Transcripts For CNBC Squawk Box 20150204 : vimarsana.com

The third rail pierced the front cabin and came up through the train. Thats a horrible horrible situation. Thats the train my father takes every day. Among big business stories were watching this morning if you read on jobs the adp employment report is coming up. Forecasters say the economy likely added 245,000 private sector jobs last month. Greece started debt swap talks with the imf. The new government wants to restructure its debt after receiving 275 billion in bailout money since 2010 and in china a post mortem of stimulus central bank making a basis point universal cut in banks reserves ratio as policy makers try to encourage banks to lend. Shell join us in just a moment to discuss. First theres a couple of stocks to watch this morning that we want to keep you abreast of. Disney shares getting a boost after results were better than wall street was expecting. Its blockbuster film frozen is still hot driving Home Entertainment and toy sales. Were going to talk to an analyst and was excited about it. Is it seven minutes . Seven minutes. Seven minute prething. Somebody gets a cold or something. Elsa or anna gets a cold and mayhem ensues. Its cold where they are. So its probably common. Now its warm there. Now its warm. In the movie its cold but in the new thing it starts out warm supposedly. I did a lot of Research Last night. I still havent im going to but i havent gotten around to it. Your kids are older. They are but they have seen it. I dont know where i was but i have never sat through it. Im not really sure what happened. But chipotle with weaker than expected sales. The cfo says the cold weather seems to have slowed sales. That is the new standard for casual restaurants, mcdonalds and others are grappling with and part of the problem and chipotle not doing as well. Macys is buying bluemercury for 210 million and the retailer reported it rose 2. 5 on topping street consensus and the macys ceo and top exec will both join us first on cnbc at 8 00 eastern. Were neighbors with terry Terry Lundgren. Those are two attractive people. Equally attractive. They are. Its not just the photos. Not just the photos. Well see them in real life. In the flesh. There you go. Now back to the big global story of the morning, greece and china. Michelle is here to break it down for us. Lets start with greece because just about an hour ago the greek finance minister merged from his meeting with mario draghi the head of the ecb in frankfurt. Hes in germany. He had gone in there trying to convince them to be more lenient. This is some of what he said when he came out. I had the opportunity to present to him and im wavering determination that it cant possibly be business as usual in greece. So greece believes the money they owe to the ecb, 27 billion euros is immorale and when i finish explaining to you why, you might agree. The reason greece owes is because the early days of the crisis 2010, 2011 he went out into the marks and bought greek debt so they could reenter the Capital Markets and borrow again. It failed. They couldnt. So that 27 billion euros sits at the ecb. Then remember this is private sector debt thats trading out there, right . They go on to restructure all of that what was the biggest restructuring in the world except the ecb refuses to go along with it. Says no youre bog to pay us back in full. And greece for something that didnt work. For an experiment. Exactly. I see their point. Exactly. And theyre like look if you had never bought that debt we wouldnt have to pay it back. Exactly. However the ecb not going to budge. That is why, i think, we now have learned in the last 24 hours and we can bring up that wall graphic we have been using the last couple of days what does greece owe to whom the same guy we just showed you gave an interview in italy, on the left is where he wanted that 195 billion cut in half and now hes going to say give us long erma tourty bonds. Ecb he was going to try to get them to give long erma tourty bonds and they said no. Now looks like hes asking the imf to do a restrukcturing and the only place left is the private sector. Right. Exactly. I dont think its going to come to that at this point but the bonds have improved as has the stock market in the last 24 hours. But then the ecb is playing hard ball and saying theres no negotiating negotiating. They have the most leverage. They have all different ways they can bring greece to its knees. If they really wanted to hammer greece you could get to the point where you cant take out more than 100 euros from your atm every day. That would make it more likely. Exactly. But yesterday there are other things going on but we have 500 dow points in two days. The journals lead story, greeces new leaders convince markets that they are eager for a deal. I think thats true. Well i read that and then i read threatens to leave greece without funding. Greece wants to do it. Ecb doesnt. But yesterday the idea was that they were going to be able to get together somehow on this. It depends which pile of debt you were talking about. Thats where we showed you the big graphic. Didnt they seem more amenable yesterday than some of the hard talk over the weekend . Greece bottom line every time appears to be backing down. It sounds like they have done that with the ecb now if we believe this article in italy today. I dont believe the premise under which the rally occurred is correct. And oil was up 2. 50. That means maybe the worlds not ending. As long as its not a slow down that warrants a 30. So they cut the reserve ratio requirement this morning that oversimplified the bank you dont have to keep as much in reserve in the bank so you can lend it out more which is undoing what they did not that long ago. The last time they did a widespread cut was in 2012. Hasnt it been a little bit of take though . Bottom line is this the sign to stimulate the market particularly in real estate. Will it work . I dont know. I did see oil this morning and it fell as a result of this for fears that it signifies. That theres a bigger problem that people appreciate it. Yes. This broke 12 minutes ago so lets see where it goes. Okay. Thank you. She does well its good. For viewers that she has to explain things to us. Yes. If we understand it right. Every viewer which is a role we try to play. Sometimes were im not sometimes were not. Lets check on the markets this morning. After 500 dow points only 3 points off of a new high which figures after that horrific january. There we are back a little bit. But it accelerated right into the close yesterday and even fair value up 19. So down 21 now on the dow down 4 on the snp. Down just under 11 on the nasdaq. Lets go over to europe. Take a quick look at whats happening. They have a little bit of red across the board there with greece notably down and then in the asian markets a nice move today especially up about 342. Oil had a couple of good sessions sessions. Then i saw some people someone was on yesterday that was pretty smart on cnbc and i was looking at some of the tweeting stuff saying that they havent cut enough yet and theres still too many riggs. People thought its over. Theyre jumping the gun. Theyre rallying about 20 . What was it . About 43 . About 10 higher than where it was. Lets look at the ten year note which it also has rising yields positive for the stock market. It all has to do with what were all these markets seeing in the future that looked so scary and maybe if they were able to maybe bounce a little. Lets look at the dollar finally against the euro and against the yen, 114, back to 114 on the euro had been down and theres the rest of the currencies. Gold had a pretty good run. We talked a little bit about that yesterday. The world does seem more uncertain in terms of which currency to bet on since theyre all everything but the dollar is going down. You wonder if the stock market does respond to what isnt 3 this year then where do you go . No yields in the bond market and if youre worried about stocks its the first time in awhile i thought maybe i need some coins. I need some coins in my i dont think thats a bad idea. Maybe ill talk about that. Do you remember how many times that was questionable. He wrote those puts on the s ps years ago. It was in and out of the money now. They got paid billions of dollars to say the market will go up over time. Request are you buying gold now . To put in my safe. Just for coins. Because you like the way it feels . Everybody likes the way it feels but all the that glitters is not gold. No but gold does glitter. I havent bought economy but people at 19, 100, 2,000. Very close to the jewelry district. Thats plated isnt it . Solid is not necessarily good for jewelry. Solid isnt good for carrying around in your pocket. Heavy. Let me tell you about something else. You dont have a pocket do you . No no pockets on here. In my coat. But something thats performed even better she squusjust walks around with gold. Disney is crushing expectations on the top and bottom lines. Big drivers, the theme parks and off the park sales from merchandise of frozen. And since the market bottomed in march of 2009 disney is up more than 500 . David bank is here with us from rbc capital net markets. Its hard to imagine merchandise from frozen was still propelling this stock. It was supposed to be a nothing quarter on the run up to the star wars release and the shanghai park opening and frozen was like a year ago and it was a monster quarter on Consumer Products in the studio and the parks at 89 . Its all just kicking. So it is just amazing the legs that the franchise has had. It shows you that these guys are a global branded Consumer Products company. They keep launching huge franchises. Thats how investors are thinking about it. Do you put a different multiple on it . I think at the end of the day is it cocacola . You think about it as a cocacola multiple as a png multiple as opposed to necessarily a media multiple. Whats the difference . The difference is like kind of a high high high teens versus a mid teens media multiple and thats a big difference. Thats how the stock keeps moving. Its near terms earnings expansion. You look at the company and they executed very well on a lot of levels but since theyre a Consumer Products company how much is it the consumer is doing well right now. How much of it is macro and how much is internal. To some extent its consumer focused. The base of the business is espn is like 60 of the company or something so fundamentally the business is solid. I think its less about the condition of the like lower gas prices. Thats been a big impact . Probably not. The bigger impact is can you keep inventing ip that people want to buy and consume . I think thats been a bigger factor than the condition of the consumer right now. Its their uncanny ability can i challenge you for one second . Youre suggesting that espn is 60 of the business. 