Transcripts For CNBC Squawk Box 20150209 : vimarsana.com

Percent. The west coast ports are due to reopen today. Part of a lengthy labor dispute between shippers and dock workers union. If theres a shut down, the National Retail federation warns the u. S. Economy could face a hit of 2 billion a day. I asked jack lew about that in our interview. President obama will meet with Angela Merkel today. Theyre expected to discuss issues like russia ukraine, international trade, and Counter Terrorism efforts. Chinas imports dropping 20 from a year earlier. The steepest decrease since may of 2009. Exports down more than 3 . In europe the story is all about greece this morning. The countrys new africanamericanPrime Minister he promised to reverse some of the reforms imposed by greece by the international lenders. Setting up another standoff with the u. N. Back at home glean prices are riseing once again. The coverage cost of a gallon of regular jumping 13 cents in the past two weeks to 2. 20 and she warns the trend likely to continue. Prices still 1. 10 below the mark at this time a year ago. I think the tensions with greece are particularly notable. They actually went so far to demand refer rations from nazi germany. Things are getting uglier. Nobody looks like theyre backing down just yet. To me, i mean we talk secretary lew about this and i guess we can talk about the whole interview now. But hes basic message was that everybody should be cool off and stop the rhetoric out there. Thats what he has to say. I think hes right. Theyre Digging Deeper holes for themselves as they stake out their sides. I would say the rhetoric is such a level. But the ecb saying basically you have until tomorrow and were not going extend anymore loans and the greeks saying we want reparations from world war ii from nazi germany. I dont know the news source but green span is for greece to leave the yoends eurozone. Wow. And the question becomes what happens to spain. How the eurozone governments deal with this issue of austerity. Greece is not the only one. Im game for the break of the euro at this point. I am. I think i think its a miss. I think theres a lot of unknowns. As soon as you start saying that the big chunk was snow started falling from the sky. Thats an answer from god. Exactly. Why dont we check on the markets. With the concerns and everything going around with the ramping up of the rhetoric you can see that the futures are a little bit weaker this point. In europe the biggest hit coming to greek. The tax is down by 1. 3 . The ftse down by a half and the cac 40 down. Overnight in asia we saw the shanghai market ended up by 6 10. Oil prices weve been watching so closely. Things picked up. They slowed down. Wti up. Gas prices at the pump up 20 cents. Take a look whats been happening in the bond market. 109year note is yielding 1. 9 . And currencies at the point it looks like the dollar is down against the euro and the yen. Also keeping an eye on what has been happening in the gold markets. It looks like gold is up by about 6. The World Leaders heading to istanbul. Last night in washington i spoke to jack lew before he left before the gathering. Here is what he had to say about that great jobs report last week and what it means for the u. S. Economy. Watch carefully. This is as feisty a our treasury secretary gets. I think that it is time to say that we turn the corner and were in an economy that is growing. It has sustainable growth. Its growth is showing up in not just businesses but in jobs and were now seeing wages go up a bit. I think this is a trend that needs to continue. We need to make sure we do what we can to continue the growth. And i think that, you know were getting some benefit now from Lower Oil Prices in terms of the economy to gate boost on top of that. Im feeling confidence were looking at a good period ahead. What do you say to the critics that the administration has a series of jobkilling policies. How do you respond . The facts have proven them wrong. We have an economy. Were growing jobs at the record rate. Were seeing strong growth and come back in manufacturing. Were seeing construction come back and seen our deficit go away down at the time when we have 10 Million People who are finding the security and having Health Care Coverage they didnt have before. I think the critic bhos said all of these things were going to hurt the economy have been proven wrong. What do you say average america who have not felt the impact of better gdp growth through their paychecks and other bays. I think thats been a very big issue. If you look over the last few months. The fact over the last year weve seen average wages going up. We need more wage growth than that for people to feel it. About 28 captainital gains tax. It seems like theres a creep going on toward well ill remind you 28 Capital Gains rate was a rate was effect in president reagan was in office and the economy did fine at that time at that rate. We are top rate for individuals is where it was when president clinton was in office and we had the longest period of uninterrupted growth in american history. I think were not doing things we havent tested. Weve had an experiment in the country. We had big tax cuts for wealthy people and the economy didnt do well. Were going back to policies that were in place when the economy was doing quite well. Obviously there are those that would dispute that notion. This is the equivalent of you know how a guy scores a touchdown . He did a million jobs over three months. That was his victory dance. That was his victory dance. Okay. What does he do when he loses . I think its the same. That was him doing the chicken dance or whatever. The crickets were wrong. The critics were wrong and we turned a corner. We made million jobs over three months. Why dont we talk about more about what jack lew had to say and dug deeper into fridays blowout jobs number. Joinings us now is qma and chief economic correspondent at politico and cnbc kribltcontributor. In erm it is of higher rates. What do you think . I think that the economy is doing quite well. I think even blow the surface that the growth and wages might be higher than the official numbers suggest. Theres aed had wind by baby boomers retiring and beplaced. I think things are going well and maybe a little bit better than the official data suggested. Were going back to rates where the economy did very well. And the idea the tax cuts that came in lead to worse economic times. I think thats probably wrong. Its impossible were going to go back toot higher rates with the current congress. It doesnt make much sense to talk about it. I think that we can possibly withstand some. I want to talk about fridays jobs number. It changes the equation about what we talk about in terms of what to expect from the fed next. A lot of people say its going to be tough for the fed not to raise rates given the great numbers. But larry somers has a piece in the final times that lays out four times why they shouldnt do it quickly. Its pretty compelling given where the Inflation Numbers are which is not very high. We did see the. 5 increase in a month. Which is pretty good not great. Weve seen it pop upanddown repeatedly month to month. I think theyll wait and see whether the numbers are sustained before they make a call on rates. I dont think theres a lot of pressure on them. The jack lew interview was interesting. Its about a million jobs over three months. Its at lot of jobs. But you mentioned bill clil ton. Clinton lowered the rate from the 28 . He want to put it back. Hes picking and choosing where he wants to put it. And hes right. Theyre not going to get the tax rates they want. But the idea theyre going back to the clinton tilestyle of policy. Theyre moving away from that. The implications for Hillary Clinton. Yeah. I think theyre significant. I think theyre significant. What way . They will be if the wage increases are sustained. Right now theres a New York Times piece on sunday shows about pressure on Hillary Clinton to come up with an economic plan to address economic inequality. People feeling better on the economy andless pressure to come up with policy sies hes running foreign policy. She can run on basic less progressive economic. If you look at the wage it is makes her campaign look easier. What do we do about economic . I think brought up the right point. This is your study you come up with. You think wage growth is better than expected. I know, you talked about it. In case anybody wasnt listening. Theres a puzzle. Its a puzzle. We look at growth in the Fourth Quarter is 4. 3 . If you look at the Consumer Confidence ratings theyre up. Gasoline prices play a role. Is it possible theres something about the data were missing. It turns out if you look make some assumptions. Theres about 250,000 baby boomers retiring and claiming Social Security every month. Its 500,000 replacing them. Make some assumption about how much baby boomers are making. Come up with six cents an hour. Its big enough to perhaps even double the wage growth the democracy worker was starting or retiring. It was experiencing. So its a head wind that is always there. But the number of new claimants in Social Security has gone up by 50 since 2006. Now were starting to get good job growth. That means we have more people coming in. We have more people going out. And the dynamic is enough to maybe skew down the number for what a typical worker is experiencing. If thats true it means the things are maybe a little bit better than the official statistics. Steve im sorry. I think theres a very long way to go to change americans opinions about obama economics. And thing youve had strong job growth but amid very very negative sentiments about the economy and, you know, ed was talking about wage growth. What you said makes a lot of sense. I think theres not been any leverage at all to get wages that keep pace with inflation. So im wondering, i mean m a lot can change in two months let alone two years. Its going to take a lot for Hillary Clinton to say im running on the economic platform of president obama. I think thats true. Opinions are starting to tip positive. So i think youre right to address some of the systemic things. More so she may have to disassociate herself. Im not sure she will. I factual to lou about this. The whole transcript is online. The notion of middle class economics. I dont know that is resonating in the mind of the American Public in a way that says im on board with middle class economics. Sign me up. Thats probably true. The record and the economic feelings that people have and the jobs numbers and the wage numbers and the attitudes might be in her hes going after the minimum wage. Shes going support the minimum wage. Invest in infrastructure. All the normal things. Closing Corporate Tax loopholes. Then says she wants to provide incentives where shes think about providing incentives to corporations to profit sharings with employees. I dont know how she would go about that. And changing labor laws to give them more clktive bargaining power. Is that considered aggress ienough . I think thats a start. She had a fivepage memo. I imagine that came out of that collective bargaining rights to do it for more profit sharing. Theres a lot of push back on that. That. Thing is going to be a rans trns transition year. By the way, much of the inequality is driven by the feds own policy. They were trying to make sure they were saving sbiert economy. As a result the people at the top benefit the most. Youre not fighting back . I think weve been through this. We disagree. The people at the top benefitted the most. They did. If you were an owner of properties anywhere around the world. What abouted fixed income. If youre on a fixed income and a senior youre getting hosed. Everybody 55 and older are the ones who are the saviors. And theyre the wealthy as well as they are the poor. I know, its part of the whole thing right now that the fed and rich people. I think theres a big argument. I know they were trying to save i think they probably did. I think in the process, you end up helping those who have the most. Their assets inflate the most. I think it was a middle position. Youre right. The older people have the assets. The reason Interest Rates are as low as they are is the fed who play ascii role. Part is because theres a great deal of cash around the world owned by older people that are seeking the safe secure from Interest Rates. You read about the fact the idea theres too much debt in the world. Yes, but part if i want to buy a bond. Someone else has to go into debt. Why are Interest Rates so low . What would Interest Rates be . Im not saying the feds shouldnt have done it. But i think people and i say this to somebody that benefitted over the last several years. Thats one of my point. If you think about the benefit two average mortgage holder of lower rates. How do you count that . In terms of the benefit or the middle class. For a long time the people who needed it most couldnt qualify. Couldnt qualify. Thats not the vast majority. Theres a percentage of mortgage holders that couldnt qualify. Theres a big chunk that who had existing mortgages that didnt qualify. Miami that cap. I did that exact thing. Im smack in the middle. We have to go. Andrew forced me to bring it up. Its a running argument. And my jury is out. I would like to see an academic study that totals up all this. Ann is in my ear telling me to move on. I need to know his pos on beyonce versus beck. Beck is the best. My facebook feed lit up with everybody talking about how great her performance was. Said she stole the show. You havent answered the question. It was before the grammys. Before the grammys. Dont have Jack Lou Jerry versus bob, of course. Thank you very much for coming in. When we come back this morning for at least the second time this winter a poeshly historic storm is heading for new england. We have a live report from maine next. First, as we head to a break. Take a look at this date in history. 