Transcripts For CNBC Squawk Box 20140402 : vimarsana.com

Too, right . The advantage of being able to say, well, were different now. My company is not going to be focused on the cost cutting and its negative effects. What can you really say when someone says that . And the harder you sort of criticize her and pushback, the more people say, well, she wasnt in charge, anyway. So its a moving target for these congressional guys. Do you want to give her a grade . I think she did as well as could be expected. In terms of apologizing or i think what people wanted more i think they were expecting too much, frankly. Given all we heard was im not sure who its passed off on the but why is there no name attached to it . There should be some names, its a big company. Anybody knows it could be this maybe ayman jabbers in washington. Who we said were going to get to, but now were going to get to him. Does he have a name . We have never met another ayman, either. Every third guy in ireland is named ayman. Do they do it that way . Thats how its done. Look, mary barra was on capitol hill yesterday. One of the Big Questions from the Committee Members is why cant we get more information from gm inspect this is a problem that dates back to 2001. Why is it were still not getting answers . Barra repeatedly cited an internal gm investigation and said until that investigation is finished, shes not going to be able to provide any answers here. Take a listen. I am not aware of you dont know about that . Im getting this information from the chronology that gm provided to ntsa. I wasnt a part of that organization at the time. Thats why im doing the investigation, to understand that. When was it that gm informed ntsa . I dont know that. There a lot of i dont knows there from mary barra on capitol hill. A lot of those members of the committee were unsatisfied by the answers. Again, barra citing that internal day investigation after the hearing. She had a press conference and i had a chance to ask her whether or not gm would release that internal investigation and whether the internal investigation would produce a report or a document or any kind. Here is her response to the question. I will share and be transparent with those items that are appropriate to share. There may be everything that is appropriate to share, everything related to consumers safety, everything related to the customer. In written format . So mary barra there not committing to releasing a full result of the internet investigation at gm. And also not saying that theres necessarily going to be a written document produced by the internal investigation that she was citing during the hearing, guys. So a lot of people in washington left unsatisfied by that performance yesterday. Shes going to be back on capitol hill again today before a Senate Committee. And you can expect a lot of the same questions for General Motors. Exactly. It will be the same questions. You know, ntsa, do we have a name sdmp. National highway Transportation Safety administration. Do we know the date that they were fully aware of this and the ramifications . And what is their enforcement ability . You know, i dont have the date handy, but i can tell you that nhtsa was pointing fingers at General Motors yesterday saying that gm had information that it didnt share with nhtsa, therefore, the implication being that the government was not able to take all the steps that it could take here in order to manage this process. And gm just didnt turn over that information. They were hiding the ball, basically. Thats the plausible deniability that they need, as well. Because ive made the point in sort of a i dont want to say cynical, but, you know, if you assume, as so many people do, eamon, that corporations arent going to do the right thing, theyre degreedy, constantly looking to make a profit, trying to take shortcuts, not worrying about and a lot of people do assume that on the left. Then youve got to assume that theyre going to do the wrong thing and it was nhtsas responsibility then. Yeah. Look, there are a lot of tough things for nhtsa. Why did it take over a decade before we saw the recall. Why even have it . Im sure its budget is huge and you know. The other thing that frustrated a lot of these lawmakers yesterday, and i saw them appearing out with the families of those that have been killed in accidents related to this ignition piece issue. The whole issue is that where you put the key into the ignition and turn the car on, that ignition switch has a problem in which if you bump it or have a heavy dangling key chain, the car could turn off while youre driving it and disable the car bags. That has caused a number of crashes. The victims families were there and a lot of people were asking, hey, look, this is a piece that costs less than 2 to fix this. Why was this never done . Where along the lines did somebody say were not paying the two bucks to fix this the. She shows up on the hill when she was questioned and struggles in some circumstances to answer some of the questions. Did the lawyers get to her os was the performance a week ago when there was nobody asking hard questions and it was a lot easier to sit broadly say youre sorry as how much credit does she actually deserve now in retrospect . Well, look, it makes you wonder what gms internal calculations are about their exposure here and the potential damage and what the dollar figure number is and whether its much higher, given that she was so anxious not to provide any new information on capitol hill. Her performance yesterday came out of scandal management 101. Theres a school of thought that says youve staerted an internal investigation. You cant provide those questions right now because were not finished investigating. But at the same time, seeing saying were not sure its going to produce a written document at the end of the day. So that was at cross purposes with scandal management where you say ultimately we are going to give you tanss. Yesterday she wasnt even saying that. Thank you for that. Also a quick program. Were going to talk to represent Diana Degette of colorado who had a Exchange Holding up an ignition switch and shes be on the program at 8 00 eastern time. Weve got a big number coming out on friday, the employment report. The expects expect the adp report to show 200,000 private sector jobs. And it comes ahead of the big number we get friday. That day is its expected to show nonfarm payrolls rising by 200,000. It was a stronger than expected factory data number yesterday that helped push the s p 500 to an alltime high of 1885. So 1848 to 1885 is is that 37 points . 37 is that right . Divided by 1850 equals exactly 2 . On an annualized basis. That would be like 10 , i think, if you compound it. The dow also moved higher. The nasdaq added 69 points. Looking at the futures at this hour to see what we can expect this morning. And its continued. Janet yellen getting, you know, sort of emphasizing her dovish is it bonifides . Yeah. You know, your Autism Speaks a pulsel. Yes. You dont have the new kind, the new version. What is the you put a hole in that shirt. I have a magnet. So that you were thinking . My Autism Speaks guy is hes okay. If i do it here, i like it here. If i like it down here, i can move it down history. This is current technology. And the mike is there. You cant see this very well. How long you should put it on my shirt . I think its visible to the viewer and because were talking about it, were giving Autism Speaks airtime, which is awareness. Were going to just unbelievable. Its up 30 . My hats are off to him. How we told the story anyway, its everybody else. Meanwhile, lets talk about pimco. 11 straight month of returns. The bond fund is the worlds largest, run by bill gross. Pimpco says the fund had 239. 1 billion in assets at the end of march, compared to 236. 5 billion at the end of february. Investors have pulled out more than 52 billion since last ma. Thats a big number for any fund that doesnt have a quarter trillion dollars in it to start with. Those numbers are life is relative. Thats what investors do and people have to write a check. Theyre called fas now. Hes still a young guy, 250 billion he trusted to him. Pretty cool. Have you watched this . Do you know what happens yesterday 12347. I saw sue. We had the players on. Whether rapid fire trading firms are saying this before testifying before a House Corporation subcommittee. She told the agency the house has a quick number regarding marked integrity and structure issues. A quick comment from wise during that hearing. Are the markets rigged . They are not. How can you be so confident . This is what we were referring to on power lurch yesterday. Brad kutiama of iex went head to head with bill obrien of mass Global Markets. He said one of the whistleblowers was featured in Michael Lewiss new book its flash boys. The exchange, one of the largest equity moderators in the u. S. Debated whether the equity market is rigged. You said it in the book, thats when i knew the markets were rigged. Its disgusting that youre trying to pars your words now. You were quoted that way in the book. Did you believe it or not . Because you said it. Its a yes or no question. Do you believe it or not . I believe the markets are rigged. There you go. And i also think youre a part of the rigging. If you want to do this, lets do this. I really do. So were going to have it we went over this a couple of days ago. Its the term rigged. And if you want to have a semantics argument, thats fine. If you want to call it rigged based on to legally front run these markets. But its loaded with all these notions that the people who hate this arent going to like it. So youre talking about investors if you like a you say wow, i really like the idea that this company does. So you pay 1502 in this market. If youre right about it, you probably wouldnt sell it if it went down at 12. You probably wouldnt sell it to take a profit at 20. But do you then use that word to say youre unable to to make any money in the stock market because the big guys are controlling whats going on . Thats unfortunate about this because it sells books and it sells commercials. Its simple. We dont need to discuss whether its true or not or have a semantics argument. People that hate wall street, theyre going to use it as evidence that the whole thing is crooked and people are realistic and no one was a better one is on High Frequency trading. Do you think the stock market is rigged so the little guy cant possibly make money . No. But i do think professionals have an advantage over little guys. But these guys have an advance because theyre skimming two cents a trade on millions of shares. Theyre making money, but they dont have an advantage on whether there is a great sal fallacy or myth. But the guy at home has the exact same opportunity or or the exact opportunity . Both. That makes it even more the same. But the guy at home was doing it sort of on not as a hobby, but after work. But that person has the same opportunity as the person that spends 12 to 14 hours and get paid for it. This is like an a part of arbitrage that just got that should have been regulated, it got out of control. But to make it blanket, its not a good time. And Michael Lewis is laughing all the way to the bank. It doesnt care that it wasnt a good time to throw the whole market under the bus. You mentioned on that, i think. You know what i mean. And people that have an ax to grind are going to see that as evidence that the whole thing is crooked. And its but you know what . If its cathartic and cleaning things up, even more. But if you buy and hold has been dead a while. But its probably going to be better than naming cash. There is a big elephant. I think also always an opportunity. Whether its all the same field, i dont know. Were going to talk more about this throughout the day. Well looking at whether markets are rigged. Chiles president has declared a state of emergency in the region where a powerful earthquake struck off the countrys northern coast. Five people were killed. Landslides have blocked roads. Fires have destroyed several businesses and powers and knocked out the sounds. I think the biggest weve seen on the west coast recently has been in the five era and right now, because its logarithmic, when you go from a five to six, its ten times stronger. A seven is ten times stronger than a six and an eight, which this was, an 8. 2 ten times stronger or a thousand times stronger, i guess, than a five. And triggered a tsunami that powered the shore line. And it makes probably knot not correlated in any way, but we know so little, you know, seismology and the whole research area, california has been very active recently, chile. Its not the same thing, right . It is not at all related to anything, you would think. I dont know. Nobody knows. Nobody knows. Thats one of the fields where we know we dont know anything. Other fields, we think we know things and we attribute events to things that are probably really not attributable, either. Potentially. Believe me. Coming up, an fda approval point inhaled diabetes drug shares of one drugmaker soaring. And what does jeff besos have planned for amazons video business . Well find out when we return. Squawk box coming right back after this short break. This sho. Whats in your ear . Oooo a quarter check for more well, i guess i can double check. My watch [ male announcer ] it pays to double check, with state farm. [ male announcer ] how did edward jones become one of the biggest Financial Services companies in the country . Hey. Yours . Not anymore. Come on in. [ male announcer ] by meeting you more than halfway. Its how edward jones makes sense of investing. Welcome back to squawk box. Let met get you to your National Forecast here. Strong to the severe storms impacted in the middle of the country. It is a system causing all the issues. Moisture coming in from the gulf of mexico. That is going to be in place out there. Some of the juice for some of these storms to get going. Thats the fuel for the fire out there. Its a zone that we will be watching from the midwest working your way farther south. Having to deal with that, some of these storms can pack a punch with damaging wind hail. Yes, even tornados out there. So the red areas were concerned about today, its going to expand this area as we work our way through the next few. As we head into tomorrow, were going to be watching these spots from the mississippi valley, ohio valley getting down into the mississippi valley. And even into the friday, even though we dont have any red shares up on the map, there is going to be the chance for strong storms in these areas here from the ohio valley heading to points s p. Now, heading north of that, were still not done with winter. Winter storm watches in effect for you after hitting 60 this weekend. Winter storm watches with snow coming in here for us for tomorrow heading into friday. Some decent totals, the areas in the purple, could see 5 to the 8 inches of that snow. So yeah, weve got the wintry side of things and the severe side of things. Andrew, back to you. Thank you for that. Time now for on this mornings executive edge. Here is the story for you. Amazon expected to give an update on its video business. The ecommerce giant is expected to debut the companys much anticipated tv device. It shows an arm chair and popcorn saying please join us for our video business. The company has denied reports that it will be unveiling a free ad supporting streaming service. Shares of amazon, you can see there, take a look. Turn that screen around. Up 343. 