Lee. Good to see both of you guys. Dow is up 170 with a pretty good rally all morning long as you can see as we had good auto sales and dovish come mens from dudly as well. The director of the fbi and apple senior vp will testify on capitol hill. Comes as a new york judge side with apple in a similar case involving that locked iphone. It could effect the government arguing about unlocking the iphone used in San Bernardino. What a turn of events it was last night as we looked at what this judge said specifically. Specifically about compelling a company to create something that they dont already have in order to assist the government. Seemed like some legal things are turning in apples direction. I read the prepared statement that well get when he gets in front of Congress Later today. To me its the clearest articulation of apples argument here but it still seems to me that they need to get in front of this story. Articulate the value of encryption to the consumer so the politicians have cover to side with them. Thus far all the gop candidates and other politicians said we think apple needs to cooperate with the government in this case. They need to turn that around somehow. Were now maybe seeing why he was a little more circumspect in his house appearance last week. But how does this change things . Apple has a really good argument for why the security of the iphone needs to be maintained. I think the government wants apple to build a version of ios that bypasses the restrictions that maintain the security of that pass code. I mean, apples argument is that the government can ask it to bypass the security of the pass code and the next thing theyre going to do is pass by the restrictions on the microphone and Location Tracking and turn it on all the time. Apple needs to make that whole slippery slope argument in a broadway to the entire public instead of saying this is about privacy and encryption. They need to say we dont make these tools for Law Enforcement and we dont want to and if you want Law Enforcement to have these tools go to congress and get a real law passed that explains what our responsibilities are. Dont let the fbi use the act to do crazy stuff. Theres still nuisance to this which is in the San Bernardino case there was a weird screw up where like the county that held on to it, they changed the icloud password and apple said i could have helped you out. Apple is willing to hand over data when they can access it without compromising their existing security. In their mind somehow the phone the phone is more sacred to them in a lot of ways. The data, if you can get to it we will help you get to it. If you have a warrant or probable cause well comply but youre asking us to do something that perverts what we create and we don want to do that. Create a law that spells out what is good and not good. Part of the danger here, congress is the sausage factory. Thats what you have seen with obamacare. They can end up with all kinds of stuff in it so part of the challenge for apple will be getting ahead of this legislative process in a way that says we talked about the donts. Heres some ideas on what you can do and by the way bring in google and microsoft so they also say yes this would be a good way to craft something that would be palatable to us and yet give Law Enforcement what they need. A for Profit Company versus the government, theyre going to move much faster. Theyre going to create the next iteration and get out ahead of whatever law they might come up with and that becomes the standard. Thats what theyre banking on. They want to get out ahead of this. They want to work with the government and Law Enforcement the best way they can. Theyre going to move ahead with the next version of the phone that might make the whole thing move anyway. I think whats important here is apple is already proposing lets have a commission and propose a law and write a statutory definition for what we can and cant do. Eventually that means theyre going to compromise and what apple is clearly not going to compromise on is the strength of the encryption and the pass code, whether theres a back door. The place that theyre going to compromise, theyre going to make it easier and more efficient for Law Enforcement to access the data they need to continue their investigations which is a very tricky road. Some argue that the fact that theyre leaning on congress for a legislative remedy here means theyre not con fireworks den in their legal case. Brooklyn argues against that but isnt that something to consider . Theyre probably getting more confident in their legal case. I know that i certainly am but the danger is they win the legal case but congress crafts a law that says heres what you cant do apple when youre building your technology. Heres limits to encryption. Heres built in back doors that you have to allow so they win this battle but they lose the war over the types of tools and protections that theyre allowed to provide. They have not had a big presence in d. C. Unlike microsoft and google but theyre seeing the limbs of their inability or unwillingness to have engaged so long theyre trying to thread the needle here. Gopro announcing it will buy two editing apps. The stock seeing a nice gain on that news but obviously down 70 in the last year. Nick woodman did talk about his future at the company in an exclusive interview in the last hour. Take a listen. Absolutely committed to running gopro longterm. Gopro is very much an extension of everything that im interested in in life. Technology, adventure, video, photography, family. Im fortunate that i get to express myself through gopro and work with some of the most talented people in the world whether theyre product designers or people in the Marketing Department and i cone ask for a better job so this is what im doing for the long haul. John yesterday we talked about whether ibms hardware problems were fixable. Are gopros hardware problems fixable . Yes but im motte confident that nick woodman is fixing them. We talked about his software challenge. He