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 . If you are up this early you might not have seen this morning. Its one of the more notable pairing last night. Tony bennett teaming up with lady gaga for a renner dedication of dancing cheek to cheek. That is a weird pairing. The weather is a major story this morning. Keith carson joins us from portland, maine. Here we go again. Yeah. Its unbelievable even for me. Piling on the snow one after another. The story with the storm is how cold it is. The nice northeast wind in my face here. Portland, obviously, you dont think of maine super compact. Theyre having the same problems in boston. The giant snowbacks out here. And there is nowhere to put the snow. They have to put it in dump tucks and drive it out of the city. They dump it into a snow farm which is a fancy way of saying a field they dump a bunch of snow. Over 68 inches of snow so far this season in portland which is the seasonal average. Were only at the beginning of february. This storm dropped a couple of inches of snow. Its been snowing consistently for awhile. Its not coming down that hard. We have the snow down here left over. Its the light fluffy stuff. Easy enough to move but when you combine it with how cold it is out here i think it is starting to get to people a little bit. I was in boston for the bliss around a couple of weeks ago. The tone in boston is different than maine. Theres a comradery people here in maine. If youre going to live up here you should be okay with the snow and cold until it at least april or sometimes may as they call it mud season up here across southern maine. But, guys you know, as you know were based in atlanta. The Weather Channel is. My wife texted me yesterday when i was standing out in there and she said where the screens for the window. I want to open it up and get air. I responded in a short message. I dont like you anymore. Were out here standing here and its 6 below. Shes down there and its 58 degree s 65 degrees i can feel your pain with that. I understand that. I could rub it in and say my coffee is not quite as warm this morning as it usually is. That would be painful. They didnt fix that in the new studio . I noticed i havent been seeing you as much. Are we only old studio friend . No youre not wearing any plaid today. We have to get you in the new studio someday. Well make it happen. I cant do the normal fashion thing for you today. Its about layers. I have a plaid medium sized shirt underneath. Im halfway, at least. Okay. We appreciate that. Putting in the effort. See you soon. We have some passing to tell you about this morning. Former Goldman Sachs senior partner John Whitehead died at the age of 92. He left after 38 years to become deputy secretary of state under president reagan. He was a board member of the new york stock exchange. Another wellknown name in the world of Corporate America also passed away over the weekend bob silver passing away at the age of 58. Hes best known as right hand man of trial lawyer. He used to call him the brain. He was behind mr. Boys biggest cases. Microsoft, for example, proposition 8, bush versus gore. All of those cases and, of course, he will be missed as well. Those are two sad stories. He was only 58. He was only 58. Yeah. You know both of them . I knew both personally. And they were good people. Coming up this morning top stories including a 30 billion evaluation of the firm behind 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. 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We enable you to reach Global Markets and drive forward with broader possibilities. Cme group how the world advances. Kid hey dad, who was that man . Dad hes our broker. He helps looks after all our money. Kid do you pay him . Dad of course. Kid how much . Dad i dont know exactly. Kid what if youre not happy . Does he have to pay you back . Dad nope. Kid why not . Dad it doesnt work that way. Kid why not . Vo are you asking enough questions about the way your wealth is managed . Wealth management at charles schwab. Welcome back. Were in the chairs talking about stories that caught our eye this morning. And this one, by the way, if you were watching us on a smart tv you should Pay Attention to this. I dont know if you saw this over the weekend. A crazy story. The idea that samsung, which has tvs smart tvs that often have cameras in them. We all have tvs with cameras. Some have computers with cameras. A look for face time and stuff. In the actual language they have about privacy it says and, by the way, you can talk to some of these tvs now. It says dont say effectively dont say anything in front of the tv what . Dont say anything in front of the tv you wouldnt you know. In other words we might be spying on you. Effectively. I dont understand. Effectively. Their privacy statement effectively says because the way the new tvs worked you could talk to them to turn them on. So its not just pressing a button. And effectively theyre saying they wont be held liable. And we have known that hackers can get into computer systems. And this era of theres a camera looking a at you. Its possible it might accidentally go on. You could be talking about whatever. Thats insane. Woo would buy a Television Like that . Is it a possibility that somebody is spying or you accidentally left it on and hackers can get into it. And you might not realize it. And who knows. Its not like samsung is planning on watching you. They can understand a scenario where someone might be able to hack in. To my i dont need that tv in my house. Thats creepy. On my computer if the camera goes on theres a light that goes on. I was thinking about it. If you were on your phone and werent looking down. It happens. We have dealt with this for years. How many times do you butt dial somebody and youre having the conversation and i dialled somebody this morning. I tried to shut off quickly. As many times a as you do that. Theyll hear the conversation. Weve gotten used to that. Think about where the tv is in most people homes. They have one in the bedroom. They do and its often looking at the bed. Just saying. We do not have a television in our bedroom. Good for you i caved and gave in. Thats very good. People say you should not have one. I will say we never watch it. Its in there and we never watch it. Youre probablily on tv all the time. You dont know where you are. I am just saying. Everywhere you are on the streets just about anywhere. I think if i know that tv is watching me. A camera too far. Right. This is a new york story. If you dont know we have one of the worst basketball teams. I think in the history of mankind. Only ten wins this year. 10she or Something Like that. Its been this way year after year. So some new york fan in a new yorky kind of way wrote a nasty note to james dolan. Which is not what i came here to talk about. The note that james dolan wrote back to the 72yearold fan. I think we have a little excerpt of it. If you could call it up. The son of the person who received the note made this public and its not a very nice note. And for a guy who should be apologizing to all of new york instead hes writing nasty notes back to me as an economics report this is a guy who has the idea he has no competition. They still are buying tickets to the lousy team. Theyre selling out. He has the nerve and its a guy i group watching the great knicks team. I saw willis reed. My parents would take me to championship teams. All of that great history of new york is gone with this team. Theres a great article over the weekend. A sad story about phil jackson. It was a sad interview with how sad he was about his try angle offense was not working the way he came here 60 million to come here and it hasnt worked yet. He has a couple of basically article said two or three years from now he thinks he has it. I dont know if its dolans fault. Its hard to see the only constant. Hes been through the coach after coach. Hes been through one team after another. The only constant is dolans ownership. I agree he shouldnt be writing nasty letters. I would like that see what the guy originally wrote. It wasnt much. Sometimes i would like to write a nasty letter. But you dont. Thats the lesson. And the guy is guys note was harmless. I want to tell you quickly about a dispute in the hamptons that has been simmering for a long time. When everybody comes for the summer, all kinds of tensions build up between the people there all year and the summer folk. Most of the summer folk a lot who come in come with noisy airplanes, noisy helicopters and it is driving the longterm residents there crazy. At first i thought theyre just complaining. I looked at what has been going on. Theyre talking about 25,000 annual takeoffs and landings at the nearby east hampton down airplane. The majority happen between may and september. Part of what the town officials are talking about after receiving 25,000 complaints about airportrelated noise is to change to a yeararound 11 p. M. To 7 00 a. M. Curfew. It doesnt seem like a big deal. Think about it. Its a terrible inconvenience. In the car. Its a helicopter ride here. I think the helicopters right. Robert franc did the story. I think thats the biggest part of the problem. What they want is to say that no helicopters operations allowed from noon thursday to noon wednesday. Which is the only time anybody would be helicopters in. Theyre going after the helicopter people. Is it more about the helicopters or the planes. I think the helicopters are noisy. I know the guy on the board. Its a helicopter story and theyre furious. You take the helicopter all the time. No i dont. I have never been on a ride sharing helicopter or any other. Once in my life ive been on a helicopter. It was scary to me. Not to the hamptons. Highlights from last nights grammys awards. And well talk to the market force behind the winners including sam smith. Startupny. Its working for new york state. Already 55 companies are investing over 98 Million Dollars and creating over 2100 jobs. From long island to all across upstate new york, more businesses are coming to new york. They are paying no property taxes no Corporate Taxes no sales taxes. And with over 300 locations, and 3. 7 million square feet available, theres a place thats right for your business. See if startupny can work for you. Go to startup. Ny. Gov. Whats that thing . I moved our old Security System out here to see if it could monitor the front yard. Why dont you switch to xfinity home . I get live video monitoring and 24 7 professional monitoring that i can arm and disarm from anywhere. Hear ye the awkward teenage one has arrived dont be old fashioned. Xfinity customers add xfinity home for 29. 95 a month for 12 months. Plus for a limited time, get a Free Security camera call 1800 xfinity or visit comcast. Com xfinityhome. Welcome back in the headline the on this monday morning. Reportedly valued at pod million. Thats the firm that runs nissan is raising the profit forecast. This comes after the automakerss latest results beat the street helped by strong sales from new products. It you have been watching the futures this morning we have seen red arrows so far. Right now things have gotten a little worse this morning. Dow down by about 85 points. S p down by 10. The nasdaq down by 21. Part of this is coming just as the rhetoric ratchets up even higher when it comes to what is happening to greek and the ecb. The greece and the ecb, a lot of attentions we hoped would be cleared up by now. None of that has happened yet. Things have gotten worse. The musics industry biggest stars came together to honor the best last night. One star wound up shining a little bit brighter than the rest. We have a wrap up of the grammys. They called his name before the show. Sam smith. And even more once it started. Sam smith the 22yearold brit won four of the six Grammy Awards he was nominated for. Im having a really really good night. Including three major ones best new artist record of the year for the megahit stay with me. I want to thank the man who the record is about. Who ive been in love with the last year. Thank you so much for breaking my heart you got me four grammys. This is absolutely incredible its a dream come true. Only singersongwriter beck won album of the year. We made this record at my house for the most part. I would like to thank my kids for letting me keep them awake a little bit extra longer. A trio of grammys went to beyonce including best r b performance. Jayz for drunk in love and pharrell won three for happy while miranda captured best country album for platinum. The show featured an array of allstar collaborations spanning musical eras as well as appearance by president obama. Its on us. All of us to create a culture where violence isnt tolerated. His message was supported by an abused survivor as well as a powerful ballad by katy perry. A memorable moment during a magical night. Lets talk about the business of music. The force behind super stars like sam smith who stole the show. Among the other media stars Pharrell Beyonce miley cyrus, and countless more. Behind the online promotion for the 49 of the 52 weeks. With us now is the founder and ceo. Good morning. Good morning everyone. So help us try to understand the business implications of what happened last night. How much money is it in for sam smith. How many people will buy his album this morning . Well, i think the best parallel you can look at is what happens with the adel a few years back. Her release week when 21 came out she sold about 350,000 copies. 