50. Im waiting. Do you have do you have prime . Do you have amazon prime . No, we dont you know what . I dont know. Ive never bought anything on amazon. And you know what . I was looking today about buying some things the before i came down here. On amazon . Yeah. I dont really want to tell you do you want to tell us what youre buying . I heard i heard a Joni Mitchell song yesterday and her voice is like a bell. It is so crystal clear, i am going to buy three of her cds and listen. Because it brings me back to my i mean, i was transported. Transported in time. Why dont you buy an 8 track . Okay. Wait a second. Do you have an iphone . Is there another way to do this . I dont know how to do that. And all of these im moving into the 21st century here. Im going to use amazon to buy a cd. Do you have a problem on with that . Cant i put a cd into my car and listenjoany mitchell . So i could actually can i buy the the. You could get the song right now. Not the song. I want to get the three albums. During the break database. I want all three albums and how do i play it in my car . What kind of i know what kind of car you have. You can probably blue tooth it to your radio. You see, this is the problem. This is supposedly easier. Why cant i just stick my cd into the little slit . Im not even sure they sell cars with cd players in them any more. I have one right there that goes right in. I had Something Else to tell you, about the amazon story that youre missing. Whenever i read this, theres another major player that wants to deliver content to me. Content is never going away. Were going to be like in the movie where they go up, what was walle. Were going to be big fat people strapped in the chair. Were going to have that oculus thing here, all our experiences are going to come in. Everybody wants to offer content. And we provide content, sort of. Im going to put this the i dont think you can see this. That up on my we will talk more about that and Autism Speaks. Do you know what the spreads used to be . It used to be a quarter, used to be an eighth. If you think its rigged now and you think who really rigged you know why the stock market is rigged . Who . The fed is what really rigs the stock market if you want to point fingers, but theyre rigging in it in a good way, right . Coming up, the next big data point on jobs, perhaps pushing the markets higher. Were going to jump into that discussion in a moment. And firing back, featuring the best selling author Michael Lewis is still buzzing this morning been well have more of this mustsee tv in the income half hour. Take a look at yesterdays winners and losers. Huh, fifteen minutes could save you fifteen percent or more on car insurance. Everybody knows that. Well, did you know bad news doesnt always travel fast . clears throat hi mister tompkins. Todd . Youre fired. Well, gotta run. Geico. Fifteen minutes could save you fifteen percent or more. Good morning and welcome back to squawk box here on cnbc. Im joe kernen along with andrew ross sorkin. Becky is still a little bit under the weather today. And the headlines this morning, weve got the adp report coming out for march. Lets look at private sector employment, 8 15 eastern. Economists are looking for 203,000 new private sector jobs. That comes ahead of fridays Government Employment report, also for march. And that is a big number that you seem i dont know, theres been bigger months. There are still weather effects. Also out today, february factory orders come at 10 00 eastern. And General Motors Ceo Mary Barra is back today to talk about its handling of its ignition switch recall. She was waiting for results of an internal investigation into why the company waited for more than ten years to recall the cars. Gm is not the only automaker with recall news. Chrysler is recalling near 870,000 suvs in this case for a potential brake problem. Corrosion may recall difficulty in applying the brakes. It applies to Jeep Grand Cherokee and Dodge Durango on models. April is typically the best month of the year for the dow, but will that be the case this time around . Joining us now, ed keion. And well talk more about all things economics, including this adp report and fridays numbers with drew mattes, chief u. S. Economist at ubs. Hes thinking about appearing without his jacket at this point. Youre snap. Youre liable to do anything at any time. Thats right. If my microphone wasnt attached to it, i would do it right now. Oh, no, no, maybe three more appearances with your jacket and then maybe have it on with one arm. I can do with the thing with folding it over my shoulder. That would be good. Here we are and we are back at a new high. You moderated your bullishness a little bit, but youre not surprised were up 2 for the year now. Yeah. Were pretty much exactly on pace for that so far as of yesterdays close. I think the economy we take over. I think well have greater acceleration in a monthly consensus growth than letss. Do you rig the market . Are you involved in rigging it on a daily basis and making sure that the small guy cant make money . Are you part of this . No, but ill tell you, we do monitor our trading costs very, very closely. We estimate what its going to cost to trade before we trade and take that into account. And we also monitor close to what the actual costs are and what the drift is after we trade. So if somebody was jumping in front of us on a regular basis, we would see that and that post trade drift would be negative and thats not the case. So the noegsz that high frequently trading is in the market. I think for us and i think for other institutional inves r investors, we make sure their trading is not as low as it can get. Are you doing that so nobody understands what youre doing . Most of the way we trade are or do you just do it straight up . We trade mostly through program type trading where we are putting out a portfolio for bid among multiple brokers and then they bid at lowest price. We are obviously in favor of greater transparency. But we think overall our trading costs have we are not the being victimized to large degree by other people. If you want to go into the whole sac channel checking and they call back the snc guys first and they find out this test you know, whatever, that is one thing. You dont make or break yourself for two cents. No one in the history of the stock market has not made or break the trade on two cents. Its a competitive business. Technology is always changing. So you have to keep up with it. These guys can skim but you look at how many transactions costs there are. In society, where people are skimming and making money and taking their you know, like the guy on g2. You say let me dip my beacon a little bit. Who is guy to provide liqu liquidi liquidity . I think its or because the larger premise of the michael loosis book is trading in large is a problem. The hero of the book, brad, who we had on the program yesterday who created the iex exchange, that exchange is involved in High Frequency trading. What does it the front running mean to the extent theres people getting daddy earlier than others and youre able to take advantage of that data. We should have a level Playing Field and greater competition. I think all of that is good things. This is an issue thats been around for a long number of years. Ill defer to the quantitative guy. Youre in economics. No one is going to accuse you of knowing anything beforehand. No, im just kidding. What do you make of the adp today . Were looking for 250 on friday. Are you really . You have a trend and payback for the past couple of bad weather months. Perhaps more importantly, wages are going to accelerate again. Most of the clients i talk to, the number one thing im getting questions on is when does inflation begin to pick up . And the answer for a lot of them could be friday. That wouldnt be good if we did 20 and the wages went up look, the issue was and has been with the fed communication and she was in charge of communication strategy. The lowest grade was the communication strategy and she was in charge of it. I dont blame her for the six month comment. I think people took that out of context. But i think if they gives a speech and holds up, its why were continuing to have overease Monetary Policy and youre holding up the structurally unemployed and half of them have criminal backgrounds, thats a problem because someone should have vetted that. Will you come back even though he sort of monopolized that was my failure. I gave you Something Else to focus on. I should have come in and talked about the economy the whole time. Ill tell you what i would like from you. Come in, leave the jacket and the tie, no shirt. No shirt. Like a chippendales type thing. Because thats what economists are known for is their body. Something like miami vice. How about just the bow tie . Huh . Huh . Thats even more chippendale. If you do it, ill do it. Wow. Coming up, we are going to continue the debate over the High Frequency faceoff. Its still buzzing this morning. More on the fireworks from the flash boys debate. Coming up on sidewalk. Squawk when we return. [ male announcer ] how could a luminous protein in jellyfish, impact Life Expectancy in the u. S. , real estate in hong kong, and the optics industry in germany . At t. Rowe price, we understand the connections of a complex, global economy. Its just one reason over 75 of our mutual funds beat their 10year lipper average. T. Rowe price. Invest with confidence. Request a prospectus or summary prospectus with investment information, risks, fees and expenses to read and consider carefully before investing. With investment information, risks, fees and expenses at your ford dealer think . They think about tires. And what theyve been through lately. 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Michael lewiss new book flash boys sparking a lot of controversy yesterday on power lunch. The conversation got heated. Bob pisani joins us now to help answer the question, is the market rigged . Good morning. It started off kind of quiet with lewis saying he thought the markets were rigged. But it turned into a food fight. Here is where i started to get testy. I think its really hard to put a word on it. You said it in the trying to parse your words thousanow, okay . You are quoted that way in the book. Lets walk through an example. Do you believe it or not . Because you said it. Let me walk you through an example. Its a yes or no question. Do you believe it or not . I believe the markets are rigged. Okay. So there you go. I also think that youre part of the rigging. If you want to do this, lets do this. I really do. Lets do this. Basically obrien accusing him of using fear tactics about High Frequency to promote his exchange, iex. It got very personal for a while. I think obrien was also frustrated by the fact that 60 minutes never bothered to go to anybody on the other side and ask what their position was to goldman or the Stock Exchanges or any highfrequency traders. Michael lewis was a little bit of a sideshow through all this. We did ask him about the idea that the markets were rigged, and did he feel it was too strong a word, and maybe he was trying to discourage people from going into the market. He sidestepped that a little bit. Listen to this. Do you not invest because, you know, do you stay out of the market entirely because you dont want to be scalped a bit . No. You dont. But that doesnt mean the scalping is okay. And thats why i think the street was very frustrated. If he would have come out and said the market is broken, all of wall street would have stood up and said yes, weve got problems. We dont like parts of it. I dont either. But when he came out and said the market is rigged, rigged by a lot of peoples standards means theres a bunch of people stepping in between trying to penny you, if thats what he means by rigged, then wall streets been rigged since the beginning. I think thats why a lot of people were upset. By the way, guys, im going to go over here. This is Goldman Sachss post. Goldman sachs is reportedly selling its designated marketmaking unit. We dont have a buyer yet. Reportedly its up for 30 million. They paid 6. 5 billion for spear leaves and kelloggs back in 2000. Give you an idea how tough. Its purportedly postponing its ipo, a highspeed trader, and thats reportedly postponed. Guys, back to you. Just what you said, bob. You know, we sit here and parse all these words. Its a semantic argument. If youre going to use the word rigged, its a loaded term. Theres a lot of people that hate wall street, occupy, whatever you want to say, theyre saying its rigged because you cant make money because all the big guys make all the money. If you want to falsely equate that with 2 cents, which is scalping and probably illegal. You know, call it what it is. Just dont use it to add vanvan agenda thats not true. Weve been talking with andrew. If you want to say s. A. C. Or some entity gets channel checks from what they call, you know, experts and they find out Information Way before the public about stocks and they know youre going to report a bad quarter, they know a drug is going to get approved or not approved, thats one thing. But, you know, what did bob, when you started down there and we started together what did the spreads used to be . We would have killed for a 2 cent spread. My god. If we would have done 2 cents, we would have said give me that all day long. Remember, the market was an eighth. Prior to 1997, it was 12. 50. So now its rigged at 2 cents instead of a 12. Its usually a penny wide these days. The bid offer is a penny wide. We know what it is. Back in 1997, let me give you an example. Pull over here, scotty. This is mcdonalds. Its 97. 