had the cameras himselves. Theres a lot of engineering focus put on those. Now he needs to focus on software. The two apps he got are good but theyre totally different. Its not clear to me whether hes going to take the teams and get them to stop working on what theyre working on and build something new for gopro or if they see this as a new Software Business where theyre going to brand the apps. Let people use them with their phones even if they dont buy the cameras. They seem to be imlying that. I dont see how you get a business with the kind of multiple that he had up to this point. Youre going up against apple, adobe and others that do this all day long. These are the apps that allow you to edit video on your phone which is a neat idea but any time you ask a consumer to download another app is a huge barrier already. Even with photo which is a big part of how people interact with their phones its a huge hurdle. I dont see it as a big pivot for them. Its a nice add on. Its a marketing element to up sell people into the camera but the camera itself as nice as it is its still kind of that device. For that kind of sort of activity use a lot of people like it thats where theyre trying to promote heres what it looks like. If you do it this way its by the camera. Its a hard sale. Im shocked theyre nott trying to diversify the camera line. It might help you sell the cameras but theres a lot of other kinds of cameras you can sell that can work in better way with the phones. The phone camera is not the be all end all. Theres a lot of places where people want great cameras that work with their phones and im surprised theyre not going in that direction. Thats a big change in behavior overtime, isnt it . Not only is it a big change but this stuff is expensive. I love the htc vibe but the computer alone is around a thousand dollar before you get the piece that goes on your face. Most mainstream people are not going to buy that. If you have a company like gopro thats looking to make vr and drones a part of their business dont expect that to rack up big numbers any time soon. A bunch of the zroen stuff relies on an ios device. Youre beginning to see the seed of the business where the phone is the center and the new hub and what comes around it in the eco system. They rely on that kind of system but johns point is right. If you want people to buy these things, they need to be cheaper. They simply need to be cheaper. Its 99. Samsung is giving it away for free. That tells you something too though if theyre giving it away for free. Samsung will give away anything. Good discussion. Thank you guys. Appreciate it very much. It is super tuesday and its looking like Hillary Clinton and donald trump are set to have a pretty good day. John is back at hq watching that and will well into the night. What makes this tuesday super is that the race goes national. Contests across a dozen states and that helps the two candidates leading national polls. Hillary clinton and donald trump. Check this map of whats in play. Strong southern accent today. Thats why they call it the sec primary. But also massachusetts, vermont, minnesota. Clinton is likely to dominate the democratic south with helps from the African American voters that powered her South Carolina victory but the republican race is more complicated. Georgia has 76 delegates. Donald trump leads with 36 while cruz and rubio each have 22 . Why is it important that each one take at least 20 of the vote . Thats the threshold for grabbing a share of the statewide delegates. Then take virginia. 49 delegates. Trump leads here with 36 as well. 22 for rubio. 17 for cruise but cruise would still be able to get delegates at that level because theres no threshold in virginia. Finally texas, 155 delegates. Cruise needs to win and he leads with 37 of the vote to trumps 28 and rubios 18 . Texas also has a 20 threshold for statewide delegates to rubio could get shut out if he doesnt get below that level. Donald trump is likely to smooth his path for the republican nomination tonight and if he wins texas, guys, he might be unstoppable. I cant wait to see the returns tonight. It is going to be fascinating to watch. When we come back, two opposing views on apples case against the fbi. Well talk to assistant attorney general for National Security and congressman gordon that will be asking the questions in this afternoons hearings. Plus the chinese drone maker unveiling the latest model complete with collision protection and then ballmer doing his best to remain one of the most interesting owners in sports. The video you have to see later on squawk alley. What are experts saying about this case. We are joined for a first on cnbc interview. Thank you for joining us today. Apple making its case today on capitol hill. Let me ask you just the basic issue in this case. Should the government, john, have the right to compel apple to write this software and give the fbi access to this locked encrypted iphone . Look, this is a serious case. 14 people lost their lives. 22 were wounded and i know that we share the goal i hope of making sure that we find out everything that happened so that we know what terrorists were involved and that we can prevent future acts and we have a responsibility and the fbi has a responsibility to find that out. Facts matter and in the fact of this case theres a customer. That customer is the county whose employees lost their lives and they asked for apples help and apple said were not going to help you in this case so were using lawful course process and a court order to obtain the information we need to answer all the questions about this case. The governments argument is its one solution, one phone, one time and apples push back on this and we heard tim cook say if i write this software theres undue risk that that code could be stolen by hackers or cyber criminals or foreign agents and i could be putting millions of iphone users at risk. What is your response to that . We share the belief that strong encryption is important. We need to keep those safe. But