40 is the consumer business youre talking about. Why would the multiple why would you give it a full on consumer multiple . Because espn is a pretty high multiple business. Its arguably the best business in cable right now in the broadcast business and i think what the Consumer Products business does is it gives you a Growth Engine but disney keeps reinventing itself constantly. That part of the business is a longterm driver of Value Creation and of earnings. Is there a point at which you ever see an Inflection Point where it switches . Means the consumer branded business you talk about isnt 40 of the business . Its 60 or 70 of the business. I think its 60 of the company. In terms of the cable business the media nets business is probably close to 60 of the business. Is there a point where i see it flipping . I think if you look this is how ieger talked about it last night. The biggest priority last night for disney is developing its relationship for its end users. Its customers. For mining data and customizing products, i think ultimately disney is positioning itself for something it doesnt want to happen right now but is prepared for. Its a direct consumer relationship. Think about cnbc as a direct consumer relationship not being sold through your cable box. The disney ceo was on the closing bell yesterday. He talked about just that. Why dont you take a listen to what he said about over the top program delivery. We believe that in an environment changing right before our eyes that some experimentation is necessary and i dont want to just say its an experiment. We actually believe this is going to last but we are going to ache a careful approach and obviously not put in jeopardy the expanded basic bundle which is so valuable to the company and to the industry. What do you think about that . I think its incredibly forward thinking. I think the way hes articulating it is just about right. Theyre not encouraging it or welcoming it. This is a fabulous Southern Land for all of you guys. You shouldnt want to break that or encourage any damage to it but should it happen at some point, some point in the future the world is going to change. You need to be positioned for it but more broadly than just the channel itself this is about mining consumer data for Consumer Products for video games, for you, know all kinds of things that disney is trying to customize products for you and thats a differ priority than some other ceos have. Are you the saving mr. Banks. He had the s at the end. Was it walt disney was the that was about walt disney making the movie of mary poppins. What had nothing to do with you . Its the father. No residual. You got nothing. Im waiting for the check. Thats why youre here. And its early. Its early. But you guys do it every day. Thank you for sharing our pain. Yeah. Thank you david. Coming up when we return move over. Seattle getting a marijuana vending machine. First lets take a look back at this state in history. Major heres our new trainer ensure active heart health. Heart i maximize good stuff like my potassium and phytosterols which may help lower cholesterol. New ensure active heart Health Supports your heart and body so you stay active and strong. Ensure, take life in. Welcome back to squawk box. We are in the chairs this morning talking about a host of stories including this one crazy story about a vending machine in seattle guys thats going to sell pot. Right. Do you feel okay about that . No. No . Think about that. Its going to be like coin operated but youre going to be able to use credit card. They dont sell beer in vending machines why would you sell pot in vending machines . Make sure youre of age. Thats a way for underage kids to get ahold of these things. Im unsure how its going to work. I think we pushed this whole experiment too far too fast. We pushed it too far and too quickly without trying to stop and figure out what happened. Theyre saying this is for medical marijuana but if you look i dont know if we can show the screen again. You cant get prescription drugs from this is ridiculous. You must need a prescription and you must prove i guess that youre the person. Is there any reason to think that you dont need another person verifying any of that. That machines can take care of these things . I dont know why you need it to be so convenient to get your medical marijuana. Lost a job for an employee. This was an experment thrust upon him. Why dont we ease into this and see how this goes . There were brownies there. It was called Girl Scout Cookies. Yeah. And theyre Girl Scout Cookies with pot in them. I dont think the girl scouts authorized that. You dont think. I think girl scouts cookies oh its not theyre calling it i would think theres a Trademark Infringement case to be had right there. Call the lawyers. All right. The buffet thing i read it quickly it was not his he wrote a bunch of sold puts that this is the bet. This is the ten year wager. And they picked van guard. But all of his money in a van guard index fund. Up against the hedge fund guys. Index fund is up 63 and hedge funds are up 19. 6 . The winner a charity of the winners choosing would get a Million Dollars and the money that both sides put up is invested in the stock now worth 1. 7 million. They give it to the charity. Its been an incredible he has pointed out for decades and decades if youre somebody not doing this for a living and youre not gifted at this go with the index fund and that will perform well overtime. We watched the markets soar and the indexes soar from some of the lows but his point is any ten year period that you pick he expects this would be the winner. Hes been incredibly successful at this. He is a stock picker. He is the poster child for people that can outperform. But he also told his family that after he passes he wants all of his money he recommended that his wife should be in van guard. Then hes stuck with all the people on cnbc telling us what to do and one in a million. You better be really really good to make it worth while for your investors. 8,000 hedge funds are not going to be all that good. The ones that are are totally worth it. Theres more than 8,000 hedge funds out there. Exactly. I will tell you guys americans are feeling more chill these days. Especially men. Chill like relaxed chill. Less stressed. Relax a little bit. You guys appear less stressed. I am not. Most americans 72 say they feel stressed about money at least some of the time. Parents with children under 18 and young adults are more likely than Young Americans to point to finances as a major source of stress. 75 of young adults say money is a significant factor. Women top the list for reporting high stress over money. 49 say paying for essentials like food and clothing. No i mean i have a 15yearold daughter. Thats stressful. Yes. Thats all i need to say. People will children. Shes great but im just worried that shes going to turn into the stereo typical 15yearold. She hasnt. Theres no reason to worry. Right. You worry less about your sons. I worry about all three of them. Anything can happen at any point. Little people problems and big people problems. When we come back this morning net nix goes down for just about an hour last night and if you were looking at twitter you would have thought the world was coming to an end. We have the story behind the outage and the outrage that followed. Did you see the guy that cutoff his hand because he had an internet addiction. That reminds me of these people. One hour without netflix. Read a book. Smoke some pot. Do something. You are on this pot kick. Theres a machine. You can just buy it. Do you see that guy on the corner there . I know for a fact that if you want just go right now. That guy or that guy . Its 6 30 in the morning. These guys are going to work. Hey, buddy, hey. Its outrageous. Inconceivable. Good morning and welcome back to squawk box here on cnbc. Im joe kernen with becky quick and Andrew Ross Sorkin. Netflix users can finally relax. The Online Streaming Service is back. There was an outage of netflix for a bit more than an hour last night. Impacting users in north and south america and parts of europe. Fans taking to twitter. Thank god they had twitter so they had something to do for that hour to express their outrage. Heres a sample. One user tweets netflix, netflix, netflix is still around. I guess ill watch cable. This is so 2007. Thats outrageous. These are people you want to be . That would be the britney f. That was brittny f. Okay. Another britney, netflix is down, might as well take my books out of the plastic. Other ideas of things to do this twitter, tweeter, suggests that netflix is down so maybe ill go and talk to my family thats what i said. Call your mom. They seem like nice people. I know youre joking but in every jest theres some truth. Call your mom. I dont. I know how to use it. Its pretty amazing. What happens if youre in the middle of bingeing something and it stopped on you. You would be talking about it this morning. I could amuse myself. Dont look at it. Thats not what im talking about. Thats not going to take an hour. Lets take a commercial break. We have to get to the headlines this morning. Dupont and trian. This could lead to a compromise of the company over the make up of its board also approving the high profile Breast Cancer drug coming earlier than expected. Shares rising in early trade this morning. Watch oil because crude reversing. Oil prices falling in early trading after a four day rally. It was a heck of a rally. We pointed out that crude oil actually searched 7 yesterday but if you look at what its done over the last six trading sessions crude rallied more than 20 from its low that was hit last thursday. That was a gain of about 10. Still to come on squawk box this morning the taste test of chipotles results. And later we will welcome iconic corporate leader jack welch. Stay tuned. Squawk box will be right back. Now with the xfinity tv go app, you can watch live tv anytime. Its never been easier with so Many Networks all in one place. Get live tv whenever you want. The xfinity tv go app. Now with live tv on the go. Enjoy over wifi or on Verizon Wireless 4g lte. Plus enjoy special savings when you purchase any new Verizon Wireless smartphone or tablet from comcast. Visit comcast. Com wireless to learn more. Welcome back to squawk box everybody. He has sold most of his stake in news corp. The sale generated 188 million. He stood by Rupert Murdoch during the phone hacking scandal. Yes i do remember that. Thank you. Chipotle dropping a burrito bomb on the street. That sounds disgusting. It sounds like slang for something else. That happens after you dropping off the kids at the pool or Something Like that. Beating on the bottom line but barely missing on revenue, the stock is going to its a 700 stock. Well talk about the incredible rise. Six years . Anyway, the company citing rising food costs. Higher beef, addvocado. Steven anderson is a restaurant analyst at a restaurant analyst at that was too complicated for the person stop stop. Thank you. Thank you for having me on. So is that forecast tepid . Historically its been early year with guidance. I do think theyll start to increase the guidance as the year goes on but i think that given the sharp drop in gasoline prices that has occurred thats lifted traffic across the restaurant sector i was a little bit surprised that they didnt go ahead this quarter to increase it and thats why the street was a little bit aprehencive today. The revenue is in line. I would call it in line. 16. 1 versus 16. 4. Its priced for perfection. Its a perfect stop because it went, what was february of 09 . Six years ago . 46. Now where is it . 726. For a restaurant. After hours trading went down. So how many restaurants did they have in 2009 . They had only maybe about several hundred. How many do they have now . Just under 1800. And they cant theres none that close to where i live and theres plenty of its not starbucks yet. Its not on every corner. Thats right. You look at where we think saturation is its probably somewhere north of 3,000 units and where they are, you know theyre heavily concentrated here in manhattan. They have yet in my view to really infiltrate the suburbs. This is something that is going to be copied again and again. I would try to open a fastcasual mexican chain. Fresh food. But you have to execute, right . You have to execute very well. What weve seen in the last 18 months is we have zoes kitchen trying to follow in their footsteps. Shake shack is probably the most prominent example today and all the stocks could be under pressure. He thinks its overvalued. In the shortterm. Are you short or not . Is it a five year game. Is it overvalued . Right at this minute. So it discounts five years. How do you mean its overvalued. I dont think most investors are actually discounted when is tesla going to earn a profit . 2020 . Tesla is discounted in the future. Where are you on shake shack . Well shake shack, probably its just when we look probably in the 30s at this point. It does well. Manhattan does well but even looking outside manhattan. Theyre not the same. Theyre not the same but still the average operating bond north of 3 million and 1,100 per square foot. Are you talking it up or down . At this point longer run its a good name to own but at this point id probably wait for it to come back in. I understand Institutional Ownership and the like. Ive asked management that. Whats the problem . Well i mean buy 100 shares. How much is that . 70,000. 72,000. No, thats why theres not a lot of normal people that buy the stock. Doesnt seem very democratic or very share. Berkshire hathaway never split. Im still disgusted by im going to drop a burrito bomb. Im going to find out who wrote that. I have a guess. I didnt write that. You didnt write that and you dont like it either do you . Chipotle doesnt like it. I would say i would like the stock in come in toward the low 600s and that will probably low 600s. Thats like going from 72 to 62. For a longterm stock its a good name to own but for the next 12 to 18 months probably not yet. Does taco bell have the same problem as mcdonalds with chipotle . Its not fast casual . It has a stigma. Taco bell is still fast food. There were a few observers a couple of years agathao that tried to see it as a come pet to to chipotle but its just not the same level of ingredients. Well i would say that theyre good for different occasions but i mean younger people love chipotle. Steven thank you. We have a couple of other stocks to watch this morning. Toyota raising its full Earnings Guidance. Its helping offset slufringmping demand in japan. Sony has cut costs of its image centers and video game consoles and gilead announces a share buy back. Aflac chairman and ceo say it right. Whats that . Aflac. Dan amos. The real thing driving business might surprise you. Maybe hell come with his own question this morning. Aflac. Check out the mostclicked on stories on cnbc. Com. That was much more annoying. Welcome back everybody. Jm smuckers buying big heart buying pet brands for 3. 