90 here. If it you would have walked into the market to the floor of the Stock Exchange in 1997 and said ive got 50,000 shares i need to buy of mcdonalds, do you think you would have got it at the last offer . Maybe you would have got it at the last offer. More than likely, you would have taken the stock up. And you might have had to have broken that deal, that desire to buy 50,000 into several offers. Thats what happens today. Bob, we know what Michael Lewis is trying to do. We know what 60 minutes is trying to do. The Publishing Industry is rigged because youre allowed to write hype rbolic comments and sell books. 60 minutes. Remember Meredith Whitney . She comes on our air. They get her to say 100 billion, and they rigged so 60 minutes rigs their guests. The difference between today and 1997 is the book doesnt have much on it. Today, the last sale, was 100 shares. And if you have significant to buy in mcdonalds or pfizer or anything, youre going to take that book up significantly to move it. And thats what a lot of people, professional brokers, are unhappy with. And thats why these orders are broken into 100share orders at a time so they dont have a big impact on the market. The bottom line, look at the floor. All those people are gone now. Heres the question. I wonder actually what brads view of this is. It sounds to me like theres two versions of highfrequency trading. Theres a good version which brad seems to have subscribed to given that he has an exchange that participates in highfrequency trading. Then theres this bad issue which runs up against this issue of front running. Thats the issue which i think the book perhaps conflates with the good part. Guys sitting on the bid and offer providing some kind of liquidity even if its phantom, theres nothing illegal about that. There may be some bad actors out there. And im not sure the s. E. C. Has all the tools in he says to detect them. Thats what im talking about. And i agree with you. There may be instances where people are engaging in abusive or manipulative behavior. By the way, that is a legal term. Thats what the s. E. C. Law says. You have to be abusive and manipulative. So if, for example, youre putting in millions of bids and offers and then quickly canceling with no other purpose than to try to elicit a business, that may be abusive and manipulative. I want the s. E. C. To have the tools to be able to detect that. You always call me abusive and manipulative, too. So i guess im violating a lot of this. Nice and warm. Nice and warm. You know, and i love brad. I mean, but, you know, he owns an exchange. He doesnt have a horse in this race. He wants to be an exchange. And hes brilliant and i like what he did and i commend him for it. You know, hes got a little vested interest here going, too, i think. He aspires to be an exchange and i say more power to him. If he attract business. I wish i had 10 of his exchange. Maybe you can no broker dealers own that exchange. Its all owned by mutual funds, some hedge funds and a few private individuals. See you. Coming up, in the next step in the gm recall crisis, well talk about that and mary barra and what shes going to face today. Return on investment wall isnt a street. Isnt the only return im looking forward to. For some, every dollar is earned with sweat, sacrifice, courage. Which is why usaa is honored to help our members with everything from investing for retirement to saving for college. Our commitment to current and former military members and their families is without equal. Gms Ceo Mary Barra faces the heat on capitol heat. That happens very often as we buy steel to make the bodies of the vehicles. If a part doesnt meet the specification, why in the world would you not refuse it . Whats the next step for the automaker caught in this major crisis . The markets on data watch. The s p 500 hitting another record high. Will the adp employment report take stocks even higher . Amazon expected to make a big announcement later today. Is jeff bezos about to make a bold move into the video world . Squawk box begins right now. Video killed the radio star video killed the radio star pictures came and broke your heart oh oh good morning and welcome to squawk box on cnbc. I can listen to anything i want to for 9. 99 a month. For 9. 99 a month. Its a good deal. Im joe kernen along with andrew ross sorkin. Becky is out today. I have cds now that im using which are much better than the cassettes. Much better. Even more advanced than the 8tracks. This is better than a cd. Download it right to your iphone right now. This world, its very daunting. The futures this morning continuing to show some gains, up 15 after the s p set a new alltime high. And we are now up again. Remember, we went up a little in the first quarter, but then almost went to flat. We were basically below the december 31st close, but now were up about 2 on the s p. Theres the tenyear. Still below where i said it would be. When tapering started. 2. 873. Brilliant. In the headlines, were a little over an hour away from the march adp report Consensus Forecast for 203,000 new private sector jobs. Reports out at 8 15 eastern. Steve liesman will be here with the numbers as soon as they come out. And microsoft is expected to unveil more on its new strategies for windows at its build conference in San Francisco today. Ceo satia nadella is expected to emphasize how he sees windows, what windows will be like in a market that focuses on notebooks and tablets and smartphones. Meanwhile, blackberry is not ruining its Sales Agreement with tmobile when it expires on april 25th. It means tmobile will no longer sell blackberry products after that date. If anyone actually tried to buy one. Although it will i dont know whether they know whether maybe a new ones not going to notice. Although it will continue to support existing customers. I apologize to you. Its just those blackberrians were so obnoxious. Why do they do that . They love the blackberry. I know they do. They love the keyboard. They make you not like them, and it makes you, you know, say things. That doesnt help their cause to be haters, does it . This is true. This is true. I dont know. I still love my blackberry. I wish i could go back there are some times i wish i had the keyboard. I miss brick breaker. I played a little the other day. Ive still got it. You dont forget. Its like riding a bike. I think gm is still on blackberry. General motors chief executive mary barra set to return to capitol hill for a second day of testimony. Cnbcs eamon javers joins us. Reporter a bit of a rough outing yesterday for mary barra as she faced a House Committee on capitol hill. Members of the Committee Really wanted some answers here on just why it took gm so long to issue this recall and why it took ten years to solve the problem of its ignition switches. Mary barra, however, citing an internal gm investigation, said she didnt have a lot of answers to provide. Take a listen. I am not aware. You dont know about that . Im getting this information from the chronology that gm provided to knnitsa. I was not part of the organization at the time. Thats why im doing the investigation to understand that. When is it that gm informed nitsa . I dont know that. Reporter theres questions about this internal gm investigation. After the hearing, mary barra held a sort of minipress conference outside the hearing room. I had a chance there to ask her what this investigation was likely to produce, when we might see it, whether gm would turn over any copies of the investigation itself to the public. Take a listen to how she responded to that question. I will share and be transparent with those items that are appropriate to share. There may be everything thats appropriate to share, everything thats related to consumer safety, everything thats related to the customer. Reporter will there be an actual document . That has not been determined yet. Reporter so gm saying its got an internal investigation going on, but not committing to necessarily release the results, the full results, of that investigation and not necessarily even saying that that investigation is going to produce any kind of written document at the end of the day. So some questions here about what exactly gm is doing with this investigation. You can expect that members of the Senate Committee at 10 00 this morning are going to want to get into a little bit more detail on that. So another day on capitol hill for Gms Mary Barra today, guys. Okay. Weve got an interview coming up here, eamon, i want you to take a listen. Joining us with industry reaction, Washington Bureau chief and automotive reporter for the detroit news. And an old buddy who has another famo famous, ingrchltacia. Whole family. A lot of comments about whos better looking. Good morning to you both. And im going to start with you, david, because weve seen this movie so many times with recalls. Youve been doing this a while. Do you remember the ford explorer, i guess, and it was weird because the ford explorer, i think you could buy that with firestone 500 tires at one point. So you had, like, a double problem. Are there differences here . What makes it interesting to me is that the government owned this company for about three years and didnt do anything. And i would think that nitsa would be, you know, more adept at handling these things. Whats the most interesting thing about this recall . I think its the documents that have come out that show that gm, you know, in 2005, did a Business Assessment and said if we replace the switch, put a better switch to address the problem, its going to cost us about 90 cents a switch but only save 10 to 15 cents in warranty costs. You know, the reality is now these companies see all these recalls as now potentially multibilliondollar hits to their bottom line. I think youll see a whole new approach to what happened after the toyota problem in 2010. Chrysler today just issued a recall for 900,000 vehicles. So i think the companies are going to be very quick to recall things even if its going to be expensive. Hey, paul, is there some guy somewhere or a group of guys that were on some committee and they know full well that they said, listen, whatever it was, to recall and, you know, the warranty will only save this much. Are they sitting around somewhere going is someone going to know its me . Is there one person or a group of people around that know that they made this decision . Well, there probably is a group of people around that were part of that decision. I dont know who they are. It doesnt seem from yesterdays testimony that mary barra knows who they are either. I think, look, she did about as well as she could have done. But coming into the hearing, there were lots of unanswered questions. And after the hearing, there were still lots of unanswered questions. You know, her blanket assertion that gm the new gm, the postbankruptcy gm, has a new culture isnt terribly satisfying. Wheres the proof of that . What have they done to really show that to people . Paul, you know, last week she came out with her statement. And everybody gave her enormous amount of credit. They said she was sort of following the sort of best practices playbook in terms of apologizing, being forceful about the apology. And people even said she wasnt she sort of disregarded the lawyers in doing that. And then she shows up yesterday. And it looks like shes coached by the lawyers. So which is the real mary barra . Well, i guess were going to find out. I mean, look. Shes under oath yesterday. So thats a whole, you know, different kind of ball game. But i think the real question is, weve gone sort of past the apology stage now. Fair enough. That was the right thing to do. But we need some specific answers. And we theyd them sooner than later. Now, i understand, look, getting the correct answers in a decade or more than decadeold situation is going to take a while. But the sooner they can get real specific answers, the better it will be for the company and everybody involved. The other thing i found disappointing about yesterday really, you know, was nitsas assertion that hey, its not us. These are the federal highway traffic regulators. To say they had no culpability in this sort of stretches the imagination to be honest with you. If youre mary barra, we talked about this on the show before, should announce just a blanket trust fund for the victims right now, try to get ahead of it, or legally does that put you in a position of creating a floor for whatever litigation you think is coming . Well, dont you think theyre already going that direction, given that they hired ken feinberg . Youre not hiring him just to look at the numbers. I think they know that theyre going to have to do something to compensate the victims, especially people whose claims are not able to be paid given gms 2009 bankruptcy restructuring. So david, youre just raising another question, though. Should the money come from the new gm or come from the old gm . Sure. I mean, theres not a lot of money left in old gm at this point. But and i think a lot of wall street analysts think theyll be paying somewhere between 2 billion and 3 billion in total and dont forget that given that toyota just paid a 1. 