Transcripts For CNBC Squawk Box 20140502 : vimarsana.com

You okay . Yes. You have this. Im told your husband had it, too. Im sorry. Andrew had it. Everybody had it. Andrew had it. Tag, youre it. I dont feel that bad. Yes, exactly. Some people, you get sent home. If im going home, someone has to send me home. Its jobs friday. Im okay. Im in omaha. I need to be here. Theres a big bubble between us. Plus i need to show off my haircut. Retrofitting of the toupe. Astrazeneca rejecting the offer from pfizer of 106 billion. The uk government says the final decision will be up to shareholders even though its already pushing pfizer to commit to keeping jobs in britain. Pfizer also adding more cash to the mix, upping it from 30 to 32 . And the company hit previously hit over 99, now its theyre rejecting the second offer as well. And in an attempt to get the British Government on board, pfizer ceo ian read, sent Prime Minister David Cameron a letter promising a new Research Center in cambridge and 20 of the large groups work force would be in britain. Pfizer will wait for astrazenecas board to respond. Shares of the dow component at this point, as you can see im surprised he didnt send a letter to president obama about what hes going to do. Are the british going to say no thanks . Why would you have to talk someone into that makes no sense. Those are big tax dollars. This is not over. This is just the beginning. But it will be well see if we get additional offers. The more pfizer ups the bid, the more we talk tax inversion and how they want to avoid what they feel is a tax burden thats too high in this country. I know the deal. Was roger here yesterday negotiating this on his blackberry the whole time . Evercore and astrazeneca. I dont know whether he was. I would certainly allow him to have his privacy in those matters and probably wouldnt bring it up on national tv like that. Youre a very discreet man. I am today. We have a lot to talk about, guy, this morning. Well get back to becky at Berkshire Hathaway, this weekend coming up. Of course, its jobs friday. These are the numbers to beat, economists predicting 215,000 jobs were added to the economy in april. Thats up from 192,000 in march. And the employment rate now expected to fall to 6. 6 . Economists expect average hourly wages ticked up 0. 2 . Its going to be a very important number. Well bring you the live data from the Labor Department at 8 30 a. M. Eastern time. Lets also take a quick look at futures. Of course these things may change the second we get that number at 8 30. Right now, it looks like things are trending up. Dow looks like it would open 10 points higher, the nasdaq up over 4 points and the s p 500 up 2 points. Europe, see whats happening there. A mixed picture. The ftse up slightly. The cac is off slightly. And the dax i would call that basically flat. Also, a few big earnings reports out before the opening bell this morning. Heres whats going on. Oil joint chevron, pharmacy chain css caremark. Also getting stuff from estee lauder and Energy Infrastructure country transcanada. Last night, expedia posting betterthanexpected First Quarter earnings and revenue. They said they sold more hotel stays than airline tickets. Also food giant kraft topping expectations with its First Quarter results, revenue coming in slightly below consensus views. In the meantime, we have to get back to becky quick. She has a lot of amazing stuff that happened overnight. Miss quick, how are you . I like her hair. Can i say that . Thank you very much. Is she doing something joe had a haircut. You didnt have a haircut. You got a haircut. I didnt have shes doing something. Let me see both guys. Turn sideways. Let me check the side cuts. Look to the side. This way. Oh, looks good, boys. I like it. I like it. Becky, i have its all about the hair. I have a selfie. I took my first selfie yesterday. He was dressed, though. Are you kidding me . While he was getting your haircut. Yes. He was trying to prove its real. I was trying to prove its real. Lets see. Can we see it . Yep, there it is. Theres my oh, thats great. How is that a selfie . A selfie in the mirror . Yes, a selfie in the mirror. Thats cool. Then i say only you have clothes on. Let me guess. Im not only the haircut president im also a klein the. Immediately people sent in you cant really see if thats a scissors or a glue gun or a stapler. It proved nothing to anyone. But after all these years, after 20 years its shorter, not longer. It is shorter now but they think i put on a different toupe. He says he polled it before. Hes polled it before. Are you going to go there . She just went there. I said my hair. He goes, that, too. Im in omaha. There are all kinds of people. People who are piling into omaha for the annual Shareholder Meeting this weekend because this is a really big event. Theres Something Like 35,000, 38,000 people expected to come in. We ran into Warren Buffett yesterday. He says he is expecting a good showing again this year. Last year there were about 35,000 people attending. This year he thinks hell get 38,000 people based on the number of ticket requests. We caught up with him yesterday when he was coming back from his lunch. This was his typical healthy diet of mcdonalds. He had a big mac and fries inside. We could smell it. It was that. We did ask him about the topic on everybodys mind, cocacola. There was a story in todays wall street journal that suggested that cocacola heard that and the management may not be doling out those shares and options as quickly as originally planned. Do you know anything about that . I wouldnt be surprised. Theyre going to look at it, certainly. With us abstaining with a fair amount of no votes. What they authorized at this meeting the other day, they dont have to do. They can spread it over a longer period of time. Well see what they do. But theyve listened to shareholders before. Maybe theyll listen again. Have you talked to muhtar kent about the vote. No, ive talked to no one about it. Not even the director. No, not even my hon, Howard Buffett. He voted in favor of the equity plan like the rest of the board did. Thats the same plan Warren Buffett abstained from voting on. Berkshire hathaway has 9. 1 of the shares outstanding that no vote was championed by David Winters. He complained that the equity plan was too excessive. Winters will be joining us later in the show. Make sure you stick around for that, too. It looks like he may get his way, even though he didnt win the vote. We got the chance to talk to Warren Buffett about those lousy First Quarter gdp numbers we got earlier this week. We asked him if he was surprised by that . Not very surprised we saw in january and february things fairly slow, which many certainly in some cases it was attributable to weather in our own case, others it may not have been. Its gotten stronger since then. If you have two months out of the three where things seam to be stag nan the, the three months arent going to be that good. When you say its gotten better since then, do you think were on pace to have a 3 gdp for the year . Im really no good at that. It seems more like it was going into the end of the year. Buffett had a lot of interesting things to say, talking to us about housing and berkshires Capital Spending plans for the year. More on that coming up later in the program. It all leads us up to the annual Shareholder Meeting this weekend. Our big show on monday comes when we are joined live by Warren Buffett, charlie hmongmu. As well as bill gates. That all starts at 6 00 a. M. Monday morning. Were continuing our coverage this morning, cnbcs list of the 25 most influential people over the past quarter century. We sat down with the former mayor of new york city, mike bloomberg, one of our icons, rebels and leaders on making the list. We talked about his impressive legacy and on bloombergs news practices, controversial in china. Congratulations on being part of the cnbc 25. Im honored. To think about the Inflection Point of when you started bloomberg lp, what you thought it would be today. I dont think i dont think anybody that starts a Company Really has time to think about that. Because at the beginning the question is can you make the payroll next week . Will anybody buy your product . How do you find a lawyer and an accountant. Can you afford the rent . Should you take a big enough place for growth, something you can afford now . I suppose people have walter mitty dreams of being a big empire. I dont really remember doing that. People keep saying do you miss being mayor . I dont think back and i dont fantasize for the future. Tomorrow is going to be the best day of my life. I know it. Ive always believed that. But i dont think about the day after tomorrow. Over the past year, theres been questions about the journalism going on in china and whether the company in its effort to grow has muzzled some of the antigovernment i would stand up for the quality ive always been phenomenally proud of the job matt winkler, i think we have 2300, 2,500 journalists do. In china they have rules about what you can publish. We follow the rules if you dont follow the rules, youre not in the country. Every newspaper, television station, Computer System, follows the rules. If youre in london, england, there are a different set of rules. You, for example, cant report on an ongoing trial in london. Thats what it is. It doesnt have anything to do with what we write. We write the stories we think are interesting and we distribute them where they are allowed to be distributed. Well hear more from mayor bloomberg throughout the program. He talks to us about wall street, some of the credibility issues, capitalism, joe, youll enjoy this and also his views on High Frequency trading. Well bring you that throughout the rest of the program. Im sure our views on capitalism are in sync. Very much in sync. Im sure. Hes very smart. Very much in sync. His views on High Frequency may surprise you. Well tease you there a little bit. Yes. Im a little bit i dont think its a huge im not going to spend the rest of my life think about High Frequency trading, although im kind of with cramer, if someone is making billions of dollars, theyre not really if theyre not providing liquidity, just sort of you know the fish that swim around on the sharks, if youre cleaning the sharks gills while cleaning their food, thats called symbiosis. You and the mayor can debate this. He thinks its good . He may come out on the other side. Thats the tease. I would have before. Because spreads have narrowed so much. I dont think its prohibitively expensive at this point to make trades. If youre going to buy apple for two or three years and it costs a penny more on the day that you buy it, then again, it adds up and its money thats like a tax. What are they delivering to you . Hey, joe. Yes, becky. Is it mutually are they helping you . Is it a symbiotic relationship. I know they talk about how it helps liquidity. I said if its not helping liquidity, the little fish that are in the sharks, theyre not cleaning the gills. Do sharks even have gills . I do want to hear what he has to say. Becky, you know how nice lacy is. Shes trying to help my throat but she brings me these things. I tried one and its like so disgusting. Its a berts bees natural throat drops. Those are harsh. Give me some of the usual not natural. Lacy is giving you something to help your throat and youre complaining. Im not complaining. Its foul. I took it out. Who owns burts bees . I think its owned by color rockies. You need hot tea and lemon or at least hot water and lemon. I was drinking hot water and lemon for a month. Theres lemon over on the cart. You can get that. Andrew is picking on me, too. Hes going to win the arguments because i cant really talk. Take your shots, andrew, when you can get them. Yesterday i had no voice at all at home. I have my dogs. Theyd be barking and running. Id go stop, ba irking, stop barking. They look at me like whats wrong with him . This is like halls. It has a eucalyptus, menthol. No, it doesnt. I want a halls. I have to spit this out. Im sorry. It is not good. I hope you feel better t. Makes less about your throat bothering you. Anyway, coming up, the executive shuffle at ford, alan mulally on his way out, mark fields on his way in. Who better than auto nations mark jackson to give us his take on the ford transition. Thats coming up next. It was an historic week for cnbc. We rang the closing bell right here at cnbc headquarters as well as revealing the top 25 list. We celebrated with guests like jack welch, Warren Buffett, sandy weill. You can relive it all, squawk. Cnb cnbc. Com. Check it out. It was annan credible week right here. Plus we had the market alltime high. I am gratified at least in this case you were able to celebrate an alltime high as obviously the wealth disparity grows. We know who owns all the assets. In general, its not something to celebrate when the wealth class is actually worth more. But in this case, because of cnbc, youre able to say that its good that the market is at an alltime high. This is a positive thing. I would say it anyway. The first new high of the year, andrew. Id celebrate both cases. Pickety had a pity party. Were all wearing black. Another new high. Time now for the executive edge. Ford Ceo Alan Mulally will be stepping down july 1st after a successful eightrun year at the automaker. Mike jackson, chairman and ceo of autonation is our guest. And it shook up the auto world a little when mulally was retiring. Thank god its not you, mike. Those would be seismictype tremors. Tell us about the quarter. Much better than your peers, right . Joe, good morning. You sound terrible. I admire your dedication in being there. Jobs friday. This morning were giving our april sales. For us it was an extremely good month. We retailed 25,500 new vehicles. Thats a 14 increase over prior year. Led by our premium luxury improvement of 22 and a particularly strong month for the asians, plus 18. For the industry, also a good month, plus 8 with a selling rate of over 16 million. Now, joe, this is the First Time Since 2007 that the industry has had two months in a row above 16. With the terrible start to the year, or to the winter, we really needed it. We got it. Were off and running to 16 Million Units for this year. Yes, thats what were going to need, mike, especially after that 0. 