Transcripts For CNBC Squawk Box 20140408 : vimarsana.com

Were happy youre back. Me, too. If youre a citigroup shareholder, not happy. Theyll take 1. 2 billion to settle claims. The settlement resolves a significant legacy issue left over from the financial crisis error. Citi will take a related charge of 100 million for the First Quarter. Heres where shareholders are getting unhappy. Citigroup warning invests, after the Federal Reserve rejected the capital plan last month. Tthe wall street journal says the rejection makes it unlikely that citigroup can hit its 2015 goal for return on tangible common equity. The measure is a ratio of profittoequity own by shareholders. Citigroup shares, unchanged in after hours, 46. 55 is the number. In related news when it comes to the Federal Reserve, this could impact citi in some way, the Federal Reserve giving banks more time to divest collateralized Loan Obligations that fall under the volcker rule. The fed said banks will have until july 21st, 2017 to shed those funds which pull together risky loans. Clo is a way for banks the volcker rule part of dodd frank, ability to invest in risky funds such as hedge funds or private equity funds. Financial regulators vote on tuesday to finalize tough requirements for u. S. Banks. A lot of news in banking and Federal Reserve land this morning. Joe . Andrew, in ukraine, a lost commentary and things happening. Tensions rising. Russias foreign minister warning kiev, warning kiev, that any use of force against prorussian activists could plunge the country into civil war. Ukrainian officials are accusing russia of instigating the protests. That led to these guys seizing government buildings in three separate cities all in Eastern Ukraine. Ukraines president warned on monday antitrust measures would be taken against protesters who have seized arms. Meanti meantime, secretary of state john kerry is attending a meeting to ease tensions. The flareups are being felt by the oil markets. Th thats when it affects cnbcs news. Take a look at the lead story in the journal. The core, russian citizens, a lot of them look like special forces. Theoretically, putin is able to send these guys in and then on a pretense and on the pretense of protecting them. Brett stevens today, putins moment, if i were Vladimir Putin id invade Eastern Ukraine this week. Strike while the iron is hot. A lot of people think i saw jay carney yesterday. I was quaking in my boots. Hes cautioning. There will be i would not just liked kid. No, no, no. Remember when you tell the kid dont do that, dont do that, then the kid does it and youre like, okay, if you go any further. You know theres no selfies in the white house. Thats another issue. This is going according to a pretty the playbook, weve seen this before. Well see whether it happens. No one would be surprised if they move in at this point. Not at all. It was interesting that said we had Larry Lindsay on. I dont think hell wait for any of that stuff. I think hes looking and willing to take it by force. Do you have i dont have my risk game anymore. The board game. I know it was the ukraine then and camp chatka. It was a region of the ussr. This was pretty good territory. Id be moving do you have risk for ipad now . I wonder. As an application. I dont think we have so many board games at home anymore. We have connect four. I love that game. You know whats weird, the market had nothing to do with this, the markets threeday selloff. Well talk about that in a second. I have some i dont know how closely youre watching at home. Did you see the tenyear yesterday. I didnt see where it wound up. It was below 2. 7 for a while. They say its a death cross, saying yields could drop sharply. At this point i think weve come full circle. Where now higher rates, people want high rates for the stock market. Its all about an economy good news is good news. Its good news is good news at this point. Theres two schools of thought. I dont know which to think about. Did the tenyear go up first and that hit the stock market or did the stock market defsh a break and people put it into bonds . I think it was the stock market first. You better hope so. I do, too. That doesnt explain whats happening in europe where yields are down. Theyre rushing into possible qe. Theyre worried. What do you think it is . You know, as a conspiracy theorist, im worried that you know, we assume we cant have another slowdown in the economy. Certainly not a recession. Its been a fiveyear recovery which was already pretty long. Right. If Interest Rates were to start dropping and if unemployment were to go back above 7 , it puts the fed in such a box. If the Unemployment Rate is rising right now, its because the Participation Rate is rising. If we dont hit 3 , if theres no see if we dont hit 3 . People say were going to 3 because theres no fiscal drag. What if were stuck because of the regulations and taxes and policies. I think were going to 3 , too. Why would we . We volcano in the five years. And so im just saying, that would put this nice, neat way the fed exits and everythings fine and we all live happily ever after after they saved us, a lot of times life isnts asimple. What would yellen do if it looked like unemployment was going back up . What can you do . Were still 55 billion shes locked and loaded. Were still 55 billion a month. She can go back up. She can go back up. She feels every pain, the death of a thousand. She feels every person who is out of work. I agree. The fed has for years. You dont believe that unemployment could start creeping back up. If the fed were to start going back up, i think it would get congress more involved with taking a look at the Federal Reserves powers. Thats died down. They wanted to audit the fed. They wanted to do a lot more with it. What can they do to help the economy . I dont know, because it depends on your perspective what you think they could or should be doing. Congress is not going to do anything, i think, to change its trajectory. If the fed were to get more involved theres a chance they could do a stronger job. This may all be were three points below where we close. Were going to 3 . You think the gdp will be 3 . By the end of the year. Why do we get 3 with these guys in charge. I think the American Economy is a dynamic one. I think its been held up for too long. Its fighting an uphill battle, when the private sector doesnt have to argue for its relevance. 3 isnt the type of growth youd be writing home about. Now it would. Were at 2. 25. I think were going back to 3 . Im not at 3 but im not a 2. 25 either. Somewhere in the middle. How close do you come to saying that the citigroup shareholders were not happy campers. I thought youd use that word. I think you were going to say campers. They took away my story. Can you get the tape . You didnt believe me. Anything you say about sports or basketball is irrelevant . Totally. At 9 00 a. M. Eastern time this morning since when . You havent been interested in march madness. You asked me the other day. I told you who was going to win, you looked at me like i lost my mind and look, uconn win. You had a 50 50 chance. Whats their name, the uconn huskies. What are you talking about . Just wondered. Seeing how much you actually im not a total idiot. Economic counselor who led the team . And director of research one name. Hell be on squawk on the street following the briefing. Can you name anybody on the team . How about the coach . The Global Markets report. Julia chatterley has been standing by. Julia has a better chance of saying shahbaz than you. Shes been standing by across the pond. I called him kemba wood yesterday. Ill be really quick. I can see youre running out of time. Reds to greens, 91. Taking the stock down by 0. 4 . We backed a ninesession winning streak yesterday with losses of 1. 2 . A bit of tension concern, concerns over the tensions in the ukraine. Weve had another ecb official saying conventional policy tools are available. Push back again on qe, not helping, i think in the european markets. Were down 0. 7 across the board. The frank markets outperforming chie. Still watching the tech sector, not making my board in terms of gainers or losers. Its down by around 1 . We have the gainers of the basic resources. Were focusing on the tech sector here, in particular, nokia shares trading higher around 2. 3 after chinese regulators gave the green light for firms to agree, that tieup with microsoft was a 4. 7 billion dollar. Chinese regulators giving it a green light. They have regulators on board, including the u. S. And europe. Good news for nokia. Back to you, guys. All right. Thank you. She said shahbaz under her breath. Under her breath. We now have a new National Champion, the uconn huskies beat the kentucky wildcats 6054. I didnt even see a minute of the pregame. Thank you for starting at 9 10, after 9 00. This is uconns second championship in the last four years. Last year, louisville won. Senior Shahbaz Napier was named the tournaments most outstanding player, having 22 points last night. Both teams didnt make the tournament last year. I dont remember an eight and a seven being in the final. Why this song . Why do they play this song . I hate this song. You do . Uconn lost 8148 like two months ago to louisville. 8148. Not many teams its weird, the culture that gets you to this point. Not that many teams have won a National Championship. Ucla has won like 11 and kentucky won 8 and then i think its uconn after that. Dukes done well. Theyve won three or four. I think three. University of cincinnati won two but you know why, the big o, oscar robinson. What was that song from . One shining moment . I dont know. Its lame. It was the glee . No, no, no. Youd know if it was glee. Show from the 70s. It was the theme song. Who was the guy with the puppet . He had a puppet. San francisco. Come on. Alf. It was written about the ncaa, if they used it somewhere else no, no, no. A guy with a puppet . I dont remember the guy with the puppet. A show in the 70s, guy with a puppet. Mr. Rogers. Comedy show. Another guy lived above them but in the same house of the apartment i believe. No . Theres market news to get to. I was in college in the 70s. I missed a lot of i missed knight rider. If you were in colorado back when it was illegal. I was in the world. College kids dont sit around watching that. We were out every note ight. The s p suffered its worst threeday losing streak. Joining us now from ft. Lauderdale is richard steinberg, president and chief Investment Officer of Steinberg Global Asset Management in florida. We see some rotation, rich, out of these momentum and tech stocks and the utilities. We start wondering whether theres more to it, even some of the cyclicals didnt do so well. Do you think this is indicating anything about the overall economy or its a refreshing pause here . I think the economy is pretty decent, joe. I think earnings are going to be okay going into early reporting, starting this week. This is where kind of investors need a gut check. And when you had the momentum names in biotech and the real high flyers in nasdaq, kind of parabolically moving, its healthy to see a pull back in a rotation to what i would call more borg stocks in the dividend names and utilities. Im perplexed by the major rally weve had in the bond market. I think the utilities may be short lived. This is a healthy pull back. We probably have more work to do on the outside. Maybe the 1800 on the s p. And cash thats on the sideline could be put back to work. What does that say, steinberg . Is that the way you say it, sssteinberg . He cant see the screen. Thats a way to set yourself apart. I thought David Steinberg sometimes i have trouble spelling my name. Thats good. David steinberg, was he funny . I saw him. He was in town. Can i interrupt for one second. Sure. Wikipedia has been upgrading this. This is for the National Championships. Ucla has 11. Kentucky has 8. I said that. North carolina has 5, indiana has 5. Indiana, thats right. Connecticut and duke are tied for 4. Theyve updated from last night with the uconn win. I dont know why i forgot indiana. Thats what i call the john wooden award. In all sports, with 11 they had walton and kareem abdul or cinder was his name. I was thinking about too close for comfort. If you remember the program. Who was in it . Ted knight was in