2 million. Thats the maker of the popular meow mix brands. This is smuckers first into the pet food market. I dont get that. Like Peanut Butter and jelly for dogs . Yeah theyre taking up a bigger space. Were youre bigger you can get better sales. Yes, you can. In the meantime lets talk about aflac. I cant say it aflac there you go. Channel gilbert gotfried. After flak did meet expectations but the company said profits were hurt by expenses related to payroll changes. The stock down nearly 2 . The chairman and ceo, he joins us on more on the quarter. Good morning to you. Did you bring us the aflac question, do you know the answers usually when you see them on squawk . I know some of them but not all of them. You know theyre written by different groups of people. And we as do sports. So i dont ever claim to try to know them. I just listen and enjoy them. Dan, we think of you we think of a duck but we really should be thinking about japan, tell us a huge part of your business is in japan. As a barometer of the economy there, what is going on and how it impacting the business . Well we had a stellar performance in the Fourth Quarter. Our sales in japan were up 28 . It was driven by two things. We introduced a new Cancer Policy over there which increased our sales almost 120 for the quarter. And it was driven off japan post which, as you know, is about the largest insurance company, or Distribution System in the word today. That, along with our existing sales force who had a very good quarter, too. So, people were talking about the economy, but people still need insurance in japan. And were helping to fill the voids that are out there in the Health Care System so were very excited. And how are they supposed to think about the currency issue . Because thats going to be a headwind and the question remains how long is that going to be a headwind for you . Well weve also given our Earnings Guidance excluding the yen. When times were good in terms of the yen, strengthening it help ed ed us, but we excluded it because we bring all of our money in in yen. And we pay all our claims in yen. Its only when we bring it back across the United States its reported that makes the difference. The yen has been weaker. But, remember over half of our profits cup from dollar denominated securities because a lot of our portfolio in japan is dollardenominated. Dan, you guys are introducing a new product which is pretty interesting. I hope this becomes not just a mainstay you that guys are doing, and everybody follows suit which is one day pay. Which is you actually will pay people out the exact same day that they had submit . Thats correct. And were introducing it on the grammys. And what in essence, were saying is that we will process, approve and pay all in one day. So in 24 hours, all you have to do is submit it on a smart claim. Now, everything has to be filled out properly as you would expect. But if you do that on our policies, its going to be a fabulous way of getting money in peoples hands when they need it most. And, so well be kicking that off. Youll see it on e where the duck will be on the red carpet. So its a big thing for us. And we think its going to really be a divide in setting us apart from the competition. Especially in the health care area. So dan, to implement this and i wonder not just for you, but what it would cost for others what does it do to your margin . And what have you had to do behind the scenes to actually process a claim in 24 hours . I dont know before this how long did it take you guys . Well they have seen of our commercials, we talked about four days. So this is will get it down to one day. Now, remember, this isnt all claims. But we estimate that over 1 million claims will be processed this way this year. I think it may be closer to 2 million as the information gets out about it. So its calculated in our projections Going Forward for 2015. We said our earnings will be in the area of growth of 2 to 7 . So all of thats in the numbers. Okay. Okay hey, dan it just shows what you technologys doing. Dan, youve always sold cancer insurance in japan. I mean thats your thing. What was different about the latest policy up 120 . I dont understand. Well remember our number one selling product has been medical insurance in japan. But it was japan post that we had an exclusive to sell for us and they went back to all of their potential customers and started selling it through their Distribution Channel. Along with we hadnt had a product in several years, a new product. So our existing Distribution Channel went back and started selling it as well. And i just think weve always been number one. Weve always dominated the market. And we started pushing it. And it was just an unbelievable growth period for us. And i think its going to continue into 2015. Yep. You are an american there is an american thing. I just checked it all out. There is American Life insurance, and theres actually another one that has nothing to do with you. And your dad started this company, right . Well my dad and my uncle john started the company, thats correct. Its interesting, it was called American Family Life Insurance in wisconsin. And we did insurance, too. And we had to flip a coin back in the 50s to decide who would go with our insurance and their insurance. There you go. I think youre probably safe though. Your dad and two uncles. Youve got a pretty good pretty good hold on that job, dan. Thank you, we appreciate you coming on as well. Thank you. Dan amos. Coming up the top stories plus the results of merck. And a man who leads little if any introduction legendary corporate leader jack welsh will join us as the leader as squawk box comes right back. We needed 30 new hires for our call center. 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. Straight from the gut, jack welsh joins us for the next two hours on the economy, Energy Prices american competitiveness and the race for the white house. Earnings alert, two big pharma names reports. Glaxosmithkline and merck. Plus General Motors and the cfo. Measles cases in the United States growing. And the debate over vaccines heating. You a Health Policy specialist the second you hour of squawk box begins right now. Announcer live from the most powerful city in the world, new york. This is squawk box. Welcome back to squawk box. Right here on cnbc. First in business world, im Andrew Ross Sorkin along with becky quick. We have terrifying pictures after a jet crashed into a river in taipei after takeoff. The images ill warn you in advance. Youll see them in a second here. 58 passengers and crew aboard. Authorities say the plane clipped a bridge and crashed into the water. The airplane belongs to transasia. An unbelievable image to watch. Meantime, back here in the United States a horrible train crash, a crowded commuter train slammed into an suv on the tracks. It happened at rush hour. Seven people were killed. At least 12 people were killed. Setting the front of the train abraise and the ntsb is now investigating. We do have breaking news when it comes to Business News as well staples is buying office depot. Among the other stories that were watching just an hour away from an early read. Joe, do you have something . No if you want to know its 11, office depot. Its cashing in stock. I dont know if you have any other details. 7. 5 in cash. 228. And by the third full fiscal year. You can see right there, staples stock is down about 3 on that move. Office depot, looks like their shares are halted pending news. Thats the news until that is reopened as well. The adp employment report is expected to show that the economy added 200,000 private sector jobs last month. Well get that number about 8 15 this morning. And disney shares getting a boost after results beat the street. Its blockbuster film frozen is still hot, its been driving Home Entertainment and toy sales much bigger than expected. And macys is buying spa Services Blue mercury for 210 million. First quarter comps rose 2. 5. Thats better than the street had been expected. Macys lou london and Top Executive will be joining us on cnbc at 8 00 eastern. The dow up 2 cents ahead offing expectizations. Revenue is what i would call in line because it is 7 im sorry, 10. 4 billion. And street was looking for 10. 449 million. Thats pretty close. The guidance Foreign Exchange will have a hul impact in 2015. Were looking at 20 cents a share on negative impact for Foreign Exchange just for the year. And 349 is where the street is for 2015. 349 in the k350e is talking about 332 to 3. 47. I dont know what thats trading at. Thats an adjusted number . Probably apples to apples . Yeah, thats why, because of the currency. 3. 33 to 3. 47. Right. Okay. A budget battle is heating up in washington, as congress looks at the president s priorities. Lets get a check on the state of the economy. Foreign policy politics in the next two hours, jack welch, executive chairman at strayer university. Hes a neighbor now. Its much easier to get to the studio. But youre gracious and nice about coming up to actually it didnt really bother you to come out to headquarters right . It was great. But this is pretty nice stuff here. Yeah. And hopefully, youll be able to come more. Weve liked the guests that weve had on its better on set. Its truly better on set. You have a great lineup since youve been here. I really enjoy it more. Thats awesome. You know im we go back so long. I know you and love you, obviously. So if maybe im not totally objective. But but you always have something i think its because you you know youve written books on management. Youve written articles. Youre always thinking about something that you could actually write a probably 10,000 words on it at any given time. You always come here with something. And i know theres something, and instead of me just trying to figure it out, why dont you just talk. Just talk. Yeah why dont you just go for it. I think if i had a thought today ive never seen cross currents in my 50 years, some years in business like they are today. Youve got the e. U. Germany versus greece. Youve got, you know, saudi arabia sticking it to iran on oil prices. Youve got hezbollah and the israelis. Youve got so many battles. Everywhere you look, theres a crosscurrent thats unique this environment. On top of this youve got this crazy foreign currency change so fast. For year i drew stocks now 21 global 28 global were 70 global. Very excited about Procter Gamble and ibm. We dont want to be global at least for the next six months. For the next sick months you want to be a u. S. Centric producer hopefully providing commodities, converting to highvalue stuff and making a ton of money. You dont want to be exporting. You just had a 25 price cut by your competitors as you show up in foreign countries. And you know the crosscurrents are amazing, oh yeah six months i had reviews for the last two days with nine companies. For clayton . Yeah. And we had we used to be on chart its in spring about how penetrating the vacuum. How were doing the basin. How were moving stuff here. Now, we dont even know we got oil. I mean we havent thought about it. Only 5 . Were only 7 . I mean its a flip like youve never seen in six months. So every presentation has changed. Like for example, one guy says ive only got 5 directly selling buildings to the oil producers. To the shale guys. But 17 of my sales go to those counties. So schools, buildings, the peripheral hits based on oil for these companies, is unbelievable. Puts a lot of ownaut fot of onus for consumers. We thought it was a tax break for everybody. But you get this foreign currency change its a whack. Its a double then you get oil. For some people focused on capitalized and look at the states. Louisiana is now with a million bucks. North dakota getting smashinged in revenues. So youre forgetting that these bond issues they had to build schools as people came there to work on that. You know ive got a chart. I always have a chart for you. This is a fascinating chart. This is an employment chart. Here ill put it up. Keep talking, well see if we can get it on the this is an comploument chart. Texas look whats happened in texas. Its negative. I dont know if you can see it. Theres texas and then theres the total u. S. Employment. Since 2008 it shows Texas Employment is up 13 . U. S. Employment is down yeah. So this had oil thing is incredible. And texas always trying to point out its not all oil. Its a lot of oil. Its a lot of oil. Well they have come across more oil than a lot of other guys do. So the crosscurrents are amazing. The meetings are so different. Weve got other companies, totally domestic growing 5 6 . You have seen orders with those companies . Always a stone. Really. For years youve said people say theyre going to be the expectation theyre going to improve but they didnt actually see the improvement. Youre seeing it now. Yeah for domesticcentric but look at these numbers, thats a domestic company. Right. Weve always talked about them as being an International Company just for the tourists that it draws in. Yeah maybe thats true. Its a domestic espn the network, the major parks. Yeah. I mean the consumer. Look if youre in a Restaurant Business right now except for weather, things are booming. You want to be so u. S. Centric you hate globalization. Jack, real quick, i just see this note is this what youre talking about here. Revenue from this year 42. 