Thing, he resigned, so he could have a reasonable succession plan. This is the oldest Major Institution in the world. Secondly, it opens up the possibility that one day priests can marry, which i would be the salvation of the church. This is going to be a very interesting debate as a result of this. I was born catholic. Im not now. Youre supposed to say thank you for being here today. Occasionally we see commentary on capitalism in action. Im not a participant per se, im just a spectator, and its a fun sport. Thank you. And thank you, michelle. Join us tomorrow. Squawk on the street is next right now. Congratulations to grammy winner fun and all the grammy winners from last night. Welcome to squawk on the street. Im carl equipment a nil la with melissa lee, david faber here at the nyse. David cramer is off this week. A busy week its going to be. Europe this week, finance minister meeting from all of the eurozone talking about cypress and greece. As for asian markets, mostly closed as the Chinese New Year took place over the weekend. It is the year of the snake. Our road map begins with a hat trick of news out of technology. Dell shareholders balking at the buyout price. And apple testing a watchlike device. The s p 500 is up for the first six weeks of the year. Something that has not happened since 1971. A big week is ahead as carl mentioned with earnings from coke, cisco, gm, whole foods and michael kors. Nemo, watch the impact on business, ford at least said it should not have a major impact on february sales. The world is reacting to Pope Benedicts announcement that he will step down at the end of the month citing his advanced age. Hes the first pope to resign in almost six centuries. Dell defends the buyout in an s. E. C. Filing. They said the deal spearheaded by michael dell and private Equity Firm Silver Lake partners offers the best value for shareholders. Three more of dells largest investors are joining southeastern asset management. They believe the deal undervalues the company. David, we had this discussion on day one. Its been a while since its seen 20. But it seems thats what they want. The buy outprice could make you to hope in some way you can at least get back to even. Always bit a risk when you do a deal. Even as it may be for a company that is facing challenging times, that is below the 52week high. We knew it would likely be at that level. My reporting, and experience on these matters, would indicate really best to see and wait. Lets see what happens over the next four, five, even six months before this deal closes. If the s p were to rise significantly, it might perhaps make those who are against the deal braver, because they would feel the down side would be less than if they were to reject the deal. In terms of the recommendations that they give the institutions who follow them, nonetheless i would still argue at this point it is unlikely that youll see this deal stopped by the shareholders. It is a majority. They need a majority of the unaffiliated shares. So michael dell is not part of this vote, and his 16 . Given that, you still have two earnings reports between now and the close of this deal, to show how good or not good things are at dell. You still need they still need to issue their debt, for example, to get their financing costs known specifically by the buyout group. They were arguing about, do we pay or not pay the dividend between silver lake. Well see. And then finally, remember cablevision. Just something i would say, leverage buyout back in 2007. It was 36 a share. Lets call it around 21 now, because they have spun off msg and amc since then. If you take a look at cablevision shares, they are not anywhere near 21. Right. The numbers dont necessarily add up either. Even though southeastern is a majority of the independent shareholders, 8. 5 stake, i believe, you know, they estimate 20 of the shares currently are in the hands of merger arbitrators. Probably even more than that has changed hands. Southeastern might not have the numbers. It probably doesnt have the numbers. Even if iss were to vote no, you have to somehow think, at this point they may have a call option on their hands. Maybe you could get a bump, if it looks like this vote may go against. This is something well be revisiting months down the road. Well see how southeastern does. The people putting this deal together were aware of southeastern. Weve already heard about the proxy in the merger agreement of all the things they looked at. The ways they thought they could create value. It will be perhaps an effective argument for those saying youre selling too cheap. You would agree that the go shop this time around is a little more than a formality . It is a go shop that does have provisions in it, carl, that is a little bit better than what weve seen. Yeah. And unexpected that still youre going to get any real interest. Again, it comes back to, if you cant include michael dell in your buyout group, certainly you wont see another buyout firm step in. Strategics, my reporting indicates they already went down that road to some extent at least and sniffed out some time back, is there strategic interest. Well see. They have that as well, the 45day period to say, hey, we looked at other buyers and higher prices. You have to believe some other form of deal will happen, will transpire in order to get to 20 a share. If michael dell is not going to be part of this, its off the table. Unless their argument is somehow in the fundamentals, they can sell things, lever up the Balance Sheet. There are others who say why not keep it a public tech company and lever it up. Those behind this deal will say, why take the broad risk amongst all shareholders, when we can just do it with two people, lets call it michael dell to take that risk. Rarely do these oppositions actually go through to resulting in a deal being voted down. But it is something, at least, worthy of keeping an eye on. Yes, definitely. Were also watching shares of google. Eric schmidt is selling about 42 of his stake in the company. Thats about 3. 2 million shares. S. E. C. Filing showed schmidt plans to sell the stock over a oneyear period. Pretty good timing on schmidts part, considering google shares hit 52week high at the very least on friday. Couple big upgrades last week, of course. I think, i forget what the last one was, but i saw a price target in the 930s or so. Well see. Of course, its part of a plan of 3. 