good morning, everybody. no double dip. reassuring words to the market from u.s. treasury secretary tim geithner. the world's biggest bond fund says it favors germany over the united states. pimco's latest call. the saints marching to the super bowl championship. new orleans defeating indianapolis 31-17. "squawk box" begins right now. ♪ we are the champions my friends ♪ ♪ and we'll keep on fighting to the end ♪ >> good monday morning, everybody. welcome to "squawk box" here on cnbc. i'm becky quick. joe and carl are off today. i'm lucky enough to be joined by steve and russ. welcome to both of you. thanks for being here. >> thank you for having us. >> good to have you guys. >> can we start right away that joe and carl are off together. they come in together. the purple ties together. >> where do you surmise they are? >> it's not a holiday week. they just happened to take off this random week in february. >> the day after the super bowl of course. >> enough said. enough said. >> not as joe would say there's anything wrong with that. >> after all of joe's speculation about who is off when, they deserve this. >> i'm glad to have you here today and most of this week. thank you. appreciate it. >> so much news that's out there. between aig and g-7 and greenspan on the weekend shows and john thain. that may be the story of the day. >> maybe story of the week. >> let's get to top headlines and you'll hear commentary on them. the risk that the u.s. economy will slip back into a recession is lower now than any time over the last year. in an interview this weekend, the treasury secretary suggested that the recovery is slow but he does not see a double dip slump. >> we are beginning the process of healing and we have the capacity as a government to try to make sure we are reinforcing that process and we help guide this economy back to the point where we're not just growing again but we have seen growth translate into jobs and that we're reaching the lives of all americans. >> responding to moody's warning last week, geithner says the united states is not in danger of losing its triple-a bond rating. he said that will never happened to this country because we have plenty of guests who would disagree with that and have seen troubles in the way we've been spending and the way the deficit is racking up. you have to tackle some of those benefits programs like social security. >> there is complete agreement that we have a long-term deficit problem. there's disagreement on the current problems and whether the deficit we're running right now are a huge problem this year and next year. what greenspan is saying is true and why the political establishment can't get there sooner is the question. we'll have to raise taxes and cut benefits. it's the only way out. but both sides have postured in a way to make that kind of compromise undoable right now. >> here's the question. is the deficit matter now? you said one year or two year. is it a matter of five or ten years out and can you deal with it in the next 18 months in terms of trying to spur the economy going to take care of it? that's the issue. >> the issue for the market is they want to see a path toward a sustainable market. the deficit of percentage gdp keeps growing. fourth quarter number is 54%. one of the things greenspan said over the weekend is this cushion. there's always been a cushion. the percentage of american debt has always been lower than our counterpart. that's one of the reasons why we're a reserve currency. the market wants to see and are accepting it which is why yields are low, they are going to get a cushion path. >> there's no cushion if you'll raise taxes right now. >> i'm going to make you guys stop. >> just real quick, there is a belief in the markets right now there will be a political solution otherwise you don't buy a ten-year bond or 30-year bond. >> it's easier in these auctions to sell the 2, 5, 7 years than the 10s and 30s. >> i don't know it's a bad deal right now. we're looking better. i'm supposed to read the prompter. the g-7 finance ministers meeting in canada this weekend. they argue the euro zone's debt crisis is under control and promise to make sure greece sticks to budget cutting plan. the finance leaders promise to make them repay funds. >> also, pimco's ceo says that he prefers german government bonds to u.s. treasuries. back to the same point we were just talking about. he's calling greece a massive wake-up call warning that its debt crisis threatens to infect other nations. he argues that german bonds are likely to outperform the traditional safe haven. if greece and some of the other european nations are in big trouble, isn't it germany that winds up paying the bulk of this if they keep the european union intact? >> that's what i don't understand about that call. hopefully we'll have to ask him. >> cit group hiring john thain as its new chief executive. thain was hired in part for the expertise he gave in restructuring the new york stock exchange. we have to talk about this. in your book he goes in and he basically does a shakedown of bank of america. right? 4 billion in bonuses for a company that less than a week later or earlier depending on whose version of events you read racks up $15 billion in losses. >> there will be a lot of people that will wake up this morning and say there's no justice on wall street. there's no question about that. having said that, a couple interesting notes. the federal reserve and the treasury department actually approved this move. they actually had to go to those departments in advance. i imagine if you asked andrew cuomo i suspect he would have a different view. i think there's an issue here. the good news is some people would say he saved merrill lynch. shareholders of merrill lynch very happy campers. if you're a shareholder in bank of america, you feel not only -- you feel deceived in some ways. there will be issues around it. having said that, he's a humbler guy than he was a year ago and as a leader he may be a better lead eer than a year ago. >> there will be people that remember refurnishing his offices. >> my favorite line of the morning was thain said in "the wall street journal" this morning i plan on keeping whatever office they give me. >> that's a smart first move. >> this drives me nuts. cuomo says until the shareholder meeting of bank of america they knew what would have been -- i don't know if it's 12 billion or 15 billion of losses at that moment before the shareholder meeting. when did they approve those bonuses for merrill? >> they were approved before that. even before that. >> they do it in a way that