary of state madeleine albright who paved the way for people like hillary clinton in the state department. up next, in her own words, the story behind secretary albright's remarkable journey. you're watching "morning joe." as your life and career change, fidelity is there for your personal economy, helping you readjust your retirement plan along the way. rethink how you're invested. and refocus as your career moves forward. wherever you are today, a fidelity ira has a wide range of investment choices to help you fine-tune your personal economy. call today and we'll make it easy to move that old 401(k) to a fidelity no-fee ira. if your a man with low testosterone, you should know that axiron is here. the only underarm treatment for low t. that's right, the one you apply to the underarm. axiron is not for use in women or anyone younger than 18. axiron can transfer to others through direct contact. women, especially those who are or who may become pregnant, and children should avoid contact where axiron is applied as unexpected signs of puberty in children or changes in body hair or increased acne in women may occur. report these signs and symptoms to your doctor if they occur. tell your doctor about all medical conditions and medications. do not use if you have prostate or breast cancer. serious side effects could include increased risk of prostate cancer; worsening prostate symptoms; decreased sperm count; ankle, feet, or body swelling; enlarged or painful breasts; problems breathing while sleeping; and blood clots in the legs. common side effects include skin redness or irritation where applied, increased red blood cell count, headache, diarrhea, vomiting, and increase in psa. see your doctor, and for a 30-day free trial, go to axiron.com. oh, that's a good one. >> oh, my goodness. >> that might have to come with us on the air. here with us is former secretary of state, madeleine albright, her book, a remembrance of war, 1937 to 194 is now out in paperback. the empress of research. she was the empress of research. >> he labeled you the empress of research. >> because at that stage i was helping him on research for his book, power and principle, so i needed a title and that's it. >> so prague winner, this is a remarkable story. could you tell me how, obviously dr. brizinski's family leaving poland, shaped your life. can you explain? >> no question. i was born in prague just before world war two, and when the nazis marched in, my father escaped with mother and me to england and i spent the war in england. and i think what makes me different from contemporaries, i actually lived through bombing. the part that i didn't know at that time. i did a lot of research for this book was about my own religious background. i was raised a catholic, married an episcopalian and found out i was judiciary. so this story is based on three levels. the inner story is my story, my parents' story. the second level is basically what happened during world war ii and the very complicated aspect of that and the third is probably the most difficult is the difficulty of making moral decisions. we all think everything's black and white but there's an awful lot of gray area. >> i've talked about this before, your experience like colin powell's experience shaped be. he'd gone to vietnam and his virs instinct was stay out. we were talking about the ball k kins. you grew up in this most horrific of times and what you learned from that. sometimes you just got to go in. >> part of the thing that happened is we can say we didn't know what was happening during world war ii. when we were in office in the clinton administration, we did know what was going. and the british and french tired from world war i did not do anything. didn't care about people in far away places with unpronounceable names. and so i think that we do care. that's what we did in the balkins, and the question is what is the right thing to do? >> she's speaking about czechoslovakia, reminds me of your uncle. >> i'd like to bring the issue of moral decisions to today, if we could, and ask you to weigh in on the president's use of drones and the debate that has now ensued. >> i think it's one of the most complicated and fascinating debates because one of the issues that actually came up during the balkins in kosovo, it was an air war and a lot of people said there's not moral, you should have boots on the ground, and i thought why should we get more people killed, when you can take care of the terrible things that are happening from the air? i do think that drones have been very effective in terms of getting rid of people that are bound and determined to attack us. but it has gotten to be a much more complicated issue and i think should be a public discussion about the appropriateness of them. >> talk about needing to go in, let's talk about syria, tens of thousands of civilians kills. assad killing the elderly. should the united states be more aggressive? >> i think we haven't talked enough about what the united states is doing. we've given like $5 million of aid. we've been instrumental in getting the opposition groups together. >> but the killing still continues. is there anything we can do to stop it? >> i think that we need to be more persuasive with those like the russians, for instance, that i think are not being particularlily helpful and keep pushing on having the opposition be able to be at the table with anybody that will talk on the other side. i think there's a real question as to whether there are enough arms or not 37 i don't think there's a lack of arms. i think there's a lack of international pushing and assad will go. so it's a tough issue. very tough. >> we have a new secretary of state. i noted the other day you said that he would be a great one despite his gender. what advice do you have for the new secretary kerry? >> well, i think that he is very, very well prepared to be secretary of state. i mean, he has traveled everywhere. he has done every single issue as chairman of the foreign relations committee. i think the best advice is to know that it is an essential job for the national security of the united states, that he has to state his views clearly, that we have a president who likes to hear a lot of different views and that secretary kerry is in an amazing position to present his views. >> all right, the book is "prague winter" now out in paperback. >> by the empress of research. >> we could go on and on with things that my father has named. >> more "morning joe" in just a moment. great to see you. thank you for coming in. 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[ crows ] now where's the snooze button? welcome back to "morning joe." it's time to talk about what we learned today. mika, what did you learn? >> i learned to the former secretary of state madeleine albright is the empress of research, according to my father. >> wrote a pretty darn great book. >> i learned chuck todd is like the mario andretti of nbc. every time he gets near joe biden's house, he slams on the accelerate. >> keep going. >> apparently a full solar eclipse in tennessee today. >> that's true. good point. >> they really should change that studio background. >> and madeleine albright, what did you learn today? >> as i listened, i learned that joe really does listen to other media. >> oh. >> i do.
good evening. this was to be expected as the hour nears. but a major credit agency has put the credit rating of the united states of america on a negative ratings watch. just last night, we came on the air reporting that hopes were high for a deal, things were moving. that collapsed today in a pile of noise and hurt feelings in washington. the government has been shut down for 15 days. the debt ceiling deadline is just over 24 hours away now. the world is watching. and the financial markets are clearly watching. and profiles in courage are in short supply tonight in washington. we have it all covered beginning again tonight with the sorry state of affairs in congress. kelly o'donnell has spent yet another day covering it all. good evening, kelly. >> reporter: good evening, brian. confusion and parol sis are all i can say for sure right now. the house had planned to vote on a bill to reopen government and prevent that default, and then abruptly scrapped that after tea party conservatives told speaker boehner they would not go along. tonight gop aides say no decision on next steps and senators tell me they don't know how this ends. how did we go from this just last night -- >> i'm very optimistic. >> reporter: -- to this today -- >> and it is nothing more than a blatant attack on bipartisanship. >> reporter: hopes deteriorated quickly on a senate plan to reopen the government and prevent a default on the country's good credit when house republicans rejected bishop senate comp mice. mr. speaker can you guarantee to the american people congress will not go past the deadline and push us into default? >> listen, i have made clear for months and months that the idea of default is wrong. and we shouldn't get anywhere close to it. >> reporter: but time is running out fast. and the mood is so sour, that clergy sang hymns as they roamed from one lawmaker's office to another, praying for a solution. behind these closed doors here in the basement of the capitol, the gop held their meeting. and that is when speaker boehner found out he didn't have enough republicans to make a deal. tea party conservatives wouldn't back down demanding changes to obama care. >> oh, my gosh we have lit up obama care for the whole nation. the rollout was atrocious. this is a fundamentally bad plan. we've made it clear to americans we stand with them on the bill. >> reporter: democrats huddled at the white house late today. >> make no mistake, the bill they're putting on the floor is a decision to default. >> reporter: why the urgency? congress sets a limit known as the debt ceiling on how much the government can borrow. the current limit is $16.7 trillion. like ordinary americans do with their household accounts, the treasury department can move money around to keep paying bills even after it reaches the limit. but the government loses the flexibility to do that at midnight tomorrow night. and if congress fails to raise it by then, the country faces default. meeting quietly looking for compromise. and john mccain begged democrats to stop bashing speaker boehner for the sake of getting a deal. >> so let's stop this. stop it, sit down, consider the speaker's proposal. >> reporter: but at this point, the gop leadership doesn't have a proposal on the table. the president has been mostly watching from the sidelines, calling the gop strategy a bad strategy. and senior administration officials say we are now at great risk of falling into that financial peril as we get closer to potential default. brian? >> running out of things to say and ways to describe it. kelly o'donnell from the hill tonight, starting us off, thank you. we are seeing now the crisis in washington play out on wall street. stocks took a hit today, all three major indexes were down, and as we mentioned, top of the broadcast we're getting first signs of serious concern in the credit ratings markets. the fitch ratings agency has put the united states current aaa rating on warning for a possible downgrade if this doesn't get resolved. to talk about that with us here in the studio tonight, andrew sorkin of cnbc and "the new york times." andrew, the public is now aware they're playing with fire and they're playing with company money, our money. what happens if this happens? >> if this happens, we are -- the 2008 financial crisis will look like child's play if we actually go into extra innings. if we default or even if we really get close to the possibility of default, all of our costs are going to skyrocket. people are no longer going to believe we are good for the money. which means if somebody is going to loan you a dollar and you don't pay back when they think you're going to pay back, they're going to charge you more for the risk. that will impact everything. how much money the country has, a 1 percentage point increase is a $20 billion cost annually, no longer going to go towards goods and services for the taxpayers. it's going to go towards mortgage payments. the payment wills go up. and it will be global. >> on that note, i guess we'll check back in with you tomorrow night. you think it is the in ninth inning? >> i think we're in the ninth inning. i hope we don't go into extra innings, and i think it's possible that we don't. >> all right, andrew sorkin, thank you as always. >> thank you. because of these clashing extremes in washington right now, it is easy to believe the same divides are in cities across the country. and that it might just define our politics these days. but nbc news and esquire have partnered on a new survey on our political landscape that suggests we are not exactly that. and in fact, according to the data, we are still a nation with a wide political center. our report on that tonight from our chief political director chuck todd. >> reporter: go to any neighborhood in the country and you'll find what we found in our new survey. americans are a lot more pragmatic and nuanced in their political views than washington politicians give them credit for. you've been conditioned to look at american politics in 2d. blue and red, left and right. but that's not what you are. a new survey finds we could all use a new pair of 3d glasses because there's a comfortable center that doesn't fit into the stereotypes of the past. in fact, the majority of the country, 51% falls into the middle lane of american politics. the hard left lane is 26%. and the hard right is only slightly bigger at 28%. >> it is not necessarily what is happening in the country. >> reporter: the center is as diverse as the country and basically falls into four categories. the minivan moderates are in the suburbs. while the most cynical and apathetic group dubbed the whatever man centrists are largely under 40. emily robliss in miami, an international businesswoman, is a lot like the mba middle. >> i don't think i fit into a box. >> reporter: she is with the 53% who favor gay marriage but also part of the 57% who think it's time to end affirmative action. >> you should get hired or accepted into college on your merit and not on your heritage or the color of your skin. >> reporter: culturally, this is a live and let live group. for instance, 52% are okay with legalizing marijuana. but 79% believe that government is spending too much money. min in -- minivan moderate like this mother of virginia, a mother of three, sums up the new american center's attitude towards both major parties. >> i have just come to expect that i don't fit. i don't fit in either party. so i have almost become comfortable in the middle. >> reporter: you know, brian, we asked a couple of major political consultants, david axelrod for the democrats, mike murphy for the republicans to analyze the data. here's what mike murphy came up with. he said dogma is out, pragmatism is in. and guess what, all of congress should be listening to that. by the way, folks can take the quiz themselves and find out where they belong. nbcnightlynews.com, use the #whereistand. >> i love the boxes they put us in. >> at least we have more. >> yeah, that is true. chuck todd, thank you. one of those issues we just heard about was in the news today. specifically ending affirmative action. today, the u.s. supreme court agreed to answer the question can voters in any given state vote to ban the practice? our justice correspondent pete williams with us tonight from outside the court. pete, good evening. >> reporter: brian, good evening. the supreme court has ruled before that colleges can choose to use affirmative action. now it seems prepared to rule that voters in a state have the power to ban it. demonstrators outside the court urged it to uphold a ruling that struck down a constitutional amendment passed by michigan voters in 2006 ending affirmative action in the state. justice sotomayer says it sponsors said it would bring back segregation. she says it appears to have done just that. but chief justice roberts says why can't you say to the colleges do everything you can without having racial prejudices? the court seems headed for a ruling that would allow affirmative action bans in michigan and several other states to stand. >> pete williams, at the court for us. pete, thanks. it was an emotional afternoon at the white house as a former army captain became the 79th living recipient of the medal of honor. this nation's highest military honor. u.s. army captain william swenson was honored for his heroism and his complete disregard for his own safety. during one of the deadliest fire fights in the war in afghanistan, some of it was captured on camera. president obama said that swenson is an example of what americans can be at their very best. we get a report tonight from our pentagon correspondent jim miklaszewski. >> reporter: september 2009. a medevac helicopter in eastern afghanistan. army captain will swenson guides the chopper to a landing in one of the worst battles of the war. >> that was a horrible day. >> reporter: swen son and his men walked into a deadly ambush. >> if you tried to get up and move, you could expect to have bullets at your feet. >> reporter: swenson led his troops as they ran into the kill zone over and over to rescue the missing and the injured. three marines and a navy man. >> you can never allow a service member to be taken hostage, alive or dead, you bring them home. and that's what we did. >> reporter: swenson desperately radioed for help, but army commanders refused to provide combat helicopters or reinforcements. an army investigation later found those commanders were negligent, leading directly to the loss of lives. the four missing americans were later found dead. >> you could clearly see they had been putting up one hell of a fight. >> reporter: swenson bitterly blames their deaths on tougher rules of engagement, intended to help afghans, not soldiers. but later, more compassion as a helmet cam captures the photo of swenson helping westbrook to the helicopter. in a flash, swenson gives westbrook a kiss. >> in the middle of a war, you kiss your fellow soldier. why? >> i wanted to make clear to him he had done good. he was going home. >> reporter: it soupds like you were surprised to see him do that. >> yes, but he was my soldier. >> reporter: but you're glad you did it? >> absolutely. absolutely. >> reporter: westbrook died a month later. discouraged, swenson quit the army two years ago, but is now working to return to active duty and the brotherhood of soldiers. jim miklaszewski, nbc news, the pentagon. we also wanted to show you another photo of another heroic american service member that is getting a lot of circulation and comment on the web. it is a photo of army ranger josh hargiss, wounded last week in the attack in afghanistan that killed four members of his unit. he is being awarded the purple heart in the hospital in this photo, a ceremony his commander thought he was unconscious for. until he started to raise his hand in a salute. he struggled to raise his arm with his doctors and his tubing, but he succeeded. the commander sent this picture along with a letter to hargiss' wife taylor saying grown men wept in that room at this sight. adding it was the most beautiful salute he had ever witnessed. still ahead for us tonight, shock and sadness after the death of 12-year-old girl. a sheriff issues a warning across the country. and later, a coach making a difference on and off the field, by making a extraordinary difference with kids as part of a team. we are back tonight with a story that is intended as a wake-up call to all families with children, especially their parents. tonight in florida a local sheriff is lashing out at two middle school girls who are accused in the latest case of cyber bullying in this country. this one ended in a suicide. the victim, a 12-year-old girl who simply reached her limit. our report tonight from nbc's rehema ellis. >> reporter: florida police say 12-year-old rebecca sedgwick couldn't take it anymore. after a year of taking threats. she killed herself. jumped from the top of an abandoned cement plant. >> we've lost sleep over that child dying needlessly. and we want to see things change. >> reporter: today a stunning development. >> we have these wonderful photographs of our two new felons. >> reporter: we're not showing their faces. they're only 12 and 14 years old. charged as juveniles with felony aggravated stalking in connection with rebecca's suicide. >> she should be here. she should be here to see justice getting served. >> reporter: rebecca's mother says after both school and police officials failed to stop the bullying, she moved her daughter to another school. but rebecca still had her cell phone, and the bullying continued. >> the difference with cyber bullying is that it is etched in stone, that people can access the history of it, review it, rewind it and reread it. and it makes it much more painful for the child who is experiencing bullying. >> reporter: legal experts believe this is the first time that a person as young as 12 has been charged in such a case. and that could pose a challenge for prosecutors. >> this defendant is by all intents and purposes a child. this is someone who may not at this age understand the significance of that sort of cruelty. >> reporter: tonight from sheriff brady judd, a father of two and grandfather of nine children, a stern warning to parents. >> watch what your children do online. pay attention. quit being their best friend and be their best parent. that's important. >> reporter: tonight as the community tries to heal, the investigation into rebecca sedgwick's death continues. rehema ellis, nbc news, new york. back in a moment with more news. also, tonight's badly needed "making a difference" report. the fruitiest and the chewiest! >> you may not know his name, but he is the man to thank for all things gummy. he is the reason it is tougher to get our kids out of the candy stores that charge by the pound. hans regal has died. he put the german candy on the map and introduced the world to the gummy bear. he built his dad's company out of the wreckage of the second world war and grew it into a global success, regal was 90 years old. and a big move in the corporate world, apple has hired away the ceo of burberry, angela ahrendts has received widespread praise for the turn around job she has done with the burberry brand. she's a native of indiana who came up through liz claiborne and donna karen. and based on what she did for burberry, already the wags on the web are wondering if an iplaid may not be far behind. and if you regard these two women as contemporary giants in the world of comedy, amy poehler and tina fey have agreed to host the next two golden globe awards. both women started in the improve trenches. both were stars at "snl" and they proved a killer combo the last time they hosted. another attempt to end childhood as we know it. an elementary school in new hampshire has banned playing tag on the playground at recess. the principal put an end to it because there have been injuries. several parents protested that it was too excessive. one of them said quote, our kids should be wrapped in bubble wrap and sent to school. when we come back after a break, a special man who is "making a difference" because of what he teaches about winning and losing. finally tonight and as promised, our "making a difference" report. it is about a high school athletic coach in georgia with his own ideas about who should make the team. we get his story tonight from nbc's gabe gutierrez. >> reporter: on this field, the highlight came before kickoff. >> and my heart just dropped because you know we don't get the opportunity to see our children like everybody else does. god, i can't believe i'm crying. >> reporter: to understand why these parents are crying and their kids are smiling, you need to meet coach scott hamilton. >> i want to make an impact on people. >> reporter: coach hamilton works at parks in georgia. two years ago, he decided to pick at least one player of the day for every home game, each of them with special needs. what do you think it does for the kids? >> it gives them a chance to be part of something they can't do normally. >> reporter: this time he surprised two, austin biel and levi bishop. how much do you like coach over here? >> i like him because he is good to me and the players. >> reporter: they get to wear jerseys to the pep rally, to the workout, to the pre-game bus. just like the other players. >> i want to show these boys how to be men. you can be a tough guy and still have a compassionate side. >> he opened these players' eyes to the fact -- >> for our boys, it is these kids. >> honestly, i don't even think coach hamilton realizes what it does for them. and us. >> and us. >> reporter: because while levi and austin stand on the sidelines, they are now part of a team. >> it is really the highlight of my day every day to you know watch them come out and run through the tunnel. when i die i don't want it to be on my tomb stone, scott hamilton, a football coach, i want it to say scott hamilton, a good man. >> reporter: for this coach, a score board isn't the only measure of victory. gabe gutierrez, nbc news. and that is our broadcast on a tuesday night, thank you for being here with us. i'm brian williams. we hope to see you back here tomorrow evening. good night. right now at 6:00, critical talks at this hour. b.a.r.t. and unions back at the bargaining table. the key players enter negotiations around 1:00 this afternoon. now just hours remain until b.a.r.t. could announce another strike. good evening, everyone, i'm jessica aguirre. >> i'm raj matthai. there are problems on two thoughts. ac transit is also threatening to strike so buses could stop running this thursday. we have complete coverage on both strike threats. nbc bay area's jodi hernandez is tracking the ac transit possible strike. we begin with cheryl hurd in oakland with the latest on the b.a.r.t. stalemate. good evening, cheryl. >> reporter: good evening, raj. b.a.r.t.'s general manager just walked through the doors 15 minutes ago. she had nothing to say to reporters. in fact, we've been here all day long and heard a little bit from the union and heard a little bit from b.a.r.t. management. both of them are saying they're doing everything that they can to avert a strike. and passengers are saying the poibility of a strike ending, they wan to hear that because that can't come soon enough. whether or not b.a.r.t. trains will roll or not is giving some riders anxiety. >> i woke up at 1:00 in the morning to check to see if it was running because basically this job interview would have been canceled if b.a.r.t. wasn't running today. >> reporter: that kind of stress has been constant with passengers as the possibility of a b.a.r.t. strike hangs over
ge has more cash to do things with. time and men's fortunes change. you go with the flow. >> every time they do a deal, they say it's great for both parties. stock goes up in one case and down in the other. ge is in one, can use the money, comcast in another and actually worked. >> worked out well. comcast has a great set of assets now a ge has cash to invest in what they want to do. we all do it differently in our times. >> jack, we love you, on valentine's day especially. >> happy valentine's day. >> merger thursday with all these deals. huge day on wall street. almost $100 million in fees for the banks. center view bank. >> make sure you join us tomorrow. happy valentine's day. congratulations to "squawk." what a breaking news. warren buffett making a big deal with heinz. i'm carl quintanilla from the stock exchange. kramer is off. we hope aol call in. heck of a week to take a vacation, one of the biggest months for m and a. year-to-date, m and a volume up 25%. berkshire hathaway, 3g buying heinz for $72.50 a share. $28 billion in debt. i know you've been working this, too. the notion now buffett is prorking with operational partners important -- portends a new area. >> one after a flurry of phone calls, the power of the brazilians. we keep saying this name 3g. people might be somewhat familiar when they think about abm or the buyout of burger king. really what 3g is is an investment vehicle for three of the richest men in brazil, some of the richest men in the world, frankly. one of them in particular. jorge paolo. there it is. they tell us, jorge paulo on the board of gillette. he was the driving force behind this deal having approached warren buffett, not long ago. this happened very, very quickly. something we'll start reading about, perhaps second day leads. we'll bring it to you now, how incredibly wealthy brazilians are. these are bullet investments. in other words, not like a private equity fund where they raise a fund. this is their money. they put it in. $4.4 billion put in by them, $4.4 from berkshire hathaway, taking back a preferred $8 billion, which they will get 9% on. we'll get the details for you. that's the interesting point, carl. your point interesting as well. they are buying this and they are doing to keep it. they are not going to take it public again. again, it's not a private equity model. they are going to keep it. the likelihood, this new partnership between berkshire and 3g, from what i hear, maybe they look for another company to buy. then you get synergies, not readily available right now through this purchase of heinz. >> another company to buy and combine in this space with heinz. therefore, the move higher we were seeing across the packaged foods area this morning. >> i don't want to get ahead of ourselves. this is something that will take years. my point, unlike again private equity, this is not. 3g is not, berkshire obviously is not. they are going to keep this thing and potentially have it forever, be a private company heinz. down the road, you could expect once they put a new management team in place and everything else, you will get other acquisitions. >> still, you can't ignore a bud, a burger king, now this. they seem to be making a few plays within a targeted space. let's bring in becky, of course, spoke with buffett about the deal earlier this morning. what a morning. >> this has been a heck of a morning, guys. i've been listening to the conversation around the table. what we've been talking about is how this really is stepping up the amount of deal flow coming through. we had some statistics earlier today that with this deal between berkshire, 3g and heinz, this actually raises the united states m and a to over $182 billion for this year alone. if you put this on track to where we were last year at this time, it was only $58 billion. there is the sense m and a starting to free up and really starting to get moving. we did speak with warren buffett earlier this morning. the deal, you guys have been laying out the terms of the deal, 20% premium from the closing stock price yesterday. the way it's structured, buffett and berkshire will be getting half the equity in the deal. the other half, of course, going to 3g. buffett because they are putting up more money gets $8 billion of preferred stock. we spoke with them a little bit earlier this morning and here is how he laid out the terms of the deal. listen to this. >> we're putting up more of the money but we'll be an equal equity partner with 3g. and there will be $8 billion of preferred stock and we'll eat a fraction billion of the common equity, we'll split the equity. but we're a financing partner in additi addition, and they are the operational guys. >> again, made it clear 3g are going to be the operational guys. he believes the ceo will be staying on. he's done a good job with things at this point. also talked about how 3g has done a great job with partnerships they have been involved in, pointed to burger king over the last several years and some of the costs they were willing and able to get out of the business and how they made that a much more profitable business. talk to a little about what he's been looking at. apparently this happened in early december. david faber talking about how this was a very new deal. he said his friend jorge paulo came to him and started talking about this. they were on a plane ride together. that's when they first brought it up in early december. he's had a file on heinz back to 1 1980. this is one of the many companies he thinks about all the time. when the right opportunity came olong, that's when they were able to pounce and jump in. buffett said at the end of 2012, berkshire had about $47 billion in cash on hand. he says he always wants to keep $20 billion around. this deal is $12 to $13 billion he's putting in. that still leaves him with $15 billion and counting that he can still look for acquisitions. always talks about how he's on the hunt for the next big elephant. this one of those situations. the cash builds from month to month, so the gun is always getting reloaded. just because they are doing this big deal doesn't mean they aren't always looking for another deal to come along. when we were on the phone with buffett, we got a chance to talk about a few other issues including how he sees the economy right now. while we hear from strategists, they think other international markets are the place to be, buffett thinks still the united states is the best place to invest money. listen to what he thinks is happening with the economy right now. >> it's really been remarkably similar since the late summer of 2009. it's slowly been improving. sometimes the sentiment gets stronger, sometimes weaker. the economy, if you look at our businesses, they have steadily gotten better but not at a fast clip. that continues right to this day. the carloadings of the burlington in january and somewhat in february. coal is down, oil is up. as everybody knows, housing is coming back with a fair amount of strength now from an extremely low base. the economy continues to improve but it doesn't do it as a rapid clip. >> a couple of other issues we did speak about with mr. buffett this morning included moody's. berkshire owns more than 10% of moody's. obviously the stock has been hit hard because of the lawsuit against the s&p. he did say they have not changed their ownership or sold any of that stock in over a year. he said he has to see what the facts are with the s&p case but he said it must think that moody's would obviously be a secondary logical target if the government wins that case against s&p. and we also talk to him very briefly about a couple of other issues, brought up nyse, all the stories about his interest in the nyse. he said while someone at berkshire was contacted it was not him. he was not contacted person and he did not have any interest in the nyse on that part of it. he talked about this deal, 20% on the opening stock price, more than $72.50, because it was strayeding above that, heinz stock above that. he said no way, you're not getting another penny out of him. guys, i'll send it back to you. >> considering the stock was hitting an all-time high, 20% premium on top of that is a rich multiple. >> when you get 20% of your all-time high, interesting here, bill johnson, the longtime ceo who fought off nelson peltz years ago. he became a board member. my reporting, seems clear they know the potential strategics out there, had conversations with many of them. it is seen as highly unlikely that somebody would come in here at this point and try to top this. you're talking about a deal done roughly 14 times, current ebitda, done in the same sector, 12.5, 13, a high price to your point, even though the premium itself not as high as some might say. wait a second, take out, it is the all-time high. johnson moved the company sharply into emerging markets which will comprise 30% of revenues. he's obviously gone from mega brands. you know, he's done a good job in leading this company every since that challenge from peltz especially over the last year. not expected you'll see somebody come over the top here. one never knows but to the point of the stock trading above the price, that was a little strange. >> interesting to watch buffett buy something that wasn't at a discount relative to its most recent performance. >> he is getting 9% on his preferred. he always like that. manages to get a nice -- >> one man we wish were at the table but on vacation jim cramer. you know he never stops working. good morning to you. you're on the phone. i'd love to get your thoughts on the deal and the week. >> first, terrific deal for buffett. let's not forget this stock until coming into this year had done nothing in five years, increased its cash flow rather dramatically, even though earnings per share were up very, very big. this is another one of the stocks that has done kind of like, around there gross profit $3.5 billion four or five, $3.2 then, $3.53. the stock up $3, $4 over a four- or five-year period. i don't think he's overpaying in the long-term. the first stop i ever bought for money for my hedge fund, i knew there would never be a chinese bottle of ketchup or japanese bottle of ketchup. this is one of the most iconic brands. he's done a great job what we thought was on board. however, in the last two years he's been kept back by the frozen food division. it's down. 15% of heinz total sales, talking about frozen potatoes. he tried to take a price increase, failed badly. it's one of those cases where the company may have been out of steam for now, but the brand never lost their luster. >> jim, in premarket trading, we're watching a lot of the other consumer food companies trade higher as well. campbell's, kellogg's, general mills. is this because there's a thought these are now somehow perhaps takeover targets or the multiple accorded to heinz should now be applied to the other food companies as well so they should be trading higher. >> i think the big one goes for multiple analysis you're talking about. a lot of these others are tough buys. conagra did an acquisition early this week. kellogg -- campbell's, $10 billion forever. i think natural foods. general mills will acquire -- the group that used to be the subject of tremendous acquisitions, kraft, the quarter didn't look so good. i think those who buy these stocks expect another bid. isn't going to work. that's why i think you're able to see them at something more than 10% more than they were a couple years ago. the gross millions were there. if you want iconic brands, always wants, buy immediately, which you can do, it does make sense. it doesn't make sense to buy general mills at 45, with a bid at 52. >> jim, i mean, you know, again, we watch that stock price trade above the $72.50, which i thought was a bit strange. these guys know all strategics that are out there. that said, the deal happened quickly, paulo approached buffet, they got together. they got a deal together very, very fast. at the same time they know the landscape pretty well at heinz. he's been talking about consolidation in this arena for a very long time. >> overbid buffett, that's not going to happen. after what happened -- [ inaudible ] people get a little too excited. no one trumps warren buffett and lives to tell the tale. that's not something you do. if i were at morgan stanley i wouldn't pitch anybody on this, warren buffett, that's a loser's game. -- nice trade, find the next one. >> finally, jim, you know, we've put it all together, the comcast/ge deal, dell, new york stock exchange, amr usair, cardinal health, welch said it, money is not the issue. does this set the table for a bigger 2q rest of the year? >> you're right, carl. what's so great i'm going to bring a gigantic back to faber who did not believe me when i said it would be the year of the deal. sounds like he's saying, jim, you better realize it's the year of the deal. >> i like when you put words in my mouth and then argue against them. i didn't necessarily say it wasn't the year of the deal. i just like to temper your enthusiasm. that's what i'm here for. >> this is payback temper for you calling him the smartest man in the universe. >> he hasn't gotten over this. >> historically, and david and i like to joke about it, the truth is size of the deals is big. the best way to play it is with the bonds dealers. david, how much is this deal goldman sachs versus the new m and a guy, goldman for 2013. >> it's an interesting point, although i will make another point which we'll start to hear more about. everybody advising the deal was boutique, centerview, quite a run, moulson & company involved. you have very little participation from the big names, jim, in this deal on the advisory side. >> buffett -- you're right. buffett has got his own people. >> sure. >> historically he has terrific people on his team. i do think the m and a departments have, there's a lot of calls to make. i was with byron over super bowl weekend, warren buffett bankers, keep in mind dpolds guy. i do think phone calls to companies today saying, listen, everyone doing it, get involved, stocks are cheap. >> jim, we expect to see you tanned, rested and ready next week. >> you're actually going to see me like this. this is the warmest and best vacation in a excluded area. how about that. >> jim, enjoy. thanks for coming to the phone. we'll see you soon. >> thank you guys. talk to you soon. >> cramer talking berkshire deal. road map including stories we're watching. this other deal, $11 billion one between amr and us airways to create the largest airline. nine out of ten domestic flights will be on one of four areas. is that sector's consolidation over. >> global markets a lift from gma, disappointing from japan to germany to france. is the rest of the world teetering on recession. >> european losses get a little worse. company expects breakeen results by 2015. a lot more "squawk on the street" is after the break. to c. ashley, ashley marshall... here. since we're often all on the move, ashley suggested we use fedex office to hold packages for us. great job. [ applause ] thank you. and on a protocol note, i'd like to talk to tim hill about his tendency to use all caps in emails. [ shouting ] oh i'm sorry guys. ah sometimes the caps lock gets stuck on my keyboard. hey do you wanna get a drink later? [ male announcer ] hold packages at any fedex office location. otherworldly things. but there are some things i've never seen before. this ge jet engine can understand 5,000 data samples per second. which is good for business. because planes use less fuel, spend less time on the ground and more time in the air. suddenly, faraway places don't seem so...far away. ♪ skies to create the largest airline. american airlines parent amr are merging in a transaction $11 million. phil lebeau. >> wrapping up a conference call going over the particulars of this merger. here are the numbers to take a look at. an $11 billion all stock deal. here is the way it breaks down. 72% by amr creditors, the others by usair shareholders. when you take a look at the combined airline, you have the number three and number five before the merger coming together. they are now the largest in the world. you look by seat miles they are larger than united, delta and further down you see southwest and jetblue. here is ceo of the new american airlines doug parker talking about why this is a good deal for consumers. >> between our two airlines, 900 routes, only overlap on 12, most are hub to hub like charlotte to dallas, voefr. very little overlap, highly complimentary. we expect to continue to fly, continue service out of all the hubs we have, service to the communities we have. that's good. >> take a look at shares of us airways over the last years, up more than 60%, moving higher today. what's interesting, carl, a number of analysts put out notes as soon as this merger was officially announced and they are all complimentary saying, yeah, the consolidation game appears to be over but discipline has people confident on wall street that earnings growth will continue for the airlines. we'll see. this is an industry that doesn't have a lot of good track record when it comes to maintaining that discipline prof parker tried to suggest on some morning shows fares won't rise as a result of this deal. i wonder if you believe that whatsoever? >> you know, if you look at the studies going over consolidations in the industry, generally speaking you do not see a huge increase post consolidation after two airlines get together. really that's a reflection of the fact you have more low cost carriers in more markets around the country. southwest is a big driver of that. that's really the ultimate penetrator in terms of keeping those fares low. >> great story, phil. appreciate that. phil lebeau joining us on amr. when we come back, will the markets feel love on valentine's day. we'll talk to art cashin as we count down to the opening bell. gdp numbers around the world, not too good, which is one reason we've been able to dig out of the red despite a flurry of action. 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[car alarm blaring] call now and also ask about our 24/7 support and service. call... and lock in your rate for 12 months today. liberty mutual insurance. responsibility. what's your policy? five minutes until the opening bell rings on valentine's day on wall street. bring in floor operations director, art, certainly we have a lot of deals going on. the biggest month for u.s. deals since june 2008. it's the gdps around the world putting a wrempbl into futures this morning. >> particularly in europe, shares of gdp reports knocked europe for a tailspin here. not too much valentine's day cheer showing up. so far beginning to look like the dow has given up rallying for lent. let's hope that doesn't continue. >> lent is a long time so let's hope not. in terms of the g-20, it's sort of a photo-op and that's it. is it much more important this time around as there's so many statements regarding currency manipulation being bandied about, having an impact on currency market and equity markets. >> you're absolutely correct. it went from g 7 comments to possibly right on the main table. g-20 meeting. the thrust is the end. how do we keep this orderly and prevent an outright currency war from breaking out. we've got a lot of american message fund players going along. half the world appears to be short the end believing this is going on. >> a longtime strategy to a certain extent, worries about the interest rate, starting to pay off. >> thanks, art. opening bell is next with banana joe. don't go away. through presidents' day, get 36 months interest-free financing and save up to $500 on beautyrest and posturepedic. get a sealy queen set for just $399. even get 3 years interest-free financing on tempur-pedic. plus, free delivery, set-up, and removal of your old set. keep more presidents in your wallet. this special financing offer ends presidents' day at sleep train. superior service, best selection, lowest price, guaranteed. ♪ sleep train ♪ your ticket to a better night's sleep ♪ but i am your rmarket data. i know what you're looking for. i'm not chained to your desk anymore. i'm faster and smarter now. and so much less expensive. i am your market data. and if i do say so myself, i have never looked better. superderivatives introduces dgx. data done differently. how do you keep an older car running like new? you ask a ford customer. when they tell you that you need your oil changed you got to bring it in. if your tires need to be rotated, you have to get that done as well. jackie, tell me why somebody should bring they're car here to the ford dealership for service instead of any one of those other places out there. they are going to take care of my car because this is where it came from. price is right no problem, they make you feel like you're a family. get a synthetic blend oil change, tire rotation and much more, $29.95 after $10.00 rebate. if you take care of your car your car will take care of you. 