2 billion criminal fine four years after its recall problems that gm also faces pretty hefty costs on that front as well. Okay. Were taking hits on both satellite feeds. So were going to leave it there. Thanks, david and paul. We do have a programming note. Were going to talk to representative Diana Degette. She had a memorable exchange. Holding up a gm ignition switch. You have a big keychain that says too big to fail, right, on it . Thats a long and that could have easily do you have one of those big, heavy keychains . As you know, i dont have a car. You probably have some kind of new technology where you dont even need a key. I just walk right in. Or do you have a ill bet you youve got like an eye thing. You dont understand. The butler opens the door. Right. And hes the one theres no reason to have a key. The door scans his retina. To let you in. I assume he has a key. I dont know how it works. You know, the doorman opens the door. The butler opens the next i dont get involved in these things with the key. You joke about 1 ers as if youre on the outside looking in. Thats what i like. You get people to think that youre really not you very well might have a butler. Is there a key for the helicopter . How do they turn that thing on . Coming up, how will fresh jobs data on jobs impact the market . That discussion, were going to kick it off next. And what is amazon going to do with its video business . Is jeff bezos going into tv streaming . Financial noise financial noise financial noise nasdaq up close to eight points higher. Nasdaq opens up by two points higher. The s p notched another record close yesterday. Joining us is craig hodges, coportfolio manager with the hodges small cap fund. No . Yeah, thats craig right there. Have you done this before . Oh, craig. See, thats a twoshot. Theres you on the right. I got it. And then here on set is Lee Partridge . Yes, sir. Okay. Chief Investment Officer at salient partners. Were all set . Okay. Its early. Its early. Youre going to give us some stock advice. Anyway. Craig, let me start with you. Just for a second here. Im reading that you say that this new quarter has no effect on the companies. And then our investment thesis, buying companies on sale. You know, in light of this 2 cent controversy were talking about, it sounds like 2 cents wouldnt make or break a trade for you, would it, on whether you make money on a position or whether management is good at is the market rigged . I believe theres rigged i dont think rigged is the right word. I think theres a fleecing going on. Thats a good word. Of america. And basically, i have more respect for a guy that takes a gun and robs a store, at least theres a risk. You do . At least theres a risk with him. And its just a way for them to come take pennies off of everyones trades on almost a riskless transaction. If theyre finding out that im getting ready to make a trade and theyre only going to let me get a few shares, then ive got to pay more for the remainder, i mean, thats you know, the answer to your question directly, is it affecting our performance . Its not, but its still a very it leaves a bad taste in your mouth, i think. That shows what a disservice it is to conflate it with rigging. It could have been a great book and a great report from 60 minutes to expose what is basically a fleecing or skimming or a front running or whatever. And instead, people with, you know, vendetta or with, you know, political ax to grind about wall street use it to say that the entire systems unfair. Correct. Thats whats bad, andrew. Dont you think, lee . Its a doubleedged sword, right . Weve got more liquidity in the markets than weve ever had before. Its cheaper to trade 100 shares, 50 shares, 25 shares as well as a block of 10,000 shares. And customers are trading more and more the highfrequency trading firms are just providing liquidity. Theyre making money in doing so. So they are scalping the market, but bid ask spreads are tighter than theyve ever been. Its cheaper for the individual investor to get into the market. Theres good highfrequency trading that provides the liquidity youre talking about, and then theres potentially this abusive highfrequency trading where people are trying to frontrun information. Thats right. And the other question is do you need to have both to make it work . Or can you get the liquidity that youre talking about thats keeping prices down without the without the bad part . Well, one might say that bringing the information to the market quicker is actually creating more efficient markets. So when an investor actually invests, all of the price information reflects whats known to the market. At any point in time. Its not necessarily known to the entire market, which is the problem. All the information thats available, is it really disseminated publicly to all investors at the same time . Are we really dealing with fair information flow as it is . Havent we always had asymmetry information . One of the things i was arguing in the 6 00 hour was this idea that we have this truly level Playing Field, that the fellow whos, you know, at home, who has a day job and who sort of trades as a hobby somehow is the exact same opportunity as the professional. You take offense to that . No, i heard. Im going to ask him for a single best idea. Ill tell you a great question is why has Goldman Sachs been for it for a while and now of a sudden now theyre against it. Theyve been part of it, and now theyre kind of coming out speaking against it. Sounds familiar. Thats right, thats the secretary of state. Craig, whats your yearend target for the s p . I dont have a specific yearend target. After a 30 gain last year, were looking for more of a kind of, you know, 8 to 12 type of return. But at the same time, we still see a lot of opportunities in the market. Everyone has been waiting for this 10 correction thats not coming. Yeah. They always do that. What are your favorite sectors . In 30 seconds. Energys one of our favorites. You know, small transports like railcar, the rails itself, copper wire, you know, some Companies Like that. Some cement and steel names are we look good. And we like the airlines for a couple years. And they still look cheap. Theyre still very underowned. Americans one of our largest holdings. We think they could earn close to 7 a year out. And stocks 35. Or 37. Take a look that the. Lee, whats your yearend do you have a target for the s p . Its not necessarily a year end, but we think before year end the s ps going to get above 2,000. Which is not that much. What is that total, 5 . Specific areas . We like energy infrastructure, emerging markets, getting oud t inting o s p. Even with tapering. Theres a shift right now with the Central Banks in china and indonesia, hong kong are all becoming more dovish right at the same time where were kind of waffling and deciding what direction were going to take. Pomost people say you can get a whole group of people who say the fed has rigged the markets. It just depends you know, this is not going to end. The true insiders. The true insiders, exactly. They know exactly what theyre going to do all the time. Talk about inside information. Anyway, thank you, lee and thanks, craig. We appreciate it. My pleasure. Confident enough to not wear a tie. He doesnt need us. We should say were wearing blue ties today. Plus its Autism Speaks awareness today. Its Autism Awareness today. But Autism Speaks is the leading and robert wright, our great former ceo and suzanne, founders of this. In ten years, its like one of the leading, i think, philanthropic organizations in the world. In ten years, Something Like that. Were going to talk more about that. And also the debate over whether the markets are rigged. That boiled over during power lunch yesterday. Nyc traders stopped in their tracks as the panel debated. Global markets even went after Michael Lewis. Its great to see bill instantly throw at brad the idea hes doing all this to promote a business model. He said that and he also said shame on you. How do you react to that . Ill say it again. I think hes outrageous. I think hes part of the problem. The debate continues. The fire burns with former s. E. C. Richard breeden. Hes going to weigh in at 8 30 eastern. More squawk in just a moment. Yes not just a start up. An upstart. Gotta get going. Gotta be good. Good . Good. Growth is the goal. How do we do that . I talked to ups. Theyll help us out. New technology. Smart advice. We focus on the business and they take care of the logistics. Ups . Good going. We get good. Thats great. Great. Great. Great. Great. Great. Great. Great. Great. all great i love logistics. How much money do you think youll need when you retire . Then we gave each person a ribbon to show how many years that amount might last. I was trying to, like, pull it a little further. [ woman ] got me to 70 years old. Im going to have to rethink this thing. Its hard to imagine how much well need for a retirement that could last 30 years or more. So maybe we need to approach things differently, if we want to be ready for a longer retirement. If we want to be ready for a longer retirement. But with less energy, moodiness, and a low sex drive, i had to do something. I saw my doctor. A blood test showed it was low testosterone, not age. We talked about axiron the only underarm low t treatment that can restore t levels to normal in about two weeks in most men. Axiron is not for use in women or anyone younger than 18 or men with prostate or breast cancer. Women, especially those who are or who may become pregnant, and children should avoid contact where axiron is applied as unexpected signs of puberty in children or changes in body hair or increased acne in women may occur. Report these symptoms to your doctor. Tell your doctor about all medical conditions and medications. Serious side effects could include increased risk of prostate cancer, worsening prostate symptoms, decreased sperm count, ankle, feet or body swelling, enlarged or painful breasts, problems breathing while sleeping and blood clots in the legs. Common side effects include skin redness or irritation where applied, increased red blood cell count, headache, diarrhea, vomiting, and increase in psa. Ask your doctor about axiron. Check out the shares of drugmaker mankind. The fdas panel of outside advisers recommending approval of the companys inhale diabetes drug. Also said the experimental treatment could help some patients, especially those that are wary of the needles typically used with traditional insulin therapy. The panel says afreza did not appear as beneficial for adults with type 1 diabetes, but it was clearly safe and effective for those with the more common type 2. They voted 131 to recommend approval and unanimously backed it with those with type 2, adding longerterm studies will be needed for side effects. The stock did trade higher on the news. Because typically the full fda will do what the panel recommends. That is the case. Coming, were going to talk about amazon. Is it about to make another bold move . We explore that next. And today is Autism Awareness today. Pulitzer prizewinning author ron susskind is going to tell us about his familys 20year struggle with autism. How hes used his sons love of disney movies to communicate with him. This is one of these remarkable stories. I beg you, keep watching this because i cant get over it. I read the book and its amazing. Were back in a moment. Aflac. Aflac, aflac, aflac [ both sigh ] ugh you told me he was good, dude. Yeah he stinks at golf. But he was great at getting my claim paid fast. How fast . Mine got paid in 4 days. Wow. Thats awesome. Is that legal . Big fat no. [ male announcer ] find out how fast aflac can pay you at aflac. Com. Your chance to watch full seasons of tvs hottest shows for free with xfinity on demand. Theres romance, face slaps, whatever that is, pirates, helicopters, piratecopters. Argh hmm. Its so huge, its being broadcast on mars. Heroes. Bad guys. Asteroids. Available only on mars. Theres watching. Then theres watchathoning. Welcome back to squawk box. This morning in the headlines, Mortgage Applications fell 1. 2 last week. Thats according to new figures from the Mortgage Bankers association. Applications for new home purchases actually rose during the week, but the overall figure was dragged down by a decline in refinancing activity. Also at least five people are dead after an 8. 2 magnitude earthquake struck off the coast of northern chile. The quake triggered a tsunami that pounded the shoreline with huge waves. The government there ordering an evacuation of the northern coast and declaring the area a disaster zone. Also wells fargo, theyve struck a tenyear agreement to issue a Service Excuse me, to Service Credit card retailer dillards. The agreement would begin during the fourth quarter. The bank has been focusing on increasing the size of its credit card business over the past few years. Also the other big story of the morning, Amazon Holding a News Conference later today on the future of its video business. Could amazon be launching a tv screaming box to compete with products like apple tv and roku . Thats the question. Cnbcs jon fortt is here with that story. Good morning. Theyd better be launching that because thats what everybody is expecting. Theyve got their vp whos head of kindle coming out to host this thing. Hardware, streaming, it kind of makes sense. Take a look at the landscape. There are an estimated around 25 million amazon prime subscribers. A lot of these people are subscribing, of course, to get twoday delivery. Other perks, not necessarily just video. Thats kind of the adressable market for amazon. I think its no coincidence that this is launching just two weeks ahead of the price hike for existing members. This might entice people to stick around if there are a few extra things they can do with prime and the video service. Netflix has 44 million subscribers. Its the big dog. And of course, the people who sign up for netflix sign up for streaming nowadays. Xbox live has 50 million subscribers. A combination of people who want to do Online Gaming and people who are getting video benefit there. And apple tv has moved around 30 Million Units since that first came out in 2007. But of course, theyve gone through several different iterations of that. Its not as if thats 30 million separate people. But itunes, in general, has a whole lot of content. That is sort of the play, the competition that amazons up against. And this is really an ecosystem play for them. Theyre trying to get people to consume more within amazon because if they consume more, if they make that commitment to be loyal, theyre likely to purchase more. So well have to see how this lines up versus the others conveniencewise as far as how they roll this out. Jon, thank you. Stay here where you are. Lets bring in victor anthony, the media analyst at topeka capital markets. Heres my question. I would imagine that a lot of amazon prime subscribers already have things like apple tv. They already have other devices where theyre getting streaming something, whether its netflix or what have you. Are you going to have two or three of these boxes in your home because all of them are going to ultimately be incompatible with each other . Thats a good question. I do not think so. I think youll just have one box. I think amazon does ammazonmazons box win . They believe that they have a platform which is the website that millions of people go onto every single day, and they can actually push that product onto consumers. And theyve been successful doing that in the past with other devices, kindle devices, namely. So i think they feel that theyre at a disadvantage in the living room, and they feel that they should have a presence. Whats your anxiety if you have some that whatever product they do come out with, they are going to sell at a loss . This happened with kindle. People had questions about that, at least for some period of time. Theres been other things, kindle fires and other things where theyve either done them for virtually no margin or legitimately a loss. Its all about selling content. And thats what amazon is. Theyre all about selling product. And so they will sell the device at break even which is what theyre doing with the kindle. But theyll make money off of it in totality because you get people to consume a lot more content, a lot more media content. So i think the strategy will be the same with whatever product they launch today. My worry with all of this is theres almost this race toward the bottom. Bezos told me at the end of last year, as you said, he doesnt want to lose money on this stuff. Its all about driving media. But these companies have to pay for this content up front. Im sure this exclusive on 24, which we have now for kindle and amazon services, that didnt come cheap. Theyve got to get the uptick in users later. And you know, can google, with chromecast, can amazon with this, can they all win . Netflix, too . Or does somebody have to lose, and how long will it take before we have that shakeout . 