was never done before. >> the issue is -- >> hold on. they usually do it at the end of the year. >> they did it in advance of the accounting of the losses. >> the question is whether they actually knew about the losses at the time that they gave the bonuses. that's less clear. >> what did they know and when did he know it question. we don't know that. >> it's less clear. he would say he did not know at the time they gave bonuses the losses would be severe as they were. >> this is high huge pet peeve issue. when did losses come from? they magically appear at a time when the market is not trading and there's no justification at all. i have yet to see any investigation. despite your fabulous, fabulous book, i don't mean to take anything away from it. nobody ever said where they came from. >> it's an important issue. i believe that they came frankly from -- i think what happened is they ended up being forced to write down an enormous value of subprime trades. >> the market was not trading. valuations -- i talked to several traders that say there's no justification at the time for those losses. >> in fairness what happened is not a good situation was it was on the other side. at the time they sold the company the stuff was marked way too high. >> all right. maybe that's it. still, my -- we got to go overseas. >> let's get to overseas markets right now. christine tan is standing by in singapore. we'll start things off in london for the latest out of europe. what's happening over there on this very first trading day of the week? >> i was listening with great interest to your little greece discussion there. also just remembering what one of our guests said earlier this morning on "squawk box" in europe about how the figures that we're dealing with out of greece, debt to gdp worries, similar to what we're dealing with in the u.s. we're used to dealing with these types of numbers but it depends on what we pick up on and it depends on the market mood. the other thing worth mentioning is risk. we're not seeing the same effect that we've seen in the past where if emerging markets spiral downwards, all do so. we didn't have sell-off of poland and other emerging xe i g economies so that's worth noting. this morning in europe we're coming back a bit on our markets. trading higher across the board although we have just gone pretty flat right now but we have been led higher by basic resources and big financials as well. let's head out to singapore now. christine, what do you have for us? >> asian markets finishing lower today. debt concerns in europe hurting investor confidence. nikkei sank a two-month closing low. risk aversion sending it higher. this after its president made a public apology on friday and said it would bring in outside experts to review quality controls at toyota. at maker recalled 8 million vehicles around the world has now decided to recall its new prius hybrid in japan. it's also considering a recall of its lexus hybrid which uses the same brake system as the prius. some are looking to the key 19,000 level and they are skeptical about assurances given by european finance ministers to alleviate the debt crisis. in china, shanghai was lower. that's a stock market action from asia this monday. let me send it back to you. >> thank you very much. right now for the latest news and analysis of the markets here in the united states, let's get to our monday morning strategy session. joining us is burt white. and from de davidson and company, we have fred dixon. gentlemen, thank you for being with us. fred, there are people trying to figure out what's been happening with the markets. the markets did on friday manage to pull back out of that slump and ended up closing above 10,000 for the dow. how important is that level? >> i think that was an important turnaround. the 10,000 level has strategic importance in the mind of some investors. the fact that it pulled up and recovered losses and i think that's a good way to start the week and put that together with new orleans super bowl victory and we're off to a good start today. more important, economic conditions probably will come back into play. the news we had last week should overshadow some of the debt problems over in europe and we put together a picture and say that investors should focus on the improvement in economic conditions that we continue to see and measure and have been seen over the last three months and not be terribly focused on isolated debt problems in some of the smaller european countries. i think we're going to be off to a good start. we should see a nice reflex rally off friday's turnaround. >> fred, you brought up a good point. is the new orleans win, does that indicate that we're supposed to see higher markets for this year? i forget what the super bowl indicator old afc versus the nfc. >> new orleans is an nfc team and that should bode well. track record is when an nfc team wins, it points to a year up with 65% track record. we'll put that in our minor bag of indicators. >> we'll take that after the lousy january indicator we got at the end of the month. there are more important things. one of those more important things has to be the jobs number. that's something people were watching closely. we'll get weekly jobless claims. do you think we'll see a turn any time soon? >> i'm fearful. the big issue here is that the baton is being switched from government spending and stimulus led growth to one that is waiting for the next runner. the next runner is business spending. businesses have not committed to this recovery yet. they are still protecting profits by not spending and not rehiring even though they did overcut they are still protecting profits. now, at some point in time they'll shift from protecting profits to protecting market share and by do that they'll invest for future growth. >> it's just a question of how far down the road that time is. >> it's probably in the next quarter or two. i think companies want to wait and see. they are stretching on the sidelines getting ready to run but at the end of the day they haven't committed yet. they have part-time employees and longer overtime hours but what we haven't seen is increases to r & d and increases to exploration and increases to cap ex and rehiring and basically we're protecting profits but at some point in time we'll make that shift and that will be an important one for this market. >> how do you play that change? if there's cash on the sidelines and people will invest it, what is the investor do looking at how companies themselves are going to winvest? do you give credit to those not putting their