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[ coyote howls ] how about no more surprises? are are. about to ring the bell, wondering if it's big enough to call. he's being very good here. at the big board this morning if you don't know the name already, shame on you. banana joe celebrating best in show at the 137th westminster kennel club dog show. congratulations to him. we're going to talk to the owner. over at the nasdaq, scholastic corporation, publisher and distributor of children's books celebrating again. what's with the dogs. clifford, the beg red-dog's 50th birthday. i wouldn't want to see clifford and banana joe in a fight. >> i think banana joe -- we've talked to past winners, best in show dogs. it's amazing how still they are despite what's going on around them, chaos, dogs. >> like the lion king on the mountain top. a big stripe across the forehead. what an odoorable pooch. it is valentine's day, too. according to howard since 1958, s&p been up way below the average, 52% of the time you're up, less than 40 for valentine's day. >> not a day of love with stocks in general. let's take a check on shares of blackberry. edry, s.e.c. filing co-founder has now a zero percent stake in the company. not clear what it was before, as of december 31st, he has no financial interest in the company. that stock trading lower in the day's session. interesting hearing that, co-ed founder not having anything to do with the company founded. >> a story we haven't mentioned at all, an important one, also involves brazilians, anheuser busch brands, complete divestiture modelo, two constellation, will not just distribute but have rights in perpetuity, manufacture, buying the big brewery. all of this designed to allow for the dodge to stay, okay, guys, you now get the green light. that is anheuser busch to buy modela. hasn't happened. we're going to be speaking to constellation brands ceo 11:00 eastern, rob sands. to explain what's going on here. you may recall constellation brands stock fell dramatically when doj came out to block the deal. they had a great deal with what they didn't own in crown, distribution rights for mexican beers here in the u.s. it was perceived that deal was not going to happen if the deal overall was going to be blocked. but now we may very well see that deal happen. take a look at anheuser bush. >> this is biggest by far, s&p. >> even above what heinz is doing. heinz and constell aig, two big s&p gainers. >> interestingly both involved the brazilians. heinz being bought by the brazilians, that is 3g. don't forget 3g, the money behind it, driving force behind what was the acquisition of anheuser busch. they are involved in a lot of deals today. >> they are. hands in a lot of honey pots. cardinal is another we're watching in terms of rounding out action. shares at 52 a&e week highs, $52 billion closely held medical supplier company, interesting to see the stock making a purchase but yet rising in today's session. >> from carnival -- cardinal to carnival, that ship towed in the gulf of mexico expected in port, sometime after the middle of the day. stocks down again as they are giving credits and a cash reward, reimbursing the purchases you made on the boat but not in the casinos. >> that is the least they can do with these poor people trapped in a loet with limited toilets. outlined financial impacts that's priced into the stock as well. >> makes you wonder, given everything lost in market cap, why not flood the zone in terms of trying to compensate the passengers beyond $500. >> everything. >> i think concordia, we had this discussion last night. concordia was across the globe. this is americans on a boat offshore. >> only supposed to be a four-day trip, i believe. it's not a long cruise. >> sounds like gilligan's island. >> it does. even worse. after all, there's no mary ann. >> or ginger. >> tina louise, i'm sorry. >> i was thinking ginger but i went mary ann. it's been a long time. i vice president watched in a long time. not that mary ann was bad. >> girl next door. >> lawsuits and litigation. >> bookings. >> it may not end here in terms of impact on first quarter results. whole friends down 9% out with earnings yesterday after the bell. the problem, a high multiple stock, of course, they lowered sales guidance, also lowered same-store sales guidance. they don't expect improvements in gross margin. they expect future quarters escrow to be slower. wells fargo came out what note saying this is a buying opportunity. they say this one off in terms of the sales slow is because of the higher payroll taxes that are hitting as opposed to a secular decline in demand for organic and higher priced groceries. the question here is whole foods sacrificing margin to compete with lower price supermarkets as the consumer appears to be more and more strapped. that's sort of the ongoing question here especially as whole foods trades again at a 33 current multiple here, down 9%. >> blackberry down 5%, a filing now confirming that the former co-chief executive has sold all his remaining shares. at one point 5% stake as late as 2011 but is out completely. the other co-ceo does remain on the board. he was at a launch. that's adding pressure to a name that had seen a bit of a rebound. same thing with groupon. another positive note from evercore, $5 better than some of the other prices we've seen. >> exactly. we're watching shares of herbalife and jcpenney, bill ackman from the conference. most of the address spent on herbalife, the understatement of the year is that he's a little bit obsessed with herbalife. the stock is trading higher. jcpenney in the after hours section really spiked after bill ackman took on the role of salesman in chief, touting the turnaround taking place, the store turnaround is amazing, price comparison ads comparing prices of jcpenney goods versus similar quality goods at other stores and that's working. giving out those in the after hours. >> continuing to wonder when it comes to him finding this fascinating this battle he's involved in in herbalife, how his investors are acting when they see him engaged with carl icahn, so obsessed with herbalife, whether they are saying, you know, i can find my activist exposure somewhere else. i'm going to pull my assets. interesting part of the story. certainly keep an eye on it. >> he did say that interview has put him in touch with people from around the world, friends from 4th grade getting in contact with him once again. >> financial world. >> guys used to beat him up on the playground and he would cry. >> ha ha. >> i can't help it. >> all right. let's check with bob pisani who is back from florida, etf conference. he's with me this morning. hi, bob. >> 89 for five days. that's all i've got to say. it's been a fabulous winter. everybody is saying in their it's been one of the best winters. we just saw the winner of the westminster show, figueireaft a. forget the cater. -- indicator. u.s. stocks covered. we got a little better than expected jobless claims for the week. that helped our market. looked like this, a little bit of a bull in futures overnight. germany and france both seen a contraction in q4. art talked about the g-20. japanese came under heavy criticism. that's ongoing that meeting. they are saying they are not trying to weaken the yen, simply trying to strengthen their own economy. the bottom line, both go hand in hand, weaken the end to make it more competitive. alr deal. you mentioned that. now that the consolidation is basically over and it is, we've got three big companies in the u.s. we've got delta, usair, amr, and we've got united continental. next question is what happens? so the good news is pretty simple. the profitability has been improving, capacity down. they have been paying down debt, all of them. here is the problem i see. exact problem with home builders. that's it. the prices have gone up. the airline index, xal at a five-year high. how much room is there? everybody keeps talking about raising fares. phil mentioned this earlier. i don't know how many. there must have been 12, 14 price hikes announced last year. i don't know if half went into effect. price hikes announced, most don't come in effect. i'm not sure how many this year. cab ella's outdoor sporting goose company, excellent report. buried in the report, interesting comment from the ceo, comparable store sells by a surge in firearms and ammunition increased 12%. that is a new record for our company. isn't that interesting? sales did increase in the wake of what happened in newtown as well as concerns president obama would try to restrict gun sales. more on that on my blog tradertalk.cnbc.com. >> bob, welcome home. good to see you back. rick santelli in chicago. good morning, rick. >> good morning, carl. we've all heard the news, there's a lot of gdp shrinkage in japan and third quarter, eurozone. it's very difficult to tell sometimes. look at a 24-hour chart of our ten-year, think what the multinational companies are thinking, looks like rates going you up, auctioned off ten-years, 24 billion. there's a rogue, a new guy on the block. it distorts it a bit. you can see we're coming back down. these yields on this new guy, still a good chance we'll settle above 201.5 close, going back to early april. if you look at a two-day chart of the boone, you can see dynamics in place, about face, suggestion of data, weaker data showed up in the marketplace. look at spain, this is really interesting. a two-week chart of spain basically, wow, these yields are really going down. are even the southern countries have their funding issue fixed now becoming flights of safety, what is slower economic growth. you have to answer that question. one area that is making sense, look at a two-day chart of the euro currency and how it's reversed. think back yesterday, 134.50 is a pivot. if you use that as a pivot you're smiling. big down day in the euro. if you open the chart up a bit, you can clearly see on this two-week chart at the euro any colostomy. friday weekly closes are highly significant for technicians. well, it could mean that the euro, unlike some of the flight to safeties in southern europe is going to give you an after picture of horsepower in the eurozone markets. melissa lee, back to you. >> rick santelli, thank you. coming up general motors chairman bob lutz waist in, looking beyond the government motors era. mobile, alabama, the destination of the disabled carnival cruise ship towed through the gulf. >> triumph several areas away expected to arrive sometime in the afternoon, hours long process. details wen we come back. (music throughout) why turbo? trust us. it's just better to be in front. the sonata turbo. from hyundai. the patient, presented with a hairline fracture to the mandible and contusions to the metacarpus. what do you see? um, i see a duck. be more specific. i see the aflac duck. i see the aflac duck out of work and not making any money. i see him moving in with his parents and selling bootleg dvds out of the back of a van. dude, that's your life. remember, aflac will give him cash to help cover his rent, car payments and keep everything as normal as possible. i see lunch. [ monitor beeping ] let's move on. [ male announcer ] find out what a hospital stay could really cost you at aflac.com. the cruise ship left adrift in the gulf after an engine fire. towed to mobile, alabama due to arrive there sometime day. janet shamlian in mobile with the latest. i have a feeling this is not going to be like that scene where people come off the boat. >> not the scene you see after a caribbean cruise. we're expected the hobbled cruise. it's a long process to get them off. the cruise ship terminal has not been used in more than a year. they have been rushing to get that ready. bringing in port-a-potties." i heard you talking earlier about the $500 additional compensation offered to passengers yesterday by carnival in addition to what passengers are getting earlier. it's a very interesting concept. you've got to imagine the. >>'s attorneys are circling around here. we're talking to family members gathering here. one gentleman said, look, my wife is a nurse. she was supposed to be back to work tuesday. they will have missed fewer days of work by the time this is over. $500 will not cover what she's supposed to make. if she doesn't work, she doesn't get paid. this is not the end when people leave here. we're expecting financial hardship. this is a blue-collar cruise. not a high-he said cruise. people are going to have some loss of revenue. what's going on in the next few hours, they are getting up to speed here. carnival trying to get people home as quickly as possible. putting them up and then flying them to houston. that's not the end of it. most left cars in galveston, texas, which is where they left from. they will have to go to galveston, get their vehicles and go home. many won't reach their home until the end of the day on friday. that is a lot later than monday morning when they were expecting to be off of this ship. carl. >> janet, it will be quite a scene. hope to come back to you later. janet shamlian in mobile. i guess they have a choice of staying at a hotel overnight and then leaving the following day, which you think you just want to get home. >> you want to get home. but you also probably want to shower. so a hotel may not be so bad in terms of delaying on the return. >> i don't want to delay on it too long. some of the reports we've had are just -- >> tough, feel for those people who thought they were going on vacation. >> the good news is there have been no fatalities, injuries, everybody hopefully will recover. >> see what happens to ccl. when we come back, california-based apple hoping for much needed love. will it come in the form of an apple tv event. one is going to happen next month. we'll tell you what he's expecting when we return. ♪ ♪ ♪ [ male announcer ] what's the point of an epa estimated 42 miles per gallon if the miles aren't interesting? the lexus ct hybrid. this is the pursuit of perfection. been a busy hour so far. simon here to tell us what's coming up at 10:00. >> the next hour of the program we're going to explain to you why airfares could rise for you as a result of the big airline deal today. rival virgin america ceo will join us live. also talk about general motors. if it sorts out its programs in europe, how much more money by stock, vice chairman and zillo up 18% in wake of its earnings, the ceo will join us live. another here of cnbc. back to you. >> looking forward to it. rumors that app will hold a tv event in march according to peter misek. he joins us from the trading floor. >> thanks for having me. >> a march announcement of the tv product but a rollout not until later this year. >> we think it's an sdk for the setup box. we don't expect a tv announcement. in fact, from the loop basically came out and said no tv. we think it's an sdk. there will be some other kind of product event. we don't know what it is. we're pretty sure it's not an iphone or ipad. >> in your notes, peter, you took down estimates in terms of iphone 5 production. it's basically because you anticipate another one, refresh to happen. how will this impact margins. seems like the faster they move away from the iphone 5, the less margin they can save, in other words. the gains they can make in terms of keeping the product in production longer will dissipate. >> yeah. so what we're hearing is apple is starting to lose more market share at the high end to samsung, particularly in europe. that's because they don't have a big enough phone size. the screen deemed to be too small. tim and apple argue that's by design. they feel they have the right, appropriate size. we think they are losing market share. that shift is causing market pressure and margin pressure. we also believe it's causing suppliers to continue to cut production. we do see an iphone 5s and lower cost phone in june. some cuts could be related to that. >> sounds like all in all margins will come down for apple when it comes to the iphone product line we're factoring in iphone 5s, lower margin phone and iphone 6 moved up, all of that equals margin pressure. >> correct. we are significantly below the rest of the street for the june quarter in particular. we're around 150 basis points lower on gross margins. that means earnings are going to be lower. if we look out, we think there's somewhere between 2 and 300 basis points of additional margin pressure which probably means gross margins hit 35%. we don't think the street is ready for that. >> what's this tv event? what do you think this is all about? >> we think that there is a huge developer opportunity in the living room utilizing apple tv, existing set top box. that may or not be an advance of an actual television. obviously chasing the tv for a while, a bit of a unicorn. we think developers clamoring for an opportunity to get access to that, far beyond the ability you now have. >> not necessarily a rollout of the product in march, something more to attract developers? >> correct. an sdk to write apps specifically for a device. currently apple tv set top box doesn't allow developers to natively make games such as angry birds or something like that. >> peter, i want to ask you about a development we learned about, leon cooperman of omega liquidating his shares. i know you don't cover facebook but i'm sure this is a conversation with institutional investors wondering if they should hole onto apple or put into a higher gross story. institutional investors whether apple has transitioned to a value play as opposed to a growth play. >> we've spoken to a few hundred investors globally. this is realtime, something happening now. investors have money in apple. obviously it's starting to concern them. they feel it's more range bound. they look at the alternatives and they are really limited in terms of something that's big, that can grow. facebook is one of the alternatives that people are considering. google being another, emc being another. those will be the ones we're hearing most often as considerations. our view, we think $500 is the ceiling for this range that apple is trading in, until they can stabilize or show us that margins are bottomed and potentially starting to expand again. >> peter, thank you. >> when we come back, more on the two big deals of the day, buffett's berkshire betting on heinz. we'll get a berkshire shareholder's take on what's called the biggest food deal ever. american and us airways combining to become the largest airline. hear what ceo of virgin america has to say about the merger in the sky and what's at stake for his airline in the cnbc exclusive. remotely so this is a big deal, our first full team gathering! i wanted to call on a few people. ashley, ashley marshall... here. since we're often all on the move, ashley suggested we use fedex office to hold packages for us. great job. [ applause ] thank you. and on a protocol note, i'd like to talk to tim hill about his tendency to use all caps in emails. [ shouting ] oh i'm sorry guys. ah sometimes the caps lock gets stuck on my keyboard. hey do you wanna get a drink later? 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>> every time i'm wrong. >> just go for it, andrew. go ahead. >> i'm going to be wrong. but i will say this. on heinz itself, one of the questions we did ask was whether he could see heinz used as a vehicle for other food companies. he didn't shy away, didn't say it was doing to happen tomorrow. this was not his last deal with heinz. i think you're going to see headlines in the future once this deal is closed where heinz is buying other food companies. we should watch for that. >> andrew, great work as always. >> thanks. >> andrew sorkin. >> let's get insight from longtime berkshire hathaway. bob miles, the author of the warren buffett, ceo. bob, i'm going to pick up our conversation right where we left in with andrew ross sorkin, what do you think the strategy is of mr. buffett is buying heinz? will heinz be used as a rollup vehicle to acquire other food companies in your view? >> well, first of all, happy valentine's day. i'm a little bit surprised on valentine's day that warren didn't buy a flower company since he already owns a chocolate company and jewelry store chain. but i think heinz is no surprise. he likes family operations, 140 years in old industry companies like underwear and dairy queen. so it's no surprise. >> but in terms of the lo longer-term strategy because we're always thinking what is next, seeing food companies on this notion they might be takeover targets down the line. do you think this is part of a longer-term strategy of mr. buffett's to roll up other food companies? >> i think if he finds value, he'd be very interested in private companies, food companies like mars and wrigley, which were actually pitched to him by my students at the university of nebraska atom has when we pitched potential acquisition candidates to him. he's very interested in long-term well established global brands with a competitive advantage like heinz. it's the perfect acquisition for him. >> how do you extract from this? what can buffett do with heinz that is worth him paying this premium and more? >> i think the same questions were asked of him when he bought burlington northern. i mean, he is consistently approving the critics wrong over time. initially they thought he overpaid for see's chocolate, he paid well over book, five times book. charlie used the example of coca-cola where you pay up for the quality, you pay up for brand name. and i believe had warren had $16 billion in 1988, he would have bought all of coca-cola. but he only had a billion, 25% of his holdings at the time, so he was only able to buy 6% of coke. >> i'm assuming as brazilians are in on the deal it's about taking these brands to latin america? >> well, it's the global growth strategy. obviously we're food and global brands are a sweet spot for berkshire hathaway. warren would love for see's chocolate to travel but it doesn't travel well because they don't put preservatives in it. they redistribute themselves to california near their manufacturing plants and they have outlets near airports where they can supply the food product within three or four weeks of consumption. >> bob, thanks for joining us. appreciate your time. bob miles, cheryl at berkshire hathaway. >> after the break this morning, a deal just in time for valentine's day. a merger in the skies. amr and usair confirming they will merge creating the largest airline in the world. all the details on that deal and what means for the rest of the industry after the break. immediate reaction to the big deal from the president and ceo from virgin america. that is a cnbc exclusive. back in a couple minutes. 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[ coyote howls ] how about no more surprises? now you can get all the online trading tools you need without any surprise fees. ♪ it's not rocket science. it's just common sense. from td ameritrade. back to the deal of the day, just in time for valentine's day, a corporate marriage, boards of amr and us airways approved a merger, the deal creates the largest airline on the planet, valued at $11 billion. phil lebeau joins us with more. hey, phil. >> carl, you made a great point last hour when he said look at all the large airlines in the u.s., nine out of ten will be by the top four carriers, the biggest of those will be the new american. this the merger of american and us airways. look at the hubs they are going to have here when you combine the five from american. we're talking about dallas, los angeles, chicago, new york, miami, along with us airways and their hubs in phoenix as well as in philadelphia, charlotte, strong presence in washington. this is going to be a huge airline. it will be run by doug parker, the ceo of us airways. he will be the ceo of the new merged american airlines. what about tom horton, ceo of american becomes the chairman through the middle of 2014. here is why these two gentlemen believe this deal makes sense. first of all, american airlines expects $1 billion in synergies by 2015. they are going to be stripping out costs they say are duplicative between the two airlines and they believe they can get those synergies up to a billion dollars. they are going to have more than 3200 daily flights, the bulk of those here in the united states but still a strong presence to latin america and europe. as tom pointed out on "squawk box," they have labor peace going into the deal. >> it does have broad labor support. in fact, we do have the labor agreements in place up front. so we have certainty on the costs of the integration. that's very unique in an airline merger. >> so the question now for investors, has the consolidation play made out when it comes to the airlines. there's no doubt the airline index has been the place to put your money over the last six months, carl. a lot of people are now saying what happens now. this the last of the major consolidation plays that was out there. so if you're an investor, do you look at the airlines and say, hey, i think they can reap the rewards now or do you look at it and say the gains have already been locked in. time to take that money out. carl. >> let me pick it up, if i may. meantime, this is a personal triumph for doug parker. he wanted the deal, got the deal, a deal horton didn't want. in the process has he givenaway too much value that by rights should belong to us airways. in bringing the amr committee and going behind horton's back toss a deal with the labor unions, is he giving away too much? >> some will say yes. additionally the offer was 49% stake going to us airways. they are ultimately ending up, their shareholders ending up with 28% stake. i think everybody realized if this was doing to be done, he was going to have to pay up in order to make it happen. you talk pout how he has been pursuing this deal, simon. think about this, eight years ago doug parker was running america west. he desperately wanted to merge into a larger airline, swung the us airways deal. he was turned away a few years ago when he tried to make the united deal. he was finally successful making this deal, turning us airways into the new american. he now would be running the largest airline in the world. >> see how they react. thank you for more on this huge airline merger bring in president and ceo of virgin america. he joins us in an exclusive interview from san francisco. welcome to the program, david. nice to see you again. >> good to see you, simon. >> cut to the chase, do ticket prices rise, not just four airlines with 80% of the market. more importantly, in certain of the hubs, you now have extreme concentration with this merged airline. what happens there? they have a near monopoly. you may be able to fly anywhere but at what cost? >> i think there won't be increased ticket prices per se. as long as there's competition, there will be good value on ticket prices. the real question in my mind, what happens to access to the key airports. that's always been the issue, if you can't get into key airports there is no competition. certainly the concentration at the big hubs will have an impact on ticket prices. the real question in my mind is are the smaller airlines going to have access into the smaller airports. >> small airlines. am i reading between the lines you are positioning for regulators to sell slots at laguardia or reagan? >> absolutely. when i look at the united continental merger, the great example i use is service into newark. we've been trying to get to newark five years. we finally have been successful. what we've seen is ticket prices for tickets into april are down by 30 to 40%. that's a key thing regulators need to look at, make sure small carriers like virgin america, jetblue and others can get access to airports. >> a lot of the travel industry is closed. all you guys, doug parker, yourself -- tom and yourself, sorry, all three of you went through american airlines. you were involved in the 1980s in the finance department. do you think culturally us airways, management team can walk into texas, enter american, make the changes they need to. culturally will it work? >> i think it definitely will work. i know the guys at us airways and the guys at american. they have the common focus, which is to build a strong company, put good service out there, make sure their employees have a stable place to work and ultimately to come to a good return nor their shareholders. i think a lot of the poker that's been going on between doug and tom has been about making sure their shareholders get a good deal. i think this will work out just fine. >> a lot of the headlines internationally willish now that american is in charge of the deals, used to be europeans ran big international alliances, now clearly americans have the upper hand. but behind that, what is the role of willie walsh of british airways. he has us airways feeding his very lucrative transatlantic operation. did willie welch play a major deal in your view of getting this done? >> i think willie was in favor of the deal. i don't think he got involved in the politics and drama in terms of negotiating it. certainly a good deal for willie, british airways. i think you made an important point. the center of gravity in the global industry has shifted back to the united states after really being european based for the last 10 years. that's where it should be. we're the largest market so far and the center should be in the u.s. >> in the meantime phil lebeau, question whether consolidation play is over. given capacity discipline there obviously is, how much more do you think investors can make from this space? >> i think we're just starting right now. if you look at the price earnings of the airlines, it's generally around six to seven, which is a historic low for the industry, certainly a huge discount to s&p. i think there's a lot more room. i think we're just starting on what should be a big upswing for airline stocks. >> david, we have this discussion with hotels all the time, too. looks like they have discipline on capacity for a while. we start to see in hotel's case room rates go up, fares go up in this case. eventually someone spoils the party. i just wonder who will make that first strike to try to get marginal business and once again make the industry as troubling as it always has been to make money. >> you know, every time we have one of these mergers, the key thing we look at as a positive is one less scheduling department and one less pricing department out there. you're going to see natural discipline because there are fewer guys out there that can screw it up. >> that is true. and you mentioned the hub structure early on. i'm thinking of all the cities that have essentially become one-horse towns, phillies, miamis, what is the most competitive hub or market now. >> certainly i think one that bears watching is chicago, o'hare is the only two-hub airport in the world really. of course down the road you've got southwest and midway. that's going to be an interesting one to watch to see how the new american goes in and reacts with their new strength in chicago. the rest of them, as you said, are generally one-horse towns outside of l.a. and new york. >> does richard branson ever talk about selling you, david? >> not to me. >> we haven't heard about it, either. nice to see you. thank you for joining us. david cush, ceo. >> did you see the sigh of relief. over here in the retail space. let's get back to josh lipton for a market flash. hey, josh. >> reporter: hey, melissa, barnes and nobles deep in the red. it expects nook unit to record a loss in 2013, slower sales of ereaders, looking for an ebitda loss to exceed the $2 million loss recorded in 2012 with barnes an nobld nobles. down 6% now. back to you. >> zillow recording fourth quarter numbers that hit the street. can they keep up with growing competition. can zillow be the best way for housing overall. joining us live in a moment. who better to sort through gm's quarter, the former vice chairman him bob lutz. back after the break in a couple of minutes. fortunately we've got ink. it gives us 5x the rewards on our internet, phone charges and cable, plus at office supply stores. rewards we put right back into our business. this is the only thing we've ever wanted to do and ink helps us do it. make your mark with ink from chase. 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[ male announcer ] find out what a hospital stay could really cost you at aflac.com. general motors misses estimates, comes in above expectation, what's the future from here. joining us on the phone bob butz vice chairman and cnbc contributor. good morning to you. >> good morning. how are you guys? >> pretty good. trying to make sense of the quarter. a little complex, everybody pointing to europe. not betting on a pick up in europe, maintaining target for break even by the middle of the decade. are they running in place or are these macroforces too much. >> the whole european business, it's bad for everybody. nobody doing good, they are struggling with ford in their home markets. it's going to take a while to turn around. i think the european economy may be on the cusp of returning. the key thing to focus on, i look at year over year. yeah, profitability is down but mostly due to special items. if you look at the fourth quarter that's kind of more of an indication of the momentum the company has got. fourth quarter profit almost doubled and fourth quarter revenue up quite sharply. so i think the company is well positioned. and the fact that revenue is up slightly, global revenue up slightly by 1%, despite the fact revenue in europe is way, way down, it indicates that the business in the united states, latin america and especially china is very, very strong. so overall i think the earnings report presents a picture of a very healthy couple. >> bob, i'm curious, how seriously do you think investors should take this prediction that europe will return to break even by mid decade given all that is going on in europe. can the company accurately make such a forecast or can we expect when the time comes again the losses will be ratcheted higher? >> well, look, the recession there, a lot of indications that the recession in europe has about bottomed out. i know some of the big investment banks are starting to buy up european securities because they expect the turning point to come fairly soon. gm is not waiting for that, like other companies they are taking measures to address that by reducing capacity. i think by mid decade, heck, that's two to two and a half years from now, we should see solid progress. not only for gm. again, europe is not a gm problem. europe is an industry problem. i think at this point a forecast of break even by the middle of the decade is as good as any other forecast. >> in the meantime, it's billions of losses. it's 700 million losses in just the last quarter. does there a point come at which you say, seen it in banking with people shutting down franchises in asia, parts of europe. does the global brand have to remain a global brand or do you say to hell with it. maybe we'll make gm cars in europe for the foreseeable future. it's just not worth it. >> well, i think i can't speak for the company because i'm no longer a part of active management, but i think the company is a longways away from that. as long as china, u.s., latin america, asian markets, india, so forth, as long as they are going strong and lawsuits in europe are bearable, i think for another two or three years they will stay the course. it can be turned around and will be turned around. i would say getting out of europe would be the last resort. remember at the time of foreclosure the initial plan was to sell off european operation, the new board rejected that plan. in fact, i think that was one of the reasons that fritz henderson was removed as chairman because he advocated the sale of european operations. i would say short-term that decision has cost the company easily a couple million dollars. the european operations are not only a failed opportunity but also an important product development center. the operation creates a lot of the architectures successful around the world. you wouldn't save all the money because you would really lose all of that engineering and design competence in germany which benefits the whole company. >> bob, before you go, you say europe being on the cusp of turning. a lot of people disagree with that given what gdp looks like, what currency are doing to their exports. >> no, look. i'm fairly close to goldman sachs. those are very smart people. they have done extremely well with it, buying european security. they are probably doing value buying. they are very smart people. they probably see that there's light at the end of the tunnel. i'm convinced there is because even though europe in the seller right now due to misguided economic policies, parenthetically, many we see adopted in the united states, which is a worry, but ultimately europe will straighten out and go back up. >> bob, appreciate it very much. good to talk to you again. >> good to talk to you. >> bob lutz. >> go straight to jackie deangelis nymex inventory numbers. >> hey, melissa, the number came out from the energy department. inventories down 157 billion cubic feet. that is a little bit more bearish than expected. the expectations for a number of 162. traders telling me to put that in perspective. looked at the number this week last year, 113. of course we had a mild winter last year. the average for the last five years is around 154. so we're in those seasonal ranges. with winter storm nemo, there's so talk we would see more of a draw because there was more heating supply necessary because of the storm but not necessarily looking like that was the case. right now checking out this number in terms of the price action, we did see a steep drop on this number coming out. as i said, it was bearish, the price of nat gas continuing to go lower. back to you. >> jackie deangelis will coming up next, the carnival "triumph" making landfall in alabama. live from the gulf coast right after this. plus much more how the megamerger between usair and american airlines could reshape the business in the sky. back in 2:00. at farmers, we make you smarter about insurance. because what you don't know can hurt you. what 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exactly what it means for teresa heinz and larger heinz -- or heinz kerry family. but john kerry himself got a nice little bonus today. >> thanks, john. >> we've got a lot of deals going on today, one we haven't mentioned too often involving constellation brands anheuser busch, enbev, potential remedy to doj problems anheuser busch had to acquire 50% of a group they didn't own. let's get to that and i want to bring up dell as well. we've had interesting developments there also. as for the deal, it's having a positive impact on constellation brands stock price. that's the dell deal. constellation brands stock price. they will buy 50% as a result of this deal. they will buying breweries, including the main one we're talking about here near the state of texas, essentially not only having the right to distribute those beers but will own them as well. many who follow trust doctrine closely this will satisfy doj. we'll see. nothing says it will with great certainty. this divestiture previously planned with crown who distributes beers and makes market and pricing decisions but in addition $2.9 billion constellation will pay to buy piedras negras brewery will allow constellation to get on with it's important deal and an hufr busch to acquire grupo modelo. want to get to dell, interesting filing from that company's special committee board of directors. you know there's been a debate lately that has risen over the price. and we've had t. rowe price, and most importantly southeastern asset management, large shareholders of dell, 1365 not enough. well, special committee puts a filing out, essentially q&a. we'll get more when the proxy comes out here. let me give you the takeaways, they are important. they began their process in august. they had over 25 formal meetings in addition to participating in six board meetings including only independent members of dell's board. three differ sponsors permitted to conduct due diligence and make proposals. so clearly they looked and didn't bite. michael dell said that he would not commit to any of those sponsors at any time during that process but would work with whoever might emerge as high bidder. perhaps most importantly to get silver lake to get up to 1365, dell rolling in his shares of the deal at $13.36, in other words, a smaller amount. they will get a larger portion of the equity, if you will, as a result of that decision by him. that was enough to get him to go up to 1365. important things that point to how hard it was to get to 1365 a share perhaps giving pause to those who would say we think we can get a higher price. >> thanks, david. carnival's "triumph" cruise ship expected to dock in mobile, alabama between 8:00 and 11:00 p.m. eastern tonight after losing power on sunday. let's bring in somebody who had insight on what those passengers might have gone through the past few days at sea with no power. a former information officer for the cruise line and lived on "triumph" for months. you have an insight. what's your guess of what the conditions will be. give us a sense of the common areas, how big the ship is, whether or not people, especially those with interior cabins who don't have the benefit of opening a window what they might be doing and if there's enough space for those people to go circulate elsewhere. >> sure, yeah. i mean, i lived on the "triumph" when we went into dry dock, so i know what it feels like when the ventilation systems go out. i talked about this in my book, "the truth about cruise ships." it only takes an hour or two without ventilation before it becomes too hot inside. you add to that the plumbing problems we're hearing about. i imagine passengers are spending as much time as possible on the open deck. whether it's hot or uncomfortable at night, it's still much better than the interior of the ship. >> jay, i was struck when my colleague carl quintanilla spoke to the coast guard running aside the ship. said, do you know what conditions are like inside. he said, no, we haven't been invited on board. you have a private company that totally contained the situation for a number of days of is there a role at some point for those people on board to say we'd like to get off and like the help of somebody else to get off ship, be it carnival cruise lines or military or is the captain of that ship always in charge. if a private company says the passengers stay with you, however longette takes you to get to port, that's the way it is, because that's what the captain says. >> yeah, the captain is like the king of his country out at sea. the only person who could really challenge him would be an executive of the cruise line. i can tell you, to bring in other boats to get passengers off, it would present a serious risk of injury to do that. if you tried to ferry passengers from the "triumph" to vessels, you can have passengers falling overboard. >> i'm sure the military must be able to get people off a ship like that, the u.s. military. >> sure. i mean, the carnival could do it themselves. if the ship was on fire right now, they would be lowering life boats. even lowering life boats is a risk. that's a last alternative. they are much more safe waiting it out until they get to port. >> can i ask potentially a very simple question. when passengers go port, they always get on these tenders. is there a reason they couldn't use the tender system to get people off the boat, albeit might take a longer period of time but i'm sure it would be better than staying on a boat where there is no toilets and electricity. >> yeah, i've been on the "triumph" when we tendered in grand cayman. there was at one point in the matter of 30 minutes, the seas went from fairly calm to pretty rough. we're only talking about waves that are one to two feet in height. even they be we had to wait and leave the passengers on the dock and wait for the seas to calm down. again, it's a safety issue. if you have a small ferry bobbing up and down, trying to transfer from one ship to another ship, it's too dangerous. >> harder to imagine a scenario with where it's better to stay on the boat but we appreciate your time. >> a huge day for corporate news. more on the buffett buyouts of heinz and other consumer food names rise on the back of that news, could it be those other players are now potential takeover targets? and bernie madoff is fired up. he's reached out to cnbc's scott cohn from his prison cell. find out why and what he's angry about if you care. mine was earned in djibouti, africa, 2004. the battle of bataan, 1942. 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[ male announcer ] just like you, business pro. just like you. go national. go like a pro. praf shares of zillow surging as much as 20% off the highs of reported earns. the ceo, good to have you back. >> good morning. >> stock behaving pretty well here. revenue, of course, pretty good. new users, average monthly unique users. walk us through the quarter. >> great quarter, revenue up year over year, record traffic, record marketplace, up 95% year over year. really a great quarter up and down. i think the big reason, zillow continues to benefit from mobile migration. in quarter more homes reviewed on zillow than desktop. we monetize incredibly well on mobile. that's a big part of the zillow story. >> starting in december for the first time more than half the visits came through mobile devices. engagements obviously. is it accelerating? >> zillow on a mobile device frankly is a better experience than zillow on the desktop, because you're remote, driving around a neighborhood. for us,monetization, someone more likely to contact an agent. someone selling advertising to real estate agents we love this migration to smartphone. >> as we watch the ball passed between rentals and sales, i wonder if rentals are soft in terms of comparison to purchase? >> well, well, rentals is a huge part, two purchases, acquisitions in the rental space, one company called hot paths, another a software company for management in space. zillow is one of the largest rent sites, a big part of our growth story going forward. >> can you co-exist? is this town big for the two of you? >> i think. zillow is number one in the category but we only have 2% of what real estates spend on advertising. they spend 98% of their ad budgets elsewhere. both companies are growing quickly but really this is a huge market. >> spencer, you guys, entrepreneurs look more broadly than operating at one time. i know the original founders of the company described zillow as a media company because of the way in which it generates its revenue. do you look around the rest of the economy and think, actually, i might be able to zillow that industry, that industry is right for the same sort of business model? >> certainly we try to do it in these adjacent categories related to the home. there are still pockets even related to the home where there is a lack of information transparency. that's what zillow is all about, empowering people with access to information. last week we launch a product called zillow digs in the home improvement, for the first time we bought price transparency to remodeling, zillow digs, ipad or desktop you can see what a kitchen remodel would cost, bathroom remodel would cost. there actually are pockets of industry where the internet hasn't yet empowered people with access to information and we intend to change that certainly in everything around the home. >> interesting. >> all right. spencer, appreciate that very much. congratulations on the quarter. >> thank you. >> talking housing tips. coming up next, rick santelli diving into interest rates. will they move more on the economy, central banks or market logistics. the morning after mark zuckerberg's big fundraiser for chris christie. details ahead. but we can still help you see your big picture. with the fidelity guided portfolio summary, you choose which accounts to track and use fidelity's analytics to spot trends, gain insights, and figure out what you want to do next. all in one place. i'm meredith stoddard and i helped create the fidelity guided portfolio summary. it's one more innovative reason serious investors are choosing fidelity. now get 200 free trades when you open an account. welcome to "squawk on the street" and thursday's rendition of "the santelli exchange." i was talking to so many brokers and accounting executives and traders regarding interest rates. today we had a great interview with simon and bob lutz. think about some of the things bob lutz said today. one of the things that stuck out in my mind when there were questions about the weakness in europe, it isn't only gm, it's cokeca-cola and caterpillar, he said we're getting more interest rate because we're buying securities in europe. the interest boys told me they don't know which way is up. you could call it a worry but i don't think so, that's too conventional. is it a wall of uncertainty, maybe, but i think it's a wall of weakness. now look at the list that traders are talking about, that trade interest rates. they're saying the one area is central banks, they play a prominent role, think how many billions a month our central bank is pushing to buy treasury securities. also think about the economy in general and not just in the u.s., but of course around the globe, and last but not least, logistics. why are logistics important? because so many investors and central banks outside of the ones of country of origin have so many positions in each other's government securities markets. so how can you possibly trade these things? you know, some of the worries i'm hearing today are of course the gdp in europe, the gdp in japan, they're weakening. well, that's unemployment, look at greece. they say greece, unemployment's up to 27% but 15 to 24-year-olds, button down on this one, close to 62%. when we think about japan, we think about g-20, they're denying there's anything going on that we need to worry about with regard to the japanese currency. but just look at the speeches of abe before he was elected. i don't know how you can reconcile those two dangling participles. think about the italian election, the turbine text, big article in the "wall street journal," think spain, one word on spain, bankia, that should be enough said. but the central banks can they really stop it? logistic, all of the positions, the conventional wisdom that interest rates are going up, well if this giant group of aggregate positions starts to reach a tipping point, what's the fed going to do in this country, for example? buy 160 billion, buy 200 billion? the economy being weaker globally is the old reason why traders bought treasury securities. goldman in a report says hey, maybe there are 200, 300 basis points underrised. how do you reconcile that? in this day and ainge being a trader may be considered complex to others but the traders think it's almost downright impossible! carl, back to you. >> a lot of people feel that sentiment, thanks, rick, see you soon. still ahead a reworked deal with anheuser-busch, imbev, shares up almost 35%. rob sands in a first on cnbc interview coming up. what's next? he's going to apply testosterone to his underarm. axiron, the only underarm treatment for low t, can restore testosterone levels back to normal in most men. axiron is not for use in women or anyone younger than 18. axiron can transfer to others through direct contact. women, especially those who are or who may become pregnant, and children should avoid contact where axiron is applied as unexpected signs of puberty in children or changes in body hair or increased acne in women may occur. report these signs and symptoms to your doctor if they occur. tell your doctor about all medical conditions and medications. do not use if you have prostate or breast cancer. serious side effects could include increased risk of prostate cancer; worsening prostate symptoms; decreased sperm count; ankle, feet, or body swelling; enlarged or painful breasts; problems breathing while sleeping; and blood clots in the legs. common side effects include skin redness or irritation where applied, increased red blood cell count, headache, diarrhea, vomiting, and increase in psa. see your doctor, and for a 30-day free trial, go to axiron.com. reminds me of our network before cdw virtualized it. how? cdw and hp networking implemented a virtual application network that reduces the time to deploy cloud applications from months to minutes. with fewer bottlenecks like this. finally. charles! client golf. aim for the lake. really? the dow is trying to get out of the the red. what is coming up tonight? >> the hottest ipo thz year, gas prices near records so we're going to ask the former bank of america vice chairman why gas prices are higher and in honor of valentine's day the trades, the traders are actively courting. >> the trades, the traders are actively courting? >> they are in love with these stocks but not quite the right time to go after them. when is going to be the right time to actually make the play so to speak. >> all right, we'll see you tonight, melissa. see you guys in a little bit. here is what you missed earlier on if you're just joining us this morning. >> welcome to hour three of "squawk on the street." here's what's happening so far. >> it is officially done after months and months of waiting, we are here, and the big news, u.s. airways group and american air to merge. sources telling cnbc that berkshire hathaway and 3g are prepared to buy heinz for $28 billion. >> this fits what he does beautifully, a steady no technology to speak of, grind it out. >> brand known around the world. >> it's good for investors, good for the u.s. airways shareholders and good for the creditor of amr, and good news for all of our employees, creates a stronger airline, allows us to do more in compensation and for all those reasons i think it makes a lot of sense. >> we're partners with 3g and we'll both the same amount of equity, we'll own a proffered stock in addition. it's my kind of deal and my kind of partier in. >> they're buying this and they're going to keep it. they're not going to take it public. it's not a private equity model. they're going to keep it and the likelihood is that this new partnership -- >> when i was at goldman sachs the first stock i bought for my hedge fund because i knew there would never be a chinese or japanese bottle of ketchup on the table anywhere. this is one of the most iconic brands. good thursday morning. what a day for news. we're live here at post nine at the new york stock exchange. it has been a busy morning. berkshire hathaway and 3g capital buying heinz for more than $23 billion. that deal has been unanimously approved by the heinz board and shareholder also receive $72.50 a share in cash for each share of heinz, spiking on the news today of course. heinz and 3g capital are hosting a joint news conference in pittsburgh scheduled as you can see to start any minute. when that begins we'll take it live. another big mover constellation brands and anheuser-busch, a complete divestiture of gru grupo modelo. do we want to head to pittsburgh? heinz holding a news conference on this deal. >> jay heinz introduced his first product in 1869 and the simple premise that served us so well for all of the years has led to today's exciting announcement about a new partnership and platform for growing our great company. heinz shareholders will receive $72.50 in cash per share, that's a 19% premium to our all-time high share price and a 30% premium to our one-year average share price. it also represents almost 14 times ebitda and over a 34% supreme your to our ten-year ebitda average. given this value following a comprehensive review our board unanimously approved this transaction. the deal will deliver a substantial return for shareholders and ensure our commitment to pittsburgh. upon closing in this unprecedented transaction, heinz will become a private enterprise, at $28 billion this will be the largest acquisition of any company in the history of the food business. our shareholders are being well rewarded as this transaction is occurring from a position of strength, after 30 consecutive quarters of organic top line growth and all-time record market cap. this is a great compliment to all who have contributed to the success of this company. more than a decade ago we began a journey of transforming heinz from a u.s.-centric food company into a global powerhouse with a more focused portfolio of strong brands in advantaged categories. with two-thirds of our sales now generated outside of the united states and 25% of our sales in emerging markets, the company has built significant global reach and capabilities. today's announcement confirms the value of what we have achieved, and the strength of the platform we have built for continued superior performance. this new chapter will be filled with many opportunities for heinz to further expand our global reach -- >> william johnson of heinz talking about taking the brand. david faber, once a sleepy domestic brand which is hard to remember, given now its exposure and leverage to emerging markets around the world. >> exactly a great point to make, almost at 30% of revenues coming from emerging markets that's something mr. johnson of course has done over the last few years, focusing on the mega brands as you say, carl. the stock at one of the highest multiples in the group, it is a 19% premium, that is berkshire and 3g are paying to its all-time high so one can imagine when he first heard from mr. buffett and mr. paolo from 3g with the joint potential bid mr. johnson made, he said okay, maybe now is the time to consider selling for shareholders, done a lot of work here and if we can get a 20% premium to the all-time high trading at the multiple we, getting 14 times ebitda maybe we should take it. clearly he did and this deal i heard the original approach made maybe in mid-december a so-called soft approach, they didn't talk price, they had a nice cordial dinner and then they get a deal done less than two months later. >> it's interesting, going to bring some cultural change to pittsburgh. he talks about the commitment to the city but now you're dealing with some brazilians that will get to know that city pretty well. someone calculated $491 million for each of the 57 varieties, if you want to divide it up that way. let's get insight, joining us on the cnbc newsline, jeff matthews author of "warren buffett's successor, who it is and why it matters." jeff good morning to you. >> good morning, nice to be here. >> let's talk about the brazil effect. i wonder if this marks a change of any, in any way to buffett's approach to m&a, to his operational playbook. >> well you know he's always been flexible. he likes to get what he wants at the end of the day. he has done deals with acadia like this, although not on this scale, so i think what it reflects is how highly he thinks of the 3g guys and how much they bring to the table here. there's a little bit unusual, it's a company that probably wouldn't run best by itself as it is. it's very international business, and very undermanaged i think in the big sense. >> when was the last time you remember him buying something where the shares were trading at or near an all-time, a 52-week high at least? >> well you know, he paid for burlington northern and the berkshire model is different than it was 30 years ago. this is not your father's berkshire. he used to buy companies for 50 cents on the dollar, buy pieces of them in the stock market. now he's buying controlling interests, and to do that you have to pay top dollar, so his hope is that 50 years from now that dollar that he's paid is worth a lot more and with a franchise like heinz and with guys like the 3g guys there, they've done a terrific job with burger king already, i think he has a lot of confidence that that will happen. >> is there a string we can use to eye his most recent purchases thematically, i'm thinking about rails, food, newspapers, i mean they're all u.s.-based but a lot of them have exposure to international markets, some have tried to argue they're a play on a long-term view regarding inflation. what do you make of those? >> well, remember, maybe five, six, seven, eight years ago he really looked like he wanted to do something internationally. he traveled to europe. he bought these really -- >> cars. >> there was a lot of expectation he was going to focus internationally and since then he's been focused domestically. i think what it really reflects is the big hole in berkshire's portfolio has always been a consumer package company, like a heinz, and you know, every annual meeting he talks about how great mars is. he did the wrigley's deal with mars, and he's always wanted to own something like a heinz, a really solid consumer franchise like this, and it's the one thing berkshire doesn't have, ironically. it's got seas candy but it's tiny, an equity position in coke but this plugs a huge hole he's always wanted to have. makes sense to me. >> interesting point. finally he loves to tantalize us with talk of how much cash he has left. this morning on "squawk box" he's got somewhere in the neighborhood of $12 billion, $14 aboutle to plbillion to play wi and still keep the amount he likes in the back. where would the next acquisition come from, what is your guess? >> this was my guess, not heinz itself but i thought he was focused on this area. after this, i don't know, it could be anything, another utility acquisition, it could be something possibly in europe, there's a lot of merchandise over there right now and the banks in europe are just starting to cough stuff up. he's very opportunistic and it's got to be at the right price, so we'll see. >> yeah, i mean we've asked the question a few times and those -- hardly anyone wants to take a guess because he is so mer k mermurial mercurial. jeff thanks so much. >> any time, thank you for asking me here. the other big deal of the day the boards of amr and u.s. airways aproving a merger of the two airlines, making the bigsest airline in the world at about $11 million. phil below is at dfw with the latest. >> reporter: you showed the press conference going on in pittsburgh. let me show you a press conference at the dallas-ft. worth airport, doug parker, the ceo of u.s. airways and tom horton, who is the ceo of american airlines, he will be chairman of the new company, they're introducing the company at a press conference here, going over the details and what are those details, carl, you mentioned it's an $11 billion all stock transition -- transaction, and what you're looking at is american creditors will get 72% of the new american/u.s. airways shareholders get 28% of the new americ american. this caps the pend of an amazing period of consolidation over the last eight years in the airline industry. doug parker started it all way back in 2005, when you talk about the merger of america west and u.s. airways and this new airline, it will be the largest in the world with 4.7 million available seat miles. we talked to doug parker earlier today on "squawk box" and we asked him if whether or not he thinks the consolidation play is over. here's what he had to say. >> it was 2005, there were 11 airlines, at least 1% of the industry. now we're down to three large carriers. i don't think there's a lot of consolidation. we have a nicely rational but intensely competitive airline industry which is going to be good for consumers and good for investors. >> certainly has been good for investors in the last year. take a look at shares of lcc, that's u.s. airways, compare them with the airline index which hasn't been too shabby itself, no comparison at all. we should point out carl, a number of analysts have come out today and already said they like the airline sector despite the idea that the airline consolidation play has essentially played out. carl? >> it's going to be interesting to see what they trade on next, phil lebeau joining ounce the amr deal. straight ahead bernie madoff wrote cnbc a letter from his jail cell. and the c oh, of constellation brands is here first on cnbc, we'll talk about the revitzed agreement between anheuser and grupo modelo that has sent the stock soaring. first rick will talk about bonds. >> carl, we'll talk about muni, munis, munis. are munis in your future? that miraculous budget that seemed to balance in california, we'll talk about build america bonds with senior analyst municipal market advisers and who is it? matt fabian. you'll want to see this, about half past the hour. clients are always learning more to make their money do more. 