that. Youll get nothing, spalding. He lived in San Francisco. With the puppet. Anyway, i didnt know quick thank you to chad bray who sent me a note. Thank you for that. Youre perplexed by the bond market. My question, its hard to know whether money comes out of the stock market or gets parked in bonds, thats why yields go down or whether Something Else is going on globally. Look at the yields in europe. Why are rates going down . Why is there a deflation fear around the world again right now if no one is worried about a slowdown . I think in europe, the issue is they need to continue to export their growth. And the qe that may be coming in is going to push money back to equities. I think in the u. S. , the beginning part of the year might have been pension, endowment rebalancing. If you started at a 60 40 blend in 2013 you ended probably around 75 25. Now, you know, we think that the tenyear could end up back at the 325 to 350 level and were hovering around 270. I am perplexed. Its not cooperating with that call at all right now. At all, no. Were still doing 55. I feel like were in a row boat and the water is coming in and were going as fast as we can to get it out. The 55 billion is still a lot of money. It isnt even doing it for us anymore. Its not keeping us level. We have three Straight Days now. We certainly havent raised shortterm rates. Were still involved with qe. 55 billion a month is still a lot. The economy is not Strong Enough to warn the that, it seems like right now. Thats why i called this market the investor, know thyself market, know. Well be up 4 or 5 on a rally, pulling it back. You have to really know what sectors you want to be in and what market caps you want to be in. Midcap is completely valued right now. Theres probably about 3 upside to small cap. Were actually starting to see more value in the large value space than we are in the growth space. That space with the 15 multiple has 6 upside without dividends. The Energy Sector and the Banking Sector may be the next rotation. Okay. All right, rich, michigan state, two . Kansas must have three, dont they . Kansas has three. Michigan state has two. Just two . Yes. Its hard. Its not easy. It really isnt. Its weird how i dont know whether its the recruiting a coach does. Theres only 14 teams that have more than one. Theres only 30 teams total or 35 teams total that have ever won. Its not easy to do. Did the women already play . I dont know. Did they already play . Tonight. Uconn could win both again. Theyre both undefeated. Theyve done it before, won both. To win the men and the womens would be unbelievable. Whats in the water up there . I hope notre dame wins. You want notre dame. Yes, i do. Theyre both undefeated. A new service from uber. Should fedex and u. P. S. Start to worry . Thats coming up first here on cnbc. Check out shares of yum brands. Theyre trying out a new restaurant. Thats all coming up next when we return. Experts. Who work with regional experts. Who work with Portfolio Management experts, thats when expertise happens. Mfs. Because there is no expertise without collaboration. Mfs. 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. Welcome back to squawk box. Youre looking at new york city where we have lingering rain showers across parts of the northeast. As we take a look at the radar, this is the last bit of it. Boston morning rain showers over the next few showers. Bangor, maine will deal with the wind and the rain today. Heres a look at the timing as we watch the rain showers lift off towards the north and east. We see peeks of sunshine as we head through the afternoon. Across the south, still dealing with heavy rain and thunderstorms. Charleston to savannah to jacksonville, it has been a tough morning commute for a lot of those spots. The early birds are getting wet roads. Jacksonville, rumbles of thunder in the area. Those showers and storms push southward for the day. We could see rain showers with thunderstorms, those storms could produce small hail, also some gusty winds, both today and tonight. Tonight well be watching a lot of the same areas, including birmingham, jackson, close to the new orleans area. I think theyll be clearing out and quieting down. Some other big stories, warmth. Tomorrow were back in the 70s in minneapolis for the First Time Since last year. Alex, thank you very much. Sure. In our executive edge today happens to be equal pay y payday. President obama is expected to make an announcement of new initiatives today in honor of equal payday. Hell be signing an executive order. Obama will also be signing a president ial memorandum requiring federal contractors to submit compensation data, including sex and race for their employees to the labor department. I dont know if you saw the other study. Theres a Study Released that shows female white house staff memb members make on average 88 cents for every dollar a male staff member earns. Now we should note, most salaries for white house staff are set by a pay schedule but because more women occupy lower posts, the median salary for female employees is 65,000, nearly 9,000 less than the median for men. Its not a job for job, same job is being paid less they dont break it out. You dont know that for sure. They explain there are more women in lower posts. They dont break it out post by post. You can write that off. If you look at things, women still make on average 77 cents versus what men make. Part of that can be explained by the idea that women take time off, leaving work to raise children. Theres still 40 that most experts will say is there because they think some sort of discrimination. Right. So the big o is not on. He finished in 1960 at university of cincinnati. He averaged 33. 8 points a game in college. Third highest ever. The guy who was on was jerry lucas. He was then signed with the cleveland pipers. Guess who was the owner of the cleveland pipers when he signed . George steinbrenner. Thats weird. That is weird. Ties you back to new york. Bob koozie was here as well. Being from cincinnati, Everybody Knows the bearcats won back to back. Yum brands, the parent of kfc arent they the Parent Company of taco bell . And pizza hut as well. Kfc is the engine of growth. Launching this week, super chicks. You go to a different place with that name, i think, super chicks. Its a latenight place youre talking about . After you get a bunch of singles. It will open in arlington, it will have a limited menu. Sounds like its healthiehealthier . No. Sounds like a chickfila competitor. Its not men to the compete with other u. S. Companies of the menu but its very similar, as i just said. Kfc has been losing market share in the u. S. Yum said this new restaurant is being tested for international purposes. Super chicks. The true question is if they put a pickle on the sandwich. When we come back, were talking about momentum shift. The focus on the selloff thats hitting stocks right now. And sam zell 0 our guest host. Well be talking deal making, the economy and the political arena. As we head to a break, take a look at yesterdays winners and losers. I know what youre thinking. Transit fares as in the 37 billion transit fares we help collect each year. No . Oh, right. Youre thinking of the 1. 6 million daily Customer Care interactions xerox handles. Or the 900 Million Health insurance claims we process. So, its no surprise to you that companies depend on todays xerox for services that simplify how work gets done. Which is. Pretty much what weve always stood for. With xerox, youre ready for real business. Afghanistan, in 2009. Orbiting the moon in 1971. [ male announcer ] once its earned, usaa Auto Insurance is often handed down from generation to generation. Because it offers a superior level of protection. And because usaas commitment to serve current and former military members and their families is without equal. Begin your legacy. Get an Auto Insurance quote. Usaa. We know what it means to serve. Gunderman group is growing. Getting in a groove. Growth is gratifying. Goal is to grow. Gotta get greater growth. Growth . Growth. I just talked to ups. Theyve got a lot of great ideas. Like smart pick ups. Theyll only show up when you print a label and its automatic. We save time and money. Time . Money . Time and money. Awesome. Awesome awesome awesome awesome awesome awesome awesome all awesome i love logistics. Squawk planner. Perfect. Is this the squawk planner song . Can i do the squawk planner with a puppet . Thats a good idea, too. Im joe kernen along with Andrew Ross Sorkin and becky quick. They were in the boxes, the star show. Hollywood squares. The guy was there all the time. The guy that was on the show with him. Jim jay bullock. I need a picture. Hold on. I have a picture. Ill show you. Weve gone completely completely deep end. Go to the headlines. This is what Business News can drive a person to. In the headline after 24 years, General Motors is planning to begin fixing defective ignition switches this week. Many dealers are apparently still waiting for the parts, though. An nbc news survey of more than a dozen dealerships in eight states found none have received the parts necessary for the repairs. As yet. And google is reportedly set to announce a program called glass for work, to pitch its google glass product to businesses, thats according to the new york times. The paper says google glass has met with less resistance from businesses than its seeing from ordinary customers. And microsoft ending support for xp today. She has an xp, her computer doesnt have memory. We had a whole little sorkin family tech session about it this weekend. Oh, that dude. Yes, i know him. Yes, yes, yes. Young guy. And microsoft extend the ted th support date a few times. A number of atms dont have it. A number of banks will pay microsoft extra to extend the service on some of their atms. My mother on the other hand needs to get a new computer. Weve been watching the futures. Yesterday was a big down day for the markets. Nasdaq down by 1. 2 , its worst threeday losing streak since november 2011. The dow and the s p 500 each lost 1 yesterday. The futures have barely budged, sitting around the flat line. Lets take a look at whats been happening on the early trade in europe. Things are decidedly weaker there. The ftse is down by almost 1 in london. The dax is down by 0. 9 and the cac in france is down by 0. 8 . In asia overnight, you did see the markets there, not massive declines, the hang seng and the shanghai were both up decidedly. The shanghai was up by 1. 9 , the hang seng up by 1 . The nikkei closed down by 1. 3 . Oil prices this morning have been indicated higher. Part of those you can point back to whats been happening in ukraine, the pressure from russia. Wti is up by 67 cents to 101. 11. The tenyear note is yielding at this point, 2. 706 . As joe pointed out, that yield pushed below 2. 7 at one point yesterday. Thats something the markets are watching closely. If you take a look at whats been happening with the dollar, the dollar is down against the euro and the yen. Euro is trading at 137. 67 and the yen is at 102. 55. Gold prices in the meantime have come up. Theyre up by about 13 this morning. Well back above 1300 at 1311. 