1 gdp. You are a person that probably has an opinion about whether that is an outlier, could be revised up, a total aberration, we could get a better second, third and Fourth Quarter by some being front end, whatever you call it. You didnt get it in this case, youll hopefully get it on the back end. Is that what you think . No question, joe, all the evidence was in that this was an epic winter in many parts of the country, its still snowing. Thats not over. That was very disruptive to the economy. The way i think about it is the First Quarter of the gdp number is an outlier, throw it out. On a rolling 12month basis we could see 3 gdp growth. You might not get it for this year because you lost the First Quarter. If you take a rolling 12 months it will come in at plus 3 . You know, mike, a lot of things that ceos do are getting a company just into shape where it cant necessarily run itself but when youve groomed someone like fields to come in, do you see faces with any trepidation at all being a big customer of ford . This is the way youre supposed to do it, right . You know, mark fields has seen it all, has done it all. He is fully prepared to take over the leadership at Ford Motor Company. I go back, lets talk about alan for a second. My view, joe, the industry should pass a hat and build a statue to alan. I first met with him shortly after he arrived in 06. We met in World Headquarters on a cold, dark saturday. We were just about the only two people in the building. I said, hey, where is everybody . He put that kansas smile of his on his face and he says, well, not everybody understands were going broke. So he brought a sense of urgency to ford that was desperately needed. And you know, i take an issue like detroits overproduction during that period and i said to alan, this is slow motion suicide. It has to stop. And within a nanosecond he said, mike, it will. This is an issue i fought with other executives in detroit almost to shouting matches and never got anywhere and alan understood it from the first moment. And you know, that sense of urgency that he brought meant that when the day of reckoning did come, Ford Motor Company did not need a bailout. And it showed that detroit in principle was worth saving, that there was hope that it was not a hopeless situation. And then his testimony in congress where he made the case why his competitors should receive assistance, really was for the sake of the industry and for the sake of america, and thats really true leadership. Just to conclude this story if i go all the way back to that first meeting, one of the things that alan did say was that he was very impressed with the talent within Ford Motor Company, particularly mark fields. This was all the way back in 06. He said basically the team i need to turn around Ford Motor Company is here. So not only did he turn around ford with his team. Hes done a fantastic job of mentoring mark fields, to the executive mark is today. I have no trepidation. I have nothing but confidence and excitement about the future of Ford Motor Company. I salute alan. A lot of boards, fords loss will be the gain for im sure blue chip boards, where mulally will end up. A lot of people underestimate alan because hes so affable and friendly and always smiling. Beyond that, he has a rigor and discipline and he gets to the essentials of an issue very quickly and then hes immutable. Hey, this is what were going to do. Here are the reasons why. Thats really great leadership. He could be a value to any company in any roll. What do you think a statue goes for, if we didnt get you couldnt spring for a statue of him if you wanted to . You could, right . You have a good point there. Ill take that up. All right. Thank you, mike jackson and happy friday. Look forward to seeing you soon. Thank you, joe. Feel better. He could get rodan. He could. Whos the guy that did a big animal . The guy thats unbelievable. There are current sculpture that are big time. What are you thinking about . Like the poodle . One of them just sold what about the balloon paddle . That guys alive, isnt he . He could do it. He probably doesnt want a balloon, alan mulally, though. Id take a balloon. Lets get back. Its even harder for me to fake that im engaged and interested. I am interested. Its harder for me to do the anchor excitement because it hurts. When youre not feeling well. Jeff kuhns. Do you know him . I actually do know him. I was kidding. I think hes serious. He is serious. I am serious. Anyway. Wow. All right, guys, when we return, we do have i ajobs preview. We have two hours to go before the big report. And squawk takes off with netjet ceo jordan hansel. Hell join us in the next hour. As we take a break, lets look at yesterdays winners and losers. Stick around. Squawk box will be right back. That was great. It wasnt bad. There were parts of it that werent very good. Could have been a lot better. I didnt like it. It was terrible. It was bad. Awful. Terrible boo. Boo true businessgrade internet comes with secure wifi for your business. It also comes with public wifi for your customers. Not so with internet from the phone company. I would email the phone company to inquire as to why they have shortchanged these customers. But that would require wifi. Switch to comcast Business Internet and get two Wifi Networks included. Comcast business built for business. E financial noise financial noise financial noise financial noise but with less energy, moodiness, and a low sex drive, i had to do something. I saw my doctor. A blood test showed it was low testosterone, not age. We talked about axiron the only underarm low t treatment that can restore t levels to normal in about two weeks in most men. Axiron is not for use in women or anyone younger than 18 or men with prostate or breast cancer. Women, especially those who are or who may become pregnant, and children should avoid contact where axiron is applied as unexpected signs of puberty in children or changes in body hair or increased acne in women may occur. Report these symptoms to your doctor. Tell your doctor about all medical conditions and medications. Serious side effects could include increased risk of prostate cancer, worsening prostate symptoms, decreased sperm count, ankle, feet or body swelling, enlarged or painful breasts, problems breathing while sleeping and blood clots in the legs. Common side effects include skin redness or irritation where applied, increased red blood cell count, headache, diarrhea, vomiting, and increase in psa. Ask your doctor about axiron. Good morning. Good morning and welcome. Is it really a good morning with that kind of voice . Its fine. Its fine. Welcome back to squawk box here on cnbc, im joe kernen along with Andrew Ross Sorkin. Becky is joining us from omaha this morning. And i dont know any artist. I know george bush. Thats the most famous jordan is here. George bush was on tv last night encouraging jeb bush to run. Did you see that . Did you see the New York Times today, becky . Yes, i did see the New York Times about stealing Chris Christies weve been talking about this and hearing about this. Its now on front page of the New York Times. Chris christies supporters are rethinking things, being swayed by the idea jeb bush could get into the race. Theyre not sure which way they are going to go, a lot of them are leaning towards jeb bush if he gets in. Er with in new jersey, people sit with us. I dont know where langone is. Theyre wealthy people. Were in new jersey. Probably a lot of them are governor christie supporters. Theres plenty of time. If he jumps in, do you think his brother would say that on tv that way and encourage him so publicly if he didnt think there was a real chance . Because of his father, right . Was it his father or the brother . I thought it was his father. I thought it was w. On cnn. Oh, it was w. I could be wrong. Looking at the body language, i think hes interested. I think hes thinking about what it would do to, you know, i guess his family and everything else. You can see he may be looking at it but hes still, becky, common core or immigration, thats whats so refreshing. Some people would have thought that was a mistake or a foot in mouth moment with saying that its an act of law. Not at uhl. That made him more human and endearing and more compassionate which maybe the Republican Party can use a little of. Dont you think, andrew . You always point that out. Yes. I do but you just did it. All right. Sorry. All right, guys, i am in omaha this weekend, the Berkshire Hathaway annual meeting is being held here. Warren buffett and company are expecting another big crowd, looking for more than 38,000 people to potentially atened this year. That would be up from 35,000 last year. It had been around 35,000 for the last several years. Of course, it is not all business out here. A lot of these people arrived and are here already. I ran into Mario Gabelli last night. A lot of people are populating the hotels, they get together, meet up and do a lot of events. The buffett family attended whats called the road show at central high school. We have video of Peter Buffett who was playing. Thats the high school the buffett children graduated from. Warren buffetts wife also graduated from there as well. Peter fonda graduated in 1924, i think. Believe it or not he learned the craft of acting here. He was on stage at the playhouse downtown with henry fonda, 1924. He was on stage with Marlon Brandos mother. This is an interesting place. A lot of things are happening people are getting together. Youll see these meetings all over the place. This is just the beginning of what is a weekend long lollapalooza for all these berkshire shareholders. Andrew will be coming into town later today, too. Today . I am. Taking off this afternoon. Cant get a direct flight anymore. Cant get there from here. Its impossible. So hard to get there. Well talk about that with jordan hansel and netjets and whether that is making it easier for netjets to pick up customers because it has gotten tougher to get here. Thats a good question, actually. Expensive. It is expensive. There and back. It is expensive. Definitely get a jeff for what it costs. What do you think it costs . On a netjet to go there and back. 35. Each way or round trip. Round trip. 40 maybe. Well ask the question. Maybe more. I dont know. Depends on the jet, obviously. We will see. We will see. See you in a little bit. Thanks, guys. Whats the average yearly annual salary in the United States . Its a different breed of person that can spend a years salary in the headlines, astrazeneca rejected an improved takeover bid by pfizer. This is really interesting on so many levels. The size, how great our pharmaceutical industry still is in this country. Now theres a chance we can lose one of the crown jewels. The latest offer is 106 billion, up from a prior 100 billion. But the british drugmaker, astrazeneca, calls pfizer the latest offer inadequate and it substantially undervalues the company. Checking stocks this morning, not much happening in either one. The reason i said wed lose the company, one of the rationales, not the only rationale but one of the rationales for doing it is to redomicile theyd leave some like token headquarters in new york but theyd be paying under the uk tax system. Thats what we mean by leaving. Thats one of the reasons they want to do it. Its 22 versus plus all the money they have abroad that they cant rep repatria repatriate. Pimcos flagship total return fund has suffered a 2th consecutive month of outflows. That fund run by people kosimco. Since last may, the fund has seen net outflows of more than 55 billion leaving its total assets at 230 billion. I think, you know, that may account for a large part of the pr campaign and debate thats been going on and why pimco has been nervous about mohammed leaving and what thats all meant. Also, just under two hours away from the april jobs report. Consensus forecast saying that the u. S. Economy added 215 thousand new nonfarm jobs last month. Thats the number to beat, with Unemployment Rate dropping to 6. 6 from 6. 7 . You never know with that headline unto itself really matters. You know that we have this idea, this notion that there was some bad weather at the beginning of the year. We think it ended before this last this april jobs number. Two days ago it was 35 degrees and raining where i lived. I mean, if it was 0. 