229 billion. Forecast for next year 38. 3 to 39. 8. Down 3 billion. And they say 2. 6 billion is just sales. Its a killer. Thats unbelievable. You say oh thats currency yeah i know its currency by the way, its worst than the street was expecting. The street had taken it down to 30. 5 billion but this is going to mist those expectation. You wont see Procter Gamble you saw their numbers. Yeah. You wont see a lot of ceos coming in saying im 75 global. Ive expanded my how do we do 3 gdp then . The consumer. The day that oil prices were heavy. And i think were going see it. Were going to see a lot of it. But this is a u. S. Centric converting to highvalue products. Weve got a business that is a terminixtype business. The trucks 10 million. Tailwind. 10 million in savings in gas in the trucks. So when you start to think about that stuff, its all right here right now. Although it question it raises is is this an opportunity . Because weve had some guests who have come in and said if you dont think these trends will last more than six months or a year, is this an opportunity to get the stocks . Or do you think these are longerterm trends . Well in 85, when we had had the oil collapse it lasted eight years. Now, who knows. Nobody can predict the oil prices. Its all over the place. Clearly, most people estimate it will be 60 or 70 by the end of the year. Thats conventional wisdom. I dont know thing about conventional wisdom. But i would say this that there are opportunities right now, for guys that are strangling to pick up debt to do a number of things. But people have stretched for the shale oil thing. So theres some assets to buy throughout. And some shot guys will pick up some good assets. You know geez i think all the companies, they wanted to become multinational and based on oil, and now you dont want to be either. Based here and got nothing to do with oil. Yeah. Ive seen presentation looking at some charts from people who six months ago were showing all the plans in premium base oil. Marcellus thing growing. And, boom i dont even go there anymore. We dont need to run into specific names that have moved big into oil and gas in recent years either. Well theres a bad rate for a short period okay. All right. Were going to take a quick break. Much more from jack throughout the morning. Okay coming up when we return, in addition to jack the Measles Outbreak in the u. S. Drumming up a lot of controversy over vaccinations including a clarification from senator rand paul. Weighing in on the topic when we return. Welcome back to squawk box this morning the cdc saying Measles Outbreak is growing with 18 added new cases to the tally. There are now more than 100 new cases reported across the country. The outbreak is traced to several dozen people exposed to the disease in disneyland california. Last night, the ceo said the measles havent kept people away from the theme park. Were not doctors. From research that ive seen from the cdc suggests that getting inoculate said a smart thing. Its a proven strategy in terms of combatting a disease that can be dangerous to young children. So personally, i would advise it. The debate among vaccinations continues among politicians. Rand paul clarifying his position. On monday the kentucky senator appeared on closing bell saying quote, ive heard of cases walking talking children who wound up with profound disorders after vaccines. Last night he said i did not say that vaccines caused disorders just that they were temporarily relatei did not allege causation, i received booster shots for vaccines when i went to guatemala last year. The senator tweeted a picture of himself receiving that vaccination. Lets bring in scott gotley resident fellow. Thank you for joining you. I will say the amount of attention this is garnering, the parents that have concern about this. Politicians are bringing things up and make people wonder if they should get their children vaccinated. Whats the answer . This is a safety net that protected our own childhood. Clearly, the vaccines are important. The science around these diseases of these disease, and autism was debunked years ago. Theres been many more studies. I think for too long a lot of People Public statements allows these myths to propagate because they said things like we dont think theres any correlation, but we need more research. We dont need nor research. We have thoroughly debunked any association between autism and these vaccines. We thought we had eradicated measles in the year 2000. Whats happening and how dangerous is it . Its growing. Last year about 700 cases. Probably going to have more this year. Were going to have to ask whether adults should go back and get booster shots as the outbreaks become manifest. And women who are becoming pregnant are encouraged to get a booster as well. The rates have fallen below the magic number of 90 that prevents the virus itself from propose pa propagating. I never had the measles myself. Its a serious illness. People arent familiar with it they take it for granted that it doesnt president anymore. Okay i was born in im not going to say. 1957. They assumed that everybody has it. If you were born after 1957 cdc generally recommends that you consider a booster. Yes. Yesterday, joe, you made the argument, other people were making the argument that its federally mandated. Not necessarily federally mandated, do you think that . Frankly, i dont think we need to federally mandate. 20 states have put in exclusions and i think those are inappropriate. The states have done an awful job of mandating this. If the states mandate it why would you be bothered if it was federally mandated. I say why should it be a state issue . Frankly, i would have no argument against the federal mandate. Thats not the way our system works. The cdc generally doesnt work that way. Youre asking to change a system thats been in place for many years that has been working up until very recently. You know its amazing that even this becomes a discussion between democrats and upper west side, versus this and that. I mean its crazy. What i like the most about the democrats, theyre absolutely certain about this. And that gmos have to be totally anything even if you feed an animal a genetically modified piece of corn you cant eat that animal. The science for the science to be exact, its calling. There are times, i think of t the thing that everybody said was safe. These are things that havent changed. There some some vaccines are newer. Yes, joe made the argument yesterday that there was a problem with the polio vaccine. Well as a way to argue it maybe the measles vaccine isnt necessarily science. The issue with the polio vaccine you that referenced was that the manufacturing stance was very different years ago. True. And some genetic material there seems to be absolutely sure that red meat causes heart disease, but ten years later theres some are things that we have to accept the truth because its been so thoroughly studied. And this is one. Theres an article on the washington post, theres a woman with a child with autism who says were facing a double backlash. I have doubts, i have concerns. My Physicians Group is saying my Physicians Group will no longer see me. The idea that youre getting so many shots at a time. The timing together. To have the issues. Are parents correct that have concerns . Well the theory of reported link between vaccines and autism have shifted. It happened in the intestinal tract, wakefields theory. And his medical degree. Exactly and then the trace mercury elements in the vaccines that have been reformulated and taken out. And you now the theory is the vaccine schedule itself. Its hard to argue when the argument is changing. Now, its about the nanny state with a slippery slope. And the federal mandate. Exactly the point. You think its a function of social media . Absolutely. I mean it gives everybody voice. Theyre out there winging it. Oprah had Jenny Mccarthy on more times than on playboy. Yeah. And what about the kennedys . What the kennedys said about autism. That gives the idea that maybe adults should get their booster shots too. If a parent is concerned, i had had someone tweet, in my child is sick should i go beyond that . A local outbreak. You get the first shot in 12 months. There has about 12 month has the passing of immunity from the mother when youre born. You can move that up. It does not break in your local community. Thats something to consider. What absents, what about hank paulsen . There are exemptions in the state. There are a small number of people that wont get it because of medical conditions that obviate getting it. The exclusions that allow people to say they wont get it because of whats in the newspapers that shouldnt be allowed. Coming up we are expecting results from General Motors you dont put my into you were doing the slippery slope thing yesterday. Im still doing the slippery slope. I dont think it should be federally mandated. Theres nothing more romantic than a spontaneous moment. So why pause to take a pill . And why stop what youre doing to find a bathroom . With cialis for daily use, you dont have to plan around either. Its the only daily tablet approved to treat erectile dysfunction so you can be Ready Anytime the moment is right. Plus cialis treats the frustrating urinary symptoms of bph, like needing to go frequently, day or night. Tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex. Do not take cialis if you take nitrates for chest pain as it may cause an unsafe drop in blood pressure. Do not drink alcohol in excess. 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Joe, these are much better than many people expected in terms of Fourth Quarter earnings. General motors reporting excluding items 1. 19 a share for Fourth Quarter. That scharcompares with the street estimate of 43 cents per share. The street was expected 30. 4 billion. 2. 1 billion adjusted. Thats what they made in the Fourth Quarter. Up 20 chaired to 2013. Why the bead. Part of it can be explained by the lower test results when you factor in the recall expenses there. Cash at the end of the Fourth Quarter, 25. 2 billion. Operating cash flow better than expected coming in at 3. 8 billion. 2. 8 billion is what it was at the end of the quarter of 2013. Becky, Pay Attention to this remember your interview in davos with carl bass saying give us a bigger dividend. It plans to ask the board to raise from 36 cents a share that would bring the dividend deal up 3. 4 than where 2 is at 3. 5 . Again, they plan to ask the board. That means the board is likely to go ahead with this raising up to 36 cents a share. Guys were talking with cfo Chuck Stevens coming up in 15 minutes. Well go over the better than expected dollar share. And also the implication that theyre raising the dividend. So thats big news. The stock 33. 98 is trading at 35. 40. A big part of it has to be that move potentially raise the dividend. Right. And, remember becky the u. S. Centric consumerdriven, and yet a great outlook domestically in the next year. Yeah. They had had a got outlook. Phil . And remember becky, theyre sitting on 25 billion in cash. And another 10 billion revolver. Thats what carl bass is talking about, saying look free some of this up. This is clearly an indication theyre starting to do that. Phil thank you. Great to see you. Among the other stories that were watching this watching merck earnings beating the street. Staples buying office depot for 11 a share and cash and stock. The total equity value about 6. 