money to work or those that are? >> credit it those that are putting it to work. i spent the last five weeks on the road visiting all over the west talking to companies of all sizes at my presentations and what i'm picking up is that they are investing in technology infrastructure, software, security software, networking. they're making the investment right now that they deferred a year ago that they have to maintain to keep themselves -- >> the markets on top of that. the market knows that already. that's why tech has done so well. tell me a place where the market hasn't picked up on where companies are going to spend their money. >> it's a couple places. one is within energy. e and p would be a great place to look there. exploration is at ten-year lows. biotech is another. i think again we have to build up that pipeline. and biotech would be another place. i think just general materials and commodities are going to benefit as you begin to see increased to cap ex. cap ex is still 60% off its peak. we're seeing that increase slowly but not as fast as we need to see. the next thing would be to go ahead as you look through earnings report and see companies that are beginning to announce that they're increasing cap ex spending and investing for future and fueling their both because at the end of the day those are the companies that are going to makeshift from protecting profit to protecting market share and they will be market share gainers. >> gentlemen, thank you for joining us today. we appreciate your time. a flash that we're running across the bottom of the screen that we've been talking about cit john thain coming in as new head there and he'll be making an initial salary on an annualized rate of $500,000. that's the word we're getting right now. >> i should tell you it's $5.5 million in stock as well. >> restricted? >> unclear to me right now. i have to go through the numbers. >> i need to get one of my junior economic data reporters to run the data. >> restricted shares. >> i want to run data. when nfc wins but january is negative. what happens? >> i haven't even thought of that until fred brought it up. >> january negative nfc wins. >> if afc wins it's 91% chance it's an up year. >> we'll have to go back. >> fred brought it up. >> if a team from the old afl wins the market will fall. fair enough. >> coming up, "avatar" dethroned at the box office. as we head to break, a look at last week's winners and losers. welcome back. "avatar" losing its top spot at the box office. guess what? the new romantic drama "dear john" unexpectedly took the title making $32.4 million this weekend after in some reviews said they booed during some of these parts. took away the number one spot at the box office. that's good news for distributor sony. it says audiences for the film were 84% female and two-thirds were under the age of 21. "avatar" slipped to number two after a seven-week winning streak. we talked about the super bowl indicator. once again, that's true. if nfc team wins, it means that the market will end up that year and that indicator is right over the last 32 years. two feet of snow dumped on washington, d.c. over the weekend. for today's forecast, let's head to the weather channel and alex wallace. >> a bit of a break from the mess that we had to deal with this there the mid-atlantic. you know what? there's more to come. in the middle of the country our storm system bringing us a bit of snow here through sections of the midwest from iowa down into missouri including kansas city and st. louis this morning. this is all going to be getting to translate toward the east. and because of that, check this out. we have winter storm watches up for a good chunk of pennsylvania all of the way down to our nation's capital. because of what is to come. we're not done yet. here's our system marching to the east bringing us snow. rain farther south is where we'll find heading into the southeast for tuesday. and there's some more of that wintry weather coming back tuesday afternoon we'll start to see that getting back into d.c. baltimore, philadelphia, and by wednesday some of the areas that missed out on this storm will get in on the act for wednesday. boston, snow showers for us. how much? that's the question here for us. looks like it will be coming down in bunchs fes for several areas. an inch for oklahoma city around the next 48 hours. look at this as we head farther east. 6 to 10 for paducah. not what we want to see in d.c. maybe an additional 5 to 8 more inches of snow. those shovels will be working overtime. >> alex, thank you very much. appreciate it. >> let's get back to markets. volatile swings in currency and commodities. we're tracking the latest this morning. let me start here, i guess rumors of the dollar's demise were exaggerated. >> yeah. absolutely. last time i was here two weeks ago i said my 2010 forecast had the dollar going up both if the u.s. economy did well and even if they did poorly. one on risk aversion and other on growth differentials. risk trade has been working well. having said this, the euro has fallen so far so fast that we have seen a bit of a short covering rally this morning in the euro. we saw urrussians on the bid. we can see consolidation. >> i just want to hammer this point home. there were people out there saying that the dollar was done. the united states was done. and the best thing to do would be to get out of the dollar. here they are at a time of crisis once again just as they did during the height of the financial crisis going to the dollar at a time of crisis. what does that tell you about the place of the dollar in the world me? >> it says that we saved reserve currency for a while longer. we have the only uniform complete capital market and governmental structure to be able to absorb risk flows and i think that's the key thing here. i think that's what you see. the euro is very vulnerable to a fragmentation risk. >> how is the rise of the dollar affecting oil and other commodity prices? >> it's been leading to huge risk regurgitation. when the dollar strengthens, you see people getting out and you see people pay attention to things like the fact that we've been talking since last march about stronger stocks mean better economy means stronger demand. guess what? we haven't seen stronger demand in oil at all. not in eight months. and if anything, the demand is getting worse which is actually now starting to be a source of concern. one of the things we saw in 2009 was the stronger stock market in anticipation of a better recovery meant that oil prices were going higher. i think we may have gotten to the