1 , do we know that weve recovered in this april jobs number to 215,000 . I think we kind of have weather rebound fatigue, waiting for this elusive bounce in activity in certain data because of the weather. In truth, if you look at the payroll trends, like by sector, threemonth changes, the numbers in march were very much in line with trend. Thats why i think you have most economists and the consensus itself is not far off of the numbers that weve averaged the last few years. No one has a 300 type number because it isnt actually clear there was a huge weather effect in the last couple of months. Even on the payroll numbers, on the employment side. I assume people know that youre michelle girard, chief economist at rbs. There may be some people who think youre michelle here we go. You came on when you were 6 the first time. I appreciate that. I appreciate that. We can do would you are you predicting a forehandle on one of these quarters. We actually are probably looking the aa better than 3 Second Quarter number although the First Quarter, we might get the First Quarter number revised into negative territory. Not up. No. Again, what we all the only thing we know so far yesterday, Construction Data was out. It was a lot weaker than assumed. That would put us down slightly. Well see how the trade numbers look next week. The thing is even if you get four and you average this week, youre still looking at a 2 growth pace. Even if we get four, how meaningful necessarily is that. Im still not convinced the underlying trend has changed a whole lot from 2, 2. 5 . I would think 215, even if i buy, the gdp number is more of a lagging indicator than employment numbers. If we had 215, it seems like with all the head winds you saw in the gdp being so low, i would think 215 would prove to you that were up closer to 250 normalized. Again, it depends on how you look at it. The trend has really been steady around 200,000. Thats pretty good, though, isnt it . Its middling. Its middling. Its good enough to bring the Unemployment Rate down. We have slow labor force growth. I think it tells you the underlying conditions in the labor market in particular havent changed all that much. Thats the biggest takeaway ive seen, gradual improvement. We have to go. What if we get 40,000 . Again, a weaker number has a lot more meaning than a strong number. People, if you get a strong number, will assume its a weather rebound. A weaker number, people feel like there are less headwinds. If you get less head winds and you get a weaker number, people will think something is going on. A weaker surprise. I think people are biased to think, if anything, it has to be stronger. Conditions have been better. All right. Thanks. Im worried it will be under 200. You are . 200 wouldnt be that bad. Under 100 would get your attention. Yes. Under 150 would be meaningful. Under 100, oh, lord. Well have more flight time with becky in omaha. Shell be joined by netjet ceo jordan hansel in a few minutes. Check out whats happening in the european markets right now. Youre seeing a mixed picture. All of this and more in terms of our own futures here in the u. S. Pill change very likely at 8 30 a. M. When we get the jobs number. Back in a moment. Theres unlimited talk and text. Were working deals all day. You get 10 gigabytes of data to share. What about expansion potential . Add a line anytime for 15 bucks a month. Low dues. Great terms. Lets close. New at t mobile share value plans. Our best value plans ever for business. Whon a certified preownedan unlimitedmercedesbenz . Nty what does it mean to drive as far as you want. For up to three years and be covered . It means your odometer. Is there to record the memories. During the mercedesbenz certified preowned sales event now through june 2nd, youll get complimentary prepaid maintenance and may qualify for a twomonth payment credit. Only at your authorized mercedesbenz dealer. Im spending too much time hiring and not enough time in my kitchen. [ female announcer ] need to hire fast . Go to ziprecruiter. Com and post your job to over 30 of the webs leading job boards with a single click; then simply select the best candidates from one easy to review list. You put up one post and the next day you have all these candidates. Makes my job a lot easier. [ female announcer ] over 100,000 businesses have already used zip recruiter and now you can use zip recruiter for free at a special site for tv viewers; go to ziprecruiter. Com offer2. Welcome back to squawk box. Take a look at u. S. Equity futures at this hour. Boy, you know, i feel silly almost telling you about them because we know the jobs numbers will impact them in a very big way. Dow it looks like would open up higher. Not even really. Were calling basically unchanged across the board. We get back to becky in omaha. Becky quick. Andrew, when we come back well talk about whats on the horizon for the private jet industry. Squawk is taking flight with netjet ceo jordan hansel. Were live at the Berkshire Hathaway annual Shareholders Meeting in omaha. Well be back in just a moment oh, babe i hate to go honestly, im pouring everything i have into this place. Thats why i got a new windows 2 in 1. It has exactly what i need for half of what i thought id pay. And i dont need to be online for it to work. It runs office, so i can do schedules and budgets and even menu changes. But its fun, too with touch, and tons of great apps for stuff like music, cause a good playlist is good for business. I need the bosss signature for this. Im the boss. Honestly i wanna see you be brave you are gonna need a wingman. And with my cash back, you are money. Forget him. My Airline Miles will take your game worldwide. What im really looking for is i got two words for you rewards. Theres got to be better cards than this. [ male announcer ] theres a better way with creditcards. Com. Compare hundreds of cards from all the major banks to find the one thats right for you. Its simple. Search, compare, and apply at creditcards. Com. First rounds on me. [ 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. Welcome back to squawk box, live from the Century Link Center in omaha, site of the berkshire annual meeting. Here now, becky quick. Welcome back, everybody. A leader in private aviation, netjets is expanding its presence in asia. Its been collaborating with the Chinese Government to get its operations collaborating to get its operation certified by this summer. Jordan hansel is the chairman and ceo. First of all, this is a big weekend for net jets. This is a huge event here in omaha. How many jets are you sending . We had 550 revenue flights yesterday alone. So yesterday was one of our largest days of the year. Is that pause of these two events in. Its in part because of these to events. Why do you think that is . I think the economy is getting a little stronger. When people want out ahead of their business challenges they come to us. Jordan, we were talking about how commercial air travel has gotten more complicated. A lot of airlines dont fly directly to cities anymore. Weather has been an issue. Not anybody can call up net jets and say i want to jump on board with you. Who is your biggest customer . Businesses. Its a broad range. What is the average price . Several thousand dollars. I would think it would be more than that. No. It was almost 1,000 bucks for my commercial plane to get here. It was not a first class ticket. Well, they are getting more and more expensive. But we dont price like that. Even though its a busy weekend, it doesnt the matter for us. When you talk about whats happening for the consumer, how does that directly is it business is better or the consumer is feeling better . What heptd out tlped out the mo . It is a little bit of both. When they feel comfortable, they come back and fly more. We are seeing double digit growth year over year. Sales growth is up. We have been quite pleased so far. What about the industry . Some of your competitors have gone out of business. Whats happening when it comes to private jet aviation. Youre right. Some have gone out of business. Some consolidate theed. Thats not a surprise to us. This is our 50th anniversary. I cant even imagine. Cnbc is celebrating its 25th. In 1964, we were started by a former general in the air force out of columbus, ohio. Its a remarkable story. When you have consolidation, when you have other players who dropped out, does that make for a more formidable player or is it better to have fewer players in the field . We pay almost no competition from that perspective. We try to phone us on providing the highest Level Service we can. Its nice to have strong competitors that make us stay on top of our game. Joe . Andrew and i are going to kind of share this question, jordan. Andrew has written about the tax treatment of private jets. I was going to mention that. But on a bigger level, just about luxury and, you know, the 1 argument we keep having. In this case i think the 1 now wants to go after the 0. 11 , which is where you get into some of the people that the do you think the pendulum will swing further . Or is that the top for the income disparate . Hopefully people tell me its going to end like the french revolution and they didnt see it coming either. I think we have already gone so far down this road pause it is unamerican because it is sos operational. I think it will start going the other way. Where are ow that . Some people dont want to be seen on a private jet. Hopefully nobody takes down the tail numbers. From our perspective, we want to provide that service to whoever would like to be able to take advantage of it. One thing is we employ a whole lot of people in the middleclass. From our perspective, its just part of the Overall Economic picture. We ought to be serving whoever we can to the best of our ability. Youre agnostic. Two corporate flight plane issues. Corporations get to depreciate them more quickly than a commercial airline would. The second piece is the landing fee issue or landing tax issue orpbd these planes. Make the argument. Because i would love to hear it on both fronts from your perspective. Well, from the depreciation perspective, all we ask is for consistent treatment on business assets. Anybody buying any business assets has a depreciation schedule provided for by law. The only thing we would ask is that the jet suspect treated any differently than anything else. So do you think its unfair for commercial airlines to have to depreciate over seven years, not five . Well, as i said, what we look at if someone approximate bought a copier or a desk or a pencil, they would depreciate that for business purposes. Thats the category in which we operate. But private jets dont last as long as commercial jets, do they . No. Thats true, they dont last as long as commercial jets. And the second piece, i think becky has a question. Well get back to becky in omaha. Well, we did the want to followup your expansion in china. Where does that stand . What is happening . When do you expect things to be up and running there . We expect late june, early july. Its been a long trip for us. We couldnt be more excited to be up and running. How quickly do you expect growth . China is an interesting market. Thats a good question. We will see decent growth for the team being. What we hope is a large market over. Potentially in the u. S. . Or dangers thank you very much for coming in and joining us. We really appreciate your time. Guys, back to you in the studio. Thank you, becky. Looking forward to seeing you and jordan. Countdown on the jobs report. Right after the break, an economic duo with moodys analyst chief economist mark zandi. Zandi. If you wear a denture, take this simple test. Press your tongue against it, like this. It moves do you feel it . It can happen with every denture. These movements may irritate your gums. But you dont have to bear with it. You can try fixodent plus gum care. Thanks to its formula, your gums become one with your denture. This helps stop movement and helps prevent gum irritation so you can keep enjoying life. [ apple crunches ] fixodent. And forget it. [ apple crunches ] dewhos got twond rhooves and just got ae. Claim status update from geico . This guy, thats who. Sfx bing. And i just got a. Oh no, thats mom. Sorry. Claim status updates. Just a tap away on the geico app. Welcome back to the special presentation of squawk box. First, jobs in america. A dual over the state of the economy with mark zandi and tony fratto. And becky is in omaha at Berkshire Hathaways Shareholder Meeting. Dr. Love, mario, and David Winters on his cocacola crusade. And thunder cloud for the markets. Mark faulkner, editor of the gloom, doom and boom reportment is there any sunshine in his Market Forecast . The second hour of squawk box begins right now. Good morning. Welcome to squawk box here on cnbc. Becky quick in home that ahead of the annual berk higher hathaway meeting. We have futures. The jobs number is coming. Its virtually once you cross the board, marginal green arrows. The nasdaq up to two points higher. S p 500, lets call it flat for the moment. In the headlines this morning, heres whats going on. Pfizer has put forth an improved takeover bid for astrazeneca. They are saying talking to the hand. 106 billion offer is in adequate and that it substantially undervalues the company. Of course the bigger issue from a policy perspective on this transaction is the inversion, if you will, that pfizer wants to leave this great country called the United States and pay taxes and the tax rates in the uk. Sarcasm. The other news, jobs friday. April jobs report 8 30 eastern time. Economists looking for 215,000 new nonpharm jobs ticking down 215,000. General motors is pack in court today in a hearing to determine exactly who can and cant be sued over the controversial ignition switch recall. The issue is whether new g. M. , this is important. Whether new g. M. Can be held liable for any of the actions from its Predecessor Company perhaps known as the old g. M. Judge robert gerber, who oversaw the g. M. Bankruptcy, is also hearing this case. So we will see how that all pans out. Joe . Lets get back to becky. She is at the Berkshire Hathaway annual meeting in omaha. Back to you. Joe, thank you. We want to talk about a deal thats