3 billion. And mortgage activity slowing down in the last week and there was a slight increase on government loans. And during the past week jordan had offered to swap a prisoner for the pilot. That did not happen. Instead, icis released a video of reportedly showing the pilot being burned alive in a cage. Lets get back to our guest host this morning. Lets go to that topic, jack which is to say, how does this all end . Does it every end . What do you make of all of this . Well look i was going to make one point, first, id like to if you take office depot and staples. Are they one and two . They are one and two in the market. So the argument is amazon or something. Right. Or walmart. I bet walmart sells more Office Supplies at some point. Youre going to have to redefine the marketplace. Big time. I dont know you just raised the question. Good point. With sirius xm and spotify. They still look at it. You never know. And youre using the earthing ball which is an index. They did to at t they did it to tmobile. And they can do it with this for sure. You want to make it amazon. You want to make it walmart. You want to make the market bigger. Right. Well see. They would have prevented some companies, some merging, five years ago. Even though its all digital now. They still would have done it based on that this is your fault, too. Why is it my fault . Your dads you oppose all these deals. Im desperate. I told you this as a time warner subscriber in new york city, all i want is the comcast deal happen because im hoping it will make my cable system better. Buy satellite, too. Youll have both. You said it threatens Net Neutrality again and again. No netflix has agreed to Net Neutrality neutrality. And at t is going to. Yes but ive also made the point that im managing whatever transaction between time warner and comcast cable, that have restrictions anyway. So i think the competition is going to be fine. All right, do you want to talk about the burning in the cage now . No were not going to talk about that. What do you make about that what is your sense . I think theres a part where we weve got to get weve got to get support from the muslim community. Thats what i thought dmrp. They may have just gone behind that resolution. The king of jordan was very resolute. Theyve responded already in kind. Yeah. But i mean its got to be a bigger effort. Theres got to be ground efforts. Weve got to get rid of these guys. Weve just got to do it. Im going to switch topics. Were going to talk about taxes and the president for a second. He put up his Budget Proposal which we all agree is not going anywhere fast. What would be, when you look at that budget and the idea of a territorial if you think of that as a territorial tax system, what numbers would make sense to you . To repatriate the cash . Whats the threshold . I dont know 13 , 14 . Thats what im saying 14 tax too much . Tax holiday in 2004 was i dont know if its going to make a difference. Forget this shortterm travel and globalization. Youve got money overseas that you want to expand with. You dont think the money is coming back anyway . I dont think the money is coming back, anyway. I dont think thats the issue. Oh but for the past two or three years, we talked on this show, not necessarily with you, but other ceos that say we need to bring the cash back. But that is the key. The flexibility of having an option you know. You know any system like that would be much better. And we shouldnt be taxing it in anything. I mean its just wrong. Trying to compete for all the wrong reasons. Yeah ideally it would be zero. And to take it to bill rhodes is a fascinating argument. Andrew, what you missed the money what would come back and maybe some would be left over but the money that would come back you dont need to look at where it goes. Even if it went to dividends, the dividends are taxed so the money would be in the federal coffers. My argument is to say, the money doesnt necessarily im not sure Companies Want to bring it back. If they were to bring it back, the not clear to me that it creates jobs. Thats what i just said. It doesnt matter whether it creates jobs. Just having it here is better than having it there. And the availability of it. Both sides have taken their ball and gone over. The corporations say, fine well leave it over here. The Obama Administration says fine, you leave it over there. If you brought it back and it went purely to shareholders through dividends, youd still get 30. Of whats over there in the corporate. Instead, its just over there. Even if theres not a single job created. At least it comes back whats paid out in dividends, the money sheer. Its creating wealth here. Its creating government revenues. Doing all that you want to do instead of just saying okay forget it then leave it there and were never bringing it back. Im just saying youre never going to get it all to come back. Probably get half. People that leave it and the thing is we should Want Companies to want to have it here. Because we treat capital better. An thats what we dont do. That i agree with. We should be attracting it. And we shouldnt be adversarial with a government with corporations. We should be working together. Right. This is by no means a jobs program, though. Thats the crazy idea. You bring it back its going to create jobs. What are you talking about, its better here than over there. But theres a lost other things to create middle class jobs. Other than raising the minimum wage and transfer payments and redistribution. Theres a lot of things we can do. More regulation. Right. We can clearly do that. You can have less tax on capital. Right. You can do a number of things. More regulation. Thats the article in the wall street journal that costanza wrote. It was. I tried to bring it here i got nowhere. Everything that like costanza started getting dates. Started succeeding in life when he did the opposite. If the president would propose the opposite wed probably have easy visibility. We sloun do that. Even the 529 thing. But im not going to yeah i know. Were going to leave that part of the conversation. Jack is not going anywhere. Well talk to jack more about you said costanza for president. When we come back miami is one of the hottest real estate places in the country. Thats what richard frac told us about. At the top. Hour, a first on cnbc interview with Terry Lundgren on macys earnings. Stick around, squawk box will be right back. We needed 30 new hires for our call center. Im spending too much time hiring and not enough time in my kitchen. [ female announcer ] need to hire fast . Go to ziprecruiter. 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Ok, so can it tell the doctor how long you have to wear this thing . The answer is yes, it can. So, the question your customers are really asking is can your business deliver . Oh freak out la freak shea chic oh freak out real estate titan Richard Lefrak putting his money to wok. He recently committed to a new 15year project in miami. Hes had also about to open a Major Development next month that will include a hotel and homes in south beach. And here in new york hes working on a new commercial tower, just around the corner from our new studios. Commercial tower. Okay. Thats good to know. Yeah. With us thats another way of saying actually i dont know what im doing here. With us on set to give us a pulse on real estate Richard Lefrak, president of lefrak organization. Richard, its good to see you. Were neighbors now. And thats closer to come here. Yes, much easier. The trip across the bridge at 5 30 in the morning is unattractive. When did you get here this morning . I got here at 7 15. Youve been watching welch . Yes, i did say, we talked about the Measles Outbreak. Icesis horrible behavior and now new york city. Which most people think is yeah equally painful. Rents very high and sustainable high with the economy . Rents are high and probably going up because, you dont just we just dont have enough apartments at this point. Thats amazing. Its a multifamily business. So underserved. We talked about domestically this is where its at right, in the globe . This the big major city in the most powerful country. Except foreigners have a little less fresh cash. Thats true. The currency is the opposite. Right. That may affect miami, maybe. And some of these super high condos that you see in new york where many of the buyers are, its foreign capital, maybe not looking so much for a home but a home for their money. Yeah. So would you be selling more now or buying more . Im always in developing mode. Which is a little different than either one of those modes because everything that we do, its kind of like a farmer you have to plant the seed and you have to watch it grow. Society lead time when we do any big project, you know its years. You just dont decide on monday youre going to build something. And build it on tuesday. So we have to really be involved with longterm demographic trends. Any kind of trend, trying to foretell which markets will be lets say, ripe in the future. And there are, you know very good old stand byes like new york city. Thats always going to be good. And are the economics the same . I was going to say the mayor, mayor de blasio is now pushing more affordable housing. Would you be developing some of that . You know thats a very good goal and well needed and also a very good sandbag, but its easy to say and hard to do jock i noticed yesterday he trotted out in the sunny side yards. Thats a project that we actually trotted out of 40 years ago. The only problem is there was a railroad there. And Governor Cuomo said two hours, forget it nta has that space. Right, its strategy yount out underutilized. They need it for the railroad. When you say youre going to do Something Like that it sourchds good. Do you find it harder to develop in the city now with the current mayor than the mayor before . I dont want to blame the politics politics. I mean, theres a shortage of land here. Every community has a lot to say about i mean hes doing business here. I know, thats why i asked the question. No i dont want to blame the politicians. The whole environment here is very difficult to get anything done because we have local Community Boards that have say in what you can do and how you can do it. Real estate is always very controversial. If you put up a onefamily home in astoria, your next door neighbor is screaming at you. Thats the way it is here. Thats why its so valuable. If it was easy to do we wouldnt have this problem. But the environment is the environment. Thats the way you look at it. Its a zip line isnt it . Miami is still a strong market today. Thats why youve got all your stuff down there . Im excited for longterm reasons. For shortterm reasons weve been building this hotel for years its really beautiful and great. Its going to open we hope march 13th. I hope you guys will come down and take a look. Maybe you can get a look. Hes busy up in palm beach playing golf. He is. March 13th thats a friday . My anniversary. Yeah. Any moron can sell a hotel in march in miami. Were not taking that much risk. How much is the risk . The rate . No to develop it. I saw some 1. 4. Its about 600,000. 1,000 a ski. Whats the overnight rate . The rack rate will probably be 850 900. Yours will be 1200. For you, a deal. A deal. I mean guns roses leaves it cleaner. Ill leave a big tip. Miami is still a strong market right now. And we put a lot of tlc in this property. Were anxious to expose it to the public. I think it will be a big success. Richard, thank you. The one and only Richard Lefrak. Ill pay extra to stay there. Great to see you. Coming up when we return, a trip inside the numbers for gm. The cfo of the automatic toy giant. Right now, gm slayers on sat. Right now, gm slayers on s right now, gm slayers on shares on the screen. Opportunities arent always obvious. Sometimes they just drop in. Cme group can help you navigate risks and capture opportunities. We enable you to reach Global Markets and drive forward with broader possibilities. Cme group how the world advances. Now with the xfinity tv go app, you can watch live tv anytime. Its never been easier with so Many Networks all in one place. Get live tv whenever you want. The xfinity tv go app. Now with live tv on the go. Enjoy over wifi or on Verizon Wireless 4g lte. Plus enjoy special savings when you purchase any new Verizon Wireless smartphone or tablet from comcast. Visit comcast. Com wireless to learn more. Gm out with earnings earlier this morning. Lets get to phil with the special guest. Is this the first time weve done this with chuck, isnt it ammann just left this year. Weve been here a few other time. But not as cfo. No i think weve had him on as cfo. These quarters all run together. Lets bring in Chuck Stevens, the cfo of General Motors joining us in detroit. Chuck, to the main question this morning. 1. 19 a share. Excluding items well above what the street was expecting, 83 cents a share. What did the street miss or what do you did vice them with that people were not expecting . Yeah phil i think when you look at our core performance in 2014 and the Fourth Quarter, very Strong Performance overall, adjusted at 2. 