100 million homes in the u. S. In particular, you expand it outside the u. S. , you get significantly more households. So i think everyone could potentially win. I dont think its a zerosum game at all. Amazons strategist is a little different. Does amazon have a huge prime business outside the u. S. . I think they have 25 million roughly in the u. S. About 10 million outside. Im a prime subscriber. I dont think ive ever used their streaming service in my life. They do a poor job marketing the service, i think. Its hard to use. Ive got access to it, of course, through pcs, through apps, whatnot, also on my tivo. But if ive got options, netflix is a lot easier to access than amazon prime. I agree. But this goes back to the issue, its annoying to me that i have a Time Warner Cable box. I have a tivo box as it happens, and i have an apple tv box. So im use itunes, im using netflix, on demand on Time Warner Cable, i have the tivo thing layered on top of that. And now youre telling me the only real way to get the amazon thing to work properly is im going to have to get their box. You have multiple different ways to access that. I dont even know how to get to. I have a samsung tv that accesses amazon prime and it works perfectly for me. Maybe you should give it a try. Theres going to be multiple different ways to access the content. Amazon does not want to be left out. Will apple, when apple comes out with a tv, the brilliance of apple is simplifying this whole process so i have one box and it does it all. But given the competition apple has with an amazon, would they ever allow that content on their box . Its possible. So far thus far, they have not, right . They have not. They probably would not. If you look at the way theyve managed itunes, theres a toll there if you want to sell content through itunes, youve got to pay apple along the way. Theres a kindle app that i use on my iphone and my ipad. There are other apple there i believe you can watch amazon video you can purchase a book through that, you have to sort of go to the web, buy it and then load it in. That would be a nightmare to try to do on the tv. I want to buy a movie, but ive got to go to the computer and then come back to the tv. People wont do it. Joe, in the last hour, tried to buy a cd from amazon. Cd, okay. If you can help him with that. Are you going to make fun of me, too . My car has a little why does my car still have a place to put the cd . Im going to try to bridge that. Thats a good point. You dont replace your car every 18 months, most people dont. You dont replace your tv every 18 months either. And thats why this is a difficult space for these companies to crack. Apple is used to selling these. We upgrade these once you bolt that flat screen tv into your wall, youve got it in your entertainment center, you dont want to constantly be going in there pulling cables. So theyve got to figure out a way to get people on the Technology Train with tv without having to deal with the hassle of upgrades all the time. And this is the effort to do that. The unemployment rate, whatever it is now, 7 and why isnt there someone that can come in and go into my samsung tv and show me amazon and hook it up for me and do all this . Where you cant figure it out, you think where are the Service People that will bring me into your world . Where are they . Im serious. Geek squad. Geek squad takes way too long. Its way in the future when you have to get them. But there should be people i could start a company that would just go and teach people how to use technology. People like me. Why isnt there one . Well, i do believe samsung has Customer Service. They do . Yeah, they do have Customer Service to help you through the process. Its fairly simple. You just have to take 15, 20 minutes to go through the setup process. Have you ever sat down with your dad or your motherinlaw and tried to train them on the new technology . Im the family Technical Support service at my house. So i am. You might have to come over. But its in new jersey. But you come here. I come here. My mom figures it out herself. My dad and my motherinlaw, they and my fatherinlaw, they call me. It was like a real moment for me because i was going to order the cd on amazon and have it sent by ordering something on the computer. And i downloaded it for him on the phone. By the way, victor, thank you, jon, thank you. A quick programming note, which you probably dont even know, squawk box has a spotify channel almost, if you will. The playlist. If you found squawk spotify, our play list. What are you guys playing . All the music you hear on the show. Thats an eclectic mix. That is true. We cover all the different bases. Gentlemen, thank you both. Penny pritzker talks jobs and trade. Its a first on cnbc interview. And then an emotional day for gmcs mary barra in washington. Shes going to do it again later today. This time in front of a senate panel. Were going to discuss gm, the recall, and much more at the top of the hour. Geico motorcycle. See how much you could save. Welcome back. Investors are bracing for the allimportant jobs report on friday. Moneytime, washington embarking on its own mission to spur job growth. Joining us is penny pritzker. Secretary pritzkepritzker, goodg to you. Good morning. Lets talk about jobs. Lets talk about what you folks are doing about jobs. I wanted to start with this. There was a piece and i dont know if you had an opportunity to read it earlier this week by paul krugman, of all people, who said that jobs and the, quote, job skills gap that we talk about all the time is a myth. He says its a fallacy that there is a skills gap in this country. And i wanted to get your view on that. Well, what we do know is there are 4 million open jobs in this country. And we have many, many, many millions of people looking for jobs. So i think there is a need to address to make sure that our work force has the skills that they need for the jobs that do exist. In fact, i was in South Carolina this week or this past week at a plant thats working with the university, clemson university, the local technical colleges and the local businesses to help workers get the skills they need. And what you see is is that kind of effort is extremely useful and valued not just by the worker but also by the businesses. But in terms of training, how much can be done on an immediate basis, and how much is this going to be a generational issue . Oh, theres a lot that can be done in a very short period. There are plenty of training opportunities that are 12 weeks, 20 weeks, 25 weeks that can give someone the skills or help them reskill so that they are able to take jobs that are available. For example, i worked i created something in partnership with the city of chicago called skills for chicagolands future where we work with the longterm unemployed. We were training folks for jobs that absolutely existed in companies that were welcoming the longterm unemployed and getting those folks back to work in a period of less than six months. Secretary, who should pay for all of this . I was in chicago last week. We saw rahm emanuel and a number of other people talking about rebuilding and reinventing america. One of the conversations repeatedly came out, you know, in the old days i dont know what the old days were companies had training programs. Companies took at least some responsibility. It wasnt just the government. How do you see that balance . I think first of all, partnership should be the operative word. Businesses need to lead in terms of the content of training and what they need. Theyre the ones who can say heres what i need in the work force today and in the future. And i think it needs to be a partnership between all parties. How much do you worry about technology . Well, i think technology is a great opportunity. Were very committed to promoting innovation and technology throughout the economy. I think its somewhere around 50 of job gdp growth is through technology growth. Taking away what might be discovered as lowwage jobs. Oh, technology, though, is an opportunity for americans to ultimately have very highvalue jobs. And so thats why skills training in combination with technology is really important. Madam secretary, one thing we could do and i dont know whether you talked to the president what happened to the trade deals . Why are they stalled . Its the president s own party now that seems to be in the way. Is there any attempt to get these things back on track . Wouldnt that help . Well, in fact, i was talking with the president about this yesterday. Were very committed in this administration to getting our trade deals done. Our u. S. Trade representative, ambassador froman is out finishing the tpp sk. And i think at the appropriate time both tpa and tpp will be brought forward both in the senate and the house. Harry reid doesnt support i mean, youve got the leader of your party in the senate has come out against it, right . I think what i think what needs to happen is, and the interest and what ive heard on the hill is a real interest in making sure that they understand whats in these bills and in these trade agreements. And so therefore theres a desire to see, lets get the negotiations further along and complete so that we can take them up at the appropriate time. But i dont think theres a lack of commitment at all to this. Okay. Secretary, were going to leave the conversation there. We appreciate your time this morning. Thank you so much. Great to see you. You bet. Good to see you. Thank you, madam secretary. So i dont understand what hes saying, krugman. I mean, i did he use that saying that theres not just to imply that the nasty Business Owners and the republicans just arent hiring people because they want to keep them down, basically . Yes. Thats pretty much part of the argument. But he does cite he cites a stud from from m. I. T. De facto, theres a skills gap. You know theres companies that would please, come and hire us. And we theyd engineers. We need visas. We need immigration. His argument is if there really was such a skills gap, youd see higher pay for some of those jobs. There still is. Theyre offering great phil lebeau has been in a factory talking about 80,000 a year they will pay. And he argues for better or worse than companies have talked about the skills gap over and over again. And yet in truth, the idea that there are remaining jobs out there has always been the case. He says its the lowest its ever been. Just what it is. This next storys amazing. Coming up today, Autism Awareness day. Up next, were going to talk to pulitzer prizewinning journalist ron suskind about his dones struggle with autism and how disney characters helped him connect. If you do nothing else today, watch this. Today is Autism Awareness day. Our next guest is well known for his pulitzerprize winning book on the economy. But his new book is called life animated. Its a very personal story about his familys struggle with his sons autism and how he used his sons love of disney movies to communicate with him. Ronn suskind is with us. Theres something about disney movies. No doubt about it. Theres a lot of disney kids out there. Since Autism Speaks became, you know, so visible, weve made Great Strides in understanding a lot of things about how complex these individuals really are, but off camera, you were talking about terms i had never heard. So the very specific interest these kids have, its not the it gets deeper and deeper and more developed. Theres actually a method to the madness. Yeah, its interesting. Over 20 years our son is just now 23 weve gone through the whole gamut. One of every 42 boys are on the autism spectrum. Thats 2. 5 of the male population of the united states. Thats astonishing. At the same time, we learned. At the beginning, disney movies. He lost all speech just before he was 3. Its called regressive autism. It comes later. Then he just watched the movies. Seems like that was the only thing that gave him comfort. Eventually, we watched the movies with him. At about 6 1 2, he starts to speak, clearly using the dialogue. There was a moment where his brother gets emotional on his ninth birthday. He says, walter doesnt want to grow up, like peter pan. We go, huh . Off we go. At that point, my wife and i, whos a journalisttype too, we became animated characters. We just played roles. You know, theres 50 animated movies since snow white. Theres a lot to work with. Off wed go. The thing behind it is totally logical. My son will, at times, Say Something that sounds so profound and we, oh, thats from usually the more profound it is but it fits perfectly with the situation but heard it in a movie. Whats interesting is these affinities, socalled, have been most things folks have wanted to reduce over these last 20 years saying, no try not to talk about it. Move on, lets keep in the moment, lets talk about other things. You and i are allowed to have our passions, but theyre not because theyre viewed as to the exclusion of much else. I dont think thats actually true. I think the science is now catching up with that. A lot of researchers are calling me in the last three weeks New York Times excerpt was in three weeks ago about the book. Theyre saying, maybe we need to reverse the telescope. It could be trains, could be maps, disney movies. If you looked at the whole spectrum population, and now you have almost 2 Million People in the united states, you could probably map out about 12 major affinities. What i think were finding in our 20year improvisational research experiment, my wife and i, is that each of these affinities has its own dna. Its got a code. Whats that William Blake line, the world and a grain of sand . Each one of them carries the dna of everything. If you can get in there and look at it. And with our son, once he let us in, it was amazing how complex it was. Eventually, together, we built a vehicle that he now drives. Hes at a school in cape cod. Hes a president. 