just been announced. We want to mentioned 3 billion deal struck my Berkshire Hathaway last night or this morning. They will buy canadas altalink, an Energy Transmission business headquartered in calgary. It will be wrapped into Berkshire Hathaway energy. On the eve of the Shareholder Meeting, we ran into Warren Buffett here into town. He is expecting more than 38,000 people to be attending the annual Shareholders Meeting on saturday. Thats up from about 35,000 last year. 35,000 is where it stood the last several years. Based on the ticket request, he expects it will be a little bit higher. He was caught up when he was coming back from his lunch. Guys, this was his typical healthy diet of mcdonalds. He had a big mac and fries. We got a chance to ask him on whats everybodys mind. Cocacola. It was suggested that cocacola had heard that and the management may not be dolling out the shares as originally planned. Do you know anything about that . Well, i wouldnt be surprised. Theyre going to look at it certainly. With the fair amount of no votes. And what they authorized at this meeting the other day, they dont have to do. They can spread it over a longer period of time. Well see what they do. They listened to shareholders before. And i think theyll listen again. Have you attitude muhtar kent . I havent talked to anybody since the vote . Not the directors . Not everyone my son. His son Howard Buffett is on cocacolas board. The same plan Warren Buffett abstained from voting on. It is the largest single shareholder. The no vote on this was championed by David Winters, a smaller longterm shareholder who complained that the equity plan was too excessive. Winters will be joining us 7 40 a. M. Eastern time. Well have a chance to talk to him about what he thinks at this point. Theres been this expectation that maybe the company wouldnt use the shares as quickly as possible. Another talked about topic is cap ex spending. The company has 48 billion in cash. Some of it they are using for acquisitions like this one they just announced. I got the chance to ask if he plans on taking some of the money and putting it back to work here . Well spend a record this year. We spent a record the year before. The First Quarter, 2. 8 billion on planned equipment. That might have been against 2. 2 billion the year before. Were going to spend a lot of money. Theres a lot of opportunity to spend. Of course. They have a lot more money to spend. Well get to hear some ideas about other things they might have in mind. Buffett had a lot of interesting things to talk about. He told us his outlook on housing. After the lousy mortgage numbers we have seen, he has real insight. Also berkshire Capital Spending plans like we just talked about. What he thinks about the economy at this point. Well have more on that coming up a little bit later. This all leads up to the annual Shareholder Meeting that starts tomorrow, saturday. And our big show monday, we will be joined live first by Warren Buffett and bill gates and Charlie Munger on set. Thank you, becky. Awe some, awe some, awe some. Jobs report at 8 30 a. M. You know, i can see the argument for a decent number. I dont know precisely where all this exuberance is coming from. Im going to before thing zandi in a second. I have this very pedestrian model that economists ride that is a simple best model. Mark has seen it. Its not that big a deal. Let me show you one of my models. It is up. But it aint crazy. Right, mark . So everything i do gives me like a 180. Heres the other thing that im confused about. The numbers are 190 now. It appears all of this catch up from the winter. We had the 84,000 number in december. Right. But january and february, right in the 190. What are we catching up from . The wages and salary number. There were depressions in january and february. And now we have catch up. Which is okay. I dont see the need for catch up here. He said im going to get right to zandi. That was his version of getting the voice is finally changing, joe. That was getting right to you. His voice is finally changing. Thats it. Let me ask, are we debating whether its 180 or 220 . Consensus is 220. 220. I keep hearing 275, 300. And word on the street was whisper numbers. I think it was adp. Thats the best number. By far. Like me. Sounds a little selfserving. Were back to january, february. Whatever happened from the winter weather, we did not seem to have a depression in job creation relative to the prior average. No. I think thats fair. The biggest change was in hours worked. We got that all back last month in march. It jumped back up. Cnbc contributor. We pay him, so he needs to answer whatever we ask him. You know the bushes. Yeah. I visited with the president a couple weeks ago. Whats jeb going to do . They dont even know. President bush 43 didnt know. Im a big fan of jeb bush. I would love to see him run. Hes a great voice. His own voice for the party. Terrific guy. I would love to see him run. Very refreshing. Do you remember when biden, it seemed like he didnt plan the whole thing but it was a beautiful way to have it happen . When jeb said that about its an act of love, do you think he knew that was actually what the Republican Party needs right now . You know what i think, joe . I think that jeb is not that calculating when he talks about this and some other topics. Thats what he really believes. I think thats what is really appealing about him. He doesnt care what some of the people think he thinks about these issues. That authenticity is most refreshing. I had to do a Little Research to find out how i felt about common core. And i realized the only reason people hate it is because obama is for it. I considered look long and hard that that might be a good enough reason for me. Lets all think for ourselves. What a concept. Annoy back to the jobs. When we look at macro, we take these clues and start telling stories. In this case even trying to predict the past a little bit with the clues. Look, if part of the story was weather was going to have a dampening effect, and i think it probably did on gdp, not so much on jobs. Because on jobs if the guy doesnt show up, you hire the next guy in line. A lot of people are still hiring. But if your story is gdp took a hit pause of weather in q1. You have to come back with a snap back not to trend it around 3 growth. It has to be something much greater than that. Were not seeing that. The tale of the tape is employers do not react very quickly to changes in economic activity. Yeah. They dont fire right away. Certainly, as we have seen, hire right away. We have seen, for example, after the recession began, it remains at a decent level. It is slow to come back. Mark, maybe you want to pick up on that. Three months doesnt mean huge changes in unemployment numbers. Weather was a factor. Expiration of the Unemployment Insurance program was a factor. The slower accumulation of inventory is a factor. All those things are temporary. Theyre not going to change their hiring and firing decision stkphrs do you think 0. 1 gets revised upwards . Now its negative. 2. When all the restrictions are in. So you know next month you have a revision, one after that, a comprehensive revision. Hey, tony. Yeah. Am i going to see you saturday . On saturday . Maybe ill see you at a party before hand. Im not going to the dinner. I havent been invited for years. Youre too good for the dinner . No. Its too long a night. I think i have hockey that night to watch. Thats good. Im starved for content. I watched the bruins last night. Big fame tonight. The nets. Lets get to becky in omaha. Becky . Joe, when we return, we have dr. Love himself. Mario is one of the Berkshire Hathaway faithfuls. He comes to this meeting every year. Well talk about this wave of m a and just whats been happening. Why the deals look different this time around. Squawk box, live from omaha. announcer scottrade knows our clients trade and invest their own way. With scottrades smart text, i can quickly understand my charts, and spend more time trading. Their quick trade bar lets my account follow me online so i can react in realtime. Plus, my local scottrade office is there to help. Because they know i dont trade like everybody. I trade like me. Im with scottrade. announcer scottrade. Voted best Investment Services company. Welcome back, everybody. We are live from the Berkshire Hathaway annual meeting. Mario is chairman and ceo of gabelli funds. You have been coming here a long time. That do you say, 12 years . This is probably 12, 13, 14 years. But six or seven years ago, on behalf of the school of business, we took over the that schroeder had. Tonight we will have 500 people. Our form sponsors it. Bruce greenwald has been there 20 years at columbia. There will be a panel. Myself. Bill ackman will be here. Wally white. A terrific investor here in omaha. And tom russo. The Value Investors get together. Lets talk a little bit about what bill ackman has been doing recently. This latest move really takes a look at some of the inversions. We have seen this huge wave of m a. Within the framework of what he ackman did, it needs more exposure. Youre not a fan of this . No, no, no. The notion of coming in and buying stock, buying it within a 10day window, doing derivatives, you know, its not fair. A year or two from now the world will change. Do you think that will change the window . How you report derivatives. How the thresholds have changed. I dont have a problem in shrinking it. You have one day to file every pun percent delta change. Going back to the big picture, growth. How do we grow in a global marketplace. Many of them are going back to the brooms saying, look, there are synergistic benefits whether its revenues. The buyer will treat the market more friendly. If its a stock deal they will pounce and beat up the stock like comcast. They will hit it not necessarily the first day. They will say, oh, my gosh, what am i doing here. On a longterm basis, its value added if its done right stkpwhrfplt does that mean you like some of these stocks . The way they would do it, you would buy forest labs as a why do buyin. Are we going to buy tpaoeuz senator maybe. Do at t . Maybe. Every one is different. We wrote a book on this about 10 years ago. Lets walk through some of the deals really quickly. What do you think of at t and directv . Its not a deal, but they said they have been approached. 120 million households in the United States. 10 million get their video through at t verizon. 16 million get it from the cable guys. The cable guys are merging. Under 30 million at comcast. Cable vacation is about three. Satellite, 20 million. If you put at t and directv, it makes a lot of sense. That doesnt mean jurgen is out. Michael white is a terrific job at directv. Does it make sense . Yes. Will it be done . Theres a lot of talk and speculation. It has 500 million shares more or less. They have a wonderful asset in latin america. Theres a lot going on. What do you think about pfizer potentially . Tpaoeuz ser a larger company. They dont fully analyze that. We dont have the same circle of controversy. But pfizer buying astrazeneca. First bid is low. Second a little higher. They just bumped the bid this morning. A couple bucks on it, a little extra stock. Pfizer is giving 25 of its pro forma to buy this. But its got to be done. In addition to the reverse, companies are constantly looking at the portfolio saying i need a higher return. They are splitting up the company. Energizer stock went from 96 to 113 by announcing they are splitting it up. Free argument on the global basis should allow that. It was back in january or february where you said this would be a great time to buy the auto parts companies. The roads were so beat up. Five people i knew were getting flat tires every week coming in. Anything trending that caught your fancy where you say, this is another reason i need to buy . Theres a whole bunch of dynamics that are fairly visible the next 10. There are companies that deal with health and wellness and also organic and natural. There are companies that are dealing with the infrastructure in the United States where you start off the roads, the bridges, are part of that. But avionics is part of that. Airports, aviation control probably 60 years old. You mean the air control. I would benefit honeywell, for example. In addition to that, this whole notion of becoming energy independent, of dealing with technology, fracking. And then transportation is a sidebar. How do we compete, reeducate. How do we get our American Worker to compete globally off the middleclass consumers . So a lot of very good ideas out there. We hopefully will compete. The problem is the price we buy them at. All fascinating ideas. Hope you come back with us. This is only warrens 50th year. We have another 25 to do this. Come back and visit us on set. We want to hear about these two. The annual report at berkshire has a picture in it for the first time that i may have to eliminate all the ones in our annual. Take care. Thank you very much, mario. We appreciate it. We just got the read from dr. Love. His take on the markets. Now its time for dr. Doom to way in. Mark faber at 7 30 a. M. Eastern time. Stick around. Squawk box will be right back. Time now for todays aflac trivia question. Which nba player was the first to be suspended for biting someone . The answer when cnbcs squawk box continues. Box continues. Aflac, aflac, aflac [ both sigh ] ugh you told me he was good, dude. Yeah he stinks at golf. But he was great at getting my claim paid fast. How fast . Mine got paid in 4 days. Wow. Thats awesome. Is that legal . Big fat no. [ male announcer ] find out how fast aflac can pay you at