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(announcer) scottrade... ranked "highest in customer loyalty for brokerage and investment companies." today's all about the industrials trading higher. generac trading sharply lower despite strong earnings this morning, in the wake of the snowstorm not too long ago. josh lipton at the market flash desk with more. >> hey there, carl, the generac is getting crushed, beat on the bottom line and the top line and bullish guidance for this year as well so what is the problem? analysts telling me they see no red flag in the report, nothing alarming. instead they argue this is just profit-taking after a hard run, generac benefiting from news of hurricane sandy, the recent snowstorm in the northeast, a perfect confluence they say of events for this company. the stock surging some 65% in just the past six months. today though down some 7% here. carl, back to you. >> josh, thanks for that. let's get our capital markets up. gary kaminsky is going to talk fixed income. >> carl, good morning. every day we hear strategists come on to the network and talk about the great rotation out of bonds, into stocks and i want to have somebody join me today who has been doing this, rich saperstein, run about $10 million, running institutions for 30 years, we got together in the early part of january, rich and you told me i'm selling bonds to buy stocks. we hear about it every day. why are you doing this and logistically operationally how are you doing this for your clients? >> economic conditions have vastly improved since the lows of the recession, yet interest rates haven't moved much so for clients and treasury partners we've been reallocating assets out of bonds and into stocks. >> the clients are willing to accept the higher volatility with stocks given the way the world is right now and the fixed income of bonds? >> let's talk about volatility. for the last 50 years the average where the ten-year treasury has been yielding 350 basis points above the s&p. today the s&p is yeeling 40, 50 basis oints over the ten-year treasury. we talk about the risk of stocks and bonds we have to calculate it to relative averages. >> we bring up this chart, this is what you sent your clients and it was startling. lot of people hear this every day but don't see the numbers. explain to viewers what you are telling people when they look at this price interest rate sensitivity analysis. >> okay, look, there's a real mismatch between where the valuations are between equities and bond yields, and in the last five years, 1.1 trillion has moved into bond mutual funds and 400 billion has moved out of equity mutual funds. >> right. >> now we're at a ten-year treasury where if rates move back to historical average, 100 basis points higher on the ten-year, you're going to have a 9% decrease in bond yields. if rates move up 200 basis points you're going to have an 18% decrease in bond yields. >> guys, bring back that chart if possible. is this the interpretation that if we are going to see a 2% move in the 30-year, somebody who is buying a 30-year bond right now could potentially lose 40% of their principle? >> correct. moreover than that the yield on the 30-year is not enough to protect against the decline in bond value so bonds are an extremely risky investment right now given where the economy is and potential rise in rates. >> you're doing the rotation for your clients. people are happy, they're accepting this. are they thinking about the next three years, five years or the next ten years as they're moving money out of bonds and into stocks? >> we have a long-term cycle ahead of us with economic improvement. we're going to see rising interest rates and improving stock values. we'll have higher multiples and that's where client assets should be allocated. >> rich thanks for joining us. guys i want to come over here to post eight, rick was talking about moving out of bonds and into stocks, look at century link, this is a stock that a lot of individuals bought for the dividend payment. this stock is down 20%, traded about 28 million shares. this is a name, guys, if you had screened on google or yahoo! and tried to find high dividend payers, this is what happens when you just buy a high-paying dividend stock and you don't know the fundamentals behind it when you screen for high yield. warning to all, not all dividends are going to be stable and growing. back to you, carl. >> yeah, there's no s&p stock doing worse today. thanks, gary. >> you got it. when we come back the ceo of constellation brands joins us live, and later on, bernie madoff writing to cnbc from his jail cell and he's not happy, we're told. we'll find out what has him so fired up when we talk to scott cohn after a break. all stations come over to mission a for a final go. this is for real this time. step seven point two one two. verify and lock. command is locked. five seconds. three, two, one. standing by for capture. the most innovative software on the planet... dragon is captured. 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$2.9 billion for the brewery in mexico as well as perpetual rights for the corona and modelo brands in the u.s., total consideration about $4.34 billion. will it be enough to satisfy regulators? rob sands, konsation brands' ceo joins us on the phone. i was almost expected to see the doj gives its blessing to the deal to acquire modelo. why didn't we see a doj ascension if you will as part of this overall deal? >> yeah, david, unfortunately i'm not in a position to comment specifically on the doj because we are in litigation with them, but suffice it to say that we believe that this transaction addresses all the issues that were raised in the doj complaint which initiated the action against abi. >> why do you believe that to be the case? >> well, this transaction establishes crown and constellation as a completely inpei independent number three player and business in the united states, basically the complete supply chain for production of the products as well as the entire distribution infrastructure. so abi will have no participation whatsoever in any part of the u.s. profit stream, and constellation and our crown beer division will be entirely independent as it relates to production and distribution, marketing, and pricing of product in the united states. so it entirely takes abi out of the picture. >> right, you've got it all now. you buy the manufacturing in addition to what was part of the other deal, distributing, marketing. you know, though, rob, there is some belief not a large one given what's going on in your stock price today nonetheless the doj's stated views previously on constellation's let's call it lack of competitive incentives to compete on price will still mean it moves ahead with blocking the deal. why do you disagree? >> well, primarily because we'll own the entire profit stream including the production element of it, and the distribution piece of it. so we would be as incentivized as any competitor to drive that business, and when you think about it, we're making a very large investment in one of the world's best breweries, and so we're obviously going to be highly, highly incentivized to drive business and volume through that brewery. >> so in your opinion this will change the competitive incentives towards let's call it this worry about coordinated pricing? >> yeah, well obviously we don't buy into any of the coordinated pricing element of this but yeah under our old agreement, under our old arrangements, the jv we had with modelo, that jv terminated or had the potential to terminate in 2016, so there clearly was different incentives under that arrangement. under this arrangement, which is entirely perpetual and ta tantamount to constellation owning the brand in the united states, our incentive is to invest behind the business and build the brand and grow the business, and i would also add the crown team has been notwithstanding the previous incentives a very, very strong competitor and we anticipate that the business is going to be very strong in the future. >> what do you know about brewing beer? >> well, we've owned a brewery in the past, and we own almost 40 wineries and distillaries around the world, some of which are some of the biggest in the world, and a lot of our operations people come from either a brewing or a distilling or a wine-making background, and probably even more importantly, the brewery that we're acquiring in pi edras negras comes with a complete and highly skilled team of people that have very successfully run that brewery in the past. >> sure. >> on a completely self-sufficient basis, so we don't anticipate any issues whatsoever. >> all right. levering up the company, comfortable almost six times leverage? >> we're only levering up to just over five times david, so around the very low fives, and you know, we've levered up to the low fives a number of times. typically when we do make a significant acquisition, we lever up to the low fives and because the beverage alcohol business is so cash generative, we delever very quickly so we would anticipate delevering back into our target range of between three and four within two to three years. >> rob, very much appreciate you joining us on an important day, your stock up 30%, rob sands, ceo of constellation brands. >> thanks a lot, david. >> you're welcome, thank you. when we come back, bernie madoff e-mailing us from his jail cell. what did very to say? that's after the break. i know what you're thinking... transit fares! as in the 37 billion transit fares we help collect each year. no? oh, right. you're thinking of the 1.6 million daily customer care interactions xerox handles. or the 900 million health insurance claims we process. so, it's no surprise to you that companies depend on today's xerox for services that simplify how work gets done. which is...pretty much what we've always stood for. with xerox, you're ready for real business. the european markets are closing now. >> let's see how our own trading session is affected by that close. lot of red and man some of the numbers we got today not good. >> shocking, it's shocking what is happening to growth in europe. overall in the fourth quarter the recession got worse for the eurozone, annualized decline of 2.3%. the european central bank is forecasting looking forward this year there will be zero growth for the eurozone, that is very important moving forward if you're in world markets. you can see the fallout on the euro, people talking about an interest rate cut that may not be the point here at this stage. euro/yen has risen 23%. let me break down by country for you exactly what happened in the fourth quarter. germany worse than expected, equipment fell, exports fell according to jpmorgan. france lightly better than expected, households and government spent more. brussels is going to give all the governments more time to balance their budgets, looking ahead probably germany will bounce back the quickest. lot of focus now inevitably is on the euro, and the way in which the euro has moved since mario draghi said that he would do everything to save the eurozone. the gain as you can see since july of last year is almost 10%. morgan stanley, credit suisse say for a 10% move in the euro, economic output will contract by 0.7%, and corporate profits by 4%. so presumably some of that still has to come as we look forward. as you'll be aware earnings in europe have disappointed to a greater extent than earnings here in the united states. that's one reason why if you look at the european markets, they have fallen during the course of the year. the dow jones continues to rise, up almost 7%, but monument securities makes this very important point, world markets are assuming that global economy also rebound this year. if there is no evidence of a rebound, perhaps by the spring, then potentially these markets could fall and the ecb is now saying there will be no rebound in the eurozone and that could be very important for equities here as well as the rest of the world. back to you, carl. >> despite what our own economy may be doing at that time, absolutely simon, thanks. let's get a check on norg and commodities, jackie deangelis? >> we're watching oil prices mostly mixed for a lot of the morning and a couple of factors to consider, first the news the iaea was failing to reach a deal with iran regarding investigating its nuclear program, that supportive of crude prices. brent prices earlier in the session near a three-day high but resistance coming out of europe, just what simon talked about, growth in the eurozone and seeing shrinkage in the biggest economies there. if you look at the ftse charts you can see the decline together. also nat gas down big today after the energy department's weekly look at natural gas inventories, the number less of a draw than expected and i want to talk a quick look at the metals complex, watching gold prices they are staying below 1650, failing to move a lot today. the dollar getting a bid, not helping gold but it's silver down nearly 1%, the biggest loser. back over to you. >> jackie, thanks so much. pisani is back from florida. >> 88 degrees for literally i mean weeks on end, some of the best weather i've seen in years in florida. here we are back in new york. at least it's not snowing on us, not yet today. look at the sector, fairly narrow range in the dow, 65 to 70 points. normally the dow moves 125-point range top to bottom. either side of positive or negative, consumer staples upside, industrials, technology on the downside. heinz has had enormous volume throughout the day, $72.50 a share for heinz, so you can imagine the volume here, put up heinz, hard to imagine that difference. there's your 20% premium. lot of people asking about what other companies might be involved in takeouts in the future at m&a. it's hard to say. all of these are up and these are new highs. general mills, smucker, b&g, historic highs. campbell's a four-year high. i think the problem is that a lot of these are bound up in trusts. campbell for example is practically private, heavily involved, the family is heavily involved in it so it would be hard to imagine there would be takeout of that particular group. elsewhere people asking whether there will be any competitors, i don't know. private equity hard to believe they'd be involved in a deal or counter a deal like this. other companies interested in heinz in the past, there's burger king. you notice what happened here, i think very importantly 3g, a lot of people messaged 3g was successful in getting costs down for burger king. they own 70% of burger king and have been successful getting costs down. burger king went public again only last year. put up some of the companies that might be interested in heinz. they've been floating around, campbell, unilever, kraft, maybe, but i find it hard to be other companies interested in a bid that was this big. still a little bit out. notice that the airlines index is sitting at a five-year high. the good news on this deal announced with usa and amr is costs are going down, the companies are more profitable overall, capacity is shrinking. these companies are great, but the problem is when you're sitting at a five-year high it's hard to argue that the company should be priced higher unless you think they'll have pricing power and that's been difficult to attain so maybe that's why today as we've announced what is probably the final big merger in airlines, look here. all of the big airlines are trading to the downside. so i think it's going to be a little bit tough to argue at this point unless you can prove they're going to get higher prices very quickly for their air fares don't think it's going to work. >> something isn't going to happen. thanks, bob. let's get to srick santelli in chicago. >> i'd like to welcome my guest matt fabian from moounie market advisers. >> hey, rick. >> maybe you can give our viewers and listeners a quick lesson on how the federal government fits into the build america bond program and then tell us how it may be facing a two front war, one from the sequester and the other from the potential hunt for revenues. >> well, you know, for sure, build america bonds were launched as part of the president's stimulus in 2009 so about $180 billion of taxable municipal bonds were sold. they are taxable but the issuer receives a subsidy payment from the federal government as part of the interest rate so that program ended at the end of 2010. there have been mull tippal tempts mostly by democrats who revived the program, as far as we can tell mostly on political grounds, they faced opposition from republicans, again, mostly on political grounds. it continues to come up with the sequester looming, those subsidy payments to the issuers would be cut under the main scenario for the sequester. it has really infuriated issuers, so any attempt to create more broad-based support for grassroots support for a relaunch pretty much compromised at this point so it's unlikely that buildamerica bonds will be coming back soon. >> it sounds like we have some technical issue, we have to wrap but we will bring you back and we apologize. back to you in englewood cliffs. >> thanks a lot, rick. part of live television. convicted ponzi schemer bernie madoff writing a note to our scott cohn from his jail cell, scott you've been tweeting about this in the last few minutes. what did he have to say? >> ea >> bernie -- i have bernie on the brain. half a dozen e-mails bernie madoff dashed off from prison all of them on the record and it is very clear that bernie madoff is angry. why, this follows our exclusive interview with irving pickard, the trustee rounding off madoff's assets for investors. pickard told us madoff has been no help, $5 billion which the trust ye is preparing to put off to investors. no help, that set bernie madoff off in a big way. i've been in touch with madoff for quite a while now much of it off the record at his insistence but picard's comments unleashed a tirade. he's telling me he now wishes he had not pleaded guilty to the epic ponzi scheme as he did in 2009 because he says picard is distorting the truth. this is a man that keeps making statements that have no facts to back them up. i wish i went to trial and he would have been required to provide the evidence he claims he has. as you can see, i'm frustrated. he goes on, as remorseful as i am for the pain and suffering i have shamefully caused, i take some comfort in the fact that, with my assistance, all of my customers will recover their original investment principal. madeoff is proud of the role he claims he played in the biggest chunks of money recovered, $7.2 billion from mega investor jeffrey pickour, who died shortly after the fraud came to life. his widow turned over the money. when i spoke to picower prior to his death action madeoff writes when i spoke to picower prior to his death i made it very clear i would testify about the role of him and his accountants, attorney and assistant, to name a few. madoff says of picower, of picard, "i can certainly understand his reasons for not acknowledging my role because how could he justify his fees otherwise?" picard has billed more than $600 million for his work. there is a lot more in these e-mails madoff on his sons, madoff on the banks, we're going through all of it, more of this as the day goes on and on cnbc.com. >> scott i hope he understands how perverse it sounds to take any credit for helping people get some of their money back. >> you know what, i think he does understand that. i think that though he's still as picard told us this week that madoff likes to feel like he's in control of the situation and that's what he's doing even as he serves the rest of his life in prison. he always prefaces these things with this bit about remorse, and then goes on to claim credit for what a good person he has been. of course that sort of ignores the fact he pulled off this epic ponzi scheme for many years. >> scott thanks for bringing that to us first, scott cohn at hq. when we come back, which political heavyweights made an appearance at mark zuckerberg's party last night. and the ceo of million tie million-dollar startup next door will tell us how he's succeeding where others have failed and how he's bringing your cul-de-sac into the 21st century. 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[ male announcer ] fast, reliable deliveries worldwide. today is gonna be an important day for us. you ready? we wanna be our brother's keeper. what's number two we wanna do? bring it up to 90 decatherms. how bout ya, joe? let's go ahead and bring it online. attention on site, attention on site. now starting unit nine. some of the world's cleanest gas turbines are now powering some of america's biggest cities. siemens. answers. coming up, bulls versus bears, can the recent pick up in deal-making trump the cracks corm of forming in europe. bet on buffett? should you buy consumer stocks even as they sit near record highs? whitney tealson is back with the best plays. and john taylor tells ulsz the best place for your money right now. see you in about 15 minutes or so. >> welcome back, scott, good to have you back in the chair. an unusual fund-raiser in the heart of silicon valley last night and inside look at the guest list. julia boorstin has the story from out west. >> hello to you, carl. facebook ceo mark zuckerberg hosted a fund-raiser for republican governor chris christie last night at his home in palo alto. it drew several dozen guests a i ton of media attention and about 40 protesters. christie arrived in a white suv, that's him in there. he snuck in while former secretary of state condoleezza rice entered through the front. event organizers did not release a guest list saying the event was targeted at zuckerberg and priscilla's social network of friends. there were a number of facebook executives present, some entrepreneurs and venture capitalists from the palo alto area. the event drew about 40 protesters chanting criticismses achristie's policies on women's health funding in particular. many of the signs they were carrying read zuck and chris, hands off planned parenthood. credo action organized some of the protesters, they said christie is funding the war on women. facebook has released a statement saying that mark and priscilla worked closely with governor christie on education reform in the newark school system, admire his leadership on education reform and other issues and look forward to continuing their important work together on behalf of newark's schoolchildren. the donations for the event last night capped at $3,800 will go toward christie's gubernatorial campaign for the election in november but the big question, carl, is how much last night's event will help fund-raising for christie's possible presidential run in 2016. back over to you. >> you know, julia, we got cheryl sandberg writing a book out soon. ap has a note randy zuckerberg, the brother will write a memoir "dot-complicated" in the near future. we'll learn more about the company in the next few months. >> zuckerberg and sandberg are very public people now, whether they like it or not, and that's something that sandberg has really embraced with her book, taking advantage of her high profile to address issue of women in the workplace and zuckerberg is doing the same thing, wants to draw attention to the education causes and introduce his friends to christie and raise his profile. >> interesting. we'll keep an eye on that, julia, thanks so much, julia boorstin out west. when we come back the startup that's turning your neighbors into a multimillion-dollar business. next door, the social network for neighborhoods backed by early investor and facebook and linkedin raised more than $40 million so far. ceo will join us after the break with some of his secrets to success. at his current pace, bob will retire when he's 153, which would be fine if bob were a vampire. but he's not. ♪ he's an architect with two kids and a mortgage. luckily, he found someone who gave him a fresh perspective on his portfolio. and with some planning and effort, hopefully bob can retire at a more appropriate age. it's not rocket science. it's just common sense. from td ameritrade. it's just common sense. (music throughout) why turbo? trust us. it's just better to be in front. the sonata turbo. from hyundai. ♪ love will keep us together ♪ think of me babe whenever ♪ some sweet talkin' girl comes along ♪ in the spirit of valentine's day, one startup is trying to bring local communities closer together. next door is the social network for your neighborhood basically, launched in october 2011, used by over 8,000 nabeighborhoods i all 50 states. this updated and announced $21 million in funding led by some of the most prominent venture capital firms in silicon valley. nirov good to see you. >> thank you for having me. >> interesting concept the notion that maybes don't talk to each other, all on social media, makes some sense but what is next door do that facebook or some other social media site is not already doing? >> next door is a very unique social network because it's not about connecting to your friends. it's about connecting to your neighbors. as you mentioned we seem to have lost touch with our neighbors. the specific data point is in america almost a third of americans don't know a single neighbor by name. there are so many ways our neighbors can help us and technology can bring back a sense of community to the neighborhood. that's what next door is all about. >> we mentioned the funding, congratulations on that by the way and some of the investors here besos expeditions, google ventures, alan and company and a man on our air not too long ago, david z. who has a history of his own. here is a history of what he told us the other day. >> i'm a fan of a big company called next door, taking the facebook experience and making it private and secure and bringing back person-to-person interaction and trust in neighborhoods so the benefit of the neighborhood you used to have last over the years we're using that technology to bring that back in the trust of individuals. >> nirav, talking about finding a good babysitter, making sure criminals aren't lurking throughout the neighborhood, is that the extent, what is the social purpose? >> it's all about connecting and communicating with the people around you to solve real problems and talk about the things that matter and it can be straightforward things like finding a trusting babysitter or dentist, more personal, finding a lost dog or critical things, sharing information about a series of break-ins. we've seen neighborhoods come together in over 8,000 neighborhoods and use technology to create stronger and happier places to live. >> you've seen examples where neighbors have, a criminal has been apprehended as a result of this. >> yes, many, many, many times neighbors have used next door to warn each other about suspicious activity and as a result either prevent or at times apprehend criminals that are trying to cause mischief in their neighborhoods. >> are we talking about in terms of monetization, fees, member fees, local advertising? >> the site is completely free to members and will always be free. we are optimistic about the business potential of the service, because local advertising alone is a $100 billion market but all of the ways that people advertise locally today seem to be on the decline, yellow pages, local television, local newspapers. we believe that will come online and when it does nextdoor will be a great place for that to take place. >> with he mentioned 8,000 neighborhoods. you've raised $40 million in basically ten months or so. is this going to always be a domestic business or does this work in dublin, does this work in moscow? >> well in some ways nextdoor could be more relevant in foreign countries because in foreign countries they don't have a culture based around going across town to eat somewhere or to your job and so in foreign countries your neighborhood is even more important in some cases. we will expand internationally in 2013, one of the big reasons we raised this financing. >> maybe you're already making money but walk me through the narrative of profitability and is this eventually going to wind up a public company? >> well like most social networks, facebook, linkedin, for example, we are now focused on adoption, 100%. we want to bring the magic of the nextdoor experience to neighborhoods everywhere. once we get some critical mass on the platform we'll turn our focus to monetization. we'd like to be a standalone public company in the future. >> when that happens i hope you'll come back if not before there, nirav, thanks for your time. we keep hearing about this local model more and more. thanks so much. >> thank you for having me, carl. >> nirat toliav joining from us nextdoor. details between one supermarket chain's struggling stock price, after a break. the patient, presented with a hairline fracture to the mandible and contusions to the metacarpus. what do you see? 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tv show" billions." here i thought he was thinking he was too big for our fun little show. back to you. >> thank you, andy. let's welcome our guests. she worked for overseas banks which is great because i have money i need laundered. she is the host of "risk and reward" on fox business network. his beard is thicker than the wool he pulls over your eyes. comedian joe devito. and he is as lively as jimmy olson in the new batman superman movie. next to me is andy levy. let's start the show. we now know the real reason for president obama's nude alarm. last week you will recall the president had an awkward moment when raul castro, the cuban leader tried to raise his hand in solidarity after the historic press conference. take a look. ♪ raise your hand ♪ if you're sure ♪ raise your hand if you're sure ♪ >> the president was clearly not sure. now the white house press secretary has explained why obama went limp in the wrist. >> i do think president castro had in mind the iconic photo of president obama and his arm raised together. it would imply more agreement on issues than exist. that's why the president resisted the idea of a photograph like the one president castro apparently envisioned. >> wow. is he reading minds? reading president castro's mind for what he envisioned for the photo? do you buy this? >> all i am pumped p is you found the sound track for that commercial from years ago. this is pretty -- i mean ernest, god bless him is the saying. actually president obama meant to do that because they didn't reach an agreement on all of the topics he hoped. he wanted the photo to look lame. it was a success. >> yes, and is it -- i would think you could argue it is more iconic because we played it 200 times on this show. do you think he was nervous about that? you are supposed to work it out and then we shake hands? >> president obama was so criticized for continuing this trip. there was the attack in brussels and president obama in paris was not there and belatedly said i should have been there and made a bigger gesture. so too he may be anxious that he was still there and then went to argentina and did the tango. >> perhaps he was tired. perhaps they should have used that excuse that he was tired from doing the wave all the time. >> localized fatigue. >> so much for the cool black guy handshake. he has the tim conway nova cane sketch. >> it was dead, you're right. >> does he have to be physically weak too? so much for the 10-pound dumbbell workouts. you can't out grapple an 84-year-old man. you don't let the arm get up. you block it on the way up. you don't do the handshake at all. what would be so bad -- what would be bad if they both had the stiff arms. >> almost anything would be better. what could be worse if he did the shocker or something like that. that would have had a little more prestige to it than just to go limp. that's what a child does when you are trying to remove them from the premises. their bodies go like this. >> it drives me crazy when you go to shake their hand and they give you a soggy hand. president is that true? >> i don't get that too often. >> i don't know why i always get the soggy hand. >> i just don't think people want to shake your hand. >> they are not excited at all. andy, are you a long-time obama uh poll gist. >> i have been an obama uh poll gist for 25 years. >> you have? >> yes. >> i do think for once the administration is giving us an honest answer here. >> really? >> yes. that is why he did it. the only problem is as you pointed out we did end up with an iconic image of an american president looking silly. and of course as joe pointed out with the whole physically weak/metaphor rickly weak thing he gave conservatives and anyone who doesn't like obama and his foreign policy the perfect metaphor for the foreign policy. >> is it us? are we looking for it? in doing the story today we did a google search hoping to get the iconic photograph. there are tons of photographs. anytime obama bends his hand there is a blog post about it. >> ernest said for an 84 yearly president -- 84-year-old castro has strong reflexes. it does keep you young. it is something to keep in mind for you kids out there. >> this makes me jealous of russians when you see putin coming out and getting ready to train with the national team, and then we have -- >> because those aren't staged at all. he is a legitimate martial artist. >> apparently like donald trump you have a soft spot for dictators, joe. >> it is my choice. i am just saying. >> you will go with the authoritarian war lord. >> we should cut obama some slack. a lot of heros have gone limp wristed at their biggest moments like rudy and rocky balboa, of course. it looks like he is is doing yoga. and even john travolta. >> that was style. >> what do you mean even john travolta? >> even american icon john travolta. >> he was a typical hollywood liberal. an outspoken supporter and said many people can't bring themselves to vote for hillary. >> we'll see what happened. >> if he gets in things will really -- so you say he is fighting the contradiction? >> he went to grad school. >> it all makes me wonder. what would a trump presidency look like? >> it was huge. it was huge. can you hold on for us? >> exactly what it would look like. >> wow. >> and here is what a hillary clinton here is what a presidency would look like. >> ♪ x with the og at the yankee game ♪ ♪ you should know i bleed blue, but i ain't a crypt though snow snow. >> i can't help but move of. >> it is a good contrast to see the knife-like rigidity compared to obama you's. obama's. >> hillary is -- i mean she is pretty tough -- >> sarandon says it is team to put an end to the status quo. but the status quo is it really that bad? >> she is supporting bernie sanders and so she is a big fan of the campaign. >> did she vote for him in the general election? >> maybe she didn't get out to vote for him. that happens a lot with the celebrities and a lot of promotional stuff. >> wait a minute. going from sanders -- sanders is not the nominee to trump and the reason -- first of all -- >> i don't think she was serious. >> she is saying the things shooy is concerned about she thinks trull p will take on. she is talking about low minimum wage. >> i don't think she is is saying that at all. i don't think she is saying she will vote for trump if he is the nominee. i don't think she ever said she would vote for trump. >> but she did say that trump -- when she said -- >> trump could bring on the revolution. >> she didn't mean he would leave the revolution. >> i thought she was kind of positive though. i did see clearly that she hated hillary clinton. she said she is a liar and all of the fracking business has destroyed a lot of industry and health and she is anti-hillary. >> how much different is susan sarandon's attitude bringing it on sooner than republicans who are, say, the never trump cry. if he runs we will stay home. but hillary will be elected and then we can rebuild the party from scratch. >> they have been working on that recipe for a couple years. >> i think she meant start the revolution like kick off the zombie apocalypse. you wouldn't say he has a great thing that is going to happen. i give her credit because what she said about hillary, she is consistent and i thought it was interesting the way lib -- liberals pounced on her. the status quo is wealthy people who built up their money without any work. at least she did it through acting. to say she will not be affected through the policies, that's the status quo. they are the wealthy elite that make decisions that don't affect them. we are the ones who are stuck with the price tag. >> if anyone is affected by bernie sanders raising taxes it is wealthy people. >> she doesn't live in a swing state. >> she can stay home. a new gallop poll trump supporters are by far the most enthusiastic. they have a passion for making america great again. and that brings us to a delightful exchange from today. the twitter user tweeted at the establishment, f-u. the establishment responded, thanks, we are so lucky you tweet your trump support at us every day. it is something special to look forward to. she said screw you all. trump knows what you are doing as do we the pome. ever heard of us? they replied, what? do you know how this works? you are yelling at a women's magazine named "the establishment" and not the government. joy respondy, i am really embarrassed. forgive the inconvenience. >> you know what, here is a one-woman waive for joy. listen, that was brave. she didn't delete the tweet. she just said oops. >> in the 10 years on twitter that is by far the best thing that has ever happened jie. the best exchange. >> usually she is tweeting the man. she is really sticking it to that account. >> she picks her battles. >> do you think trump would have admitted this mistake or just gone with it? >> no, the fact she apologized means she is not a true trump -- >> if an ex-president leaves you a tip don't say he did 9/11. lisa, a waitress with no last name, had the honor of serving george w. bush and his wife, laura. the former first couple had burgers and onion rings and posed for a photo with lisa. w left a tip that was anything but loose change, specifically he left a $40 tip on a $21 bill. that's presidential. lisa later tweeted the pic with a cheeky caption "bush did 9/11, but did me a solid and left me a hella tip." predictably it went viral. she did the bush did 9/11 for laughs. i have a couple of friends that use the mim a lot and they were the only ones expected to see the tweet. i was just trying to get a laugh out of my friends, but i in no way believe the conspiracy. she later tweeted psa, i don't think bush actually did 9/11. andy, did she mean ps like postscript or psa? >> maybe she meant public service announcement. we need to cut her some slack. bush did 9/11 is a mim is used by people who don't think he did 9/11. she is not a public person and she had 2 had you followers -- 200 followers at the time. i think she may have deleted her account. i tried to access it before the show and it wasn't -- >> you are not already friends with lisa? >> i am not. she thought she wag a dumb joke to her friends. it is a dumb joke of the 9/11 is is not that long ago and it is touchy for a lot of us. >> why is it a mim for those who don't think it happened. >> because mims are dumb. you say dumb things in mims and that's part of the mim. anyone who uses the bush did 9/11mim doesn't believe -- >> because it is not cool for people who really believe it? >> i was able to look at her account earlier today and it may be gone by now, but it looked like she was getting a lot of support. yeah, he totally did it or at least in spirit they were supporting her. >> not from the establishment. >> what made me realize -- well two things, when did tipping and receipts become a way to grandstand on politics? there is a lot of people in the tip area writing down "i don't approve of your lifestyle." it is strange. i write what 20% is and then i leave. i don't have to say go back on the gold standard. >> some people do. >> they do. i believe you have to cut her some slack. she appears to be pretty young and we forget that someone who is 25 was around 10 years ole and 9/11 to them is like pearl harbor. >> it is. it is more of a joke -- not a joke -- >> not a joke, but if you take a photo with a former president you have to know that's going to go viral, right? >> young people are supposed to be savy with the social media, but i would know not to do that. >> young people don't realize -- i don't know. i think you are older and you would say i just took a picture with the president. people l are going to be interested in that and for younger kids it is another snap chat thing. all right, coming up, are you allowed to say women's basketball is boring? we will find out after the break. live from america's news headquarters, i'm jackie ibanez. donald trump won't be telling his campaign manager you're fired. the republican front runner vows he will stick with him even though he is facing misdemeanor assault charges in florida. the case stems from anen -- from an encounter earlier this month as she attempted to ask him a question. he yanked her away from the candidate and he said he never touched her. surveillance video released yesterday appears to show him grabbing the woman's arm of the our nag appears to be losing -- our nation appears to be losing the battle against heroin addiction. mr. obama noted that nearly 30,000 people lost their lives to opioid over doses in 2014. that's more than the number of people killed in car accidents. the president added the good news is that the republicans and the democrats are working together to address the issue because it is affecting everybody. tough times could lie ahead for the boeing employees. the aerospace giant is taking steps to eliminate 10% of the workforce in washington state. that translates to about 8,000 jobs. the cost-cutting plan is expected to be done by june and will affect workers on every level of the commercial unit including executives and managers. president obama's will talk about what to do about north korea. they say if pyongyang keeps advancing their nuclear weaponses program the u.s. will need to take defensive measures that china may not like. they hope they will apply the economic pressure on north korea to convince the rogue nation to step in line with u.n. guidelines. now back to "red eye" for all of your headlines go to fox news.com. you are watching the most powerful name in news. fox newschannel. >> can you be too good for your own good? uconn women's basketball team is dominant. not just a little, a lot. after their lopsided victory, "boston globe" sports writer tweeted this about uconn. hate to punish them for being great, but they are killing the women's game. watch? no thanks. the uconn coach responded my question is don't watch. don't wawmp. don't watch. that's not really a question, coach. but i do get your point. that's the same as shaughnessy. but the pile on had begun. people on twitter jumped to uconn's defense and many attacked shaughnessy. holly rose said his comments were sexist. if this were a men's team doing this no way he makes the comment. maybe. or is is is there sexism in the fact that anything in women's sports will cause a hair trigger backlash. n -- novak djokovic suggested that men should fight for more because the stats are showing we have much more spectators on the men's tennis match. he was so widely condemned that he had to publicly grovel and ask forgiveness. many still refuse to ago ept is. as they say in tennis, game set and never express an unpopular opinion. >> they do say that, right? you are not a big fan. >> i used to be a big tennis fan. >> they had different catch phrases. >> is it sexist to talk about women in any capacity some. >> you mean in general? >> first of all -- i don't think what he said -- >> they are the greatest team ever. and they are so gad they are boring to watch. >> there are two ways to look at this. you can say, wow, i am in awe at how good this team is and i want to watch them because of that or you can say i have no interest in watching a game where one team beats another by 60 points. >> that's it. i'm leaving. >> either is valid and either -- and neither is sexist. i may tune into the final of the women's ncaa championship to check out how good uconn is. >> there was a score. >> they beat texas by 20 points. >> that's a compliment. >> i love the fight and the competition and i like the drama. this is more like performance art. this is maybe where he got on -- he said it was like ballet and it was like theater. didn't he say there are better writers than o'shaughnessy? >> he came out with the comment and fought back. but it was the idea that the espn commenters and the woman on espn said it was a sexist remark. he comments all the time, did you president he? >> yes. if i was the coach i would be proud. i built an amazing team. >> it is definitely an ignorant opinion. if he doesn't want to watch he can spend his day however he wants. when he says it is killing the sport that's not true. if it wasn't for uconn and tennessee having all of that and then uconn becoming a jugger not they wouldn't be watching it. ratings went up 30% when they made the championship. i love to see the vein sticking out. it is like watching somebody beat up another team in a video game. i enjoy it. >> he said was tiger woods bad for golf? no he brought a lot of people to the sport when it was dominant. movies at home when we come back. no moreover priced popcorn and milk duds. this can be the end of movie theaters. a new venture called the screening room would allow people to watch movies at home the same day they are launched at the theater. it is being launched by the guy from napster fame. here is how it works. customers buy a $150 set top box . the screening room is being tested in some homes m -- look. >> clark kent, daily planet. >> son of crypton. >> he seemed to be enjoying batman v superman. maybe that's it. maybe you have to enjoy it in your home. so they understandably are not so hot on people watching at home. moviegoers theng it -- think it is exciting. >> no. >> no. that's too much. i could buy so much food with that. >> the movie i saw cost a fraction of that and it was on a way bigger screen than i have at home. >> absolutely not. >> maybe not that excited. dierdra, do you think this is a good idea? i think this is where it is going. >> $150 is the proprietary set top box and i am just looking back, but they kind of tried it. it was $29.99. it wasn't an immediate release, but it was a newer release and that fail spectacularly. i personally like leaving home. i live in new york city. i know, andy says are you crazy? i like to leave even if it is for five blocks even if it is to a movie theater. >> andy, you obviously are a shut in. you can't wait for this to happen. >> that's not a slur. >> wouldn't you describe yourself as a bit of a her met? >> no. >> sometimes i play a character on tv. >> i get it. >> so this is most likely never going to happen because i don't think -- i am not sure if the studios will go for it and the national association of theater owners or nato as they are known, they are not going to let it happen, and i blame nato for the garbage conditions you have to put up with in movie theaters which is like donald trump i support pulling out of nato. when you where this might interviewed those people, well i just went to a movie for a fraction of a cost of that. in manhattan it is a high fraction. it might actually work better in bigger cities where you are paying upwards of $20 for a movie ticket. >> well, joe, what if they make -- the $150, that's what was getting her, right? >> what if they gave away the box. that's what you have to do. you give it away for free. >> what about the sticky seat? what about the bedbugs? what about the joy of sharing -- >> you are all bringing down the theaters. >> the theaters aren't the problem. it is the people. >> i used to go to movies because it was a shared communal experience. and now i don't go to movies because of the sheared communal communal -- the shared communal special. >> directtv some. >> they can complain all they want, but this is what they said about vcr's, and then that changed the industry. >> it is going to the home eventually. we'll see when it happens. ponytail? more like pony fail. a woman on a plane failed to drape her hair over her seat. it flipped over the back. we know this because the "boston globe" columnist tweeted the picture with the caption congrats to ponytailed woman in 22b. you invented a whole new way to be awful at 35,000 feet. the tweet went viral. some suggested ramos light her hair on fire. that's reasonable. aver marvel -- after marveling at her unobliviousness, she moved it. why didn't he just -- >> light it on fire? >> well is the option lighting it it on fire or tweeting about it? he could have just spoken up first. >> excuse me, miss, you may not -- i don't know how she didn't realize that, but excuse me, miss, raw -- rapunzell, your hair is cascading down the screen. and you hope it is a normal person. my hear is bothering you? well how about this sticky drink. >> you're right. >> what if it was a biker, a big, bad dude with a ponytail and he went up -- >> yeah, watch out. >> my question is why was dante ramos who works for a major newspaper, he is way back on 23 and can't he get closer on that plane? >> it is not like you are in a movie theater where the person is is being rude. what if the woman starts a fight with you and now you have to think is it worth it to create a big problem on the plane? what i would have done if i were him was incorporated her hair to be a character in the movie like a cousin it. that's why before i fly drugs, headphones. i get to whatever closest to comatose. >> you mean legal drugs like a benadryl or something? >> theoretically. >> andy, was he right? >> no, he was completely wrong. >> you can't see her face. >> it would be like you are watching "the ring" where the girl came out of the tv with the long hair and everything. enjoy "the ring." it is a good movie. the fact that the instinct now is i have to tweet about this instead of -- i find it hard to believe that as awful as people are i find it hard to believe she did it on purpose. i can't believe somebody can be that awful. i know it sound weird me saying that -- >> it is terrible. first of all i don't understand why the person sitting behind her wasn't wasn't -- if it were me i would be -- ma'am, do you know your ponytail -- >> he is a journalist. >> i don't know why that person didn't do that in the first place. that's what is weird. maybe he has a fetish. >> did you see the list of tweets that follow? you think that is is bad? and there are all of these people person kicking my chair and person putting shoes on my shoulder. >> it is unbelievable. >> now it is time for interest interest -- international demon news. >> the bishop says demons are most active when people are asleep and that's why his loud preaching and amplified music must continue. demons are active from 3:00 a.m. to 4:00 a.m. that explains the tweets we get from viewer. take a look. i can't wait to shave. joe devito owes beard with my pitch fork. he warms my heart almost as must have as the lake of fire. and he makes more points than a pentagram and with "red eye" was so funny i forgot i live in a world that feeds off human suffering. they love "red eye." and look at this message from a long-time viewer, demon dog. >> he loves our show. he is taking a bath. andy, what do you think? do you think -- are you up at that hour? >> i am. that's one of the reasons i am up at that hour. if you stay up until the sun comes up, you are safe. >> it is a church service. >> i like any church that plans their services around level of demon activity. >> i guess you have to know when you move in next to a church. >> maybe you can move around with time zones and the demons are active in those hours. you can make an effort. if you are next to a church you will have more foot traffic. >> i didn't know demon appreciated this show. that's why andy introduces me in that way. do we have the video? back to you, old scratch. back to you, father of lies. back to you, lord of the flies. son of perdition, king of the bottomless pit. king of babylon. yen-lo wang. >> i thought those were terms of endearment. >> i am trying to let people know what the hell goes on here, literally. >> it is time to take a break. stick around. i will be joined by dan soder and the brilliant minds behind the hit show "billions." live from america's news headquarters. the u.s. is ordering government workers and military members and their families to get out of southern turkey. the directive coming as security concerns grow where turkey shares a border with syria. the country has seen several bombing attacks in the past few weeks. one report said isis is is planning to attack jewish schools there. the u.s. operates strikes from a base in turkey. the u.s. is advising against travel in the area. the three gop presidential hopefuls backing away from a pledge to support the party during a cnn town hall on tuesday. donald trump, texas nor ted cruz and ohio governor john kasich all signed the pledge in september and now trump says he has been, quote, treated unfairly and would no longer support it. kasich weighing in saying none of us should have answered that question. earlier cruz said i am not in the habit of supporting someone who attacks my woif and my -- my wife and my family. walker called off his own presidential campaign in september. that state will hold its primary next monday. north carolina's attorney general says he won't defend the new anti-discrimination law calling it an embarrassment to the state. a number of groups say it limits protection for lgbt people. the attorney general is running for governor. scott is offering a chance for the connecticut-based school to avoid taxes on the endowment. if the state tax hike gets approval the spokesman says they appreciate the offer, but they will stay put. now back to "red eye". log on to fox news.com. you are watching the most powerful name in news. fox newschannel. >> are you tired of election coverage, but still want to see two grown men in an all out battle over who has the bigger -- isn't that it? isn't that it in a nutshell? you will love billions on show time. it star damion lewis as hedge fund billionaire and then the powerful attorney chuck rhodes in the battle for dominance. take a look. >> what kind of crimes succeed in this country. everyone has access to the information. we just know how to analyze it better. >> we spotted a suspect trading pattern. >> you must get that all day. >> all three firms have links to bobbie axelrod. >> play hard, play clean and be careful out there. >> joining me is the comedian and the actor dan soder and the two creators and the executive producers of "billions." guys thanks for coming. i love the show and i have seen every episode and i am totally into it. tell me, when i was in eighth grade my english teacher put protagonist and antagonist on the blackboard and i thought i understood drama for life. i don't understand who is is the protagonist in this? >> well, we grew up watching old school pro-wrestling and it can flip at any moment. there can be a heel turn and it can split. people ask why isn't he just a hero? who was a good guy wrestler, but if he had the brawl he could brawl with the best of him. that's what his character is able to do. i made $5 for mentioning martino. >> and it made sense. you really worked it in. is one of you guys -- would you say one of you guys identify with ax and the other with chuck rhodes? >> are you think back to high school don't you think we miss the part where they suggested going into hedge fund? i didn't even think about it. we are writing about it -- >> they used to call the writers schmucks. we are fascinated by the guys who can go out and make billion of dollars. but instead of being those guys we will type about them. >> you started in 2008 you had the idea? what was it? >> we had been interested in the hedge fund world as a subject of a drama for a longtime. we have been researching it, but it was in 2013 we started on this project. >> let's talk about the actors, david and dan. we have a clip of you guys working together. let's show that. >> great news. >> here it is. >> you all have them. so-called friends at other fund who will tell you we are dinosaurs and unoblivious to our own extinction. >> are you going to tell us they are not our real friends, mom. >> i will tell you they are [bleep] and wrong. >> he didn't say words there. he was just bleeped. that's how he curses is talks in bleeps. >> dan, i want to ask you how you got this job. he was so good that a lot of people don't realize that you are the guy in breaking bad and you are the guy in lincoln and the jennifer aniston movie. >> we are all a little uneasy because we know how tom loves you. he doesn't feel like he considers himself to be a bad guy. but i feel like you do and you like it. >> i don't consider myself a bad guy, but i consider myself like an animal and i am that. >> he is the it of the hedge fund. >> are you the stand up comedian of the office? >> i would say i am the tapes. >> we willed dit it out. -- we will edit it out. >> as far as for the safe bet i would say i am the hang nail. >> we have more with the guys from billions after this. i'm back with actor david constable. the comedian and actor and the two creators and the executive producers of "billions." guys, i want to talk about a real issue. another guy went down from world of prifl lj to the ago -- privilege to accusations of fraud. the fictitious capital is accused of insider trading. i want to know what you would think about insider trading. i want to know why it is a big deal. it is just knowledge. trading and securities by individuals with access to nonpublic information about the company. >> that's not really the prosecutable definition. >> what is it now? they have information. >> but there has been benefits exchanged. >> that's why two convictions were overturned. they couldn't prove there was benefit given. the idea is -- you know we co-created the show with andrew sorkin who brought us into contact with people on all sides of the issue. we pressed all the time to say where do you see moral culpability. there is always somebody else on the other side of a trade. market manipulation is clearly bad. insider trading is clearly bad. if you pay somebody to give you idea that they know they shouldn't disclose and you have that information, you are violating the basic premise on which the market trades. and the real problem is if we destabilize the market and if people lose confidence because the market is down, people lose confidence because they believe it is crook cede like a caw -- crooked like a casino in tombstone because we will have a massive selloff and people running from it and eventually what happens is is there is a run on the bank and you end up walking around in a barrel. you get rid of the clothing and you have a barrel with suspenders. >> so you guys are the average guys. what did you think? when martha stewart came down she said you have on sell the stock. how do you expect her to not sell the stock? >> i just moved into a bedroom with a window a year ago. this is all you guys. >> that's the actor who has done the kind of research who will under. >> he was coming all the way up. >> waiting tables in midtown on brokers. >> special thanks to dierdra and joe devito and andy levy. that does it for me, tom shillue. see you next time. thank you, guys. dvr. another else of "special report" next. donald trump takes his campaign to the next primary state while his campaign chief prepares to take his case to court. this is "special report." good evening. welcome to washington. i'm bret baier. there have been several surreal days in the 2016 campaign so far. and you can now add this one to the list. while republican presidential front-runner donald trump is planning the flag in wisconsin, the man who is supposed to keep the trains running is dealing with a bump.
