Transcripts For CNBC Squawk Box 20100121 : vimarsana.com

bit after the show and asked him more on that. he s not opposed to the idea of the banks paying for it if it s just to pay for the bank losses. it s including it and making it look punitive for other industries in other areas where you re handing money out. they re calling these new restrictions, though, glass steagall light. that s going to be a big issue. we ll see what he says later on. no one has really explained to me why it s so important to have glass steagall gone. because you make a lot more money when you combine the two? it s much more profitable, right? right. but why would that appeal to government, to the guys letting the things happen? i don t really understand the rationale for a commercial bank being involved in something than what it s core things are, core you know, why we have commercial banks. i don t know this, but my guess would be splr along the line they made the argument that, look, we could make a lot more loans if we could raise the money, if we could do it through some of our proprietary trading, if we could be more lucrative on this account, we would be able to make more loan owes this end. if you leverage it up, you can loan a lot more out. if you tax us, you re going to reduce the amount of capital available for lending. right. it s the leverage idea, that you can make more loans and make more loans that are good for american businesses and american homes. but at some point, it made sense to somebody years ago that jpmorgan, when that guy was so powerful, we should have his morgan stanley over here and jpmorgan over there. and it made sense way back then, right? they knew something 100 years ago that we re relearning. we keep touching the hot stove, but we ll obviously watch wells fargo, jpmorgan and bank of america, among others. the fdic geared up for a busy year of bank failureses. they will argue the agency is equipped with staff and the tools that are needed to handle failures. speaking yesterday, fdic chairman sheila bair warns troubles in the commercial sector will increasingly be a driver of bank failures this year. it s been a busy week. today s agenda will include goldman sachs. the company is expected to post earnings of $5.20 a share on revenue of $9.7 billion. shares of goldman are up about 141% in the last year. we will bring you the numbers as soon as they hit the tape this morning complete with instant analysis. get a look at futures this morning. dow action yesterday, not so good. a lot of that added to this morning on the numbers out of china. gdp for the fourth quarter 10.7 and for the year, 8.7%, which is above the target of 8%. people are now saying, whoa, maybe guys like chanos are right. maybe that s why we saw the banks move yesterday in china. i saw a lot of interesting analysis on what these mean in terms of is more stimulus less likely at this point? when an addict all of a sudden doesn t get any drugs, somebodier or later, it s going to be good that you re getting off drugs, but initially you re like i would say a second stimulus, probably the chances went down yesterday as opposed to up, right? yeah. and in a per verse way, the weak dollar, the carry trade, if we stop sfending hand over fist, then the dollar, maybe, does a i mean, it s doing a little better, anyway. but then the carry trade is less, the risk trade is less likely. so initially, the markets like you know, there s a lot of way toes interpret that. some of our markets are calling for the dow to rise if scott brown won and obviously, it was the day before when you saw the news. but there s a lot of different cross currents as to how to interpret it, depending on your ideology, you could say, oh, you see, now you clip the president s wings and you go down 122 points. we re up 730% under obama. now you re clipping his wings.you could interpret it either way, couldn t you? i would argue there s a lot of different ways to look at yesterday s numbers. there s the bank tax, restrictions 200 for a while. so futures are moderately down. oil relatively setting below dollars. inventory numbers i think yesterday were bearish. the 10-year note this morning, which we ve seen the yield come down a little bit from earlier in the year, 3.669%. the dollar, as joe has said, has been doing very well in recent days. and the euro hit that five-month low. still just below 1.41 this morning. there s gold at $1,103. let s get overseas and see what s going on. christine tan is in singapore. first, though, to london and welcome back anna martin. anna, good morning to you. thanks very much, carl. it s really good to be back. good to see you. the european equity markets played catchup in the early part of the session. we added on some gains to reflect the gains that you guys made at the end of your session. but that has changed a little bit now. digesting, working through the chinese markets, the markets here right hand conclusively moving in either direction. some of the pharmaceuticals, pretty strong on upgrades out of roche and novartis. it does 60% of its sales in the u.s. they told us things are mixed in terms of their performance at stop n shop. the dutch business was pretty strong and that helps them to impress the markets. perhaps a sign of the times, remi quantro, their champagne sales have been lit in recent months. but it s not all bad news. apparently in china, they re drinking quite a lot of cognac and that is where a lot of the growth is coming from for that business. that s all from me. over to christine. thanks for that, anna martin. i guess china must be celebratingel drinking a lot of growth. sackso today, most asian markets sell out the growth. china s economy grows 10.7% in the october to december period, below market expectations of 10.9% growth. now, the figure was up sharply from 9.1% in the third quarter. for the full year, we had china s economy growing 8.7%. also adding to tightening worries was cpi data which came in bigger than expected 179%, second rise in a row. that data saw the hong kong market lose a lot of ground today, at least 2%. investors there sold off chinese banks and property plays on concerns of monetary tightening. but the shanghai market, guess what, managed to recoup losses to end 0.2% higher. banks, which sold off heavily yesterday, they led the rebound today instead of worrying about monetary tightening, investors were taking the fresh data as a positive sign that the economy is recovering. over in japan, slugging off those china concerns there. the nikkei is up 1.2%. the market was more focused on the dollar strength against the yen helping to drive this particular market higher. tech groups got a boost. on that note, that s it from asia. now back to you. thanks, christine. coming up, why aig bonuses to many ex employees are owed at this point. that s going to be fun to watch. first, though, a look at yesterday s winners & losers. eye welcome back, everybody. futures at this point are a little below fair value. of course, this comes after the biggest drop we ve seen for the markets in this entire year. down by about 122 points yesterday for the dow. in the headlines this morning, aig reportedly owes retention payouts to many ex employees. sources tell reuters about 40% of the firm s financial products employees are set to get some $195 million. they no longer work at the bailed out insurer, but those payout residue in march. aig is said to be considering a plan to early as employees take a cut of up to 15%. nbc is confirming an exit deal with conan o brien has been signed and we ll bring you the complete details as soon as we have them. right you to, let s get your national weather forecast. let s time to check in with scott williams at the weather channel. good morning, scott. good morning, becky. we are tracking numerous severe weather threats aclose the southeast. in particular, watching southern sections of alabama. the florida panhandle, this red box that you see, a tornado watch box until 9:00 local time. look at all of the lightning. heavy rainfall is expected, as well, as we ve seen several tornado warnings this morning. expect more severe weather potential as the day progresses. we have a slight chance for thunderstorm activity awrong the west coast where they continue to see the rain, heavy wind and watching the radar it s also into coastal sections of georgia. as far as the national perspective, quiet conditions in the northeast for today. partly cloudy conditions and watching for snowing continues as we move along the west coast. as we switch sources, you ll see the elevation here showing the snow. as we move out west, the heavy rain will continue. watching for delays as we move into san francisco. los angeles, call ahead. phoenix, you ll see 2 to 4 inches of rainfall. atlanta, look for moderate delays, as well. along that i-20 corridor, watching for the rain and wind as we move into atlanta. jacksonville, watching for severe thunderstorm activity along the gulf coast. as we move into the southwest here, along i-40, flagstaff watching for several fooel feet of snow. certainly extreme weather taking place and watching that i-5 corridor into sections of klt. as was we move through oregon, we ll continue to find the rain down through sacramento into los angeles today. back to you. scott, thank you. it s freezing. i have to wait to leave my house for the ice. like so many countries around the world, ireland was hit hard by the xrie sis. it s been one of the first governments to seriously attempt living within its means. spending has been cut opinion guy johnson is in ireland with the story. good morning, guy. tell us about this. reporter: hey, joe. yeah, we re standing outside the tea shops office here in sunny dublin. it s been an interesting story. it s been an interesting 18 months for ireland. it was the first euro zone country to go into recession at the back end of 2008. but since then, this is rapidly becoming the model for how exactly you should handle a financial crisis. certainly according to the ecb and according to blus brussels and many economists around the world. since then, finance minister brian lenihan has delivered some crushing budgets for the public sector here. in december, he created an austiere budget. that has won him much parade around the world. the question is, has he won enough credit from the bond market for the heavy lifting he has done. this is what he told me last night. they can never come in paradox, but they have come in for ireland and they ve come in a very difficult international environment. but i think the one remaining issue we have to address and we will address in the first six months of this year is the uncertainty about the domestic irish banking system. i think the markets want to be satisfied that we have that fully under control. and now, compared with greece, this is the very model of a perfect economy, you could argue. it is at least delivering on the promises that have been made. but brian lenihan is walking a tight rope right now. he s got the issue of the banks, he s got the issue of the bad banks to deal with, as well. how does that cost the irish? how much money do they ultimately have to put into these banks to secure their future? and the ecb, does it raise rates early? there are so many questions still to be answered. but at the moment, the markets seems to be giving mr. lenitan this information. greece now needs to follow sul. guy, it s one of those things where a couple of years ago, you would point to, look, look what ireland has done. low taxes, less regulation, less government. capitalism, the free markets. it s the greatest things that ever happened. and we went from that to look what happened when you let free markets control everything. i need to know. we need to get this settled. because both sides have been pointing to ireland to make their case. it s interesting. you hit the nail on the head, joe. what they ve done is they ve kept tax very low. corporate tax is still only 12.5%. they re trying to attract businesses into ireland. they re trying to get companies headquartered here and they re having a lot of success with that. the problem was the public sector got too big and they had to deal with this issue of cheap money. they went from high interest rates to joining the euro to the cheap money coming in. now they re having to pay the priels for that and you and the public sector has to be shrunk back down the size. all right, guy, keep us up-daded on that. we re pulling for these guys. i d like to be able to say low taxes and the free market is the way to go. keep us updated. now to today s conversation that we have with two people, one an economist and a which is called our our conversation on two what s wrong with task force? i m not using that any more and i m not using that other earnings this is something i missed while i was in omaha, right? what is a task? we re not in the army. we re not in the armed services. there is a task at hand. but they re not a force. they re two guys does that mean we re not the e team any more, either? no, we re not. ben pace, this morning, we ve got chief investment officer at u.s. bank, he we called him up and said would you talk about stocks. this enthis is the one i m excited about, senator elect scott brown. is this not your you have your clothes on. you are not scott brown. you re a different scott brown, i understand, scott, is that it? i d like to thanks everybody for the congratulatories. i don t have anywhere plans to run for president. 