4 billion which is consistently higher than consensus, i think thats one of the big the drivers in the difference in eps. Importantly that captured a very strong 2014 from a performance perspective, really led by the two most important markets, north america and china. And obviously, had you had lower tax expenses related to the recall issues. Youre planning to ask the board to raise the dividend by 20 . Up to 36 cents a share, raising the dividend yield to 4. 3 . How much of that is because you were hearing from activist investors, hey, free up some of the 25 billion in cash . Our plan in increase in dividend is very consistent with our stated objective which has been to have a growing and sustained dividend underpinned by strong business performance. And announcing it today in conjunction with our strong 2014 performance, as well as our expectations of better performance in 2015 including improved profitability. In all four automotive regions is consistent with that objective. So nothing has really changed. Chuck your shares are up premarket. Almost 4 . Theres a lot of debate about whether or not this Business Cycle for the Auto Industry is different than in the past. Because typically four years into an upmarket, you would not be buying the primary automakers at this point in the cycle. Do you think this cycle is different . And if so how much longer do we have to go in terms of seeing it expended . Yeah i think the cycle in the u. S. The expansion cycle in the u. S. Has some room to run. Theres still a lot of available credit. Interest rates remain low. Theres a lot of pentup demand. When we look at external views, ihs or otherwise, i think this has some room to run. Chuck stevens, cfo of General Motors joining us this morning. First on cnbc on the gm headquarters. Andrew on a morning where gm is getting a lot of attention because its raising its dividend or plans to raise its dividend up 26 centers a share. Phil thank you for that interview. When we come back its jobs reporting. On the payroll report. Because mark zandi is going to join us on set. Plus macys ceo Terry Lundgren is going to join us and the talk to us about the retail which macys just bought. Beauty is in the eyes of Terry Lundgren the ceo of macys talks about this acquisition of bluemercury on a first on cnbc interview. Jobs front and center. The adp payroll data set to be released. We have the reaction from the reports creator mark zandi. And foursquare plans to talk to mark crowley about how he plans to keep his plan relevant in a very crowded room. As the squawk box continues right now. Ozzie, take it away. Announcer live from the most powerfulle city in the word this is squawk box. Wow, welcome back to squawk box here on cnbc. Im joe kernin along with Andrew Ross Sorkin and becky quick. Futures at this hour have pulled back a little bit after a big twoday rally of about 500 points on the dow. When you least expect it the dow down 44 today but we can deal with that. Some of that is probably milk i guess, which sharply lowered its revenue forecast for next year. It will be down compared to this year. 2. 6 billion of it in the shortfall is florence. Jack always wanted g. E. To say domestic with oil and gas. Thats it. I hated being globalized. In hindsight, what were you doing this weekend . What a jerk i was with the pie charts 40 , 50 . What were you thinking . Andrew. Lets tell you about the top stories at the top of the hour the revenues with the drug giants warning it will a 27 cent per share negative impact in Foreign Exchange this year. Also we should tell you this morning, staples buying office depot for 11 a share. Jack youre calling at just regulators on this right . Its interesting to see what they say about it. Total equity value 6. 3 billion. And china cutting its Bank Reserves today. The central bank pushing stimulus measures in attempt to keep the economy stable. Macys buying Beauty Products maker bluemercury for 202 million in cash. Its the retailers first acquisition in ten years. Joining us is Terry Lundgren the chairman and ceo of macys. And also mara beck. Welcome. Why bluemercury and why now . Well it wasnt because we werent looking for something to acquire in the last ten years. Its just because we didnt find the right fit for us. And bluemercury is perfect for us. Its a core business for us. Were very strong at the beauty business. Its in the front door of all macys stores. What marla and barry have created its a service model, very different. Highend Luxury Brands and very serviceoriented. And i think thats a new level of opportunity for us. And, of course were not in the freestanding Specialty Store business. This is a new avenue for macys. Is this a vote that we have to be other plays besides just traditional malls and anchor stores . Yeah, i think we made a vote several years ago, we couldnt just be in traditional stores. They became one of the omni channel leaders in the world. Its been a huge success. Weve grown in the lat five years because of the omni channel in the beauty business. And its the next leg in the store. And another one three or four years. We cant just sit still. Marla what will this mean for bluemercury, how will it be different or the same . Actually well separate the same. Macys omni channel is amazing. Theyre the seventh largest commercial plan in the u. S. Most people dont know that. How did the deal come about . You know the usual. We had tons of offers and the best one was macys . Was this an auction scenario where you were out there, or did he come to you several years ago and you guys started tow well give us a back story. You want the back story. Yeah. We actually have private Equity Investors in this and weight watchers. We had goldman because we were getting so many offers inbound. And honestly the best pick was macys, given their resources and their vision and their expertise in retail. And did they promise never to bother you, his Hr Department wont be down beating on you, all of that . Jack, you know this. I actually had to protect marla because the guys wanted to take apart, 30 people in the corporate office. Yeah. Its going to report to me. This is how its going to work. You got a problem, you come to me. Weve actually developed a very good rapport. As ive said weve had other acquisitions even recently that weve passed on because the if it wasnt right. The personalities werent right. The trust wasnt there. This is completely the opposite of these things when i met marla and her husband. Its a solid, great rapport. And we feel good about what we can do together. Marla, how many stores right now and how many store douses do you see down the road . We have 60 stores right now. We think we can be a 500store retail. Weve only hired fulltime employees. We have shifted the retail model about being about experts and fulltime staff. Your clients come and see the same people over and over again. Its not just abcout transactions, its about loyalty. You go to the chanel counter for the estee lauder count theyre going to sell you that. You go to bluemercury, theyre going to look at you and say whats the opportunities . Theres no counter. Right. You dont look at this as any opportunity to canal liez your business . In terms of if she wins you dont lose . No shes capturing a customer that i dont get, actually. Theres definite a freestanding customer cha we dont get. Do you see an opportunity of transitioning her customer to you for other types of products . There may be. This is brand new for us. Yeah were both kind of late night emailers and texters, were kind of exchanging a lot of thoughts and ideas. Weve talked about Loyalty Program exchanges. So we dont know exactly what were going to do but weve got a thousand ideas. What about the comp plans in your program, you have fulltime employees . Yes. And youve got bonus plans, compared to the aisles that are all over macys . With those individual comp plans does that cause a problem with employees . I dont think so. This guy is asking hard questions. Well, he knows. Their plan is they want a really good business. Were going to run that business the way they run that business. Marla and barry and her team are staying in place. And theyre going to keep running it. I dont know this. This is not my expertise. They do. Theyre staying with to us run this business. So were going to keep the lines separated for as long as it makes sense. Can we ask a question is there a role for you are you going to be there for the duration . Ive been with bluemercury for 16 years. Im not going anywhere. I wouldnt want to go in and ask what youd do for me id need a surgeon rather than makeup. As Technology Becomes more sophisticated in terms of measures with medicine and pharmaceuticals, would you tell somebody she need botox . You can do it that way . You know weve stayed out offed medispa business. For a purpose. We actually have our own propriety plan m61. Youre looking at me telling about m61 what does it do reduce wrinkles . Absolutely. Did reduces wrinkles. What are the samples . Terry, youve raised your guidance. Youre looking at 4. 35 to 4. 47. The last time we talked to you, you said that the lower gas prices were kind of slowly and gradually working their way in. Are you seeing more and more of that . I am. Its still slow. They keep on buying cars apparently. Im happy for the car industry but id like them to slow down the car industry and start buying more apparel and cosmetics. Ive definitely seen some of that in early december. Thats continuing on. Youre entirely in the sweet spot. Your buying should be cheaper. Yes. And your customers be more affluent now. Right. Why are you in a sweet spot . Weve estimated not me, but the fed has estimated Something Like 50 and 70 billion being put back in the consumers pocket. You were spending 60 to fill up your tank. Youre now spending 35. Thats material when that happens multiple times in a month. What happens to your sourcing class . They must be great . Yeah they should be. I havent seen that yet. But were definitely coddling im sure there are discussions from chats. What about those fields turned into lower costs in goods yet. Im sure that becomes a focus in terms of whats happening with the consumer from what you see here. Your guidance for the full year raised. And if we continue with the lower fuel rates, that should happen from here. Should be positive. Theres been a lot weve been bouncing around the last couple of days. Typically, when fuel makes a big move like it has, it should stay down for a while. That should be good for consumers, there good for us. Terry, what does worry you . Today, im not really that worried. You know, i really im always worried. Im always thinking about how we can get growth. Like i said weve had five really good years. Six really good years of earnings in a row. Im thinking about, thats great. Fantastic. Thats over. Whats next. How do we keep going. All of the things are about the future. Are you ever where you want to be and are there places where you wish you went . Are you finished with that . No no not everything is completely done. Are you in ghost malls and places where you definitely want to be . Ive got 775 macys stores. Bloomingdales is five. Ive got 37. Yes, im going to have some in the wrong places. What happens is i said this last time the fact i could talk to him about that but theres a mall here thats been here for 50 years. All of a sudden a new mall decides to come next door. That old malls not going to work over time. Thats going to continue. Thats going to continue to happen. Jack was suggesting build all the macys malls near the oil and gas states. That was your idea right . Should investors expect you to pick up more specialtytime stores . I mean you said the next four years maybe. But would you look at lululemon which people have talked about . Or something thats totally in a different line that you havent thought of . Id look at anything. You know it took us ten years to do this one. Dont expect anything from us. Terry and marla, thank you very much. Congratulations. Nice going. Financial noise financial noise financial noise can it make a dentist appointment when my teeth are ready . Can it tell the doctor how long you have to wear this thing . Can it tell the Flight Attendant to please not wake me this time . The answer is yes, it can. So, the question your customers are really asking is can your business deliver . Have you heard of the new dialing procedure for for the 415 and 628 area codes . No what is it . Starting february 21, 2015 if you have a 415 or 628 number youll need to dial. 1 plus the area code plus the phone number for all calls. Okay, but what if i have a 415 number, and im calling a 415 number . Youll still need to dial. 1 plus the area code plus the phone number. So when in doubt, dial it out raking news from adp. Adp reports from the month of january the private sector created 200,000 jobs that is less than the expectation. They did revise up the prior month, now 253 from 241. Thats plus 12,000. Probably the best number plus 31,000 on goods which is 18,000 on construction. And 14,000 on manufacturing. Otherwise, no big stand outs. Kind of a broadbase growth. Different size of industry. Dont we have zandi here. Youre giving his numbers before we go to i thought we would go through it. And let zandi do it. He woke up early. I cant believe you sold this you need to be cut out of this area. I mean what exactly that youre exactly providing . Do you have any data . These are your numbers. Youre here to intro him. I was just about to that. Becky had told me. Joining me now is mark zandi after spending a minute and a half of our three minutes that we have on joe. Im all for steve doing that. Yeah. I would definitely botch it. Yeah. Mark zandi, what do you make of the number . Its a good number. Anything over 200 k is say solid number we annualize that. The growth would be 5 . Its on the side of expectations its still good. Thats what John Williams just told me 5 Unemployment Rate by the end of the year. Does that mean the fed is behind the curfew, mark . No because wage growth remains got another reading on that last week 2 ish. Thats inflation expectations. Inflation is low. We got the core pce yesterday or the day before no last week. A little bit of a blur. That was 1. 