election. it all ties into this huge headline -- bob mueller seeks to question president trump about michael flynn and jim comey's departures. we've got the three reporters with those by-lines and each of those big stories on "morning joe." national political reporter for nbc news carol lee. "new york times" reporter michael schmidt and "washington post" reporter covering national security, devlin barrett. and we have veteran columnist and msnbc contributor mike barnicle and former fbi special agent clint watts along with willie, joe and me. let's get to it. it was a day of revelations in the russia probe with suggestions that special counsel robert mueller is closely examining whether president trump obstructed justice when he fired former fbi director james comey. the "washington post" reports that mueller is seeking to question president trump in the coming weeks about the firing of comey, and former national security adviser michael flynn. comey was interviewed by the special counsel late last year, a source close to him tells nbc news focusing on memos comey drafted after private meetings with the president. comey testified that trump asked him for loyalty and to let go of the fbi's investigation into flynn's contact with russians. the president has denied asking comey to pledge allegiance to him. and last month, tweeted that he never asked comey to stop investigating flynn. yesterday, "the new york times" was first to report that attorney general jeff sessions was questioned by the special counsel's office last week. a person familiar with those discussions told the "times" that the special counsel appeared most interested in asking questions about comey and flynn. yesterday president trump was asked about the special counsel talking to a sitting cabinet member. >> no, i'm not at all surprised. no, i didn't, but i'm not at all concerned. thank you all very much. >> so there we are. joe? >> yeah, so here we are, michael schmidt, it seems that the focus based on your reporting, the people you spoke with, had to do with donald trump actually obstructing justice in the investigation itself. explain. >> there are two big buckets of mueller's investigation, one is the russia question and one is the obstruction bucket. the thing is, is that there's just a lot more things in the obstruction bucket that relate to the president's conduct than there is on russia. there's not a lot of things we know about trump's efforts to collude with russians, but there are a lot of questions about different things that he has done in office. whether it was the comey firing. whether it was trying to get rid of sessions. all of these things, the president's long-time obsession with loyalty. these are the questions that mueller really has to drill down on. and are the things that current and former white house officials who are being interviewed by the special counsel are being pressed about. >> so carol lee -- >> go ahead, joe, sorry. >> willie, you go ahead. >> i was going to carol lee, the one-year anniversary of michael flynn's interview with the fbi. you've got fresh reporting this morning about what he said about it, what he didn't say about it. when the white house found out about it. and what the implications of that might be for how they describe that series of events. >> what we wanted to do was go back and look at this very significant moment and see what else we could learn about what happened at that time the because if you look at it, it's the first moment where the russian investigation really knocked on the white house door. we hadn't, it was only four days in. but there was a very small amount of time where it wasn't as inside the white house as we're so used to now. and what we learned is that michael flynn took, did this interview with the two fbi agents, and didn't tell anyone. he didn't mention to anybody that this had been put on his schedule. he seemed by sources say overly confident. in the interview, he didn't take a lawyer with him. typically if the fbi shows up in this way, national security counsel lawyer would be notified and perhaps sit in on the meeting. he didn't have his personal lawyer in. he didn't say anything to anyone, including the president. and they only learned about it two days later when sally yates showed up at the white house to warn white house counsel don mcgann that michael flynn could be vulnerable to blackmail to the russians because he wasn't honest about his conversations with the russian ambassador. so this really set into motion a number of events after that. we know that then the president invited james comey over to the white house to have dinner. you know, then later you know, flynn remains in his post and still no one really understands what went into that, what happened in that fbi interview. we know that source told thaus don mcgann didn't even ask michael flynn whether he was truthful to the fbi. it was only later after he had already left that they got an indication that he had lied. and so if you look at that moment -- then ironically this interview with michael flynn was set up by mccabe's office. now he is, all kind of come full circle, because he's in the president's crossharris at this time. we've seen this ramping up of the president's frustration with his own justice department. >> then there's a new development last night about andrew mccabe, the deputy fbi director has been heavily criticized by president trump, who alleges that mccabe was influenced by donations to his wife's virginia state senate campaign three years ago. the "washington post" reports that while mccabe served as acting fbi director after the firing of james comey, president trump summoned him to the oval office, and asked who he voted for in the 2016 election. mccabe, who was considered to replace comey said he didn't vote. according to several anonymous current and former u.s. officials sourced in the report. mccabe, who has spent more than two decades at the fbi, found the conversation with trump disturbing, said one former u.s. official. and one person said that trump/mccabe conversation is of interest to special counsel robert mueller. both the white house and the fbi declined the to comment. devlin, this is your reporting. all these pieces were just reporting them at this point. it's very hard to -- try and not come to a conclusion. but when you tie them together, where is bob mueller potentially going with this? >> well i think the mccabe conversation is of interest to mueller. it gets at one of the basic questions that mueller's investigation is trying to answer. which is, what did the president want out of the fbi? what exactly did he want out of the fbi? and as much as the president clearly has a lot of dislike and a long-running dislike for andrew mccabe personally, it also raises the question was the president trying to get some sort of assurance as to what the fbi would be doing in a post-comey environment. >> mike barnicle in. >> devlin, his longstanding antipathy toward mccabe, what is the root of that? did he know mccabe prior to running for president or becoming president? >> not at all. it stems from the late days of the campaign, it came out that andy mccabe's wife had run for a state legislature seat in 2015 as a democrat. and for that race, because this race was in virginia, she got a lot of money from political action committee run by terry mcauliffe. terry mcauliffe, as most folks know, is a very close ally of the clintons. and basically when the then-candidate trump heard that, he started attacking mccabe on the stump. and what's clear, you know from the, what's clear from both the president's tweets and frankly what he does in private, is that he has never let go of this an mouse for mccabe personally. and it comes out in a bunch of different ways. including this meeting in the oval office. >> clint watts, let's try to put some of this together. i've been writing down notes. because there's so much going on here. and there's so many things that are outside the norms for a president and his allies, who are now at war with the fbi. you have of course the new news, donald trump goes up to the acting fbi director and says how did you vote? extraordinarily inappropriate. does violence to the constitutional norms. and the rule of law. he asks comey. remember for the loyalty. he then asked comey to drop the investigation of his national security adviser. after he admits that he knows that his national security adviser committed a crime. by lying to the fbi. then of course, he fired comey. and then if you look at what happened yesterday, and i want you to talk about this, this is the most troubling thing, that the republicans now are so desperate, because they see that donald trump is going to have to go and actually tell the truth. try to tell the truth for once, or fall into what his associates call the perjury trap. which means they know that donald trump is a liar. they brought up -- republicans are talking about this secret society inside the fbi? they sound like crackpots. that bill buckley kicked out of the conservative movement back in the early 1960s. like you know, the illuminati. harry potter and ron weasley, all because of a fbi agent who sent text messages to a friend. and we have "the wall street journal" this morning, the same fbi agent was hesitant to join robert mueller's team because quote my gut sense is there's nothing there. and yet, there is a declared, lou dobbs said it, a declared war from the right on the fbi and the justice department. >> yeah, it's absolutely baffling why would you want to destroy a u.s. institution. and it's indicative of what we've seen that donald trump has learned nothing after the firing of comey. we saw the triggering of the special counsel based on the firing of comey. and then he walks right back to the acting deputy, the acting fbi director, mccabe and is trying to figure out, are you on my team, can i coerce you or push you in a way that's not in line with justice and doesn't represent the american people well. every time we see somebody from the trump team or the campaign go in to get interviewed, suddenly there's a rash of gop outrage about text messages or attacking the fbi as an institution. i don't know how that's good for the country. ultimately it damages our ability to do law enforcement and push for justice. but it's indicative of how this team -- >> in this case, clint, they're going after an fbi agent who said he didn't want to be involved in this probe. because there was no "there" there. and when they start talking about secret societies inside the intel agencies, this is what erdogan did in turkey, to go after and persecute the military. and his intel services. this is what erdogan did to destroy democracy step by step, piece by piece in turkey. i mean what -- are republicans going to sit back and allow this to happen? are the board members of news koerp going to allow fox news to declare war on the fbi? >> we've heard republicans show up on "morning joe" say that they're going to purge it and that's what we see in the third world and that's what we see is the discrediting through conspiracies. make the conspiracy and look for evidence to justify it. but also leave out evidence to the contrary. >> and that's what the conversation between the president, and andrew mccabe was about. where are your loyalties, where are your wife's loyalties. carol lee, if you look as joe said at just the list of information we got yesterday. the people we know that mueller has spoken to. james comey last year. jeff sessions last week. mike pompeo, former acting attorney general, sally yates, steve bannon later this month and looking at the president sometime very soon. when you look at that graphic we have up right now, what does that tell you? this has reached the highest reaches of government. and is knocking on the door of the oval office. >> it has, and the thing that it says to me to go back to what michael was talking about with these two buckets of the investigation, you have the obstruction piece and the russia piece. you can see the number of people who have been roped into being interviewed and being focus of this investigation. being questioned. because of the president's own actions. that have nothing to do with russia's meddling in the election and whether there was collusion with the trump campaign. so the c.i.a. director, he would not, he was specifically interviewed because they wanted to know about his conversations and anything that he had to do with the firing of james comey. so all, you see every, each step of the way the president just increasingly expanded this case of obstruction. that he essentially created with his own actions. so that's, that's partially what i see when i see the number of people who have been interviewed, there was always going to be a set number of people who were interviewed based on the russia investigation focused on collusion. and possible collusion and the meddling in the election. and then there's this whole other group of people. because of what the president himself has done. >> and michael schmidt, while you're reporting focuses on obstruction of justice, that doesn't mean that bob mueller doesn't have information on donald trump possibly colluding with russia. we don't know that at this point, do we? >> no. we have far less clarity into that. the, the reason why we know much more about obstruction is because it's all happened since the time that the president was in office. there are all these white house officials that interacted with him, some of it played out publicly. a lot of the things that president has said privately he simply tweets about as well. will often be reporting about things that are about potential obstruction, we'll find out he did something in private that he simply just talked about publicly so that's why there's so much more there. look, there's so much that we don't know we never knew that a guy named george papadopoulos was going to plead guilty last year. it kind of surprised us, and i wouldn't be surprised if there was something else to come. >> mike barnicle, i want to go down this list again. it needs to sink in. americans need to understand just what is going on. >> people say i like his tax cuts. i like how he tells it like it is. and a lot of educated people, who should know better, brush over the constitutional norms. the violations of how we have run our government for 200 years. brush past those, because they think the united states having a gdp of 2.9%, instead of 2.7%, in the third quarter of 2018, is really worth it. is it really worth it when you have a president of the united states who actually demands a loyalty of his fbi director? a president of the united states who then fires that fbi director because he doesn't get the loyalty of? a president of the united states who admits to knowing his national security adviser has committed a federal crime? but that same president of the united states then going to the fbi director and pressuring him not to press charges against the national security adviser, who he later admits knows that he committed a federal crime. and then going to tell the russian foreign minister and the russian ambassador to the united states -- inside the oval office -- that he had to fire his fbi director and that should put, take pressure off of them. and then talking to nbc's lester holt and telling him that he knew he had to fire james comey because there was this investigation that he knew he had to get behind him. and then sending his troops out to go on fox news, to go in front of cameras on capitol hill, and attack the fbi. to talk about a purge of the fbi. just like again, right-wingers don't like it. that is the language of joseph stalin. that is the language of dictators. you add all of this up and then add up now, the whisperings of secret societies, like harry potter and ron weasley are getting together at the fbi and are creating a secret society. the person who they have playing the role as harry potter in this tinfoil illuminati is the guy who said he didn't want to be in the mueller investigation, because there wasn't any "there" there. this -- i will ask it again, what do the directors of news corp. think when they have lou dobbs on the air declaring that now is the time to go to war with the fbi and the justice department? mike? >> joe, in every investigation from homicide on the street corner to investigating what's going on in washington, d.c. right now, there are phases and there are patterns that investigators follow. the obstruction of justice phase that michael was speaking about that you've just been speaking to, is one phase. and it might be approaching some sort of a conclusion. that we don't know, the russia stuff is another phase of mueller's investigation. but the pattern, the pattern is pretty clear throughout. and the pattern is this. with you the president of the united states confusing the department of justice, and the fbi, with michael cohen, his personal lawyer. who swears personal loyalty to donald trump. and donald trump expects personal loyalty from agencies of government that have been independent since the inception of the united states of america. devlin, your story in front of the "washington post" today gets to the root of that, when you have an acting fbi director being asked by the president of the united states who he voted for. in the prior fall election. in your reporting, what sense do you get from fbi agents out of the department of justice, about what this is doing, the idea that, that a 20-year bureaucrat, assistant director of the fbi, acting director of the fbi is attacked by the president of the united states in tweet after tweet. the morale of the bureau must be devastated. >> i think a lot of people at the fbi feel under siege. the funny thing is when you talk to them about the way the president talks to andy mccabe and about andy mccabe. none of them are particularly surprised at this point. but it is a sense of siege. and it's also a sense of isolation. think about one of the stranger things that the whole thing has created is that the fbi is very isolated from the white house. and the white house is very estranged from the justice department. and the doj and the fbi are actually pretty disant from each other right now. that's a bad environment for the government to be operating in. but that is the environment we are in. and that is the kind of thing that frankly worries folks at the fbi, at the justice department. and you know, they're frustrated, i would say. but i think they've gotten used to it at this point. >> yup, desensitized. and there are a lot of republicans and lawmakers on capitol hill who should be a lot more worried about this. i don't understand why they're not. >> and mika, if you look at what andrew mccabe has done in serving this country, he was in the new york field office and the s.w.a.t. team. he investigated and had a key role in investigating counterterrorism after september 11th. he held management positions in the counterterrorism division, and the fbi national security branch. he was, he was the first director of the high-value detainee interrogation group to get information from al qaeda, to try to stop the next attack. and he played a key role in investigating the boston marathon bombing and bringing those terrorists to justice. look at this man's face. this man dedicated his life to you and to your family. keeping you safe from terror attacks in new york city, in washington, d.c., across the country. serving with the federal bureau of investigation. and because donald trump has completely blown through every single barrier, every single constitutional protection, now some are attacking this american hero because it just fits their political, their political message of the day. it's despicable, mika. it's despicable. >> and the bigger picture will end this block with a question, with so much at stake, so much at stake, it's one thing to look at this president as a bumbling idiot who tweets and says stupid things and is inappropriate, misogynistic, racist and embarrassing, that's one way of looking at it. but my question is, when is it okay to say that what we are witting before our eyes are the rudimentary beginnings of the destruction of a democracy? when should we be worried that this is happening? i say now. >> you should be worried and willie geist, when you have fox news declaring war in their words on the fbi and the justice department, the deep state there, when you have people talking about secret societies inside of the fbi, that's, that is out of what erdogan's playbook -- erdogan's playbook that he used in turkey to undermine that democracy. and to go after political rivals in his government. they're doing it here in america. right now. >> bob goodlatt, a republican congressman, talking about a conspiracy between of the texts between lisa page and peter struck, the two fbi agents. ron johnson, the senator from wisconsin, to come out on tv and throw out there irresponsibly that an informant told him about a secret society and that proves there's so much smoke here and there's a conspiracy, a secret society he said, of fbi agents who meet off-site, away from government buildings, to theoretically, i don't know how the argument goes. plan the takedown of donald trump and his presidency? what a terribly irresponsible thing to say without presenting any evidence to defend it. >> we know, it's interesting, hold on, mike, it is interesting there was another senator from wisconsin, that would hold up pieces of paper and throw out allegations. wasn't there? >> yeah, joe mccarthy, 1952, '53, the mccarthy hearings, the preds of the united states, dwight eisenhower, quite late in the game stood up the way he should have came up and came to a lawyer, joseph welch to stand up and say senator, have you no sense of decency. but ron johnson's comments as willie pointed out, are truly, deeply irresponsible. and we're talking about tampering with the institutions of government that have always been independent. the federal bureau of investigation. the department of justice, they do not belong to the office of the president. they belong to the united states of america. they are charged with operating independently and they're being tampered with daily. >> all right. the "washington post" devlin barrett, thank you very much. carol lee, thank you as well. we'll be reading the exclusive nbc news report that you and kristen welker have out this morning. still ahead on "morning joe," former vice president joe biden sounds off on russia's election interference. why he says republican leaders share some of the blame in not stopping moscow's meddling. plus from the deep state to secret societies, we'll talk more about the continued attacks on the justice department and what they mean for american democracy and the rule of law. you're watching "morning joe," we'll be right back. >> it may be time to declare war, outright against the deep state and clear up the rot in the upper levels of the fbi and the justice department. yes, i said the rot. the fbi and the doj have broken the public trust. by destroying evidence, defying oversight and actively trying to bring down the trump presidency. ♪ when you have something you love, you want to protect it. at legalzoom, our network of attorneys can help you every step of the way. with an estate plan including wills or a living trust that grows along with you and your family. legalzoom. where life meets legal. new aveeno® positively radiant it's timbody lotion...glow on! with the moisture-rich power of soy. it transforms dull, dry skin to leave you glowing. new positively radiant® body collection from aveeno®. we know life can be hectic. that's why, at xfinity, we've been working hard to simplify your experiences with us. now, with instant text and email updates, you'll always be up to date. you can easily add premium channels, so you don't miss your favorite show. and with just a single word, find all the answers you're looking for - because getting what you need should be simple, fast, and easy. download the xfinity my account app or go online today. i sat down with president trump on friday and offered him quite a bit. he made an offer for a wall. i said if we do full d.r.e.a.m.ers, we'll give you the deal and he basically agreed. so we were close. then he pulled out and backed off. so now i've taken the wall off the table because they backed out of that deal. and then he shut the government down. >> okay, so push for immigration reform appears to be back to the drawing board. the senate top democrat withdraws his wall offer and the president treats about cryin' chuck. that's all next on morning joe. why create something this extravagant? 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>> i think it's got to be baffling, if you're inside the government at this point. you're asking why would you do this for america? if you're the chief executive of the united states, and for all the leaders in congress, why would you want to erode u.s. institution? so what you see, we've talked about this before, joe, on the show, what you see with russian influence and russian active measures is they don't create the narratives, they just piggyback on it. when they see a u.s. institution under attack by other u.s. elected officials, this is a home run for them. they don't have to create the narrative of dissension, they just amplify it. but over the grandeur scheme of this, we're also talking about an attorney general and a president that have taken on a crime and justice sort of approach, and yet the main arm to do that across this country is the federal bureau of investigation. these are the people taking on the opioid crisis, they're the ones dealing with terrorism around the world. white collar crime. and you're eroding their ability to do their job. if you're an fbi agent in trump country going out today and trying to run a lead or build an informant or do anything to enforce a good standard of justice, you just got your job made significantly harder by the leader of your country. and that will have lasting effect on this country. >> we're going to be following this part of the story throughout the morning. but now to this senate majority leader chuck schumer said he's taking funding for the wall off the table in upcoming daca negotiations. schumer said he had offered to give trump $25 billion for the wall. and border security. in exchange for a deal on daca. but deputy white house press secretary hogan gidley said the offer quote never existed. president trump hit back at schumer in a tweet last night. saying quote cryin' chuck schumer fully understands especially after his humiliating defe defeat, that if there is no wall, there is no daca. we must have safety and security together with a strong military for our great people. joining us now, former treasury official and "morning joe" economic analyst steve rattner. and joe, he had a skiing accident. he's on crutches. >> oh no. >> just like our trip to the e.r. this weekend, he was at a ski slope and then the e.r. >> can i tell you my funny story. i get to the bottom of this hill with my bad leg, i end up in this clinic in jackson hole, wyoming. the doctor comes in and looks at me and says, i know you from somewhere. >> is that good or bad? >> and he said i know you from somewhere. and i said only if you watch a lot of cable news. and he says you're the chart man. you're the chart man. so there are chart watchers in jackson hole, wyoming. >> thank god, and i'm sure they gave you special care because your charts are amazing. and also with us white house correspondent for pbs news hour. yanish and the commentator for the "washington examiner" and american enterprise institute tim carney. good to have you all on board. one of those mornings there's too many dots to connect and it's best we don't. just put the dots out there. >> it's very interesting, donald trump tweeted out what he tweeted out yesterday that cryin' chuck knew that he lost if you look at a nbc news survey, 58% of americans believe that either donald trump or the republican congress were responsible for the shutdown. 39% believe the democrats were. so you add up congressional republicans and president trump, the republicans on that list, far outnumber the democrats. but you know, let's go to, let's go to our ski expert first. and just, steve i'm going to ask you, why would chuck schumer feel the need to say what he said yesterday? it didn't seem to be especially constructive. i know he was getting pressure from his base. isn't that the point, when they ask you, to say you know what? everything's on the table. we want to move towards a negotiation. everything is on the table. instead of -- you know, sounding a bit petulant like the president and saying "i'm taking it back." >> the democrats are in a somewhat awkward position. they are divided. you've got these ten red-state democrats up for re-election, who are very worried about their future. and you have a bunch of centrist democrats who are saying we don't think shutdowns are good for the country, good for anybody. and then you have the progressives who want to shut down the government essentially permanently until they get daca. and so it's really been a tough, it's been a bit of a tough row. so i think the reason he took that off the table was because essentially now he wants to start the negotiations from, from zero rather than from already having given up the wall so by bringing this back, he's got something else, another chip to try it play with the president. what i worry about is if the sentiment in the democratic caucus against shutdowns persist, then even when you get to february, the next deadline, that the democrats may not really have the firepower to stop the president on some of these issues. and i, so i think the democrats are on their back foot at the moment. >> tim carney, it's going to be tough enough getting anything through the senate, we hear that maybe you know, there will be 65, 70 senators voting for a bill. but that means absolutely nothing in the house. if you don't have tough border protection. if you don't have what the president wants with the wall. and the only way this thing gets dragged through the house of representatives and passes, would be if donald trump pressured them, right? >> that's right. the wall is everything for donald trump. and that's, i think why chuck schumer wanted to take it off the table. because for a huge part of his base, opposing donald trump is everything. so if the wall is in there, i have trouble seeing house -- now of course when i say the wall, that's a vague concept. and we can get into that later. if a satisfactory wall is in there, i have trouble seeing house republicans bucking donald trump's main campaign promise. and there's enough of the sort of lobbyist base in both parties that wants as much relief for illegals, including daca, as possible. so i think separating this out and putting a small immigration deal on the table outside of government funding has a real chance of passing. and that schumer is in a tough situation where he also wants to pass something that does daca. but he knows that he has a base out there that their number one priority is do not give any wins to donald trump. and a wall would be that win. >> so tim, you sound a bit more positive than noah rothman and other people on the set yesterday in that if there is something that's at least called the wall, that donald trump can go back to his base and say -- i g got that wall i promised you. then you believe, like i believe, that donald trump will get that passed through the house. >> yeah, and i mean there's other, there's tons of immigration provisions that could be put in. but at the "examiner" we've editorialized repeatedly, let's make this a small deal and this is kind of how the senate is supposed to work, too, right? don't have it all be legislated on government shutdown. you want something on immigration, these other guys want something on immigration, rather than it just be a republican bill with some democrats or a democrat bill with some republicans, both sides look at it, maybe these guys don't go along, these guys don't go along, but both people have something to offer. they use that to get it across the finish line, rather than using the threat of a government shutdown to get it across the finish line. >> help me understand this. the entire point for democrats inserting immigration into the government shutdown conversation was to get protections for daca recipients. they didn't happen, but they got a promise from mitch mcconnell that there would be a conversation about that and they could work out some kind of a deal. we know, as the president has said over and over, the president says new york city wall new york city deal there has to be border security if you want me to keep daca recipients in this country. so if you take the wall off the table, chuck schumer, where's the deal? >> essentially right now, there is no deal. yesterday i talked to white house spokesperson hogan gidley who told me that schumer's offer to the president was like hogan telling you he was going to give the readers of pbs news hour $1 million. so he was saying that schumer never made an offer he was talking about, an authorization, but nota a real appropriation and that the idea that the democrats were making two solid points when they shut down the government. said that they were tired of having really short-term spending deals and they really wanted the daca fix to be included in that. they didn't get either one of those things and they reopened the government. so it leaves the democrats essentially looking weak, even to their own base there were so many emails that went out from liberal groups saying the democrats took a bad deal. opened the government too quickly. and with the white house saying essentially that the president is not going to stop until he gets $33 billion in border security funding, including $18 billion for the wall, i don't know how this is going to continue. >> hey, tim in the past five or six days we've had endless discussions about daca. we've seen the government shutdown, we've seen increased amounts of verbiage from the white house and from the senate about this issue. and i can't think of a time in the recent past, when we've had proof positive that the system has become so dysfunctional, so broken, that you have an issue, daca, where 90% of americans want it done. where most republicans, sensible republicans and there are a lot of them, want it done. we're nearly all democrats want it done. and it might not get done. >> no. and i think it's a very good point, especially because the spending bills, there's a super majority in the senate that agreed with those, every provision in the continuing resolution. including long-term extension of children's health insurance, federally subsidized children's health insurance. why wasn't it getting passed? because the senate has gone from being 100 individuals, they thought of themselves as we're all sort of scholars, this is a roman senate. to instead being two individuals, and those two are chuck schumer and mitch mcconnell. that the partisanship that has, that, the party leaders control the senate nearly entirely. you throw in the fact that everything gets filibustered. they haven't nuked the filibuster on legislation yet. so instead of there being a situation where let's have an amendment vote. let's have a debate. a debate and an amendment vote? that's the last thing these party leaders want to trot out there on the floor. because a tough vote is the last thing one of these vulnerable 2018 democrats wants to have to face. so i think it's broken. the government. mostly you can point to the fact that the u.s. senate is broken. it does not function as the senate was thought was going to function. >> let me say a couple of things. mike on your point about the last time we've had this on guns. we had a 90/10 issue on guns and we couldn't get anything done. it's odd to me that the elected representatives of the people don't seem to want to do what the people want them to do. secondly on the current situation, there's an easy, there was a trade. there was a deal, right, between the democrats and trump until he reneged on it. which you do daca, get money for border security. trump request call it a wall, the democrats can call it enhanced border security and life goes on. so i think there's a deal out there. not withstanding what chuck said yesterday, which is all part of the negotiation, which isn't that hard to do. think what we learned the other day which is troubling to those of us who want to see daca get done, who have concerns about the wall is that the senate democrats are not actually completely united. they're not completely following chuck schumer. they're worried about their own re-election prospects, they're worried about their perception. i think the challenge for the democrats is going to be holding together firmly enough to get a good deal out of the president. i think that's going to be the give and take and that's what we should watch for in february. >> you know, i agree with tim, mika, that there is a deal to be made here. and it's a pretty easy deal. if you can drain the emotion out of it. on one side, you've got daca. it's a 90/10 issue. and unlike the gun issue, even though we talked about it for months and months and months, there are just some members in the house and the senate, the republican party, that will never, ever negotiate. and there's nothing you can trade for that. daca, you got a issue. you are going to have the next two years, pictures of young adults being dragged out by i.c.e., dragged out of the country, there is going to be these nightmare scenes that's complete gut republican standing. it was out of detroit. last week of a 39-year-old being ripped away from his family. those are the sort of things that when ronald reagan would see them on evening news, it would drive his aids crazy. that's why ronald reagan won 49 states. that's why i think it makes a lot of sense for republicans, okay, we'll give you daca and you give our president the wall of what ever that maybe, it maybe a couple of miles of barbed fence or whatever they want to call the wall, they call it and everybody wins and they move forward. this should be easy. >> if it is not, it is time that republicans address that they have a much bigger problem on their hands with this white house. >> tim carney and allison, thank you both. still ahead, we'll talk to joe manchin credited with ending the government shut down. can he help prevent another shutdown in two weeks. 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tripadvisor now searches over... ...200 sites to find you the... ...hotel you want at the lowest price. grazi, gino! find a price that fits. tripadvisor. top of the hour, there is new reporting on multiple fronts this morning, all pointing to a special counsel drawing ever closer to the white house. an nbc news exclusive has new details of the stunning fall of michael flynn. we learned that jeff sessions spent hours last week answering questions in the russia investigation. and the washington post details an encounter in the oval office where president trump probed the acting fbi director about his political leanings. welcome back to "morning joe," it is wednesday, january 24th. we us, we have clint watts and michael schmidt and ari melber and department of defense now on nbc news national security analyst, germany bash and former u.s. attorney, joyce vans. we'll get to all those developments regarding to russia. first, the fallout, president trump and republican allies continue to allege biassed at the fbi. the chairman of the senate homeland security, republican ron johnson, released more texts belonging to peter strzok for despairing trump with messages with lisa page where he's romantically involved. last night at 10:54 p.m. eastern time, president trump tweeted, "where are the 50,000 important text messages between fbi's lovers, lisa page and peter strzok? blaming samsung." we'll cooperate any investigation. that's the second time trump over stated the number of texts with the justice department says that's the overall number of messages found on fbi servers. regardless, republican chairmen in the house and senate say they see evidence of conspiracy in the white house. >> we are missing texts running from when the russia investigation was launched right up to the point where you have the mueller investigation being launched. >> what's missing is important but what's also there is important. it is manifest biassed not just against trump but against his kids and business interest. there is a tax where they hope that the trump hotels fail. that's a level of bias that you rarely see. >> what this is all about is further evidence of corruption, more than biassed, corruption at the highest level of the fbi and secret society. we have an informant talking about a group that were holding secret meetings off site. >> there is so much smoke here. >> a secret meeting off-site of the justice department and you have an informant saying that? >> correct. >> is there anything more about that? >> we are digging into it. again, this is bias ambassadcor at the highest level of the fbi. robert mueller used to run the fbi. he's in no position to do an investigation over this kind of misconduct. i think at this point in time we should be looking at a special counsel to under take this investigation. >> filling in for president trump, ron johnson, joe? >> it is unbelievable. he actually did, we talked about another senator from wisconsin that would throw out outrageous allegatio allegations. that's what ron johnson was doing right there. clint watts talking about a secret society that was planning -- basically, planning a coup against the president of the united states. asked if he has any more information and he says we'll have to dig into it. i wrote down other things. we have corruption at the highest levels at the fbi. a secret society trying to take down donald trump and i told you already that fox is declaring that war must be declared on the fbi and the justice department. this is breathtaking all because donald trump was called to testify by mueller. i cannot even begin to imagine the danger, not only to the fbi but our law enforcement officers and this country in general. >> it is really fascinating because it is the same techniques of subversion used by authoritarians when they're trying to under mind any sorts of resistance when they have in their power. we are seeing congress taken part in this as well. what we have seen them do with these text messages, for example, they take some to support their stories. they don't name what the secret society is. it is been called deep stated and terminology changes but they never pin it down with evidence. what will be fascinating is the fbi will disclose this investigation. this will all ultimately come to the surface. never in the line of attack are we seeing americans being put first. what's good for america is reenforcing institutions. if there is something wrong at the fbi, it is been corrected. we should know the investigation of the first thing that mueller did. and these interviews are continuing to pick up. we see the gop yelling louder and louder in this vein and the intensity of the investigation is going. >> and fox. >> and jeremy bash, clint is exactly right. these personal texts were sane. they were taken off the investigation. there is no participation by them in the investigation. of course, the republicans and those on fox that are calling for the destruction of the fbi declaring war on the fbi saying it is corrupted at its highest levels. there is no evidence in that and there will not be any evidence in that and at the end of the investigation, my question is will these people come back and circle around and apologize for the men and women dedicating their lives and give their lives in this country? >> cyeah, i have to stick up wih the men and women of the fbi, joe. they do defend us at the front line and investigating terrorism and counter intelligence threats to our country. what we have seen here is that the war against the fbi is really a war launched by three elements. one is the russian federation and the second is the trump organization, i hate to say is the third is by some members of the hill of congress who wanted to fend the president at all cause. i predict joe and mika, the next 24 hours, you will see a trending hashtag used by russian twitter box that says where are the messages and the same way releasing the nunes memo -- >> lets, lets tell jeremy explain if you will how the freedom caucus and their hashtag that they were promoting release the memo was actually picked up and promoted by russian intel agencies. >> that's right, senator dine an feinstein and adam schiff sent a letter which they laid out this evidence shows that a think tank have reviewed the twitter activity of russian linked bots automatic fake accounts and released the memo hashtag was the top trending twitter hashtag by those russian linked accounts. it was used a hundred more times than any russian linked twitter accounts. this is fuelled by the russian federation. >> ari, we saw in that series of clips that we played of republicans speaking on capitol hill yesterday about the fbi, the arguments have laid out exclusively. have johnson say that bob mueller used to run the fbi. how could we trust him to investigate based on what we said that the fbi have been corrupted. the congressman from texas say on fox today. i am not saying that actually happened, it is something that we should look into. they're soften the ground right now. consider the source and don't trust it. >> i don't know if they are buying their tinfoil in bulk. there is plenty of tinfoil has to go around. we have seen it before in a variety of context. the bad news of the trump white house is this looks like the o.j. defense. so you attack the investigating agency. in the o.j. defense, there was evidence by the way. that did not change the under lining evidence in the criminal trial. this is a trillion probe. so even if you want to grant the most open mind to the concept that there may be some where of a conflict that needs to recuse. mcquaid is getting a lot on fire. he did by the way recused from clinton related matters because his wife was involved. it is not a criminal thing but even if you grant that, it does not get you to where they want to go which is to try to change the under lining facts that are under review. that's why they are interviewing on obstruction and ron johnson gave the game away. x, y, z, text forttinfoil and t means no one can run the investigation. >> republicans, i guess is ta n taking an oath. speaking of mcquaid, there is this news last night of mcquaid. he was influenced by donations to his wife's virginia state campaign three years ago. while he served as acting fbi director after the firing of james comey, president trump summoned him to the oval office and asked who he voted for in the 2016 election. mccabe considered to replace comey says he did not vote. he spent two decades of the fbi found the conversation with trump is disturbing. both the white house and the fbi declined a comment. i want to take it to joyce vans if i could. why would this be an interesttof mueller. >> this is a stunning investigation even though the president and the vice president are not required to avoid political activity. this is an unprecedented kind of conversation to have with one of the president's campaign employee. mueller and his team will be interested in pushing down on this investigation to learn whether or not it is some indication of the president's state of mind. was he so involved in the political context and was that relationship, part of his effort, in effort to struck the fbi investigation. deciding whether or not he was someone in essence sign up for the president's team. did this contribute to this overall state of mind and at the end of the day, bob mueller's obsession of whether obstruction occurred? >> you do have the special counsel investigators looking into obstruction charges against the president and his people. >> look, there is a lot of stuff that mueller needs to look at in that area. we know far more that leads us to question whether the president obstructed justice than we do of his connection to russia. there is so many different things from the comey firing to his demand of loyalty and long time obsession with sessions' decision to recuse himself and who was overseeing the investigation. there is a lot of things in that area that raised questions. if you are bob mueller, you need to turn over every single stone to make sure you have to look at every matter. that's what comes up. a lot of interviews have gone into see the special counsel. >> so michael schmidt, you have republicans on the hill that's trying to attack the fbi and trying to under mind the fbi and talking about quotes, secret society where people go off and destroy the trump presidency. you have devin nunes during the back and forth with the white house several months ago. if you are talking about trying to under mind an investigation against the president, can't and i will open it up to everybody as well as you, can mueller look into communications between ron johnson and devin nunes and communications between these people who are openly attacked to investigators. is ron johnson now putting himself in the middle of an obstruction investigation by doing these? are the other people doing the same thing? i will ask you and i will ask joy vance. >> i am not sure. my guess is mueller would not want to go near something like that. there are legitimate questions about how the fbi handled the the investigation