41! all right. you are. ben, get us started here. yesterday was a pul pullback. it makes sense, isn t it, that we go 70% and then maybe the free market guys or the wall street types maybe get, you know, a little bit emboldened by the loss in the super majority heads straight south. is that going to be something we watch? will this last for a while, this pullback? no. i hope it s not straight south, joe, but you have the consolidation here. you have the big run here. usually whether you come out of the free markets, you stred water for the next year. we think it will be better than that. but at the end of the year, we re looking at high single digits, maybe 10%, 11% for the markets. there are a lot of people that said if the administration gets their wings clipped, it s harder to put in tax increases, it s harder to get a lot of these anti-business initiatives in. so there are a lot of people saying the market is going to surge if, you know, they lose the super majority. why didn t it happen? yeah, well, the markets have done well, it s just that you re going to have a lot of consolidation here. a lot of people are saying that this gridlock is good for the environment. so why don t 122, then? well, you know, i think from the per spengtive of where we are up, it s a little consolidation. but what you re seeing, joe, the last hour, a little bit of buying, right? so this buy on the dips mentality is still there. you go down 3% to 5%, there s cash on the sidelines waiting to get in. scott, what is your view of the economy? is it better than people think or are we metaling through? i think it is a very gradual recovery. we have a lot of headwind in the near term. there s still the hangover from the housing problems. issues in commercial real estate at this point, state and local budgets are under enormous strain. as we roll into the second half of the year, now you ve got uncertainty because the fiscal stimulus will start to ramp down into 2011 and then you have the bush tax cuts which are set at the end of this year. so there s a lot of uncertainty. we expect number toes be decent, but that s not enough to push the unemployment rate down at all. you look at how much the government involvement in our economy has been the story for the last 12 months. how do you view yesterday s news, scott, in terms of how you try to determine what the economy is going to do? there might be less stimulus, right? there is a view that gridlock is good, that you ll end up, you know, not doing any harm to do economy. i go around the country and i talk to a lot of people. one thing that people bring up is the policy risk. small businesses to medium sized businesses, they re worried about, you know, potential costs from a lot of policy changes. and whether that s real or not, the perception is there. so maybe that perception starts to go away. you may get consumer spending a little bit more, businesses investing a little bit more, banks willing to lend a little bit more. scott, this news this morning about the president unveiling something that s glass steagall like that would break up the banks and not allow them to do do proprietary trading if you re going to be a commercial bank, what ramifications would that have on the broader economy? do you think this is a good thing because it would break up this idea of the too big to fail? i think it may be a mixed back. certainly it will be a negative for a lot of the large banks. and, you know, if you look at this crisis, we ve had some big banks and the big banks have actually gotten bigger through this crisis. we re seeing a real dichotomy now between small banks and large banks. large firms have been able to borrow in the corporate bond market. they re now able to get bank loans. it s the smaller firms which account for a lot of the growth in a recovery that are still having a tough time. right. ben, we fine finally got a the vix was up a little bit yesterday, but i think this is tree straight triple digits days after this splsh we haven t seen that type of amply toout attitude at all. are we usualing in the days where we get volatility again? i don t know. i think we ve seen a trend decrease in volatility. based on the volatility that we ve had over the past couple of users, maybe we re at lower levels that we re going going to be at for a while. we re starting to get away from selling volatility to maybe looking at buying it as these cheaper levels. all right, gentlemen, today s task force, ben, and scott brown. scott, thank you. gotcha. the first interview as far as i m aware with anyone named scott brown since yesterday s news, is it not? we had scott brown on the show today. do you want to disagree with me on that snch. no. you re right. first on cnbc. i would like to know, honestly, when was the last time we had three straight 100-point swings. that s a good question. i bet you it s been a while. it s been boring. 122 is the biggest drop we ve seen all year. yeah. and then the day before we were up 121, right? and then the day before that, we were down 121 exactly. i bet you it s ban long time. we ll get a task force of research people. he know a guy who knows a guy that can get us that information. stay tuned. ah, auto! sir? finding everything okay? i work for a different insurance company. my auto policy s just getting a little too expensive. with progressive, you get the name your price option, so we build a policy to fit your budget. wow! the price gun. ah! wish we had this. we d just tell people what to pay. yeah, we re the only ones that do. i love your insurance! bill? tom? hey! it s an office party! the freedom to name your price. only from progressive. call or click today. what are you doing.? calling chase sapphire, seeing if we have enough points to stay longer. now? you don t have enough time. and you have to push all those buttons. no buttons, someone answers every time. yeah, right. bet you a massage. yeah, ok. hi, julie. i have a question about my points. hi, what button do i press for a massage? hello? new chase sapphire. you call. we answer. no waiting. just press right here. go to chase.com/sapphire. chase what matters. come on, let s twist again like we did last summer do you remember when good morning. welcome back to squawk box here on cnbc. i m joe kernen along with becky quick who is back from the heartland, from nebraska where they get free medicaid for all or they used to. that might be off, that deal. and carl quintanilla. we have today s top stories for you and then we ll head to the futures pits in chicago for a jump start on the trading day. 6:50 eastern. is your company a desirable place to work? we re talking about the locations. the benefits, the free perks like these mugs. fortune magazine is here to unveil the list of the 100 best employers. then later we have a former bear stearns boss ace greenberg, legendary on wall street. his comments are always appreciated. first, we ll go to this morning s top stories. and at the top of the list today, the world bank warning that the global economy may pull back extraordinary liquidity that they pumped into the markets. the bank says that the acute phase of the financial crisis has passed, but cautions that chronic weakness remains. now the global economy is forecast to grow by 3.2% this year. china s vice foreign minister caughts a between china and going the should not be in his words overinterpreted. today at 9:0 eastern, second of state hillary clinton is going to deliver remarks on internet freedom in washington. she has weighed in. you said that the words should be troubling? troubling. not unfortunately, but just troubling. troubling. whose side are you taking with troubling? no idea. there s trouble here, there s trouble there. i don t know whether it s china or i m just the whole situation has me feeling troubled. if she says that, it s going to be hilarious. october 28th, 29th and 30th. that s the last time the market closed we ve got viewers that are squawkapedia. that s only three or four months. anyway, i don t remember that that well. we were down below 10,000 back then, at leave the like 90 it got down to 9664. that s amazing. president obama is urging lawmakers to agree quickly on core elements of health care reform. i don t know if that s kind of burying the lead there. that s huge to say that the existing bill that includes so many things that he wanted, he s basically saying, just pear it down to maybe just he said in an interview on abc that they came back and said that s not really what they would like most. he would most like it if they went ahead and quickly acted on the bill that exists. well, i d like to win the lottery and live in paris for the rest of the my life, too. i don t think that s going happen any time but i think it s the idea that he s start to go admit such things and sandwich control is coming back and saying, that s not really what we mean. i d like to go on the pga tour. that may not happen for me. not in this year. in an interview yesterday, he argued that now has to be the time for action. if we didn t take on health care, then when were we going to tate on? and if we don t take it on, then what are we going to say to families when two years from now, three years from now, their premiums have gone up 30%, 40%? the president acknowledged voter anger helped carry scott brown to a victory in this week s massachusetts election for ironically ted kennedy s former seat, the people s seat, but ted kennedy used to occupy it. for more than 42 years. that s more than occupying. almost owned it. 62 to yeah. 47, something like that. yesterday on squawk, we asked war withen buffett about health care in the heated senate race. people generally in the country do not like the health bill. whether it s a good thing or not, but they don t like it and they don t feel good about congress and they feel less good about the administration than they did a year ago, clearly, and they feel like the economy is dragging on for a long time. so all of those factors converged and probably to some extent, to the particular candidates. if vicki kennedy had been the democratic candidate, i don t think there s any question that she would have won probably 3 to 2 or something. but it was a referendum, sure. it was a big one. the journal take on it, you re saying that they ve come back and they ve dried to distance themselves from him? this specifically obama retreats on health, a peared down bill would it would include things like overde overdenying no with, i think it s damage control that came back and said, look, we want this other bill covered. and the down trodden look as the democrats were headed to lunch he did tell stephanopoulos that the people in massachusetts spoke and the ground needs to be a part of the process. yeah. so the idea of ramming this through and reid said that they re going to see brown. is the white house communications director, dan pfeiffer said later the president would prefer congress to pass the complete comprehensive package and hasn t given up on that option. damage control coming back after it s in the journal. the progressives on the far left are saying keep going. and put everything back in and do it with reconciliation with 51 votes. which is what president clinton told us originally. right. and some of them are saying, listen, we re going to get slammed whether we pass it or away don t pass it, so we might as well pass it. which is why you have the president moving today for the assault on wall street with this idea of coming after the banks. this is what headlines everywhere are saying, we re about to get into a big fight with the banks and he is because they re talking about separating in a glass steagall sort of manner from proprietary traders. you ve got bank of america, jpmorgan that would be largely affected by this. whoops. this back fires, too, because if you ve lost the public you know, the public isn t really happy with a time of things that have happened in the last year, maybe it s health care or whatever, to try and take the easiest thing and try to get back into the public graces by curving favor, that is transparent, too. the times take is that the reason there is so much public ire is that the president spent too much time trying to craft something with so many ire. he never made the argument, if you re worried about your job and you load your job, rough health care. only kgman would say that the president s mistake was that he didn t blame the meyer administration enough. if you don t know how many speeches have included what was here when i got here, there hasn t been a speech that didn t include that sentence. incredibly complex. you can say anything with a straight face and they re going to print it and that s why the people are so confused. you can say anything and try and pass it off. it s incredibly toxic. jason, good morning. like this guy. morning. anything. there is a lot to digest. we are still talking about massachusetts. we ll get goldman in all can have hours, an hour and a half. these china gdp are worried, some people talking about them now being about the same as japan was, residential prices going up 20% in a year. with those things on the agenda, the dollar index trading at levels above the late last year high. so several things are going on. a lot of the good earn eggs are priced in. you ve got the better than expected data out of china, but comments from them over the past few days that they intend to try and cool that off. at the same time, last night we saw worse than expected manufacturing data out of europe and the continued troubles with greece. so you ve got a combination where and then you throw in the president potentially putting caps on risk taking and that could bring in another round of deleveraging. you re seeing it reflected through the dollar. it s all coming to roost seemingly at one big time. do you think that is market positive? in other words, is there a if the dollar benefits, as it has been over the past few days what s the impact on equity? the impact is if the dollar were to continue its leg, commodity prices come down and portfolios have to readjust their waiting. so we ve started this year and basically traded in this 1125 to 1145 range in the s&p. and if you look, since late last year, since early november, every time the s&p has a down 1% day, we turn up the very next day. so i think today could be an interesting day. we lost another percent yesterday. now will we have any follow through from that or is that complacent i want to buy every dip, wait the first day it s down, will that shift? and a breakout in the dollar index could leave that just as a function of asset rotation. yes. i presume that varies with the rg energy? correct. they can be vul nrble and you want to throw that in. just a function of market cap waiting. we ll see if that changes. jason, good to talk to you, jason roney. coming up, perk, flex time, opportunities, great benefits, health care, which employers have the best of everything? fortune magazine unveiling the nation s best companies. by 2010, 30%. of the data stored on the world s computers will be medical images. the trouble is all of that information is trapped. x-rays aren t talking to. medical records aren t talking to. patient histories aren t talking to. insurance forms. we re trying to connect all that data. make it smart. we would see the patterns in your medical history. in the histories of entire populations. predict dangerous drug combinations. we could tailor cures. to your genetic code. put the focus back where it belongs, on the patient. that s what i m working on. i m an ibmer. let s build a smarter planet. tdd# 1-800-345-2550 investors got lost in the shuffle. tdd# 1-800-345-2550 investment firms forgot whose money it is. tdd# 1-800-345-2550 enough is enough. tdd# 1-800-345-2550 it s time investors got what they deserve. tdd# 1-800-345-2550 real help that s there when you need it. tdd# 1-800-345-2550 pricing that leaves you with something to actually invest. tdd# 1-800-345-2550 at schwab, we offer a lot more help for a lot less money. tdd# 1-800-345-2550 because at schwab. tdd# 1-800-345-2550 investors rule. tdd# 1-800-345-2550 are you ready to rule? a man who played second base here some 45 years ago. actually, 47. ladies and gentlemen, mr. larry mccarthy. amidst today s financial turmoil, our sophisticated wealth transfer strategies. and philanthropic expertise ensure your legacy. is passed on to family or your favorite pastime. northern trust. wealth management. asset management. asset servicing. we continue to follow developments out of haiti this morning. scott cohen joins us with the latest. good morning. good morning. some of the early concerns, violence and lieutenaooting are away to a more serious concern, disease. at the dawn of day nine following the quake, the health crisis is growing. doctors without borders say there is a 12-day backlog of patients and some victims are dying of infection. u.s. navalship comfort is offshort but they were air lifting patients on board. some of the biggest companies to the rescue are pharmaceutical companies. overall, the u.s. chamber of commerce told us late yesterday the pace of donations is tapering off. members have donated more than 80 million thus far, but the organization wants to match the u.s. government commitment of 100 million. we ve been asking you to tell us what your company or you are doing to help with this quest. henry shine and its suppliers donating $1 million. exped expedia, the travel company, donating $100,000. and intermune, a small