3 . Is there anything in these numbers that tells you about the quality of jobs being created, you have the construction jobs manufacturing jobs, those tend to be betterpaying jobs . Jobs creation is lowbased. No doubt, retailers. And now its across the board. The its really everything. Still low paying yes, high paying, middle paying, everything. Mark the data has been a little soft. We had had the isms understand expectations. Another one today. The durables the Capital Spending numbers come in lower than expectations. Are we settling down. We had a couple of really good quarters. Now it looks like were doing 2. 5 in the First Quarter. Its a 3 roll. You have to extract from the clearly ups and downs and data. 200 k job growth is existent with 3 gdp growth. What do you make of this chart i used earlier this morning, total u. S. Employment versus Texas Employment . The u. S. Is its a d. O. S. Number. Yeah heres a factoid for you. Last year u. S. Economy created 3 million jobs. Texas created 400,000 of those jobs. Dallas alone created 123,000. Are you going to ga him about the gallup . I send this to jack yesterday. From the gallup. Big lie, 5. 6 unemployment. Thats the whole thing. But why is it a lie . All of the other data im asking you that. All of the other data in his article comes from the government. We reported. The fed knows about it. Its not like theres a big secret. But u6, u6 reflects that premise. But from an investment standpoint, i think people are looking at this sick ways to sunday. Theres no added information in terms of the trajectory of jobs or the slack just looking at the other numbers as well. Because theyre all coming down pretty much in line with the way the Unemployment Rate goes. But theres a lot of slack, right . Yeah. And thats why the wage is out. Jack what should the fed do then . Do you think the fed ought to take that slack in consideration and not raise rates here . Thats the conundrum theyre dealing with. I think its crazy with the volume where it is. And it would be insane to raise it now. Thats awesome. Wow. But its a fairly important one. The official Unemployment Rate overlooks that. We have more in just a moment. Sheila you see this ball control . You see this right . Its 80 confidence and 64 knee brace. Thats more. Shh. I know thats more than 100 . But thats what winners give. Now bicycle kick your old 401 k into an ira. I know, i know. Listen, just get td ameritrades rollover consultants on the horn. Theyll guide you through the whole process. Its simple. Even she could do it. Whatever, janet. For all the confidence you need. Td ameritrade. You got this. Merck earnings topping estimate but the drug giant warning it will a 20 negative impact from the foreign strange. And we have long timer pharma watcher barbara ryan joining us on the cnbc squawk. Normally, we need five or ten minutes on the milk report. Is it the aim as florex this time. Yeah its ahead of the currency obviously people expect that for 2015. The numbers, the guidance that the company has given is below the street. As you mentioned, a hit on currency, so it remains to be seen how people will receive that. I think the real story for merck going squarely at the pipeline i think we talked about this before, ken frazier, the ceo has stayed the course investing in innovation. The company has had six new products to move in the United States over the past year one of which is the first therapy for advanced melanoma. Just yesterday, the Company Announce theyre launching a drug for insomnia. Theyve enhanced three of their franchises hgd and oncology over the last year. I think people will be looking for updates on cubeis. Theres an advisory meeting in the First Quarter for gridion which had an advance from neuromuscular blockage from surgery. And theres new products for people to focus on. Certainly, the numbers were a little bit of a disappointment, certainly, the currency cant be a surprise to people. You can say on some level, too, barbara, a look at the stock price, do you take any credit for that . Its gone from 30 to up to where it is now . I can take zero credit for that actually other than than say ive been extremely supportive of ken frazier and the team and their strategy. And i think theyve stuck to their guns as we talked about before when it wasnt easy when pfizer came out and said they were going to cut their r d budget by 40 . Ken frazier said were not going to do that. That was not well received at the time from the street. But i think six new products in 2015 speaks for telephone. What is the eventual size of that market do you think . Oh gosh lots of people are trying to predict that. Thats not really my job anymore. People are talking about certainly 5le to 10 billion. Unbelievable. Its very exciting. And pfizer just got approval for pembro for a drug for Breast Cancer. Is a very exciting time no question. All right barbara. A quick snapshot of merck. Thanks. When we return foursquare ceo joins us to discuss his vision of the social app company and how hes looking to take on wealth. Well see if hes checked in here on foursquare. Well take a break. The dow set to open about 38 points off. Nasdaq off about 15 points and the s p 500 down about 6 points. Back in a moment. Financial noise financial noise financial noise welcome back to squawk box. Take a look at some stocks to watch this more than. Kohls shares rising increased 3. 7 during the Fourth Quarter. Raised its guidance above the street estimates. And Ralph Laurens profits came in below estimates but the dividends increased to 50 cents per here. And sony shares jumped. Better than expected sales of Playstation Video came console. Youre laughing about that. Lose less. Stock goes up you lose less. Jack i want to talk about something that you just mentioned in last break. I dont know everybody caught what you said. You said the fed would be raze to raise rates right now because of where the dollar is. Well if you want a 3 gdp, your exports would fall off the take even more. The dollar would strengthen. It does nothing at all for the u. S. Economy to whack it now, with everybody around the world, easing easing easing. I said that theyre going to fold like a cheap deck of cards in july. You call it folding folding means they wont raise. I know. Because they should eventually. Weve got to get ammo not right now, though. I know. And they wont. But theyre still talking like theyre going to, why. You guys know them better than i do. I have watched them on the show. You guys are using them now because he knows all of them. But i think it would be ludicrous to raise them right now with the situation that we have. Weve got oil problems. And in the u. S. We got a wealth of fracked oil that we dont talk about now which is broader than oil. Its a strong dollar. They think theyre going to raise. Isnt it already in the dollar that theyre going to raise . Maybe if they didnt raise, the dollar wouldnt be as strong as it would be. I think thats part of it isnt it . You dont realize the magnitude of what theyve done 25 productivity that are coming in, like siemens picks up in the morning. You cant get 25 productivity in six months. Theres no way to do it. So and another thing, the Global Market this is a bitch of a problem with this dollar. Currency right now. Now, ive been saying the dollar, ive been oneonone for 15 years wrong. Compared to the euro you mean . Yeah. And it actually happened at this point. It actually happened 15 years later. If you look at their quantitative easing the only thing they can hope is they weaken their currency because youre not going to get rates. The only way they can do if the fed doesnt raise rates, does that put a halt on that whole part of the plan . And does that hurt europe as a result . No i think these guys theyve got what they wanted. They got 20 or so. And that puts exports in a much better position. Now, they still have the problem north and south europe. Right. Thats incredible structure there. But im not sure they can save the euro. But they saved by dwriedingividing it. When they made this deal with greece it better be be a sweetheart deal. Its a breeze for europe. Spain is be looking at a much bigger number what are they doing for greece okay . So if greece goes, spain will pay up. If greece gets a lot of sweetheart deals, spain is going to be tough, no question. Thats like a lehman analogy. In a way. The eeb here with the euro in currency in ten years . If i had had to bet, im not an expert by any means, id bet no. This is just structurally the dislocation thats have to occur. I like people now that say, i wouldnt have done it to start because it wouldnt have worked but now that theyve come this far, we have to keep it. And thats an argument. You know but structurally how do you possibly but you bet it actually youre saying ten years from now, it doesnt exist . Some form of northern southern currencies might exist. Im not sure how you can take southern currencies like greece remember switzerland was using basically was tied to the euro. And swiss frans. What the end game is germany acts like they hate it. Theyre lucky to have currency cheap, right . Theyre selling all of this southern currency that their yelling at theyre selling all of this stuff. I dont know. People wonder about the skeptics and the rise. Theres a guy in spain to the left of the guy in greece waiting in the wings and austerity they hate. And that band is going to keep playing. Hey, jack lets switch gears and talk a little bit about entrepreneurialism in this country. We celebrate it. We think its huge but there was recently an article in the wall street journal that suggested that millennials and younger people are not taking the tens to create their own businesses like we assumed. You know this is a shock to me. I have one of my favorite charts here which is business startups. Theyve been declining since 1977. And theyve taken the steepest decline from 2007 to now, business startups. And yet, its a surprise for me to see the data. My view is entrepreneurship is in the air. Box one day foursquare another day, and deal after deal. But if you look in total at this chart which shows yeah. Ill hold it up. Which actually shows a decline. I dont fully understand that chart. But its a d. O. S. Chart. Its authoritative. It must be small restaurants a lot of stuff that families are doing together. I think can think. Two thing, one is its tougher to get a business loan. One is the mentality, being afraid and being shocked and seeing things go so wrong. Yes, but there was a theory when the big layoffs occurred that im never going to work for the man again. Im going to go and start my own game. Right. And that doesnt bear on any of these numbers. Right. Which is its counterintuitive to what you read what you hear when you have squawk on the street, 11 00 to 12 00. Hes teasing the shows. Its great. You talk to aaron leavy, hes got ideas about terminal stories. Its wild, you know. Thats why its important to go back and look at the data too. It tells you whats really happening in trading. Thats why i like data. Jack is our guest today. Well have more with him in just a little bit. When we come back you wont believe who is starring in rihannas new music video. Well have a sneak peek. And foursquare. Jack just talked about foursquare. Finding a table at your favorite restaurant and a company thats transforming itself into two different apps. First check out other major currencies. China central bank looking to reduce the reserves that the bank is required to hold. Just happened about 2 1 2 hours ago. Check it up, the dollar is up against the dollar 1. 