and things that went on. the problem is because there is not bipartisan support for a true investigation on capitol hill, every time there is a question that's looked at at a partisan lens, we are not going to get as large view -- the republicans are not going to buy to both parties trying to work together to get to this matter. >> joyce, wall street journal has struck saying -- wait, i am not sure if i want to be apart of mueller's investigation. >> yeah, that text messages is really interesting. it certainly put to rest of this idea there is a deep state inside the fbi. look, i agree over sight of the fbi and what they did is fair game and everyone in the government needs to be transparent and open up their processes. with that said, mueller's job is to be put together all evidence of anyone who may have been involved in obstruction efforts. he will follow that evidence where it leads. he will be looking at this core of concerns lodged in the white house and he will have to make a decision when he has all the facts together, were there criminal acts, is it so different that it should be prosecuted. who is it involved? is it one person or one conspiracy. looks like what we are hearing of all the interviews of the point of this investigation at least to those obstruction charges trying to decide was there criminal conduct and who was involved and if so, do we need to file charges? >> jeremy bash, there was such a fire host reporting of this special counselinvestigation, i want to sit through with you because you are so good at it. comey had an interview and bannon is on schedule to be interviewed and salley yates and mike pompeo and the list goes on and on. which of those strike you the most significant? >> none are surprising. they're all natural witnesses. why when the president asked to engage in the ethical conduct of staying in the investigation, the president had no business doing that. the other reporting that i want to touch on willie is the investigation a year today. the lead of that story that fli flynn did not give an interest of the fbi. that means when the president fired yates and invited comey for the candle light dinner and told comey to drop the investigation, he knew that flynn had met with the fbi and lied to the fbi. jeremy bash, joy vance, thank you both and michael schmidt and ari, stay with us. a new poll shows 39% of the people blamed democrats and far more pin the blame on congressional republicans and the president. we'll run through those numbers straight ahead, you are watching "morning joe," we'll be right back. now you can join angie's list for free. which means everyone has access to our real reviews that we actually verify. and we can also verify that what goes down, [ splash, toilet flush ] doesn't always come back up. find a great plumber at angie's list. join today for free. i sat down with president trump on friday and offered him quite a bit. i said if we do dreamers, we'll give you the deal. he basically agreed. and then he backed out that deal and he shut ts the government down. >> senate minority chuck schumer says president trump is ta says he's taking the wall off the table. deputy white house press secretary hogan refuted his claim saying the offer never existed. president trump hit back at chuck schumer at a tweet last night. "crying chuck schumer fully understands especially after his humiliating defeat that if there is no wall, there is no daca. jo joining us now is rick tyler and the professor at the university of texas, and steve and michael is back at the table as well. i feel that everyone is bidding on a house on a tv show or something. >> i don't understand -- yeah. i mean a couple of things i don't understand. donald trump cannot read or cannot at least add numbers. if you look at the poll, nbc survey monkey poll, 56% americans blamed donald trump and only 39% blamed the democrats. you add those two bottom numbers up. republicans get 56% of the blame and congressional democrats, 39%. that requires everybody to put up those numbers. the second thing i don't really understand is why chuck schumer would go out there and say i am taking the wall off the table. i understand that may have been good for his base but he needed to say to his base. hey, just stay calm. we need to get the deal done, just trust me, i am working this thing right now. whep when he says that, he will get the exact response that he got from the president of the united states. the spokesperson, i think it was counter productive for him to do that. victoria, for liberal activist to that are pressuring chuck schumer on this wall issue, why not just give them the wall which we know is not really going to be a wall. it is going to be basically something made out of -- paper clips and as i say 30 ball burying. it is not going to be a berlin wall, it is going to be something that allows donald trump that i built the wall and on that, you win daca. should that be easy for democrats to do? >> it should in theory, i view the wall as an expensive useless toy but it is part of donald trump's tantrum. he knows he has to give it to his base. i think that's a small price to pay in humanitarian cost and economic ones to give him the juan and we get the dreamers. if we push close to 1 million dreamers in the shadow. that's going to be a multi billion economic hit here for us in the united states. it is a small price to pay, i don't like the idea of it but sometimes you got to do the horse trading. >> right. >> rick tyler, is this an easy horse trade to make in you got daca and some conservative congressional districts, i understand that, but it is an issue around the rest of the country. why not if you are a democrat say okay, we are giving his wall whatever that is and in exchange we actually do a deal on daca and maybe we expand it out to get the dreamers in as well. that seems to be a win-win for everybody. >> you would think so, joe. chuck schumer puts all his cards on the table that's why you saw him withdraw yesterday. he gave donald trump essentially what he wanted and still nobody knows what donald trump really is. donald trump and chuck schumer wanted to get a deal, they went back to their respected camps and got pressured. everybody wants to solve daca. the republicans want something in return for it and that's border security so that we don't have future daca. i think that sounds wholly reasonable. i really don't think you need a wall per se, we need border security. the way to keep people coming over from mexico to the united states is no t tt the wall, it cut-off the incentives of getting them paid. so there is a lot of things you can do. one to require employees to only do electronic transfers to their bank account when they pay them. it is simple. people go to the atm. you would be surprise quickly highw how people come to compliance. >> victoria, do you see where it is happening given where this issue sits at our country of a 90/10 issue. is there a negotiation, is there a legal or a lack of a deal that allows that to happen and we have images of that morning and the morning after of children and young people of teenagers being forced back out of the country? >> that's my nightmare, willie, that's the nightmare that i will wake up to if no deal is found. i am optimistic that if the wall that donald trump wants for the wall is given to him, a solution is found for daca. if it is not then i think dreamers are going to be a fair game. when donald trump came in and he changed through his executive orders, a lot of immigration laws of what we saw is he changed the priority system to where non-dreamers are in the same category as being eligible for deportation. if you are a dreamer after march 5th, you are a fair game as someone previously not a dreamer. a month or two months from now, we don't get that deal, that cannot be happening. >> on rick, border security, we all want border security, it is worth noting that immigratio immigration -- believe it or not -- [ inaudible ] >> it seems to me the wall or the border security or whatever you want to call it is an easy part of the deal. it is a straightforward trade where it should be. the harder part is daca and immigration. a simple deal would be daca but then you have republicans who want chain migration dealt with and diversity lottery to be dealt with. that gets complicated. then you have the problem of the house of representatives. you remember 2013 i believe would not pass the senate immigration compromise because there is more hard line. how do you see those politics immigration playing out in the republican party. >> and you referred to the game of eight passed overwhelmingly in the senate. it was not brought up in the house which makes, it actually makes schumer deal with trump sort of meaningless, he's saying -- i am sorry, sure, i will give you a vote in the senate, there is no guarantee of what to come in the house. there is been a negative migration to the united states from mexico. that illustrates my point. people come here because of the money and opportunity and when the money and opportunity are lacking then people won't come. so i think to get rid of the economic incentives would be a much more effective way to keep people coming here illegally than a wall. though i do agree that we need border security. the democrats, simple to say and i think daca should pass because these people who are here who came, their parents brought them here illegally did not do anything illegal on their own and the government have looked the other way and all these years so we need to do something to fix that. we don't want to create a situation where we continue to have people come in and we have to solve the problem over and over again that happened in 1986 when we promised we have border security and we won't be dealing of immigration, that actually never happened. these are all reasonable things to get done. what you are seeing is power politics, interfering with good policies. >> rick tyler and victoria, thank you both for being on this morning. ahead of our next hour, we'll talk to our former mexico president, he joneins us onset this hour, on the fast moving development of the russian investigation. democratic jim heinz joins us on the table next on "morning joe." 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ask your doctor about taltz today. and go to taltz.com to learn how to pay as little as $5 a month. two students are dead after a student opened fire in kentucky. shots rang out before 8:00 local time when the student entered the school. the suspect was taken immedia immediately by the first officer on the scene. >> i see fire aaw fire and i tu around and ran into the weight room. it was just scary -- just scary. >> authorities have not publicly identify the suspect but they say he will be charged with two counts of murder and several counts of attempted murder. so far no motive have been given for shooting yet. another school shootings and one in texas. >> it keeps ongoing on and on. it seems unfortunately that too many republicans and especially donald trump remains silent when that happens. yesterday is a great example, americans want to hear from their president. they want to be sued and told everything is okay especially those people in kentucky, they got words of condolence from the canadian president before the president of the united states. the president of the united states tweeted out a lie of 50,000 texts of lovers from the fbi of a misleading tweet. more importantly than that, why is the president of the united states doing that instead of focusing on his job which is not only be the commander in chief but as we learn from ronald reagan and others the comforter chief. >> it is an easy thing to do. that was a decision not to comment about that. he obviously knew about it and briefed about everything. i don't know because he does not want to be seen as sympathetic of gun control advocates and his motive motives. again, you have teenagers running inside their schools and teachers running to save their lives. >> children are being gunned down wild in school. this has happened before where people are gunned down and he remained silent. when someone committed an act of terror then he immediately tweeted furiously it is terrorism even if it is not or even if he had no clue that it is terrorism. you look at the number of school shootings and the number of americans that are killed by gunfire, the act of terror in this country, he's obsessed on that instead of -- and not calling for gun control, i am calling for human decency here. he cannot bring himself of being human decency when students are being gunned down. >> joining us now is jim himes. congressman, it is good to see you this morning, thanks for being here. >> so much ground to cover on this. >> good morning. i want to ask you something of what we have been talking about this morning. this is a pattern that we have seen overtime but especially yesterday from your republican colleagues planting the seeds of doubt of the fbi and its competence and its intentions and suggesting there is malicious intent here that there is some kind of secret society that they put a meeting outside to plot the take down of president trump and his white house. what do you make of comments like that when you hear from people like ron johnson? >> it is disturbing. there as campaign to de-legitimatize. people like ron johnson are coming up with mad conspiracy theory of secret society. devin nunes producing memos and big rumors. the president said it is a hoax. you would not tell stbannon noto come before the committee. instead, they obstructed the investigation by congress by claiming all sorts of executive privilege. there is been this campaign to de-legitimatize the fbi if and when mueller comes up with an indictment, they can say hey, mueller was compromised. >> when you look at our front story today that you have ongoing efforts by the president of the united states to go ask for a political information partisan loyalty by what was then. the acting fbi director, so comey is out over russia by the president's own words and the new guy is questioned by his republican loyalties. do you view that as ongoing evidence to obstruct? >> with respect organization that should be political. >> let me hang it up there. inappropriate is the word that's used and i think the viewers understand inappropriate. the question is, does this report have the evidence to intent of obstruct? >> this report does not trouble me as much as the president looking at jim comey who ultimately reported to him and said i need your loyalty or asking somebody's political affiliation is beyond inappropriate. it shows state of mind but i am not sure in of itself is evidence of obstruction. >> what do you think of the most significant development of the russia investigation given the fact that mueller focusing now of what appears of the departure of comey and flynn. >> it points out of two things going on, there is ongoing investigation of the fbi and two congressional investigation around the nature of contacts with americans on the trump campaign of russia. we know george papadopoulos and flynn and don jr. , there was contact, whether it is collusion, we'll decide down the road. you got the parallel tracts that we were talking about, did the president or the president's people tried to obstruct the investigation. there is a way to deal with an investigation which is everybody goes in front of the investigators and lets tell them everybody and get past this. don't let people go in front of the investigation, when you get worried of the investigators, you start slamming down. >> undermining their credits. >> there is a process issue which you have been speaking to and there is a stanubstance iss of what happened at the end. lets assume of what we read and heard of james comey about this and that is true. lets say he did told comey to take it easy on flynn and all of that stuff. what is the appropriate remedy in your mind? >> if there is obstruction -- >> well, i am asking you if there is obstruction, what do you do about it? >> i am on the committee investigating and asking this question, i am not going to say it is clearly obstruction, there is meddling points in the direction of possible obstruction. if there is a case to be made about obstruction, that was one of the articles impeachment against richard nixon. if the president engaged in an attempt of the most severe attack that we have against our democracy at the time, remember it is have very very -- >> here, we have he says she says and i don't know how the movie ends. we have the effort of ron johnson and devin nunes, anybody that do not have the the information or the facts milwaukmaking an attempt to sliam the fbi. that's going to create uncertainty of the minds of the american people. >> is the funny part here that we also have tapes but they were made by lester holt? i mean the president said something on tv that if it were a secret tape and -- we found the secret tape of him saying russia was on my mind when i found the fbi director. >> it is kind of a good point. >> don jr. meeting where he's looking and excited of getting dirt about hillary clinton, yeah, it was all about e-mails. maybe they're not tapes. >> it is tapes and it is called reality tv. we got them. nbc joe. >> and following up on ari, we are talking so much of what bob mueller may be digging into and all the investigations and depositions and all discoveries that he's going through. my god, with the lester holt's tape, you have his intent, you laid out clearly and with the sarah huckabee sanders' statement the next day, where he wanted to finish and finally the smoking gun of all smoking guns the white house released a conversation between donald trump and the russian foreign minister and the russian ambassador of the united states. congressman, you got the president of the united states saying hey, i got the pressure off. this guy is a real nut job. i fired him. so now the pressure is off on this investigation so guess what? donald trump colluding with the government of the two people that were inside that oval office. >> it is kind of obvious, is it? >> well, i am not going to say it is obvious. >> at a minimum of everything you cataloged, we need more discipline of how any campaign or transition makes contact with any organization. again, the idea that the idea that there is never anything there and joe, you listed all the contacts. t >> and the next level that we just described here of the three pieces of evidence is trump on tape going, look, i am going to obstruct justice, okay? everybody listen, lester, are you rolling? i am going to obstruct justice. >> mika, i am telling you, follow up on what ari said, this is the sort of thing when i was an attorney and we were digging through old depositions or we were digging through discovery or digging through documents, this would be the sort of thing that you would pull out of a thick file. >> right. >> and you would run down and going to your senior partner and say, i found busted. except for the fact he did it in plain sight. he admitted it in plain sight with lester holt, with the russian foreign minister, with the russian ambassador of the united states, and then had his white house spokesperson do it. >> all right. member of the house intel committee jim himes you didn't say that, we did. thank you very much for being on the show this morning. still ahead this morning, senator joe manchin joins the show. 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( ♪ ) the president over the last several months lost confidence in director comey and most importantly the rank-and-file of the fbi had lost confidence in their director. >> i can tell you also that director comey enjoyed broad support within the fbi. and still does to this day. >> well, i can speak to my own personal experience. i've heard from countless members of the fbi that are grateful and thankful for the president's decision, and i think that, you know, we may have to agree to disagree. >> last year then acting fbi director andrew mccabe andrew mccabe directly contradicted sarah huckabee sanders over morale at the fbi. now "the washington post" reports that when president trump brought mccabe to the white house for a get to know you meeting he asked mccabe who he voted for in the 2016 election. we wonder if that meeting happened before or after mccabe's testimony. either way, it's another potentially interesting data point for the special counsel. we'll speak to the reporter who broke that story. we're also following several other key developments in the russian investigation, what bob mueller wants to ask the president, new names added to the list of those cooperating in the probe. all while to be republicans on capitol hill continue to say it's the fbi which needs to be investigated. a very busy hour of "morning joe" is just ahead. we are the tv doctors of america, and we may not know much about medicine, but we know a lot about drama. from scandalous romance, to ridiculous plot twists. (gasping) son? dad! we also know you can avoid drama by getting an annual check-up. so we're partnering with cigna to remind you to go see a real doctor. go, know, and take control of your health. it could save your life. doctor poses! dad! cigna. together, all the way. why create something this extravagant? or make a back seat that feels nothing like a back seat? why give it every feature you could want, along with a few you didn't know you needed? it's simple. you can build a car, or you can build a cadillac. come in now for this exceptional offer on the cadillac ct6. get this low-mileage lease on this 2018 cadillac ct6 from around $549 per month. visit your local cadillac dealer. i was going to fire comey knowing there was no good time to do it. and, in fact, when i decided to just do it, i said to myself, i said, you know, this russia thing with trump and russia is a made up story, it's an excuse by the democrats for having lost an election that they should have won. >> quote, i was going to fire comey. i said to myself, you know, this russia thing is a made up story. this morning and for the foreseeable future we'll hear a lot of stories about russia none of which are made up. we have an nbc news exclusive with significant developments on the growing number of top officials now cooperating with bob mueller's investigation. the "new york times" has reported attorney general jeff sessions was grilled for hours last week. and a piece in "the washington post" that says the president asked the acting fbi director how he voted in the 2016 election. it all ties into this huge headline, bob mueller now seeks to question president trump about michael flynn and james comey's departure. we have the three reporters with those bye lines and each of those big stories right here on "morning joe". national political reporter for "morning joe," "the washington post" reporter and michael schmidt. also with us nbc contributor mike dabarnacle. it was a day of revelations in the russia probe with suggestions that special counsel robert mueller is closely examining whether president trump obstructed justice when he fired former fbi director james comey. "the washington post" reports mueller is seeking to question president trump in the coming weeks about the firing of comey, and former national security adviser michael flynn. comey was interviewed by the special counsel late last year. a source close to nbc news focusing on memos comey drafted after private meetings with the president. comey testified trump asked him for loyalty and to let go of the fbi's investigation into flynn's contact with russians. the president has denied asking comey to pledge allegiance to him. and last month tweeted that he never asked comey to stop investigating flynn. yesterday the "new york times" was first to report that attorney general jeff sessions was questioned by the special counsel's office last week. a person familiar with those discussions told the "times" that the special counsel appeared most interested in asking questions about comey and flynn. yesterday president trump was asked about the special counsel talking to a sitting cabinet member. >> thank you. no, at all. i didn't. but i'm not at all concerned. thank you very much. >> so there we are. joe? >> yes. so here we are. michael schmidt it seems that the focus based on your reporting, the people you spoke with had to do with donald trump actually obstructing justice in the investigation itself. explain. >> there are two big buckets of mueller's investigation. one is the russia question and one is the obstruction bucket. the thing is there's a lot more in the obstruction bucket that relate to the president's conduct than there is on russia. there's not a lot of things we know about trump's efforts to collude with russians but a lot of questions about different things that he has done in office, whether it was a comey firing, whether it was trying to get rid of sessions. all these things, the president's long time obsession with loyalty, these are the questions that mueller really has to drill down on and things that current and former white house officials who are being interviewed by the special counsel are being pressed about. >> i was going to carol lee. this is the one year anniversary of michael flynn's interview with the fbi. you have fresh reporting just this morning about what he said about it, what he didn't say about it, when the white house found out about it, and what the implications might be for how they described that series of events. >> yeah. what we wanted to do is go back and look at this significant moment and see what else we could learn about what happened at that time because if you look at it, it's the first moment where the russian investigation really knocked on the white house door. it was only four days in, but there was a very small amount of time where it wasn't as inside the white house as we're so used to now. what we learned is that michael flynn did this interview with the two fbi agents and didn't tell anyone. he didn't mention to anybody this had been put on his schedule. he seemed like overly confident in the interview. he didn't take a lawyer with him typically the national security counsel would be there. he didn't have his personal lawyer. he didn't say anything to anyone including the president. they learned about it two days later when sally yates showed up two days later to warn that michael flynn could be vulnerable to blackmail by the russians because he wasn't honest with his conversations with the russian ambassador. this set into motion a number of events after that. we know that then the president invited james comey over to the white house to have dinner. you know then later flynn remains in his post and still no one really understands exactly what went into -- what happened in that fbi interview. we know a source told us that he didn't ask michael flynn if he was truthful to the fbi and it was only later after he already left they got an indication that he had lied. so, if you look at that moment -- then ironically this interview with michael flynn was set up by mccabe's office and now he is, you know -- it's all kind of come full circle because he's in the president's cross-hairs at this time and we're seeing this ramping up of the president's frustration with his own justice department. >> then a new development late last night about andrew mccabe andrew mccabe, the deputy fbi director has been heavily criticized by president trump who alleges that mccabe was influenced by donations to his wife's virginia state senate campaign three years ago. "the washington post" reports that while mccabe served as acting fbi director after the firing of james comey president trump summoned him to the oval office and asked who he voted for in the 2016 election. mccabe who was considered to replace comey said he didn't vote, according to several anonymous current and former u.s. officials sourced in the report. mccabe who has spent more than two decades at the fbi found the conversation with trump disturbing, said one former u.s. official. and one person said that trump-mccabe conversation is of interest to robert mueller. both the white house and fbi declined to comment. this is your reporting, devlin. all these pieces were reporting them at this point. it's very hard to, to try and not come to a conclusion, but when you tie them together, where is bob mueller potentially going with this? >> well, i think the mccabe conversation is of interest to mueller because it gets at one of the basic questions that mueller's investigation is trying to answer, which is what did the president want out of the fbi? what exactly did he want out of the fbi? and as much as the president clearly has a lot of dislike and a long running dislike for andrew mccabe andrew mccabe personally, it also raises the question of, you know, was the president trying to get some sort of assurance as to what the fbi would be doing in a post-comey environment. >> mike barnacle. >> devlin his long stand iing dislike of mccabe -- >> this stems from in the late days of the campaign it came out that andrew mccabe andrew mccabe's wife ran for a state legislature seat in 2015 as a democratic. for that race because that race was in virginia she got a lot of money from political action committee run by terry mcauliffe. terry mcauliffe is a close ally of the clintons. basically when the president, then candidate trump heard that he started attacking mccabe on the stump and what's clear, you know -- what's clear from the president's tweets and what he does in private is that he has never let go of this ani mrmus mccabe. >> clint watt let's bring you in here and try to put some of this together. i've been writing down notes, because there's so much going on here. and there's so many things that are outside the norms for a president and his allies who are now at war with the fbi. you have, of course, new news donald trump goes up to the acting fbi director and says how did you vote. extraordinarily inappropriate. does violence to the constitutional norms and the rule of law. he asked comey, remember, for the loyalty. he then asked comey to drop the investigation of his national security adviser after he admits that he knows that his national security adviser committed a crime by lying to the fbi. then he fired comey. then if you look at what happened yesterday and i really want you to talk about this, this is the most troubling thing. the republicans now are so desperate because they see that donald trump is going to have to go and actually tell the truth, try to tell the truth for once or fall into what his associates call the perjury trap. republicans are talking about this secret society inside the fbi. they sound like crack pots, you know, that bill buckley kicked out of the conservative movement back in the early 1960s. the ill lilluminati, free mason harry potter all because of an fbi agent who sent text messages to a friend and we have the "wall street journal" this morning, that same fbi agent was hesitant to join robert mueller's team because quote, my gut sense is there's nothing there. and yet there is a declared lou dobb said it, a declared war from the right on the fbi and the justice department. >> yeah. it's absolutely baffling why you would want to destroy a u.s. institution. donald trump has learned nothing after the firing of comey. we saw the triggering of the special counsel based on the firing of comey and then he walks right back to the acting fbi director mccabe and is essentially trying to figure out are you on my team k-i coerce y you, can i push you in a way that doesn't represent the american people very well. every time we see somebody from the trump team or campaign going to get interviewed suddenly there's a rash of gop outrage either about text messages or attacking the fbi as an institution. i don't know how that's good for the country. ultimately it damages our ability to do law enforcement and really push for justice but it's indicative about how this team is playing. >> in this case, clint, they are going after an fbi agent who said he didn't want to be involved in this probe because there was no there there. when they start talk about secret societies inside the intel agencies this is what erdogan did in turkey to go after and persecute the military and his intel services. that's what he did to destroy democracy step by step, piece by piece in turkey. i mean are republicans really going to sit back and allow this to happen. are the board members of newscorp going to allow fox news to quote declare war on the fbi? >> it's a classic tactic of authoritarians. republicans have showed up here on "morning joe" or msnbc and talk about a purge of the fbi, cleansing it so that only those loyal to them can be in charge. that's what we see in the third world. then what we see is discrediting through conspiracy. look for evidence to justify it but leave out evidence to the contrary. >> still ahead on "morning joe" our graphics team is running out of room to show all the officials talking to special counsel. we'll run through them with more of that exclusive reporting. you're watching "morning joe". we'll be right back. over the years, paul and i have met regularly with our ameriprise advisor. we plan for everything from retirement to college savings. giving us the ability to add on for an important member of our family. welcome home mom. with the right financial advisor, life can be brilliant. i'm the one clocking in when you're clocking out. sensing your every move and automatically adjusting to help you stay effortlessly comfortable. i can also help with this. does your bed do that? oh. i don't actually talk. though i'm smart enough to. i'm the new sleep number 360 smart bed. let's meet at a sleep number store. >> we're talking about the growing list of people being interviewed by the special counsel. >> the list of people we got. comey last year. jeff sessions last week. mike pompeo, sally yates. steve bannon later this month and obviously he's looking at mueller for an interview with the president. when you look at that graphic what does that tell you this has reached the highest reaches of government and is knocking on the door of the oval office. >> it has. the thing it says to me is, to go back to what michael was talking about the two buckets of the investigation where you have the obstruction piece and russian piece you can see the number of people being roped into being interviewed and the focus of this investigation, being questioned because of the president's own actions that have nothing to do necessarily with the russia's meddling in the election and whether there's collusion with the trump campaign. so the cia director, he was specifically interviewed because they wanted to know about his conversations and anything that he had to do with the firing of james comey. and so all you see each step of the way president the increasingly expanded this case of obstruction that he essentially created with his own actions and so that's partially what i see when i see the number of people who have been interviewed is there was always a set number of people to be interviewed based on the collusion and mudslideling in the election and then this other group of people because of what the president himself has done. >> michael schmidt while your reporting focuses on obstruction of justice that doesn't mean bob mueller doesn't have information on donald trump possibly colluding with russia. we don't know that at this point, do we? >> no. we have far less clarity into that. the reason why we know much more about obstruction because it all happened since the time that the president was in office. there are all these white house officials that interacted with him. some of it played out publicly. a lot of things that the president has said privately he simply tweets about as well. often we'll be reporting about things about a potential obstruction, we'll find out he did something in private that he simply just talked about publicly. so that's why there's so much more there. look, there's so much that we don't know. we never knew a guy that george papadopoulos would plead guilty last year. it surprised us. i wouldn't be surprised if there was something else to come up. coming up on "morning joe" we're joined live by senator joe manchin. trying to break through the partisan split on capitol hill. >> he had like a talking stick. he had talking stick that susan collins made them pass around. >> your son jack has a passing stick so nobody interrupts him. >> i think that got broken in half by kate the first day. >> was it kate? the west virginia democrat joins the conversation straight ahead on "morning joe". whoooo. going somewhere? here's some advice. tripadvisor now searches more... ...than 200 booking sites - to find the hotel you want and save you up to 30%. trust this bird's words. tripadvisor. you know, in age of trump, clint, things come at us so quickly. it's important to add some context yet again to what's going on right now. you actually have a fox news host calling for war against the men and women of the federal bureau of investigation and calling for war against the men and women, the professionals who work at the justice department. at the same time you actually have a gop senator pushing out murky allegations about a secret society inside the fbi that is plotting a coup against donald trump. and this all happens on the day that they start a hash tag release the memo which russian bots, russian bots start going to push forward hash tag that the freedom caucus is trying to move forward to undermine the reputation of the men and women at the fbi, all on the same day and it's not a coincidence that we find out that donald trump is going to have to testify under oath to bob mueller. how does this look for professionals inside the fbi and at justice who dedicated their entire life to projecting americans from terrorist attacks. >> i think it's got to be baffle field goal you're inside the government at this point because you're asking why would you do this for america? if you're the chief executive for the united states and all the leaders in congress why would you want to erode a u.s. institution. what you see, we've talked about this before on the show, what you see with russian influence and russian active measures is they don't create the narratives they just piggyback on it. when they see a u.s. institution under attack by other u.s. elected officials that's a home run for them. they don't have to create the narrative of dissense. they just amplify it. over the grander scheme of this we're talking about an attorney general and president that took on a crime and justice approach and the main arm across this country is the federal bureau of investigation. these are the people taking on the opioid crisis. they are the ones dealing with terrorism around the world, white collar crime. and you're eroding their ability to do their job. if you're an fbi agent in trump country going out today and you're trying to run a lead or build an informant are a do anything to enforce a good standard of justice, you just got your job made significantly harder by the leader of your country. and that will have lasting effect on this country. >> coming up on "morning joe," senator joe manchin joins the conversation. plus the former president of mexico, inventovincente fox. why he says the president is negotiating border security the wrong way. morning joe is coming right back. why make something this intelligent... (engine starting up) ...when it can get by on looks alone? why create something that stands out, when everyone expects you to fit in? it's simple. you can build a car, or you can build a cadillac. come in now for this exceptional offer on the cadillac cts. get this low-mileage lease on this 2018 cadillac cts from around $469 per month. visit your local cadillac dealer. this is a talking stick, and it comes from africa. i really needed people to listen to one another and a way to control the debate. and believe it or not, this is enormously effective. >> whoa, whoa, wait a minute. you had a magic stick that makes senators work together the whole time? and then you only bring it out after the shutdown? what the hell, susan collins. by the way, guys, i don't know what she's talking about. but we don't use talking sticks in africa. i feel susan collins got bamboozled by some random guy in the street. take this stick, the spirits of our ancestors will bring you together for $500. africans don't use talking sticks susan collins. we use microphones. we haven't used talking sticks since 2007. joining us now democratic senator joe manchin of west virginia. he reportedly told his colleagues yesterday while he intends to run for re-election he added quote, this place sucks. senator manchin, always good to see you, sir. did you say that? >> i sure did willie. mika knows i talk like that from time to time. >> it raises the question if that place suck, why do you want to go back? >> i'm trying to make it better. i get so frustrated at times. there's so many good people here. so many sensible, reasonable people that want to do the right thing. and we've allowed the power to accumulate between two people, the majority leader and minority leader and i don't think the system was ever designed to have that much power in two people's hands and we get frustrated. we're not in on negotiations sometimes. chuck has been great with the caucus, we try to work with him but at the end of the day basically it's two people making those decisions. we want more input. that's where the common cause coalition came together. we figured hey, it was so -- we were so excited to be in one room and talking and working together. susan and i did this in 2013. we thought it would being a great to come back again. we were at a stalemate. people weren't talking. no movement was made. it was a time to open up government. not a time to shut down the government. i was opposed from the beginning to shut down the government. but that did not justify the way this was done. >> you've been, senator, as long as we've known you a person that felt this way about washington given a place you came where you were governor and you were used to getting things done. is there any hope you can glean, any sunshine you can shine about what happened in that room with that talking stick and if that might be applied to future conversations and future discussions. >> first, you need good coordination to catch it. when the stick comes to you you have to catch it. >> did somebody drop it and broke it? >> i don't know about that. i was there. i've been in every meeting. when it goes across. the room is pretty good size. rather than walking around, if you're sitting beside somebody the stick goes back and forth. we started throwing basketballs from that day forward. much easier to catch. it put order to everything. hold on you'll get your turn when the ball comes to you or your stick comes to you. that's your turn to talk. so it really put -- it was a light way to have the level of lightness that needed to be done in that room. it helped. we had a good time with it. i'll tell you one thing we started working together. we know we won't throw these kids out. these kids don't know any other home but america. they are americans. their parents brought them here as little kids or babies. what happens beyond that is what all the talking is about and how far do you go? should they be able to bring other people in? i think that's going to be tightened up a lot. the borders have to be secured. the borders have to be secured, guys and we're going to vote to secure the borders. there will be some wall. some technology. we'll do whatever it takes to secure our borders. >> so, senator, first of all, we haven't talked since your brother won a national championship and did it in extraordinary physician. he does not flinch. incredible. secondly i got to ask you a question and you're exactly right. the senate wasn't set up to have two people run it, to have no regular order, to have four or five people go behind closed doors, decide what major legislation will be passed and then shove it down everybody else's throat. you all are starting to take back power, i guess. why is has it devolved in the way it has where that's not a democratic institution, it's an institution run by a handful of people. >> so many ways to explain it. you do tuned process up here because you've been here but the senate is much different than the house. house to works on simple majority. if you have 218 democrats or republicans they don't have to talk to the other side. but the senate was always designed to be a bipartisan and cool things off a little bit from our frame toers george washington, the purpose was to make sure there was a cooling off period. if the senate works no different than the house and it takes gimmick like budget reconciliation we're no better. it will be partisan. we must stop that. i'm not blaming anybody how we got to where we've come to and ultimately the power lies in the majority because they set the agenda. but don't you think if something comes through, a committee process, the committee votes on it and two-thirds or more of the committee approves that that it should absolutely go to the floor for a vote? it shouldn't be up to one person making the decision. do you vote on this or not? do i put this on the agenda? it would help our leadership from having all the pressure put on two office. the two offices are being bombarded unmercifully by saying you can stop this. no. i'm sorry the rules don't give me that type of power. we got to take this place back and make it work and protect each other for the sake of the country. >> senator, you and doug jones met with the president a couple of days ago and you came out of that, correct me if i'm wrong feeling genuinely he want as deal on daca. >> i believe that. >> he wants that. if that's true do you think he has the ability to stand up to the hard-liners around him, especially in the white house? >> i hope so. i mean right now he has secretary nielsen, seems to me she's the point person for the white house coming over and working. she's well-liked and well thought of and regarded and i think it will be a trustful, meaningful dialogue back and forth. mika, the whole thing comes down to how much further do they go? i keep going back to the 2013 piece of legislation we all voted for. it would have taken a major, major change in immigration across the country, 11 million people if this, once they went and paid their fine for breaking the law by coming here illegally and have not committed a crime. they were working. they were paying taxes. there was like a 13 year pathway, 12 or 13 year pathway for citizenship and if they messed up during that period of time they were deported out. we took care of the daca and dreamers. we put $42 billion to secure the border more than has ever been recommended or talked about since. so when he a pathway of fixing this. that didn't happen because the house would not take it up. the senate passed it in a bipartisan way. now if you're trying to pull off -- you did this in 2013. how about doing this? that was an inclusive approach. now they are taking just daca, about 700,000. if you put dreamers up to 2 million plus. put all the people that are allowed to come with them if they have a pathway of legalization that's an awful lot of more people coming in that have not been vetted. recognizing 700,000 children that came here as babies, their parents broke the law and came other illegal, i get that. but the kids don't know any other place but america, this beautiful country as their own. i think everyone is sympathic and wants that to be taken care of. it's all the nuances around it. cooler heads will prevail. mike? >> i want to get back to this place sucks. >> mike, you talk straight. i one that. >> i get the notion about the senate being run by two people and everybody wants to it be more inclusive in terms of decision make. but do you personally -- you sort of live in the middle. you represent a state that's in the middle. america seems to live in the middle on a lot of things and yet you belong to a party that's increasingly reactions of donald trump moving further left. i wonder if you feel any sense of concern or discomfort or whatever that at some point the democratic party might move too far to the left and away from you? >> well, the national -- i'm not a washington democrat. i'm a west virginia democrat and i'm a rule democrat. that's what the washington democrats steam have a hard time grasping. that's why we're in the minority. chuck schumer has been fair and open. he understands exactly. i can't speak for the republican caucus because i'm not in that republican caucus but the senate caucus, the democratic caucus chuck is trying make it more inclusive. he understands it. he's willing to stand up there and take a hit. listen you might have 30 people moving this way and five or ten of us moving this way. he understands and respects that. i really appreciate that. i'll speak up. they know that. they've been very receptive. they one that i'm not changing, i'll never change. it's all about west virginia. i said this, mike, if i can go home and explain it i'll vote for it. one time one of the leaders came up to me and said this will be a party line vote and i said what does that mean when i first got here. harry told me, we all stick together. i said let me see the bill. i read the bill. i said harry on my best day i can't sell this crap to west virginia. that's as honest as i can be. once they figured joe will be joe, i'll vote for west virginia. i don't work for you. i don't work for the washington democrats. i work for west virginia, democrats, republican, mountain party, everybody and i'll do that. i'll continue to do that. >> senator joe manchin thank you for trying so hard not to make that place suck. >> we'll make this place work, you watch. >> thank you very much. thank you, joe. our next guest has never minced words when it comes to president trump's border wall. vincente fox is calling the president the west's most powerful false prophet. the president of mexico joins us next. dynamic performance, so you can own the road. aggressive styling, so you can break away from everyone else. the bold lexus is. experience amazing. you might be missing something.y healthy. your eyes. that's why there's ocuvite. ocuvite helps replenish nutrients your eyes can lose as you age. it has lutein, zeaxanthin and omega-3. ocuvite. be good to your eyes. 46 past the hour. joining us now the former president of mexico, vincente fox. he's an outspoken critic of president trump. growing so angry at times he's cursed on live television. we hope he doesn't do that here. i don't think he well so he's lost his voice. so we'll try to get through this. don't bother this. in his new book "let's move on beyond fear and false prophets" he writes what concerns more about trump. all false prophets create a heightened sense of looming danger that allows them to consolidate forea tragic end. historically the reaction of the panicked people is to retreat to their respective tribes and there you see the rise of protectionism, populism, zenophobia, racism and homophobia with the reactions of increased hate speech and violence towards anything foreign. today trump is the west's most powerful false prophet. i think that's really well put. you saw it with the carnage speech, the way he's laid out his presidency is to make everything seem a lot worse than it is and that he's somehow the savior and now even makes very misleading false statements about the state of our economy or the state of our country, again, to prop himself up. is that part of being a false prophet? >> it is. it is. it's based on fear. >> right. >> fear. when you have fear then you react in favor of the authoritarian. i'm sorry for my voice. >> no problem. we can hear you. >> and that's the case with trump. >> right. >> i think this nation, i sense it has fear since 2011 and sees enemies every where, even mexico, your neighbor. so that's something that trump is abusing of, taking van of. >> abusing details. mexico, more people are going the other way across the border. first of all. and saying mexico will pay for the wall is not only possibly incredibly untrue or maybe just complicated and not true, but even more so, setting up even more of a sense of hatred between the people. >> we don't care about a wall being built in the united states, paid by u.s. taxpayers. we don't care. but it's a waste of money. it doesn't work. it doesn't work at all for people. >> it's a toy he wants. >> right. >> it's his toy. >> i lost my voice on tv two weeks ago. i know what it sound like going through puberty on tv. >> a former head of state has taken an aggressive approach. the tone you've had with this president. any part of you that fought as a diplomat, somebody who is head of state that perhaps i shouldn't be sodiplomat, as a head of state, that i shouldn't be so -- you signed the book "yours in resistance." what compelled you to go so hard against donald trump? >> we are offended. we mexicans, 120 million people, we've been offended. so we want to explain what we are -- what mexico is all about. and we really are a trustful neighbor to the united states, that we are a solid partner, that we can work together, that we can make out of north america the most competitive region in the world. that leads me to say the truth about mexico and mexicans. >> let me read from your book. you say, do not fear donald trump, fight. don't give up, never give up hope, never give up on the american dream. history is on our side. have faith in each other. there is something good helping out there. i can feel it, trust me. i helped usher in democracy in mexico so i know what momentum feels like. for millennia, those in power have used religious faith to oppress and divide. you say trump is used the myths of division. the book is "let's move on." former president vicente fox, thank you very much and good luck with your voice. >> i'm sorry. >> no problem. up next, president trump is headed to davos tonight. but his treasury secretary is already there and making headlines. stephanie ruhle says what steve mnuchin just said about the dollar is such a big deal that she can't wait until 9:00 to talk about it. we're going to bring her in next along with brian sullivan. we're back in two minutes. i'm on the move all day long... and sometimes, i don't eat the way i should. so, i drink boost. boost high protein nutritional drink has 15 grams of protein to help maintain muscle and 26 essential vitamins and minerals, including calcium and vitamin d. boost high protein be up for it like you do sometimes, grandpa? 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had a coach in high school. really helped me up my game. i had a coach. math. ooh. so, why don't traders have coaches? who says they don't? coach mcadoo! you know, at td ameritrade, we offer free access to coaches and a full education curriculum -- just to help you improve your skills. boom! that's lesson one. education to take your trading to the next level. only with td ameritrade. president trump is set to head to the world economic forum in davos, switzerland later today. he's touting the u.s. economy before he departs. he tweeted this morning, tremendous investment by companies from all over the world being made in america. there has of your been anythi-- been anything like it. jobs, jobs, jobs. meanwhile treasury secretary steve mnuchin is already making headlines in davos, telling reporters there that a weaker dollar is better for trade. joe? >> i am so confused. stephanie ruhle, let's bring you in. though, yes, it is true, i do defeat nobel prize winning economists in debates. >> you do. >> and i leave them sulking. i'm not really that great with econ 101. but even i know, you don't want your treasury secretary to say this, duo you, at davos? >> joe, that is exactly is. it is true, a weaker dollar suits president trump's america first agenda. but steve mnuchin is not a president trump surrogate doing cable tv. he's lost the advantage of having the u.s. being the world's currency. people in the administration have said this is steve mnuchin going rogue, a result of steve mnuchin having no advisers, no experience, and a skeletal staff. it will clearly impact the markets and it's a huge break from protocol with treasury secretaries before him, not to mention wilbur ross being on tv saying we are in a trade ross. maybe wilbur ross has been falling asleep in meetings, because last i checked, president trump says we're not. >> oh, my god. >> we look forward to hearing a lot more on this topic from you later on. brian, let me bring you in. there are so many people that didn't think this treasury secretary was up to the task of being treasury secretary, that he was beneath it. did he just prove his critics right? >> i don't know if he did or not, joe. i know you guys like to bring up historical figures from the world of politics. here is one for you, lloyd bentsen. >> oh, my -- >> yes, mika, lloyd bentsen was the last treasury secretary to reference the dollar in any way. it's not law, but it's policy, treasury secretaries simply do not comment on the dollar. here is the thing. wilbur ross coming out and saying that yeah, troops are on the ramparts of a trade war. mnuchin coming in and making comments about the dollar. if there is a strategy, and i don't know if there is, but if there is a strategy, it would seem like the two are kind of front running the president, to say i am willing to take a tough stand on trade and maybe even use the u.s. dollar as a short or medium term weapon in that fight. this would be really -- lloyd bentsen? >> you know, this is like watching an "snl" episode, watching all your reactions to this. let's do final thoughts. i'll start with willie and barnicle at the table. >> wilbur ross also said, sully, to andrew sorkin, there's a good chance nafta will be renegotiated. is that actually going to happen, will they go in and peel apart nafta? >> they could. and if they get a deal, it might not kill it totally but it might be unilateral, instead of bilateral. it could be just the u.s. and mexico or the u.s. and canada. not trilateral, i should say. you'll have "naf" on one side and "ta" on the other. >> mike barnicle, final thoughts? >> it's every day, and multiple times every day that something happens out of the white house, or somebody employed by the president of the united states, in this case it's steve mnuchin in davos, and it always involves an element of chaos. chaos and disruption every day. >> i will say i think steve mnuchin and his wife posed with the dollar, with her in black gloves, they miat the mint. i may sound catty, but about the most tone deaf thing i ever saw anyone ever do. final thoughts, joe. >> if you want to know, the big headline from yesterday is the president found out he was going to be questioned by the independent counsel, and on cue, his henchmen on tv and in congress, his most pathetic henchmen, started attacking the men and women of the fbi, started talking about a secret society, that harry potter and ron weasely were meeting somewhere in a cave trying to undermine the president of the united states. this is the stuff of dictators. this is how erdogan went after democracy a decade ago. this is how democracies start to die. it's up to responsible members of the media and responsible members of the republican party to fight back. >> let's have those harvard professors back on, how democracies do. stephanie ruhle picks up the coverage. >> i'll disagree with mika, i happened to love that picture of secretary mnuchin and his wife at the mint. coming