company in california put out the call to its 105 employees. they donated $12,000 in just a week, which the company will match, all of it badly needed. more on those stories and how you can help. thank you very much. scott, thank you very much. when we return, we ll get the rankses of america s best companies. at&t s 3g network covers over 230 million americans. that s a lot of people. to prove my point i asked gary here to friend request all of them. how s it coming, gary? [ ding ] we got one! that s good. oh! ah, wow. [ dinging continues ] becoming a popular guy. [ rattling ] [ male announcer ] want 3g coverage? we ve got it. 230 million people in 9,400 cities. let s get out of here. ok. [ male announcer ] at&t. get an exclusive pantech messaging phone free after mail-in rebate. only from at&t. what do you mean homeowners insurance doesn t cover floods? a few inches of water caused all this? but i don t even live near the water. what you don t know about flood insurance may shock you. including the fact that a preferred risk policy starts as low as $119 a year. for an agent, call the number on your screen. welcome back, everybody. fortune magazine, unveiling the list of best 100 companies to work for. leigh gallagher is here, the magazine s senior editor. people look around and want to know where they could get the top perks. at the top of the list this time around, sas. yes, this software company based in north carolina, it s been on our list for 13 years. every single year we ve done it. this is the first time it s been number one. this company has an incredible story when it comes to working there. it has everything you can imagine. a 66,000 square foot gym with an aquatic people, intramural soccer, free a hair salon? yes. it s everything. meditation garden. he s like, i m on you of here. yes. the ceo has gone over the top. there s a reason, the company has a turnover of 2% compared to 22% for the rest of the software industry. his theory is con tetented cows give more milk. it s a private company so they can get a lot more than a publicly traded i guess i would let him call me a cow for those perks. unlimited sick days. people don t abuse that? they don t. build trust with your employees and it will come back to reregard you. it s an apaysing story. did they do something to make it to the top of the list? did they do something new or did other companies pull we we outsourced to a company, and two-thirds of the rankings come from employee surveys. it s a measure of how employees are thinking and feeling and the rest comes from what they call a culture audit based on benefits, salary, hiring, diverse tishgs that diversity, it is a formula. who was at the top of the list, google? zappos, a lot of companies have been at the top. . you have heard some companies pulling back on some perks they used to throw around so freely, especially in silicon valley? we haven t seen it that much on this list. same with hiring. more than 96,000 jobs from this list alone. so there s jobs out there. a lot of the consultant on the list ahiring. accenture has 40,000 job openings if you want to be like a tiger oh, no, no. they re not in the marketing department in the high weeds. i lost my train of thought. are there any companies that have huge compensation but don t make the list because it s horrible to work? vice versa where they don t pay anything but it s so great to work there it s in the top 100? sas is kind of like that. salary, it s not top of the league. it s other things, that s why people stay there. goldman is actually on the list because, i pemean, that comes straight from the salary. from the employee survey. the employees are happy there because they make so much money. wouldn t you be? it makes a lot of sense. they re handing out major compensation bonuses. that makes up for a lot. they probably have pretty good health care. i don t think they have an olympic size swimming pool. or hair salon. i was going to say, why would you, mr. blankfein doesn t need it. a lot of companies do things with sa bat cbatticale and and general mills has 800 employees married to a coworker so they have a lot of family-friendly employees? as you said, 800 are married to a coworker. they have a state-of-the-art infant day care center. this is specifically for infants. it can hold up to 60 infants at once. if you imagine what that must look like. sounds like cnbc, never happen here. it s all over the place. some day we should put all the kids together from cnbc s kids? yeah, that have resulted from we need a bigger studio. yeah, we could get 60 in day care. 800, that s not off the charts in any way. the most interesting is the number of job openings here and the idea that employers are not necessarily pulling back on perks just because of the hard times. right. this list is probably a separate situation. these are companies where it s really in the culture and it s something if you ve done this sort of thing for many, many years, you don t really pull back. it has a really deleterious effect if you pull back on things employees are passionate about. many companies had wage freezes. they held raises. they may not have had layoffs but they did that instead and in this climate is something to be said. that s the trend we saw. we re not on the list but cnbc is a wonderful place to work. you can try for next year. you need to look a little closer, don t you think, you two? i agree. it s a wonderful place. leigh, thank you for coming in. when we come back, a look at top stories. also, who would you rather have making your investment calls , r bernanke or lloyd blankfein? only one a day men s 50+ advantage. has gingko for memory and concentration. plus support for heart health. ( crowd roars ) that s a great call. one a day men s. hi, ellen! hi, ellen! hi, ellen! hi, ellen! we re going on a field trip to china! wow. [ chuckles ] when i was a kid, we we would just go to the the farm. [ cow moos ] [ laughter ] no, seriously, where are you guys going? ni hao! ni hao! ni hao! ni hao! ni hao! ni hao! ni hao! ni hao! ni hao! ni hao! ni hao! ni hao! [ female announcer ] the new classroom. see it. live it. share it. on the human network. cisco. earnings in china in focus this morning. stocks losing steam on fears that the recovery may be slowing. a string of power players here to help you navigate the stock market. who s the better trader, goldman sachs or the fed? a closer look at a deal for aig securities that could make ben bernanke look like a wall street geni genius. goldman sachs ready to report, we ll see what goldman may say about the state of wall street as the second hour of squawk begins right now. good morning, everybody. welcome to squawk box here on cnn. i m becky quick along with carl quintanilla and joe kernen. coming up, southwest ceo gary kelly talks about the latest quarterly results and nyse euronext ceo duncan will be here. and we go shopping with the ceo of taubman centers, robert taubman. futures are a little under fair value. we ve been talking about the three triple-digit days weave had over the past three sessions. we have done that since late october moderately above fair value. the president set to propose stricter limits on financial risk-taking today. the proposed measures would cut down on excessive risk-taking by banks on part of a revamp of the regulatory system. a senior administration tells john harwood the proposal will include size and complexity limits specifically on proprietary trading. earnings front, ebay with quarterly results beating estimates and giving a pretty good outlook for current estimates. sales reached $2.37 billion and they see earnings of 39 to 41 a share. the street s looking for 39. starbucks posting the first rise in same store sales in more than two years. and beating wall street expectations for the quarter. the giant earning 33 cent well ahead of forecasts. they ve had some problems with growth, having to cut the number of new stores, that kind of thing. same store sales, if they sooner or later they go up, right? it has to. that s the way you re seeing with all of these companies, they re going up against lousy comps when you say two years, so down, down, down, down, down, down, down, down you know, finally a bump. hit your head against the wall when you stop, it feels pretty good. the focus for the market will be financials. goldman sachs is due to report its fourth quart he numbers in less than an hour. here to join us is dick bovis, and your estimate for what you re looking for in terms of earning per share from goldman. it s way below the consensus. it s at 442. the reason it s there is because i think trading activity, as everyone is well aware, was very poor in the fourth quarter last year and poor because of the seasonal issues, nobody works on thanksgiving and christmas and because many hedge funds who are the biggest traders made so much money last year they simply stopped trading at the end of the year. the net effect is it doesn t mean anything. i think what is more important is is what the opportunities are for goldman in the coming year. you know, in 2010. and i think the opportunities are phenomenally good which i think makes this a cheap stock. what opportunity are you talking about? first off, we know money has now come back. in other words, the cost of a junk bond, which was 25%, 12, 13 months ago s 9% today. that means there will be a big increase in merger and acquisitions so that s one big area of opportunity. the stock market has been relativelily good so there should be more new issues coming down the pike. we re seeing this huge surge in financing in the fixed income markets at the present time, which is also very positive. so the net effect is, all of the core businesses that goldman services, you know, are going to do really well. plus, money supply keeps growing. that means trading will keep growing. i think that this could be a record year in earnings for goldman. again, i d be a buyer of the stock. the one thing that might be a little difficult to try and handicap would be the political winds coming out of washington, dick. everything from what happens with bonus pay to now this talk today that you could be seeing a glass steagall light coming from the administration. the president himself saying that we re about to get in a big fight with the banks. what would that mean for goldman, if something like this went through? it would be very positive. i think, you know, if you think about this thing from three angle the shareholders, number one, number two the overall banking system in the united states, and number three, the overall financial system it would be a big boone to shareholders. i think if you broke up jpmorgan or bank of america, you would make far more money with the pieces than you re going to make with the whole. in fact, you know, a couple of days ago we wrote a piece strongly advocating that jpmorgan get rid of its consumer finance businesses because they re losers. they re not just losers because that s where the loan losses are coming from. they re losers because they re saturated businesses filled with price competition where regulation is increasing. so, you know, if the companies don t have enough sense to get rid of these businesses and the government comes along and forces them to, i would i would think that s a major positive. would you for the nation would you expect would goldman have to give up their commercial bank status? they might. but who cares? it doesn t mean anything. they don t intend to use it for anything. i mean, they re not going to go out most of their money comes from trading, right, from investments? right. exactly, exactly. the fact is, if all of a sudden you broke up these universal banks into companies that had to be on the same footing as goldman and comes that didn t have this deposits they could put into, if you will, proprietary trading or facilitating deals, goldman would be in much stronger position. if it s such a boone, i can understand why you think it would be good news for a goldman because it would hamper some of their competition, but if it s such great news for someone like a jpmorgan, why is jamie dimon fighting something like this so hard? it s beyond my comprehension. as i say, we wrote a piece about a week ago arguing that he should stop doing that. first off, the credit card business is a saturated business filled with price competition, which now is losing a lot of money. so even when the loan losses go away, you still have the saturated business with the price competition. the mortgage business is going nowhere for the next five years because housing is going nowhere. the automobile business, sure, that s a good one right now because general motors is on its knees, but what general motors comes back, he ll take that business back from the bank again. there are no real growth opportunities in consumer finance but again, don t these don t these banks want to be that size so they can kind of make it through any fluctuations in the market if one business isn t doing so well right now, something else is, just this idea of a conglomerate bank? well, i see it the other way. i think it s always having one foot stuck in the mud. in other words, it means that when one business is doing good, you re always dealing with the business which is doing poorly, which is pulling down earnings. what if the nation what does it mean for somebody, besides jpmorgan, what are we talking about like a bank of america which just bought merrill lynch? this would be pretty disruptive policy what would you rather have, would you rather own merrill lynch or bank of america? i would rather own merrill lynch. if i had the opportunity to own merrill lynch again, i would look forward to it. remember, bank of america is a big retail bank and it s in trouble. not because of merrill lynch but because of this big retail bank which has all of these consumer finance businesses which are going which are going nowhere. if the united states wants to bring back the s&ls, which is what this is all about, then it can do so. but we ll see the same failures at the end of the game that it saw back in the 1980s, 1990s. you know, i would rather be i would rather see these businesses jet set from these companies. i think i could make much more money in that situation. that s an interesting take. we appreciate your time today. we ll talk more about this. dick bove and thank for your time. did fed chairman ben bernanke beat goldman sachs lloyd blankfein and others? they suggest the fed might have gotten the better of the bankers. steve liesman is here with more, this review of aig by the fed. you know, carl, no deal is more controversial than the fed s purchase of aig derivatives in 08. bless you, joe. the fed paid bankers too much money in the deal, a backdoor bailout and tried to limit disclosures, charges the fed denies. portfolio of the maiden lane three-deal partnership has kicked off $6 billion cash in a year and likely generated billion dollars in paper products for the fed bank. fed officials contacted by cnbc declined to comment reiterating their expectations that the aig portfolio will likely show a profit. special dertive experts contacted by us say the trader, the fed in this case, is doing better than the trader who essentially closed out their decision. bernanke might have bested blankfein. yesterday on cnbc warren buffett praised bernanke s trading prowess. bernanke has taken on a trillion of mortgages. he s got a great hedge fund now. i mean, ben ought to ask for 20 and 20 because he