52 weeks later after she had the amazing grammy night she sold just over 750,000 copies. It was the biggest sales week of the entire 21 run. If i was going to guess, i think sam smith will be somewhere along the lines. I think hell have an incredible week this week. I think a lot of people will say who won four grammys and, you know, a lot of people will be curious about everything. How many people are going to go out and buy the album versus those who are on spotify or apple beats. Isnt that how people will get the musics . Arent people not really going buy the album . Yeah. But i think recently billboard moved to consumption model where buying isnt nearly as important as consuming. And, you know, if you look at the chart its sales plus streaming. I think youll see consumption across the board rise. When consumption rises and the industry has sort of figured it out to the point where you did buy physical digital, subscribe to a streaming inging platform and they count. I think the billboard score card and the score card is smart enough to capture all the way people will consume. The v neck sweater. I thought do you have an earring or something hip . I thought you were on the edge of the hippest. How is it different how you advertise these albums and normal advertisement. What are the differences here. How are you successful . Yeah. First of all, im sorry to disappoint. Second of all, i tell my clients. I get into the music conversations. Im out of my depth. The truth of the matter is im not a music fan. Im an data and advertising fan. Im more of a data person right. So you know what is different about what we do is you can go buy a Super Bowl Ad and reach 115 Million People. Some of the people care. Some dont. What we were doing last night and i had a 20person Media Team Last night. Soon someone walked off the stage or walked up to receive an award. We were ready to go. At that very moment when they won the award. Tell us what your media team did. You know so theres people that are, you know, have clients that are all the nominees and the award would get read and the team goes running to their desk. They are bringing up, you know search campaigns and facebook campaigns and making sure that the messaging is spot on. And that is, you know theres a half buzz. And theres minutes before it starts getting old and its we have to be live and capturing that. So quick. How long can you keep it going . Meaning this happened last night. You said it has a short life. Will we be talking about these guys a week from now . Youll be talking about the winners. For sure. And that is now its a badge of honor theyll wear forever. I think that will help them. I think theres a tremendous tremendous spike last night into this morning that we have to be all over. You know, i look back at beyonce album that was dropped, if you posted she dropped at midnight. If you posted at noon the next day that felt like old news. If you posted at 8 00 a. M. That day, even that felt old. You look at the biggest pop music events eight hours after it happened you know, if you walk. And said beyonce has an album. It felt old. We couldnt afford to do it yesterday. You have a tattoo right . I think theres some things we dont know about. Something. Thank you for joining us. A block buster jobs report. Could there be a downside . The possible bad news in the good news. Thats next. Welcome back to squawk box. The economy creating more than 300,000 jobs. But we shouldnt be getting excited too yet. Good morning. Good morning. You know we had an earlier conversation at the top of the hour where we thought things were great. You say not so much. Look i say which im now guilty of it i say the way were paying more attention to jobs reports is counterproductive. It was probably useful 2009 2010, gave us a lot of directionality. But if we create in a jobs optic 200,000 jobs at 15,000 a job, the way in which we have the conversation is hey, thats great. Employment is coming back. If we created different jobs we wouldnt these reports dont distinguish between the quality of the jobs. Are you saying because of the fact we havent seen average hourly wage growth that people wouldnt have anticipated this is part of it . I think its the nature of the jobs that have been created for the past four years. If we have an entire economic landscape that is based on Health Care Services bartenders, retail work thats seasonal. And thats the bulk of these jobs. And im not denigrating the nature of that. If those jobs are entry to something else. Walmart and mcdonalds are magnificent job creators but you dont want an economy where thats your career. Whatly point out and i hadnt thought about this until we talked to a guest in the show earlier on and he thinks part of the reason youre not seeing better growth in those average Hourly Earnings part of the reason is youre seeing so many baby boomers retire and theyre being replaced by younger people. You have higher wage earnings going out and lower wage earnings coming in. Show us where those jobs are. Show us where 4 million walmart and mcdonalds workers are ten years from now i dont think theres wage growth because theres no reason for it. Hold on. Because the alternative is that they dont have jobs. No no let me just make a point. Wip is a person who worked a couple years at mcdonalds or walmart is certainly more qualified for the next level of job than he or she might be had that person spent those past two years on the couch at home. Absolutely. And certainly, i mean its not the best thing, but obviously you could make a tradeoff between education and working at walmart. Maybe the education is a better way to advance your prospects. But theres certainly a better way to go about it than not working at all. I totally agree. Thats why i said im not denigrating those jobs or the need for that as part of a Conveyor Belt of an economy. But we dont talk about that when we talk about jobs report. Were talking about it now because i shifted the conversation to talk about it. But its not what we do statistically, right . We look at jobs created and thats a plus. But if youre a person living and this is not where its a right left thing. If your transfer payments amount to more than any job in your horizon you think you can get, youre probably going to make some rational but unpleasant decision to do so. The thing thats interesting around job creation is something that Howard Shultz is doing, right . In terms of if youre going to be in that level, theres maybe a corporate incentive to help the entry level become a nonentry level by paying for college education. And the question is whether we can make that Conveyor Belt work. Thanks for coming in this morning. Appreciate it. When we come back jack lew on greeces possible exit from the eurozone. A cnbc exclusive. Squawk box will be right back. Anything . No. You . No. Aflac what are you guys looking for . Claims legend has it these hills are full of em. It can take months for an Insurance Claim to surface. Claimin takes patience. Aflac paid my claim in one day. They got some newfangled kinda one day payin machine . Hehehehe yea, i got aflac at work. Aflac. In just one day, we approve and pay. One day pay, only from aflac. Aflac. [ male announcer ] your love for trading never stops. So open an account with schwab. And when a market move affects, say a Cloud Computing stock youre holding, we can help you decide what to do. With tools that help you see how market activity is affecting your positions. So when the time comes to decide whether to scale in or scale out. You can make your move wherever you are. And start working on your next big idea. In our house, we do just about everything online. And our old internet just wasnt cutting it. So i switched us from uverse to xfinity. They have the fastest, most reliable internet. Which is perfect for me, because i think everything should just work. Works . Works. Works works . Works. Works. Jack lew meeting with finance ministers this week. But he talks to cnbc first. His take on the possibility of greece abandoning the euro and russias sanctions. The debate over vaccinations heating up as the Measles Outbreak in the United States expands. Should the vaccine be free . Should it be mandatory . And the quest to make cars lighter. Were going to show you the worlds first 3d printed car using carbon infused plastic. Second hour of squawk box begins right now. Live from the beating heart of business, new york city, this is squawk box. Welcome back to squawk box right here on cnbc first in business worldwide. Im Andrew Ross Sorkin with becky quick and Steve Leisman. Pharrell taking home the grammy for his song happy. Weve got a little more grammy buzz coming up later this morning. In our headlines this morning, heres something we havent seen in about nine months. Higher gasoline prices. The latest lundberg survey shows it was up 13 cents over the last two weeks. Average of 2. 20 a gallon. Imports tumbled almost 20 in january from a year ago in china. They were looking for a drop but maybe something more like 2. 5 . And greek Prime Minister is vowing to dismantle the Austerity Program and is ruling out any abandonment of the bailout program. He would also like to see reparations made for his country from world war ii. Thats helpful stuff right there. I sat down with u. S. Treasury secretary jack lew before he left for this weeks g20 meeting in istanbul. I asked him about concern over greeces potential exit. Heres what he had to say. I think what has to happen is there needs to be a conversation where greece and all of the parties its engaged with looks for practical, pragmatic paths forward which is in everybodys interest. I certainly hope that happens quickly. I think that greece has made a lot of sacrifices and changes in its own economy over the last few years. There is a Stronger Foundation than there was and they need to build on that Strong Foundation to come up with mutually agreeable terms going forward. Do you have any sympathy for easing the austerity rules . I think greece is going to need to work through with its partners in europe and others that it has deep financial relations with. Terms that are acceptable to everybody. I think thats possible. I think that the heat has to come down a little bit in the conversation. And i think that the sooner that happens, the better. Violence seems to be escalating in ukraine. Is there a sense the current level of sanctions are not sufficient . Actually, i think the sanctions are working in the sense they had a tremendous impact on the russian economy. The russian economy is not good. Some of it is the oil price coming down. Some of it is the sanctions have really weakened the core of russias economy. I think that what we havent seen is the government of russia, president putin respond in the way that would be the reasonable way to respond which is to work through a diplomatic resolution and see these sanctions rolled back. I hope he chooses to take that course. Obviously the diplomatic course right now is one thats designed to drive in that direction. Were prepared as ive said many times. If we need to to take the sanctions and ratchet them either up or down. Our preference would be to ratchet them down because that would be the best thing for the economy in europe and the best thing for stability. But that would require russia living by its commitments and pulling back in honoring sovereignty of ukraine. Obviously a full plate of International Issues for the treasury secretary as he heads to istanbul for the g20 meeting. Are russia, greece, the strong dollar. The industrials looking like they will start the new trading week in the red. Here to tell us what will drive the action, Strategist Research partners strategist. I want to talk about relative to the dollar and the issues out there. Theres a front page story in the journal this morning of banks getting hit because of it. Every major multinational is talking about the impacts of the stronger dollar on their earnings. How big a negative is it for stocks . Its a head wind but we found personally that a stronger relationship is actually between the dollar and multiples. Actually, theres about 70 correlation between earnings multiples and the dollar index. So what you lose on earnings i tend to think you gain in terms of pe. Just to the extent you have lets back up. Basically when the dollar rises the mull pl of the stock market. So earnings will come down. Why is that . I think its because of fund floats. More money comes into the market. Wealthy people all around the world let me ask this question of david. Whats your impact on the take of the dollar . Is it a reason to sell u. S. Stocks because of the earnings impact on the translation of the dollar . I think you want to look at it on the earnings and the pe separately. We know because of the size of the foreign operations, its a net negative of earnings. And it weighs on Commodity Prices as weve seen. The pe multiple. Well, this is debatable. If you go back in time the mid80s you have strong dollar strong pe expansion. The pe at the end of 1984 nine and a half times. Right now, 17. 5 times. Were looking at a moment where multiples are way above history, but Interest Rates are well below history. Were trying to see if a strong dollar can keep rates low. If Interest Rates come up does that have to correct . There is a lot dependent on Interest Rates staying not this low but far below historical norms. Beneath about 3 on the 10year treasury. I dont think Health Stocks are dependent on this but most of the rest of the market is. So if rates rise look out below and steer clear of other areas. If rates rise quickly, i think it will cause the market to pull back. Were going to we think the fed is going to hike this year. And if rates react, longterm yields react to that we probably have more upside. Is there a limited ability of u. S. Rates to rise given whats happening overseas and in europe . Yes. I would say, though steve, the consensus now is largely gotten to the point where people believe that rates cant possibly rise because you have german fiveyear yields that are negative and german tenyear yields that are some people say its not even possible. I have a different view. We have a different view. Switch to say i think at the start of the year there was a general consensus the rest of the world would drag the u. S. Down. I think last fridays Payroll Employment numbers suggest that the u. S. Is doing just fine. And all of the rest of the stimulus youre seeing around the world, maybe the rest of the world starts to catch up. I also think theres a sector call here within the market which is a certain sector. I think Interest Rates will back up. Certain sectors, though are very at risk. Even if bond yields back up to 230 or something, thats a meaningful trade. Kind of looks like a safe place. This is the second time ive heard this idea. Jim paulson was talking about synchronized global growth. That changes the game in a lot of different ways. You think of what happens to commodity price, if thats your call here where europe japan, and the United States are all growing. To varying degrees, right . Growth in europe might be 1 . Right . Well take it. Well take it. Japan too, same idea. You have to remember with oil, its an enormous benefit. It hurts very small relatively small global economies. Its an enormous help to some of the largest economies. Not the least of which would be china, india. You never know from watching the dow. This has driven me nuts. The idea that the correlation and we had a note that went around here internally used to be. 03 between the s p. And it got up to. 7. Did it make sense to you . Does it make sense to sell stocks when Oil Prices Fall . The short answer is yes. It does . Yes. Okay. Weve seen how it smashes the earnings of the s p. Typically the energy sector. You have to watch to see the break points. You know theres a sweet spot on oil. Were beneath that sweet spot right now. On the notion of oil in a barometer of whats going on in the world economy, synchronized growth, theres moderate growth occurring in relative markets. But