40 an ounce. For more on the markets, lets bring in jason pride, director of Investment Strategy at glenmede. And we have a chief economist from ihs. How nervous are you about whats been happening in the markets lately, jason . Were sitting in a position of guarded optimism here. The economy is moving in the right direction. Were still seeing expansion. But other economic leading indicators have turned into what is technically a slowdown period where growth is moderating out a little bit. Thats coming at the same time the valuations, particularly in the u. S. Are quite fully valued, maybe not necessarily dramatically expensive but were definitely not cheap anymore. That creates this kind of unique environment where equities have less support underneath them, at least domestic equities. That pushes us in a position of in the u. S. Were using more guarded positions. Were twisting towards the higher quality, the consistent growers. Outside of that were emphasizing the international waitings. Were getting considerably better discount. You know, i think we all know were having to put up with a lot of other things there, whether its weaker economies in europe or japan or just the turmoil thats going on in the emerging markets. Has this year caught you by surprise . When we started on january 1st did you expect to see a flattodown year for the markets . We did not. The interesting thing is, you have a 25 or higher up year or the year before. A lot of people look at that and say that means the next year is going to be bad. Its normally some indication theres something going on inside underneath that market in the economy. Thats still the case, its just that this First Quarter has been rough. Were having a slowdown behind that. Its making for a tough First Quarter. I would expect as we pass through the year, things will stabilize out. But for the meantime, were sitting with a more guarded optimism. Where do you expect well end the year . We could easily see up 5 to 10 from the start of the year. Lets face it, when youre forecasting oneyear returns, the likelihood for error is wide because of the volatility of those numbers. Anything could happen from now till the end of the year. The best Case Scenario, most likely Case Scenario is a 5 to 10 year. Lets talk about the economy. Jason thinks theres something happening here besides the winter weather. What do you think . I think theres a little bit of a Something Else going on here in the sense that were in the middle of an inconvenievent cycle. We have a buildup at the end of last year. The First Quarter will be pretty bad. We all know that, probably below 1 . By the second quarter, we think well be up around 2. 5 and by the end of the year, 3. I dont think this is a permanent bad news story. Its a temporary bad news story. The tenyear note yielding at this point, 2. 7 , it fell below that yesterday. What do you think that is an indication of . I think its an indication of softness in the economy. Its an indication of flight to quality. With all this risk, where do people go . They go into u. S. Treasuries. The tenyear treasury yield is not always a good indicator of what is going on in the u. S. Economy. You dont think this is signaling weakness in the u. S. At this point . You think this is more of an International Concern . I think there is. Theres obviously a little bit of u. S. Concern. Its mostly an International Concern. Anytime there are jitters, people come in to treasuries. I think thats whats going on right now. Where do you think the tenyear yield is at the end of the year . Certainly i think it will probably go over three. If you expect or believe what were seeing in terms of growth, i would expect that will get reflects in terms of a higher number. I wouldnt see it much above 3. Why do you think well be looking at 3 gdp by the end of the year . I agree with you but im not entirely sure why or how we get there. There are a variety of reasons. One is the strong head winds of deleveraging and austerity easing. We have a pretty good tail point in terms of the energy boom. Europe is adding to global growth. A variety of factors, none of them spectacular. All coming together, we think that would help. Anything that would change that forecast . What have you seen this year thats thrown that into doubt . The internal risk is that businesses still stay conservative, continuing to hoard that cash. They dont spend it, they dont hire as much. Thats the internal risk. The external risk is geopolitical. Those are the things that would keep me up at night. Thank you both for your time this morning. Thank you. Coming up, the country best prepared to handle a disruption in the oil market and our exclusive guest host today is billionaire investor used to be called the grave dancer, grave dancer, real estate titan sam zell. I was a stockbroker i used to buy this guys company back in 1982. You didnt want to be on the other side of the deal with him. Thats why they called him grave dancer. No, on the same side. A quick check of whats happening in the european markets right now. [ banker ] sydney needed some Financial Guidance so she could take her dream to the next level. So we talked about her options. Her valuable assets were staying. And selling her car wouldnt fly. We helped sydney manage her debt and prioritize her goals, so she could really turn up the volume on her dreams today. And tomorrow. So lets see what we can do about that. Remodel. Motorcycle. [ female announcer ] some questions take more than a bank. They take a banker. Make a my financial priorities appointment today. Because when people talk, great things happen. Make a my financial priorities appointment today. Maestro of project management. Baron of the buildout. You need a permit. To be this awesome. And you. Rent from national. Because only national lets you choose any car in the aisle. And go. And only national is ranked highest in car rental Customer Satisfaction by j. D. Power. aaron purrrfect. vo meeeow, business pro. Meeeow. Go national. Go like a pro. Hi, are we still on for tomorrow . Tomorrow. Quick look at the weather. Nice day, beautiful tomorrow. Tomorrow is full of promise. We can come back tomorrrow. And we promise to keep it that way. Driven to preserve the environment, csx moves a ton of freight nearly 450 miles on one gallon of fuel. What a day. Cant wait til tomorrow. Welcome back to squawk box. Its time for the squawk planner. The markets will get a read on Small Business confidence with a march report of the National Federation of independent business. Alcoa is also on the earnings calendar. The aluminum producer is expected to report after the closing bell. On the ipo front, black stone backed hotel chain laquinta, the estimated price range is 18 to 21 per share. That will value the company at just over 2. 5 billion. That is your squawk planner for the morning. When we return, something im looking forward to, uber rush, maybe give fedex and u. P. S. A run for their money. Thats first on squawk box, when we come back. Ameriprise asked people a simple question in retirement, will you outlive your money . Uhhh. No, that cant happen. Thats the thing, you dont know how long it has to last. Everyone has retirement questions. So ameriprise created the exclusive. Confident retirement approach. Now you and your ameripise advisor can get the real answers you need. Well, knowing gives you confidence. Start building your confident retirement today. 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. 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Why do that when you have this other great business you have completely revolutionized . We are seeing people use uber cars tpaor this business. A pair of keys to a roommate locked out. Or book to a client. We are seeing this used on our cars. This is an experiment. Were going to try it here in manhattan. Doing it by bike or foot makes the most sense. To come to your office in midtown. Which makes it much harder to do in new york. You cant take advantage of the scale that you already built. You have to build an entirely new infrastructure. We are going to start today. Our promise is it will be reliable. The service will be faster than the competitors. He or she will take that thing to somewhere else directly. Youll see the progress. Whats the pricing . It starts at 15 bucks. Five zones. Up to 30. Just across town, 15. Upper west side to financial district will be 30. This will be cheaper for what its offering. For cheap, under an hour delivery. I see this as a hint directionally in this idea that uber wants to be this on demand service that does everything for you. Say competing with amazon, with fedex, with all pieces of the last mile. What is the ambition . Uber is lifestyle logistics. It started as transportation. Thats going well. You may recall on demand ice cream. On valentines day, on demand flowers. On christmas, on demand christmas trees. We have been experimenting to see where we can make peoples lives better. Its an experiment. We dont know if its going to work. But it is taking it one step further. They cant buy stuff for me. Post mates is pretty cool. Or seamless can go pick up food for you. You arent do that . For now the experiment is lets see if you want to move your own thing. But part of the experiment is to see all the creative ways that new yorkers use the service. People do want their courier to go buy something for you. For now bringing something to from the point a to point b. How many do you have . We have hundreds coming every week. We have been training three weeks. We will keep asiding to keep this reliable. How many drivers do you have . In the thousands. You raised price on the black cars. Have you raised on the cars . No. We have taken it up 7. 7 . I use the service like crazy. One of the things i hear is now that you have so many drivers actually the business isnt as good as it used to be. Its harder for then to make a lot of money. Thats not true. Drivers are earning as much as as they ever had in nyc. We make close tabs to make sure we are not oversupplied. Josh, congratulations. Thanks. Well see how it goes. When we come back, sam zel will be joining us. Deals, job creation, politics, and much, much more. An exclusive two hours starts right after this break. After th. Does it matter . Youd do that for me . Really . Yeah, id like that. Who are you talking to . Uh, its jake from state farm. Sounds like a really good deal. Jake from state farm at three in the morning. Who is this . Its jake from state farm. What are you wearing, jake from state farm . [ jake ] uh. Khakis. She sounds hideous. Well shes a guy, so. [ male announcer ] another reason more people stay with state farm. Get to a better state. You stand behind what you say. Theres a saying around here, around here you dont make excuses. You make commitments. And when you cant live up to them, you own up, and make it right. Some people think the kind of accountability that thrives on so many streets in this country has gone missing in the places where its needed most. But i know youll still find it when you know where to look. Without standard leather. You are feeling exhilarated with frontwheel drive. You are feeling powerful with a 4cylinder engine. [ male announcer ] open your eyes. To the 6cylinder, 8speed lexus gs. With more standard horsepower than any of its german competitors. This is a wakeup call. Squawk exclusive. Our guest host today is the one and only sam zell. The theyre investor will sound off from the economy, Shareholder Activism and maybe even washington. Crude realities. Which country is best prepared for a disruption . U. S. , russia, canada. Well reveal the name on the top of the list another rough day for the markets. How to invest from the momentum ships. Todays platinum Portfolio Manager Oscar Schaeffer has a few picks. Squawk box begins right now. Good morning, everybody. Welcome back to squawk box here on cnbc. Im becky quick. Weve been watching futures this morning. After the big declines yesterday, the s p and the dow both down by 1 . You can see the red arrows continue. The dow futures are indicated down 16 points below fair value. Nasdaq off three points, as is the s p 500. The 10year note we have been watching closely. The yield 2. 7 . It did trade below that yesterday. Again, the 10year trading 2. 701 . And in our headlines this morning, citigroup will pay a little over 1. 