has 5% assets and no cost on the liability side. i mean, he should negotiate a better deal. there s no single index for the fed s portfolio. it s a diverse portfolio. here s what happened to prices of one asset we know the fed owns a lot of. subprime mortgages, high-grade abs from 2005, about 30% of the $30 million portfolio is made up of this. prices are 10% from where the fed bought in. that doesn t count the cash kicked off by derivatives. the chart might understate the gains. fed received high grade s sets for its billion. it sgot the top of the capital structures and they have risen in value. the kroefs part, it got the underlying securities at 50 cents on the dollar and when i hear everybody talk about this, nobody says that, hey, they got these things on the cheap, probably at or near the bottom of the market. and you can t have it both ways. but you you can t pay off 100 cents on the dollar and then get the market value for the securities. they can negotiate any way they like. you re going to pay 90 cents on the insurance contract, you ll pay more when you get the underlying security. that s the way these things work. it s one thing to be a trader and see an opportunity and pounce, right, and make a good trade. another to be a trader and get in because you were afraid there would be nobody else to make that trade, it was up to you, right? exactly. i think the other thing is, the fed came in necessarily at the bottom of the market. if it wasn t the bottom, the fed wouldn t have had to come in. it came in and it provided the stability to the market because the argument that bernanke has made all along, and the fed in general, is that had aig gone down, it would have been a much more general collapse. even though goldman says, we were covered, you come in the next dashgs joe, you know what this is like, i don t know if the guy on the other phone has any money behind him and the whole thing seizes up and that s what they avoided. meanwhile, so far, the cost to the bailout people use this word $24 billion, i don t i don t think it s right. they completely don t count the assets on the other side that the fed got back. i can tell you that the hardest ticket to write, either buy or sell, the one you feel most uncomfortable writing is the one that usually works out. most of the time if you mess up a trade and you put buy when you meant sell, you ll probably make money on that one rather than the one like going to the racetrack and getting the wrong ticket at the window. you never give that ticket know how hard it is to buy at the bottom when there s blood well, that s you know how easy it is to buy you know you ve got ten point on a stock. i m going to go ahead and stay my profits, then it triples. the hardest thing to do is to buy more when you re up or sell it when you oh, don t want to take a loss. that s when you probably should. paulson and bernanke, they stepped in and purchases they made were at the absolute bottom. because they had to. no one else would do it. we could have a debate about was this worth it or not? you have to talk about both sides of the trade. they gave 100 cents on the dollar but they got back assets that were trade agent 50 cents on a dollar. we have to go. why is there a discrepancy between blankfein saying we were never asked to take a haircut and others saying the new york fed did approach some and say, guys, do you really need 100? i don t know that. what i do know is what they needed was a blanket solution for everybody. if they started treating different securities do you know that the counterparty in a credit default party is treated equally with the senior debtholders? you get 100 cent on the dollar. you keep the collateral already posted and then you go into bankruptcy equal with senior debt. that s the way the rules work on cds counterparty. the fed s leverage in that case was not all that great. then you get into the situation, i ll give goldman x, and that s a dessert, what was it? parapasu. oh, that s tiramasu. thanks, guys. i m looking that up. next time he comes up i m not going to be so clue what is it is that economics humor, joe? you are falling into the trap. i can make it without humor. it s the delivery. it s your economics humor. we ll be back with more economics humor at 8:00 with the countdown. now you re doing it. any thoughts or questions about any of that stuff, give us a shout. our address is squawk@cnbc.com. what opportunities lie ahead in the face of economic reform? we ll talk to duncan niederauer and southwest airlines flight plan, ceo gary kelly will talk about the results for the quarter and how it s handling the economy. this is not pay the hospital insurance. this is not pay the doctor insurance. this is not major medical insurance. this is affordable-we-pay-cash -directly-to-you- fast-when-you re-sick -or-hurt-insurance. if all you know about us is. aflac! .then you don t know quack. to find out all the ways aflac s got you covered, visit knowquack.com it all starts with havinglocks more hotels to choose from.. that s why i book with expedia. so i can find someplace familiar. or somewhere more distinctive. nice! then i can compare dates to find out when i can save the most cash. done and done. we should do this more often. more choices, more savings. where you book matters. expedia. dot com now the answer to today s aflac trivia question. what english chemist and physici physicist discovered hydrogen? that was not in the form of a question. who is henry you don t get credit who is henry? i will he can i get nothing. i realize i can t come up with the names anymore. i think it s an early sign of something. i m not kidding. you ve been a little scatterbrained on air, too, which isn t good. we will be there. let s get to mr. niederauer, nyse euronext duncan niederauer made headlines for throwing support to president obama, to modernize our outdated regulatory structure. joining us is the aforementioned duncan niederauer. good morning. it is nice to see you. nice to see you. for a while, it looked like you know, london was going to be the financial center of of the world. then they put in their punitive measures and jamie dimon said, fine, i might not build a building over there. looked good for new york for a second. now it looks like we may be headed down a road the same road london is on, no? a little too early to predict, but i think the challenge we ve all got is we ve heard a lot of the right words in the last six months from the administration. i think it has to translate now into actions. we really haven t seen the actions that are going to be taken yet. are you sure you want it to translate into actions? which things? there must be some things you wouldn t like translated into actions, no? the first thing i would like not translated into action is this idea of a transaction tax. i know wall street s an easy target now, i think we ve tried to explain to the proponents of this bill, it s obvious to us, this is a pass-through tax. main street will get severely, much more severely than wall street if you put a transaction tax through. i don t get the point on that one. i think some of the other proposals like systematic risk oversight, more transparency like the s.e.c. is talking about in the receipt concept release, i think those are all things i d be happy to see translated into action. what about the bank tax, as we re calling it? i haven t been convinced yet it s the smartest idea to tax banks when the financial system is as fragile as it is. but i understand behind all of this is we ve got to fund the deficit, right? i guess well, we re funning the bail outof gm with the banks. i guess that s one way of funning it. everyones tsays the same thing, duncan. if you tax one entity, it s the poor people you tax the banks, it s going to be the poor people that eventually end up paying for it. it s like you can t tax any corporation or entity about worrying about it being passed along to the people that don t deserve it. that s probably true in most cases, joe, but i feel like particularly on this transaction tax, you put a transaction tax in the value chain in value services is pretty easy. if there s a customer at the end of that order, whether it s a retail customer or mutual fund holder, it s pretty clear to all of us that that s the person at the end of the chain who s going to pay that tax. it s going to flow downhill. we have our guest host there s i think mobile is whatever the highest is, we have him above mogul, bill ruden. good to see you. i ski moguls which exactly. duncan, thanks for joining us. two questions. the announcement coming up today in terms of the limitation of proprietary trading, what do you think the impact will be on some of your members? also, i guess, behind you, you re starting or completing the renovation of your floor. what s the floor of the exchange going to look like over the next five, ten years? on the first question, bill, and it s nice to see you, i think on the first question, let s hear what he has to say today. i think it s we re in the mode right now where a lot of ideas are going to be floated. as joe said, let s then gauge what the probability of actual implementation is. as far as the trading floor goes, it s pretty simple. our view is, we ve always had a trading community down here on the floor. we intend to have one going forward. and consistent with what we said about the high-tech, high-touch model we re trying to put in place, we thought it was good to spend a little bit of cap to freshen the place up and really invest in a better network down here. what we re moving towards is to let people, instead of the old days where they could only operate in nyse securities from down here, they can rul a full-fledged agency business from down here. phase one is going to be completed end of february. second and third phases will be completed as we unfold and go through 2010. you re so important for the for downtown. we ll talk a little later about the commercial market but the presence of the stock exchange and what you guys are doing is very, very important for the future of lower manhattan. and it goes back to a little bit about what joe said as new york as a financial center, too. we re committed to downtown. we re committed to new york city. and i think this is our way of trying to convince everybody that the floor is relevant. we re not kidding ourselves. we know it s an electronic world right now but there is a role for the floor in price discovery, an important role for the floor in moments of volatility like we ve seen in the last 18 positive. we re committed to new york city, committed to lower manhattan and this is our way to illustrate that. back on the banks and whether it s the taxes or this new glass steagall light, obviously f you re a big bank f you re big enough, are you enjoying some inherent protection from the government because they re not going to let you go under. so how are they supposed to pay for that? is there a way to get them to compensate taxpayers for that protection? well, that also goes back to what joe said. wow, we ve got to interview joe at some point. i guess it is, because he may not know the difference between pari passu and tarimasu but he has other things going for it. cocoa and that s right. you re on wour your way. in terms of that, you then have to isolate where are the businesses where the banks can really pay where it s harder for them to pass it through if we re trying to get some remuneration for the benefits occurring to them. it s hard to find businesses where it s not an obvious pass-through. i think some of these otc derivative areas might be one of these areas because that is an over-the-counter dealer-to-dealer market. it seems it would be a little more challenging to see that flow through the system. maybe that s one place to target it, but it s not obvious. mr. niederauer, how concerned are you about the rise of p populism and the politicization of what s happening on wall street? the division of wall street and main street and what politicians are doing with that? i ve said for a while f we don t take our eyes off the prize, which is about job creation, finding the fuel for sustainable recovery, encouraging investment, and then getting credit flowing to small businesses, if you think that that s where we re trying to all get to, then main street and wall street are basically the same street. so i m very frustrated by the increasing cassism between the to. what we encourage the administration to so do is focus on that. there are good signs on the horizon. you have senators dodd and sheldon collaborating effectively right now. i think the more bipartisan a bill on financial reg reform that comes out of that committee, the better for all of us. i think the senate win in massachusetts is going to mean a lot of reform now going forward is going to be a more moderate, sensible and bipartisan approach. i m hoping those are positive signs, but i think you re right, there s certainly a lot cassism between main street and wall street right now that we have to figure out how to close that gap. more sensible approach, which is sort of in stark contrast maybe to we appreciate your time this morning. thank for wearing the for people don t know, the autism speaks pin as well, if people are wondering what that is. thank you for saying that, joe. you re welcome. thanks for appearing today. coming up, the holiday rush is far behind, so how is taubman centers keeping consumers coming back to their malls? the ceo will join us to discuss the state of the consumer, traffic trends and more when squawk box continues. what are you doing.? calling chase sapphire, seeing if we have enough points to stay longer. now? you don t have enough time. and you have to push all those buttons. no buttons, someone answers every time. yeah, right. bet you a massage. yeah, ok. hi, julie. i have a question about my points. hi, what button do i press for a massage? hello? new chase sapphire. you call. we answer. no waiting. just press right here. go to chase.com/sapphire. chase what matters. right now 1.2 million people are on sprint mobile broadband. 31 are streaming a sales conference from the road. 154 are tracking shipments on a train. 