12 kids just like him. Now its 35 kids. Its hard to find anything positive in 1 out of 42 except that theres a lot of potential friends between these people because theres so many. Thats something that every parent worries about. Look, joe, its part of the miracle of this modern age. People can find each other. Even a girlfriend. Hes got a girlfriend, yeah. He uses some of the movies to help. At one point he was talking to one of his therapists and says, you know, aladdin and jasmine. Aladdin gave her a choice, gave her space. I need to think about that. A lot of people could use that advice. By the way, youve won all sorts of awards for books. Ive read them all. This is my favorite. Itll make you cry and make you think about a lot of things about life. But my question for you about owen is, he sees a lot of the world through disney, but as hes gotten older, does he has he moved beyond disney . He has. Disney is still the foundation. We still hes got powerful ideas through disney, but hes moved to a lot of live action. You know, he reads now. He searches the landscape for things of interest. Its interesting. He said something to me the other day now that hes kind of globally famous as an autistic guy. He said, you know, in fact, i think it made me stronger. I think that shows a kind of awareness that a lot of autistic folks are having. You know, theyre not in the broken toy department. Yeah, they have challenges, and the enormous effort to support them by society is crucial, but theyre also saying, look, ive got a lot to offer. And you guys are working on a documentary. Yeah, probably out next year. Saw some clips online. If you have a second yeah, theres a great viral video of owen doing those voices. Pretty amazing. Ron, thank you. Autism awareness day. Big day. Certainly is. Thank you very much. Coming up at the top of the hour, a closer look at gm. You probably know xerox as the company thats all about printing. But did you know we also support hospitals using Electronic Health records for more than 30 million patients . Or that our Software Helps over 20 million smartphone users remotely configure email every month . Or how about processing nearly 5 billion in electronic toll payments a year . In fact, todays xerox is working in surprising ways to help companies simplify the way work gets done and life gets lived. With xerox, youre ready for real business. And life gets lived. Return on investment wall isnt a street. Isnt the only return im looking forward to. For some, every dollar is earned with sweat, sacrifice, courage. Which is why usaa is honored to help our members with everything from investing for retirement to saving for college. Our commitment to current and former military members and their families is without equal. Tdd 18003452550 life inspires your trading. Tdd 18003452550 where others see fads. Tdd 18003452550. You see opportunities. Tdd 18003452550 at schwab, were here to help tdd 18003452550 turn inspiration into action. Tdd 18003452550 we have intuitive platforms tdd 18003452550 to help you discover whats trending. Tdd 18003452550 and seasoned market experts to help sharpen your instincts. Tdd 18003452550 so you can take charge tdd 18003452550 of your trading. Gm in crisis. And congress is looking for answers. Its going to be a switch that is it going to be a newly redesigned switch . Well get a take on mary barras testimony. Is the market rigged . That question sparking a heated debate at the new york Stock Exchange. I believe the markets are rigged. And i think youre a part of the rigging. Former s. E. C. Chairman Richard Breeden weighs in. Plus, more of the debate around the trading floor. Plus, a Luxury Real Estate agent turned reality star. One of the main players on br o bravos milliondollar listing joins us on squawk box right now. Welcome back to squawk box here on cnbc, first in business worldwide. Were counting down to the adp private payroll report. Were going to get that at 8 15 eastern time. Economists expect the report to show 203,000 new privatesector jobs. This snapshot comes ahead of the number that comes out on friday again. Its like it comes every month, it seems like. The Government Employment report, which could show nonfarm payrolls rising by 200,000. That is the approximate estimate at this point. Okay. Lets tell you about a couple headlines this morning. Chiles president has declared a state of emergency where a powerful earthquake struck off the coast. Five people were killed there. Landslides have blocked roads. Fires have destroyed several businesses. Power has now been knocked out to thousands. The quake registered an 8. 2 and triggered a tsunami that has pounded the shoreline. An 8. 2 is very, very high on the richter scale. Also, more bad press for pimco. Investors pulling 3. 1 billion out of the Flagship Fund in march. It marks the 11th straight month of net redemptions for their total return fund. The bond fund, which is the worlds biggest, is run by bill gross. Morningstar says investors have pulled out more than 52 billion since last may. As joe was mentioning, they still have 250 billion or more. The bad news is that people pulled 3. 1 billion out of the fund. Good news is that represented just over 1 . Right. So just to context yulize the story. Also, the Obama Administration celebrating yesterday as the number of obamacare enrollment came in. The 7million benchmark. Last night the first open Enrollment Period under this law came to an end. And despite several lost weeks out of the gate because of problems with the website, 7. 1 million americans have now signed up for private insurance plans through these marketplaces. 7. 1. The new Health Care Program overcame Early Technology failures that prevented people from signing up online. The white house numbers did not include information about enroll lees, including the ages of applicants. The first group represents a higher rate of older and of course costlier members than had been hoped. That could mean higher insurance premiums for people in many parts of the country. So time for the administration to celebrate, but we will see how much theyll be celebrating because theres still an open question. Lets watch those 12 Democratic Senators that have been embracing obamacare so openly. Theres 12 of them that have been running from it. Now that 7 have signed up, lets see how quickly they come around and say, wow, we love it. Well see. Theres 12 of them. Lets watch them. Gmcs mary barra tackling tough questions from congress yesterday. Shell be back on the hill today to face the senate. Eamon javers joins us now with more. I bet you its like the same thing. Its going to be were going to hear the same questions and get the same answers, but each one of these politicians, when they get the cameras on them, it looks like its the first time the question has been ever been asked. They love this, dont they . And a lot of times you see the politicians asking the same question that has already been asked half an hour earlier because they get the chance to ask it. But they do it like the fedex guy. But i said it like this. They do a little different hand motion. Yeah, one of the members of congress yesterday actually asked the head of nitsa what nitsa stands for. If youre going a hearing on traffic safety, you ought to know what theyre all about. You get these questions because a lot of the members are new to the issue. Well see at 10 00 whether gm adjusts its strategy. Yesterday she was on able to provide a lot of information about an internal investigation at gm. I have two sound bites that give you a sense of what she was saying, starting with what gm has done and what shes pledging it will do in the future on this whole issue of these ignition switches that potentially shut down the cars while theyre driving. Take a listen to mary barra yesterday. When we have answers, we will be fully transparent with you, with our regulators, and with our customers. While i cannot turn back the clock, as soon as i learned about the problem, we acted without hesitation. We told the world we had a problem that needed to be fixed. We did so because whatever mistakes were made in the past, we will not shirk from our responsibilities now or in the future. And then of course so much of this is really about mary barra herself. A new leader at General Motors. A female leader at the top of that company. So much focus on how she responded to those questions. She also talked a little bit about what her own role in all of this is going to be. More than a decade ago, gm embarked on a smallcar program. Sitting here today, i cannot tell you why it took so long for a safety defect to be announced for this program. But i can tell you we will find out. This is an extraordinary situation. It involves vehicles we no longer make, but it came to light on my watch, so im responsible for resolving it. So guys, shes taking responsibility there for solving this problem. Well see at 10 00 this morning in front of the Senate Whether shes able to provide any more of these answers or whether gm is going to stick to its strategy from yesterday of citing that internal investigation and saying, hey, until thats done, we cant provide anymore information to you. All right. Eamon, stick around. Jo czech this out. Gm is intending to replace all the switches for those cars beginning on april 7. Is that right . We will begin shipping new parts are you going to put a completely redesigned switch or put the old switches from 2006 into those cars . Its going to be a switch that meets the is it going to be newly redesigned or the old switch from 2006 . Its the old design that meets the performance thats required. She joins us now to shed more light on the testimony. Representative, good morning. Good morning. Thanks for joining us. Im trying to figure out what the end game really should be here and what we should try to do. Do we need to find either the individual or the group of individuals that we know signed off on letting this continue without a recall and bring them to justice, or do we need to change the culture of gm . Do we need to change the culture of all of Corporate America . What are we trying to accomplish . The main thing were concerned about is how could gm have put switches in over 2. 5 million cars that were defective that the engineers knew were defective from the beginning. We know of over 30 accidents. We know of at least 12 deaths. There are probably more than that. What were really concerned about is this just seemed to go on year after year with all the regular flags going up, but gm or the regulators didnt capture it. Was it willful . Were they consciously not reporting this, or was there just some massive lack of communication within the company . You figure the first ones they put in, they had to figure out they were defective. Then i guess as the cases trickle in, they were in denial probably for a while as to whether its a pervasive problem. Well, let me just say, the first ones they put in, their engineer tested them, and they said they did not meet the minimum standards of specification. So they knew when they were putting them in those first cars that were made up until 2006 that they were well below the standards. Then they reengineered the ignition switch in 2006. Even under the new reengineered switch, all those cars fell short of those standards. It wasnt like one of them came off the line wrong and oops. They knew all along these were substandard. Congresswoman, were you satisfied with marys testimony . Did you feel that she was forthcoming enough, and how do you consider when during a hearing like that the legal considerations for somebody whos on the other side of the table who has lawyers in their ear saying, dont say too much . Well, i understand that ms. Barra just took over the company in december. And im pleased with her response that says shes going to get to the bottom of it, that the buck stops here. I think all of that is good. What i was concerned about yesterday was when i was trying to ask her some basic questions about what happened here, about the chronology of events, she stone walled me with every question. The reason that frustrated me was because i had gotten the chronology from documents that gm provided to the committee. So it was her own documents that she refused to acknowledge. I just hope that the investigation Going Forward has a different tone than that stonewalling we got yesterday. And i always i do come back to, okay, so theres going to be these individuals. They probably exist somewhere. Somebody made the decision. Somebody was in charge of something that said, okay, lets keep putting them in. We find them, punish them. Does it really change the Corporate Culture of gm . You know, if you think if youre a person that thinks corporations are repeatedly going to try to cost cut to maximize profits, then the only thing you can really do is you need to just you got to have regulators that have teeth and that are on top of the situation and youre focusing on the wrong entity. You got to go to the regulators and find out why they didnt know it was happening. The first thing is that we need to have corporations who understand that a 57set part should not be an impediment to making the car safe. Were going to be watching today. We have the adp. Its a hard number we have to get. Sorry to end it here and cut you off. Hopefully well talk again. Thank you. Coming up, as joe just said, were just minutes away from the adp private payroll. Find out if the winter chill is affecting hiring. Were back in a moment. Moment. I just want to say, i combined home and auto with state farm, saved 760 bucks. Love this guy. Okay, does it bother anybody else that the mime is talking . Frrreeeeaky [ male announcer ] bundle home and auto and you could save 760 bucks. Alright, mama, lets get going. [ yawns ] naptime is calling my name. [ male announcer ] get to a better state. State farm. [ male announcer ] get to a better state. Sometimes they just drop in. Always obvious. Cme group can help you navigate risks and capture opportunities. We enable you to reach Global Markets and drive forward with broader possibilities. Cme group how the world advances. Breaking news. The adp private payrolls data is seconds away. Andrew has the numbers. I have the numbers. And the adp coming in a bit below forecast. The u. S. Economy added 191,000 new privatesector jobs last month. Economists had been looking for 203,000. However, februarys jobs gain was revised significantly higher. Thats the good news. Its now at 178,000 from the originally reported 139,000. Total private thats 191,000, revised. Going through the whole list there. February revised up 39,000. Goods up 28,000. Goods and services, that is. Nonfarm payroll is 200,000. So dumb the way we did that. Where i toss to you to read it. Yeah so dumb. Its silly. Were going to go to mark, though, whos not dumb. Makes you wonder, doesnt it . Thats how we can mistake wednesday for tuesday. Wheres steve . What happened to steve . Hes sick. Youre stuck with me, my friend. We could have tossed to you to give the numbers in london, no less. Headline from your perspecti perspective . A good number. You know, i think all along the slowdown has been related to weather and the weather effects are fading. Were getting the better economic data. Were getting back to trends. As weve been talking for quite some time, job growth is 200,000. I think were back to trending. I think this spring well get better numbers. The nonfarm payrolls estimates on friday, 200,000. Whats your number going to be . You want to tell us now . Yeah, unfortunately, i wont be with you on friday. Im here touring around europe. I take the 191 at face value, subtract 5k, loss of government jobs. So 185. I think well get 185 for the month of march. Was there any down sector . You said the government was down slightly. Anything else, though . Im looking through the rest of the numbers. Theres a plus sign on just about everything. No. Yeah, no, everything is broad based. Its across every industry. So really, no weakness anywhere. And across company size class. Big companies, theyve been doing well all along. Small companies, it feels good. Its not only the number itself, but its the fact that its broad based across lots of Different Industries and size classes. I think were in pretty good shape. It just feels really good going into the spring months. All right. Mark, were going to bring in your buddy Rick Santelli on this for more reaction to the adp data. Lets bring in Rick Santelli. That was pretty good, i guess. 