aflac. Com. [ girl ] my mom, she makes underwater fans that are powered by the moon. She can print amazing things, right from her computer. [ whirring ] [ train whistle blows ] she makes trains that are friends with trees. My mom works at ge. E my mom works at ge. Financial noise financial noise financial noise financial noise we got a fair price. Ruecar. Com,. My feeling is that. Ing. And youre like. Iyou know, the salesman icomes over. , theres no buyers remorse, you know. Im happy with my purchase. Its the truth. When youre ready to buy a car, save time, save money, and never overpay. Visit truecar. Com the answer to todays aflac trivia question. Which nba player was the first to be suspended for biting someone . Wayne traoep rollins in the 1983 playoffs. We just talked to dr. Love a few minutes ago. Now we turn to dr. Doom. Marc faber is coming up after the break. The break. Whon a certified preownedan unlimitedmercedesbenz . Nty what does it mean to drive as far as you want. For up to three years and be covered . It means your odometer. Is there to record the memories. During the mercedesbenz certified preowned sales event now through june 2nd, youll get complimentary prepaid maintenance and may qualify for a twomonth payment credit. Only at your authorized mercedesbenz dealer. Im taking off, but, uh, dont worry. Im gonna leave the tv on for you. And if anything happens, dont forget about the new xfinity my account app. You can troubleshoot technical issues here. If you make an appointment, you can check out the status here. You can pay the bill, too. But dont worry about that right now. Okay. How do i look . Thanks. [ male announcer ] troubleshoot, manage appointments, and bill pay from your phone. Introducing the xfinity my account app. Welcome back to squawk box on cnbc this morning. Im Andrew Ross Sorkin along with joe kernen. David winter, Wintergreen Advisers has been part of the big spat over cocacola with mr. Buffett. We will talk to him 10 minutes from now. In the headlines, heres whats going on. The futures ahead of the april jobs report. We get that number at 8 30 a. M. Eastern. These numbers will probably change. Things looking green. Dow up three points. Cant get too chiropracticed just yet. Major averages all higher for the week. Lets check some of the companies that reported quarterly profits. Newell rubbermaid, 3 cents above estimates. Sales declining in most of newells segments cvs 1. 02 a share. 2 cents below average. It was due to unforeseen weather related issues. Did they take the cigarettes out . Even if you practice safe driving and refrain from using your cell phone behind the wheel. The fcc is proposing a 48,000 fine for a florida man who used his cell phone jammer for nearly two years on his daily commute. Thats according to the tampa tribune. He took it into his own hands. Cell phone metro pcs was tipped off to the jammer when they noticed that transmission at a tower along an interstate suffered in the morning and the evening. This happened every day. Federal allow prohibits cell phone jammers because it would prevent people from making emergency phone calls. In general, its a pretty good idea. I kind of like this guy. I might send him a thank you present. They have hand signals. Like if someone is in the left lane going 35 miles per hour. Thats 55. At least go 55. Or if theyre on a phone and theyre driving bad, i go, thats a phone. Occasionally. Yes. If im rahm, i would have to always use one. I wouldnt be able to speak. Its amazing how many people text. When youre driving, you cant look over and watch other people. Joe just lost his microphone. Mark zandi is here, special guest host. When you Companies Like cvs still talking about the weather, are we going to be talking about this forever . Y1 and q2. It was 35 degrees last week. They are still talking about what was happening in q1. It got depressed in q1, a little bit better in q2 and not talking about it at all in q3. What are the chance office a blowout number today . I think were due. We were talking with steve earlier. The average monthly gain in payroll in the last two, two and a half years was 185, 190. Rock solid. Some above. Some below. With revisions you come into 185. People always get excited about the headline number. You think it is 6. 6 is where you think this is going. I think it will decline. When does it really get under six . I think it will be a year to 18 months. It will be a slow decline. You were wrong last month. No. Last month i nailed it. It was december. December i had a problem. But what was it last month . I dont remember. 190 there was one that just shocked everyone. So thats not going to happen . Last month was okay. It was 192. 195. It wasnt a bad number. It was right in expectations. It was like december, january. How many times has rick you hear him out of the corner of your ear when youre talking. That was five years ago, joe. I think it was the enabling. Oh, that was two days ago. It rolls right off your back. It happened on wednesday. When youre in studio far away, you dont see all the players. I dont think he was in the conversation, was he . Yeah. Okay. I hear you, though. Im always nice. Im laughing about it. What do you think the natural Unemployment Rate in this country can be . Okay. I think its currently 5. 5 . Just define that. Thats the Unemployment Rate you would consider full employment. Right. Roughly speaking. And the best month we ever had was 4. 6 . The demographics were perfect for the job market. You could have argued it was 4. 5 to 5. But i would argue 2006 at 4. 6 was alice in wonderland. Back before the recession the consensus, and it was right, 5 . It caused it to rise a half a point. A really bad number, youll immediately say weather, wont you . No. Ill be totally perplexed. I am like confused. If its really bad. You always have a way. Hes not that confused. Well have to see what the revisions are and everything else. Really . Theres the stimulus. What is what if youre riding in the back and your phone is jammed . Are you saying you think its going you would hate that . Thats true. Youre always on the phone. Always on the phone. Okay. We have a lot more to talk about today. Coming up, David Winters of wintergreen partners questioning the board of cocacola and Warren Buffett about statements made by the company in connection with the Shareholder Equity plan. Im going to break out in song in a moment. This is from frozen. Dewhos got twond rhooves and just got ae. Claim status update from geico . This guy, thats who. Sfx bing. And i just got a. Oh no, thats mom. Sorry. Claim status updates. Just a tap away on the geico app. 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. Welcome back to squawk box live from the Century Link Center in omaha, site of the berkshire annual meeting, here now becky quick. Welcome back, everybody. Wintergreen advisers may be getting its wish in the cocacola compensation battle. It won approval for Equity Compensation plan. But warren buffet told us shortly after the vote he had abstained from the vote. He said he didnt like the plan, thought it was excessive. But he didnt want to not show support for the companys management. Now cocacola may be backing away from the plan. We caught up with Warren Buffett yesterday. Heres what he had to say about cocacola compensation. There was a story in the wall street journal suggesting cocacola had heard that and the management may not be doling it out as quickly as planned. Do you know anything about that . Well, i wouldnt be surprised. Theyre going to look at it certainly. With us abstaining with a fair amount of no votes. What they authorized at this meeting the other day, they dont have to do. They can spread it over a longer period of time. Well see what they do. They listened to shareholders before. And i think theyll listen again. Have you talked to muhtar kent since the vote . Stkpwhreu haven. I havent talked to any of the shareholders since the vote. Not even the directors . Not even my son. Founder and ceo of Wintergreen Advisers. Super to be here. You kicked this whole thing off with people taking a look at the cocacola plan. Warren buffett himself said he didnt notice it until you brought it to his attention. Youre not known as a loud activist investor. You tend to be a value investor. I was surprised to hear these things. What caught your attention . Well, in fact, one of my colleagues dan geary found this and brought it to my attention. I was absolutely stunned that beloved cocacola would have a plan to dilute the shareholders and take a lot of the Free Cash Flow to buy back stock. We were stunned. We talked about it internally. And we decided, with my Business Partner liz, that we had a fiduciary duty to our clients to move forward. So we decided to write the letters and to lay out the analysis. Because we love cocacola. But we think that the plan, and were delighted, delighted, that buffett agrees it is excessive. He didnt agree with your math, though. I think you said 14 or 16 dilution. He thinks its much closer to cocacola. 1 , maybe 2 , 4 , 5 . Have you rethought the math. It comes from the cocacola document. You go page 86 and page 8 of the 10k. You can through the it any way you want. The plan is not in the shareholderss best interest. You lost the vote but you may be getting your way anyway. Cocacola could very likely take and dole these out over a much longer period of time. Was that enough for you . Well, in fact, the shareholders who voted, if you take out the broker nonvotes and the extensions, which buffett did, they didnt get 50 . They give you 50 of the shares outstanding. So basically theres no mandate. We think this whole thing has to be looked at. As more disclosure has come, including your superb interview over 10 days ago there have been more questions than answers. You know, what the board did, how this worked. Did they basically ignore Warren Buffett . Is that possible . You mean did they talk to him ahead of time because buffett said he had had some conversations with muhtar kent. Youre wondering if they took that related to other shareholders. Not only the whole sequence of who knew what when. But the most famous revered investor in the world why would say i really dont like this. And the company would go ahead and do it anyway. So i think theres real fundamental governance issues here. You know, we love the cocacola company. But the idea that they are going to they are the custodians of the secret formula. This is 100 some oddyearold company. Do they need tens of billions of dollars for a couple years work . It seems wrong, especially in todays society. Okay. Lets ask about the way you went about this and the way buffett went about this. Did you make the letter public the same time the company was finding out . Im wondering working inside versus working outside. They didnt call and say were going to dilute but by a specific amount. Muhtar didnt call me up and say, hey, by the way, im taking this money out of your clientss pockets. We were so stunned by the significance of all of this. Seemed to be extreme overreaching by cocacola to really effect the Investment Case for the business. So we decided the right thing we were to do, we were in possession of the information that we needed to disclose. So, again, if you get your way and cocacola says, fine, maybe we do it over six, seven, eight years, does that put it more in line in terms of what you have seen in the past . Is that okay . Well take a look at whatever they say. But im no longer convinced. I think they need to withdrawal the plan really. Because just getting equity, gifting equity to people, the way you feel like an owner, becky. You probably own a home. You have to save money. You worked hard. You have Home Ownership because you put up the money. If you were just given the home, you wouldnt have the same sense. Thats not that unusual. The idea of giving shares or giving option toss employees is a pretty widespread practice. I grew up im i grew up here. Not necessarily this room but smaller versions of this annual meeting. I always took Warren Buffetts words as gospel. Youre a longterm investor. You dont give people free options. When i saw that cocacola was doing something that which is conflicted with the basic essence of what i had learned here, it just the alarm bells went off. This is your 24th year in coming to the Berkshire Hathaway annual meeting. I know andrew has a question too. Andrew . You have been very critical of Warren Buffett, much more so in documents and letters than you have been this morning. I wonder if theres backtracking going on now that it appears you might have succeeded to some degree. When Warren Buffett didnt come out publicly prior to the vote and say what he said after the vote, which is that he agreed with you, you went after him. Do you think in retrospect that was right, that was wrong . And given that hes done what he has, and you still may get your way from a strategy perspective, you know, do you look at what warren did and say, okay, maybe he was right . Or do you still put him in the bad category . Well, you know, andrew, i have enormous respect for Warren Buffett. Whether we agree with everything he does is another issue. You wrote an article that was helpful in all of this. What we remain concerned about is warren went radio is silent for four weeks. It would have been very helpful i understand his position if he had let all investors know what he was thinking. Hes so respected. And i think it would have changed the vote. So i dont think you should say we have been we want this to work out just fine. We have enormous respect for buffett. I know you love warren buffe buffett. Just so i understand what youre saying here, you dont have a problem with pay for performance. In other words, if theres a company lets say that puts into a ceo compensation some type of number where it is just simple math five years later that he accrues 50 million worth of Company Stock which would dilute shareholders at some extent. You dont have a problem if a guy makes 50 million. Am i right about that . Or just in general no one deserves that much. No, no, no. People should get paid for doing a great job, andrew. Andrew wouldnt ask that question. That was joe. Joe, we have bad ifbs. We cant hear. Sorry, joe. Youre right. People should get paid for doing a good job. It all has to be laid out. Look, youre a great journalist. Youve been on tv a long time. You should make a ton of dough. But the the thing is it cant be too easy. And you cannot take lots of money from shareholder pockets and just put it youre making a lot of sense now with what you said about me and everything else. I agree. I agree. Joe likes you now a lot. Youre making a lot of sense now. David, very quickly, have you sold any shares of cocacola or do you plan to . We have not sold any shares of coke. We love coke. But we think theres real fundamental issues here not only did b this the bad plan but the governance and the clarity and how this has been run. Thank you. Its been a pleasure. Great to see you. Great to see you too. Matthew rose, bnsfr. Stick around. Squawk box will be right back. Latte or au lait . Cozy or cool . Meow or woof . Exactly the way you want it. Until boom, its bedtime your mattress is a battleground of thwarted desire. Enter the allnew sleep number classic series. Designed to let couples sleep together in individualized comfort. Starting at just 699. 