if what jason is saying is true that its an enormous benefit to both developed and developing countries, then why wouldnt you buy stocks on Lower Oil Prices . I think the fear was that it was the average price was 73 a barrel. The average price last year was 93 a barrel. The decline happened so rapidly that people were afraid they were missing something. They were missing a global deflationary force. There was no pulling out. To the extent to which oil prices stabilize, it gives people some maybe hope that youre not in a global deflationary spiral. That this is more supply demand driven. You have to remember in the emerging markets, everybody is living at a level that Commodity Prices are a bigger part of the cpi. Twothirds of their cpi is food. Right . I mean so you get declines in Commodity Prices big increase to real wages. In some ways it benefits emerging markets that are not dependent on commodities themselves like brazil and russia. Its bad for them. But other places, huge positive. Russia and brazil are in recession and china is slowing down quickly now. Its weakening demand for capital goods. I think you need to stay away from energy industrials given whats happened in the slowdown of the emerging economies. You had a yearend call on the s p of 2051. Im 2150. Id probably be around 2200. You know its with these multiples, its very difficult. Because its hard to justify 16 17, 18 times earnings. If rates stay this low, its possible. You think the feds going to raise this year . Only because Larry Summers has an oped today saying they should be going slow. Theres no reason to do this. We can debate the pace of economic growth, but its clear the labor market is tightening. We dont think this is going to be a hiked cycle. Look for them to hike in june if not september. Second of all, hes got four points. The fourth one being the global society. If you raise rates right now youre going to get creamed with the dollar. The dollar will be a head wind to u. S. Growth but growth will continue. It will be a headwind to earnings growth. Ultimately the focus is on the labor market. Nowhere were beginning to see the signs of labor costs climbing. Okay. There we have it. Thanks very much. Thank you guys. Coming up 2014 was a banner year for activist investors with 143 companies targeted. But an activist says another will get bigger and louder this year. And later the debate over vaccines. Were going to continue talking about that topic. Measles and more with a doctor from the brookings institution. Squawk box returns in just a moment. 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. Welcome back to squawk box, everyone. Weve been watching the futures this morning and weve seen a lot of red arrows so far. A lot of this is coming because of concerns because the rift between the greeks and the ecb has not gotten better over the weekend. Thats weighing on things here and in 234e United States. The dow futures are down by about 76 points right now. And the nasdaq down by 19. In our headlines this morning, apple is reportedly planning its first swiss franc bond sale. It could come as soon as tomorrow. And high demand for a denominated. Franc denominated debt has pushed bond yields into negative territory. This is good news for apple because Corporate Bonds are normally linked to government debt. So the tech giant will be able to borrow cheaply. Lets talk about activism. 2014 was a banner year for activism with 330 companies being targeted. Thats up from 291 from the same fund a year earlier. Some market watchers are saying 2015 could turn out to be a busier one. Joining us now to weigh in on all this, Jeff Sonnenfeld from the yale school of management and also cnbc contributor. Great to see you, jeff. You over the years, i think, have not been a fan of activists. You have been more on the core of management, is that right . I wouldnt say anybodys corner. There are responsible activists and there are frat boy screamers that i think have a destructive impact. No there are people like relational who i think are fantastic partners with home depot and hp. I think value act has been tremendous going back to Martha Stewart and microsoft. Let me ask you this question. Theres a cover story on the economist on friday capitalisms unlikely heroes. Why activist investors are good for the public company. If you were to judge it would they be good for the public . If you were to look at the overall sort of move towards activism, has this been a good thing or bad thing . Shortterm, longterm . I think having real activist investors opposed to these who style themselves realize they are a good thing. We need to have some accountability. But i know what you expect me to say and i am going to say is we have a lot of these faux activists who drape themselves in Good Governance terms. Who do you put in the faux activist category . I just think that bill ackman and carl icahn, they dont get into icahn had a problem to be dealt with. Hes targeted some good situations. Nelson peltz. These are guys that like to scare up the antics. Hold on. I could look at nelson peltz and look at the heinz situation and say i had created enormous value. Longterm value. I think they had a pretty good ceo in there with bill johnson. In fact peltz kept him and celebrated when they were on course. Its so confusing as to why hed want to split anybody like pepsi up and going the opposite direction. Obviously were seeing consolidation. That was already happening in food. There are other food players its going to happen with. I mean hes underperformed most of his target Companies Like dupont if you look back at the last five years. Hes underperformed. Dupont. And in fact you see that hes trying to kick up dust here. I think as a reputation building. As an attentiongetting mechanism. But he actually whats he know about chemicals going into dupont . He took a company into bankruptcy. Youre saying why do you say he has underperformed dupont . He hasnt owned dupont for five years. If you look at his total returns for five years and compare duponts last five years, you look at i think one year it would have beaten their total shareholder reserves of invested capital. Thats a problem overall at the hedge funds own aspect. 16 billion in Hedge Fund Activity right now. Theyve got about a 14 return on s p. Half that in 2013 last year from what the hedge funds are bringing in. Yes, youve had some anecdotally great examples. Bill ackman had a good year. Thank goodness for him because of being on all three sides of the table in one deal. But he had a pretty miserable year if you take out valiant. Trying to understand. Is this the same different, better, worse, bigger smaller than the whole lbo thing in the 80s . Is this the same thing under another name or has it transformed itself into something more meaningful and better here . I think it is very similar. Its some of the exact same names. Some of them passed on. But basically were looking at people taking a very small stake. The audacity of peltz looking for a third of the board seats with 2 of the ownership . You know the old Dupont Family they never had any kind of audacity. Weirdly enough you know apple, pepsico, these are extremely strong performing companies. Sit good for capitalism and since you joined us on this looking at alternative economic systems, leon told me not long ago hes the former head of sasac. He said weve stopped converting. Weve seen what activists have done to your companies. It isnt because were in the back room its that we see that the shorttermism is so rampant. And with our state on enterprises while ive got you here i want to talk to you about another management shakeup. Amy pascal at sony. When we first learned of the hacking attack and started seeing emails, i think you were supportive of her and thought shed ride out the storm. She didnt. No. I wasnt supportive of her. I think shes a really smart person. I think shes extremely well liked. But you look at these emails to go out there and making the racist jokes about the president of the United States even in an email form especially a person thats a studio chief, its uncalled for. And to suggest that im with you. But is it fair to get rid of somebody based on personal email that were to be private. She was irresponsible to put them in email . Or she was irresponsible in what she said . Or i mean part of this is at some point is there a privacy issue here or no . You know if somebody walks into these senior levels in corporations, you surrender a certain degree of privacy and need to be held accountable. If wed known she thought this way and by the way, she damaged her legitimacy to lead. And they have not destroyed their leadership skills on many great movements. And amy is really smart. Weve got to run. We want to thank you though. Thanks. We appreciate it. Well talk to you soon. Thanks. So where are you on all this . Good, bad . I think democracy is messy. But usually in the end it works. Coming up american sniper giving up the top spot at the weekend box office. Well tell you which film soaked up the big bucks. And then cavita patell will give us an update on the Measles Outbreak and weigh in on the voxuation vaccination debate. Barbara just bought a bike. She wrote a tweet about it. You cant learn much from that. Bumillions of tweets combine that with your companys supply chain and sales data. Apply ibm analytics and expertise, and all of a sudden, you can learn which bikes to build what to make them from, where to sell them. Because barbara and the world just told you how to build a better bike. Theres a new way to work and its made with ibm. Know that chasing performance can mean lower returns and fewer choices in retirement. Know that proper allocation could help increase returns so you can enjoy that second home sooner. Know the right Financial Planning can help you save for college and retirement. Know where you stand with pnc total insight. A new investing and Banking Experience with personalized guidance and online tools. Visit a branch, call or go online today. There is a new top dog at the box office this week. American sniper falling to second as sponge out of water takes the top spot. Spongebob brought in 56 million in american sales. Jupiter ascending brought in just 19 million in its debut did you go to the spongebob movie . I did not. But we are a spongebob family. There are times my kids left the room and i kept watching it. Ez a lot about you. It does. Coming up the outbreak of measles in the United States. Up next we talk about the debate over policies that mandate vaccines for children. As we head to a break, take a look at u. S. Equity futures at this hour. Nasdaq off 20 points. And the s p 500 off about 10 points. Back in a sec. 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 . In our house, we do just about everything online. And our old internet just wasnt cutting it. So i switched us from uverse to xfinity. They have the fastest, most reliable internet. Which is perfect for me, because i think everything should just work. Works . Works. Works works . Works. Works. Welcome back to squawk box. Among the stories that are front and center alibaba making investment in chinese smartphone maker for 419 million. Federal judge putting a near 95 million sale bankruptcy casino in Atlantic City on hold. A hearing is set for today on a motion to block some of the terms. Also u. S. Equity futures at this hour looking like we are in the red in kind of a big way. Youre going to see the dow would open off 75 off. Nasdaq down about 19 points. And the s p 500 down around 9 points. Video game fans including my son, listen up. Netflix is making a live action show based on the legend of zelda. Thats according to wall street journal reports saying the show is in early development. Nintendo has not made a formal announcement. I think my son plays that game. He does all this online stuff. World i dont know even know. Yeah. He just plays it a lot. Im still on minesweeper. Hes off that. Sure. With over a hundred new cases of measles in the United States this year lawmakers throughout the country are discussing options to make it tougher for parents to legally opt out of vaccinating their children. And questions surrounding government involvement are front and center as well. Joining us with more on this is dr. Cavita patel. The doctor is a managing director and fellow. And thanks for being here today. Thank you very having me becky. Lets get your position straight, first of all. What do you think about vaccinations and whether they are good or evil. So im a primary care doctor. I get vaccinated my son gets vaccinated. I believe in vaccines and theyre good. However, when it comes to whether they should be mandated, you think what . I disagree with any sort of federal mandate and there are people who have echoed this as well and really what it gets down to is a vaccine just like anything else in medicine is a procedure. Its a personal decision. Im not saying that people should not get vaccinated. But we should not have the federal government mandate and force people to get vaccines or anything other procedures, for that matter. Right now state governments are the ones who set the laws on this. Youre okay with states setting the laws . So states are also creeping if you look at whats been on the docket around states around the country, states are also getting very dangerously close to interfering in a different way where the exemptions are getting so extreme that its very easy for parents not to understand what the implications of not getting vaccinated are. Its not just about getting the vaccine. Its about making it easy to not get it and not understand. And thats exactly what were seeing happening in these cases at disneyland and around the country. I understand the arguments that people have put forth. That this should be states deciding these things. But youre not talking about commerce and travel the way it was, lets say, a hundred years ago. Every day i cross back and forth between state lines. I dont have a problem with federal mandates for some of these. And part is if you look at polio and smallpox. Should the government go ahead and force vaccinations if those diseases were to come back . No. Again, even if weve talked about vaccines every time something kind of resurges. And we had cases of smallpox and polio around the globe. And again, the answer is not to say that you must force someone to have a vaccine because at that point, where do you stop in what a federal mandate would encourage for your health care . If