1 billion to 18 stpaourbl investors. That payment will settle claims involving mortgagebacked securities sold prior to the 2008 security crisis. Eli lily has been ordered to pay 9 billion in damages. That case involved claims that the companies concealed cancer risks related to diabetes drug actos. They plan to appeal the ruling. A florida jury ruling the company did not infringe three patents by nxp. Nxp claimed various infringements in different blackberry hand sets and playbook tablets. A new National Champion in ncaa basketball. Womens champion tonight. It could be from the same school. Uconn huskies won. Kentucky last won in 2012. Napier had 22 points last night. It was like kemba walker. Yesterday i said kemba woods. Looked it up. Bill clinton picked her. The first time an attorney general would have ever been a playboy bunny. It had to be bill. Im going to get an attorney general. Why not a playmate . If youre going to do it. Better than eric holder. Dont you think, andrew . If you can find an attorney general that was also unform, kemba wood only five days training. She was trying to make money. She was in a tough position. Funny bill was the one. What president would have picked her . Had to be, right . Am i right or am a right . Sure. From his city, one of real estates biggest names. I dont think he loves his president so much. Sam zel chairman of Equity Group Investments. Good to have you. I want to talk real estate. Give us your sense of whats going on in the economy and the markets given what we have seen the past few days. Well, i have been pretty consistent that i didnt think the market was left of the economy. And that is still very much the case. The stock market was up 30 last year. Where is it . Im looking at operations every day. Things are not terrible. Im not suggesting that. But were missing an awful lot of bounce. The stock market would have suggested everything was kumbaya. What happened here . How did you get i dont know. Didnt you see me on the guest list as leading sam . I had all my questions. What happened . Why was it changed in the prompter . Why dont you try to find out for me, rob. That would be good. Hi, sam. Hi, joe. How are you . Im fine. Youre leading another one. Its overcomplicated. Not really that complicated. I think competition is good for you guys. It is. Heres where i wanted i would have started by saying for a while you thought the entire move in the market has been orchestrated by the fed. I know that. My biggest question is whether this 10year note, which we have been talking about, which is a 2. 7. Are you a 3 gdp for the rest of this year . Are we going to 3 . I dont think so. I mean, maybe it will be 2. 5 . Maybe 2. 70. I dont know. At least so far i dont see the buoyancy in activity levels. But its early. If you think of the last three years, the first three months of the year have had a lot of enthusiasm that has waned. Thats a result that as it increased, and i think companies were reluctant to the that. This was the point i made in the last couple of days. Is that theres been this discussion about what causes this horrible recoveriy we have seen. The weakest in history probably. Is it the depth of the financial crisis or selfinflicted from uncertainty, tax policy, obama care, all these even the fiscal drag where we had, you know, the sequester. Whatever you want. Sure. So since nothing has changed based on all these policies, i wondered how everyone thought we were going to 3 . They thought like night follows day that unemployment continues to come down. On that thesis, first of all, the Unemployment Rate coming down is certainly questionable. When people drop out of the unemployment market and the market goes down, i dont think thats a positive economic signal. So i think that the issues youre raising about uncertainty, about obama care, about all the head winds. Look. Take a look at the map of the world. And then take a look at the map of the world in 1914. 100 years ago today. Or 100 years right now. And when you compare those maps, what you see is a whole bunch of burnishing problems all over the world. We have the same thing today, whether venezuela, crimea, ukraine or these are all very significant issues china, japan that are head winds, any one of which could change the game. We think about, you know, maybe we have similar thoughts on a lot of this. But the idea that the fed can write this story, we saved the world, increased the Balance Sheet to 4 trillion. We exit effectively and were the heroes. It is such a weird narrative. There are so many ways that could go wrong. If the economy stops improving the fed is in a box. It said it will exit. These people wont exit. If they think unemployment could go back up, theyre stuck. Is it possible they cant get out . I think that they can exit. Whether or not they will have the wherewithal or the guts to exit thats what i mean. Remains to be seen. I think its late in the game to consider anything other than exit. Right. And i think just think this comes down to a very simple concept. That is when you have a goal of redistribution, growth is extraordinarily difficult to achieve. The two conflict with each other. The result is we have spent an awful lot of the last few years trying to, quote, redistribute because thats the president s policies. And i think growth is the victim of those policies. And i think we will have subpar growth. Examine the market is based on the economy not improving to justify where the stock market is, power value, what do you think it is. Youre not a stock guy. Im a hard asset guy. I thought you were going to say a hard ass guy. The market, and particularly, you know, what i call the basics. Stocks havent gone down in this thing. Were talking about twitter and whats app is worth billion dollars. Does anybody remember etoys . All of these things . I dont get it. I can still count on my fingers. When i start the count on my fingers, i cant figure it out. When youre looking at hard assets, when youre looking at real estate, youre not impacted by what you see in terms of the geopolitical head winds, are you . Oh, for sure . Yeah . Oh, for sure. Just think about some change in one of these military situations. And very significant alterations in real estate values. To some extent the United States has benefited from the fact that everybody in the world wants to invest in the u. S. Real estate market. But the u. S. Real estate market to some extent is that attractive because it basically has demand. There arent very many other places in the world where demand is obvious. Does that mean they would invest more . Or youre investing more heavily now because you think were continue to go benefit from that . I dont think i think that way. In other words, i think that its a big mistake to in effect tie what you do every day to, you know, what i call global issues. So you look at a deal and you base it on what you know on that deal in particular. And the price of the dial. In the end everything comes down to price. If the price is cheap enough, you can buy something in the middle of depression. You are the master of of finding the right price. Have they gotten expensive or locked in when it comes to real estate or is there still room to run . I think that the liquidity factor exists today is unprecedented. And i think it has made real estate in the United States, commercial real estate extraordinarily liquid. More liquid than at any point i can remember. Whether that translates into crazy pricing, at least so far i dont think we have seen crazy pricing. The kind of stuff were talking about, instagram, whats app. Do you have a feeling that the 10year is not creating where it would if no fed right now . Where do you think it would be right now . How low do you think the yield could go . Or should it be above three . Rates are dramaticic i drama. I think the hoohaha whats the latest move in rates . How do you see it . Well, it appears to be europe. Draghi is talking about adopting a qet kind of policy. So i think thats very much the case. Just get a snap sho. Sal, you mentioned whats app and that you dont understand it. You own, i was reading this piece the other day actually, last night rather. You own 70 of all the rent controlled real estate in palo alto. Yeah. What is that bet about . They claim theyre getting evicted and its pushing the representatives up. You have made a bet on palo alto. We had an opportunity to buy this project. We felt that owning this kind of piece of a Great Community was a very terrific, very long term commitment. When we brought the property the property was subject to rent control. It is still subject to rent control. The gentleman who wrote the article forgot to mention that, yes, we out 165 notices, which we are required to do by california law. It doesnt mean anybody was evicted. Okay. But theres this problem that says you have to pay your rent. If you dont pay your rent, we will replace you with another affordable tenant who can pay their rent. So this is not to charge them higher rents. I only wish. Then the property would be north five times what it is. You know rent control in new york, if you can actually get them out, the rent control goes away. Well, theres a lot of conditions to that. In this particular case, we bought it with rent control, we accepted the fact that it was rent control. It was priced into the deal. We have abided by it because of exactly this kind of issue. We literally in the Board Meeting when we bought this property, we talked about the issues. And we said, as long as we follow the state of californias laws and the local community to the letter and by the way, if we dont send the notices we lose rights under the california law. Are you a fan of brom . Is he doing a good job. I very much like rahm. Hes chief of staff of the white house. Has he changed . Its weird. Do you see a disconnect . Youre suggesting hes not doing well . Im suggesting hes doing well. I just dont see he had to move to the center. Hes running things . Hes no longer in washington . Well, first of all, i dont think rahms political views and expressions are much different today than they have always been. I knew rahm very well as a congressman. He had to do what the president wanted to do. Of course. He was chief of staff of the president. Okay. We have a lot more from sam throughout the next two hours. Thank you for that. Coming up next, which country is prepared to deal with the major disruption n oil market . Were prepared to talk about it. Lets just say the United States is not in the top five. The answer straight ahead. Back in a moment. Back in a mome . Scottrade. Ron im never alone with scottrade. I can always call or stop by my local office. Theyre nearby and ready to help. So when i have questions, i can talk to someone who knows exactly how i trade. Because i dont trade like everybody. I trade like me. Thats why im with scottrade. Announcer ranked highest in Investor Satisfaction with selfdirected services by j. D. Power and associates. Maestro of project management. Baron of the buildout. You need a permit. To be this awesome. And you. Rent from national. Because only national lets you choose any car in the aisle. And go. And only national is ranked highest in car rental Customer Satisfaction by j. D. Power. aaron purrrfect. vo meeeow, business pro. Meeeow. Go national. Go like a pro. Really no one has taken awe sophisticated comprehensive look of what they mean. We took the economic impact, the structural dependency and the oil security and supply and put them together and ranked the players. Japan is number one, which is incredibly surprising because they have no oil. Russia as last because they have all the oil. Plain that. If you look at all the metrics, efficiency of an economy, consumption per capita, theres a greater importance in some of those as there is in supply itself. Japan is an incredibly efficient so they are less efficient of oil per gdp. Uk has Oil Production which helps it out. I think this helps redefine. Its a global oil mark. Every economy is impacted in ways the same. So what you see as oil prices go up, different economies get impacted in different ways. Despite the incredible revolution and supply, what you do see is that our economy is rather in efficient. Actually the second worst economy when it comes to fuel per capita. Were incredible fuel intensive compared to our peers in the oecd. Yes, we are producing a lot of oil. But at the same time it is so important to our economy. I will just note last year, despite the record production in over two decades, the United States, both consumers and businesses, spent more on oil than any time in our history. Thats people taking money and buying gasoline instead of other goods. We were just talking before off camera. Sam zell, you guys know each other. Sam invested in a pipeline from egypt to israel. I dont see either of those on your list. Where were they placed if they were going to . We cant do every country in the world. We took the 13 most important sort of oil markets based in terms of consumption and production. Right. And came out with this list. What i think is interesting at the bottom of the list is russia and saudi arabia. If you look at russia, which fell last, yes, they have a lot of oil. But government budgets, 50 are depe dependent on oil and gas revenues. We think of the proverbial gun at our head but the truth is were really smart and have the right policies and our businesses take the right action, we could turn it around and its pointed at their head. What is going to happen to your pipeline . I have no idea. Its mott operational . Its not operational. The Muslim Brotherhood running egypt, they blow it up every day. I think its been blown up 30 or 40 times. Now it basically turns out egypt doesnt have the gas they thought they have. Right. And israel is loaded with gas. So you have a real opportunity to dramatically benefit egypt by turning it into a causeway for israeli gas to get to europe. Because sitting on the mediterranean are two giant liquid nitrogen plants for converting gas to transportation. One is running at 30 . The other not at all. And they dont have any gas. So egypt could benefit. Israel could benefit. Thank you. Coming up, the masters ready to tee off later this week. We have gram mcdowell, u. S. 