33 are iming on a ferry. and 1300 are secretly checking email on vacation. that s happening now. america s most dependable 3g network. bringing you the first and only wireless 4g network. right now get a free 3g/4g device for your laptop. sprint. the now network. deaf, hard-of-hearing and people with speech disabilities access www.sprintrelay.com. welcome back to squawk box on cnbc. still to come, the ceo of taubman centers, robert taubman. what a the greatest mall in definitely he knows you shop there. i don t shop there. i know people who shop there. i do swing by california pizza kitchen for a salad, once in a while. he ll join us for trends he s seeing in his shopping malls, including short hill malls. also alan greenberg talks about the future of financials. and ronald kirk, his thoughts on nafta as well as protectionism. first, though, a look at what s making headlines this morning. since becky s back, we ll get put her to work. thank you very much. futures have turned around in the last 20 minutes or so. right now you see those dow futures are up by 5.5 point above fair value. the s&p 500 is also those futures are also a little above fair value by a point and a half. this morning we had seen them down by 30 or 40 points. there was a little pressure despite the losses we saw yesterday in the market. again, the dow yesterday down by 122 points, the biggest loss we ve seen over the course of the entire month. goldman sachs is set to report quarterly numbers at the top of the hour. earn are expected to come in at $5.20 a share. we ll have those numbers and the instant reaction as they hit. president obama is set to propose stricter limit on financial risk-taking. he is scheduled to speak on those proposals at 11:40 eastern time this morning. he ll be appearing with economic adviser and former fed chairman paul volcker, who s been a very big advocate of tighter restrictions on the bank. expectations are you may hear something like glass steagall light, but we ll see again. that s coming up at 11:40 eastern time. conan o brien has signed an agreement to leave nbc and the tonight show. more details are expected to be revealed this morning. this clears the way for jay leno to move back to his old slot at 11:35 p.m. if you were goldman, wouldn t you do a couple of crummy trades at end of the quarter? just so you don t have too big of profit yeah. if you could figure out how to lose money and miss expect takeses, wouldn t you estimate have come down. wouldn t you miss i would miss. really? dick bove has a number well below expectations. he says it s because the fourth quarter, you didn t see the hedge funds trading as much because they had had a profitable quarter they reined it back in and said, hold on a second, we want ho old on i don t think it would be that easy for them. it s hard to lose money. as a pr person, if you guys could, you know, do some stupid things. put it in the couch. or, right, talk to your accountants, put some here, some there. this is not the quarter if it s $5.20, today is not the day to report $8 a share. we ll see. we have half an hour left before they report. comment or questions, send us an e-mail. the address is squawk@cnbc.com. when we come back, it s catchy commercials taut those bags that fly for free. what a great campaign that is. a sticking point for many travelers. get your own bag because it s on. we ll talk to the head of southwest, the ceo gary kelly. rr jooishg. welcome back. first on cnbc this morning, to fly through southwest airlines numbers, chairman and ceo gary kelly joins us from dallas, i believe. good to have you back on the program. good morning. good morning. the results look pretty good. we ll walk through some of that in a bit. even though you re macro view on the economy is not all that hot, it sounds like you re pretty optimistic as far as thing like unit revenue for the coming quarter. well, yeah, i think that s we re outperforming. i m very, very, very gratified with the results in 2009. it was a very difficult year. our people responded magnificently. all the way around it was a great performance, great operation, great customer service. the fourth quarter was our best quarter of the year. i don t know that that s ever happened. certainly in the 24 years i ve been at southwest. so, we re concerned about the economy still and we re concerned about energy prices, but at least we re outperforming, at least we re in the black. our 37-year profit streak is intact. you know, we re ready to go. you think revenue trends, booking trends for q1, how do they look? look real good. look very good. and we had a lot of records, believe it or not, in 2009 in the fourth quarter. we had a record load factor performance. a record load for the full year of 2009. i wouldn t be surprised if that trend continues here in january. the so far. so, our revenue trends are very healthy. we have some work to do on the cost side and that s where we re going to turn our focus in 2010. sop of those are out of your control. it sound like you think jet fuel cost this year might be more troublesome than some might expect. well, prices are still high. and i think it s a bit misleading to say, well, it was $147 a barrel in 2008 july and we re $77 today, but that s still very, very high for this industry. and the industry has not yet adjusted to these energy prices. so, we re scrambling to do that. prices right now are predicted to be higher still this year. so, yeah, it s definitely a concern. we talk a lot about the bags fly free program. you ve stolen some share. do you how much share have you taken, at least domestically? how much do you attribute to that ad campaign? it s tough to know. i think there are so many thing that we did in 2009, it s not fair to say it was just bags fly free, but the awareness that southwest doesn t charge for bags is very, very high. and that was our number one objective. the credit that we re getting from customers for not charging for bags is huge. so, i just cheer on our competitors. i hope they charge 100 bucks a bag. they might. we ll take all the customers they want to give us. they might just do that. all of that said, and the strength you see in booking, we ll talk about fares in a second, you still are not going to grow capacity a whole lot. why not? well, we re taking it one published schedule at a time. right now we re scheduled out through august. we re keeping the fleet roughly flat through august of next year. you know, again, we have made tremendous strides in generating better unit revenue. our unit revenues were up 7.4% in the fourth quarter. very much outperforming the rest of the industry to a record unit revenue performance for southwest. so, those trends should continue in 2010. the concern is, is the demand going to be strong enough to overcome some of the cost pressures in the near term, especially higher energy prices in 2010? are you seeing is there enough demand to support some kind of pricing power, some kind of fare increase? well, we ve had fare increases in 2009. you know, right now i think we re pretty happy with our revenue production. so we re not forced to raise fares. we re generating record load factor. we re pretty pleased with where we are. i think if demand stays at this levelnd continues to improve, there should be some pricing power in 2010. well, we continue to watch you dominate, at least stateside. we ll continue to watch over the next few quarter. gary, good to see you, as always. great to be here. gary kelly, ceo of southwest airlines. tomorrow, jeff smisek will top by, coming up tomorrow, right here on jacques. up next, we ll hit the mall with giant taubman centers. later, by the way, goldman sachs set to report, coming up at the top of the hour, 20 minutes awii way. we ll have the numbers, instant reaction, a lot of things people will be watching. welcome back, everybody. retail sales, they were up this holiday season, but with unemployment holding steady at 10% and consumer sentiment ending 2009 at 30-year low, the retail sector is uncertain. joining us is robert taubman, president, ceo of taubman centers. thank you for joining us. it s our pleasure, becky. you know, joe keeps talking about short hills. i hope washington doesn t take away his bonus because we need him there. oh, my bonuses, they when is the last time i don t think we ve ever gotten one, have we? we get coffee. i would sell all your other properties and just focus on that, bob. seriously. that s the best mall. it s a terrific shopping center. there s no question. the consumer, becky, has been inching back, no question. this is the first time, this fourth quarter, is the first time we ve been up in 12 months now. literally, the day that lehman filed bankruptcy, shoppers just stopped. the consumer was just turned off. we were down 14% in the fourth quarter last year. and the 12 months ending september 30th, we were down 11%. we ve told the investment community that we believe that we ll be up flat to 3% to 4% in the fourth quarter. it appears like we re going to be at the high end of the range. we ve never seen anything like this in the 60 years we ve been in business. we re delighted that things seem to be inching back. yeah, robert, i ve heard that from a lot of people who run either restaurants or stores, who talk about the consumer really flipping a switch and turning things off. it s great to hear things are inching back but you re going up against weak comparisons. how does this match up against maybe two years ago where the consumer was? well, there s no question. our sense is that our peak was 2007. just as you said, about two years ago. our sense is that it s going to be 2012 before on a nominal basis, not on a real basis, we re back to those levels. you know, until jobs come back, you heard it yesterday from warren buffett, you know, we re you know, while they talk about 10% unemployment, it really is with underemployment almost 17%. you re looking at 1 in 6 people without really the kind of job they want. there s no way that the consumer, which is so much of our economy, it s over 70% of our economy, there s no way they re going to feel good about spending money at this point in time. bobby, it s bill, good morning. good morning. i m sorry i m not in the studio with you. we re sorry you re not either. let s shift gears for a second. you and i are on the real estate roundtable together down in washington where we talk about major issues that affect our business, the real estate business. on the top of that list is lack of liquidity. what are you seeing in terms of financing? i just saw simon s today, $2 billion corporate mortgage, financing the other way, where do you see the credit markets going? how does that impact your business and for the future growth of your malls? simon is an investment-grade credit. you have to look at him more as a corporate credit. he was able to really pay off some short-term maturities between 11 and 13. there s a lot of speculation about him getting ready to make a bid for one of our peers, general growth. when you talk about the real estate market generally, as you know, bill, and with our work in washington, there s over a trillion dollars of debt coming due over the next three years. most of it was securitization through cnbs financing. most of it was done at 10 teams ebida. to replace that kind of funding level for a property, you re really looking at five or six times. you have enormous difference in valuations today and funding levels. you are really going to see huge dislocation over the next three years. we absolutely need help out of washington. we need washington to encourage policy that encourages equity that comes into our industry. ferpta, as an example, hundreds of billions of dollars offseas, offshores, that wants to invest in our country. the best they could do is buy an asset for 49.9%, you d send daunting structures that make absolutely no sense. we need to encourage policies, again, that bring equity, that encourage securitization. tafl is something the government is try pentagon. tafl is very important. again, because it will create price discovery a securitization. how much debt do you have coming due over the next 12 months? well, fortunately, our balance sheet is in very good shape. we re one of the only companies that did not have to issue equity during the last year. we paid all our dividends in cash, as we had in the past. others in our industry actually converted to stock or cut their dividends. so our balance sheet s in good very good shape. we only have three small maturitie maturities, about $260 million coming due this year, which is about 8% or something of our overall debt. does that mean you would be a potential buyer of some of these other properties that are maybe coming due if people can t hold onto them? well, we re certainly very interested in what s happening at general growth, interested in what s happening elsewhere in our industry. we re going to we re going to look at everything that comes across the table. what s your pipeline for new development? i know it s, obviously, constricted because of lack of capital, but what are you working on that s coming online in 10 or 11? we were part of the city center in las vegas, we opened 5,000 foot of retail space. it s probably the most upscale development anywhere in the world and we re delighted with how it s doing. we also have one of only two projects in the united states, regional malls, under skrushgz construction today. one is in santa monica and in salt lake city with the mormon church. as you suggest, bill, we don t think much is going to get built. really over the next five years, i think only two or three additional developments may occur. but as you get out into the next period of time, say, six to ten years, we think at least one or two regional malls are going to be built a year. you ve got to remember that the country is growing at about 3 million people a year. for every 250,000 to 300,000, in theory, you can build another mall. but there needs to be excess supply. as demand develops, i think one on two malls built over time. are you going to buy the pistons, bob? well, number one, they re not for sale. they are an incredible franch e franchise. they are for sale, aren t they? i don t actually believe they are, from what i understand. i think there s a lot of speculation and rumor. bill davidson was an amazing owner of that asset. he did a heck of a job. unfortunately, passed away not long ago. he was an important asset to this community here in detroit. sounds like a yes to me. everything s for sale. if i made an offer for the short hills mall, we could talk, right? we do home and home. he comes to the knick games with me and i go to detroit to watch the pistons every once in a while. don t think i can t raise the money for short hills mall with ruden sitting here, too? i think that bonus would have to be awfully big to get into short hills mall. you re right. mr. taubman, thank you for joining us. it s great talking to you. it s my pleasure. everybody have a good morning now. thank you. you, too. thanks. coming you, ace greenberg, vice chairman of emeritus and ledgeary bridge player. he ll join us right here on squawk box. a lot of earnings. let s start with xerox. better than expected revenue at xerox, estimate is 76 cent. united health reported 81 cents. there was a $5 million gain there. but the estimate was 73. it would still probably be above if you back that out. revenue, right in line with expectations. interesting. here s a medical loss ratio. we re talking about 81.3 versus 82. remember, in the old bill, seems like years ago now, they were talking about 90, capping it at 90. other people said 85, maybe 80. they re at 81.3. next year guided to 2.90 to 3.10, estimate is 3.06. continental reporting three cents a share. that was a profit. the street was looking for a loss of seven cents. that is a surprise profit. you can see the stock s done pretty well lately. fifth third reporting 20 cents a share losses including some stomaches may not be comparable to the loss people were looking for. looking at what might have been in that. finally, you heard about southwest reporting better than expected results. then fairchild semiconductor reported 43 cents a share, above the 17-sent estimate. i guess we have goldman coming up. minutes away, that s right. i can feel it. it s coming. the next hour could set the tone for the trading day. we ll get results from goldman after the break. weekly jobless claims at 8:00 a.m. eastern time. making his way to the set, wall street legend, ace greenberg. no stranger to wild swings in the markets. this time, though, he says it s different. we ll find out why after a break. wow, that s a low price! wow, that s a low price! wow, that s a low price! how many products do we carry? [ man ] 7,000. wow, that s a low price! i ll get him a cart. hot diggity dog! yeah. that s a low price! [ male announcer ] staples has low prices on everything you need for your office. and we mean everything. staples. that was easy. i was just in town for a few days, and i was wondering if i could say hi to the doctor. is he in? he s in copenhagen. oh, well, that s nice. but you can still see him! you just said he was in. copenhagen. come on! that s pretty far. doc, look who s in town. ellen! copenhagen? cool, right? vacation. but still seeing patients. oh. [ whispering ] workaholic. i heard that. she said it. i. [ female announcer ] the new office. see it. live it. share it. on the human network. cisco. to the all-american meal. french fries, and our national passion for them, are legendary. classic. iconic. but times change and people want better foods. so cargill helped a restaurant chain create. a zero trans fat cooking oil for their french fries. canola plants. and innovative processing techniques. while preserving their famous taste. because no one wants to give up a classic. this is how cargill works with customers. banking on earnings central. goldman sachs about to become the next financial giant to report. squawk has the numbers and instant reaction. a legend of wall street on the set. former bear stearns chief ace greenberg brings his wisdom on the markets, politics and the state of the economy. plus, the most up-to-date report on the nation lab market. weekly jobless claims at 8:30 a.m. eastern. squawk box begins right now. good morning. welcome back to squawk box here on cnbc, first in business worldwide. 