99 for a queen mattress. Hes the softy. His sleep number setting is 35. Youre the rock, at 60. And snoring . Sleep numbers even got an adjustment for that. Find your sleep number setting only at a sleep number store. Know better sleep with sleep number. Yesterday i spoke with mayor Michael Bloomberg. I had a chance to ask him about his biggest regrets and some of his best management practices. I hate it when people leave because you are losing the investment and their talents. If i thought they were there because i thought they were good. But sometimes people decide to have other careers and go off. I think nepotism is a terrible idea so my kids cant work in the foundation where we are now or in the company. They are trustees out of the foundation, board members, but they cant work here. Same thing with the company. We give employeess sons and daughters a summer job, one summer. There is a lottery because we have so many people now. Im a big believer that organizations are family. And you cant be perfect. Sometimes you make mistakes. But weve got to make sure that people understand if they devote themselves to the good of either the City Government where i worked or this the company or the foundation or whatever, its a twoway street. More from the former mayor on evolution. High frequency trading. Controversial comments about that. Stay tuned for that. Coming up, though, more from cnbcs first 25 in the mayor. And of course well be talking about the countdown to the april jobs report. Thats continuing. We are now just a little over 30 minutes from the hour of the month. Our panel getting ready to rock. Joining us after the break. Aft. If you wear a denture, take this simple test. Press your tongue against it, like this. It moves do you feel it . It can happen with every denture. These movements may irritate your gums. But you dont have to bear with it. You can try fixodent plus gum care. Thanks to its formula, your gums become one with your denture. This helps stop movement and helps prevent gum irritation so you can keep enjoying life. [ apple crunches ] fixodent. And forget it. I dont have to leave my desk and get up and go to the post office anymore. [ male announcer ] with stamps. Com you can print real u. S. Postage for all your letters and packages. I have exactly the amount of postage i need, the instant i need it. Can you print only stamps . No. First class. Priority mail. Certified. International. And the mail man picks it up. I dont leave the shop anymore. [ male announcer ] get a 4 week trial plus 100 in extras including postage and a digital scale. Go to stamps. Com tv and never go to the post office again. The jobs report is just a half an hour away. Well tell you what to expect and bring you instant reaction when the numbers hit. Former new york city mayor Michael Bloomberg made our list of the top rebel, icons and leaders of the past 25 years. He weighs in on High Frequency trading and income in equality. And matthew rose will join becky live in omaha. Hes the executive chairman of bnsf railway. Full speed ahead. The third hour of squawk box starts right now. Becky quick is in omaha for the annual Berkshire Hathaway meeting. Ill be going out to see her in a little bit right after the show, becky. Thats right. I will see you a little bit already. Already people are piling in. You will see all sorts of the berkshire faithful. Berkshire managers. This is all happening on the eve of the annual Shareholder Meeting. We caught up with Warren Buffett ahead of this. He is expecting a good showing. In the past, we have seen 35,000 the last several years. He is now expecting about 38,000 people to attend this years meeting that starts on saturday. We caught up with mr. Buffett when he was coming back from lunch. This is his typical healthy diet. He had a mcdonalds bag in his hand. We talked about a topic on everyones mind, that is cocacola. There was a story in todays wall street journal that suggested cocacola had heard that. And the management may not be doling out those shares and those options as quickly as originally planned. Do you know anything about that . Well, i wouldnt be surprised. Theyre going to look at it certainly. With us abstaining with a fair amount of no votes. And what they authorized at this meeting the other day, they dont have to do. They can spread it over a longer period of time. We will see what they do. They listened to shareholders before. I think they will listen again. If you talked to hue tar since the vote. None of the directors . No. Not even my son. The plan that Warren Buffett abstained from voting on. Berkshire hathaway is the largest single holder with 9. 1 of the shares outside. Hes happy with some of the progress being made. But he would like to see coke withdraw that plan. He said it would be enough to him if they simply took shares and options they had requested from management and spread that out over a longer period of time. We talked to mr. Buffett about several things, including the weak gdp numbers. He said he wasnt terribly surprised by the print we saw earlier. He does think things have been picking up since then. The housing is another topic thats been in the headlines lately. A subject Buffett Knows very well because of all his different businesses that shows how mortgaging are going, home sales are going. I asked him to gauge the strength of the Housing Market for us. He didnt sound overly optimistic. Housing is not that strong yet. Im surprised at that. But its better than it was a couple years ago. But the pickup in housing has been slower than i would have anticipated. And i would say thats true right to this date. And its true in the secondary market for houses. The prices have recovered some in all of that. But if you look at transactions and pending transactions in march, you know, its not booming. Of course it hasnt stopped Berkshire Hathaway from spending money. Another 3 billion acquisition that the Company Announced just today. Well talk more about that a little bit later. This is all leading up to the annual Shareholder Meeting. Things kick off tomorrow bright and early. And our big show monday morning. Squawk box will be live in omaha. We will be joined by Warren Buffett, Charlie Munger and bill gates. We have matthew rose will be joining us to talk about bnsf. He is the executive chairman. Gentlemen, ill send it back over to you. Becky, thank you for that. We have headlines to bring you up to date with whats going on this morning. A big deal. Pfizer putting forth a takeover bid for pfizer. Astrazeneca saying the 106 billion offer is in adequate and it substantially undervalues that company can. Of course the big policy issue on that deal is the tax issues and moving of the headquarters and Holding Company to the uk. Take a look at futures. Futures likely to change at 8 30. The dow looking slightly higher, five points higher on s p 500. 1. 5 higher. Nasdaq opening up 2. 5 up higher as well. Jobs report 8 30 a. M. Eastern time. Here are the numbers to beat. Consensus says the u. S. Economy added 215,000 new nonfarm jobs last month with unemployment dropping to 6. 6 from 6. 7 . Less than half an hour from the big jobs report that comes out on the first friday usually of every month unless Something Weird happens. A Research Fellow at the Hoover Institution and Public Policy professor at stanford university. Just looking at his resume. 30 degrees in boston harbor. And mark zandi at moodys analytics. You dont know zandi. We have met. He said aep is really good at what they do. I like this guy. Hey, theyve been really good. The last couple months especially. Lonnie, the stuff that he might not like is some of this malaise, and you are stim concerned about the growth and the economy, is because no new policy approaches in washington since 2009. I dont know what you think of zandis 800 billion. I want the money back for that stimulus. You got it back in the jobs, stock market. We need a shovel. What do you mean by that . Well, i think the approach has been fundamentally the same. With the reelection in 2012, theres been no new effort to grow the economy. The one potential bright spot was trade. Even there we have been stalled. We have this is the world were living in now. Raising the minimum wage, they will tell us thats pro growth policy. Ive heard the republicans have balked all the policies. We had that long argument about raising letting the bush tax cuts expire, et cetera, et cetera. Those are anything short of more stimulus. They dont really consider any of those things pro growth policies. What else would make sense . Well, trade certainly the keystone. Xl pipeline. Fundamental tax reform. Dave camp has his plan out. Not sure if its going anywhere. Probably not. There could be more of an effort particularly from the white house to embrace some of these policies. If you want to see real change in terms of the trajectory of the economy. These are things that could make a real difference. When you see the wedge issues that have been introduced, whatever, minimum wage, raising the over time for executive action where you can raise the wages of a few people. Right. Just write that off to try to win the 2014 election . Or is it actually in good faith, an ernest attempt to help people that need jobs . I dont want to totally discount the benign motive. But we do have an election coming up in november. There are issues that can help. Minimum wage. Paycheck fairness act. These are all efforts to make sure that parts of the electorate are there in november. I tend to think its more political than anything else. Youre with with me on a lot of these issues. It is just ironic to me that focusing on those while ignoring pro growth policies sets the people pack that you presumably have been elected to help, the people that need the help and need jobs. You basically are sort of ignoring them for political expediency. The average time of unemployment is incredibly high. You have about a third of people that have been out of work for more than 27 weeks. You look at the Unemployment Rate amongst blacks, young people, hispanics. Thats quite high. People working parttime who want fulltime. There are a number of factors that are quite concerning. I found a guy i can really talk to. Its very exciting. Do you have any what would be your the counterthe factual that you always love to talk about is things should be going heck of a lot better than they are. The first question you wanted to ask is what policies we should be focusing on. Pro growth policies. Lahnee brought up a good one, tax reform. Who should be leading . The president should be leading and he is leading. On tax reform . Yes. When is the last time you heard him say that . It was in his state of the union. Are we in may now . Come on. You would focus on the 10. 