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When we return, a money manager who outpaces the s p 500. Up 38 in 2013 alone. Oscar schaeffer joins us with some of his platinum picks right after this. After this. 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. Welcome back to squawk box this morning. In the headlines, the senate has voted to restore jobless benefits for 2. 4 million. Republicans are against the bill. But there are indications that opposition isnt quite as vehement as it has been in the past. And g. M. Still waiting for parts to fix the switches from the recall. None will begin work this week as planned because they do not have the parts. U. S. Issued a warning over china over the depreciation of its currency. It could raise serious concerns if it means china is moving away from allowing the market to determine exchange rates. We are on day two of our squawk platinum portfolio series. We have been picking Portfolio Managers to come on and tell us their stock picks. Today we are adding Oscar Schaeffer. His stock returns 38 over the last year. 2002 to 2013 his firms compounded returns crushed it by more than 14 age points. Over 175 million in assets. Lets talk about your stock picks. These are three picks youre looking at. You got good reads on each of them. The first is bioscript. About a month ago Warren Buffett talked about how to invest in health care services. They had a few criteria. One is does Health Care Delivery deliver better than elsewhere. Does it deliver net savings. We own a stock called bioscrip. AtHome Infusion therapy. The stock has come down twothirds from its high. They had a problem with a noncore asset integrating their acquisitio acquisitions. But i think businesses have basically stopped going down. In a couple of years it will earn a 100 until in ebitda. Cvs and wall greens are both Home Infusion. What is Home Infusion . If you have a chronic disease, hospitals will save money by getting your treatment at home. Do they do oxygen too . Yes. Its like an outpatient. Its a lot cheaper. Out of the highcost hospital into the home, which is a whole trend. Home infusion is just one of it. Something is going to happen where the some wage was going to be raised on all these providers. I think they have. These guys dont have reimbursement problems. There are people, recently dialysis who get reimbursed. They raise the price, lower the price. This company does not have that problem. How come you only have 175 million. Is that all your money . No. I gave all the money back to my old firm and started with two great partners who have been with me five years. We have a concentrated portfolio. Im the chair but they basically run the fund. Interaction holding. It is strangely spelled. It is not able to see and pronounce it. There are few mega trends whether its streaming video, cloud computing. I cant pick the winners. So i pick a come who benefits no matter what happens. Interxion. Inxn. Its a Data Center Business. In europe, theres a Great Company that has a network of data centers all over europe. And they generate huge cash flow. Its a great real estate play. And theyre at the peopremium e. It generates large cash flow. They put all the excess into expanding data centers. If they stop expanding 10 or 11 times free cash flow. Whether its, you know, you have more mobile. You have more video, more data, Data Center Business is a great business. They dominate the high end in europe. You say you have been paying 10 or 11 times if they were to stop it. All the cash flow goes into expanding. Business is growing so fast they put money into new data centers. Who do they compete with . In the United States, equinet. U. S. Analysts dont really understand it. The people in europe dont want to buy american stock. Thats why it falls between the tracks. Great management, Great Company. Is that what you look for in general, companies that the market still dont understand . We hope thats the case. We hope we understand it better than the market does. Real d is a company that licenses 3d technology. Right. What else do you know about it . I hope i know a little bit about it. The 3d business boomed with avatar in 2009. The problem was the Movie Companies produced really lousy movies in 3d. So the 3d business went down. After a few years in decline, we think the take rate has bottomed. Gravity reinvigorated 3d. There is one movie a year that i feel i need to see in 3d. Well, the beauty of reald is its a toll booth. They sell the machine for 10,000. Then they collect 50 cents for every person who watches 3d. And gravity this year. Next year star wars. 2016, avatar again. So the company that spent a lot of money domestically reduced its sgna. They reduced 3d in china. I think in a couple of years they will have cash flow in the stock which i think is around 10 will be probably 18 in a couple of years. Are these the same screens when you go to imax . No. It is a Different Company and different screen. Much bigger. And they have a limited number of screens. It is a 3d screen. And as you know, you have to wear those glasses. Theres app effort to do 3d at home. It hasnt worked. My sense is they are working on it. How much of a bet is on the tv component . None. Its a free option. Because tv has not worked. Has not worked at all. So, again, youre looking for things that you think the market doesnt understand or has misvalued in some way. Or theres a change in management, in the perception. In reald the business is bottom we think. Interxion it falls between the cracks. Where prices have come up significantly, is it harder to find deals like that or does it not matter what the macro is because you will always find stocks that the market doesnt understand. Reald is down a lot. And bioscrip down twothirds. We own 12 to 13 stocks. In a way its gotten easier. Yes. As sam said before, theres some crazy elements to the market. Only 15 stocks. How long have you known sam . Too long . In 1979, a mutual friend of ours i went out to california. A future friend of ours, i had dinner with him. He said who are you here to see . President of itel. He stopped eating. I said whats wrong . It stock was 3. 5 8. And i went to see the company. I get a call from him. He said i just spoke to sam zell. The guy in chicago. He wants to compare notes with you. I said, can i trust him . And he said yes. So i called sam. He said the same thing to sam about me. He had known me forever. And sam said, can i trust him . And thats how i met them. And now you spend time together even on vacation. We ran motorcycles together. If you ride motorcycles with someone, you better trust them. Thank you so much for coming in today and thank you for joining the platinum portfolio. Bioscrip, interxioan and reald. One was 480 million. Oh, god, are you kidding . Theyre moving already. Youll be winning the year in the platinum thing already. But there are only three so far. In fact, i like louie and jim, a lot more distinguished today with oscar. Itel was a stock that i owned in 1983. Rail cars. Exactly. Nobody wanted them. Nobody wanted them. It was terrible. Other people were buying intel. You could go in the bank in those days and tell them you had rail cars. What else were you doing . I think he was in the real estate business. Real estate as well. But this was a little bit oh, yeah. When we started, that was 1980 we decided that we didnt like the commercial real estate business. And we said we were basically good businessmen and why couldnt we do anything else. You were friends with lefter and renee crown . Yes. My buddy went to Northwestern Business School and i stayed at his house. You were a good friend of theirs. Anyway, small world. Coming up, more from our guest sam zell. New list of the colleges that give the best return on your investment. And then we kick off masters week. Well talk to graeme mcdowell. He won at pebble, won the u. S. Open. Nerves of steel. Made the final putt when the european won the ryder cup. So well talk to him. K to him. K to him. Hi, are we still on for tomorrow . Tomorrow. Quick look at the weather. Nice day, beautiful tomorrow. Tomorrow is full of promise. We can come back tomorrrow. And we promise to keep it that way. Driven to preserve the environment, csx moves a ton of freight nearly 450 miles on one gallon of fuel. What a day. Cant wait til tomorrow. Checking the futures. After three pretty tough sessions well see if they with he get any bounce. Not so far. Is this the time . When are we going to do the 8 to 10 . It would be bizarre to see it happening as yields are coming down. It would be bizarre enough for that to happen. I think its mixing apples and oranges. If you look at the last three weeks, biotech. Momentum stuff. These are the stocks that went up like nothing. They were allover extended. We havent seen what i would call core stuff, the real estate stocks. I think generally the market is overvalued and theres too much optimism. Salary and Career Research shop pay scale is out with College Rankings for the best return on investment. It ranked 1,000 colleges and universities based on total costs and alumni earnings. Top of the list is dominated by socalled stem schools. Ones that put heavy focus on science, technology, engineering and math. Number one for 2014 is Harvey Mudd College in clarmont, california. Total cost, 230,000 with a 20year net return of about 981,000. Typical starting salary after graduation, 73,000. Cal tech and m. I. T. Take second and third spot on the pay scales list. And science, technology, engineering and math. We need more guys like that. Sure do. And keep the foreigners that part of the procedure here in the United States. Staeyou get to party for fou years with the cush stuff. Its not liberal arts degrees from top colleges. You have community classes, you need to educate to get them to do another job. You have to get trained to do something. I went to michigan. I was a Political Science major. I thought that was fabulous preparation. And then i went to law school. But in terms of just a broad scale. If youre worried about getting head over the head, you better look out for the guys doing the hitting. Knowing the law is important. I thought law school was the biggest bore of my life. I hated it. But i use it every single day. There isnt a day that goes by where that training and the way you think is i use molecular biology the same way. Same way. Joining us first to handicap the field. Squawk will be right back. Ill be 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. Could save you fifteen percent or more on car insurance. S 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. [ banker ] sydney needed some Financial Guidance so she could take her dream to the next level. So we talked about her options. Her valuable assets were staying. And selling her car wouldnt fly. We helped sydney manage her debt and prioritize her goals, so she could really turn up the volume on her dreams today. And tomorrow. So lets see what we can do about that. Remodel. Motorcycle. [ female announcer ] some questions take more than a bank. They take a banker. Make a my financial priorities appointment today. Because when people , great things happen. The unofficial start to the golf season this week at augusta national. The best of the best will gather to compete for the coveted green jacket. Joining us on the squawk news line from augusta, georgia is one of those contenders, professional golfer graeme mcdowell. Guys, how are you