we wish you really, really well, katy. >> thank you, ari. i'll see you soon. >> i have to admit, ied by break on that silence, only because i have to start my show. >> youed by break. but you know what? it's okay. we forgive you. >> thank you. and good luck. and katy tur, we thank you. let me tell you what we're going to do in this hour. i have neal katyal here to talk about why he says bill barr won't be able to hide behind grand jury secrecy rules which is essential to whether we ever see the mueller report. later we'll go and look at this new push to get donald trump's tax returns and financial records and new york state taxes. so that's a lot thin this show. but we begin with what looks like a trumpian purge of the homeland security department and the tacit agreement by donald trump that he has basically failed to driver on his own immigration promises. this is his own measurements, not ours. dhs secretary kirstjen nielsen on her way out after overseeing trump's policy infamously of separating families at the border. now we have multiple dhs posts with no senate confirmed leadership whatsoever, a shake-up reportedly driven by none other than trump aide stephen miller, a hard-liner on immigration. the reality of the trump/miller agenda has become quite clear, though. remember, no new wall. no approved national emergency at this point. the border open after threats to close it, immigration obviously hasn't stopped in any fundamental sense, and those failures again on their terms, not what critics or others might like to see. but those failures on trump's own terms appear to be animating a shake-up at homeland security so he can get some other outcomes. i've got a lot in the show. so i want to start with our guests and do more later. i bring in now reverend al sharpton, chris lu, former aide to barack obama. cornell belcher, a democratic strategist and pollster. cornell, i want to start with you on the biggest picture of this, which is what is the actual narrative, message, moral policy, otherwise that comes out from what we've seen from this dhs secretary? >> well i think the morals of it are terrible. and i think when you look at the 2018 midterms, there was a lot of unpopular things that the trump administration was doing. none of them were as unpopular as this. and when we get into focus groups and you listen to marley women voter, particularly the women suburban voters, they will organically bring up the separation of children at the border. this is something that strikes americans, particularly middle americans right in their gut. this is something that brings home how mean and cruel the trump administration is, and it really separates them from trump and the republican party in a profound way that he is doubling down on it now makes me think he set on the ideal that he can win again with just 46%. he doesn't have to expand his base at all. >> and chris, what is your view of what we've heard from dhs, basically, why is she leaving, what did she get done, and what do you think of some of the leebs or reports that say, well, at some point maybe she claims or people claim she was trying to stand up to president trump. >> well, let's say this. no one should have any sympathy for kirstjen nielsen. she really has been leading the charge on some of the most draconian policies, whether it's sending troops down to the border, whether it is making asylum much more difficult to seek, and obviously the child separation policy. but as draconian as those policy were, she apparently had a limit. she was not willing to flout court orders, child separation. she wasn't willing to shut down the u.s. economy by closing the border. so even she had a limit. >> is that even her limit? isn't that her oath of office to follow judge's orders? >> i realize that is your oath of office. that's a pretty low bar these days, but at least it is a bar. and as troubling as the other purges that are happening throughout dhs right now, i managed president obama's cabinet. i've never seen an agency with such a leadership void, particularly such an important agency that touches so many americans. >> yeah. it's not, of course, a laughing matter in essence, but i see cornell smiling. i'll let you respond before i bring in the rev. what tickles you there about the decline of standards? >> well, it is -- this is a guy who gets away with -- there is no accountability. and he is a guy who can do whatever -- and part of the reason is because of his base. listen, he can grab them by the private parts, he can disobey the law, he can break all the rules. there is no accountability whatsoever to this. privilege, the biggest privilege of privilege is in fact not having to be accountable or having any consequences for your actions. and this is what you're seeing in action in the white house. >> privilege. rev, there was a famous movie that had the line "being in love never means having to say you're sorry" which people debate whether that's true or not. clearly, the privilege of the way, as cornell puts it the president operates is never apologizing. and yet this was a set of policies, particularly on zero tolerance where with or without the apology, they did back down. it comes back and forth. vigilance important. but i want to play for you a little bit of the question about reuniting kids and the way they've played that -- i'm sorry, i should say i'm going to read to you the president saying well, when we put the kids back together, we don't want to have children separated from their parents, and secretary nielsen saying you read this order. we're implementing it. all of this dodging. but at the end of the day, what does it mean to you that they did fail in that policy eventually, a lot of wreckage on the way? >> i think it shows that their failure is in the area that he touted the most. i think what we've bought to deal with here is when you see such a leaderless agency now, homeland, this is what he most promised his supporters. >> uh-huh. >> i'm going to build wall. i'm going to close the border. i'm going to do this, that or the other. so how do you turn around even the people that are in love with you and explain that the one area, the chocolates and flowers i was going to bring you i don't have. this shows the recklessness of this administration, because this is not an agency that was not in his priority delivery. this is supposedly his sweet spot. and for those of us that protested, i went to the border and saw what they were doing when they were ordering the children separated from their parents. for all of us to protest and turn around and you have an agency that's leaderless, you had another federal judge today that ruled against them on an immigration policy, it showed that he is in denial if he thinks that he can keep the majority of even the american public and not lose even some of his 46%, or that he is either in denial or he is just delusional and just thinks he can do whatever he wants to do. this clearly hits at the heart of what trump has promised his followers. >> i want to hear what you think of the way speaker pelosi is saying about his new statement, he can't get it done and quote, it's deeply alarming that the trump administration official who put children in cages is reportedly resigning because she is not extreme enough for the white house's liking. >> i think it's frightening because i think she is absolutely right. here is someone, nielsen who some are saying resisted some of the president's directives, but look at what she didn't resist. >> right. >> she took babies out of mothers' arms. they put people in cages that the congresswoman had to really graphically almost make her admit these are cages. and if that wasn't tough enough, then what's tougher than that? when you look at the array of the openings at the very top of homeland security and the type of characters that he would feel would be tougher than this kind of ruthlessness, it is frightening. and i think speaker pelosi hits it right on the head. >> so, chris, how do you put all of this into relief against the fact that on an annual basis, we are not anywhere near an immigration crisis on the southern border. we have, as we reported on this show, and i have a breakdown of nielsen's legacy coming up, we have a very different set of facts on the ground than the president's urge to use the fear tactics. >> that's exactly right. the facts on the ground don't suggest the national emergency crisis that the president keeps talking about, these fake caravans that he keeps talking about. in fact, if anything, his policy, the zero tolerance policy is making the situation worse at the border. the fact that he is cutting off aids to three countries in latin america is actually making it worse in the country. and on top of that, he is violating not only u.s. law, but international standards in terms of making it more difficult for migrants to apply for asylum in this country. so everything he is doing on his core priority is actually backfiring on him. >> i want to thank chris lu, cornell belcher and reverend sharp tan. you can catch the reverend on "politics nation" on weekends at 5:00 p.m. eastern. we're not done with our a block. i want to hear from the experts and walk through the latest news, but not get lost in the latest news, because we also have to look, tonight of all nights, at kirstjen nielsen's evidence. on key issues she was in lockstep with the president throughout her tenure. she was nominated october 2017, nielsen was eager to push forward on donald trump's directives. >> i will with the utmost strength and dedication work every day to protect and secure our homeland. i share the president's profound commitment to the security of our country and the safety of the american people. >> that commitment, though, that commitment led to nielsen separating thousands of migrant children from their parents and detaining them under quite controversial conditions. initially nielsen denying that such a policy even existed. in june 2018, tweeting we we do not have a policy of separating families at the border, period. that's a statement by a government official. and it's not true. take a look, of course, at what we all know. but the facts matter here. a dhs memo that was from months earlier with nielsen on board, you see it there, with what they were doing. a plan to increase prosecution of family unit parents and, quote, celebrate family units. when nielsen was later called to testify, which of course is under oath about all this, she then claimed the family separations were -- if they were going on, they were not unusual or cruel. >> the child under law goes to hhs for care and custody. >> they will be separated from their parents. answer my question. >> this department will no longer stand by and watch you attack law enforcement for enforcing the laws passed by congress. >> the history matters, because then attorney general jeff sessions backed her up and said we cannot and will not encourage people to bring their children by giving them blanket immunity from our laws. nielsen for her part saying we have to do our job. we will not apologize for doing our job. and nielsen oversaw and basically directed the implementation of this policy of family separation of what we all witnessed and watched, which people around the world and human rights experts said basically qualified as government sponsored human rights abuse. all of that went down and americans began to hear the voices of some of the people involved and some of the parents. >> because the youngest one is only 2. >> they had told him that someone might have adopted his child. this month. and that he would not be able to see him again. >> tonight is the time to hear those voices. we also want to remember "the new yorker," which published a cover that really captured something wrong according to many people. immigrant children now cowering under the skirts of the statue of liberty, a symbol of tolerance. "time" magazine with its cover of trump staring down a crying child at the border, crying from the choices of his policies. we also eventually saw the images of those tearful reunions between families who got a reprieve from this trump policy. well also saw images showing the separated children being housed in what amounted to large cages. >> are we putting children in cages? i just want you to admit that the cages exist. >> sir, they're not cages. >> does it differ from the cages you put your dogs in when you let them stay outside? is it different? >> yes. >> in what sense? >> it's larger. >> it's larger than a cage for an animal. not that different. we need to bear witness to everything that happened as we see the reports tonight of this secretary positioning herself in a very classic washington way as somehow some sort of conscientious objector on her way out the door. the facts matter. the families matter. the journalism matters because we also know that when it was all said and done, however many families were affected, however too long it took, the fact is that the president did eventually buckle. the policy was in a way narrowed or temporarily stopped. dhs didn't keep the accurate records to help people. so the court-ordered mandates to reunite families itself was compromised. the trump administration is asking for two more years to track down what could be thousands of additionally separated migrant children still unaccounted for. officials uncertain of the exact number. close to 2800 migrant children have been reunited with their families. 65 kids still remain separated under the original policy from their parents. so what we're talking about here is not just a question of morals, it's also a question of policy, because as i've emphasized tonight, based on the administration's own goals from secretary nielsen and trump, they also fail trump's dhs has a record 50,000 immigrants locked up in u.s. facilities. the separation policy apparently not deterring many of those families from coming in. the number of families caught at the border has also been recently growing, although historically we are nowhere near a large border crisis. i want to turn to melissa mark vivarito. thanks for being here. >> thank you so much. >> on top of all the latest news in the washington news, we also wanted to walk through that record there. what stands out to you as important to think about as secretary nielsen vacates? >> well, i first want to thank msnbc. it's hard to watch the images. but when you hear the testimony of the families, we are living in a moment of perpetual crisis. domestic shock and awe, this attempt to continue to be beating us down and trying to use the force of this administration to make us be submissive, to give up, to give up our hands and fight. seeing the voices of these families really puts into perspective how dehumanizing these policies are. that is her legacy. there are children there are individuals who have died under her watch. she was the cheerleader in chief in front of congress of holding these policies. that is the legacy, no matter what she tries to do now to either sanitize or scrub her background, that is what she is going to be upholding. so we need to continue to put the pressure now when there is potential discussion now to be had about who will be the next leader of this agency that we need to put pressure on all senators that they need to make sure that they will not support anyone unless they disavow these inhumane and callous policies that is where the attention needs to be, because we have an administration that continues to get away with it. we've had a congress that has now disavowed or separated itself from this administration and its policies. we now have a house under democratic leadership that is willing to check this administration. we have senators, democratic senators in the senate. we need to also put the pressure obviously on the republican senators to say that we will not support anyone to basically -- that upholds these policies. and we have senators, republican at that, who are against these family separation policies. we have them on record. so let's hold them to task as we look at the next secretary of this department. and so that is of real concern. that's where the energy really needs to be now. >> and how do you understand a situation where on the one hand, the family separation policy was ultimately beaten back, and on the other, we see reports that the president still wants more, wants to go there when the courts have basically held that back. >> well, this is the issue now where what we've seen in terms of reporting, where we know that the president who steve miller has his ear, obviously, and is really influencing him deeply, they are putting all these acting secretaries of divisions and departments. there is a consolidation of power happening under this one individual who is really dictating what this immigration policy is going to be. so we have a real crisis and a real problem here. and that's where, again, we need the congress to step up and do its diligence and do its roles. so we're again going to be putting pressure, raising the visibility, the humanity of this, humanizing, putting the perspective of the families, children that have suffered, that have died. adults that have died also being held in these detention facilities and the policies. we need to hear also from the presidential candidates. >> right. >> we have only heard from one that has presented, and that's former secretary julian castro. we need the others to speak out about how they are going to address this issue. this is not going to go away. we need to defeat trump, yes. but once we do have someone else there, a democrat, what is going to be your vision of how you're going to try to bring back some sense of purpose and our values and our moral values being upheld and respected. >> melissa mark viverito, thank you so much. coming up, why bill barr may not be able to hide behind grand jury secrecy rules. we have the man who wrote the rule, neal katyal. plus, my special report on donald trump's approach to the fed and why you should care. all of that. and if you happen to be in new york, i want to mention tonight, i have a very special panel at the 92nd street y. you can show up at 8:00 p.m. for tickets. you see some great guests are with us. 92 y.org if you want more information, i'm ari melber. you're watching "the beat" on msnbc. msnbc.. let's go. limu's right. liberty mutual can save you money by customizing your car insurance, so you only pay for what you need. oh... yeah, i've been a customer for years. huh... only pay for what you need. ♪ liberty. liberty. liberty. liberty. ♪ craftsmanship and technology that have made the rx the leading luxury suv of all time. lease the 2019 rx 350 for $409 a month for 36 months. experience amazing at your lexus dealer. you wouldn't accept an incomplete job from any one else. why accept it from your allergy pills? 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well, congressional democrats putting the heat on attorney general bill barr who is in a redaction process, we're told, scrubbing information that could include secret grand jury proceedings which are usually protected by law. now the question with this grand jury material becomes are there the kind of exceptions that democrats are concerned would apply? take a look. >> in every similar situation in the past, whether with nixon or with clinton or many other situations, the judiciary committee has again all the information, all the underlying documents and evidence. he would have to go to court to get the release of the grand jury information, but that has happened successfully in every previous situation. >> so if congress was able to successfully get at grand jury material in these other situations like watergate and like ken starr's report, would bill barr try to keep that out of the report that he turns over to congress? well, for the answer and what is the actual boundaries, i want to turn to an expert on these kind of disputes that part of a new series we launch heard, the opening arguments with neal katyal, former doj official neal katyal who wrote the special counsel rules and has argued dozens of cases before the supreme court, including as obama's acting solicitor general. mr. katyal joins me now. good evening. >> good evening. >> let's start with what it means when we see a politician there, chairman nadler say there is a way to do this, and they've always done it. what does that really mean? >> i think that's exactly right. i think the first thing to think about is what is this tradition of grand jury secrecy. grand juries are really important. they're enshrined in our constitution in the fifth amendment. a grand jury secrecy exists for a very simple reason. there is a truth-seeking reason. you go into a grand jury, you're not even allowed to bring your lawyer. and you testify and you provide the truth. and the idea is suppose there is a mob organization or something like that that might have compromised your own lawyer or provide you'd a lawyer. you can go in and tell the truth and have that be secret. so that's the idea behind it. and chairman nadler's exactly right when he says that truth-seeking function also means sometimes that material's got to be turned over to another judicial proceeding or a congressional investigation. he is 100% right on this. >> so one of the things i'm loving about the start of our segment, of course, we're only two deep right now, neal, is you tend to bring some homework. so you've alerted us to a very simple order here that i'm holding up that is the example from the clinton case. explain. >> yeah. so ken starr went and actually asked the court for permission to release his information, all his grand jury material to congress, and this is before even a formal impeachment investigation. and so here is i think the most telling thing about barr. because this whole thing, oh, he should be able to redact and have grand jury information and the like. starr didn't do that and jaworski and watergate didn't do that. instead they went straight to a court and said hey, court, give us permission to give this to congress. it's been, as you say, 17 days now, and barr hasn't done that. and to me, that's the real tell. for those who are wondering is barr doing this in an exercise of good faith, or is there the possibility of a cover-up. right now unfortunately looks like the latter. he hasn't even bothered to go to the court to seek the release of this information. >> that's really important when you lay it out like that, and it gets us away from some of the partisan posturing and down to the bottom line. your point being that if his main concern was just lawfully dealing with the grand jury stuff, he could do it the way other prosecutors have so that congress would have the underlying material. and then what? the actual rest of the public redaction fight would be about what the public doesn't see, but congress wouldn't go in with a blindfold. >> exactly. notably, even with the starr investigation, congress got secret material and it never became public. it's not public even to this day. i think there sway to do that. i hope barr does, that even though we'll be on day 18 tomorrow. but the clock is ticking, and there is a really grave public need to know this stuff. >> right. >> and, you know, even if the public can't find every jot and diddle of what's in the grand jury, i think congress has to at least has to in order to fulfill its duties. >> that's a key part here because there has been so much pettifogging about with the series of letters and the statement and the update about when is mr. barr trying to deal directly with congress, which is part of the obligation, the rules you wrote, and when is he otherwise referencing rules, referencing things, then actually seeping to lean against transparence it is. while have i you hear in opening arguments, there is another big legal thing i wanted to get your views on, totally separate from muellerology, if you will. take a look at the president talking about the courts. >> we have to do something about asylum. and to be honest with you, we have to get rid of judges. >> they have to get rid of the whole asylum system because it doesn't work. and frankly, we should get rid of judges. you can't have a court case every time somebody steps their foot on our ground. >> what is your view of the president there in a democracy, a man who takes an oath to uphold the constitution just wantonly talking about, quote, getting rid of judges. >> ari, i can't tell you. it is despicable. it's unamerican. it's everything that i think this country rebels against. that's the way king george iii acted before the american revolution. indeed, in our declaration of independence, one of our complaints against him is he was trying to destroy judicial independence. when you think about what o ame system, it is this idea. we don't get rid of judges for decisions that we don't like. we respect them. and, you know, i think to me the best illustration of this, but there is a bazillion over american history. but if we think about 1957. we think about little rock. and i know last year you actually had one of the people for the little rock nine on your show. >> uh-huh. >> and in that situation, the supreme court had ordered desegregati desegregation. and president eisenhower, who is a republican president didn't necessarily support by any stretch what the supreme court did. but what he said is the supreme court can't enforce its decision on its own. instead, he ordered federal marshalses and troops to go and escort those children into the school to protect the judicial independence and to protect the court's order. can you imagine our current president doing anything even close to that? that's what the rule of law is all about. that's what's at stake right now. indeed he also said this was just reported a few minutes ago. he said, quote, if a judge says don't -- that you have to do something, say sorry, judge, i can't do it. i can't do it. that's not the american system. it's not the justice department that i know and love, and it's certainly not our country and its traditions. >> i think you put it very eloquently, and it's an important wider spectrum, wider perspective on this, neal. and as you know, part of what we're seeing is the system working. the president so frustrated that his own aides keep telling him, whether it's dhs staff or don mcgahn or others that he can't do certain things, then he is frustrated acting out. the words, as you say, carry a lot of weight when they come from the commander in chief which makes them frankly chilling. neal katyal, thank you. i want to tell our viewerious can catch this and the other segments we're doing with neal at msnbc.com/openingarguments. videos and more. check it out. coming up, when we are back in 30 seconds, we have the tax record push for trump, and my breakdown on something very important that donald trump is doing with two nominations that has his own supporters rattled, when we're back in 30. k in 30.h. go to the pharmacy counter for powerful claritin-d. while the leading allergy spray only relieves 6 symptoms, claritin-d relieves 8, including sinus congestion and pressure. claritin-d relieves more. [horn honks] man this is what i feel like when i wear regular shoes, cramped and uncomfortable. we can arrange a little upgrade. which is why i wear skechers... wide fit shoes. they have extra room throughout. they're like a luxury ride for my feet. try skechers wide fit shoes. controversies continue to swirl around president trump's immigration policies and his approach to the mueller report. and his administration's pretty brazen announcement that it will defy federal laws in providing tax returns to congress, all important issues. but right now i want to turn to a special report we've prepared for you about another big story that may fly under the radar for some americans. it is about who has the power to make huge decisions about your money and holding banks accountable, and what are we all going to do if there is another financial crash? and if you've been alive for a while, you know there often are downturns, if not crashes eventually. i'm talking of course about the fed. now, can you think of, say, president trump's last nominee to run the fed? a lot of people can't. it's jerome powell, a lawyer and former private equity executive who was considered a pretty moderate republican before joining in a consensus builder across-parties. he served on the fed board since 2012 and also worked in the treasury under george h.w. bush. i tell you all that to give you a sense of basically who is in charge. many people do remember how pivotal the fed can be in a crash. andrew sorkin tracking how it came down to bankers and regulators in a room like you're looking at to try to prevent that downturn from becoming a crash. it was all documented in the film "too big to fail." >> i'm running a company. if the fed tells me i can't offer competitive pay for talent, you're going to launch the biggest brain drain this country's ever seen. is that the way you want to run the banks? >> until the money is repaid to the treasury, there will be some limitations on tax deductions on golden parachutes. >> well, there you go. >> i don't really understand why there needs to be so much tension about this. the country is facing the worst economy since the great depression. if the financial system collapses, it will take every one of you down. >> give me the papers. >> give me the papers there are plenty of criticism of how the fed runs and should run. there is a nonpartisan premise that has generally been accepted that at the fed you want independents, meaning people who are just going to follow evidence and not short-term partisan posturing, and you obviously want expertise. you only want heart surgery from a doctor. and while people do lean left or right, you want your fed run by experts, typically, which brings us to president trump pushing two people for the fed who critics are loudly saying tonight break with those traditions in several ways. trump pushing conservative media star herman cain and stephen moore for these powerful posts who run america's central bank, the federal reserve of the united states. we are talking about the entity that at least on a good day is supposed to handle inflation, unemployment, bank regulation, wall managing risk and emergencies that can hit the united states and international markets at any given time. steven moore advised cain's campaign. he helped trump on his tax plan. and if you remember obama's treasury secretary nominee getting grilled over his tax problems, it's also worth noting that mr. moore owes $75,000 in back taxes and penalties. some see him as an odd choice for the fed because he has questioned whether it's, quote, even should exist and called at one point for all its members to be tossed. >> i believe the people on the federal reserve board should be thrown out for economic malpractice. donald trump wanted to drain the swamp. well, john, the fed is a swamp. >> he picked one of the alligator. >> exactly. >> exactly. the fed is the swamp, or whatever. with the promotion now on the table we can note, because we want to update what moore is say, now he has a different tune. people can decide whether this reflects a, quote, learning curve or a kind of opportunism. here he is this month talking down some of his past tone in a new interview. >> by the way, i'm kind of new to this game, frankly. so i'm going to be on a steep learning curve myself about how the fed operates and how the fed makes its decisions. this is a real exciting opportunity for me. it's hard to say what even my role will be there. >> herman cain ran godfather's pizza. he also served in a nonpolicy post at the federal reserve bank of kansas city and then made his bid for the presidency. taking these candidates seriously does mean taking their record seriously. when cain was warming up toer the presidential run, he was still putting the united states back on the gold standard. >> measurements must be dependable. that means getting become to a gold standard because the measurement of the dollar is not dependable because we spend too much and inflation is going through the roof. >> those are not just talking points. this is what cain believes. he stood by it in 2017. now, is he going to change the position? has he even talked with the president about it? as for cain's argument, most economists disagree with the claim that using the gold standard in order to stabilize inflation is a good trade-off. in presidential debates, he also pushed his 999 tax plan, which many people said wasn't quite a holistic economic policy. >> will the people of nevada not have to pay nevada sales tax and in addition pay the 9% tax? >> governor romney, you're doing the same thing that they're doing. you're mixing apples and oranges. no, no, no, you're going pay the state sales tax, no matter what. whether you throw out the existing code and you put in our plan, you're still going to pay that that's apples and oranges. >> and i'm going to be getting a bushell basket that has apples and oranges in it because i'm going to pay both taxes. and the people of nevada don't want the pay both taxes. >> there were other things about herman cain that gave people pause about his pursuit of the oval office. >> 999 means jobs, jobs. >> that's what i'm talking about. >> becky, becky, becky, stand, stand. >> i believe these words came from the pokemon movie. ah shucky ducky! >> we should know cain did drop out of his presidential bid after facing five allegations of sexual misconduct. he has denied them. one way to read all of this is that at bottom, maybe donald trump is still going for pro wall street conservatives, maybe more colorful than typical fed picks. so you can argue it's sort of a trumpy shell around the core preferences of gop's economic conservative wing. by that logic, you would expect wall street to like these picks or be comfortable with them. tonight i can tell you the news is that's not the case. wall street, which did largely back trump's tax plan, and looks the other way i should say on some of his other issues is headed towards something of a small uproar over these picks. 60% of a new cnbc fed survey says the senate should reject more. 53% of these bankers take that position on cain, whose name came out later. 70% of the respondents say both are too political and not qualified. a higher share say both men just aren't up to the job. now that's just one measure. but it is striking. and some of these figures from this economic survey going on the record. quote, both moore and cain are highly unconventional and politically biased choices, and they would be very disruptive at a time when monetary policy is at an important crossroads, said the chief u.s. financial market economist at oxford economics. so when you take it all together, president trump may welcome, you know, this is controversial. he actually has been blasting his own pick for fed chairman, jerome powell, whose life could get hard fer people like moore and cain are confirmed. but when you think where we started, what happens in that room that most people never see, these important regulators dealing with bankers who in 2008 had one of the biggest decisions ever to make, the question that according to the cnbc survey that wall street is concerned about, and maybe a lot of other people should be as well is the american economy, which is your money and your retirement accounts safer with herman cain and stephen moore in that room making those big decisions. we thought it was question worth raising tonight. now, when we come back, we have a lot more in the show, including the democratic strategy to get donald trump's taxes and whether it can really work. one hour pickup order? 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(kickstart my heart by motley crue)) (truck honks) (wheels screeching) (clapping) (sound of can hitting bag and bowl) (clapping) always there in crunch time. it's easy to move forward when you're ready for what comes next. at fidelity, we make sure you have a clear plan to cover the essentials in retirement, as well as all the things you want to do. and on the way, you'll get timely investment help to keep you on the right track, without the unnecessary fees you might expect from so many financial firms. because when you have a partner who gives you clarity at every step, there's nothing to stop you from moving forward. who gives you clarity at every step, - (phone ringing)a phones offers - big button,ecialized phones... and volume-enhanced phones., get details on this state program. call or visit and accessoriesphones for your mobile phone. like this device to increase volume on your cell phone. - ( phone ringing ) - get details on this state program call or visit democrats unveiling a new local vat. >> to get some of donald trump's tax returns. it coming from some new york state lawmakers who have a new bill to get some of donald trump's state returns and then hand them directly to the u.s. congress. this is distinct from the other story which is richard neal's move in congress to get trump's federal returns. i'm joined by a professor of tax law at new york university law school. thanks for being here. >> my pleasure. >> your expertise is hot right now, professor. >> you've got to strike when it's hottest. >> is this legal? >> the new york state move? >> yeah. >> there is absolutely nothing to make it illegal. it was never needed before because it was never thought there obe any problem gets a president's tax returns. it's kind of stepped into the void because it was never needed before. >> and the president has outlined all sorts of things. he has claimed he would release it. he lied about it. and then he has his defenses, one of them is the audit defense. take a quick look. >> oh, i don't know. that's up to whoever handles it. i don't know. hey, i'm under audit. but that's up to whoever it is. from what i understand, the law is 100% on my side. >> in your experience, as an expert on this, this is your life's work, tax law among other things is being under audit a defense to a lawful request for your tax returns? >> it's completely irrelevant. as a matter of strategy you might be less happy about having them released but it has nothing to do with the law or his responsibilities as a public servant. >> so you teach in a very prestigious school. what would you give a law student who turned in a paper arguing that the audit means they don't have to comply with the order? >> i don't think we're allowed to give f-minus, but might have to make a special check this one time. >> you know, the president is very -- he is very sensitive about his hidden grades. so f-minus, that wouldn't be something he'd want to get. do you see courts ultimately backing up these efforts, be they the state or richard neal's tax bid? >> i don't think there is a good faith ground for the courts not command the release. but it's always hard to predict what they'll do. the statute that neal is relying on says "shall." the returns shall be given to the congress. there is not a whole lot of wiggle room in that that. >> is a command kind of room, not may. >> not think about it. >> right. not if you feel like it. >> right. >> yeah. >> i feel like we've benefitted from your whole tax course. it was quicker i think than a semester. >> it usually takes me 42 hours or so. but this was less. >> professor, i know you know a lot about this. and i appreciate your answers and your clarity tonight. >> well, thanks. >> yes, sir. up next, more questions about a trump cabinet official apparently hiding contacts with energy lobbyists. all of this from people who said they were going to drain the swamp. an important ethics story, when we come back. we come back the futu re. ♪ so, every day, we put our latest technology and unrivaled network to work. ♪ the united states postal service makes more e-commerce deliveries to homes than anyone else in the country. ♪ because the future only happens with people who really know how to deliver it. i that's the retirement plan.e, happens with people with my annuity, i know there is a guarantee. it's for my family, its for my self, its for my future. annuities can provide protected income for life. learn more at retire your risk dot org. but prevagen helps your brain with an ingredient originally discovered... in jellyfish. in clinical trials, prevagen has been shown to improve short-term memory. prevagen. healthier brain. better life. dso should the way you bank.. virtual wallet from pnc bank. just one way pnc is modernizing banking to help make things easier. pnc bank. make today the day. 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(vo) the best network is even better with apple music on us. plus save big when you switch. only on verizon. what else do you need to know? well, tomorrow capitol hill features, yes, attorney general william barr testifying before the house. but it's for an appropriations hearing looking at the doj budget. he's signalled he'll deal with all the mueller stuff with his later testimony, but we're still going to watch whether those questions come up and we'll have guests like jim walden, michelle goldberg and the legal robbed redford himself john flannery joins us. i hope you'll come back. 6:00 p.m. eastern. that does it for me, though. "hardball" with chris matthews is up next. is america full or is trump? let's play "hardball." good evening. i'm chris matthews in washington. donald trump, who promised to create jobs, made his bones, of course, by famously ending them. >> you're fired. >> in the past 24 hours, the president has done just that to two top officials at the department of homeland security. last night dhs secretary kirstjen nielsen resigned under pressure after meeting with the president at the white house, and just this afternoon, secret service director randolph alice,
>> and mika, of course, all the hopes and the prayers and all the kind words and all the well wishes, they may be helpful sometimes, but again, with -- as we have said time and again without real action coming from this white house, without real action coming from moscow mitch who, by the way, has gun safety legislation on his desk which he's killed. we should put the tombstones we're going to show you in the wake of these killings he put his political opponents in the grave yard -- >> truly moscow mitch. >> put tombstones there. i'm not sure whether it was in russian or whether it was in english, the actual language, but you know these two people, donald trump and moscow mitch are responsible for the killing of gun safety laws which make america less safe and the gun safety laws that you and i and 90% of americans support, we're talking about expanded background checks. more universal background checks. and you saw even yesterday "the new york post" came out, mika, this is very telling. "the new york post" came out with a front page headline -- this is rupert murdoch's "new york post," speaking again for a majority of americans who are saying, ban the weapons of war. ban them now. that's "the new york post" saying that. and well over 65, 70% of americans also agree with that and yet donald trump and moscow mitch are the two people -- only two people in washington, d.c., killing that legislation and assuring that donald trump continues -- a year from now, we will have to add ten more of those speeches. and the death toll will continue to sky rocket, all because they refuse what you and your neighbors want them to do. >> and these solutions are basic and the problems are becoming much bigger than the solutions, so we're waiting too long to do even the basics here and honestly when you listen to the president's scripted words that his aides wrote for him, what does locking arms mean when you fan the flames of racism? what does banding together when what you say is a national security threat? all of this has to be taken into context, this president is a racist, that this president fans the flames of hatred and one little scripted speech means absolutely nothing in all of this. with us we have politics editor for the daily beast sam stein with joe, willie and me. republican strategist and msnbc political analyst susan del percio. pulitzer prize winning columnist and msnbc political analyst, eugene robinson. and cofounder and ceo of axios, jim vandehei joins us as well. >> willie geist, let me go to you. i speak only for myself here, but the president of the united states saying those words far preferable to the president of the united states not saying those words. the president of the united states calling out white supremacy even though he has played a large role over the past three or four years, even if you look at the statistics of white supremacy exploding in america since he got into politics. but the president calling out white supremacy is better than the president not calling out white supremacy but as we have seen in charlotte, as we have seen time and time again, as we saw after the rallies where those nazi chants were rising up through the audience in north carolina, send her back, the president apologizes and then he backs off of that and seems to double down. so it's hard to say, willie, what comes out of this latest speech that he gave yesterday. >> again, the president clearing an incredibly low bar that he condemned white supremacy. my god, i hope he did. he said the thing that he had to say, but as mika said the president made a speech. he read a speech off a teleprompter yesterday. completely disconnected from everything he's done and said over the last four years since he came down the escalator and started to attack immigrants to this country, in the lobby of trump tower in june of 2015. donald trump actually said this yesterday. quote, now is the time to set destructive partisanship aside and find the courage to answer hatred with unity, devotion and love. donald trump -- donald trump is lecturing america about destructive partisanship. it's a speech that if another president made it, yeah, those are the right things to say but you don't get to walk in for five, six, eight minutes and make a speech that has nothing to do with everything else you said and done over the time that's preceded it and the time that comes after. it's just words from the president in the teleprompter. >> well, you know, mika, they're words from the president. they have to be followed by actions. and what actions? well, the president talked about expanded background checks. all right. call mitch mcconnell back. moscow mitch right now is -- of course, he's setting up grave yards and putting names of his political opponents on tombstones and grave yards. and tweeting them out. right after a slaughter in el paso, and a slaughter in ohio. maybe if moscow mitch is not too busy doing that and also killing legislation that would actually protect american democracy, maybe the president and here he is, he calls himself the grim reaper. you will see he -- >> this is what his staff did. >> what he calls the graveyard. he actually has the name of his political opponent on a tombstone. and he tweets it out thinking that it's appropriate with -- by the way, yesterday, one of donald trump and mitch mcconnell's followers got 20 years in prison for sending pipe bombs to political opponents. so mitch mcconnell thinks that's funny on that day and on the day that families are getting ready to bury their loved ones, that were going back to school shopping. and a white supremacist attack, so maybe if moscow mitch is not too doing that, maybe donald trump can call him back to washington and we actually can have what 90% of americans want, mika. and that is expanded background checks. universal background checks that will make america a safer place. >> yeah. and often in situations like this the victims get lost in it all so let's take a moment here. the death toll from the el paso mass murder now stands at 22 as two more victims died from their injuries. one late sunday and another monday morning. the latest victim, 77-year-old juan velasquez. he and his wife were returning curtains when the rampage happened. she was injured. among the dead, 60-year-old retired staff sergent arturo vinavedes. he served in the army and the texas army national guard and he retired in 2001. he served america. >> by the way, this man served america. a gun was turned on him by a killer inspired by right wing hate rhetoric and the killer's manifesto reads shockingly like a donald trump speech. so there you have again people serving this country proudly, gunned down because of hate that is stirred up by politicians in america. >> the youngest victim killed 15-year-old javier rodriguez. he was remembered at his vigil at his high school last evening. we are told he loved to play soccer and was a good student. we're also hearing more from the father of andre anchondo. he was killed trying to protect their 2-month-old son. >> they're both heroes because they were doing their job as parents, protecting children. >> two white house officials say the president is expected to travel to el paso and dayton in the coming days. i believe he misunderstood dayton for toledo. we're told he's likely to meet with first responders including some customs and border protection personnel who responded to the scene in texas. will he meet with families? yesterday trump delivered a prepared statement from the white house reacting to the mass shootings that included the deadliest hate crime against latinos in modern american history. "the new york times" reports that since january, more than one in five trump campaign ads on facebook have included the word invasion to describe immigrants as a growing threat. a growing threat. but yesterday, trump made no attempts to reconcile his condemnation of hatred with his persistent anti-immigrant rhetoric and made no mention of hispanics or latinos. the group targeted by the gunman in el paso. >> the shooter in el paso posted a manifesto online consumed by racist hate. in one voice, our nation must condemn racism, bigotry and white supremacy. these sinister ideologies must be defeated. we must recognize that the internet had provided a dangerous avenue to radicalize disturbed minds and perform demented acts. mental illness and hatred pulls the trigger, not the gun. we must make sure that those judged to pose a grave risk to public safety do not have access to firearms and that if they do, those firearms can be taken through rapid due process. that is why i have called for red flag laws, also known as extreme risk protection orders. >> jim vandehei, so the president of course chirping out the nra's line that it's not guns that kill people, it's mental illnesses that kill people and yet, our rate of mental illness isn't higher than other industrialized countries and yet the number of murders are so much larger and so with the president talking that way, what are you hearing about the two policy proposals he put forward yesterday morning? the possibility of expanded background checks or an all encompassing immigration reform plan. any chance that moves any time before donald trump leaves office? >> i would say there's no chance on immigration reform, a slight chance on background checks as you have more and more republicans come out today that will talk about it. the truth is, you hit at it in the top of the segment. one of the problems is going to be the first and second amendment in trying to go after this spread now, which is a pretty wild spread of domestic terrorism. one, like even if you did -- even if you did background checks, even if you outlawed semiautomatic weapons we have so many damn guns on the street that anybody who wants to get a gun