10 minimum wage and go place to place with people behind you. I think minimum wage is a good idea, but i dont think thats a game changer. Immigration reform say game changer. Bipartisan support for all those proposals. We cant seem to come together politically on it. Its just the political environment were in. Its encouraging everyone is on the same page with regard to that. Hahnee, when we get the election out of the way in 2014, are you optimistic at all that we do anything pro growth between then and 2016 . Frankly, no. I think were in this political cycle now. And theres no reason to believe, look, if we have the period between the 2012 elections and 2013 and nothing happened. And now were into election season, i dont see things changing any time soon. Part of its is president ial leadership. Marc brought up immigration reform. It will make a big difference. I dont see action coming on that any time soon. Republicans share the blame for that. Heres a prediction. Nothing will happen before the election, no doubt, because of politics. On the other side of the election, we get some kind of immigration reform. Theres another election coming up after this election. The 2016 . Yes. But we have 2015 to get some work done. I think in there we get immigration reform. You can get host when you want. I dont have a voice. You can sit here in fact. Am i allowed to invite him back . I think you think. Its very reasonable. I have been reading this story while you guys have been talking. You do that all the time. This is a true business story. Porn stars are saying chase is canceling their accounts. They dont want their kind. It is all over twitter, the porn stars, talking about it. Im scared to click on some of the links because i dont know where it is going to go. I want to report the story. This is an important story to report out. You cant wait to the get out of here. Does this have incognito, this web browser . I dont know what that is. What is a name of a couple of the porn stars. Do you know a porn star named teegan presley . I know elvis presley. But not teegan . Buck naked . No. I dont know who that is. Veronica addlux. Chest brock well . Stormy daniels . Thats a good one. Miles long. Back to becky in omaha. She will be joined by the executive chairman of bnsf. Well talk rail and a lot more. And continue the countup on 8 30 a. M. Eastern time. Pack in a moment. [ girl ] my mom, she makes underwater fans that are powered by the moon. She can print amazing things, right from her computer. [ whirring ] [ train whistle blows ] she makes trains that are friends with trees. My mom works at ge. 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. Welcome back to squawk box live from the Century Link Center in omaha, site of the berkshire annual meeting. Here now, becky quick. It is a big weekend for Berkshire Hathaway. This is the companys annual Shareholder Meeting. Joining us is one of the berkshire executives, matt rose. Bnsf is a wholly owned subsidiary of Berkshire Hathaway. Matt, its great to have you here. Great to be here, becky. I love talking to you about what you see in the economy. We have a horrific gdp for the First Quarter 0. 1 . Jobs numbers coming in a little bit. What are you seeing right now . So we were the epicenter of weather for the quarter. It really was a lot about weather. We dont count jobs but we cant car loads. Car loads are coming up. We look at 22 businesses on the railroad. Over half, twothirds of those are actually positive. If you look at the underlying strings, housing, auto, trade, truckload, ag, coal, oil, all those things are coming back. What kind of economy does this feel like to you . If youre not talking 0. 1 , what are we talking for the year . At least the last threequarters for us is actually going to be a little stronger than what we will see gdp at. We are forecasting 2. 6 . But its really the Energy Revolution that is putting the additional volume into the overall supply chains. Lets talk about crude oil. It has to be one of the strongest categories. What are you seeing some. Continue development of shale plates all across the country. I look at it from what we see in terms of manufacturing, near shoring, reshoring, development of these shale plays. I think its the most significant thing we have seen in our lifetime. What it is doing is allowing u. S. Manufacturers to come back to the United States to be able to rely on affordable, reliable energy. That oil has been huge for you because you happen to be a train line that comes can from those areas and comes through. Right. What has that meant in terms of volume . It is huge. The majority on s out of the l balkan. The bottom line, as we grow to energy independence, north american, pipelines will have a huge role to play. But rail will have a huge role not only for the United States but the canadian crew that wants to come down to the refineries. There have been a lot of questions about safety. Csx had another derailment. A crude car derailed and burst into flames. Right. 56 senators say they would vote in favor of the pipeline pause they think its a safer way to do it. What happens if the Keystone Pipeline is approved . First off, when i was on the president s jobs council i voted for it. This is not a rail versus pipeline deal. We believe railroads and pipelines ought to be built for the shale plays, eagle, nibrera, there is additional gases, ngls being shipped that is creating the volatility. We have been working hard with the group that regulates rail safety hazards, department of transportation, federal Railroad Association and a plethora of other people on designing the next generation tank car. We believe we have a tank car that quite frankly will approach being able to handle this crude in one form. But theres also another way and that is to remove the gases out of it. Just like canadian crude, it will have a whole different type of compound. Make sure the crude is properly identified in terms of packing groups. And we have the right tank car against that. Those are difficult jobs to get the new tank cars. It doesnt happen overnight. It takes a lot of time to get the orders in, get them on the railroads. The whole idea, i didnt know about removing the gas. How is that that even worth the process . It say mini refinery process. Whether or not that will actually occur or not. Just when we are looking at canadian crude. Through the year we developed the right tank cars, just like we have for crude. It was agreed to in 2011. The d. O. T. Just this week sent to the white house omb a tank car standard. Well see what comes out of this. The bottom line is the country needs for us to be very successful in this not only for safety but truly the whole debate, its really not about that. The keystone is the northsouth pipeline. A lot of crude oil wants to go to the east coast, west coast through the refineries that otherwise would have taken imported oil or quite frankly would have been shut down. Its vitally important that we do get the tank car standard right and the operating car practices to go along with that. You stepped away from the ceo role. You are a young plan. Theres speculation about what else you might be doing. People are talking about you being a potential successor to Warren Buffett. Can you talk about your plans, what you might like to do or the speculation. Fim staying busy on many of the Public Policy issues, as well as helping carl think through succession planning. Theres plenty of things for me to do. So youre not retiring any time soon . Im not retiring. Thank you for joining us. We really appreciate your time. Thank you. When we come back, april employment report just a few minutes away. We will tell you what to expect when the numbers hit just after this. Still to come, hes number 20 on the cnbc first 25 list. Wall street data pioneer and former new york city mayor Michael Bloomberg. Find out what the richest man in new york thinks about leadership, the economy, and washington. That interview and much more when squawk box continues. Theres a saying around here, you stand behind what you say. 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. If your denture moves, it can irritate your gums. Try fixodent plus gum care. It helps stop denture movement and prevents gum irritation. Fixodent. And forget it. Its called truecar. And truecar users. Save time and money. So when youre. Ready to buy a car, make sure you. Never overpay. Visit truecar. Com today. Welcome back, everybody. A big show monday on squawk box. Three hours with Warren Buffett. And longtime adviser Charlie Munger on set with warren. And well be talking to to the father of microsoft. Bill gates. All three on set together. Bill gates is a director the at Berkshire Hathaway. Monday, 6 00 a. M. Eastern. We have so much to talk about. Well send it back to you. Andrew, ill see you in a little bit. Joe, feel better. Okay. Well see you next week. The voice doesnt sound like it. The voice doesnt necessarily show how you feel. Coming up, well bring you the job numbers. Instant analysis. And a move in the markets. Dont go anywhere. Jobs report in just a minute. [ ] theres a gap out there. Thats keeping you apart from the healthcare you deserve. But if healthcare changes. If it becomes simpler. The gap begins to close. When frustration and paperwork decrease. When doctors are better connected. When grandparents get to live at home instead of in a home. The gap closes even more. And you begin to live a healthier, happier life. So lets simplify things. Lets close the gap between people and care. Between people and care. 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. Im almost done. [ male announcer ] now you can pay your bill. Manage your appointments. [ dog barks ]. And check your connection status. Anytime, anywhere. [ dog growls ] oh. So youre protesting . Okay. [ male announcer ] introducing xfinity my account. Available on any device. Welcome back to squawk box. Were seconds away from the april employment report. Equity futures down. Turning a little negative. S p looking up as well. Hampton pierson joins us from the Labor Department and hes got the numbers. 288,000. April nonfarm payrolls increased by 288,000 jobs. Unemployment rate is 6. 3 . Thats the biggest drop in the Unemployment Rate since september of 2008. We had significant revisions for february and march. Increase of 36,000 more jobs than previously reported there. Private sector in the month of april. Plus, 273,000. And the job growth was widespread. Retail trade, 35,000. Food and drinking places, adding 33,000 new employees. And construction was up 32,000. That 6. 3 unkphoeuplt rate due to these components. Labor force declined by 806,000, including the number of reentrants. Thats the largest monthly decline since the Labor Department began keeping those kinds of statistics. And the number of new entrants was 126,000. The Labor Force Participation rate. 62. 2 , the lowest since december 2013. A big change in the longterm unemployment. 35. 3 of total unemployment. Thats the biggest monthly decline in longterm unemployment since october 2011. Bls now is telling us that the average job growth for the last three months is around 238,000. Lots to chew on. Back to you guys. Thats a blowout. Panel reaction. Unbelievable. You cant throw tissues at me you just blew your nose in. At this point Michelle Gerard said a big number wont matter. You said the one thing to worry about is 6. 2 percent. They are looking at the plethora of labor market data. Average hourly earnings. What did that do, steve . Give me a moment here. Up 0. 1. Nonfarm production is what you want, right . Up 0. 1. March, negative 0. 1. If someone would have told you. Lahnee, you can get in this too. If somebody told you we would be 6. 3 and 10year, under 2. 7. Were under 2. 7 . 2. 68. Unbelievable. Go back to the drawing board, would you, please . I learned something. Maybe the underlying trend is higher. You have to go back. You have stuff in your ears like in your throat this morning. We saw 32,000 increase in construction. 32 in construction. 12 in manufacturing. Government, 15,000 up. Thats related to the late easter. Hlahnee, i have often made te point, this is a great economy no matter what. Does this surprise you . Its definitely on the up side. I think its good news in that sense. I dont know that it alters the fundamental trajectory of where the economy is going. My concern is still the ratio. 58. 9. There is concerning larger questions where we are. Thats what i would be concerned about and focused on right now. One other number to chew on here. The decline in the longterm unemployed, it was 3. 73 or 3. 74. Now its 3. 45 million. So 300,000 or so give or take decline in those longterm unemployment. Is that right . So this could be the effect, the expiration of the emergency ui. When that program expires, the longterm unemployment may step out. They are leaving the workforce. This is something we have been anticipateng. Theyre no longer unemployment. Theyre not looking for worth. Does this prove krueger right or wrong that they will not exert downward pressure as yellen expects. I think it proves them right. Freddy krueger . What is he talking about now . People who were paying attention the longterm unemployed aint coming back. They are more likely to leave the workforce than come back into the workforce. The fed should not consider this group of people as being part of the slack in the labor market. What is shortterm unemployment . Its normal. If back to historical norms. Rick, zandi didnt even know you were here on wednesday. Thats all right. We dont need the markets. We can just massage the incomes. Dont be mean. I want the market to go up on this. Its a great number, and im happy. No . The stock market did go up but not very much. I know. Dow futures were up four. They shot up to maybe 29. Now they are up 15. The yields, you want to watch the fiveyear the most. Theres a lot of reality to the fiveyear. Or even further down the curve, which gets distorted by the notion that european southern economy rates are basically in parody with ours. That moves from 1. 66 to 1. 75. Its now 1. 