doing . Great. Irishman, how are you . Thanks for joining us. First of all, whats the temperature right now . How is it looking for the next couple of days, graeme . Yesterday was big storms. We had a washout. It was a huge disappointment for the fans. They have a ticket for next year. Its a big disappointment for everyone. From today yon wards, clear skies. Obviously to say the season is just starting. Theres other good tournaments already played. Theres just something about the, i dont know, the atmosphere at that golf course with the history with the kind of stuff that just seeps to happen every year. Its weird, isnt it . It returns to the same venue every year. Like you said, theres something special. The risk reward. Par 5, par 3. Its a special major championship. Were all extremely excited and ready to go. I always said if i ever met you, it was so nerveracking, pebble in 2010. You hit your second shot on 18. Werent you in the bunker . You had to get out and putt. What did you have to do . I was on pins and needles watching it. There was ice in your veins . That drive is hideous, isnt it . Exactly. The tee shot. It never crossed my mind. I had a par 5 at the last to win the u. S. Open. Two putts from 30 feet that i mantled all my life. Managed to still knock it in i have hit the in the ocean and Pebble Beach Lodge on the drive there. And then the putt you sunk to win the ryder cup. How are you playing now . If you havent won any majors since 2010, how is it different now . My game has steadily been improved. The u. S. Open was obviously a massive goal. Its been a process of resetting and continuing to improve and adapting to my new life. It certainly thrusts you into a new echelon in the game. I have a couple of chances in 2012. The game is ticking along nicely. Theres a lot of great players in the world. Everyone has a lot of belief. Everyone hits it a long way. Tiger is out. That does make it it is a little bit more wide open, you would think. Who besides yourself is right there for the title this year . Its disappointing to the fans. Sort of everyone globally. It gives an opportunity for some other players to make headlines and perhaps some of the young guns this week. You picture rory mcilroy, jason day, dustin johnson. If i can execute my game plan, ill be there. Certainly the stage is clear to really show the world. It was hard to watch. Yeah. Its going to be great. In tv you say break a leg. That doesnt work in golf. We wish you luck. Hopefully you can maneuver the greens. You have to have a good caddy, graeme. For sure. You have to chip and putt really well. You always need luck in life. Well be watching and pulling for you. Thanks for talking with us and talking the time. See you later. We have much more, sam zel. Whats holding back the european recovery. What more central bank or whether its on the way. And well induct the newest member of our squawk platinum portfolio. Back in just a moment. In just. Why relocating manufacturingpany to upstate new york . I tell people its for the climate. The conditions in new york state are great for business. New york is ranked 2 in the nation for new private sector job creation. And now its even better because theyve introduced startup new york dozens of taxfree zones where businesses pay no taxes for ten years. Youll get a warm welcome in the new new york. See if your business qualifies at startupny. Com Gunderman Group is growing. Getting in a groove. Growth is gratifying. Goal is to grow. Gotta get greater growth. Growth . Growth. I just talked to ups. Theyve got a lot of great ideas. Like smart pick ups. Theyll only show up when you print a label and its automatic. We save time and money. Time . Money . Time and money. Awesome. Awesome awesome awesome awesome awesome awesome awesome all awesome i love logistics. Afghanistan, in 2009. Orbiting the moon in 1971. [ male announcer ] once its earned, usaa Auto Insurance is often handed down from generation to generation. Because it offers a superior level of protection. And because usaas commitment to serve current and former military members and their families is without equal. Begin your legacy. Get an Auto Insurance quote. Usaa. We know what it means to serve. A guest host that is never shy about speaking his mind. When you have a goal of redistribution, growth is extraordinarily difficult to achieve. One more hour with sam zell. Plus, our platinum portfolio series conditions with kevin landis. Its tuesday, april 8th, 2014. And the third hour of squawk box begins right now. Welcome back to squawk box here on cnbc. Our guest host is sam zell, chairman of Equity Group Investments. Much more from sam. Still ahead. First your morning headlines. Citigroup will be paying 1. 12 billion to settle claims related to mortgagebacked securities. The bank reaching the agreement with 18 institutional investors. It says it resolves an issue left over from the financial crisis era. They will take charge of 100 million in the first era. The Federal Reserve rejected the capital plan last month. It makes it unlikely they can hit the goal for return on tangible equity. Citigroup shares look like they are trading six cents. 46. 49 the last trade. More time to i did vert collateral loan that fall under the volka rule. It pulls together risky loans. You can sell the ex poker herb to other investors. It is part of dodd frank hedge funds and private equity funds to around 3 . Financial regulators will vote tuesday to finalize tough requirements for the us Bank Leverage expected to be stricter than overseas firms have to follow. Right now a look at the markets. U. S. Equity futures have been indicated a little bit lower. Down 12 below fair value. S p down 2. 5 points. Nasdaq off 1. 5. More trouble for g. M. Center for auto safety warning of a possible air bag defect. This time in chevy impalas manufactured between 2003 and 2010. The problem is with the al go rhythm that determines when the bag deploys in an accident. The air bag may be improperly deactivated if the passenger is bounced in the seat just before an accident. Shares of g. M. Closed well off their best session of the year. Got out in a pretty good time. Update. I know you have a tearal view of that. I wonder if they knew . Did anyone know it would mushroom into this size. Probably not. Im going to give the benefit of the doubt. You give the government the benefit of the doubt on everything. Not always. An update on missing Malaysian Airlines plane. They picked up possible pings. The battery was supposed to be out already. Give it 30 days. Over the weekend they saw the ping. I think they heard another one. Unable to detect any further signals. Time is running out. They have reached the end of their 30day life, as we said. The search for the missing plane is on track to cost hundreds of millions of dollars. Probably the most expensive search in aviation history. Resources involved in the search including 26 countries in planes, ships, submarines and satellites. Obviously a lot of manpower. You hope nobody else gets hurt. Its not a rescue mission. Its recovery. Its recovery at this point. Sam zell, Equity Group Investments chairman. We had Steve Schwartzman on the show a couple of weeks ago. We were talking about residential real estate. Blackstone has stopped buying. They have big a huge buyer. What does that say say about where the markets are. Are you in agreement with him . I actually had a session yesterday with john gray for blackstone. I, from the beginning, had a different view of the opportunity in the Single Family market. I always said i think what blackstone and other members have done is a good trade. Meaning what they bought it for and what theyre selling it for will make a profit. Right. What i have always challenged is whether that Single Family structure can be turned into an operating and efficient company. My real challenge is as time goes, on even today, if blackstone sold one house they would be unable to replace it. In terms of a value playing field. As we know, Public Companies dont do well on onetime events. They started by buying 5,000 homes. And i think you will watch them liquidate 5,000 homes. Theres been an argument that firms have propped up the market in certain areas because they have gone and been as aggressive as they have been. There are markets where commercial buyers have made an impact. I dont think theres any question. When you move into an area, you buy 1,000 homes. 1,000 homes. You dont think blackstone strategy you think they will sell them as opposed to actually operating them . Thats correct. Some investors think it is coming. Thats been part of my difference in opinion with a lot of investors. I think the Single Family business is going to be a good trade. But kwrorz it as an operating business. If you compare it to equity residential, on average, we have 300 and some odd units per location. They have on average, one unit per location. We have 350 units and one hvac system. They have 350 and 40 different hvac systems. Et cetera, et cetera. So all the things that make scale important are all missing in this process. As i said, i think its going to be a good trade, just not an operating business. Joe is giving me a hard time for the question. Its a private equity question. Bitcoin stkpwhrb we could go to bit coin. We will get to income and equality. It is loaded. In a different way, David Rubenstein was here. They said he would be fine. Only prepared to give up his carried interest if the Real Estate Industry which he suggested is a much bigger debate gives it up. There is the first ladys birthday party. Were you there . No. Youre from chicago. Missed it. Hes in pretty good. He might be exempt, you know. He worked for jimmy carter. Still very successful in private equity. Go ahead. Where do you stand on that particular issue . The whole concept of carried interest is predicated on the assumption that its a longterm investment. I dont know about anyone else, to the extend we created funds in our average fund life is eight or 10 years, im making a very significant bet. Im putting up capital. Right. Why shouldnt i be treated as a longterm investor. The argument is on your own capital, no problem. You should get Capital Gains on capital you invested. On capital you are managing effectively on other people, which is the carried interest component of it, that is more commission oriented fee as opposed to a investment. That would be the argument. In response to the argument is, number one, if im selling disks for xyz company and i get a commission, the sale is made and im done. In this world, theres a continuing level of responsibility that keeps going. And the responsibility is defined in terms of people, et cetera. And you are measured against how you do over a long period of time. Its that long period of time that justifies Capital Gains treatment. Real Estate Agency could take years to sell a property. They would get paid a commission. It would be considered ordinary income. They sold other houses. They did other stuff. They have no exclusivity, no commitments. They said if i can find a buyer, ill tell your house for you. Thats very different taking your money and investing it and being respond spoeut and having a fiduciary ear responsibility. Its a very different animal. You want to weigh in, ms. Quick . I do think if its something youre getting paid for managing the money, it should be treated more as income and not Capital Gains. How about lowering everybodys taxes to that instead of raising yours . Thats jumping on the corner. You have to go back to this is longterm commitment. Everybody says, well, you raise the fund. You go like this and it gets raised. That means you go on the road a year and a half. Its no different than building the foundation to a house. I was going to use that same argument. The contractor built the foundation of my house. He got paid. Not after a year. But he still had a very defined period, very defined measuring point. Here we have had situations where all of a sudden the proverb hits the fan. But he could still walk away. I cant. I threatened to move in with him if he wasnt going to be done in time. Wow, what a horrible threat. My entire family. Oh, thats a different story. It was getting exciting for a minute. I threatened to move my entire family into the basement. Again, i think there are situations where you could say the same thing. People happy to pay the taxes they were paying had a lot invested and have a lot going on too. We have a basic principal that said we in effect treat longer term equipments different than shortterm investments. Is there a way to measure it . It may be part of it. Lots of ways to change the standards. We want to encourage people to make longterm investments. How would you change how you operate your business . The net bottom line would be dramatically different. Give or take half. Meaning you wouldnt make the same investments . No. You wouldnt make the same profitability. When you attract young people to work for you. All the things of how you, quote, build the business. And the answer is, whats your margin . You cut the margins in half. Duh. Its going to have an impact. Youre a journalist. Maybe you dont understand the math involved. I get the math. I could talk slower. We are going to go to commercial on that score. Thank you, sam. We will continue this. You set me back up. Touche. Coming up im still working on interaction with the stock from oscar. Is there more easing ahead . And we will induct a new member into our platinum portfolio stock picker bubbles. Picks in the tech sector. Salesperson 1 the real deal is the passat tdi clean diesel gets up to 795 highway miles per tank. Salesperson 2 actually, were throwing in a 1,000 fuel reward card. Weve never done that. Thats why theres never been a better time to buy a passat tdi clean diesel. Husband so its like two deals in one . Salesperson 2 exactly. Avo during the first ever volkswagen tdi clean diesel event, get a great deal on a passat tdi, that gets up to 795 highway miles per tank. And get a 1,000 fuel reward card. Its like two deals in one. Hurry in and get a 1,000 fuel reward card and 0. 