is going to be able to get a gun. you can't even under any of the proposals imagine the federal government going in and taking back weapons that law-abiding citizens already have. then you talk about social media. and here's where domestic terrorism is really hard under our constitution to be able to combat. because of free speech, it's really hard to go and force these companies and be able to sniff out the individuals who are gathering on social media before they had nowhere else to gather. now they can do it en masse, they can do it at scale. they can find lots of people with like-minded crazy ideas to get them even more ginned up. it's very hard -- >> jim, what you're describing -- yeah, what you're describing is what isis was when it was expanding in 2013 and 2014 and the government ignored it, called it a regional threat. it wasn't until the government focused on stamping out isis they were able to do that starting really in earnest in 2015, 2016. so a lot of americans are asking why can't we do the same thing now with this sort of hatred? >> you can and you can't. when you're dealing with isis, when you're dealing with the foreign threat because of the laws post 9/11, government has a lot more flexibility. the fbi has a lot more tools in its arsenal to be able to go after foreign threats as opposed to domestic threats. so sometimes these debates get a little too simplified. this is like a big problem. i think the thing that the media is doing a great job of is grabbing people by the collar. last year was the worst for right wing extremism in terms of violence flowing from it since 1995 and this year is already worse than last year. this is a real problem. conservatives can't deny it, republicans can't deny it. trump can't deny it. it's a huge problem and it goes against the back drop we have talked about that the country is changing. the white population is shrinking and there's no doubt it's been a concerted part of the trump campaign to be able to exploit the us versus them divisions. when you do that, when it gets amplified on social media, awfulness happens. yes, you can say the shooting took place because of donald trump, but you can't deny that when you look at those rallies, when you look at the rhetoric, when you look at the output on social media both from the campaign and from supporters that things are getting cranked up to a level. that it is purposeful in some ways to really play in to that -- oh, there's us and there's them. and the only way you can really dial that back is through national leadership. like that is what you have. when you think of what george bush did versus what trump did, you can say the country is changing, let's have the party, let's have the country sort of adapt with it or you can exploit it. he's exploited it. we're now playing with fire. >> well, there is a -- there is though a direct line that you can attach the hateful speeches and the rallies and the language that are used in those rallies. you can draw a straight line to much of the language in the manifestos. and when you have the manifesto coming out of el paso where the killer is specifically saying that there are too many hispanics. there's a hispanic invasion of texas, and that if it doesn't stop that democrats are going to take control of texas and will change the electoral map forever, so democrats will continue winning and republicans will lose, suddenly it becomes not only very political but very specific. you know, willie though, it's interesting that, you know, this white nationalism and hate crime the numbers have exploded since donald trump got involved in american politics. "the washington post" reported yesterday that hate crimes in areas where donald trump gave rallies in 2016 have gone up over 200%. and yet, the federal government is still not focusing on stamping out hate crimes. a lot of people of course could look back and say, well, you know, back during the obama administration there was a real frustration that the government would not even mention the words islamic radical extremism and were slow to start going after isis. the president dismissing it as a regional threat. now, here we are. that was the threat then. this is now the threat of our time. >> yeah. >> and specifically since donald trump came into the white house and what's he doing? we don't have a law on the book to arrest people for domestic terrorism. >> don't take our word for it. take the word of the fbi director christopher wray who testified before congress that the vast majority of the terror arrests are what he could owe up to white supremacy. that's what the fbi is focusing on right. there's a piece in "the new york times" from the fbi special agent who is in charge of investigating 9/11 and he said it's time to call this what it is and designate it as terrorism so that the fbi can treat it that way. he says, 20 years ago we grossly underestimated the rising threat of islamist terrorism and that cost us dearly on september 11th. we can't afford to wait for the white supremacist equivalent. he cites mi-5 and do you think that changes what we saw over the weekend? >> it's possible but i think we're too late. we were trying to have this conversation at various points in the past and we never summoned the political courage to do it. so in the wake of what's happened in el paso i go back to one sort of moment in the obama administration. the department of homeland security had produced a memo about rising right wing extremism and there was a huge backlash against what the obama administration had done, as the republicans who viewed it as an attack on them and also veterans who are suffering from ptsd. instead of the obama administration standing up for the data points in it, they backed down and issued an apology for that. i understand why they did it. it was a huge political inconvenience, but i'm not saying they contributed to el paso i think it -- shows maybe it sparks new research for the fbi but you know we could have been having this a long time ago. >> why would we expect anything different from this president who would -- who has a full report saying that russia was involved in our elections. he refuses to acknowledge that. do you think he's going to start recognizing the fact that white supremacist terrorism exists especially when it's connected to his hateful speech? it won't happen. we are so far beyond relying on what the president may do. he can give a statement like he did which showed absolutely no heart whatsoever. and then go out there at the next rally, rile everybody up to where he does show emotion. but he's not ogoing to do anything so it does fall -- it falls to the state by state and an elected officials being held accountable. >> i totally agree with that. i don't think anyone should expect anything different from trump. everyone is waiting for the next tweet to see what happens. the fact that he would stop demonizing immigrants seems far-fetched. but in the panhandle when he talks about invasions and the crowd responds with shooting, only in the panhandle. maybe in the future the elected republican officials in the panhandle will say, no, not only in the panhandle, it's not acceptable here either. >> well, they have been a bunch of cowards, i don't expect it to change any time soon. >> then there's the legislation of gun control we have been talking about for a long time. universal background checks, in a q poll enjoyed 97% support in the united states public, including among republicans and gun owners, very popular. also the idea that the president put out yesterday of the red flag laws which would be a temperature seizure of weapons from somebody who sends up a red flag like posting online, a kill list or a rape list as the guy in dayton did. >> yeah. that's right. but you know the problem with the red flag concept is that we don't have, you know, precrime laws in this country. we don't have a totally reliable way of telling who's going to do something like this and who isn't. and we do have the first amendment that guarantees free speech. you know, these two atrocities over the weekend, you know, we know that the el paso shooting was political. we don't know what the deal was with the dayton shooter. but we know that they both have weapons of war. they both had high powered military style assault rifles that are designed to rip human bodies apart on the battlefield. that's what they -- that's what they had and that's just crazy. it's just crazy. it's crazy that we don't have background checks. it's crazy that we -- that we allow and really encourage the circulation of possession of weapons of war and the american people believe with -- agree with what i just said. yet it's donald trump, it's mitch mcconnell, it's republicans in the senate and the house who just frankly have blood on their hands. they have blood on their hands today and they'll have more blood on their hands the next time this happens. they have been beholden to the nra which has been finally revealed to be the sort of corrupt cesspool that we knew it was. and some of them ideologically believe the tree of liberty is somehow being watered by the blood of patriots but it's really being watered by the blood of children. the floblood of walmart people,d couples going out for a drink on saturday night. we have to do something about the guns. they have the guns that are just not civilian weapons. they're not covered by the second amendment and, you know, maybe some day. how many times have we said this? >> and you can add to that list of course the blood of jews going to their synagogue on a saturday night. >> absolutely. >> children, first graders, going to school. >> the blood of festival goers at a country music concert in las vegas. i mean, you know? >> it goes on. >> how many assault rifles? just crazy. >> yeah. yeah. clubs in orlando, i mean, you talk about vegas and the bump stock that's still legal. nothing ever gets done. you have a corrupt group of lobbyists in washington, d.c., that have seized control for years of the nra and are pocketing the money of dues holders. and they are getting in the way of any meaningful reform that actually an overwhelming majority of nra members support when you start talking about background checks. and, you know, mika, i'm reminded as gene is talking about the republicans and others that won't support these bills. i'm reminded of heidi heitkamp who had 94% approval in her state for voting for background checks and heidi heitkamp voted no because she was afraid of the nra. i wonder what heidi heitkamp would do today if she had that vote back because guess what? she was in the senate and now she's out of the senate and she went against 94% of her electorate because she was afraid of three lobbyists in washington, d.c. that worked for the d.c. arm of the nra. three very corrupt people who i don't know if they're going to go to jail or not. but i find it hard to believe that the nra people are going to -- nra members are going to allow them to stay in office. but this is what fear gets you. it gets you voted out of your office and you have to live with the votes for the rest of your life. not worth it. i was there, it's not worth it. vote your conscience and vote with 95% of americans who want expanded background checks. >> jim vandehei, thank you very much. coming up, mayor pete buttigieg joins the conversation. he has a plan to counter the gun lobby and shares that with us, straight ahead. plus, former president obama speaks out. we'll read his statement about the mass shootings, gripping the nation. you're watching "morning joe." we'll be right back. you're watching "morning joe." we'll be right back. but we're also a company that controls hiv, fights cancer, repairs shattered bones, relieves depression, restores heart rhythms, helps you back from strokes, and keeps you healthy your whole life. from the day you're born we never stop taking care of you. so, every day, we put our latest technology and unrivaled network to work. the united states postal service makes more e-commerce deliveries to homes than anyone else in the country. most people think a button is just a button. ♪ that a speaker is just a speaker. ♪ or - that the journey can't be the destination. most people haven't driven a lincoln. discover the lincoln approach to craftsmanship at the lincoln summer invitation. right now, get 0% apr on all 2019 lincoln vehicles plus no payments for up to 90 days. only at your lincoln dealer. i went straight to ctca. after my mastectomy, i felt like part of my identity was being taken away. my team made me feel whole again. cancer treatment centers of america. appointments available now. cancer treatment centers of america. right now, congress is working to end surprise medical billing. that's when patients are hit with medical bills they thought would be covered by insurance. but what congress is considering would cut money that vulnerabe patients rely on the most. that means seniors, children, and americans relying on medicaid would be hurt. it's already too hard for people to get basic medical care with hospitals closing and a shortage of er doctors. tell congress we can end surprise billing without shredding the safety net. paid for by physicians for fair coverage. you should be mad they gave this guy a promotion. you should be mad at forced camaraderie. and you should be mad at tech that makes things worse. but you're not mad, because you have e*trade, who's tech makes life easier by automatically adding technical patterns on charts and helping you understand what they mean. don't get mad. get e*trade's simplified technical analysis. here, hello! starts with -hi!mple... how can i help? 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[ camera clicking ] wifi up there? -ahhh. sure, why not? how'd he get out?! a camera might figure it out. that was easy! glad i could help. at xfinity, we're here to make life simple. easy. awesome. so come ask, shop, discover at your xfinity store today. ♪ welcome back to "morning joe." quick correction about a minute ago i talked about bump stocks not banned yet. they of course were banned and i knew they were. just one of those joe in the volcano brain clouds i had. kind of like when you're trying to say dayton and you say toledo instead. it happens. >> no, i don't think it's like that. >> my apologies. >> that's a totally different thing. >> it's great that bump stocks have been banned. now let's move towards expanding background checks that -- as willie said, 97% of americans support. >> president obama is speaking out following america's latest mass shootings. in a lengthy statement the former president called for stricter gun control laws and also appeared to take a rare semiveiled swipe at president trump writing in part, we should soundly reject language coming out of the mouths of any of our leaders that feeds the climate of fear and hatred or normalizes racist sentiments. i don't think this is really veiled. leaders who demonize those who don't look like us or suggest that other people including immigrants threaten our way of life or refer to other people as sub human or imply that america belongs to just one certain type of people such language isn't new. it's been at the root of most human tragedy throughout history here in america and around the world. it is at the root of slavery and jim crow, the holocaust, the genocide in rwanda and ethnic cleansing in the balkans. it has no place in our politics and our public life. and it's time for the overwhelming majority of americans of goodwill, of every race and faith and political party to say as much, clearly and unequivocally. yeah, semiveiled, that's not, thank you president obama for your honesty about our current commander in chief. >> yeah. willie, some people were saying that yesterday president obama should have said his name, taken it directly to president trump. but you would have to be living in a cave for the past four years to not know who president obama was talking about. >> yeah. it will never be enough for some people, but clearly, he was talking about president trump. i was thinking as i listened to president trump make his remarks yesterday, joe, if it were someone else you'd look at this moment and say i don't believe i'm responsible for what happened over the weekend. but in a moment of reflection, is there anything i'm doing or saying that's making it okay for other people to take action? is it -- am i creating a space with my rhetoric that gives these white supremacists room to go out and act on the things they believe in, that makes them travel from 8chan chat rooms to a walmart in el paso. the president is not an empathetic man and in a moment like this he could step up and say, i have to knock it off because this is having real world implications. i don't believe i'm responsible he could say for this. but if i'm contributing even a little to it, i've got to stop. >> and you can tell, gene robinson, that the man has never run for re-election before and you can tell that because what he doesn't understand is, what he gets away with in the moment stays with him forever. it's not like vapor. what he says at the rallies will follow him throughout the campaign. when -- well, here's a very good example of it. and i think this is one of the reasons why he made the statement that he made because there's a lot of video that looks just like this. watch this. >> this is an invasion. when you see these caravans starting out with 20,000 people, that's an invasion. i was badly criticized for using the word invasion. it's an invasion. but how do you stop these people? you can't. there's -- that's only in the panhandle you can get away with that statement. only in the panhandle. so it's a tough situation. >> actually i'm from the panhandle. you can't get away with that in the panhandle and you can't get away with shooting somebody on fifth avenue like donald trump thinks. but gene, that stays with him forever as does every hateful screed that he's ever said at a rally. the send her back chants with him sitting there and soaking that in like mussolini. that's with him forever and i guess he doesn't understand it and so he needs to get as far away from that as possible. the only way to do that is to actually follow through with some meaningful legislation and to stop that nonsense which none of us think he's going to do. >> right. he could do that. but do you think he will? i don't think he will. i absolutely know -- i'm not a optimistic in terms of trump and taking any sort of real action that would turn things around. i mean, you know, in that clip he used the word invasion and here on msnbc and on other networks in the last couple of days we have been running montages of all of the times he's used that word invasion, invasion, invasion to refer to latino immigrants. and that has had an obvious and i think profound impact because it buys in to this whole -- you know, white nationalist white national conspiracy theory of an invasion of brown people to replace the white people in america. it's -- it's directly related to that. and anybody should know that, but of course, you know, maybe donald trump really -- maybe to him history doesn't really exist. maybe the only thing that exists in his head is what's happening today. what's happening now, what gives me in my mind a slight political advantage. i don't particularly care what's happening in donald trump's head now. what i think we should all care about is actually doing something. we repeat this ritual time and again and you just know what's going to happen. it's going to happen again and it could be a week from now, could be a month from now. there could be another oklahoma city bombing, you know? or something like that. i mean, we're going to have the equivalent of a racist right wing, white nationalist 9/11 here i think and i make that prediction -- you know, i don't think i'm going out on a limb here and -- >> you're not. >> gene, you're not -- yeah, you're not only not going out on a limb. it's what the fbi director has said. that's what other intel agency people have said. and of course frank figliuzzi said that now -- now after four years of donald trump he is now starting to see the lights, the warning lights blinkering all over america and it reminds him of the warning lights he saw before 9/11 and other people in the counterterrorism business, mika, before 9/11 they saw it. they saw those warning lights blinking. those warning lights are blinking again. if donald trump wants people to stop talking about him just using words, which is a good start, use your words and then have actions follow then he needs to speak out against the hatred towards hispanics. he needs to let people know they are welcomed in this country. he needs to let people know that the federal government is going to actually put on the books a terrorism law for domestic terrorism. there's not even that law on the book right now. we'll talk about that in a little bit. but there are a lot of things he could do. >> but he won't so you have to ask the question, joe, and i'll ask you, isn't it okay to deduce that at this point this is what he wants? he is inciting hatred and violence and inciting racism. if he doesn't unequivocally call it off and say, this is wrong and we stand together against this and we are doing this, this and this to help fight hate crimes -- i mean, this is a president who seems to want these things to happen. how else can this be explained? if he doesn't call it off? >> well, he's got to call it off -- >> but he's not going to. >> as you know, he's inciting hatred now and he's been inciting hatred up to yesterday because he sees that as a good political strategy. just like as we have discussed many times and jack helped us put together a package to show the 1990s when he owned casinos in atlantic city and had boxing matches, suddenly it made sense for him to hang out with hip-hop stars. it made sense for him to hang out with civil rights leaders. it made sense for him to write big checks to nancy pelosi and write big checks to hillary clinton and write big checks to the democratic national committee and to write big checks -- >> he knows what he's doing. >> and to date african-american women not only in the '90s but into the 21st century and he -- and he only figured out that actually this bigotry role that he's followed now made sense in 2011 with birtherism. of course, i know about the housing in the '70s. i also understand about his central park five scam and the fact he still won't back off of that. but for a large chunk of the '90s and into the 21st century, donald trump was far from being a white supremacist. donald trump was being transactional and was the friend of, again, civil rights leaders and hip-hop stars because that's what suited him at the time. will he change? only if it suits his own political purposes to change. and that's what americans must show him. that this is a dead end road that he's on. white supremacy is a dead end road. it will lead not only to terrible things for other people, but for what matters to donald trump the most. it will lead to terrible things for him politically. >> hopefully, republicans would perhaps show him -- >> where are the republicans? by the way -- >> where are you? where are they? >> did we hear from joni ernst yesterday? >> how about mitt romney? >> where's mitt romney? >> watered down statement -- >> any republicans that have called out donald trump? >> alex? >> specifically the president, no. mitt romney released a statement calling out the action of that kind of rhetoric, but never said the president's name. we're working -- we're trying to get republicans on the show. we have offered many of them to appear, but so far they have all declined. >> so no republicans will come on this show and call out the president of the united states for inspiring white supremacy. not one. >> not yet. not the ones that we have asked. >> wow. >> okay. well, we're also following today other than that sad, pathetic display -- >> spineless. >> the trade fight with china, which sent the stock market tumbling yesterday. steve rattner is here with the charts. 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(vo) snap and sort your expenses to save over $4,600 at tax time. quickbooks. backing you. global markets are under pressure following a massive sell-off here in the united states as president trump's trade war with china once again intensifies. the dow shed more than 750 points yesterday after beijing allowed its currency to weaken to the lowest level against the dollar in more than ten years. u.s. stock futures have pared earlier losses and are pointing to a more positive open and over the weekend the china's central bank allowed its money to weaken past the psychologically important point of 7 to the dollar. with us now let's bring in former treasury official and "morning joe" economic analyst steve rattner and business columnist at the "new york" magazine, josh barro. steve, i want to start with you. we want to see your charts. did you see by any chance yesterday the quarterly report, i'm sure you saw it it warns that quote, the ultimate reversal of the massive bull markets are likely to be more intense than normal and could lead to one of the greatest market reversals in history. are you hearing similar concerns among your business associates? >> well, market predicting is a dangerous game but i would certainly say this is the riskiest moment i can remember since the great financial crisis. and this could easily unwind. we had better news last night but i can take you through the last few days of history and show you kind of how we got to where we are today. >> but before you do that, can you tell us, steve, what is it about this particular moment that not only has you and many others saying we're in an unusually risky time? >> really it's the trade war and that really goes to the -- goes right to donald trump. we had a recovery that was in its later innings but still chugging along at a reasonable rate. he passed some tax cuts that stimulated the economy a bit more for a little while. but all in all, we have low unemployment as you know, 3.6% and low inflation and the economy was doing okay. and then suddenly the trade war started and trade wars are in the end bad for everyone. they raise the price of imports, they hurt exports and it ultimately becomes a downward spiral. you have already been able to see that in the economy. that's why the fed cut interest rates last week and that's why the market thinks they have to cut them again and now with this currency war that seems to have started on top of a trade war, you can see it in these -- in this devaluation by the chinese. >> all right. do you have charts for us this morning? >> i have charts but it's a scary moment. so let's start with the stock market and go over the last few days of the stock market and as i said, when the fed cut the interest rates back last wednesday the stock market began to crack and, first of all it's important to note that the stock market -- that the fed only cut interest rates because of the trade war. the trade war is weakening the any, the fed had to cut interest rates, the stock market cracks, kind of recovered from that. but then on thursday, the president walked out and announced he was going to apply tariffs to another $300 billion of chinese goods on september 1. the stock market tanks as you can see here. even then, the stock market kind of bottomed out but then sunday the chinese as you said in the intro weakened the currency and that was the scariest thing of all to the market. because trump previously comes out all the time and says i'm going to put tariffs on this or and that. sometimes he does, sometimes he doesn't. it's a negotiating tool. but once the chinese retaliated like that and then last night -- sorry, yes, yesterday afternoon when the treasury announced that they were a trade -- currency manipulate their really sent a signal this is for real and it will be hard for people to get back into their corners. one last comment before we go to the next chart. as you noted the market is going to open slightly up today. that's because the chinese did not weaken the currency further last night and so we think that perhaps this is slowing down. now, let's take a look at what this trade war has meant so far for the united states. ironically for the united states, it has meant that our exports have gone down by more than our imports from china have gone down. so why is that? that's because the chinese can control their economy better than we can. so they essentially say we're not buying any more american soybeans, the purchases stopped. we're not buying bmws and mercedes that are made in the slow. those slowed down dramatically and meanwhile on our side, our private enterprise businesses continue to buy so far the trade war has been a loser to us and a small fun fact. the amount of aid we are paying to farmers is greater than the amount of tariffs that we are collecting from consumers in america. so let's look at the next round of tariffs which trump talked about for september 1st. if he actually goes ahead and does this. this will really hurt consumers. so far the tariffs have targeted more intermediate goods that go to businesses and the next round goes to consumers. much of what we buy here, almost everything we buy here that is manufactured is made somewhat else in these categories. so if you look at cell phones for a second, you can see that 82% of the cell phones that we buy are made in china. this is all telecom equipment. computers is a large number. when you get to toys, let me drop down to toys here, 90% of all the toys we -- that we buy are made in china. almost 100% of the footwear that we buy is made somewhere else and the majority of that is made in china. these are things that people buy every day. if you have an apple phone like this one, it's going to cost you 10% more on september 1st. even though it's apple it's made in china. and then lastly, let's take a look at examples of how this has already affected consumers. this shows the prices of goods that are mostly imported and you can see that the goods that are imported have -- they were declining actually in price over the last few years and that's mostly because of a strong dollar. strong dollar makes imports cheaper. but then trump started putting tariffs in place and so we separated the goods that have tariffs on them from the goods that don't have tariffs on them. and you can see right here very clearly that the goods that have tariffs on them, the prices are already going up whereas goods that don't have tariffs on them are relatively flat. it's not an exaggeration to say that if trump goes ahead with this next round of tariffs, it is very likely that the average consumer will pay more in tariffs than the benefit of the tax cut that he got a year ago. >> so josh, with all that in mind it's starting to look like trade wars are neither good nor easy to win. >> no, i think that's right. i think to steve's point, you know for the last couple of years a lot of this is sort of background noise. the president would make the threats and impose some tariffs but most is services or things produced domestically. a lot of the imports don't come from china, a lot of things weren't subject to the tariffs. they were fairly small, but as the stuff that's subject to tariff gets to be a larger swath of the economy then you're going to start to see regional effects if china weakens the currency that has effects on japan and south korea and then that affects our trading relationships with them. this is grown enough to the fact that it has material effects on the economy. i still don't think we're at a place that it's likely that we'll see a recession in the near term. but the sort of thing that can start shaving significant amounts off gdp growth, less job creation, and it means less political pen fit to the president from the economy so the one thing he has going for him is a strong economy. if we're looking at you know at the growth somewhere in the 1% range in 2020 that won't be a strong tail wind for the president as he seeks reelection. >> it needs to be gospel that the tariffs were attacks on the american people, tariffs were a bad idea and we haven't heard much from republicans. you hear joni ernst and those from the farm states talking about it, but by and large, lindsey graham is completely flipping on tariffs because president trump is the one imposing them. >> for a lot of farmers you are seeing specific targeted payments to make them whole for the economic damage specifically to them. but more broadly yes, the republicans have pointed out that this stuff damages the whole economy. you see senator pat toomey from pennsylvania making a lot of noise about that, but the problem is you know that the congress could take these powers away from the president. the constitution gives the power to set tariffs to congress. we have long standing laws that have given presidents the powers. they have been used more responsibly in congress, but that would involve a big fight with president trump that i think republicans in congress would not be eager to have and then you have divisions among democrats about trade policy. >> josh barro, thank you very much and still to come, a must read this morning on what's keeping the nation from doing all it can to combat domestic terrorism. plus a growing number of democrats pressing mitch mcconnell to cancel the august recess in order to act on gun control. ohio senator sherrod brown is one of them. he is pressing his colleagues to vote on a back ground check bill. the senator will be our guest this morning. and after september 11th, mayor and 2020 candidate pete buttigieg signed up to fight the threat facing our nation. now he's calling on leaders to fight the threat of white nationalist terror. mayor pete joins the conversation ahead on "morning joe." we're back in two minutes. on "g joe. we're back in two minutes. this was me six years ago... and this is me now! i got liberty mutual. they customized my car insurance, so i only pay for what i need. then i won the lottery, got hair plugs, and started working out. and so can you! only pay for what you need. ♪ liberty. liberty. liberty. liberty. ♪ welcome back to "morning joe." it is tuesday, august 6th. still with joe, will he and me we have sam stein. republican strategist and msnbc political analyst susan del percio. former treasury official and "morning joe" economic analyst steve rattner. pulitzer prize winning columnist and msnbc political analyst eugene robinson. and joining the conversation political writer for "the new york times" and msnbc political analyst nick confessore. columnist at the "usa today" and author of the book "the death of expertise", tom nichols. and contributing editor for the women's news site pustal alisa menendez is with us. the president is expected to travel to dayton and el paso and is likely to meet with some customs and border protection personnel who responded to the scene in texas. yesterday, trump delivered a prepared statement from the white house reacting to the mass shootings that included the deadliest hate crime against latinos in modern american history. "the new york times" reports that since january more than one in five trump campaign ads on facebook have included the word invasion to describe immigrants as a growing threat. but yesterday, trump made no attempts to reconcile his condemnation of hatred with his persistent anti-immigrant rhetoric and made no mention of hispanics or latinos, the group targeted by the gunman in el paso. >> the shooter in el paso posted a manifesto online consumed by racist hate. in one voice, our nation must condemn racism, bigotry and white supremacy. these sinister ideologies must be defeated. we must recognize that the internet has provided a dangerous avenue to radicalized, disturbed minds and perform demented acts. mental illness pulls the trigger, not the gun. we must make sure those judged to pose a grave risk to public safety do not have access to firearms and that if they do, those firearms can be taken through rapid due process. that is why i have called for red flag laws also known as extreme risk protection orders. >> and that's donald trump yesterday. willie, donald trump this morning as i'm sure you know is retweeting comments from supporters at places that many call state run tv talking about the number of mass shootings that occurred while barack obama was president of the united states and comparing the two. of course, what donald trump and his supporter that tweeted this on state run television did not say is that during barack obama's two terms, he was trying desperately to pass measures like -- well, you know, like extended background checks that 90, 95% of americans support. he was trying to work with democrats and republicans and congress to pass other meaningful gun safety laws and every time it was mitch mcconnell who stopped him dead in his tracks, even though 90, 95% of americans wanted what president obama was pushing for, especially -- well, republicans, democrats, gun owners and members of the nra, the majority in every one of those groups supported expanded background checks and mitch mcconnell killed them then and now it's mitch mcconnell and donald trump that are killing the legislation today. >> it appears the focus on other places is now on president obama because president obama put out a thoughtful statement yesterday without naming the president talked about calming down the rhetoric and not having these words passed out of your mouth that go after immigrants and perhaps lead to incidents and tragedies like the one we saw in el paso. this is all predictable though, tom nichols. we could see it happening. the president reads a speech off the teleprompter, he clears the world's lowest bar which is to condemn white supremacy inside the white house, he did that. then this morning as most people predicted he will turn it political once again. >> it's amazing how difficult it was for the president to read that speech. you can see that when he has to get off of his extemporaneous talking points and give a contrition speech it's a physical effort. like he can't get his mouth around the words and make his way through the statement. first thing in the morning he's right back at it with grievance about obama, grievance about whose record was better. you know, this isn't -- i think the people who constantly make the point that well you have to encourage the president when he's right, criticize him when he's wrong, really don't take into account that he's just never sincere about these statements that sound right. but really don't reflect what he believes in any way. >> and willie, you know, for those people that are tweeting now from other networks that donald trump is the least racist president ever, i wonder if they saw the clip from the florida speech. alex, do we have the speech from the florida, where the president laughs when people say we should shoot hispanics. can we run this for our friends that are actually saying that donald trump is the least racist president ever? >> this is an invasion. when you see these caravans starting out with 20,000 people, that's an invasion. i was badly criticized for using the word invasion. it's an invasion. but how do you stop these people? you can't. there's -- that's only in the panhandle that you can get away with that stuff. only in the panhandle. so it's a tough situation. >> so there's actually somebody on another network, willie, who is saying that it's political season so they're going to continue the racist narrative. it's not a racist narrative, there's the president talking about the invasion, invasion, invasion, which he talked about through 2018, it led to devastating results for republicans. of course they're too stupid to figure that out, i guess, politically stupid. but, no, it's not a narrative at all. the president has been speaking like a racist. he's -- his crowds have been chanting nazi chants, send her back. i mean, this is not the political season. this is the season for donald trump's white supremacy and racism and we're all just hoping as a nation that he backs off of it. >> yeah. president trump quoted on twitter this morning the quote from that host that you cited and then followed up with his own line and i am the least racist person. nick confessore, you look at the two clips, the president in pensacola laughing off the idea of shooting people coming across the border and then the president at the white house yesterday. is there anyone who buys the person who spoke at the white house yesterday. can you take ten minutes of your day and read a prompter speech written for you and convince people that you aren't actually the person you've been for the four years that led up to it and now from the day that comes after it it? >> look, i think it's far pastime for us to start looking at trump the in the totality of his record over time. anyone who has followed this president knows that teleprompter trump going to be there and go away and twitter trump is going to come back at any second. and that's where he says what he really feels and in that sense, you know, twitter trump is very valuable. his twitter feed is helpful to all of us. because it's what he actually thinks. this is a president who wants credit for anything and responsibility for nothing. >> yeah. i just think it's worth recognizing how deep we are into this we're in the alice in wonderland rabbit hole world. the president of the united states wakes unafter a national tragedy, turns on cable news and airs his grievances on twitter, this is what we're expecting from the president. we're in a surreal universe this is the expected behavior. all i'll add, there's an immense amount of weakness to this. it takes a little strength to be introspective to recognize where you have failed and to seek to improve it. i mean, it does take some strength to do that. trump is utterly uncapable of doing that. he refused to acknowledge any contribution he may have made to this climate that we're in. we see it now in the manifestation of his id on the twitter feed where he's lashing out at a subtle but important criticism from his predecessor. stronger people would have said you know what, i'll seek to do better but unfortunately we don't have that in the oval. >> well, he's weak and insecure and that's all he's got. >> weak and insecure and susan del percio, let me go to you and tom nichols. i'm a former republican. tom is a former republican. susan not exactly sure if you're a former or a current republican still. >> nope. >> but still, we were all republicans and i have just got to say that as we look at donald trump and what he's gotten away with, i'd like to ask both of you when there are fascist chants from the audience, send her back, when the president of the united states says go back to where you came from, where is joni ernst? where is mitt romney? when donald trump is laughing, when somebody says shoot hispanics, shoot immigrants after he keeps talking invasion, invasion, invasion to rile up the audience where is cory gardner whose election is up the next year in the swing state. where is susan collins, up in a swing state? where is thom tillis when the words of hatred continue to come out of the president's mouth? usually at rallies or on twitter and they lead many people believe because the manifestos line up with what he's been saying to the death of over 20 people in el paso. >> well, you bring up a good point. you mentioned the folks in swing states and who are up for re-election. and they operate out of fear. they're afraid of trump, they're afraid of the primary. that's not an excuse. i think it's just a stark reality. as far as i think what's even worse, the folks who aren't up for mitt romney who has over 5 1/2 years left on his term who is afraid to speak up. that's what angers me and donald trump will be gone and the republican party will have to figure out what it is. i for one -- i'm a current republican, i will be there to hold those people accountable and make sure that they no longer represent the republican party. because we do need a two-party system. there are republicans who do believe in doing the right thing. if you're an elected official and not doing it, you should be out of there. >> we do need a center right party but i don't think it's the republicans anymore. the republican party now -- >> that's correct. >> i think susan's point about fear is really important. it's a party that is completely caged by its own fear of everything. not just of its own voters but a fear that the weakness of its own ideas. the republican party i joined in my youth 35 years ago, 40 years ago, was a confident, optimistic forward looking party that believed in america, believed in immigration and in national unity. this is a party that's afraid of everything that it's afraid of its own voters, doesn't have confidence in its own ideas and it's mortgaged everything it's believed in to be a cult of personality for a very weak and insecure man. there's no center to the republican party. it has been hollowed out by this cult of personality and by its obeyence to donald trump. >> case in point, take a look at this. two-term republican state senator who represents a district in omaha, nebraska, is saying enough is enough. on sunday, john mckohlister tweeted that the republican party is complicit to the obvious racist and immoral activity inside our party. i'm not suggesting that all are white supremacist or that the average republican is even racist. what i'm saying though is that the republican party is complicit to obvious racist and immoral activity inside our party. we have a republican president who continually stokes racist fears in his base, he calls certain countries s-hole countries and tells women of color to go back where they came from and lies more than he tells the truth. we have republican senators and representatives who look the other way and say nothing for fear it will negatively affect their elections. no more, when the history books are written i refuse to be someone who said nothing. we all like to cite abraham lincoln's republican lineage when it is politically expedient. but now is the time to act like lincoln and take a stand. what a great statement. in response, the nebraska state republican party issued a statement telling him to leave. >> wow. >> executive director ryan hamilton said the latest false statement about republicans should come as no surprise to anyone who is paying attention and we are happy he has finally shed all pretense of being a conservative. >> stop right there. >> whoa. >> stop right there. the republican leaders that made that statement are liars. i'm speaking directly to you. you're not a conservative. you're not close to being a conservative. chances are good -- i don't know how old are the people who wrote that statement but i was fighting for conservative causes while a lot of you were in diapers and when i was fighting for conservative causes we balanced the budget, not one year in a row, but four years in a row chbltd. we passed entitlement reform, we extended the life of medicare and strengthened nato. we pushed back against russian and the republican party of donald trump and the republican party of the very people who wrote that statement are responsible for the largest federal debt ever. the largest deficits in good economic times ever. they're responsible for the den agrace and believing the word of vladimir putin over the fbi director. believing the word of an ex-kgb agent over the word of donald trump's own appointed cia director and director of national intelligence. you also support a senate majority leader, moscow mitch, who has killed every attempt to protect the united states from a growing threat that the u.s. military, the fbi, the cia, the dni, the department of homeland security says is emanating from russia. they're invading the united states and pose an immediate threat to american democracy. that's the word of our entire intel community and the military. it's not the words of me or anybody at msnbc. or "the new york times" or "the washington post." that's our intel community. you know nothing about being a conservative, absolutely nothing about being conservative. this is not about ideology. this is about your blind fealty to donald trump. you have chosen to follow a con man and a scam artist who spent his life giving money to nancy pelosi and hillary clinton and rahm emanuel and the democratic national committee and now is pushing protectionist policies the republicans used to despise. and how does he -- how does he pay off others who are hurt by these protectionist policies? he comes up with an idea of a $16 billion socialist farm bill that is the biggest socialist farm bill scam in the history of the united states of america which of course goes to big corporate farmers. not rank and file farmers and you're lecturing anybody on being conservative. you're not conservative. i know conservative. i am conservative. you are pathetic. >> that's where we are. >> and by the way, sam stein, you know more about this story. but we have seen it in washington, we have seen it across the country. you have these party leaders who are sycophants for donald trump. they don't know the meaning of conservative. they probably never read hyatte, they probably read milton friedman. they probably read russell kirk. they don't know what conservative is. >> yeah, i mean, this is -- when i saw this statement from the nebraska republican party i was shocked but also not shocked because fealty to trump is the defining ideology of modern republican party right now. and i just think, you know, we're having this larger discussion about what will happen in the wake of el paso, whether gun rights laws will change and, you know, if you're sober minded about it the answer is not much is going to happen until trump givens some sort of signal that he's letting the people lose and/or one republican follows another republican, follows another republican and says enough is enough. so you diagnosed the problem pretty much straight forward, there are two people standing in the way of any legislative action here. one is donald trump and the other is mitch mcconnell. and until one of them is willing to break that's where we are. >> you know, i have got a question for you, mika. ben sasse, isn't he from nebraska? >> yeah. >> you know i haven't heard from him in a long time. >> he keeps hiding. i don't know what -- >> he had such a strong sense of self and sense of what is right and wrong and -- >> well -- >> very strong. i -- >> where is he? >> i wonder why he speak out here? i know george pete bush is not afraid to speak out when things are going on inside his state. where is ben sasse? does he think he can just hide for the rest of his term? >> apparently. which is -- you know, at this point, something that we're not shocked by. that's the issue i want to ask about. i guess i'll take it to gene or anybody who has some historical perspective here, because look at trump's grip on these republicans. even down to the local level. trump's grip on them muting them, making them spineless. spineless politicians who literally don't stand for anything anymore. changing who they are if they ever were leaders who believed in america. trump's grip looks to me, gene, like something very un-american. is there anything in history that matches what we're seeing today? >> not that i think of, really. i've never seen a party in thrall to one figure -- >> in history -- >> well, right. in history. u.s. history. >> there are events and times that countries are led by people who do not have a sense of american values. this does not look american to me at all. the way this is going. >> well, it doesn't look american because it's not. or at least historically and it's certainly not conservative or republican as i understand the term, as i understand the terms for my entire life. and really, there are two people here. there's donald trump and there's mitch mcconnell. and mcconnell to a certain extent has -- follows the trump agenda but he also has his own agenda preserving his majority protecting his republican senators from having to take votes that they need to take, going on record. and it's -- you know, this party has forfeited the right to -- the right to hold office, the right to lead. it really has. it is disgraceful and the solution ultimately is to vote them out. just to vote them out. it is -- there should be more focus among democrats not just on the presidency in 2020 but on the senate as well. because you know, guess what? we get rid of donald trump and moscow mitch is still going to be there. and still going to be blocking any much needed legislation on guns and on a whole range of things and it's got -- >> and securing our democracy. >> yeah. >> that's why something bigger seems to be happening. we'll get to all the different angles here. steve rattner on the business angle. we need to get to alisa menendez on the 20,000 foot look at all of this. and joining us now though is democratic presidential candidate mayor pete buttigieg of south bend, indiana. mayor pete, really good to have you on the show. >> good to be back. >> can you describe to us what you see happening, especially with president trump and the republican party and the inability of republicans to stand up to what they see? >> you know, i remember a time when the republican party was associated with security. with the idea of keeping us safe. it's very clear what we have right now is an intersection of two things that make us very unsafe. that undermine our security. one of them is the loose gun safety laws in this country. the other one is domestic terrorism, powered by white nationalism and white supremacist ideology. and this president is incapable and this party refuses to do anything about it. you think about the fact that the house finally acted in a modest way but at least they acted to do something about background checks. of and senator mcconnell won't even allow a vote to happen. it calls for us to ask okay, what would it take to really have it be different this time? we always say this time is different but here we are. one more time. you know, after 9/11 we said this is going to change us. we are never going to be the same. we're going to unite, we're going to do something and how ever imperfectly our nation came together and took a lot of steps to keep us safe. are we going to do the same this time or not? a lot of it depends on the senate. congress is in recess right now. great time to find senators in their home states and what i'm urging our supporters to do on my campaign is really think about this with an action mentality. we put out a text through our organizing program and last night about 15,000 people used that link in order to have a call into their senator's offices. as senators are going to their home states and communities across this country, somebody needs to be asking them whether they're going to continue to allow inaction to dominate washington and fail to keep us safe. >> mr. mayor, it's willie geist, good to have you on this morning. there's obviously as the country is bombarded with the horrifying images and stories out of el paso and dayton about parents, people shielding their newborn babies in walmart, there's emotion around it. there's got to be common sense gun reform, but that's not specific, that's an emotion. let's talk about your plan. if you become president, what's realistic for the american people to expect you do can do on the question of guns? >> well, first of all, we know that there are steps that the american people support, that would get through congress if they actually had the courage