2 million shares over the course of the year. It wont happen today or tomorrow. Hes been selling a lot of stock. I did reach out to a couple of shareholders that i know, and neither one of them seem overly concerned in any way. One saying it was a nonevent. Well see what the reaction is today. It shows how incredibly wealthy this man has become. You know, last year he had 9. 1 million shares. He sold 1. 5 million shares over the last year. Having similarly filed to say he would be selling. So he went down from 9. 1 million to 7. 6 million, and now going to 4. 4 million. He certainly is reducing his stake in a significant way. Listen, hes in his late 50s. Hes executive chairman now. A smart thing to do. I think a Financial Planner would say, dont have all your billions in one place. Meanwhile, the stock keeps going up. Just average up. Yeah, keep averaging up, exactly. We start this week, of course, this new market week with the s p 500 coming off a sixweek winning streak, highest close since november of 2007. You also have the nasdaq at 12year highs. The dow a little more than seven points below 14,000. What is next for the markets here. Lets bring in Michael Jones with river front investment group. Michael, great to see you. Good morning. Of course, we are entering into sort of a new political period for the markets in that we have the state of the Union Address tomorrow, and then were bumping up against the sequester deadlines. What do you anticipate for the markets as we are at these new highs, but entering potentially a rough ride politically speaking . Were obviously overdue for some sort of pullback. Most crowd sentiment creators are indicating were at an optimistic extreme. We should keep in mind that the fed is pushing 85 billion of new liquidity into the market every month, and despite state of the union and some of the other bumps weve got coming, Political Uncertainty and policy uncertainty is much lower than it was six weeks ago. Youve got the fiscal cliff issue resolved, and probably more importantly, president obama seems to have pulled the republicans fangs with respect to the debt ceiling. Thats probably the big risk that the market was worried about. You made recent changes to your 2013 allocation strategy. Some of them are interesting. High volatility u. S. Large caps and micro cap stocks. It would seem youre increasing the beta place. When you say u. S. Large cap volatile stocks, what do you mean by that . Well, we believe that theres an evolution in the Asset Classes that investors are going to be tapping into in the next decade. You know, if you look back over the last 20 years, people spent a lot of time arguing, what was the value stock, what was a growth stock. And a lot of times it was in the eye of the beholder. Volatility is a much more objective mesh yasure of what a stock is. You can do very good long term, 80 and 90year analysis of what this asset class means. And right now, we show high volatility stocks have been beaten down very, very much in the rally, relative to low volatility, sort of bond proxy stocks. That suggests to us that theyre one of the best opportunities in the market, as we stabilize, as the fed keeps pushing in liquidity. I think youre going to see a return to those kinds of beatendown names. You know, michael, one of the big talkers of the morning is this discussion as to whether or not this 13year period, where equities have essentially done nothing, is coming to an end. Big piece in the journal today. I just wonder if you think were getting a little too anxious to have that discussion, if its too early for that yet. No, not at all. And heres why. We are some that believe that there was no lost decade per se. The last 13 years, stocks have been sideways because they were insanely overvalued in 99 and 2000. They were about 100 overvalued. That has happened about four times in the past. Every time that has happened, youve spent about 12 to 14 years going sideways, while you work off the excess overvaluation. Were getting towards the end of that period. As a matter of fact, right now, our price matters works suggests that the market is still about 15 to 20 undervalued. So i say we still have room to run just to get back to fair value. Michael, good to speak with you. Thank you for your time. The northeast still trying to dig out from winter storm nemo, which dumped at least three feet of snow on some parts of new england. Travel bans are still in effect for parts of massachusetts. The weather channels mike seidel is in plum island, massachusetts, one of the hardest hit areas. Mike, good morning. Good morning, carl. Out here they not only had two feet of snow, but they had to deal with the ocean, raging atlantic with 20 to 25foot waves taking out even more beach. This is a small cut compared to what youll see down the beach. This is six to seven feet. Down the beach, youve got about a 20foot cliff. They put these berms in after the december 28th storm, but it was no match for nemo. Around the area still, 120 customers without power in massachusetts, add on about another 20 in the state of rhode island. Thats where all the power is out in these two states. Mostly down close to the coast. Most of the power in boston is on. Where they had the fifth biggest storm on record. Weve got a little bit of light snow this morning. It will not last very long. It will go to sleet, freezing rain, and then everybody will turn to rain. We have delays inbound to laguardia and philadelphia. A nuisance today. People trying to get things back to normal. Up here its hard to see around the corners of the streets, because the snow is piled so high. All night long, this is what i heard, boop, boop, boop, snow plows, and bulldozers taking the snow out of the downtown area. Thats all i heard all night long. Thats why i feel so good this morning. Back to you. Mike, everybody knew what you were talking about on that first beep. That was great tv. Thanks so much, mike seidel joining us from plum island. A surprise announcement from the vatican. Pope benedict xvi said he will step down on