9 apr for 60 months on tdi models. 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. As inflation in the eurozone slips lower, should investors be concerned about the slowing european recover. Head of Investment Strategy at brooks mcdonald Asset Management and cnbc contributor. Is it as simple as we are on the other side of this in terms of tapering and the europe is moving into the accommodative phase . Investors shouldnt be scared of deflation. Its low flation. It is inevitable and its a good thing. Its a redistribution of competitiveness. The core starting to struggle. But the periphery which struggled in the beginning, are accelerating at growth levels. Italys growth hit a threeyear high. If there wasnt a single currency, we would see this act out by currency devaluation. Michelle has been talking about greek bonds. All these place where we basically thought they were insolvent. When yields get this low, it is hard to understand that the economies are bad because they have all this debt service. So it couldnt be that bad. What does it indicate when investor are willing to take so many for countries we thought were so risky. We have to be specific. If you look at the likes of italy, its still very different from spain. It has half the level of unemployment as spain. A lot of u. S. Companies have been lending, trying to step in where the banks were. That is a risk if they are lending sporadically. As an investor it is important to reexamine what you mean by safety and risk. Low risks are necessarily bad in europe, showing that the economies are slowing and that there is deflation. Couldnt you look at it positively that they are accepting less to go there . You are seeing low labor costs. Corporates are feeling in other parts of the world. It means the corporates will be able to regain competitiveness. As long as this environment is shortterm, then what you are going to see is growth come back, rehire. You are starting to see enough momentum in the tpreufry countries to bring you out of that. How much is the recently drop . How much is due to what we saw in europe and whats happening here, do you think . Well, theres generally been a lot of optimism. It has had a followon effect. Whats interesting to see is the trade is also reversed. What we used to see is investors feel comfortable in gen exporters export to go emerging markets. Investors very much are focused on investing in the inner search field. They are then you dont see the yield in the 10year indicating that were over optimistic about growth in the United States . I dont think were over optimistic about economic growth. Where i see the risk is in the fixed income in general theres been overbuying of bondsing et cetera. History is at risk of repeating itself. We have seen it in financial debt. There seems to be these pockets of risk thats there. The longterm trends are positive. The concern is the divurgence. The risk is rates are headed higher. Yeah. Really . Because if they were e headed lower, i dont know what that would say about the recovery here. Exactly that. It is about the rates going higher. The rates are going higher whether we have a recovery or we dont. Keep saying it youll be right eventually. Its just a death cross. Just such a good term. But the death cross, theres been 10 of them and nothing has happened. It is very slow. It will be gradual. Markets are forward looking. They will be expecting this. They started tapering at 2. 9. There has been this optimism. Selfperpetuating will for it to be where it is. Dont you think you have to include crimea and venezuela and syria in this calculation . As event occur around the world they get more skaerg, the demand for u. S. Securities goes up. I dont think you should make the assumption that it has anything to do with the economy and more to do with looking for security. Thats what you said. You think its all coming from external factors than from whats happening right here. You have to see where the flows are coming from. We have seen more buying of bonds than stocks during the tech boom. There is this real risk of somebody pointed out earlier, if you were 60 stocks, 40 bonds at the beginning of last year, that went to about 75 25 because of the huge run we saw in stocks by the end of the year. Rebalancing the portfolio is so important at the moment. Another one worth mentioning is they are being used so heavily in china as collateral to get around lending laws. It will be correlated we have no time. Youre convinced his bow is the particle. Im confident. Im not a scientist. You hem your bets. I would say im confident. All the signs are there. They identified signs of the big bang. Low levels of radiation. The size of the pin of the head, the whole universe the pin of a head. People are wondering why in gods name did i ask that. Rocket scientists. When we come back, much more from our guest host. Stick around. Squawk box will be right back. Sam zell chair of Equity Group Investments. We talked a lot of things. Are there things that you still want to hit on . No. Im done. Youre easy. Off the set. Im listening to the lady from europe. Which she had to say. We have heard from a lot of people. You have been pessimistic about the stock market this morning. I dont think very pessimistic is the right term. I had over and over again that i dont understand the correlation between Economic Activity and the price the stocks are trading for. Youre talking about the stock market overall, not just pockets of technology stock. I think the pricing is crazy. If sis qaa was worth what the stock was trading at it would represent 25 percent of the economy. It is unsustainable. Yeah. So is a lot of this other stuff. Generally speaking, i think everything is a little frothy. And more optimistic than i think the boots on the ground are suggesting. Relationship, does that tend to be a leading or lagging indicator. Generalingly a magging indicator. We have gone through this unusual period where except for limited exceptions we built nothing since 2007. It tends to be a great factor. Youre looking at a limited supply and demand thats built up. On the other hand, except for a couple of markets in the country, prices, rents are not high enough to justify new construction. If you think about San Francisco and new york, very Little Office added to the overall supply since 07. And other areas. Apartments are now finally coming back to the scale they were e at before. But the demand has increased. So percentage of People Living in apartments 10 years ago versus the percentage living there in the future is higher. So the new construction is not fueling a surplus as trying to catch up with demand. A lot of your thesis for why you think Apartment Living in urban areas is more people will want to live there. Its not about people not being able to get loans for houses. I dont think it has anything to do with that. I think it comes down to, you know, our lifestyle has changed. You know, look at our chiropractor. They live very differently. You know, we look at, say, our apartment projects in new york city. Whats amazing is people dont live in them. They sleep there. They get up there. But they spend all their day at starbucks or down the street or at work or whatever. Therefore, it say different criteria for renting than my castle in the sky. That is a thesis that has served you well. One you have laid out on squawk in the past and continues to hold out. And i think whether it be congestion or all the other issues. In terms of trying to get to work. Trying to get to work. Frankly, i gave this example squawk box. 20 years later they were renting office space and it was 40 occupied. Nobody wanted to go out there. What was it all about . The engineer they hired in 1968 was already married or about to be married. And he therefore brought a little house and drove to the plant. The word marriage is offensive to him at that age. All he wants to do is live in a 24 7 city and experience life. Very different set of criteria on how life really works. You are buying into the death of the urbs suburbs is upon us. Im a journalist. Im looking for depth of the surbs. But were not seeing the death of the suburbs. But what were not seeing i think is the demand is to get your stake in the ground and get on the track and own a house and da, da, da. Despite all the discussions about ultimately the suburbs equate to schools. And you are beginning to see through the charter system, through special schools created. Chicago, for all its Typical School system has a number of these magnet schools moral class. 25 years ago that was not an option. So therefore if i had a son who was a techie or something and he couldnt possibly play in the city. Today theres just a lot more options. And frankly we prioritize education or lifestyle in a way where we are willing to spend more of income on schools to preserve the lifestyle. So all dramatically Different Things than white picket fence in the suburbs of four years ago. Sam zell is our best host. When we return, well be talking about your list of stocks opening bell. Plus, well be adding a new member of our platform portfolio. Squawk platinum portfolio will be adding a new member. U. S. Equity futures have been lower today through most of the morning. Right now they have turned around. Around. Look at them. Making moves that would put an adult in the emergency room. Yet all they really want to do is grow up. Its funny, everyone i know wishes they could go back and feel younger. Sound familiar . Then test drive one of these. Current nongm owners and lessees use your 1,500 allowance to lease the 2014 cadillac ats for around 359 a month with nothing due at signing. Does it end after youve expanded your business . . After your companys gone public . And the capitals been invested . Or when your companys bought another . Is it over after youve given back . You never stop achieving. Thats why, at barclays, our ambition is to always realize yours. Maestro of project management. Baron of the buildout. You need a permit. To be this awesome. And you. Rent from national. Because only national lets you choose any car in the aisle. And go. And only national is ranked highest in car rental Customer Satisfaction by j. D. Power. aaron purrrfect. vo meeeow, business pro. Meeeow. Go national. Go like a pro. Welcome back to squawk box. Lets take a look at stocks to watch ahead of the opening bell. Nokia is moving higher after Chinese Government approved the sale of the deal to microsoft. 7. 