1448 up against the yen. Squawk box will be right back. Onesecond trade execution. Guaranteed. Did you see it . In one second, he made a trade we looked for the best price and the trade went through. Do the other guys guarantee that . Didnt think so. Open an account and find more of the expertise you need to be a better investor. Take a deeeeep breath in. And. Exhale. Aflac and a gentle wavelike motion. Ahhhahhhhhh. Liberate your spine. Ahhhahhhhhh. Aflac and reach, toes blossoming. Not that great at yoga. Yeah, but when i slipped a disk he paid my claim in just four days. Ahh four days . Yep. See why speed matters, at aflac. Com. Welcome back to squawk box, everybody. Check this out. Here is an interesting threesome, rihanna, Paul Mccartney and kanye are teaming up. The first single from rihannas upcoming album. Her First Release since 2012. The trio will perform at sundays Grammy Awards as well. Facebook is heading into foursquare territory. The social media giant has a new feature called place tips that will put in news feeds. Foursquare has seen tripledigit growth. Lets hear more about that in the app that split. They now have two of them. The ceo who checks in on swarm not on foursquare. I did. As soon as i got here, i checked into the studio to let people i was here and on tv. Just explain about foursquare users, you split the app in two effectively, right, did you do that . Yeah, we did that last year. The primary reason was we realized there were two main users. A lot using it for search and a lot to check in but very few people were using both at the same time. I think the big trend is to move towards simplier lighter apps. That was really the thinking. So now that youve done the transition which app is more popular . Its interesting about a third of our existing user base is using foursquare exclusively. And third use swarm exclusively. About a third use them both. It justifies our thinking going back to that. When i teed up the segment i mentioned what facebook is doing. What do you make of what theyre going to do and what that means intoyour company in Emergency Rooms of competition . Its interesting. Weve been around six years now. The Fourth Quarter last year is one of the biggest quarters weve ever had. In foursquare, weve seen facebook doing it many times, trying to copy the checkins and the play tim that theyre doing, the other thing that theyre doing, we keep doing what were passionate about which is helping people find the way to amazing local businesses. Weve got a ton uses it for that purpose . When you think of competition, do you think of facebook as the competition . Do you think of google maps . Or yelp . Yeah, its anyone that steers people towards local businesses. When we explain foursquare, we say, do you use the yelp . Its a much more personalized version of yelp. Whats your end game . If you asked me i would thought you would sell to a facebook to a google to an apple probably two or three years ago. Yeah. Now, the world has moved in all sorts of different ways. Where is your place in it . Its interesting, every year the company gets stronger. Like were generating more revenue this year than the year before. Every year you see the path of how this whole thing works out. Were still talking about revenue growth. We havent talked about profit growth. Not yet. If you look at where facebook is, 11 years old. Twitter, i think twitter is ten years old. Were six years old. Weve got a couple more years to get there. We can see the pieces coming together. Jack, are you a four square user . No what is the model. One of the biggest one has been data licensing. See weve been licensing our play database to places like microsoft. Weve got about 60,000 developers people that make the smaller app that come off our date database. When you look at these other companies what is keeping from you the public . Well were not there yet. Six years, we still have a lot to prove. We have tripledigit revenue growth. How many years are you away from profitability . We normally dont discuss that stuff. But well talk to you in the future. Good answer. Thank you for coming in. And checking in on swarm. People can find us. Are we registered . Is this studio on your you had to add us to your map . I did i set it up as nbc sky studio. When you do that does that register on the map forever . Yes so anyone that comes in after here can check in. So if you guys want to check in on the break. Great. Congratulations. Jack we wonder why youre not at the patriots parade. I was going to ask him. Why arent you at the patriots parade . Too cold and too much snow. Did you congratulate robert . No but i congratulated dale. Up next gm plans to answer demands from major investors. Plus jim cramer on the new york stock exchange. And skikey earnings from drugmakers and macys buying bluemercury. Welcome back to squawk box. Gm earning beating estimates. Revenue falling short. The automaker will seek board approval to raise its dividend to 36 cents. Carl bass called for it when he joined us in davos just a couple weeks ago. I think the company has too much cash on its balance sheet. I think with 27 billion in cash and doing 15 million a year. Abe maybe 5 billion, 6le in cash flow they can afford to double the dividend if they pay another 1. 6 billion. And i think gm, if shes really going to be shareholder focused, i think you can see a different Capital Allocation policy by the company. Kyle bass ton. Gm shares up 4 . He said double it. Up 20 so yeah. But would you, with tesla, would you spend all of gms money right now . I mean do you think theyre all set, out of the woods, everythings great for gm . No but theyve got it pretty good. Everybody tells me the president , did you meet him in davos . The cfo. The king him. I hear all kind of stuff about him. All right. Lets get down to the new york stock exchange. Jim cramer joins us now. Also knows jack pretty well. What did you see today . I know you probably listened to jack. I told him he can talk about whatever he wants. I say that to you, too, jim. I loved his zeemens comment. What . Look, why dont we give all of our companies a gigantic handicap. Start every game with the other team having 14 points and we have nothing. I take it to heart because it seems to be happening and no one in the government noticing we are handicapping our Great American companies. I also think i share the optimism, i see a lot that is pretty good. Earnings this morning pretty good. Love your takeout on gm they are overcapitalized. A much higher dividend like the old days in the 80s and early 90s when we used to see dividend go up and stock become income producers. I like what i see. Thats good. Merck, what happens, another one with forex but should have known . Yeah, mercks got things in the pipeline people arent talking about, including an alzheimers drug theyve hidden from everybody. Kohls having a huge guideup. And the disney warterquarter, remarkable. The consumer is spend, dont lose that these this with gasoline at 2. 20 dont believe the naysayers, theyre spending. Hello, jack great to see you as always. Great to see you. Sorry about philadelphia. Ow. Thats not nice. Next jack sounding off on other pieces of the days news. And then later on squawk on the street, staples founder is going to be with them get his take on the mornings big Office Supply store merger. Back in a moment. Hey matt, whats up . Im just looking over the company bills. Is that what we pay for internet . Yup. Dsl is about 90 bucks a month. Thats funny, for that price with comcast business, i think you get like 50 megabits. Wow, thats fast. Personally, i prefer a slow internet. There is something about the sweet meditative glow of a loading website. Dont listen to the naysayer. Switch to comcast Business Today and get 50 megabits per second for 89. 95. Comcast business. Built for business. Guest hoset, jack welch of the jack welch institute. You did other things besides jack welch . Youve got i know you ge wasnt it for how many years. 21 years 20 years. First book was straight from the gut . Yeah. The second one was winning. Winning. You said that before charles. You always had tiger blood. Now another one april 14th. Yeah. Big day. The real life nba the no bs. Generally the no bs guide to winning the game building your team and your career. All three things. Like the other book . Did suze right this. More than ever. Shes on the cover. And the books are better when she writes them no question. Weve noticed that. Noticed that. Everyone else does too. Whats the book about . Breaks it down . Yeah in the first section, it there is no word of ge its my experience over the last 15 years with barry diller in the internet space and with my experience with private equity. And suze and i have spoken over 1 Million People since that time and audiences around the world. So its always q a. Weve got a lot of questions, a lot of input. First sections all about strategy, where are you going . How are you going, how you get there. All of the interesting techniques that you need to win the game. The second one is the second section, is all about building your team how you build great teams, because building great teams is the answer to winning the game. And the final section is all about growing your career. You know, the roadblocks, when youre stuck, how you behave when youre stuck, how you deal with boss whose are excuse me. Thats good. Bad. Cable. Good for air. Bad bosses. Bad bosses. Royal i apologize for that. Youre allowed to say those are the three sections. We cover the game the team and your career. There you goep straight from the gut. Part of Career Potential to get to nba. Were booming. The Jack Welch Management Institute up to 850 students. You see stories that people say they dont want mbas like the way they used to . What is going on. You pay 300,000 give up two years of your life get out of here. They do want ones where you pay 40,000. Right. Keep your job and youre growing in your job and double digit increase while youre there. We are our role not take you from one company to another company. Our job is to train you to grow in your company. And its winning like crazy. I mean were growing 40 a quarter and its just the most exciting thing ive done in years. I wanted to bring up last time which book was out you were booked on squawk box. Awful day. Terrible day. I was on the today show that morning. September 11 2001. And all of a sudden the book for a year september 11 2001 meant everything to me year of writing on it work on it, in that instant, it seemed stupid and trivial, why do it . The grief we felt that time unbelievable. You sell hundreds of thousands of bookbooks. Over a million. Who do you give it to. Ive been giving it to charity. Schools, my old school. My hometown. The boys and girls club. Ive got tons of things in my own town. We have scholarships in my own town from my parents, lots stuff like that. Its good. You work hard on the books and suze works hard. Suze works harder than i do. I talk and she thinks it through. When you have the book coming out april 14th, will you come back with suze too. Yes. Shes on the cover. She has to be back. I cant show up by myself. Guarantee shell come in here . Book her for us. Ill do that. You know somebody . I know somebody. I can work it out. I know suze. Weve got you better ask projecting from your own i had a couple of thoughts. Well, along with this dollar stuff i think china and i think the mornings move i was going to talk before the move is weaker than people think. This government 7. 5 is a number that one would want to put 20 seconds left. And the other thing is cuba. This nonsense about cubas going to be economically beneficial. Whether this is good for the people of cuba thats another question. But as far as u. S. Business if they get 10 billion, its less than half a percent. Stop wasting time on discussing. Every time you guys do it it drives me crazy. On that note were out of time. Jack, thank you. Thank you so much. That does it for us. Time for squawk on the street. Good wednesday morning. Welcome to squawk on the street. Im Carl Quintanilla with Jim Cramer David Faber at the new york stock exchange. Premarket a tad soft after yesterdays rally. Stocks have best two days to start any month in about 4 1 2 years. Oil, of course driver yesterday, highest volume in at least a year. And it is giving a little back now