8:00 on the east coast and we re getting goldman s numbers. we were told not to expect a lot by some, joe. how does it look? it s 820. 520 was the estimate. i said, this is not a day you want to be reporting 8.20. put on bad trades. they did report 8.20. you never know if it s a clean number. that seems to be so far goldman in the past, that s the way they did it. they used to beat by 50, 60, 70%. they haven t recently. we had bove on earlier, he was half of that. revenue number wouldn t make you think they were able to have that much go to the bottom line because the revenue number is 9. it looks clean. i m looking for the release. revenue number is in line with expectations. thatcy let c there s the sd higher. where did meredith get negative on things like that? she was looking at less volatility what? fixed income, commodities. hedge funds going into the year a little quieter because the year had been so good. all that said, it does look like the bottom line number is much better than we thought. estimates have come down over the past couple of days. here are the comment dpr lloyd blankfein. throughout the year, during the most difficult conditions, goldman sachs was an active adviser, active maker for our client, strong performance, he point out blah, blah, blah. performance is recognition of broader environment resulted in our lowest compensation to net revenue because they re talking about what they pay to their employees, as well. despite significant economic headwinds we re seeing signs of growth and remain focused on that growth by helping companies raise capital and manage risks by providing liquidities to market and investing for our client. that s him tipping his hat to some of the headwinds saying that big banks are only in it for them and for what they take home, saying, hey, we provide services, too. you add in rolling stone, matt and the giant squid in the face of capitalism, they re going to say a lot of government it s hard to keep the dollar bills in the building with they re flooding out the front door, right? i mean but people will say, when you get you know, even though goldman paid pack the t.a.r.p., when you re rabl to bo able to y at zero and invest with government put on anything you do, that s what the populous side will say on these numbers. this will inflame things even more. the compensation and benefits were 38.5% of net revenues, down from 48% that you re talking about for 2008. represented the firm s lowest annual ratio of compensation and benefits to net revenues. well, that helps. they also point out in the fourth quarter, as we know, compensation was reduced by $500 million to fund the charitable contribution to goldman sachs gives. that s reflected in the negative compensation. if i were david paterson, mike bloomberg or the federal government, i would be happy you re going to get paid income tax on this amount of money. of course, the cynics would say they don t pay tax, but they do. 32.5%, which is their effective rate from the quarter, up from the first nine months of the year. so you can t even blame there used to be a world where profit were good. state and city tax, close to 50%. remember the days when you would be congratulated for this. they ll one thing that hasn t changed is the head shaking that happens when this release comes out every quarter, how do they do it? futures have moved a little bit on the news. it s good to be pretty good. let s get to our next guest, true icon of wall street. you know, squawk exclusive with ace greenberg, vice chairman of emeritus, ceo of bear stearns. the next few days mark the end of the bank s legacy as private client division will change to jpmorgan services. jpmorgan was no slouch. you knew how to take risks and you were on the ride side of a lot of trades but you had to look at goldman and say i think the people at goldman sachs are underpaid. what are you laughing about? i m not laugh pentagon. that they re good. don t you get paid for performance? yes. how is their performance better better than everybody else. 22.5% i find it funny that people don t object to athletes making a lot of money or movie stars or singers or tv personalities or present company excluded. cable with the ticker business news no, but even the coach of a state university getting a long-term contract at $5 million a year, no problem, right? where the professors make $150,000 a year. but all but they don t recognize that in finance there are superstars. and superstars should get paid, regardless of what industry they re in. they say the superstars are what got us into the mess. i don t agree with that. that s like saying congress got us in the mess. they forced fannie mae and freddie mac to make too many loans to people that shouldn t have houses. they put pressure on them. they defined it differently, haven t they? yeah, they sure have. but this whole thing i think the biggest misunderstanding is that people don t realize that they own we, you, me own 25% of citibank. we own 80% of aig. these are huge companies with revenues in the billions. citibank s over $5 billion. and they need top management. and what s the difference if the top five people are paid money? they re doing a good job. they should be paid more. you can t have people competing with goldman sachs and jpmorgan if you don t have the best talent in the world running these things. i m rooting for these companies to do well. maybe we make money with the banks and the options, so forth. but people just don t seem to understand. they want these people they want these institutions to have limits on how much they can pay people. they don t realize these huge organizations need top talent. i mean, you can t win the world series and not have a-rod. shouldn t you be able to fail? shouldn t you be held accountable for bets that don t pay off? well, who should be held accountable? i m a stockholder. should i be held accountable of citi corp? the highly compensated partner. they re fired. they re gone. the question is, they have new blood, certainly at aig they have new management they ve had several new managements. they faced a problem of what they can pay people to come to work there. but if the guys running the place, ace, can have other people s money, it s not theirs, there was a time you could offload a lot of the rick ysk y were taking. we re not calling in any money from chuck prince or stan o neil, right? they re gone. they re gone, but they re they re on the rivera with a mai tai. i wasn t in charge of their compensation. and the board for whatever their wisdom, whatever they dshg they did. i know some people feel the biggest mistake made was making prince the head of citi corp, maybe it was. but that s history. now we have a mammoth corporation in need of top management. aig and citi corp. if they have to pay to get it, they should pay. feinberg hasn t been as bad as the greatest fears of a lot of people. i m a great believer of our president. he s doing a great job. he inherited a mess. you can t pay people and people at goldman sachs have done remarkable. they re underpaid if you compare it to their peers. they grind it out every year. this whole executive pay thing the populous that s not going away any time soon. it looks like some of our people in washington are going to pivot and even get more populous. do you forget at bear stearns and lehman, your compensation at bear stearns, a lot was going to stock. these people are wiped out. there was a clawback or a penalty. they lost their job, life savings from the secretary to the guy in the mail room to the senior executive. so there was, you know, a retribution for the company going out of business. so, you know, i agree with ace. you have to find the talent. you have to run these companies. and you ve got to create long-term value. but there must be some lasting ire and anger because that s why the bank tax is being proposed in the first place? it s done in a punitive way, isn t it ? yeah, and they keep adding fuel to the fire. they say, how can they make so much money when they had help from the government? they were. but the government had a high interest rate, wells fargo, goldman sachs and so forth, and i think the government s return on their loan was like 25% or 30%. when you factor in the options that they sold. so the government was well paid. now they come back at them and to say they re going to tax the big banks and not the little banks. i mean, i don t understand it. the president last night apparently speaking on abc, we re about to get in a big fight with the banks, with a new proposal we re expecting today around 11:40 eastern time, that will look a little bit like glass steagall light. well, i know that volcker has spent a lot of time and effort, i have a great deal of respect for him also. glass steagall went into effect, i think, in 1934. there was a reason for that. there was a terrible conflict of interest that existed then and maybe even exists now. but that was repealed. i don t think they can do anything about that. they can t the eggs have been scrambled. they can t put it back in the shell. i just don t think they can. i just glanced at this thing. i don t know what it means. does it mean they can t trade in currencies anymore? does it mean they can t trade bonds anymore? those are risk-taking. i guess it s possible to be even at the end of the day, unlikely, but i guess it s possible have night to go home and be even in bonds, even in foreign currency, even in currenciecurrencies. there s going to be a little exposur exposure. i do think the banks have to have some leeway because the old-style investment bank is gone, will never come back. there were five of us left. all five of us have disappeared or changed form, either through a merger in our case or going out of business, like lehman, or both goldman sachs and morgan stanley became banks, you know, and people say that that s silly that they should not be banks anymore. they don t know what they re talking about. i don t think that an investment bank can stand a run on itself. if goldman sachs, as powerful as they are, couldn t stand to run, who can? that s why they became a national bank. if you re a national bank and they start a run on you, if the authority say you re sound, you re sound and they ll give you money and that s the end of the run. so somebody has to fill this void. the banks, quite frankly, have done a tremendous job, certainly in the new issue business of both bonds and equities the last year or two. so, look, we ll see what he says. they seem to the most popular sport right now is picking on the banks right now. everybody s picking on the banks. i m not sure they understand what they re doing. ace, can you stay with us for a moment? we have to sneak a quick break in. no, i m leaving. please stay. okay. we ll have more with ace greenberg and reaction to goldman sachs, those numbers just reported. tdd# 1-800-345-2550 investors got lost in the shuffle. tdd# 1-800-345-2550 investment firms forgot whose money it is. tdd# 1-800-345-2550 enough is enough. tdd# 1-800-345-2550 it s time investors got what they deserve. tdd# 1-800-345-2550 real help that s there when you need it. tdd# 1-800-345-2550 pricing that leaves you with something to actually invest. tdd# 1-800-345-2550 at schwab, we offer a lot more help for a lot less money. tdd# 1-800-345-2550 because at schwab. tdd# 1-800-345-2550 investors rule. tdd# 1-800-345-2550 are you ready to rule? what are you doing.? calling chase sapphire, seeing if we have enough points to stay longer. now? you don t have enough time. and you have to push all those buttons. no buttons, someone answers every time. yeah, right. bet you a massage. yeah, ok. hi, julie. i have a question about my points. hi, what button do i press for a massage? hello? new chase sapphire. you call. we answer. no waiting. just press right here. go to chase.com/sapphire. chase what matters. welcome back. the conversation continues at the table with ace greenberg and bill reutimann. want to get to steve liesman with news out of treasury, right? the administration we talked to this morning. official telling us that what is being talked about about new banking regulation is, quote, not about bringing back glass steaga steagall. a wonderful quote saying bringing back glass steagall is like trying to bring back the walkman. he says it was old when he we got rid of it. he says this is about separating the trading a bank does for its own account versus what it does for its customers. they believe they can do that. the aim is to limit, ultimately, the access of a bank s proprietary trading to the government deposit guarantee. there s a sense that during the crisis, when there were losses in proper trading that the government backstopped those losses. the administration supports essentially a house bill, an amendment to the barney frank financial reform, that would give regulators the authority to limit risky bank activities, the scope as well. but the details of how this would all work have not been worked out. look for tough talk today from obama, but at the end of the day, it s not about bringing back glass steagall. carl? thank you for that. sure. interesting. they re clearly listening to the conversation around the country today. i still don t get how you would actually put some of those restrictions in place? how do you make sure you re not backstopping well the left hand versus the right? they use their own equity, capital to make these trades. i m not an expert like ace, but let s see what it says. there was big talk a few months ago about derivatives have to be traded on the clearinghouse. what happened to that conversation? i haven t heard much about it, have you? it s gone. it was too difficult. most derivatives are tailored for a customer s needs and so forth. it s not a standardized contract like 100 shares of ge. but anyway, it s gone. they don t talk about that anymore. how about the tax? we haven