you are not vaccinating your children, thats a risk youre putting your children at. Its not just your children who are at risk though. Its people they come into contact with. People who maybe are either too young or too sick tor able to get the vaccinations themselves. By doing that they put all these other people at risk. And thats really the becky, thats the heart of it. Its not about having the federal government forcing the hand of a certain procedure like a vaccine. Its actually about understanding when you dont get that procedure or that vaccine, understanding the lifelong implications of that. And i can promise you thats not something that i think were having a dialogue about in the United States. Dr. Patel, could a school board in your opinion, would you support this . A school board saying you are not allowed to come to our school if you dont have a vaccine. So School Boards and actually even my own hospital wont let me work if i dont get a flu shot every year for example. And even in those cases, not just a school board but a hospital or any institution would have to have some sort of policy and exemptions. Im okay with having local and municipal kind of entities give guidance on this. But when we Start Talking about this is more than guidance, dr. Patel. Right. You cant come to school if you dont have this vaccine. So are you in favor of that or are you against that . Im in favor of making sure that schools are supported to have policies to get their kids vaccinated. If they tell you that you cant come to school unless you get vaccinated, that school board would have to also make sure that they do everything to educate parents about why that vaccine is important. And that im in favor of. They can do it as long as they are educating the people as to why theyre doing it . Educating as to why to do it and then i think even more importantly educating for the parents who have real either personal or religious or certain kind of consciousness around why not to vaccinate. That needs to be something theyre educated. As you said becky, the implications of that are life long, not just personal. There are states like new jersey where i think the number i was reading this weekend, the number of personal compensatory damages since 2010 has jumped five fold. Thats more than 198 people in schools who hasnt been vaccinated. Its a tweak in the state law that says you can claim religious reasons even if its not religious reasons. They are not allowed to question. Is that appropriate or not . There are lawmakers in the process of trying to change that. No, thats exactly what i was reference b referencing. Theres a number of exemptions across the country that havent passed legislatures that are on the boxes for potential consideration. And i think weve been talking about mandates but whats the opposite of that . Its being so passive about allowing people not to vaccinate. Thats what were seeing happening. So i am vehemently opposed to states who think its okay to relax exemptions. Weve had exemptions for as long as weve had medical procedures. Weve let people say no i do not want to do this. But we go through whats called informed consent. And in this case were not informing anybody when we just say all right, thats no problem. You dont need to vaccinate. I think the problem has become if you have 95 vaccination somewhere between 95 and 90 you can guarantee herd immunity. Meaning the diseases arent going to pop up because enough of the population has actually gone ahead with the vaccination. I almost feel like you are picking through very fine points to say that its okay until a lot of people get to that point. Where its just a very slippery slope. When is it okay and when is it not . No, no no. Let me be clear. It is absolutely the right thing to do to vaccinate. And when i say its not okay its only in that its not okay to encourage a federal mandate to force you to vaccinate. We do not want and what it gets down to is we do not want federally mandated guidelines for procedures that are medical and should be in a dialogue. What happens if enough of the population decides they dont want to do it . Well, thats what were starting to see whats happening. And the answer is not to say that we have to line everybody up and have the federal Government Force people to get vaccinated. Its kpa were doing right now. Its what im doing with my patients. So to make sure everybody is vaccinated in my patient population. So this is not something that i think we should encourage a federal mandate for. Here is my problem. Im watching twitter as were doing this. And i have seen some ridiculous ideas that have been spewed on twitter about this very topic. People who will look at this and who now think you are telling me that they agree with dr. Patel, becky should give herself and her kids all she wants. They are conflating ridiculous things between the two. This is not about drugs or drug free or advil or aspirin or anything. This is about trying to make sure that your kids are protected from horrible diseases. If youve looked at these diseases that people had forgotten about because we havent seen these things weve gotten to the point we think its no big deal. I took my son back in for his second booster for the measles, mumps, and rubella on friday because were traveling to california. Im highly concerned about the idea that people have forgotten what these diseases actually are. They think the vaccines are worse than the diseases. Thats exactly lyly right. Youre right that people should not conflate this with just Everything Else as you mentioned all the drugs we give children and whether or not to give them. Each of those are an important decision. This is about vaccinations and the implications of not vaccinating. But the discussion is should the federal Government Force the hand of every parent to get a vaccine and i think we havent even done enough to ugt why we need to do this stopping short of saying that the federal government so you think education solves the problem . If more people understood, theyd go along with it. Not just education, but Education Plus a very serious conversation for parents who decide not to do this for their children. And that involves exactly what youve said that we cannot let parents then have those children enter into schools and community settings. And thats not something that i think parents have really thought about who have refused the vaccine. When i went to my pediatrician and talked to the office staff and whether they talked to families about vaccinations. The office staff said when parents tell them they dont want to vaccinate their children they just kind of stop. And i think as health care professionals, we need to push. And we need to be very clear about what the implications of saying no are. Okay. Dr. Patel, thank you for joining us today. Thank you. Coming up when we return the department of energy issuing a challenge to make cars lighter. And the bar has now been set high. Up next were going to show you a fully drivable 3d printed car. Were going to talk to the Government Agency thats funding the project. Were back in just a moment. Doug, we have the results, but first, we have a very special guest. Come on out, flo [house band playing] you have anything to say to flo . Nah, ill just let the results do the talking. [crowd booing] well, he can do that. We show our progressive direct rate and the rates of our competitors even if progressive isnt the lowest. It looks like progressive is not the lowest ohhhh when we return well find out whether doug is the father. Wait, what . At ally bank no branches equals great rates. Its a fact. Kind of like shopping hungry equals overshopping. Welcome back to squawk box. Opec raising its demand forecast for its own oil. Lower oil prices will slow production must faster than first thought. Take a look at crude oil right now. It is up by 1. 5 . Wti. Brent is up about. 7 . And natural gas, why do we take that out . Is that tenths hundredths thousandths . Wow. 2. 0819 . Wow. Im glad we have that precision on our board. We have an awesome story to tell you about, i think. Whats driving innovation in the venture capital. The Energy Department has given away a billion dollars in funding through the agency that funds high risk High Reward Research into the energy space. Deputy director joins us now from the Innovation Summit bringing developers investors, and researchers together. She is standing right now in front of the worlds first 3d printed car. It is called straty . Is that how i pronounce it . Yes. I think the fact its printed by a 3d printer its crazy. Can you explain whats going on with that vehicle behind you . Yes. Local motors is a Company Looking at ways to prototype automobiles and they actually produce this car in conjunction with the department of energy. And its actually 3d printed. Not entirely, obviously. Some parts were put together afterwards. But it is a fully drivable car. Were particularly excited at the summer to be showing the car. I think people will be really excited to see the produce hype and were partnering with them to look out further into the future and look at what we need to be doing for prototyping cars in the future. What was the cost of putting this car together . Oh gosh. I dont have any idea. So local mow tors took care of all the details of that thing. Really a prototype, a demonstration car. And in terms of the intellectual property created from this car, does that get shared ultimately . Do you think of this as a governmentspon bsored project . Do we the citizens or elsewhere get to use that ip . Will others get to use it . Local motors is really excited about being able to share designs and have cocreation happen. And so in the creation of cars like this as well as our Design Competition thats ongoing right now, they are looking at cocreation and sharing ideas amongst entities. How does it work . Actually the details of how all the pieces come together im not really sure for this particular example. But were here at the summit outside of washington with 2,000 investors, entrepreneurs, actics, and Government Agency workers to look at not only prototypes of things like the 3d car, but storage devices that could allow us to have grid scale storage, hardware and software relative. Were excited about the type of innovation were seeing coming out here. How should we think about the idea of the government picking winners and losers to the extent the government has become an investor in these companies . Actually, its interesting. I came from the private sector. I was, you know came in for three years. To work and develop and deploy. We give grants to outstanding entrepreneurs. And we work with them during the life of the grant basically asking the question if it works, will it matter. And we work to get partners from the private sector to come in after we fund to move things to the next stage. And we do not keep an equity stake in anything. The ip thats invented belongs to the inventors. So this inventor who made the car behind you, if he hits it big is that a success for him or the country because it raises the game on innovation . Are rksrrp looks to leverage the follow through all of the industry and the u. S. Sustains its leads in the energy sector. You know, and thats the big payoff is that just like innovation for a long time here in the u. S. Has benefits the entire country. I just its probably a stupid question but were not interested in 3d printing as a way of actually having a Production Model of this car. Thats not a we to manufacture cars in the future. Just a way of doing a prototype. The nice thing about some of the techniques we use early on in things is that you can rapidly produce something and be able to see all the ways the parts interact even though later on you certainly use more conventional math manufacturing types of techniques in order to produce as many and at the cost you need. Okay. Cheryl, thank you for joining us. Come to the city. Bring one of these 3d cars. We could park it outside. Wed love that. Outstanding. Well look forward to you seeing lots of innovation in the future. When we come back this morning, it was a Charity Campaign that went viral. The ice bucket challenge raising more than 100 million for als research. How the money is being used right after this. 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. Youre going to count down. Three, two, one and then ill do it. Okay . My friend and colleague. Three, two i knew you were going to dump it fast. Its been months since the ice bucket challenge blew up our social media feeds. It raised more than 100 million for als research. Meg tirrell joins us with an update on what happened to the money. This challenge raised 115 million. Clearly people were both dumping and donating. That compares to about 60 million for the Als Association and all of the chapters raised in the previous year. It brought in a lot more funds. They allocated 22 million to research. They announced grants to four projects in october going to the people of als to better understand the disease and to speed up drug development. And other nonprofits also brought in ten times the amount of funding they normally do. Thats already been allocated to ve search as well. Theres also funding going to providing support for caregivers for people with als and to providing better tools for communicating and for getting around people with als. And it really provides this huge boom to research and to the community. And theyve seen triple the number of applications for young scientists because people are much more aware of the funding. Thats amazeing. Are they planning on doing this again . Theyre hoping to do it again. They dont know if people are going to dump water on their heads again, but they hope every time july august rolls around people will donate. What will they dump on their heads . I think other people are thinking maybe water again. Even if they dont, maybe theyll still donate. I think other nonprofits for other causes are trying to think of what else they can do. A lot of people have tried to emulate it. 22 million that theyre giving towards research where are we in the research on this . How close to anything what needs to happen . So some of those are really, really early stage. Like the genome sequencing project, thats to discover the root cause of the disease to develop drugs from the earliest stages. Others are trying to accelerate drug development. The Als Association thinks it would be possible to have a drug on the market within the next two to five years. Weve had being blowups. They had a phase three program that did not work. It looked promising. Other companies are still working in the space. One thing that project als, another association is doing, another organization is doing, theyre trying to take approved drugs that are already on the market and try to see ive got to interrupt. 