203, 196. Thats close enough. This isnt government work, rick, but its adp work. Its close, right . Yeah, no. Close to expectations. Actually, maybe a smidge light. Once again, i dont think its an issue of being able to generate kind of middle of the road job growth. I think its a question of the sustainability of the numbers and the longterm outlook of what the economy needs to additionally create to really make a difference overall. You can just look at the Interest Rate spectrum, preopening equities. There arent any giant surprises here. Of course, well have to see how fridays number reacts. But it also does underscore the relationship between the jobs market and janet yellen and slack. I know that she has a dual mandate, but it doesnt make sense to me, the structural issues of unemployment and the fact that ben bernanke and janet yellen still stick to a program of trying to indirectly affect jobs. There doesnt seem to be a good correlation there. Well, eventually, you know, if wages go up and if we get down in the sixes, what we need to figure out is when she actually gets, you know, not as accommodative, where she actually you know, she gave us a head fake that maybe she was getting there already a couple weeks ago. The day will come when she needs to go up on the short term, you know . Yeah, i dont know. Listen, theres a whole army of people that are going to being looking at her head fakes. The reality is, you know, i look at her now getting involved in anecdotal stories. With millions of people out of work, i could probably find somebody that, you know, has three arms, four antennas, onefoot tall, ninefeet tall. Anecdotal stories in the biggest central bank on the planet. I still get kind of, you know, just thinking about it. This is not the type of central bank i want. Maybe its the kind of central bank in a u. N. World, but its not my cup of tea. Mark . Joe, can i make a point . Yeah, if we stay at 200k for a month and say we stay there and dont accelerate, i expect that. Lets say we stay at 200k for a month. In a stable Labor Force Participation rate so Labor Force Participation doesnt continue to climb, stays where it does well be back to full employment. A point below where we are today in about 2 1 2 to 3 years. So by the end of 2016, maybe early 2017, the economy will be back at full employment, even with the stocks where we are today. Wow, nine years. Only nine years. Well, i mean, think about all the jobs we lost in one year in 2009 and what happened to unemployment. It went from 5 to 10 in a matter of 18, 24 months. So in that context, and given what happened, you know, certainly wed love to do better. But were getting there. Yeah, unless you put the Participation Rate where it was in 09 when you lost the jobs. But of course we dont really want to do that. Its all settled, right . Its all settled that its working and its settled. No more arguments. Well, thats because of the stimulus that mark was on. Remember the 800 billion . I wish we had that back, mark. You were a big push on that, werent you, mark . Well, on the Labor Force Participation, i mean, its come down, yes. And a chunk of that is discouraged workers. I do expect them to come in over the next couple three years. But the preponderance of it is retirement. The boomers are retiring. We lose 40,000 people from the work force every single week because of the boomers. By the way, rick, this is going to be a phenomena for the next 15 years. Heres an intrepid forecast for you. The biggest problem were going to have five years from now isnt unemployment or underemployment. Its a lack of labor. Thats our key problem. In large part because of the retirement. Im not even going to ask you about that huge Success Story we saw yesterday with the 7 million signups for obamacare. Im in the even going to ask you about that. Well, you know what, joe, you really do, thank you, my buttons have been on the reset, waiting to be pushed for weeks. Listen, i blame media. Whether its press, tv, whatever it is. I dont care how many people visit any website. I want to know how many people have lost, how many people have gained, the intersection, how many people have paid. You know, an analytical quantitative approach. But thats not what we get. You know, 7 million, its settled. Climate change, its settled. Its all settled, right, joe . Yeah, settled its not going to be repealed. Ill tell you, when anybody tells you lets rephrase. When we cant get three intelligent people on the Stock Exchange to understand how hft really plays out, what chance do we have to tackle things like Mother Nature . Wheres the hubris in any of this . Holy cow. I like that the lead author of the ipcc report said, well, if the governments told us to Say Something different, we would have, but at this point, this is what it was predetermined. This is what they want us to say to get people more active in trying to stop this, so were willing to say it. But we change it if the governments told us to say Something Else. The lead author actually said that. What do you think people would think about gm . If mary barra took not for lois lerner. Right. Enough said. Thanks, rick. Thanks, joe. Love you. Coming up, one of the stars is of bravos hit show Million Dollar listing. Hell tell us why living space in manhattan is at the highest prooig price per square foot in the last 20 years. Back in a moment. Back in a mome. Coming up, andrew is going to tell us about a real estate reality star. I am. Go ahead. Im tossing to you again so you can do the i think this is thats the way we should do it . Were going to talk about it with fredrik eklund. Hes on bravos Million Dollar listing. What do you have, joe . They cut it out, but there will be more. Thats what happens when you mess with them. Mess with them. At your ford dealer think . They think about tires. And what theyve been through lately. Polar vortexes, road construction, and gaping potholes. So with all that behind you, you might want to make sure youre safe and in control. Ford technicians are ready to find the right tires for your vehicle. Get up to 120 in mailin rebates on four select tires when you use the Ford Service Credit card at the big tire event. See what the ford experts think about your tires. At your ford dealer. Which will cause me to miss the end of the game. The x1 entertainment operating system lets your watch live tv anywhere. Can i watch it in Butterfly Valley . Sure. Can i watch it in glimmering lake . Yep. Here, too. What about the dark castle . You call that defense . come on [ female announcer ] watch live tv anywhere. The x1 entertainment operating system, only from xfinity. Welcome back to squawk box. Take a look at some stocks on the move. Monsanto beating estimates by 8 cents. Revenue beating consensus as well. They did give a yearly forecast slightly short of forecast. Joe, do you want to take the next one . Drug maker mankind stay r saying its stock got a huge boost after an fda panel recommended approval of its inhaled diabetes drug, andrew. Were also watching shares of myriad genetics. Well see medicare reimbursement cuts for its treatments. However, the final number were going to start going in between stories. We can do it those cuts are not as large as the Company Originally anticipated. First we alternated stories. Then we were able to go into the details about a specific stock and alternate it. How about we alternate Michael Lewis new book flash boys sparking controversy. I think the producers arent happy with us. The conversation got heated. Bob posani joins us now with more of that heated discussion. Bob . It was quite a food fight. Started out quietly. Michael lewis reiterating to us he felt the markets were rigged. We tried to get him to define it. But it really got testy. Take a look. In my exchange as a sign of corruption. His backing is a sign of virtue. Theres a difference. Why is there a difference . The backing of me is bad and the backing of you is good. How is it different . Because there are financial they invested the investors in our exchange dont trade on our exchange. Thats part of the problem, right . This builds of owned by people who traded here for 200 years. Is he always like this on the show . Its insane. What you say is insane. You think obrien is a little mad . And it didnt get any more pleasant. Look. Do we have computerized trading on our market . Absolutely. I think the term highfrequency trading should be eliminated. You use it 20 times in the book. Its not his book. Youre quoted. Computerized trading and computerized scalping. People can trade with computers. They will until the end of time. People use computers to scalp. Theyve always looked to game the markets. You cannot scalp trades. You cannot scalp orders on iex. So theres little knocks on all this. A deal thats been in the works for a while, come on over here with me. This is Goldman Sachs designated post here. They are reportedly selling this whole unit for roughly 30 million. Still dont have an exact buyer yet. When they bought this, it was several billion dollars in 2000. That gives you an idea of the value of Market Making and how its come down as we went to computerized trading. Its hurt the profitability of the industry. Back to you. Thank you, bob. Appreciate it. Potty mouth. I heard that. Used a phrase not allowed in my household. Lets continue this debate over highfrequency trading. Heres what Mary Joe White said about is yesterday. Are the markets rigged . They are not. How can you be so confident . Sorry, we have a hearing. Former s. E. C. Chairman Richard Breeden joins us now. Hes also the former chairman of h r block. Where do you come down on this, sir . Markets arent rigged. Doesnt mean theyre risk free. Doesnt mean you cant get hurt. Highfrequency trading, good or bad . I think theres lots of areas in the world. When i was chairman, i issued a lot of the original permits to allow computerized trading. I think speed and technology are good things in the marketplace. What about this issue of both skr scalping on one side and front running . Theyre real issues. Theyre real issues that people need to Pay Attention to. Look, you can go you go to disney land, theyll sell you a pass that for an extra cost puts you at the front of the line. Ski resorts will do the same thing. Theres nothing inherently wrong where if speed is more important to you, you pay a higher price. But the difference potentially is when you go to disney land or a ski resort that offers you a higher price to get to the front of the line, thats available to everyone. Part of the job of the regulatory system it to make sure people have an equal access. But theres equal access and theres a sense that the market is fair, that everybody is getting the same information at the same time. That if i trade on etrade or ameritrade, that my order is going in at the same time as your order and you cant see that im about to make my order and basically buy and resell me the stock at a higher price. That undermines the credibility in the marketplace, no . Absolutely. Whether it is happening or people just think its happening, that certainly undermines credibility in the market. And it may undermine the ability of confidence of people to trade. Ive argued theres sort of two versions of highfrequency trading. There might be a good part that helps liquidity and there might be a bad part that could be considered the scalping piece or front running piece. My question is, do you need to have the scalping piece to make the liquidity work . No, i dont think you do. And there should always be rules. Why has the s. E. C. Not done anything about this thus far . Because doddfrank said you should do nothing but implement 300 or 400 rules that are sp speci speci specified. I think Mary Joe White and her colleagues at the commission under the importance of this issue. She indicated in confirmation hearings that highfrequency trading was one of the three biggest issues she saw that needed to be addressed. So i think theyre the right people to address some very serious issues. You even know. You know. Its just so simple. The frontrunning aspect of highfrequency trading, we need to make sure that doesnt happen. But this is going to be our malaysian jetliner like to cnn. We can make this, with Michael Lewis and 60 minutes and whats his face, this will be our were going to try to make this our missing malaysian jetliner. Thats the thing. Thats what Cable Networks do. But the answer is simple, is it not . You