4 billion. It expects to close at the end of the month. Nike is buying. Athletic apparel and footwear macker has standout fundamentals. And a recent correction makes for an attractive entry point. And twitter has been rated. They have too many new things. Its the biggest apparel company. Nike is thats what i said. I said it because i knew i could shock myself and shock you guys. It shocks myself to remember. And twitter has been rated. 2013. Nike, goldman, visa. I forget about goldman and visa. We get news here. Goldman added to it. And twitter, look at that. Thats one of those stocks. Those tech momentum stocks. The air has just been slowly leaking out. Fast leaking out. This is new coverage. Jannev said it will benefit from the shift to mobile advertising. I see every once in a while. Cramer does too. If i were cramer i would be blocking. He has so many followers. And he takes so many stands. Just obnoxious. You would block them. You want them as followers, right . No. You want to see what theyre saying. Its a very democratic way of looking at things. People say dirty things. I like those. Coming up, our platinum portfolio continues with dirty things. No, just kidding. Here to talk tech. And a programming note. Dont miss squawk tomorrow. Treasury secretary jack lew will join us in a cnbc exclusive at 8 15 eastern. Steve liesman will john tomorrow. Were continuing our platinum portfolio. Kevin landis of capital management, four star technology. Ceo of the firsthand Technology Value fund with this fund focuses on venture capital. Facebook and twitter years before they ever went public. It has a oneyear return of 40 in a fiveyear return of 10 . 400 million of assets under management and average length holdings two to five years. Kevin is here. Good morning to you, kevin. Good morning, andrew. So lets start with the top one. Gt advanced technologies is on your list. What do you like about it . Right. Gt advanced technologies started out as a solar play. They made the furnaces. They also work well with sapphire. It is a great material thats been famously tough to work with. If you can do it right, you can get a glass display thats a thin sheet of sapphire. And you say this is a play on apple. Thats right. Well, apple hemmed guide gt into building a huge new factory in arizona the to produce the sapphire displays for future iphones. And your last iphone probably had a gorilla glass display. The next could well have a sapphire display. So sapphire is not on the current phones . There are actually three places you can put it on a phone. The smallest is on the cell phone camera. They have already done that. The last thing you want is a scratch on that lens. The second is the finger print recognition sensor. It has to be scratch free to read your fingerprint the toughest, the most expensive is the main display. And how much u do you worry, though, that another technology will come up out of nowhere and take over this in five years. And apple will decide were not using these guys. Now we want flexible displays and somebody else makes it. Its a flexible display would be the one thing that would be a challenge for sapphire. Because sapphire, it is so tough. It is so hard that you cant make it flexible. But, you know, cracked screens are such a problem now that i think gtat will do terrific with this first shift over. Not everyone is foggy to want a flexible display. I have a case. I would love to take the case off. Lam research, whats behind that. It is whats happening at two other companies. It is the number three Semi Conductor company. It is hard to find a less sexy tech. Number one and number two are merging. Applied materials and Tokyo Electron. Typically when two companies merge its a mess. Its a play on that. Is that a shortterm activity or longterm play given the dislocation in the business. That often is temporary. I think its probably a couple of years. This year and next year that Tokyo Electron will be sorting things out. Adobe. Right. Thats a company that has its been an up and down story. If you look at it long term, we are showing a straight up story. Its come down recently. You can go all the way back to postscript if you want with adobe. Go back to when i was young. It goes all the way back to the 80s for goodness sake. In tech land, its an old, solid company. But, you know, theyve got 4 billion in revenue. It is in digital ad technology. Look at the sexy pure plays, rocket fuel and the river con project, recent hot ipos. Iffeded ad tech or Digital Media portion were in it, it would be a hot item right now. Well be talking a lot about the markets. Nasdaq is taking a huge hit. Where do you stand on whats happening here . You know, i still think that money needs to flow back to equities. But more importantly i believe the scarce commodities these days is growth. So it does you not that much good to rotate into sisco. Its not really growing. Or intel that might even be shrinking. Find the Growth Companies with in tech. This selloff a couple years ago, did you think we would be back to 4400 or whatever . There were dark days in the nasdaq. If we asked three years ago, wouldnt you have said im lighting it up at 4400 . Like 5,000 the first time, i never thought we might not ever see it again. Its really hard not to get anchored by things, right . Were all anchored by nasdaq 5,000 way back when. By the way, if you look at tech within the nasdaq, its a lot less now. If you look at Tech Companies in the 100 back when it was at its highs, most of them were gone. Kevin, thank you for this. Appreciate it. Jim cramer getting fired up for the trading day ahead. Bank stocks and probably the huskies. Maybe what happened tonight with the huskies. Lady huskies. Tomorrow on squawk box, guest host Barry Sternlicht will talk real estate, energy, the hotel industry, and a lot more. Plus, an exclusive interview with treasury secretary jack lew. Squawk box starts tomorrow at 6 00 a. M. Eastern. 6 00 a. M. Eass 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. Today is tuesday today, we greet you. Treat you. Care for you. Today, you can come to Cleveland Clinic for anything, everything or just to get that thing checked out. Big, small, and yes, the best heart care in the nation. Its here everyday, for everyone. Thats the power the power, thats the power of today. Cleveland clinic. Call today, for an appointment today. Welcome back to squawk box. Cnbc has learned that Tech Hedge Fund coto is returning 2 billion from its Flagship Fund out of 7 billion total. A letter cites volatilities that caused the fund to lose 9 of its value last month. The fund says it hasnt seen this level of Portfolio Volatility until at least the financial crisis era. Weve lad the ceo on. Yeah. They bought a stake in snapchat very early if you remember. Very successful tech investors but being in the tech space has been i meant to add this earlier i was looking through pistorius the testimony today, and they have all the emails between the two trying to prove one thing or another. All of them on wats app. Every one. Years ago. People internationally use that what did they pay for that . 19 billion. 16 with 3. 5 pistorius and his girlfriend to say the apps back and forth. Nothing. Like 1. 99 a year. Justifies 19 billion. Imagine if they paid a penny, it would be 25 billion. There it was right in lets get down to the new york stock exchange. Jim cramer is standing by. What do you think about the news we just reported with the hedge fund . The return to volatility doesnt seem like there would be a huge surprise coming. A as a former Hedge Fund Manager the word volatility is one of the silliest things in the world. What you mean so say stocks are going down that i own and right. Right. Maybe a little bit truth in advertising there, jim. I feel i have to, because im listening to sam, which is so much fun, and so much truth coming out. Its so great not to be politically correct, its great to speak your mind. Thank you. Thank you for just coming on and saying how you feel. No kouchg. Its a joy. I didnt know you were ever accused of not saying what you thought. Well, you know, sometimes the guests rather be a little more diplomatic and i think that you lose your edge. Youve never lost your edge. Youre a joy, man. I love it. Thank you. Jim, what else is catching your eye this morning . What are you going to be talking about when we come to you in a few minutes . The kevin landis call is interesting. People at home have to rec fize hes got a very longterm view. You may think i have to take adobe here, buy some, and not understand landis is saying over the next two or three years adobe will go back and then some. A lot of people want to talk take a cue from someone like that. I dont want them to guess disturbed if get disturbed if the selling continues. Were going to be with you. Wait. Before we go you want to talk about uconn, didnt you . I dont i know jimmy is i mean, they could win both and i know a lot of people, becky wants notre dame but its amazing to have a program that how do you do it . Last nights game was one of the great joys of sports. I mean i just every time they got close, uconn showed clutch. Just a fantastic game. Amazing how much fun college is. Next year, i dont know how impossible how do you possibly, after this year, how do you figure out who to pick . How do you get anyone in the final four . Who would have thought uconn when they lost to louisville by almost 40 points a month or two ago. You have to do a disruptive block. Disruptive, havent mentioned that word today. But you have to do something that basically says im going six to eight seed and give it a shot and be willing to be blown out early on. Yeah when a number seven and eight meet in the finals its like i dont think anyone in our whole tv newsroom, that everybody was finished three or four rounds ago. In our pool, one team had kentucky and connecticut. Wow. Youre kidding . And they won 3500. Wow. And every other team lost money. Wow. Thats what seven and eight does. Thanks. Well see you in a few minutes. Thank you, guys. More from sam zell. Well talk activism. The bid to take over the commonwealth. That and a lot more when we return. Return. With all the opinions about stocks out there, how do you know which ones to follow . The equity summary score consolidates the ratings of up to 10 independent Research Providers into a single score thats weighted based on how accurate theyve been in the past. Im Howard Spielberg of fidelity investments. The equity summary score is one more innovative reason serious investors are choosing fidelity. Call or click to open your fidelity account today. Im bethand im michelle. And we own the paper cottage. Its a stationery and gifts store. Anything we purchase for the paper cottage goes on our ink card. So you can manage your business expenses and access them online instantly with the Game Changing app from ink. We didnt get into business to spend time managing receipts, thats why we have ink. We like being in business because we like being creative, we like interacting with people. So you have time to focus on the things you love. Ink from chase. So you can. Sam zell our guest host this morning, talk about we havent got much time, about your bid for commonwealth, that re reit. Weve had the process, its a unique situation, weve won with 81 of all the vote and 99. 5 of everybody who voted. We now have a Company Without a board of directors. Which is very strange. And i guess the outside date is may 28th for a new board to be elected. I would expect that the slate that we put up will be elected on may 28th and that will allow us to take the steps necessary in order to turn this company into a conventional reit. Sive seconds, anneck ster, is it going to be sold . I dont know. We dont want to make comments on that. Thought we would try. Make sure you join us now. Squawk on the street begins right now. And congratulations to the uconn huskies on their fourth National Championship in 16 years. Good morning. Welcome to squawk on the street. Im Carl Quintanilla with jim cramer and david faber at the new york stock exchange. Were going to watch the market open carefully today. Futures are mildly positive but the s p trying to avoid its first fourday losing streak of the year. The tenyear remains critical too, back above 2. 7. The bank of japan saying its not considering new stimulus and the nikkei did fall on