21 million from 115 million is 94 million. What happened to the other 94 million . Theyre going to spread it out over the next few years. Because they assume theyre not going to get that money again . [ overlapping speakers ] its always one of the biggest problems when you get a rush of money. They can see its prompting projects and other sources to step in to continue to fund them. Meg, thank you. Thanks. Coming up Sales Numbers from mcdonalds expected in the next few minutes. Well have instant analysis as soon as the data hits the wires. Plus retailers bracing for a possible port shutdown on the west coast. The head of the National Retail federation telling us what it will mean for the supply of goods on store shelves. App coming . Weve got to make something great. Hows the app coming . Weve got to do it fast. Lets do this on bluemix. You can build apps with analytics, big data, even ibm watson. That could give us the edge. Lets do this on bluemix. It can provide code for you. We could be first to market. Because being best is priority one. Being first is priority one. Theres a new way to work and its made with ibm. [ male announcer ] your love for trading never stops. So if you get a trade idea about, say organic food stocks schwab can help. With a trading specialist just a tap away. Whats on your mind lisa . Id like to talk about a trade idea. Lets hear it. [ male announcer ] see how schwab can help light a way forward. So you can make your move wherever you are. And start working on your next big idea. Tigers, both of you. Tigers . Dont be modest. I see how youve been investing. Setting long term goals. Diversifying. Dip you got our attention. We did . Of course. Youre type e well, i have been researching retirement strategies. Well thats what type e s do. Welcome home. Taking control of your retirement . E trade gives you the tools and resources to get it right. Are you type e . [ male announcer ] at northrop grumman, we know in the cyber world, threats are always evolving. At first we were protecting networks. Then, we were protecting the transfer of data. And today its evolved to infrastructure. Finance. And military missions. Were constantly innovating to advance the front line in the cyber battle, wherever it takes us. Thats the value of performance. Northrop grumman. Ronald mcdonald serves up sales data. Can the fast food chain bounce back from declining sales . Well get street reaction. West coast shipping run aground. A labor dispute at some of the largest ports costing the u. S. Economy billions. Jack lew sounds off in my exclusive interview. And sam smith steals the show. And the grammy goes to sam smith. Sam smith. Were going to talk winners, losers weird crowd dancing. Oh, wont you stay with me as the final hour of squawk box begins right now. From the most powerful city in e the world, new york, this is squawk box. Welcome back to squawk box right here on cnbc first in business worldwide. Im Andrew Ross Sorkin along with Steve Leisman this morning in for joe kernen and becky quick. You are looking at whats happening at europe in europe right now at this hour. The crisis over greeces debt and the countrys future in the eurozone dominating todays trading. Remaining cautious at this hour. You can take a look at futures right now and see red arrows across the board. Dow looking to open 56 down. The s p off 12 points. Meantime beckys got news on mcdonalds. Weve been waiting for their same store sales. This has been a closely watched story. Those numbers are just hitting the tape. It looks like they are down 1. 8 . U. S. Sales actually up. And this is good news after some really terrible numbers that theyve seen for quite a while. U. S. Sales up by. 4 . Theyre saying that it was a positive impact of breakfast day part performance. But they said it was offset by competitive activity. Thats been something thats been plaguing mcdonalds for some time. I think the huge news though is asia pacific, middle east and africa. The comps there, down 12. 6 . They say this reflects not just currency issues. This is broad based consumer reception issues in japan along with the lingering supply of the distribution issue. Down 12. 6 . Not often you see a number for a company like mcdonalds down that much. Down 12. 6 is going to catch a lot of people by surprise. This is the object found in the food. Remember that . There was a supplier in china who was accused of selling rancid meat. I think thats affected a lot of different chains. But its affected mcdonalds for sure. Objects found to ensure product safety. Something found in the food there. In any event, we should point out in europe 0. 5 . If you were looking for any effects from currency that might have been a place you were watching it too. The company says that it is trying, its on the path to regain business momentum globally. Lets get more on mcdonalds Sales Numbers. Joining us right now is senior restaurant and retail analyst at morningstar. Also the editor of fortune. R. J. Lets talk about the number themselves. How big of a surprise is it . I think as you pointed out, the number is jarring. Thats going to be the point of focus coming out of hit this morning. It seems like after the supplier issue as well as the japan issue theyve been running into doesnt seem like its getting better. Middle of the year, youre against a tough comp. But thats nearly the point of concern. U. S. Numbers are also concerning. I think that as they look to right the ship a lot of things they need to focus on there. Slightly off, but a pretty easy comparison. Focus on pricing, Product Innovation at this point. Allen, lets just talk about the longer term issues facing mcdonalds. This has been a disaster in the making. 2014 was the worst year in a dozen years. The company seemed to have lost its focus. It used to be about value and convenience. You have the dollar menu but you have some other stuff pretty expensive expensive. And convenience has gone the wayside as the menu has grown. It needs a refocusing which is not easy for a company as large as mcdonalds. You almost wonder, a company this size how can you turn things around and can anybody . I think thats right. Mcdonalds is starting to b all things to all people because they need all people to keep same store sales growing. Theyre losing ground to much more focused, smaller fast food restaurants. Can you tell the chicken wing story . It was a great example. They introduced this this was in 2013. It was called mighty wings. Big, fat giant wings. We the this in a story in fortune in november. App good product, but fairly expensive. A dollar a piece. And consumers revolted. They said this isnt why i come to mcdonalds. I could get cheaper wings some place else. But are you convinced if they went back to basics, theyd still win . No no. I dont think this is going to be an easy thing to pull off. Now, remember mcdonalds went through a tough patch back in 2001, 2002 and they did get out of it. But theyve got to figure out what their proposition to the consumer is. Right now theyre all over the place. This laidesttest ad campaign pay with calling your mom, that doesnt get to the basic problem which is food. Consumer surveys show people think that the food isnt particularly good. And theyve got to figure out a way to address that. R. J. , one of the things bounced around in the industry is the menu has gone from 30something items to 120plus items over the span of a few decades. Thats growth that is really hard to keep up with. It makes it tough to get the food out quickly to the patrons. And it makes it tough for you to make anything all that well. How do they handle that . Yeah i think absolutely you hit the nail on the head there. They are to focus and reduce the amount on the menu. Theyve already committed to 16 theyll take off the menu this past month. But i think that they need to be more aggressive on that front. R. J. What do you make of this idea of customization . You hear its going to be experimenting with it. That means more. I dont get it. How can you and how can you construct your own hamburger and still keep the convenience, the speed which was the original reason a lot of us went to mcdonalds in the first place. Thats exactly my worry with that. Youre taking menu items off, but the fact is the menu board and customization, thats something that customers at mcdonalds. Ten minutes . Yeah. Ten minutes for a customized burger. How is that even a drivethru . They said theyve got another Assembly Line that they can make the drivethru option worth it. But thats still a pretty big if at this point. Fwhooer a wait and see mode. The big drag here is asia. Which is this astonishing 12. 6 decline in sales. Can they fix this problem . Yeah. I think the asia issue is more of an issue with the supplier. At least the china issue. Thats mainly a supplier issue. Thats one thats impacting everybody. I think in time theyll be able to come out of that. Japan has been a drag on sales for many years for the company. I think thats something thats going to take a lot people found a piece of vinyl in a chicken mcnugget. Yeah. That sort of takes the appetite away. Russia is a problem too. Theyve had the government going after them. A giant mcdonalds at the square was one of the great symbols of the opening of russia after the gold war. It was closed by the government. Lets talk about the stock and maic a case either for or against it. Right now trading at 18. 5 times. What is the rest of the industry trading at . Low 20s. If you bring up casual dining restaurants, its drading at a discount to the space. Obviously though expectations of growth are quite a bit lower for mcdonalds right now. If the company how the company is going to turn around the business and if they can do it. The one thing you have with this company is it a z a goodhas a good dividend right now. If you think this is decline, worth going somewhere else. Allen people are watching easterbrook very carefully. Do they want to see . Focus. When youre that big, you farther to focus, you may lose thats right. I like the wraps. I like the wraps. I like the salads. And if im there with the kids id like to see that. He has a difficult job. He has to focus the company. He has to recreate the consumers mind. But he cant afford to spend a lot of time watching the same store sales decline. Allen, thank you for coming in today. Yeah. I like you guys in the building. This is fabulous. All i have to do is take the elevator. R. J. Thank you for joining us too. Thank you. Some other headlines were watching this morning, treasury secretary jack lew tells cnbc the u. S. Economy has turned the corner. But he cautions the nation needs further gains in wages. Well have more of my exclusive interview a little bit later in this hour. Alibabas Ant Financial Services group is reportedly valued at 30 billion. The firm running alipay. And nissan raising its profit forecast. This after the latest results beating the street. Helped by strong sales from new products, exchange rates, and cost cutting. Okay. A few stocks on the move this morning. Lets tell you about them. Hasbro earnings topping estimates by a penny. Revenues were slightly below. The toy maker said it hurt revenue by more than 750 million last quarter. Hasbro wanted to buy for a little bit dreamworks animation. A mixed quarter at diamond offshore. Revenue fell short amid weak oil prices. The company is dropping its special dividend 75 Cents Per Share that it had been paying since 2010. And maskos earnings were better. But saying its benefitting from cost controlled and better productivity. Coming up scott black betting on healthy returns from biotech. He shares his stock picks after the break. And later, after a weekend shutdown of u. S. Ports, tensions running still high. Billions could be lost at sea. We head to the west coast and talk retail in just a bit. Whats that thing . I moved our old Security System out here to see if it could monitor the front yard. Why dont you switch to xfinity home . I get live video monitoring and 24 7 professional monitoring that i can arm and disarm from anywhere. Hear ye the awkward teenage one has arrived dont be old fashioned. Xfinity customers add xfinity home for 29. 95 a month for 12 months. Plus for a limited time, get a Free Security camera call 1800 xfinity or visit comcast. Com xfinityhome. Down and theyre down a little bit less than they were. Dow down about 60 points. If it were to open now. S p 500 down about 7 points. And the nasdaq down 13. Weve got a special treat this morning. The squawk platinum portfolio is back. Now you can go online to prak the track the Portfolio Managers picks. Here with us to share his picks is scott black. We dont get to see you in person like this all the time so thank you for being here. Well, its a excuse to come visit you. It is. Lets talk through some of the companies you like a lot these days. And what type of upside you see there is. The first one is actavis. Yeah. It used to be watson pharmaceutical. It was a tiny company when i had dinner with paul in new york. And now hes buying agn. Allergan. And he just packed in a little british company. The company should have close to 23 billion in revenue next year over 17 heres the good news. You bought this company at 3784. Thats good considering the stock is now trading at close to 286 a share. Thats the good news. The bad news is most of our viewers who have been following this has v not been able to piggyback this trade. How much more upside do you see out of this stock . Well in two years they promised to deliver 25 a share in earnings. I think thats realistic. If you put a multiple 15 or 16, youve got 4 400 a share. And close to 21 a share in free cash next year after the merger goes through. So its a money machine as well as earnings. We have the ceo of allergan on tomorrow on squawk box. Anything you want us to ask him . Is he going to continue with the company . Thats a good question. Is he going to leave after awhile . Isnt that the idea . Im more of an expert on actavis than allergan to be frank. Fair enough. Your other big take. Okay. Theres 11. 45 in cash. They dont have comp based in their earnings on a calendar basis. Close to 25. Its a double digit grower both bottom line and top line. 2 billion in excess cash. The stock at 12. 