should not be able to go in knowing that theres a block of stock thats going to be bought by an institution. You should not be able to see that block, buy it first, and then be able to benefit. And front running has always so get rid of that. Is the market rigged . Can individuals not make any money . All these conclusions that we draw from that simple thing, which Michael Lewis enables, it gives us stuff to talk about. When i was chairman, we had all these people doing insider trading. The argument was everybodys doing it. This is the way of business. It was a crime, and we took a lot of those people out of the market. The fbi is apparently investigating others. The question becomes then, are we going to see indictments that relate to this . Is it the fault its not illegal right now. But if somebody decides its illegal, all the sudden it becomes illegal. Thats whats going to be interesting to me. Is it the fault of the highfrequency trader . Is it the fault of the exchanges . I like your selling the bad actors the ability to do this. You might be on to something there. When i was chairman 25 years ago, the new york Stock Exchange put on a fullcourt press trying to get us to abandon accounting and Disclosure Rules to protect investors in order they could get more listings and the exchange would make more money. Would have been the worst thing you could do. So theyve had a conflict between their profit interests and the interests of investors for a long time. The s. E. C. Is supposed to police that. I think given a chance, they will. One other point i want to make thats really important in all this is that when we talk about the broader market, we cant lose sight of the fact theres trading issues, and there are rules about trading. Then theres investment. You know, if i bought tesla three or four years ago or if i bought qualcomm, im a happy guy, even if somebody else made a penny more before i bought it. And im still happy. We cant lose sight of whats good for real investors, not just what rules ought to apply. You should save the word rigged for when i hate to keep talking about s. A. C. Capital, but if you have guys out finding out from doctors that a drug trial is not going well and you know before anyone else and youre able to short the stock, that i would use rigged for. This doesnt rise penny stock manipulations. Quick to call Jordan Belfort a wall street player when he was nothing more than a criminal. And we make a movie out of it. I want George Clooney to play me in the movie after i rip off old people and get to go to oscar parties and have starlets asking me for an autograph because of you. Because of me. Richard, thank you for joining us this morning. Coming up, bravos tv version of real estate. You know this guy . Hes amazing. Fredrik eklund will join us. Hes one of the stars is of Million Dollar listing new york. In one week of the upcoming season, he sold 100 million in Luxury Real Estate. Two apartments. [ bagpipes play ] make it happen with fidelity active trader pro. Its one more innovative reason serious investors are choosing fidelity. Call or click to open your fidelity account today. Were back. New york City Real Estate is on fire with new developments jumping 55 year to date. Our next guest is one of the big apples top luxury brokers whos capitalizing on this hot market, having closed 400 million just this quarter. Joining us now, fredrik eklund. Am i pronouncing it right . Thats right. Star of bravos hit show Million Dollar listing new york. I tried to get him to do the karate kid thing you do. He does this thing on the show. Remember britt . Who . Britt eklund. Related . I remember her. Shes beautiful. First time i ever saw nudity. Really . So what the heck is going on . Who is buying these apartments . Well, i think its a perfect storm. Everyone is buying right now. For a couple years during the crisis, we had everyone was waiting on the sidelines. People have been jumping in for a long time now. We have the internationals. We have the locals. Money is inexpensive. So lets talk about the milliondollar plus apartments. What percent and what do we say now, the average apartment in new york city is 1. 7 million . Yeah, it was up 30 from last year. In one year, 30 jump. Thats big, its major. So the percentage of consumers for these apartments are foreigners, locals, where . How do you break it down . We used to have wall street, right. All that money. We still have that. Bonuses were good this year. I feel i have a lot of tech too. No one really talks about that. We have a lot of west coast these newly created millionaires and billionaires buying. Theres a lot of new inventory on the market because theres stuff thats finally been built. I dont think its enough. We monitor this really well. There was a concern there was too much new development coming. We have such a low inventory. Less than 5,000 apartments in manhattan. We have usually up to 12,000. Theres really not enough. Theres 285 buildings we know of thats going to come into the market the next year. Around 8,000 units. Its not enough. Thats being rolled out over a year. Whats the most expensive apartment youve ever sold . You can say it aloud. Its okay. No, i mean, i sell hes translating from kroener. I sell a lot of volume. I did 400 million last quarter. Every day i sell maybe three apartments. I do a lot of new development. Most expensive, i dont know. Is it important . Im just curious. 20 million, 30 million . Its more than that. I have a listing now im negotiating for 40 million. A penthouse. Who are the type of buyers . Where do you find the buyer for that . Well, the beautiful thing is they find you . Yeah. And i think the show has really helped double my business. It was very risky to sign on to do Something Like this. The format is the dramatic, to say the least. But, yes. You wont cross the rivers. What does that mean . You wont sell in northern new jersey. Will you sell in west chester . Well, i sell in brooklyn. I have a new building coming there. I dont sell in jersey, no. Will you ever sell in queens . People say queens may be the new brooklyn. Maybe. Maybe. Hes less than enthusiastic about that idea. Im very busy. Im very committed. Were right on a train line. We have a beautiful train station. No, its beautiful. You just sold a parking spot for 700,000. Is that right . Thats correct. Ten by ten piece of concrete. I think it was a record. I hope it was clean at least. There werent any oil stains on the concrete, right . Whats the cheapest apartment you take on right now . If somebodys watching and they have a property to sell. You guys are all about money. Youre making it difficult for me. Its always about money. Im curious. This is real estate. It is about money. Thats the business. Hes satisfying a need for people. Hes a giver. Come on. I take on everything. Take on everything . What does that mean . No, i mean, its very difficult to find an apartment in manhattan, especially condominium with amenities below 1 million. If there was one, yes, i would love to sell it. All right. It doesnt exist, apparently. He owns you. What do you mean he owns me . It just seems like hes going to answer what he wants and stop when he doesnt want to answer other things. Im learning from this. Im going to do this with you once in a while. I like it. Fredrik. Yes . You have a lot of selfesteem. My like it. Thank you. No, hes done very well. Its amazing what hes done. Are you the number one in the whole country . No, because its very difficult to measure that. This is good. My team was number one last year. But i dont know in the whole country, no. One final question. People always talk about Digital Technology and how Digital Technology would somehow kill the real estate agent. Do you think thats actually true . Well, it certainly makes it easier to do a search yourself, but i think that you still have a need for someone to negotiate for you. I do this for a living, and i negotiate a lot. Its always good to not be emotionally attached to what youre buying. Okay. Last, final, final. What is the fredrik premium . If i hire you over somebody else, how much more are you going to get me than the other guy will . I would say 20 . Thats pretty good. Ill take 20 . Hes a reality star. Theyre totally different. Its a totally different zooit geist. Youre not here to help us. Youre here to be a hes selling. Exactly. Thank you for being here. Thank you, guys. Appreciate it. Youre welcome. You can have us on your show whenever. I would love to have you on. You have to sell your place. He wont sell it. No, i wont get the fredrik premium. Anyway, jim cramer with reaction to the adp report. What investors should be watching at the opening bell. Aflac. Aflac, aflac, aflac [ both sigh ] ugh you told me he was good, dude. Yeah he stinks at golf. But he was great at getting my claim paid fast. How fast . Mine got paid in 4 days. Wow. Thats awesome. Is that legal . Big fat no. [ male announcer ] find out how fast aflac can pay you at aflac. Com. Lets get down to the new york Stock Exchange. Jim, if you dont count the fed, is the market rigged . I mean, certainly if i count the fed i can say its rigged, but otherwise would you say otherwise would you say its rigged . I think moment to moment it is. Its very interesting because mr. Breeden said its like the disney line. Well know. The disney line we kind of know it. This is not something we would necessarily want. I know the exchanges, i was talking to some of the people here, i mean, obviously the exchanges are now run for profit. New york Stock Exchange wasnt run for profit. It was mutual. They have to make a living. But the idea that we all kind of knew it is absolutely wrong. Some of us definitely knew it, just like some of us knew that certain information is given ahead to traders, but the fact that Michael Lewis book made a splash its so obvious no one knew about the disney line, that, therefore, the analogy just doesnt hold up. Doesnt hold water. Jim, if someone watches cnbc and, you know, i dont know how often were going to have, you know, once in a lifetime financial crises, buffett doesnt thing another one is going to lets say its rare. They watch cnbc, they watch jim cramer, they watch mad money, they make some, you know , e a half a brain and make investments and hold them for a while, you can do okay in the stock market . Thats what ive been saying on the show, mad money. No one wants anyone scalping but were not trying to make were trying to make big money. Were not trying to make pennies. If you are going to be a trader and trade 50 times a day they will eat into your profits. But, joe, were trying to find google at 800 and have it go to 1,500. It really doesnt matter if someone takes a milicent. We dont want to get lost in the weeds here. Our viewers are trying to make longterm, good money. Right. The idea they should be day trading, do you know what, theyre not going to win. Theres no ron barrons or peter lynchs that put all their money in cash or treasury bills and got a multiple of their money back in 15 or 20 years, is there . The stock market masters are not trying to win on a secondtosecond basis so i why dont we listen to them and try to glean some of their ideas. All right, jim, thank you. Well see you in a few minutes. Later the gm ceo is back on the hill today. Its the senates turn to question mary barra about gms recall crisis. Thats coming up in the 10 00 hour. Squawk box is coming back in just a minute. Just a minute. So ally bank has a raise your rate cd that wont trap me in a rate. Thats correct. Cause im really nervous about getting trapped. Whys that . Uh, mark . Go get help i have my reasons. Look, you dont have to feel trapped with our raise your rate cd. If our rate on this cd goes up, yours can too. Oh that sounds nice. Dont feel trapped with the ally raise your rate cd. Ally bank. Your money needs an ally. I just ah woke up today and i said i need something sportier. Annnd done. Ok maxwell, just need to ah contact your Insurance Company with the vin number. Oh, i just did it. With my geico app. Vin is up to the loaded. Ok well then jerry here will take you through all of the features then. Why dont weeeeeeeeeeee go out to the car. Ok, ill just be outside. Ok, yeah. His dad is my boss. Yeah. Vin scanning to add a car. Just a tap away on the geico app. Recently weve been seeing a big rotation out of momentum stocks and into some value names, so this morning in our whats working series well look at three value stocks, dow instruments and cedar fair, and, michael, now you take over. Thats unfair. Its not that hard. Vogelsang. Do it with siyllables. Lets go over the three as quickly as we can. Yeah, sure. Well, the big thing here is that these three are all relatively slowgrowing kind of companies. Theyre not tesla or amazon or netflix but they all have one thing in common and that is management that treats shareholders really, really well. So, you know, cedar fair is an interesting company. They are basically in the Amusement Park business. They have 12 or 13 different musical parks around the country and in canada. This was a story that got blown up big back in 2009, 2010. They eliminated their dividend. This is an mlp, by the way, so its a different kind of mlp than your Typical Energy mlps and they basically said well continue to increase our dividend. The business is healing and recovered nicely. And they are basically looking to return both through debt repayment, Share Repurchases and dividend increases, capital back to shareholders. Its the Capital Allocation story thats really, really strong here. Excellent. That was was that all three . No. That was cedar fair, joe. That was only one. Texas instruments we like it a lot, relatively slow growing. Theyve turned over their business now about two thirds analog, chips, base cliff, things that are relatively stable in price, relatively consistent in how theyre working. Theyre returning lots of Free Cash Flow to shareholders. All right, great. Dow, ti, and cedar fair. Were going to squawk on the street now but we appreciate your time today, mike. Thank you. Thanks a lot. Make sure you join us tomorrow. Squawk on the street begins right now. Notes good wednesday morning, welcome to squawk on the street, im Carl Quintanilla with jim cramer and david faber at the new york Stock Exchange. Looking for some followthrough after a pretty nice start to the month of april yesterday. Futures relatively indecisive ahead of tomorrows ecb meeting. The jobs number here on friday. Watch the tenyear adp was roughly in line at 191. Mortgage apps down and the europe is led by the dax. The markets still looking to om higher desp