to do it. obviously, universal background checks including closing the so-called hate loophole. right now, being convicted of a hate crime in most parts of this country is no obstacle to your being able to acquire a weapon. we know we we have to have stronger red flag laws and we need to act in order to do away with the research ban. the fact that the cdc is prevented by law from even researching gun violence as a public health issue begs the question what is it that they don't want the researchers to find out? and this is clearly the influence -- not so much of gun owners but of the executives of gun companies who are viewing this entire thing as a matter of money. same thing with assault weapons. look, the kind of weaponry that i handled when i was deployed overseas has no business in american neighborhoods. the fact that the dayton shooter was able to kill that many people in about a minute shows you that it really does matter what kind of weaponry is in people's hands. this isn't just about the gun side. we have a lot more work to do when it comes to countering violent extremism at home. i think frankly that this white house and party doesn't want to act because they're embarrassed about their own relationship to this kind of extremist ideology at home. but that's no excuse for allowing it to fester and in many cases allowing it to kill. >> so mr. mayor, i'll take the other side of it and let you respond. even universal background checks wouldn't have swept up either of the two shooters in dayton and el paso. people say you can ban all the guns in the world and there are still more guns than people in the united states and somebody with hate in his heart and someone who wants to get a weapon and wants to kill people will find one. what do you say to the defeatism, there's some things we can do but it's never enough. how do you respond to that? >> for as long as i have been alive america has fallen into the habit of accepting the unacceptable. we do it on health care, accepting we're on the only country in the developed world we don't have national health care and living with the fact because it's been this way for quite a while that we're going to have crumbling roads. we accept it on guns as though there's nothing to be done. we are the only country where this happens all the time in the way that it does. also there's nothing that can be done. of course bad things will still happen but if that were really an argument against gun laws it would be an argument against all laws. look, not every single incident can be prevented. that doesn't mean you don't bother. after 9/11 we didn't say, you know, even if we put together the -- the best counterterrorism program some highly motivated terrorists are still going to get through, so you know, we shouldn't bother. let's just not bother to do anything about terrorism. a highly motivated terrorist is still going to get their hands on -- no, you take action. if the action moves the number of people who will be vulnerable to losing their lives down to something higher than zero, but less than it is today, then you'll be glad that you took that action. >> of course after 9/11, dick cheney and george w. bush and the bush white house adopted the 1% solution. if there was a 1% chance that something could lead to more bloodshed from islamic terrorism then they were going to do everything they could to stop it. of course, republicans now appear to be in the opposite direction. there has to be a 99% chance, even 100% is not enough to make them move. let me ask you this, mayor pete. there aren't right -- it's shocking to me, but there are not any federal laws on the book to actually prosecute people for domestic terrorism. if you're president of the united states, what does that law -- that domestic terrorism law look like? >> yes, that has to change. we have to be empowered to act on domestic terrorism because it's becoming the bulk of the threat. consider this. over 70% of arrests related to international terrorism happened before an attack takes place. the reverse is true when it comes to domestic terrorism, over 70% happen unfortunately after there's been an attack or after there's been an act of violence. we need the means and it won't be easy to set this up because as we do it, we of course have to make sure that we are protecting our liberties. we learned a lot of things the hard way during the response after 9/11. this is often a surgery that you have to undertake with the scalpel. but look, the bottom line is we have woefully inadequate resources for combating violent extremism at home. so much good work has been done on counterradicalization, trying to reverse the radicalization that's happening overseas for example in some corners of the islamic world and yet right here at home they have actually cut the funding for a program in the department of homeland security that addresses just these issues. when it does come to the international links and unfortunately you know white nationalism is a global phenomenon too. we need the national center to at least be empowered to invest gate the international connections. i'm proposing that we invest a billion dollars in countering violent radicalism and extremism at home and empower the department of homeland security to act on these threats. and come up with a legal framework that gets ahead of these kinds of hate crimes and these kinds of home grown terror networks. >> all right. mayor pete, thank you so much. we really appreciate it. and good luck on the trail. >> thanks, good to be with you. so all right. so alicia, let's look at this from 30,000 feet. mayor pete brought up a couple of great points. first of all, the cdc can't even look at the impact of gun violence and it's not just the mass shootings. i think 40, 45 people were shot in chicago this past weekend. you look every weekend around the united states. people are getting injured, are killed from gunfire. and yet, the cdc can't do a report. we have cut the -- the federal government has cut research into that. also the ability to track down home grown terrorists. what do we do and at what point do the american people say enough? >> right. how do you reconcile the fact that republican elected officials aren't necessarily where republican voters are. republican electeds are much more resistance to gun control than the voters and the majority of republican voters support background checks, a majority support red flag provision and to pull this all together it's part of the perversity around this language of invasion that the president uses to talk about the southern border. it's supposed to make us feel as though we are unsafe as though the threat is coming from outside. when really if you look at these numbers around right wing extremism the threat is coming from inside. so it is interesting to me that in the wake of el paso, you have the congressional hispanic caucus led by joaquin castro putting out three requests. one, that the president stop using this language of invasion. that seems like a very low bar to clear. then on top of that, talking about coming back, doing some type of gun control legislation and third, taking seriously offering funding to this question of right wing extremist terrorism and really a basket of issues and you can't take one without the other. >> they all have -- they all have to be used together and also the facts -- the facts are stubborn things and the fact that illegal crossings were at a 50-year low when barack obama left office. but donald trump according to a lot of experts actually by talking about invasion, invasion, invasion and talking about his wall, actually precipitated a crisis that allowed smugglers to go to potential immigrants and say, we need to rush up there now because donald trump is talking about walls and he's talking about an invasion. we need to get there as quickly as possible. so again, under barack obama and his leadership, those illegal crossings were at a 50-year low and they only spiked under donald trump. i don't know if you saw this, but andrew ross sorkin has a letter to the chief check conservative of walmart. dear mr. mcmillan t massacre at your store over the weekend were a tragedy and so were the shooting deaths days earlier of two walmart employees at a walmart store in mississippi. so too was the mass shooting in dayton, ohio. and the multitude of others in recent years. it is clear that this country is suffering from an epidemic that law enforcement and politicians are unable or unwilling to manage. and in the depths of the crisis lies an opportunity for you to help end this violence. you singularly have a greater chance to use your role as chief executive of the country's largest retailer and largest seller of guns with greater sway over the entire ecosystem that controls gun sales in the united states than any other individual in corporate america. steve rattner, yesterday, we were asking what ceos were still funding donald trump's campaign and funding the white supremacy that he was spewing out on the campaign trail because that white supremacy is attached to those ceos, those coos and those companies that contribute to donald trump's white supremacy campaign. that whether it's the nazi chants, the fascist chants of send her back or whether it's people shouting shoot them and donald trump laughing and applauding -- everybody applauding. and we're going to have somebody on later this week from colombia sportswear who actually answered that challenge and spoke out about some of the more offensive chants. but i mean, i'm just curious, where do ceos, where do companies that have pacs, where -- i mean, how exactly do they contribute to a president who is now directly linked to white nationalism and white nationalist chants? >> well, look, i think obviously that is not what you want to see happen. i don't know how much comes out of the companies themselves. i don't know honestly how much the ceos would actually contribute to trump. i think that he certainly has many supporters in the business community for his business policies and they like his tax cuts, they like his deregulation and they support him for that. but the ceo's i know, most are not white supremacists, they don't want to support white supremacists and it will be interesting to see what they do as a result of this. i think andrew sorkin raises an interesting idea that walmart does have this exceptional position in the ecosystem to actually push back on the gun problem. and the chairman of walmart is a reasonable guy and it will be interesting to see if they start to step up and do something to help instead of being on the sidelines like so many of the republican politicians you were talking about before. >> and tom nichols, i guess it could be another part of this puzzle is ceos who could make up for -- for what republicans aren't saying but for many it might be tough because they're benefitting potentially from trump's policies. it would call for them to have a moral standing on all of this and to step up and speak out. >> and that's the problem. currently the republican party and everyone here has identified the president and the senate majority leader as the problem. the republican party stands for power and money at this point. and in senator mcconnell's case the prerogatives of the senate. ceos would have to step forward and to address this violence by again changing the culture which is something the republicans are not willing to do. because they're not willing to speak out. because people like romney and ernst and ben sasse who is missing somewhere at this point won't step forward. so it is possible that ceos could take a role in this and change the culture and to say, you know, we could do with guns -- we'll -- i shouldn't say that. i don't mean to be as defeatist as mayor pete points out, but, you know, america has a second amendment but we don't -- we can make the gun culture less attractive, less romantic. do something with it that we did with things like smoking or drinking and to say, you know, that there is such a thing as too much of the glorification of this kind of culture because the young men -- it's always men. the young men in this are shopping for ideologies and they're attracted to the romance of guns and violence. and that -- that intersection has become a really powerful and dangerous thing in this country and no one is speaking up about it. because they're paralyzed by fear. i'll just add one more thing. the republicans really have become the party that fears facts and science, that they don't want to let the kind of studies go forward because they're not confident in their own position. they know that they're -- their own electeds are far away from where their own people are on this. so we really have to break that logjam somehow. but as long as there's the united front from the white house to the corporate world i don't think that's going to happen. >> alicia menendez, we have heard it for a generation after the shootings and there's a frustration that nothing tends to come from them. i have heard just anecdotically in the last few days they thought sandy hook was the moment, when first graders were slaughtered in the classrooms that the country would come to terms with the massive problem in front of it. do you believe that something is different this time? do you see any hope that things change maybe at the very least in the way we approach white nationalism as a domestic terrorism problem? >> right, a good question. you can feel the frustration. it is palpable. i mean, if anything, what happened in el paso -- there have been alarm bells going off about this for months. there are people trying to warn us and yet, we have not heeded that alarm. i think it remains an open question, i mean, el paso revealed to us how deeply unprepared we are as a country to tackle this threat. whether or not we are ready to take action on it, i think unfortunately remains an open question. >> alicia menendez, steve rattner, tom nichols, thank you all. coming unfederal sentencing guidelines calling for life plus ten years in prison for the trump supporter behind the pipe bomb plot against prominent democrats and journalists. so why was he sentenced to just 20 years behind bars? we'll try to answer that question next on "morning joe." . if your gums bleed when you brush, you may have gingivitis. . and the clock could be ticking towards bad breath, receding gums, and possibly... tooth loss. help turn back the clock on gingivitis with parodontax. leave bleeding gums behind. parodontax. right now, congress is working to end surprise medical billing. that's when patients are hit with medical bills they thought would be covered by insurance. but what congress is considering would cut money that vulnerabe patients rely on the most. that means seniors, children, and americans relying on medicaid would be hurt. it's already too hard for people to get basic medical care with hospitals closing and a shortage of er doctors. tell congress we can end surprise billing without shredding the safety net. paid for by physicians for fair coverage. here, hello! starts with -hi!mple... how can i help? a data plan for everyone. everyone? everyone. let's send to everyone! [ camera clicking ] wifi up there? -ahhh. sure, why not? how'd he get out?! a camera might figure it out. that was easy! glad i could help. at xfinity, we're here to make life simple. easy. awesome. so come ask, shop, discover at your xfinity store today. cesar sayoc the florida man who pleaded guilty in march to mailing more than a dozen pipe bombs to prominent critics of president trump days before last year's midterm elections has been sentenced to 20 years in prison. a federal judge yesterday concluded sayoc intentionally designed the bombs so that they would not detonate. according to "the washington post," prosecutors had sought life in prison. while sayoc's defense lawyers pushed for a ten year sentence. saying he was using large quantities of steroids when he became delusional in his support for trump. sayoc told the judge quote, i'm so sorry for what i did, now that i'm a sober man i know that i was a sick man. i should have listened to my mother the love of my life. joining us now, msnbc legal analyst danny cevallos and david aronberg. >> so danny, there's so many things i don't understand about this. here's guy, a domestic terrorist, who actually in the heat of a campaign targeted democrats, targeted political figures. targeted media figures. and the prosecutors asked for life -- a life sentence. and the judge backed off. something that certainly i find it hard to believe he would have done if this had been an islamic terrorist. >> we know from the outset that sayoc was going to get at least ten years. that's because that's the mandatory minimum for one of the crimes he pleaded guilty to. between that ten years which the attorneys asked for, really ten years and a month, and the sentencing guidelines suggestion of life plus 120 months there was a lot of wiggle room for the judge. and what the defense pointed out, number one, there's no way he could have intended these to be real bombs. they were so ridiculously not real bombs. they had no components, maybe cosmetically they appeared to be bombs, and in addition, he was suffering from mental illness, which i know isn't going to garner a lot of sympathy. but what should be considered is the fact that somewhat similarly situated defendants received lesser sentences even in the double digits which is far below what he received and the judge in this case concluded that he did not intend to make real bombs. >> so david aronberg, this leads to the larger question about -- well, you have the coast guard -- a member of the coast guard who put a hit list together, was inspired by other white nationalist murderers and that included not only media personalities, some of whom you know, but also a lot of democrats that were running for president against donald trump. and yet, they had a hard time keeping him in jail because there is no federal domestic terrorism statute. how could that be, first of all, and secondly, is there one in the state of florida? >> there is not, joe. is not. the case you mention, the coast guard white nationalist found with a cache of weapons and was almost released pretrial because there is no code in the book for terrorism. had he given aid to isis or al qaeda, he would probably not have seen the light of day. that is something congress needs to fix. your previous point why he only got 20 years. the judge who is a respected juryist has been an out spoken critic of these mass incarceration. that provides some context here. i agree with the prosecutors here that even though the bombs didn't go off and didn't have a chance of exploding. he would have filled the pipes with sand. that's not what he did here. he filled them with explosive powder, glass and pool chemicals to burn the skin of his targets and anyone nearby. >> this is an important question whether the law enforcement tools are sufficient for domestic terrorism. if you passed the law in one reason, it can be used in a variety of ways down the line. talk about what tools there might have and what holes there might be in bringing justice to these people. >> the sample that cesar sayoc pleaded guilty to many crimes. if federal prosecution, do we need additional statutes like domestic terrorism laws? keep in mind, we have certain tools available to the government, to law enforcement to investigate foreign nationals because they don't have the same protensions that american citizens have. if you create legislation that targets doe me targets dos mess tick terrorism the same as international terrorism, you have to take into account the protections we would never give foreign nationals. we would much rather invade the privacy of foreign nationals if it means with he can protect american citizens. >> an interesting part of the story is that the defense attorneys for sayoc effectively blame the rhetoric of donald trump saying, quote, in this darkness, mr. sayoc found light in donald j. trump. >> the judge found that sayoc was a devotee of donald trump. prosecutors pushed back on that saying he was radicalized way back in 2012 when he posted racist e-mails against barack obama and hillary clinton. the defense lawyers pointed at the fact that he lived in a van plastered with trump stickers and they say prosecutors didn't want to touch this because they work in trump's executive branch. that is something worth discussing. something that did not radical lies cesar sayoc is video games. >> that is true. danny and dave, thank you both very much. still ahead, we'll talk to democratic senator sherrod brown of ohio after the mass shooting in his home state. his message, the senate majority leaders, let us do our jobs. we'll discuss that ahead on "morning joe." going back to the doctor just for a shot. with neulasta onpro... ...patients get their day back... ...to be with... ... family... ...or just to sleep in. strong chemo can put you at risk of serious infection. in a key study... ...neulasta reduced the risk of infection from 17%... ...to 1%... ...a 94% decrease. neulasta onpro is designed to deliver... ...neulasta the day after chemo... ...and is used by most patients today. neulasta is for certain cancer patients receiving strong chemotherapy. do not take neulasta if you're allergic to it or neupogen (filgrastim). an incomplete dose could increase infection risk. ruptured spleen, sometimes fatal as well as serious lung problems, allergic reactions, kidney injuries and capillary leak syndrome... ...have occurred. report abdominal or shoulder tip pain, trouble breathing... ... or allergic reactions to your doctor right away in patients with sickle cell disorders, serious, sometimes... ...fatal crises can occur. the most common side effect... is bone and muscle ache. ask your doctor... ...about neulasta onpro. pay no more than $5 per dose with copay card. 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[ slap ] your nails! xfinity home... cameras. xfinity home... disarm the system. door's open. morning... welcome to the neighborhood. do you like my work? secure your home with x1 voice control. and rest easy knowing you have professional monitoring backing you up. awarded "top pick" by cnet. demo at an xfinity store, call or go online today. xfinity home. simple. easy. awesome. >> we are joined together today in sadness, shock and grief. the pain and grief we all feel. a nation in grief. >> shock, horror and soar row. a country music concert. a place of worship. marjorie stoneman douglas high school. a walmart store. let us pray for healing and for peace. join all americans in praying america comes together as one. we pull together. we join hands, we lock arms. we are all joined together as one. together, we lock arms to shoulder the grief. and we are here for you. we will never, ever leave their side. we are here for you and we will stand by their side forever. >> a brief history of brpreside trump addressing mass shootings in america. >> all the hopes and the prayers and kind words and well wishes, they may be helpful sometimes. as we've said time and again, without real action coming from this white house, without real action coming from moscow mitch who by the way has gun safety on his desk, which he's killed. he should really put the tomb stones which we are going to show you. he put his political opponents in a grave star. i'm not sure if it was in russian or english the language. these two people, donald trump and moscow mitch are responsible for the killing of gun safety laws which make america less safe. they are gun safety laws you and i and 90% of america support. we are talking about expanded background checks, more universal background checks. you saw yesterday, the "new york post" came out with a front page headline. rupert murder rupert murdock's post saying ban the weapons of war. that's the "new york post" saying that. well over 65-70% of americans agree with that. yet donald trump and moscow mitch are the only two people in washington, d.c. killing that legislation and assuring that donald trump continues -- a year from now, we will have to add ten more of those speeches. death tolls will continue to skyrocket. all because they refuse what you and your neighbors want them to do. >> these solutions are basic. the problems are becoming much bigger than the solutions. we are waiting too long to do even the basics here. honestly, when you listen to the president's scripted words his aids wrote for him. what does locking arms mean when you fan the flames of racism. what does ban together mean when you put yourself out there with your own words as a national security threat. oug all of this has to be taken into context. this president is a racist and fans the flames of hatred. one little scripted speech means absolutely nothing in all of this. with us, editor from the daily beast, msnbc analyst a and prize winning columnist and msnbc political analyst, cofounder and ceo of axios joins us as well. >> willie geist, let me go to you. i speak for myself here but the president of the united states saying those words, far preferable to the president of the united states not saying those words. the president calling out white supremacy even though he has played a large roll-over the last three or four years, even looking at the stat tisices of white supremacy exploding. the president calling out white supremacy as opposed to not. as we are seen in charlotte and in those rallies where those nazi chants were rising up, send her back. the president apologizes and then backs off and seems to double down, so it is really hard to say, willie, what comes out of this latest speech he gave yesterday. >> again, the president clearing an incredible low bar condemning white supremacy. as mika said, the president gave a speech, read a speech off a tell prompter collecty disconnected to everything he's set in the last four year since he came down the stairs. donald trump said this yesterday, quote, now is the time to set destructive pa partisanship aside. it is a speech if another president made it, you'd say yeah, those are the right things to say. you don't get to walk in for six, six, eight minutes and make a speech that has nothing to do with the things you've done and said during the time preceding it. they are just words from the president and the teleprompter. >> they are words and they have to be followed by actions. what actions? well, the president talked about expanded background checks. call moscow mitch back. he's of course setting up graveyards and putting names of his political opponents on tomb stones and tweeting them outright after a slaughter in el paso and ohio. maybe if moscow mitch is not too busy doing that and also killing legislation that would affect american democracy -- here he is. he calls himself the grim reaper. you will see, he has what he calls a graveyard. he has the name of his political opponent on a tomb stone and tweets it out thinking that it is appropriate with -- by the way, one of their followers got 20 years in prison for sending pipe bombs to political opponents. to mitch mcconnell thinks that is funny and on the day families are getting ared to burry their loved ones that were going back to school shopping and a white sprem s supremacist attacks. maybe donald trump can call him back to washington and get what 90% of americans want. that is expanded background checks that will make america a safer place. >> still ahead, we'll remember the victims of the mass shootings and the lives they led. plus senator sherrod brown joins us. he represents ohio where nine people were gunned down over the weekend. you are watching "morning joe." we'll be right back. johnson & johnson is a baby company. but we're also a company that controls hiv, fights cancer, repairs shattered bones, relieves depression, restores heart rhythms, helps you back from strokes, and keeps you healthy your whole life. from the day you're born we never stop taking care of you. when didwhen i needed ton? 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yesterday, trump delivered a prepared statement reacting to the shootings that included the deadliest hate crime towards latinos. it is reported one in five trump adds on facebook have included the word invasion. trump made no reconcile of his condemnation of hatred and made no mention of hispanics or latinos, the group targeted by the gunman in el paso. >> the shooter in el paso posted a manifesto on line consumed by racist hate. in one voice, our nation with you condemn racism, bigotry and white supremacy. we must recognition that the intergnat is contributing to radicalize. mental illness pulls the trigger, not the gun. we must make sure those judged to pose a great risk to public safety do not have firearms and if they do they can be taken by rapid process. i have called for red flag laws or extreme risk protection orders. >> so, the president, of course, chirping out the nra's line that it is not guns that kill people, it is mental illnesses that kill people yet our rate of mental illness is not higher than other industrialized countries and the number of murders are so much larger. with the president talking that way, what are you hearing about the two policy proposals put forward about the possibility of expanded background check or all encompassing immigration reform plan? any chance that moves any time? >> i would say no chance on immigration reform. slight chance on background checks. you'll have more republicans come out today to talk about it. you hit at it at the top of the segment. one of the problems is going to be the first and second amendment going after this spread now of domestic terrorism. even if you did background checks and outlawed semiautomatic weapons. we still have so many damn guns on the street anybody who wants to get a gun can get a gun. you can't imagine those officials going back and taking back weapons people already have. then you talk about social media. this is really hard to combat. because of free speech, it is really hard to force these companies or sniff out individuals gathering on social media. before, they had no place to gather. they can do it in mass and at scale and find like-minded people. >> what you are describing -- what you are describing is, of course, what isis was when isis was expanding in 2013 and 2014. the united states ignored isis. it wasn't until the government focused on stamping out isis that they were finally able to do that starting really in 2015, 2016. so a lot of americans asking, why can't we do the same thing now with this hatred? >> you can and you can't. the government has a lot more flexibility and the fbi has more tools to be able to go after foreign threats as opposed to domestic threats. sometimes these debates get a little oversimplified. the media is doing a good job of grabbing people by the collar. last year was the worst for white nationalism and this year is already worse than last year. this is a real problem. you can't deny it. it is a huge problem. it goes against the back drop we've talked about where the country is changing. the white population is shrinking. no doubt, it has been a concerted part of the trump campaign to exploit the us versus them divisions. when you do in a, awfulness happens. yes, you can say the shooting took place because of donald trump but you also can't deny when you look at the rallies and the campaign from supporters that things are getting cranked up to a level and is purposeful to really play into there is us and there's them. the only way you can really dial that back is through national leadership. you think about what george bush did versus trump. you can either say, the country is changing, let's adapt with it or exploit it. he's exploited it and we are now playing with fire. >> there is a direct line you can attach, the hateful speeches and the rallies and the language used in those rallies. you could draw a straight line to much of the language in these manifesto. you have the manifesto coming out of el paso where the killer is specifically saying that there are too many hispanics. there is a hispanic invasion in texas and if it doesn't stop, democrats are going to take control of taxes and change the electoral map forever. suddenly, it becomes not only very political but very specific. willie, you know, it is interesting that this white nationalism and hate crime, the numbers have exploded since donald trump got involved in american politics. it was reported yesterday that hate crimes in areas where donald trump gave rallies in 2016 have gone up over 2,000 percent. the federal government is still not focusing on stamping out hate crimes. a lot of people factor back in the obama administration, there was a frustration that the government would not even mention islamic rad ral extremeism and were slow to not go after isis. now here we are. that was the threat then. this is now the threat of our time. specifically since donald trump came into the white house. what's he doing? we still don't have a law on the book, which we'll talk about later, to arrest people for domestic terrorism. >> don't take our word foreto. you the last majority of terror threats and plots have been what you could owe up to white supremacy. >> coming up, president obama did not use the words donald trump in his statement. no question what he was talking about. the climate of fear and hatred. next on "morning joe." ♪ limu emu & doug mmm, exactly! liberty mutual customizes your car insurance, so you only pay for what you need. nice! but uh, what's up with your partner? oh! we just spend all day telling everyone how we customize car insurance because no two people are alike, so... limu gets a little confused when he sees another bird that looks exactly like him. ya... he'll figure it out. only pay for what you need. ♪ liberty. liberty. liberty. liberty. ♪ it's how we care for our patients- like job. his team at ctca treated his cancer and side effects. so job can stay strong for his family. cancer treatment centers of america. appointments available now. cancer treatment centers of america. the doctor's office might mejust for a shot.o but why go back there when you can stay home with neulasta® onpro? 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[ repeats ] access denied. if it's not xfinity xfi, it's not good enough. for wifi with super powers, get xfinity xfi. and go see, fast & furious presents, hobbs & shaw. now playing. >> president obama is speaking out following america's latest mass shootings in a lengthy statement, the former president called for stricter gun control laws and appears to take a rare, semiveiled swipe at president trump writing in part, we should soundly reject language coming out of the mouths of any of our leaders that feeds the climate of fear and hatred or normalizes racist sentiments. leaders who demonize those who don't look like us or suggest that other people, including immigrants, threaten our way of life or refer to other people as sub human or imply america belongs to one certain type of people, such language isn't new, it has been at the root of most human tragedy in america and around the world. it is at the root of slavery and jim crow, holocaust, genocide in rwanda, and ethnic cleansing in the balkins. it is time for the overwhelming majority of americans of good will, of every race and political party to say as much clearly an unequivocally. thank you president obama for your honesty about our current commander and chief. >> some people were saying that president obama should have come out and said his name and taken it directly to donald trump. you would have to be living in a cave for the past four years to not know who president obama was talking about. >> it will never be enough for some people but clearly he was talking about president trump. i was thinking as i heard president trump making remarks. if it were someone else looking at these moments saying i don't believe i'm responsible but in a moment of reflection, is there anything i'm doing or saying making it okay for other people to take action. am i giving space with my rhetoric giving place for these white nationalists that makes them travel from 8chan chat rooms to a walmart in el paso. unfortunate because in a moment like this, he could step up and say, i got to knock it off. i don't believe i'm responsible but if i'm contributing even a little to it, i've got to stop. >> you can tell, gene robinson, that the man has never run for reelection before. you can tell that because what he doesn't understand is, what he gets away with for the moment stays with him forever. it is like vapor. what he says in these rallies will follow him throughout the campaign. here is a very good example of it. one of the reasons why he made the statement he made, watch this. >> this is an invasion. when you see these caravans starting with 20,000 people, that's an invasion. i was badly criticized for using the word invasion. it is an invasion. how do you stop these people -- you can't. that's only in the panhandle you can get away with that stuff. [ cheers and applause ] only in the panhandle. so it is a tough situation. >> actually, from the panhandle, you can't get away with that, you can't get away with shooting somebody on fifth avenue like donald trump thinks. but gene, that stays with him forever as does every hateful screed ever said. the sent her back chants with him sitting there soaking that in. i guess he doesn't understand it. he needs to get as far away from that as possible. the only way he can do that is actually follow through with meaningful legislation and to stop the nonsense none of us think he's going to do. >> i have absolutely no optimism in terms of donald trump realizing what he's going to be doing and taking any sort of real action that would turn things around. in that clip, he used the word invasion. here on msnbc and other networks, we've been running mond montages when he uses that phrase invasion when referring to latino immigrants. it buys into this whole white nationalist, racist conspiracy theory about an invasion of brown people to replace the white people in america. it's directly related to that and anybody should know that but of course, maybe, donald trump really does -- maybe to him history really doesn't exist. maybe the only thing that exists in his head is what's happening today, what's happening now. >> coming up on "morning joe," senator sherrod brown decided against running for president so he would cork work on massing meaningful legislation on capitol hill. will that ever include greater gun control? we'll ask next on "morning joe." my experience with usaa has been excellent. they really appreciate the military family and it really shows. with all that usaa offers why go with anybody else? we know their rates are good, we know that they're always going to take care of us. it was an instant savings and i should have changed a long time ago. it was funny because when we would call another insurance company, hey would say "oh we can't beat usaa" we're the 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memory of those who perished in toledo. >> that was president trump naming the wrong city. a mistake as this photo shows was not in the teleprompter. the mayor had this to say. >> i've heard he's coming wednesday. i've not gotten a call. you know, he might be going to toledo. i don't know. >> police are still searching for the motive in the shooting in dayton, ohio. the suspect's sister is among the victims. no indication that race was a motive in this case. former classmates of the gunman are questioning how he could have been allowed to buy the military style weapon used in the attack. they say he was suspended during his junior year of high school after a hit list was found in a bathroom. following an earlier suspension after he came school with a list of female students he wanted to sexually assault. police reveal he was armed with magazines if full would have carried 250 rounds. they have recovered at least 41 shell casings fired by the shooter. >> joining us now, senator sherrod brown of ohio. thank you for being on the show. you are hoping get to work and come back from the recess and get some gun legislation done? any response? >> not yet. i spoke to the mayor who tells me she got dozens of calls and texts from other mayors around the country, most of whom have had something like this happen in their city. it is so widespread. i called senator schumer and mcconnell to bring us back into session today or monday or any time this week. called senator schumer to talk to him. he's doing that to urge senator mcconnell. we could pass this in an afternoon. the president could sign it the same day. the house has already passed it. that's a first step and an important step. we should reinstitute the ban on assault weapons. that cut down on the number for a decade but the gun lobby stopped congress from renewing it. >> you know, senator, things have changed quite a bit since new town. frustration is great. you look at public opinion from then forward. 90-95% of americans support background checks. the number of americans support an assault on military-style weapons shot up into the 60s and 1970' and 70s. the front of the "new york post" saying ban military style weapons now. is that an idea whose time has finally come? >> the idea has finally come but i look at the maillions of dollars the nra puts in to help to spend to punish their enemies. i want to go back to something mika said at the beginning about the number of 41 empty shell casings and up to 250 bpotentia bullets that the shooter had with him. we know from the first shot to the last shot until the shooter was killed was only about 30 seconds. it was five police officers and a sargent that rushed in. yesterday, when connie and i were in dayton, i was talking to some rescue squads and first responders. it's like a war zone. the kinds of choices, the triage you'd see in a war zone. you step over one body, somebody that looked probably dead to try to save somebody else that person's sister is begging them please take care of my brother and they have to choose which people to try to save. that's because of these magazines when they can do these assault weapon-style machine guns call them whatever you want, where you can find dozens of rounds in the space of a minute or two. that's why many police officers say to me, those civilians cannot have those kinds of weapons. they are weapons of war. >> thank you for being with us this morning. i cited a poll that showed 97% of americans approve of background checks. you can't get 97% of people to agree on anything. i understand the two shooters passed background checks and legally bought their firearms. what is the idea when you bring that to mitch mcconnell? how does he argue against 97%? >> he just doesn't. he just says his members don't want to do it or we'll argue about it later, we'll get it to the judges. he doesn't give answers to the colleagues or the press. he's protecting the majority. he knows the gun lobby has put, will put millions into protecting his majority. i know how they spent millions against people they don't like. i'm okay with that. i can win in a state like ohio with that. i know a lot of people don't see it that way. that's why shows like this matter, those polls matter. pushing them to bring us back this week to and do something. >> there does appear to be agreements on the legislation or reform. this idea of red flag laws where if there is somebody like the dayton shooter puts a kill list up and a rape list up in high school, there are people who could petition a court to say you need to go and temporarily seize their guns. is that something you would support? >> yes, i would support. just like at airports if you are on a watch list, you can't go get on a plane but you can buy an assault weapons. we should close all those loopholes. when i hear my colleagues in the house or the governor's office in ohio where they've done virtually nothing. it is so predictable. first my thoughts and prayers are with the victims. all of us feel that, of course. they say now is not the time in the middle of the tragedy and then they talk about mental health. when you look at what happened in texas. white supremacy is not a mental illness, it is a choice. to put this on mentally ill people always, as they always do, most people who are mentally ill don't hurt others. they are likely to hurt themselves. at the same time, the same crowd says this is about mental illness and want to cut funding for treatment of mental illness. i was in a treatment center in cincinnati a couple of years ago, the people were being treated for opiod addiction. one man said, my daughter is alive today because of medicaid. thousands of people in my state have medicaid now because of the affordable care act. people want to talk it is all about mental illness and not guns. they are just wrong. >> they are talking in circles. they never want to talk about the crisis in front of them. we have other panalists that want to ask you and it in to talk about gun safety. i wanted to just ask one quick side question and get your in sight because a lot of people have been talking about mitch mccon a mcconnell and calling him moscow mitch and not understanding why this man is ignoring the warnings of republican appointed fbi director, republican appointed cia director, republican appointed confirmed department of homeland security director who have said time and again to congress that american democracy is at risk. their words, not mine. american democracy is at risk from vladimir putin. in 2016 and trying again in 2020. and yet muitch mcconnell can yo give us insight as to why this is happening. many americans don't understand where mitch mcconnell is killing every bill aimed at protecting american democracy. >> i was on the floor when mcconnell stood up. i just walked in and he was speaking to an empty chamber. defending himself from people calling him moscow mitch. it was remarkable. he talked about how tough he was on the soviet union. he was so defensive. there is an old saying, when you throw a dog at a pack of dogs, the one that yelps is the one you hit. he is clearly defensive on this. he never gets rattled. he is defending this president. he believes -- i don't know what he believes. i know the president believes he needs the russians for reelection. he will benefit from them coming in. i think mitch mcconnell more than anything. my colleague south of me over the ohio river needs donald trump to protect his moajority. if trump loses, he loses his majority. no question the russians are in again and will turn up the volume on what they are doing in this election of 2020. no question about that coming from any intelligence people in this country. most are republicans appointed by a republican president. putin and the russians are back. never really left. they will do more. they want us in congress to do something and mitch mcconnell refuses. >> turning back to gun safety for a second. obviously, there are people in the senate that want to pass new laws. as you pointed out, there is a log jam, there is money and things that prevent people who about this issue, is it possible the time is to look past the senate, past congress, to direct action by consumers, boycotts, and at businesses as my colleague pointed out in "the times" today, walmart is a huge seller of arms and there are ways to put pressure on businesses. >> well, yeah. absolutely there is. and i think more and more corporations realize they're on the wrong side of history, realize they're going to take a hit to their bottom line if they continue to play ball with, essentially with the nra and the gun lobby because they contribute to it. i'm hopeful particularly with social media with all of the terrible things that have come out of social media on white supremacy and hate crimes and racist rhetoric, from the president to the people that are so emboldened by this president. we know the klan and these groups like this president, like what he does and says. that should be enough to know. but with all of that, we can push back and people can push back. you're saying that on a show watched as widely as this. and then pushed out in the hours and days after the show is really important to build a movement because that will put more pressure on politicians in washington to do it, too. >> senator sherrod brown, thank you very, very much for being on the show. good luck. then this. police in gilroy, california will hold a joint news conference later today with the fbi to discuss developments since a gunman opened fire at a food festival last -- >> i wonder, mika, do americans even remember that, that at one of the largest food festivals in america just last week? >> there is a shooting every other day, every day. >> americans were slaughtered. >> mass shootings have become a way of life. >> and then two more rapidly followed. these are happening so quickly that the nra, the three lobbyists in washington d.c. that have been found to be so corrupt that they're stealing money from, according to these reports, that we've read in "the new yorker" it appears they're stealing money from their own members, they're ignoring their own members, who the majority want background checks expanded. but this is happening so quickly. is donald trump going to keep listening to these corrupt leaders of the nra or is he going to listen to actual members of the nra and #t97% of americans and give us expanded background checks? the tragedies keep happening one after another after another and they are not going to stop until action is taken. >> as politico noted yesterday, speech included no mention by donald trump of that mass shooting, which happened in the same week and illustrates how quickly these horrific incidents are apparently forgotten or minimized because of the sheer number of them. the 19-year-old assailant who died of a self-inflicted gunshot wound killed three people -- a 6-year-old boy, a 13-year-old girl, and a 25-year-old man. officials say the suspect posted white supremacist propaganda on instagram shortly before the attack. investigators do not believe he was targeting a specific group. a motive has not yet been established. >> and, yet, another white supremacist, with too many guns, goes out and shoots up communities. >> up next we'll go live to el paso. we'll speak with the reporter for the "el paso times" who has been covering the emotional toll taken on that texas community. we'll be back in two minutes. fact is, every insurance company hopes you drive safely. but allstate actually helps you drive safely... with drivewise. it lets you know when you go too fast... ...and brake too hard. with feedback to help you drive safer. giving you the power to actually lower your cost. unfortunately, it can't do anything about that. now that you know the truth... are you in good hands? but we're also a company that controls hiv, fights cancer, 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(gasp) or not. you okay? yeah, no, i'm good. earn miles. we'll match 'em at the end of your first year. joining us now the watch dog reporter for "the el paso times" and thanks so much for taking time with us this morning. we appreciate it. we heard from congresswoman veronica escobar who represents the district there in el paso. we heard from native and presidential candidate beto o'rourke that the president of the united states is not welcome there. what is the feeling on the ground as the president prepares to travel there this week? >> sure. well, last night a couple of the people in the community got together, planning on not very welcoming to trump coming into town. a lot of it has to do with the outrage and the frustration some of the people in the community have toward the president's rhetoric when it comes to immigration and certainly to the way he has handled the situation. >> we should say, the mayor of el paso says he will perform his professional duty and welcome the president and be there with him. >> i want to follow up a little bit with aaron here. what happens? he is going to show up it seems like. clearly there is antipathy among political leaders there about him showing up. so there's a lot of tension there. as you talk to people, what are we lookingat? the possibility of political protests? are we going to look at a collegial welcoming of the president? how would you predict this plays out? >> well, sure. i mean, you can very much expect to see protests from the people in the community, who are just outraged, who will be calling for some kind of gun control legislation from congress. they'll be calling the president to support something like that. but, also, what a lot of the community is just upset with is when the president tweeted out yesterday we need some kind of gun control measures and tied it in with immigration. that didn't set well with community members. these are two separate subjects that need their own, unique attention and that's a little bit about the people's frustrations that you're going to sense. >> aaron, you're in el paso, a border town, talking about the community. the community often interacts with the other town across the border, jaurez. what is the reaction there in look ath tho looking -- the towns, how they're look ath everything, the president wrongly bringing up immigration and gun safety, but what is going on in the community level? >> sure. well, certainly one of the big differences in this incident is that el paso and jaurez, mexico, are very tight knit communities. these may be two countries but they have a very unique identity and they feel that they're intertwined. you know, just from the reporting you'll see that several mexican nationals were kill at this walmart. and that's because there is such high traffic from chihuahua and a lot of people who come from jaurez to shop here in el paso, a lot of people in el paso have family. they have friends who live in jaurez. so this tragedy is really impacting the community on both sides of the border, simply because of how close knit these communities are. and you're going to see vigils in jaurez, mexico for the people who they've lost and for the people we've lost here and vice versa. >> clearly, why the mass murderer traveled so far to come to that community. watch dog reporter for the el paso times, aaron montes, thanks so much. joe, final thoughts this morning? well, i'm just curious about what you and mika think. for me, there are so many parts of this story. but the disconnect between republicans in congress and the american people they're supposed to serve is massive. they ignore 95%, 96%, 97% of americans who want background checks. they ignore the majority of americans who said in a recent poll the president is a racist. they're still defending him. >> i mean, you can't look at this president in one single moment. you have to look at the pattern and then figure out what side do you stand on, the side for democracy and the united states of america or something else? republicans, please consider that. that does it for us this morning. stephanie ruhle picks up the coverage right now. thanks so much, mika. hi there. i'm stephanie ruhle. here's what's happening now. in any minute, the governor of ohio is set to give an update about the investigation in dayton in the wake of the shooting that killed nine people there. this comes as we are getting new details about the shooting that took place in el paso just hours before and how the gunman even endedn
The former president was still basking in the glow of the rapturous reception he got from GOP lawmakers, most of whom were forced to flee in terror when a mob of his supporters stormed the Capitol on Jan. 6.