7 times this years expected earnings. Tell me if you can find other hightech companies with proprietary Technology Selling it there. You think its a multiexpansion story . Its both. What do you think the multiple gets too . I think you get a 15 multiple. I think the stock definitely goes over a hundred. And theyve got the wind behind them. Because equipment on the front end is going to be up 2 billion or 3 billion. As weve got a smaller line with 3d,. 10. 15. I dont know what that means. Its got part of what you do is meet with the people at the company so you feel comfortable with them. In fact last time out we met with a chief technology officer. I met with martin the year before. But i wanted to see what they have. So pretty smart bunch there. Okay. Lets hit number three. Customers bank corp. I dont know this bank. Yeah. Its jay sedu. He took that from a nothing bank and he sold it prior to the crash in 08. He took this one from under 400 million in assents in 09. Its up to 6. 9 billion at this point. They should do somewhere in the order of 2. 08. This year its a 21 stock. 1. 3 times tangible book. Got very good growth. Strong portfolio. Big part is mobile. That was recently for on the money. And thats what they talked about. Yes. Thats a way of gathering chief deposits in they have 1 Million Students hooked up through a network and they bottom line is they hope after the youngsters graduate that the process will stay there. On a given day, theyve got 250 to 275 million in deposits for free. How much of this is a takeover play . Not at all. Hes going to build the bank over the next few years. Then it might be a takeover. If youre looking on a shortterm basis, not at all. The idea now is to get to a hundred on basis. And hes close on the return on equities. Youll have to stay tuned. Okay. Scott, thank you. Appreciate it. I thought that music was us trying to go out, but its your phone. Im really sorry about that. I thought it was off. Thats embarrassing. Appreciate it. A reminder by the way, go online to cnbc. Com to track the picks in realtime. Scott will be there. Plus read their exclusive analysis. When we come back this morning, the odds of winning the record high power ball drawing are pretty slim. The jackpot surging. The numbers will actually shock you when we give them to you after the break. Plus samsungs smart tv Privacy Policy raising some spying concerns. That story and more when squawk box comes right back. Hey, girl. Is it crazy that your soccer trophy is talking to you right now . It kinda is. Its as crazy as you not rolling over your old 401k. Cue the horns. Just harness the confidence it took you to win me and call td ameritrades rollover consultants. Theyll help with the hassle by guiding you through the whole process step by step. And theyll even call your old provider. Its easy. Even she could do it. Whatever, janet. For all the confidence you need td ameritrade. You got this. The conference call. The ultimate arena for business. Hour after hour of diving deep, touching base, and putting ducks in rows. The only problem with Conference Calls eventually they have to end. Unless you have the comcast business voiceedge mobile app. It lets you switch seamlessly from your desk phone to your mobile with no interruptions. Ive never felt so alive. Get the future of phone and the phones are free. Comcast business. Built for business. Welcome back everybody. Gasoline prices are rising. Industry analyst says the average cost of regular jumped 13 cents in the last two weeks to 2. 20. And she warns that the trend is likely to continue. So weve seen the lowest of the lows, perhaps. The price is still 1. 10 below the mark at this time a year ago. Power ball fever continuing this morning. No big winner claiming the price this weekend just yet. The next drawing will be around 450 million this wednesday. Your odds of winning, 1 in 175 million which to me is probably a decent chance. Im going to have to go buy some. No. If im going to worry about my son getting measles, then i cant thats true. But i still think its worth the buy. The best description of a lottery is a tax on people who are stupid at math. You need to be careful what you say around your samsung tv. In the small print of the tv makers Privacy Policy the Company Warning the Voice Recognition feature on its smart tv could capture your conversations including personal information and pass it along to a third party. Samsung says data is only shared if consumers consent. And if they turn on the voice feature. Andrew . Wait a second. Its actually shared if you consent to it . No, no. What it means is if you turn on the voice feature which you need to get to work properly they will share whatever youre saying through the voice system to some server somewhere which is processing the voice information sending it back. Its not being shared to everybody, but thats the privacy issue thats in the waiver, if you will that you have to sign. So if you are saying turn to channel 13 and then you Say Something in that same process like nasty to your kid or Something Like that not that i would ever do this but in that case that would then be out there. It would be sent to a server somewhere. Because the server is processing the voice. And that voice server is then sending the information back to the tv. And the question is does that server somewhere in the sky save that information . And somebody could hack it. Or somebody could come knocking. But if i dont have the Voice Recognition thing, i dont have this problem . No. So i just solved the problem. I dont have a camera on my tv. I dont have a Voice Recognition. I have a click per. I dont have a problem with a clicker. Expect the back keeps coming off. Tape. Still to come this morning in europe avoiding greek tragedy. Well find out what people are watching this morning. And a shutdown at a west coast port. Jack lew spoke to steve yesterday about the ongoing labor dispute and the impact on the economy. Weve got that exclusive comment after the break. Plus were going to hear from the National Retail federation on that issue. We head to a break, take a look at u. S. Equity futures. In the red. Dow off about 63 points. Nasdaq looking to open down 14 points. And the s p 500 looking to open down about 6. 5 points. [ male announcer ] at northrop grumman, weve always been at the forefront of advanced electronics. Providing technology to get more detail. Detect hidden threats. See the whole picture. Process critical information and put it in the hands of our defenders. Reaching constantly evolving threats before they reach us. Thats the value of performance. Northrop grumman. Welcome back to squawk box, everybody. In our headlines this morning, a new ap poll finds that americans are feeling better about the health of the economy. Nearly half of those surveyed say that the economy is good now. That is up from just 41 in december. The Financial Times announced many are criticizing Warren Buffett over the who cover the Company Point to difficulty in modeling berkshires quarterly results. And lets get another check on dow component mcdonalds. The global comps were below what had been expected. But mcdonalds did beat the forecast for both the United States and europe. They havent had that in awhile. That was seen as a bit of a win. The biggest miss was in the asia, middle east region. Down more than 12 . That has puch pressure on the stock this morning which looks down about 60 cents. Before you grab a snack for your morning commute, check out this story. A man in georgia cited by police accused of eeling a double quarter pounder with cheese while driving. The man says the officer told him he observed him eating and said, quote, you cant just go down the road eating a hamburger. The ticket was issued under georgias distracted driving law. But he had both hands on the hamburger . Because ive eaten in the car before. No but the police are saying youre not allowed to eat. I mean, i would have been are you looking that up . Im looking at there was this i dont know if you saw it. There was this horrible tragic accident with bruce jenner involved. And bruce jenner apparently was smoking a cigarette and people were saying there was an issue about smoking cigarettes while driving now in california. There were people raising the issue that it should be illegal. Guy back and look at this again. It was not just a hamburger. It was a double quarter pounder with cheese. Thats a pretty big one. It might take two hands. Ive done it before. I mean if you cant eat a hamburger when youre driving, then i mean you know i dont normally do this a lot. But you have to change the whole model. You dont eat wings when you drive. You could. What do you eat when you drive . Its easy for me to eat in the back there. Its not a problem. You would think that would be, like more of a northern thing. You wouldnt think georgia would be that uptight about a guy eating a cheeseburger. You can definitely make the argument sometimes for trying to do too much behind the wheel. Hold on. If hes eating with his elbows on the wheel, thats a problem. Or steering with your knees. I think we need more on this story. We will do a little more work on this one. Find out the real problem. In the meantime lets take a check on the markets. Jim iuorio joins us now. Whats happening this morning . Well its tough to follow hamburger talk, but im going to give it a shot. If we look back to friday everything seemed good. Those numbers werent just good, they were very good. Leaves little debate now we were on the right track from an economic standpoint. Now come this morning, were worried about greece again. Im trying to decide if the story really changed or is it just that we had rallied 5 essentially in a weeks time trying to take out the old highs and continue to new highs. And we couldnt do it. Were using greece as the reason for doing that. That to me is kind of what it seems like. Its sort of that election happens, couldnt we have predicted these things happening in greece . Then explain what youre saying. That when market position gets to a certain way, stories that shouldnt be a huge deal. And by the way, this is a huge story. Whats moving the market this morning . Thats what im saying. Too many people on the long side of the boat. Everybodys bought it for 5. 5 they wait for it to make a new high after the great number. It cant. People rush to the exits. Then we back up and try to pick the story thats going to explain that. And again im not saying the greece thing is not a big deal. Today is not the epicenter of this story. Okay. I dont know. What is the epicenter of the story then today . No today is just its a risk off day thats fueled by greece. Were only down ten handles. So its not like were building a zbaster. But what im saying is just we gather steam a little bit and look for the next reason to go higher. Let me ask you this. There have been some notes that have been circulated that point out italian and spain and portugal yields are backing up. That has people concerned. Theyre watching the situation in greece closely wondering if greece actually exits what that means for spain, portugal and from there on. No doubt. Thats part of the whole risk off equation. Theres a very decided line between greece i mean germany, france, switzerland and then spain, italy, portugal. People are clearly worried that if greece exits, opens the doors for them. I think its much more likely if greece exits and i do believe that will happen in the next couple years, but i think what happens is they tighten up a little bit more and make it easier for those countries to stay in. Thats my opinion on it. Okay. Jim, thank you. Thank you for explaining what the story of the morning really is. Coming up a star studded event at the Staples Center last night. The 57th annual Grammy Awards were held. Were going to talk buzz and the big winners in just a bit. Paul mccartney looked like a backup singer. And later, late comedienne joan rivers condo up for sale. The price tag with the unique features are just ahead. Back in a moment. The real question that needs to be asked is what is it that we can do that is impactful . What the cloud enables is computing to empower cancer researchers. It used to take two weeks to sequence and analyze a genome; with the microsoft cloud we can analyze 100 per day. Whatever i can do to help compute a cure for cancer, thats what id like to do. Welcome back. The economy could see billions of dollars lost if port os then west coast dont get back to full capacity. Sending ripple effects across the nation. Jane wells joins us with more now. Hey, steve. This is the local dispatch hall where the first jobs are about to go out to work shifts since friday. And there are about a couple dozen ships ready to be unloaded here in long beach and los angeles. Now, the terminal operator and the ship operator said they agreed to hire no long shoremen since friday night to offload vessels because they said theres no place to put the cargo. Thats something the union disputes. Now, exempt were cruise lines and ships taking supplies to hawaii. Both sides accused the other of continuing to ratchet up the slowdown. Yard work continued this weekend, but no offloading or loading of ships. I think any time the foreign owners of these companies that control americas ports on the west coast, when they decide to close the ports, thats a pretty serious issue. I think people should take it seriously for what it is. Its a form of economic terrorism. And these companies should be more responsible. They shouldnt be allowed to behave in this reckless way. Well management has shown me some numbers which indicate if accurate that the union began the slowdown on the yard starting in november. And then both sides of it became a tit for tat and so here at the largest complex where nearly half of all inbound movement from asia comes. Were now into the fourth month of slowdowns. What happened is we call the dispatch saying were going to need 15 yard crane operators at terminal x or terminal y. What were hearing back from them is no. Youre going get one. Now, the impact of this could be 7 billion on retail. Just retail over the next year according to analysis. And 37 billion over the next two years. Because of ongoing problems on the west coast dealing with larger ships and more volume. Theres a dispute over pay. They say the average dock worker makes 170 grand. And its more like 82 grand. As for the claims things are to stacked