at the same time in this particular case i believe that apple has the ability to technically assist. It will take a couple of weeks for them to do that. They say thats a burden. Well see what the courts decide whether two to four weeks to try to find answers in a case where 14 people lost their lives is an undue burden or not. That will go to the courts but they can do it on site. We dont need the code. At the end they can destroy the code. The fbi is looking just for the information about this murder. What is on his phone and the customer again in this case whose phone it actually is and wants the answers. John its john fort here at the stock exchange. Its interesting i thought i heard you say apple say were not going to help you in this case but apple would say they were helping in this case as soon as they had the opportunity in every way accept writing Custom Software that breaks the security on a product they have already written. Do you really mean they were not helping . Look, our Technology Companies have some of the best and brightest minds in the world and to solve some of the problems were facing, were going to need to Work Together and ill tell you that out here talking to Companies Day in and day out in Silicon Valley. This isnt my first trip and it wont be the last and these are a bunch of problem solvers by and large they want to start thi thinking we want to find out what happened where people lost their lives and we werent able to find out a way to get it outside of this litigation. Its in litigation now. Im not going to talk too much about litigation that will be up to the courts. The broader issue is we continue to have this conversation about the country about here are the new threats that were facing. Some of them involve threats of information. Some of them involve terrorists trying to take advantage of our social Media Companies that do so much good in order to spread their propaganda to recruit and direct terrorist acts inside the United States and in order to confront that threat we need to Work Together with the best minds out here in Silicon Valley helping those of us tasked to protect the American People. And we can Work Together. The other argument is this is bad precedence. So if you can ask or compel apple to write this new software so the argument goes, whats to stop the government from demanding that apple and others track users and messages. Thats why were seeing so many Tech Companies coming from apples side. Whats the response to that argument . Those are important discussions to have in this particular case. This litigation could go away tomorrow if apple decided they wanted to help their customer in this case and voluntarily provided the information thats on the phone. There would be no litigation. There would be no legal precedent. I hope they did that. So bottom line is if we can get the information as quickly as they can, thats what the investigators are looking at. They want to make sure that theres no question left unanswered for the victims of this crime. We appreciate your time, sir. Thank you. Ill send it back to you guys in new york. Thank you for that. Toyota releasing its monthly auto sales number. Phil has been working this all morning. A little light of expectations from toyota. Sales coming in at increase of 5. 2 . The edmonds. Com estimate was from an increase of 6 . So just a little bit below what the estimate was in terms of whats driving sales not just at toyota but all auto makers it was up 11 last month. At this point with most of the auto makers reporting it looks like its going to be around 17. 6 of or 17. 7 million. Thats an early estimate. Well see what happens when we get the luxury names over the next couple of hours. Back to you. All right. Thank you, phil. Up next a real rough day for shares of barclays down more than 8 . Highlights from kaylas intervi interview. Stocks continue to rally in session highs. The dow is up 1. 27 . S p up 1. 5 and nasdaq up 1. 7. Next thing to watch of course close in europe well bring it to you in just a few minutes. Dont go away. We needed 30 new hires for our call center. Im spending too much time hiring and not enough time in my kitchen. announcer need to hire fast . Go to ziprecruiter. Com and post your job to over 100 of the webs leading job boards with a single click. Then simply select the best candidates from one easy to review list. You put up one post and the next day you have all these candidates. Makes my job a lot easier. announcer over 400,000 businesses have already used ziprecruiter. And now you can use ziprecruiter for free. Go to ziprecruiter. Com offer2 police saying the executive is accused of ignoring a judicial order. Facebook is disappointed with the extreme and disproportion gnat measure of the authorities. Were waiting for what exactly happened here but were going to be seeing a lot more of this once governments realize the collection of data is a subject of debate. Government pressure on Tech Companies to give them access to cases. This is a drug case but it speaks to the overall theme of apple fbi playing out in numerous jurisdictions. We dont always see it as clearly as the story but its an important theme for the whole issue. Especially on a day like today. While more wall street banks are competing head to head for talent across the ponds theyre in cost cutting mode and kayla has been covering this all morning in her interview. The cost cutting here in london in the city of london where the banks are located has run deep and its not stopping. When he came to the helm of barclays he instituted a hiring freeze and said this morning head count has gone down by 5700 people. And as they start to exit more of these noncore businesses they have gotten out of retail in italy and portugal. Theyre selling their Wealth Management business in asia and they have already gotten out of that in the u. S. There will be more cuts to come. They refocus their strategy on either side of the atlantic. The most pressing task now that the noncore assets are established is improv