74. Nonseasonally adjusted looks a lot different than the numbers on the screen. We all know about the Labor Force Participation rate. Why are we happier . The Participation Rate or the weather generated all the jobs . I cant tell you whether weather generated jobs or not. I just know these are seasonally adjusted numbers. So many traders are not questionsed of the realities of how things are being measured against markets. They have bigger shovels, sharper pencils and better glasses. Boy, let me tell you something, the Market Options are going crazy. All you see is more buying of of calls and selling of puts, which is not a bearish trade. It is the weekend. What you want really want to concentrate on, things like participation, percentage of the labor force population. But im not going to dismiss the fact that i like to see nonfarm payrolls up. Rick, i dont know if you can see the graphics. But i have a graphic that shows the last six years you were right. And the last six years i was right. Here is the recession and job growth since the beginning of the recession. What you found is that relative to the decline, this has not been strong enough. Thats why everybody was looking for 300s. We went way down. That shows rick is right. We should have much stronger job growth. The next shows i am right. Since the end of the recession, this job growth outpaced the prior recovery from the other one. It has been stronger. It is stimulus work. I was hoping for nice words. Youre making a funny. A zandi funny. He will be down in tribeca. The trend job growth was south and now it is north. What does this tell you, mark, about the bounce back . We know the data decline, except what i thought was the jobs data. Maybe the underlining trend is higher than we thought . What does it tell you about 2q gdp . I think it will come in 3 . Thats big. Everybody thinks it is two. Juror saying it is a percentage point higher now. Even at zero in q1. It is 2. 3 . Were going to get to three mid year. We hed to have more discussion at later date, this notion of 6. 3 getting down to 6. Lahnee, any of the admissions people at stanford . Give me a call. Well see. Thank you. Thank you, rick santelli. Marc, thank you. Cant work everywhere. Right, andrew . Not going to cornell any time soon. Theyre not going to let him in. Coming up, more of our enter vow. Coming up, our interview with former new york city mayor Michael Bloomberg. One of our cnbc 25 with what he has done from a business perspective. Plus, of course, what he has done in insure. His fake on income equality capitalism and High Frequency trading. Surprise to hear some of the things he says. Historic week for cnbc. We unveiled the cnbc top 25 list and rang the closing bill here at cnbc headquarters. You can relive it all in this weeks talking squawk blog. Squawk. Cnbc. Com. Heres a good one seattle. What did geico say the mariner . We could save you a boatload foghorn sounds loudly whats seattles favorite noise . 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While we were talking about jobs, april jobs report. Dow component chevron released quarterly earnings. Earning 2. 36 per share. Missing estimates at 2. 51. Revenue below estimates. Were going to see pressure in early trading. Yesterday i sat down and spoke with Michael Bloomberg as part of our 25 list. Most impressive individuals over the last 25 years in business. What he thinks about the controversy over High Frequency trading. I think there are too many events that have taken place where clearly people were breaking the law, where people were not looking out for their customerss best interests, where there was corruption scandal, theft, whatever. But generally speaking, in the aggregate, people that work on wall street are as good as people that work anyplace else. If it wasnt for wall street, commercial banks, investment banks, we would not have an economy. The average person that works on wall street makes 70,000 a year and lives on main street and shops on main street. We are all in this together. And i think most of these where we pile on and blame the ceo for some of these things, in retrospect im sure they look back and say i wish i had caught that thing before somebody was taking advantage of us or just doing something wrong. But the organizations are very big. The world is phenomenally complex today. And you can say, well, we have to simplify it. You cant. What do you make of the larger debate about in equality and capitalism as a businessman. One of the things youre seeing is the effect of the Federal Reserve pumping a lot of money into the system. I dont know whether its created a lot of jobs. Its probably created some but not a dramatic number. But what it has done is it has inflated asset values. Assets are held by the average person through their pension fund or the wealthy because they have the money to own assets. And so that has exacerbated the rich poor top 20 , bottom 20 gap. The issue here is what do you do about it . And taking it away from the top and giving it to the bottom has been shown in history to not be think of the ussr. Thatst does not work. You have to the make a fundamental decision, do you think it should be equal opportunity for everybody or equal results in and thats really the difference between those that the populus who think it should be equal reports. Or those that think, you know, theres some luck involved in everything. But you dealt a set of cards. You have to play them. Sometimes you win. Sometimes you lose. But at least you are in charge of your own destiny. One of the things bloomberg lp did so many is bring transparently cy to the market. Yes. What do you make about High Frequency trading and the argument that the system is rigged. There is always abuse. The system isnt rigged. Somebody is hacking into the Computer System right now. Somebody else is trying to trade given an edge on trading, that sort of thing. The world should be measured the following way. The commissions charge to do a transaction are so dramatically stronger today they are measures in thousands of a penny sometimes compared when i was in the securities business in 1966 on a 50 trade. 1. 50 commission spread. And thats all gone. The public is better served by it. And if you want to make sure you get the best price today, if you want to, for example, sell 1,000 shares of ibm, there are 30 different changes in dark pools that list ibm. Only a computer can do that. I would think you might be against dark pools given the transparency. No . No. You dont have to trade that there. You as an investor dont have to tell everybody what you want to do. If somebody comes to me with a bid, maybe i will hit it. Maybe i wont. The other person doesnt have the right to know that. If you are making an offer, you should make it to everyone. Dark pools you come in and say i want to do something and see if the other side is there. Final question. Do you like being back to work . Love it. Its fascinating. Im so proud of what i built and all the other people behind me more than 12 years ago and particularly the last 12 years, peter, dan have taken the company. What happens to it . Is that a company you eventually sell . Eventually it becomes the property of the foundation. Everything i have is going to go to the bloomberg philanthropies or directly things i care about, Climate Change, the arts, Public Health and Johns Hopkins and other educational institutions. One of the things peter says is where else can you work for a company where 100 of the profits go to charity. Until Climate Change i felt like the grinch. You know how his heart grows three times bigger at the end . His comments on capitalism were just right on. In watching it i realize what a quandary. You love bloomberg and this pickity guy. And a wealth tax. And you just heard from another one of your idols that it doesnt work. We tried outcome instead of equal opportunity. We have seen what happens. It doesnt work. I love you. Im im watching when he gave that he told you theres no doubt in his mind that taking it and a lot of people have come to this conclusion, weve had hundreds of years. What did you make of the High Frequency trading bit . Same thing . Same thing. Were going to have jim cramer on he can argue my side better. Sometimes i defer to him. I dont always. If theres a couple billion dollars, like i said, if it bloomberg seemed to thing it does increase liquidity and gives you a place to go to buy at all these different places. If it anything positive a couple pennies are okay. But if the gist is there to enrich the guys that are faster i dont know. We will continue this debate with jim cramers job report. Squawk box coming back. Comin. With fidelitys guaranteed onesecond trade execution, we route your order to up to 75 Market Centers to look for the best possible price, maybe even better than you expected. Its all part of our goal to execute your trade in one second. Im derrick chan of fidelity investments. Our onesecond trade execution is one more innovative reason serious investors are choosing fidelity. Call or click to open your fidelity account today. What is this place . Where are we . This is where we bring together reliably fast internet and the best in entertainment. We call it the x1 entertainment operating system. It looks like the future we must have encountered a temporal vortex. Further analytics are necessary. Beam us up. Thats my phone. Hey. [ female announcer ] the x1 entertainment operating system. Only from xfinity. Tv and internet together like never before. Lets get down to the new york stock exchange. Jim cramer joins us now. A lot to talk about. Jobs numbers first. Your take and where the market goes . Well, i think you guys have been digesting it pretty well. I think the idea maybe we get some kind of a redo basically of what im seeing where youre just getting a lot of jobs that would have been created coming up, the revision is terrific. When you go boots on ground whether the auto industry, whether it be not the residential but the nonresidential construction industry, whether oil and gas, you can see there are job places where there are so pane jobs and few people that this is beginning to kick in. There are people recognizing if you go to louisiana, go to texas, oklahoma, go to north dakota you will get a job. There are jobs available. Jim, an issue we have not touched on together and had becky on earlier from omaha and im getting on a plane to get out this weekend, what did you make of the coke situation and specifically whether you think that warren buffet did the right or wrong thing in terms of how he voted and how he reacted publicly . Well, im always loathed to criticize him because hes like many, i idolize him, but i was surprised to hear look, if you dont like it, speak up. Because if you dont like it its going to get redone. I look at warren buffet and say this is a man who has a bias toward action, not a biased to passivity and i think if you wanted to just make this thing happen he could have picked up the phone but he didnt. I respect the fact he doesnt do that, but he is the largest shareholder. These guys are not being good stewards. Im not opposed to the pay package but i can see it explained different ways. If youre going to abstain why not go allin and say listen this doesnt please me . I dont know if you saw we had the mayor on, mayor bloomberg. That was a great interview. And on High Frequency trading he said no biggy. I was surprised only because he has been an advocate for transparency and people say dark pools unto themselves are exactly the opposite. I was surprised because i think there are tax on the system, i listened to joe and joe was so right, that look, if they are running ahead, and they are taking pennies, if youre a or fractions of pennies if youre a large trader thats going to add up. I dont think you need them to create theres lots of reasons we have liquidity. You dont need them to provide whatever liquidity they do because when the market is big swings they disappear. Thank you, jim. See you on squawk on the street in a moment. Coming up much more on the april jobs report and mark zandi and later first reaction from labor secretary tomas perez and then Goldman Sachs chief economist hes going to be joining us as well. His name is . Jan hatzius. Yes yes 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. 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When working with an investment firm, whats really important is whether the people behind the desks actually stand behind what they say. Introducing the schwab accountability guarantee. If youre not happy with one of our participating Investment Advisory services, well refund your program fee from the previous quarter. Its no guarantee against loss and other fees and expenses may still apply. Chuck vo standing by your word, thats what matters the most. Welcome back to squawk box. Take a look at futures right now. This is a bit of a surprise because theyve turned negative after the april jobs report. Those numbers came in 288,000, what i thought were strong. Lets get some last thoughts from our guest host, mark zandi. Explain this one. Why we saw there was news from chevron which is a dow component. Yeah. I mean i dont think anyone has forecast change because of this, right . I mean the numbers are up one month, down another month, still coming in around 200 k. People think that nothing has changed. My forecast has not changed. Why buy sell stock. We always predict we ask in the beginning of the show to predict whats going to happen at 8 30, predict whats going to happen in a month from now. To what . The next jobs reports . Yes, sir. I think were coming close to what i call a field of dreams moment, that is, businesses are ready to go and create more jobs. Thank you. Join us on monday, becky will be in omaha, squawk on the street begins right now. Good morning. 288,000 jobs in april. The fastest pace in two years. Welcome to squawk on the street. Im Carl Quintanilla with jim cramer and david faber at the new york stock exchange. Futures taking stock of that number which is a strong headline. Unemployment plummets to 6. 3, thats the lowest in more than five years, but that labor force decline has some looking at the number a little more sceptically. Were going to explain everything you need to know. The tenyear yield did pop, not like you might expect, curnt