up and clogged on the yard, theyre putting out pictures showing at least in some places its not that crowded. The pr war continues. They cant even agree on how much theyre getting paid. Isnt that basically just simple math . Add them up and divide. One would think. One would think. Yrn i dont know, becky. But theyre saying inging average pay with overtime and some people have higher rates with others 147 grand. I had a chance to talk to secretary lew. I asked him whether or not the federal government should get involved here. Are we close to that level now . We may be. There are some calls by there has been talks that the president may have to do what president bush did in 2002. If it comes to complete shutdown not just for a weekend but every day, then the president could enact, there would be a cooling down period. But were talking 80 90 days before things get back to normal. And even at this point, youre already hearing 7 billion impact this year to retailers just because its taking so long to get the ships offloaded. It seems this is a constant debate that comes up every six months every year. Yes. The situation at the ports is different. Its under a different congressional act than the rail yards or other parts of our infrastructure. And thats why there are some saying congress should move to move it into where we wouldnt have this situation every year. Management would love that, the long shoremen dont want that. Thanks for getting up early and bringing us that important story. You bet. I sat down with treasury secretary jack lew for an exclusive interview and asked him about this ongoing port problem on the west coast. There are a lot of people who are looking at that carefully to answer that question. I think that up until this last week we were seeing you know shippers find alternate paths through there. There were delays. But i think that its important that this gets resolved. And the sooner the better. Douglas from caterpillar said anybody producing in japan, uk europe will have an advantage over their american competitor and i would expect it to have a negative impact on the United States. Are you concerned the dollar is in a place where its beginning to hurt u. S. Jobs . I think if you look at our economy right now, it is quite strong. And on a relative basis, its stronger than a lot of the economies that we compete with. I think the real challenge is getting other economies to get back in the growth pattern where theyre doing better. And some of that would then equalize. I mean right now what were seeing is the function of the u. S. Having a Strong Economy which is a good thing, not a bad thing. Obviously we would like to see more growth in europe. We would like to see more growth in other parts of the world. Thats one of the things well be talking about at these g20 meetings. I do think the Global Economy has weak spots in it and its important for those spots to be strengthened. What i do think we have learned from our experience is if you use all of the policy leverage you have, you can change the course of your economy. Lets go right back to this port issue and find out how the slowdown at the port is affecting the retail industry. Matt, have we started to see this issue show up on the shelves of retailers in the United States . Steve, i think what weve seen is that the slowdown has had serious impacts. It continues to negatively and significantly affect operations of retailers and many other industries in the u. S. And this goes back many months. Weve talked with you about it on a couple of occasions. You know this is as was being observed a minute ago, negotiations have gone on for nine months. Contract expired six months ago. And in context here, this is 29 ports from san diego all the way to bellingham washington. 42 of all containerized trade. 12 of gdp. 18 million jobs. Its starting to have an effect. And as the port operators are saying, there was a shutdown for ten days in 2002 and that cost the economy a billion dollars a day. Our study estimate ifs that happened today, it would be 2. 5 billion every day. Give me an example of what is happening to retailers . There are enormous amounts of containers of products not getting to shelves. There are 25 sitting off shore in los angeles. 15 off shore in oakland and they cant get here. Much hard tore get the product and to turn that inventory. And for everyone not just us but for Agricultural Products that are rotting and cant get exported, manufacturing goods both coming in and out of this country, its started to add up. And you know, were all trying to help the middle class here. Theyre going to be the ones that feel it most at higher prices. Matt are you urging federal government involvement here . We have been since before the holidays. We have been for many months. What are they telling you matt . You heard secretary lew tell you theyre monitoring the situation closely. We dont want to take a position on the negotiating issues between the parties. We encourage them to continue with the existing contract stay at the table, and keep normal operations in place and avoid the slowdown. And when you have 25 ships sitting off shore outside of long beach in last and 14 off shore in San Francisco this is the thing that takes a few days to unload a container. Now it takes weeks. You heard a couple of examples of the inability to get the right kinds of skilled workers to operate those cranes. This is a real serious issue. And its a significant part of the economy. You know, 95 of the personal protective equipment used in medical institutions gloves masks, gets made outside the u. S. It cant get here. We have commissaries on military bases where military families in asia and europe cant get Fresh Produce or meat. This is affecting Many Industries and we feel it very acutely. Matt, thank you for coming in today. Thanks, steve. Up next jill was known for her vivacious personality. She loved the dplits and glamour. And they are condo reflected her luxurious style. We go inside her condo which goes on the market today. When squawk box comes back. Know that chasing performance can mean lower returns and fewer choices in retirement. Know that proper allocation could help increase returns so you can enjoy that second home sooner. 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Our commitment to current and former military members and their families is without equal. Start investing with as little as fifty dollars. Whats that thing . I moved our old Security System out here to see if it could monitor the front yard. Why dont you switch to xfinity home . I get live video monitoring and 24 7 professional monitoring that i can arm and disarm from anywhere. Hear ye the awkward teenage one has arrived dont be old fashioned. Xfinity customers add xfinity home for 29. 95 a month for 12 months. Plus for a limited time, get a Free Security camera call 1800 xfinity or visit comcast. Com xfinityhome. Its a narration of her 12th book and this was rivers first grammy. In other joan news the penthouse condo hitting the market today. Diana olick is there with a special look. Joan rivers famously said, this is what Marie Antoinette would have done if she had money. Im thinking she was kind of right. Now for a mere 28 million, this home, unique to say the least, can be yours. It goes on the market today, ballroom and all. Now, the penthouse is as candid and colorful as the comedienne herself. Four bedrooms, four and a half baths. Its had a lot of work done. Once a gilded age limestone mansion, it was converted to condos in the 1930s, but just an exclusive nine units. It spans three floors 5,000 square feet two kitchens staff quarters, and five fireplaces. But the real glamour, of course is in the entertainment spaces. I mean how could it not be . Incredible parties thrown here. She had a salon, a grand ballroom. Its kind of like if these walls could talk. Now, of course celebrity status always affects the Property Values for better or for worse, depending on the circumstances. And while joan rivers tragic death does hang heavy in these walls, the family would like potential buyers to think of this as a place of humor and celebration. Becky . All right diana, i couldnt have said it better for myself. Thank you for that glimpse. Right now lets get down to the new york stock exchange. Jim cramer is standing by. Jim, have to find out what you think about those mcdonalds numbers earlier today. Theyre good. Everyone knows asias terrible. So asias getting worse. But thats okay. The markets that drive this stock are United States and europe. Maybe the Marketing Campaign is pandora. Howard schultz taught me that when you come back or change management, its 18 months. So were not even in the first month. I dont think youll see this is even harder to turn than starbucks starbucks. But i thought it was good news the United States and europe werent so bad. I think thats the way the markets going to play it. Asias been a disaster for a long time. It got to be more of a disaster. Its like yum at 67 when it was a disaster. Got a new sheriff in town and maybe can make a difference. The stock is trading at a discount obviously because of whats happened to some of its peers in the restaurant business. You say 18 months to make a turn, but how long would you wait as an investor to get in . I think that theres plenty of time but kind of wish we dont. The change is going to take a long time because the food is so out of style. A company that was passed by. When i look at chipotle and read some of the things that chipotles saying its clear that mcdonalds has to reinvent itself. Ive got four chains that are doing burgers that are better than these guys. Theyve got to clean their act up. Figure out how to become more relevant in an age where people think that their food is at the worst part of the food chain. Thats going to be difficult to do. The younger people know that the food chain is corrupt, so they have to defeat that. Also to be such a large company. You dont want to be all things to all people. Thats not a recipe for success. But when you are that big, its kind of hard not to be. The menus impossible. Its like a chinese and greek restaurant. Who can make that . The whole idea behind mcdonalds was like henry ford and the model t. You produce the model t. Effectively every day. If i were ronald mcdonald, i would go in with henry ford. And say were going back to model t. They have to go back to the way they were. They feel like if they add certain things to the menu theyll look like chipotle. No. Theyre not going to sell a safrita burger. This new guys got to say weve done everything wrong and we are going to go back to basics. Make it so that when you go in there, the people can make the stuff. I think its Something Like more than 133 different items that they have. Its mcdonalds, for heavens sake. And its five things that sell the majority of everything. The big mac, hamburger, chicken nuggets, fries. Maybe the Nobel Peace Prize guys accounts and foreign relations, a lot of guys from oxford and cambridge behind the counter. Im not seeing that. Ive cleaned dishes at a new restaurant. Its not as easy as you think. But dont make it so that you have to go get a road scholarship to be behind the counter. I agree. As somebody who bar tended and waited, too. Jim, thank you. We will see you in just a few minutes. When we come back, positive drug data sending stocks soaring. Weve got the names to watch right after this. Be sure to join us tomorrow. Allergens ceo will talk about the takeover by activist. When the moments spontaneous, why pause to take a pill . Or stop to find a bathroom . Cialis for daily use is approved to treat both erectile dysfunction and the 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. Side effects may include headache, upset stomach, delayed backache or muscle ache. To avoid longterm injury, get medical help right away for an erection lasting more than four hours. If you have any sudden decrease or loss in hearing or vision or any symptoms of an allergic reaction stop taking cialis and get medical help right away. Ask your doctor about cialis for daily use and a free 30tablet trial. Welcome back. Shares of a couple of stocks jumping this morning. Meg has the story. Were looking at akilian and regulus. Curing all 12 patients after six weeks. Treatment times range from eight weeks to 12 weeks, so thats seen as a potential improvement. Well see if they can compete. The problem is probably going to be price because these drugs are very expensive. On the other side weve got regulist. The stock falling. Its aimed to give just once and potentially career the disease from there. Weve seen some data that drove reguluss shares up 100 in one day because it looked like they were curing patients. But what weve seen today is a higher dose, which still looks good, but on that original dose, they reported that two patients relapsed. So that might be whats driving the stock down this morning. Okay. Thank you. Thank you, guys. While winning four grammys was the major highlight of sam smiths night, it wasnt his only one. He also teamed up with mary j. Blige for a duet on his monster hit stay with me. The powerhouse collaboration of rihanna, kanye west and Paul Mccartney took the stage for a Live Performance of their new tune and pharell won three grammys on the night including pop vocal performance happy, which always makes me happy, which he performed. And madonna utilizing bulls and a gospel choir for her performance of her newest single living for love. I dont know if you saw her outfit on the red carpet but it was maybe revealing is putting it politely. And country album of the year winner Miranda Lambert sang a high Energy Version of little red wagon. Steve pointed out that tom petty gets royalties. Which is hilarious. I start singing his song every time i start to sing it. Thanks for being here. We appreciate it. Andrew and i will be back here tomorrow. Well see you then. Right now its time for squawk on the street. And good monday morning. Welcome to squawk on the street. Im Carl Quintanilla with Jim Cramer David Faber at the new york stock exchange. Stocks a little skittish to start the week as greeces Prime Minister takes on a rather defiant tone over the weekend. Plenty of big earnings this week including coke cisco, whole foods, a bunch more. Oil continues to inch back into the 50s as opec cuts their u. S. Shale Production Forecast for 2015, and the tenyear yield right around 1. 9. The markets coming off their best week in two years. Concerns about chinese