february 28th citing Health Reasons. He becomes the first pontiff to abdicate in 600 years. Cardinal Timothy Nolan re acted to the popes announcement this morning on nbcs today show. Im as startled as the rest of you and anxious to find out exactly whats going on. I find myself kind of somber, you know . In a way, boy, i love this pope. I mean, every catholic feels the pope is his father, we call him our holy father. The world looks to him with respect and affection. The vatican spokesman said a new pope will be elected by the ed of march. Some of my favorite jokes on twitter had to do with him making some money in the private sector. Hes raised the bar as to what youre going to give up for lent. Theres good reaction today, happened early this morning. Media and twitter was on it. We continue tweeting with the question. Its a good question. Hes got about as many followers as joan rivers, i think. Theres been rankings that he falls in the joan rivers category. After the ipod, the ipad and iphone, will an iwatch be next. Take one more look at futures, not severe action at a moment, but what a week. Youve got the earnings, state of the union, goldman tech conference, a lot going on. Squawk on the street is back in a moment. Is an iwatch in the works . Apple is assessing risklike watches and that would operate on the ios platform. This whole Wearable Technology segment is sort of all the rage. Some watches are already on the market. Theres pebble. Microsoft unveiled the concept at ces. But i dont wear a watch much anymore because the time is on my phone. I do wear a watch. I recently got somebody sent me the nike fuel band. But i found that you have to plug in, and go online. Thats too much. But its similar in the sense of trying to track your movements and do Different Things for you, and then weve got the google glasses. Tim cooks going to speak at the goldman Conference Tomorrow, after the bell. 4 15, i think is when he starts speaking. It comes a couple days after the herd mentality of the analysts. Some continue to get it wrong. And why the guy whose record is best on it is a private analyst whose target is, i think, 320, Something Like that. Yeah. Brian marshall had an interesting note out on sunday who said hes been on the road for six weeks straight. And right now, a lot of shareholders are developing bases in apple. Theyre actually going in and buying stocks. It will be interesting to see how this pans out, given the push of return of capital to shareholders, the meeting tomorrow and the Shareholder Meeting later this month. Well speak to tim stewart at the top of the next hour. He can take the oldest story in the world and make it fresh. Yes. So we look forward to talking to jim in a few moments. Whats the most thing you should focus on as we begin a new trading week . Art cash has words of wisdom. Take one more look at futures. A busy week is coming up. Squawk on the street live from the nyse, straight ahead. [ male announcer ] ive seen incredible things. Otherworldly things. But there are some things ive never seen before. This ge jet engine can understand 5,000 data samples per second. Which is good for business. Because planes use less fuel, spend less time on the ground and more time in the air. Suddenly, faraway places dont seem so. Far away. We all work remotely so this is a big deal, our first full Team Gathering i wanted to call on a few people. Ashley, ashley marshall. Here. Since were often all on the move, ashley suggested we use fedex office to hold packages for us. Great job. [ applause ] thank you. And on a protocol note, id like to talk to tim hill about his tendency to use all caps in emails. [ shouting ] oh im sorry guys. Ah sometimes the caps lock gets stuck on my keyboard. Hey do you wanna get a drink later . [ male announcer ] hold packages at any fedex office location. Lets bring in art cash this morning. Good to have you. Good morning. Youve written over the past couple of days bullish orders on close on friday and prior to that, some big options bets toward the down side. What do you think is happening . Well, it looks like a lot of the large players are buying some insurance in a couple of places. Not only i had written about kind of a false spread on the vix that it might soar above 20 in the next 50 days or so. And weve seen large put buying of a few of the indices, and etfs. Weve got by some counts 57 bullishness. That gets a little scary on the contrary basis. And of course, it is the year of the snake. And the year of the snake is the least bullish of all the 12 asian zodiac characters. And its seen some spotty events. 9 11 happened in the year of the snake. The attack on pearl harbor was in the year of the snake. And something called the crash of 29 happened during the year of the snake. Wow. All this snake stuff. Weve got the super bowl on our side. Arthur, i want to know when you see new secular bull market stories, as the wall street journal does today, your reaction . Well, im a little cautious. Ive been around for a long time. Ive watched the 17. 6year cycle go. And were approaching for the third time highs in the s p, and in the dow. I want to see us get through those. In the 17. 6year cycle, you go through a phase where the market moves up and down. But it never gets a oneway ride to the upside. And the other part, like the biblical fat and lean years. And on the other side you could throw a dart in the wall and almost anything you buy goes up. Retail investors have been plowing into the markets, particularly in the month of january. The article in the journal points out the last time this happened, it happened just before 99. But they didnt pull out to the extent that they pulled out this time. So that may be the difference. Well, i think it is. Of course, everybody talks about the great rotation out of bonds into stocks. I dont really see a great deal of evidence of that. Weve had a bigger than historic surge of new investments in equities, but theyre still plowing money into bonds. So well wait and see if it turns into a real stampede. Historically, weve seen the early part of the year, see some of these inflows. Finally a quick thought for Pope Benedict. I know your thoughts are with him today, yeah . Yeah, it was a surprise. And let