t talked about the bank tax. there s a lot the chatter, whether or not you like it or not, it would be easy to sell it to the people, to the american people. yeah, but i think it s unfair, it s unwarranted, unprecedented. and they excluded they re not going to tax in order to no matter how much money fannie and freddie and aig make, they won t be taxed. if-f they should turn around and pick on the big banks, it s unfair. some of the big banks didn t want to participate in the government loans. they said, no, you must, because if you don t participate, it means you re sound and everybody else isn t and therefore you have to take this money and give us option. then when they wanted out, the government held them for a while and said, no, you can t do it that quickly. all of a sudden, they pay them off. they sell their options. they make the government makes a lot of money. now they re coming back and saying, we want more money. it s not fair? i don t is it constitutional? i don t know. i guess so. because now if you ask someone, whose fault was the financial cries, the. announcer: is it s the bank s faults. we were talking off-camera that it started with the actual underwriting of the first mortgages is where the real somebody turned in an application and certifies this person has the income and so forth and so on. that s where it all starts. that s the mortgage company, right? right now, what banks are failing? it s the community banks, it s the regional banks. you had over 140 banks in 09 go out of business. not because of these type of loans. it was because of commercial loans, land loans, underwriting standards were just totally thrown out the window, same with the same with construction loans. yeah. and so that s you know, that s a huge issue impacting if you live in, you know, in a region, you try get a bank loan. you can t get it. the banks aren t in operation. it s very it s very scary. i think what they re trying to do in washington is control risk. i think vb geverybody got the m. he were trying to get a loan on a renovation of an apartment building. it s $100 million. en a big loan for new york standards. i met with the bank the other day. they said, well, maybe we ll underwrite it based on a residential rental and we ll bring in four banks to lend you the 75 or $100 million. this is a major bank. there s risk involved but we ve shown thaez coere s comps in th neighborhood, selling in a very strong neighborhood and still, everybody s afraid to lend. that s today, right? the fear is that everyone got the forget down the road. that s an issue. if you have good bank, good management, like, you know, ace s partner, jamie and his team, they run a great bank. they know how to manage risks. they compensate for the they have the capital reserves. and i think that s really part of the issue. ace, do you think wall street s memory is good enough to hang onto these memories of the past two years? or are old habits hard to break? let s understand, there s more wall street. there are banks on madison avenue, park avenue. the only bank downtown is goldman sachs, i think. wall street is gone. bank of new york mellon is still downtown. the market is made up of people throughout the world. when i started out in 1949, the vibe in the new york stock exchange was less than a million shares a day. i think the other day citi corp traded a billion shares in one day. so you can t compare it. the market is made up now of people all over the world buying and selling stocks in new york. there s no more wall street. they can t blame wall street. there were only five major investment banks left, if there was a wall street, and they re now gone. they changed form or disappeared. so you ve got to they can t blame wall street. let me try it another way, then. are underwriting standards going to revert to their old practices, anywhere, from anybody, without some kind of change in policy? well, you know, the history of all these bubbles is the same. they appear in slightly different form. people get taken away carried away by the tech bubble, then carried away by the real estate bubble. so you can t protect people against bubbles. if grown people want to invest in a crazy way, you can t stop them. so history does repeat itself. with the new, you know, stock of the month club. so that s not going to change. people are constantly get overenthusiastic over something. you know, there are stocks that are worth absolutely zero that are selling at prices that are ridiculous right now. i m not going to get into who they are, but they re worth zero. enough of the public buys them, they go up. but this goes back to the point of, i know you said what s happened in the past is history, and you can t change stan o neil or chuck prince or someone who s left with a lot of money, but can you set something up in place to try to keep that from happening again? to try to keep history from repeating itself with management? with management, yeah, with yeah, but, becky trying to set some rules some of the best intentions in hiring people, i mean, you can go back i remember two guys, michael price and michael steinhart, two pros, own over 50% of that company in the south. they hired dunlap, chain saw dunlap, at an unbelievable salary sun beam. yeah. they owned over 50% and they paid him a huge they were wrong. and when people, of course, with home depot, you know, in retrospect that might have made a mistake in what they offered that gentleman. i m glad ken isn t here. god, i retract that. it was a great it was a great a great move. duncan was on the before, the head of the stock exchange, talking about regulatory reform and that shelby and chris dodd are working on a more balanced approach in terms of, you know, financial service reform. do you have a thought about that? or do you no. i ll see what they come up with. they may just disappear like the cleari clearinghouse. you know, people talk and i don t know. you know, the board of directors a book just came out criticizing the board of directors of american corporations. it got a good review a couple days ago. written by gillespie, isn t his name? i don t know. i can t disagree. some corporations have made terrible mistakes in choosing a chief executive. just gave a couple of brilliant people, who, okay, you know, you make mistakes sometimes. it s corrected, right. you have to live with it. how you can stop things like the two you mentioned, joe, occurring again, probably not. do you miss your days at bear stearns, the way things were? well, i was very disturbed about the 14,000 people that worked there. i really that bothered me a lot. but, you know, evolution, you can t look back, you have to look forward. i remember when billy solomon, who built a tremendous firm, and when citi corp dropped solomon brothers from the name, i called billy up and i said, i m sorry that your name is disappearing. he says, oh, look, that s history. that s gone. i don t care about that. he took it. and his name was on it. so, if he can handle, it i can handle it. ace, it s always good getting insight from you in these crazy times. good seeing you again. thanks for having me. when we come back, it is all about jobs. we ll get jobless claims in five minutes time and ron kirk will talk about promoting job creation at home through trade. s of independent investors? let s ask. when you re trading a stock, every penny counts. i hate when the trade is done and you find out you paid more than the quote price. i want it at the price i expect. or better. td ameritrade s unique trading platform uses multiple market centers to help you find the best possible price. i like those odds. i know they can t flat out promise a better price, but they re always looking for it. they know what matters to me. every online stock trade is always $9.99. not a penny more. and no maintenance fees. who else does that? are you ready to declare your independence? td ameritrade. independence is the spirit that drives america s most successful investors. announcer: trade commission free for 30 days, plus get 100 dollars cash, when you open an account. [ male announcer ] introducing the all-new lexus gx. it has the agility to avoid the unexpected. .the power to take on any mission, and the space to accommodate precious cargo, because every great action hero needs a vehicle. welcome back. we continue to pour over the goldman sachs number that came out over a half an hour ago. mind-blowing numbers. the estimate was 5.20, came in at $8.20. 4.95 billion in profit. we re looking through some revenue numbers. revenue for the quarter, almost 10 billion. ? line. in trade be. trading in principle investments, 6.5 billion of that. so the dynamic of the goldman number, they make most of their money in trading, in a quarter where we knew things were quieter than normal but the only only way, said, joe, bring down that number, the 8.20, this isn t a blowout quarter, the only way to do that at the end of the day is to pay your employees more and they re only paying their employees 32.5% of the pay versus what is it, 30 and they earned versus 48%. this is their fourth quarter and earned $22. doing the simple math, it s like 7, isn t it? let s get to rick santelli with the jobless claims number where we re looking for a number around 440,000. good morning, rick. good morning. well, it s significantly higher. it s 482,000. and that s revised 446,000. continuing claims, slanted upward on a revision to 4.6, let s call it 2 million and that is now 4.599. that move down a bit but it s awful similar to the unrevised number that we originally reported last week on continuing claims. so, of course, i can t dig beyond what is released as the seasonally adjusted numbers. of course, the adjusted numbers are very important. but when we talk next time and throughout the next 25, 30 minutes, we ll look at the nonseasonally adjusted because they ve had a different track. they ve been moving higher. it s not as easy as is-t used to be. interest rates are slightly elevated. the dollar index once again is higher. and flirting with the best levels usurping some ining some made toward the end of 09. currency handle, 140. this is very important to monitor because it underscores the threat of sovereign credit, in the form of greece, isn t something that is going away any time soon because at some point there s going to be a day of reckoning and i think the market senses that. that s part of the battle going on in the foreign exchange markets. back to you. rick, don t go anywhere. we want to get more from you, also jim urio and steve liesman. let s talk about why we re looking at the nonseasonally adjusted numbers because that washes out over time. the roon is because there are two other programs with hundreds of thousands and millions of people getting claims that are only reported on a nonseasonally adjusted level. what we have to do all the time, we end up in the next half hour, adding that all to the total universe of claims, and the extended benefits. that s why we focus. by the way, these numbers are a week to two weeks old. that s the problem. to get the absolute picture, we still look at the claims number and the inputs to the system. haven t seen the four moving average. it had been on a 19 straight week of trajectory declines. that could bring that up for the first time in 19 weeks. jim, give me a take on what s going on with equities this morning because given the lackluster response to some decent numbers over the last couple of days, some are wondering if the rally at intel/alocoa is the top. isn t it ironic that goldman has great earnings on supposedly the same day government is going to pass new regulations on them? can you really buy goldman after those numbers? looking at the picture going forward? no. this jobless number is a crummy number. it s a weekly slap in the face to remind people it s still about the labor picture. it s improving, but not at a fast rate. i think it s summed up in lehman verse citi the other day. lehman posted good earnings same day citi posted bad number. that s the flow. lehman is firing people, the lehmans of the world, having problems with credit cards and things like that in the banking industry. but the thing that strikes me the most is two days ago we had a vote for conservative government. is that a great thing for the stock market? no. for the last ten months, the threat of irresponsible fiscal policy has been one of the movers higher for the stock market because it s been rick s going to take a swing at me. anyway, we wesqueezing money ou of the riskless dollar by making a slightlier more risky asset. now that s a controversy. i watched it yesterday in horror thinking, oh, my good, yurio is going to be right. if we don t have a another big irresponsible stimulus and keep printing money to hammer the dollar to keep risk taking going, it could be a bad i was thinking you hate when i m right. it came true when you said it. i m like, oh, no. it s come true for a day. let s give it more time before then i said, look, you have to take the heroin away from the addict. he might not feel so good right away, but eventually he s going to lead a healthier life. that s the whole of the point, joe. this is a needed thing. for the long term this is a great thing. for short term it might be detrimental to the stock market. rick, we have tiger woods, you know, photos on the cover of the post with him in rehab and the economy in a different kind of rehab, perhaps. well, you know, i think jim and i finally have closed the gap. i don t need to pop any blood vessels today. i think that what has gone on in stocks is real because you can cash the check if you ve been mostly long of late. but it doesn t mean it s delivering the message about the economy. i think we re all on the same page. i think the behavior yesterday in the stock market is had to discern, what effect was china, what affect was the vma election. no doubt the latter had influence in whether the punch bowl s getting bigger or smaller. i think what we need to focus on is quit living in the past. i think what we need to focus on, once again, are jobs, jobs, jobs. i think by all this bank regulatory talk i m not saying i disagree with bank regulatory talk, but, hey, let s quit being negative. the bailouts obviously didn t work or you wouldn t try now to punish the people that benefitted from them, but let s just work on positive issues. creating jobs. let s not go back and chew our tobacco for the fifth time. it s over. now we re going to get you know, that s a perfect segue, rick, because we re going to ron rick now. if we could only make things here and sell them everywhere else, but he s the u.s. trade representative hosting a conference this morning to promote jobs on main street, but then we sell everything around the world. it seems simple, mr. kirk. but it s not, is it? well, you know, i think that may not be a question as much as it is an answer. it is simple. especially when you look at the overriding reality over the last 10 to 15 years. still, the overwhelming majority of jobs in this country, net new jobs r created by small businesses. those are businesses that employ 500 people or less. and so we at ustr and the small business administration and the department of commerce are coming together to see if we can t dig a little bit deeper into that phenomenon and look at ways we can work with small businesses, first of all, to demystify this whole world of global trade and encourage more of them to become participants in that market. so over the next however long you re going to to be connecting this, what are your goals? how do you do it? how do you get small and medium-sized businesses more on the right page? well, one is we are going to use small businesses themselves to help tell their success story. and we ll give them a lot of information. we ve commissioned a study by the itc, first of all, to help us make sure that whatever strategies we come up with are appropriately tailored to the needs of small businesses and not just intuitive. we have learned some things. here s the good news. small businesses remarkably account for 97% of u.s. exporters bction 250,000 businesses and 300 billion jobs. it s not $300 billion of exports. we re not talking about an insignificant number. remarkably, that s less than 1% of the universe of small businesses in this country. and we know that investing in small businesses is a great way to create jobs here in america. because they re going to grow at home. they re not going to pick up and move, you know, to hong kong or mexico or somewhere else. we think-i a smart part of the trade strategy and the president s overall strategy to help americans get back to work with highlighting, working with and focusing on small business. we focus on, you know, more free trade, more trade agreements or do we need to focus on more fair trade like we ve seen recently with some initiatives that have gone against china? well, we can listen, you re going to have to use all of those strategies. obviously, our work at ustr is not only to open up markets but to make sure we have full access to those markets in which we already have trade agreements. that s why our enforcement work is so important. but in the case of small businesses, with 99% of them not even thinking about exporting globally, i think a strong, smart education initiative and partnering with them to help remove some of their entries to or barriers to entry into this market, you don t have to negotiate new agreements if we just get more of them engaged and understanding the power of exporting to grow their businesses and help create jobs. what about within our own shores, ambassador, and the political winds people say are building into november. they re worried about a lot, a lot more populous rhetoric being aimed at china going into the midterms. are you bracing, getting ready to lean into that wind? well, you know, we can i forget which one of you was screaming jobs, jobs, jobs probably all of us. as you were finishing your discussion about the market but i think the smartest thing we can do is keep our heads down, leaning into that wind, if you would, and keep working to make sure that, first of all, we have the right foundation for the economic recovery, do the things president obama has laid out for us, invest in our education system, invest in green jobs and innovation and creativity, and then i think from our perspective, whatever we can do to enable, empower small businesses to continue to grow k be a great part of our overall economic strategy. but there isn t as you said, there isn t one silver bullet. we have to get all of those to get america working. that s what we want, ambassador kirk. good luck. we appreciate your time this morning. well, good luck. if any of your listeners want to learn more about the conference, tune in at ustr.gov. thank you. sounds like you want some tenants there, too. oh, that s usda. coming up, an update on the crisis in haiti. plus, we are getting ready for the opening bell on wall street with art cashin. to the all-american meal. french fries, and our national passion for them, are legendary. classic. iconic. but times change and people want better foods. so cargill helped a restaurant chain create. a zero trans fat cooking oil for their french fries. canola plants. and innovative processing techniques. while preserving their famous taste. because no one wants to give up a classic. this is how cargill works with customers. the rescue and relief effort in haiti is growing by the day. scott cohn has the latest. the effort is growing but it can t grow fast enough as we continue to get stories of one step forward, two steps back. like the couple who celebrated the birth of a healthy baby yesterday, delivered with the help of u.s. army medics. then the family had to go back to a dispraised survivor s camp. the makeshift hospitals where stories like this are playing out, simply overwhelmed. what we do need really is supply. supply for the o.r., supply casting, metal plates to help put the bones together. so we re trying to run it the best we can. well, the health care industry is working hard to get supplies into the region. the medical equipment distributor henry schein teamed up with suppliers to pledge more than $1 million of assistance. we learned that through our special e-mail at hai haiticrisis@cnbc.com. medco have announced an open-ended commitment to deliver medicine. and sanofi initially donated by $140,000 to the relief effort. now it has pledged $1.4 million in long-term assistance. more about how you can help at cnbc.com. all important numbers, scott. thank you for that. we continue to keep our eye on that story and the futures this morning after getting the goldman numbers about 45 minutes ago. any good work that might have been done, at least short term, was undone by the jobless claims which came in worse than expected. we re still close to the area we ve been in all morning long, about 20 points below fair value. when we come back, the bernanke countdown continues, but could it be coming to an end sooner than we think? that moment of the day with steve liesman. you know why i sell tools? tools are uncomplicated? nothing complicated about a pair of 10 inch hose clamp pliers. you know what s complicated? shipping. shipping s complicated. not really. with priority mail flat rate boxes from the postal service shipping is easy. if it fits, it ships anywhere in the country for a low flat rate. that s not complicated. come on. how about.a handshake. alright. priority mail flat rate boxes only from the postal service. a simpler way to ship. what is cloud computing? a cloud is a workload optimized, service management platform enabling. .new consumption and delivery models. it s what? my cloud does email. lowers my energy bill. shares pictures. we collaborate on our cloud. i develop software in my cloud. i want a cloud that understands risk. .compares patient histories. .predicts traffic patterns. my cloud is. everywhere. my cloud is secure. simple. powerful. flexible. that s what we re working on. i m an ibmer. let s build a smarter planet. ( inspiring music playing ) someday, the driver will get to choose how efficient or powerful their car will be. the first ever hs hybrid. only from lexus. the most fuel-efficient of all luxury vehicles. it s that time again. time for the bernanke countdown. let s get to steve liesman. what s going on with bernanke today? what s on his schedule? ten days left, joe. we understand he s going to be looking at the difference between the payroll survey and the household survey. payroll survey, as you know, reported 4.1 million job losses year to date. the household survey is 4.9 million. he s going to be, more importantly, the payroll survey shows that the trajectory has been improving whereas the household survey doesn t show that. he thought he might invite over bunning, demint and sanders for tea, for a tea party. brown won, so he was put into the invitation as well. those are the three senators who have a hold on his nomination. you got a laugh out of bill on that? can i get we need it on the reel when somebody laughed. when someone laughed at my jokes. john harwood reporting friday is supposed to be the cloture and vote. this number may only be nine. if the senate actually votes tomorrow that wasn t a joke. why are we having a laugh track? we never know. now, it s also well known that he and his wife anna do the sunday cross word puzzle and apparently anna was stumped on three down. so he wanted to call anna and tell his wife the answer to that question. the answer was barn. you know what the clue was? no. website for charlotte. for c. oh, yeah. a good one. a web, yeah. i like that. i get crickets on that. you like it i get crickets. i don t know why you didn t have call reid because reid has time on his hands now. apparently he got through. he s got some time now to consider some other things. exactly. can i just say that shot here on 5 looks like you re talking to a green screen. oh, i see. it s back this way. i m confused. all right. the tv gods are throwing up there you are. we don t show who s laughing. good-bye. there s becky. they get that on espn a lot. so maybe we ll all have be out of our misery with this whole easel thing coming to an end by tomorrow. please let them have the vote by tomorrow. rip it off and do it. put the easel to rest. thank you, steve. the bears get a chance to roar. we ll check out the catalyst for yesterday s selloff and see if they are still hanging around today. art cashin has the trader s edge right after thchlt welcome back. it s time for the trader s edge. art cashin is the director of floor operations at ubs financial services. we re going to focus on financials again today, goldman out with better than expected earnings by a mile but the stock probably not going to get that much of a pop at least looking at the early trade. what s the concern? what s happening in washington right now? well, i think a little of that was baked in the cake earlier. people were anticipating good numbers, so people were buying in and now you ve got the realization it s not bringing a lot with it. plus the fact that the financials are worried about washington and the rest of the world is worried about china. and that the idea that china was telling everybody to stop lending until the end of the month really kind of shook global markets yesterday, caused the dollar to rise. that spent gold, oil, and the stock market much lower. they re trying to circle the wagons and see if they can get things better. that s going to be the prevailing view for a while though on the street if the dollar is strong just what it immediately takes out of the stock market? absolutely. but the relationship has turns somewhat per verse here. it used to be that as the dollar strengthened, then those markets would move down. now it is as it s moving. it s got to be in the present tense. it s got to be going up. when the dollar pauses, even if it pauses at the high, that allowed for example yesterday gold, oil, and the stock market to come off the lows, so it s kind of a strange relationship now. art, what should we be watching? we talked a little bit about the jobless claims. being a disappointment but also having weird, seasonal noise in there. what else are you guys watching on the floor? well, we re watching the jobless claims. you know, everybody is talking about it being a jobless recovery and there is some feeling that what happened in massachusetts wasn t so much a slap at the democrats as a plague on all your houses. i think every incumbent should feel a little concerned. there is this whole wave of populism, wall street versus main street that they excited and exacerbated is now coming home to roost on washington. i don t think it will get much calmer or prettier. thank you very much. good to see you. next we ll have running a real estate dynasty in this market who does that? our guest host bill rudin. squawk box will be right back. , seeing if we have enough points to stay longer. now? you don t have enough time. and you have to push all those buttons. no buttons, someone answers every time. yeah, right. bet you a massage. yeah, ok. hi, julie. i have a question about my points. hi, what button do i press for a massage? hello? new chase sapphire. you call. we answer. no waiting. just press right here. go to chase.com/sapphire. chase what matters. it doesn t cover everything. and what it doesn t cover can cost you some money. that s why you should consider. an aarp medicare supplement insurance plan. insured by united healthcare insurance company. it can help cover some of what medicare doesn t. so you could save up to thousands of dollars. in out-of-pocket expenses. call now for this free information kit. and medicare guide. if you re turning 65 or you re already on medicare, you should know about this card; it s the only one of its kind. that carries the aarp name see if it s right for you. you choose your doctor. you choose your hospital. there are no networks and no referrals needed. help protect yourself from some of what medicare doesn t cover. save up to thousands of dollars. on potential out-of-pocket expenses. with an aarp medicare supplement insurance plan. insured by united healthcare insurance company. call now for your free information kit. and medicare guide and find out. how you could start saving. welcome back. our guest host bill rudin of rudin management joins us with some final thoughts on the market and sort of how it surpassed the worst of the expectations. well, for new york city, where our portfolio is as we talked about before we ve got 400 million feet of space in new york. last year we signed the entire city over 24 million square feet of leases with companies like at&t, gibson, citadels actually took 100,000 feet bringing people from chicago so there s expansion, you know, in the market place and we re seeing things a little bit more positive but there again it s about the jobs and the economy and what happens going forward and the liquidity issue. how do you get a loan? how do you grow your business? those are concerns for our tenants. see what the year brings. always good to have you, bill. thanks for coming in. thank you. a lot of fun. that does it for us today. make sure you join us tomorrow for the final trading day of the week. squawk on the street is coming up next. live from the financial capital of the world, i m not kidding you, anyway, this is squawk on the street. good morning, everybody. i m mark haines. and i m erin burnett. we are glad to be with you this morning and here is what we are watching. goldman sachs, numbers out. much, much better than expected. the bottom line, profits 4.95 billion dollars and that works out to $8.20 a share. that compares to expectations of $5.20. by the way, the banks usually crush them or misthem by a wide margin. yeah. so i think we should take that with a grain of salt. nonetheless, better than expected for goldman sachs. their proprietary trading makes their earnings very volatile. hard to predict. plus president obama is set to make an announcement on some major changes for the american financial system today. it s a very important day. we have it covered from top to bottom. from side to side. and futures right now, you know, mark, we were down a little bit more but frankly there had been a rally around the world. not a huge one but we had been up, so people are waiting to see, frankly, what the president is going to say. you keep calling me frankly. my name is mark. i did use that too often in this you don t look like a frank. no. or a frankly. let s get to our market reporters. frankly, we would like to hit a little bit more on this issue of the banks. john harwood, hello. what is the president going to propose? i guess we should emphasize propose. this would have to go through congress. well, some of it would but not necessarily because part of it is would be by regulation and, erin, i just first have to say to your colleague, frank, there, there is nobody who