Welcome back. Time for the last word. Jim chanos is our guest today. We started out talking about china. Why dont we end up there, too . Avoid anything with the chinese property markets, steel, cement, iron ore. Can you short australia too, jim . Certain parts of australia are going to feel this, not the whole country. This is the bubble is just being blown bigger and bigger and bigger and it is hard to avoid. Three years ago this was somewhat controversial but when a property bubble is visual, you cant miss it. Emerging markets somewhat dependent on china, too . Asia . Depends. Some are. Some less so than others. To be on your radar screen. Should just be careful, anything dependent upon the chinese economic miracle, i would be careful of. Bigger shorts on, stuff we have been talking about for years . Broadening out from china to construction equipment, things like that. Jim, thank you very much for being here in studio. Always a pleasure. Andrew, jeremy siegel, thank you guys so much for everything from new york. You guys did a great job, great guests and jeremy, we are looking forward to seeing you back here in studio again. Andrew, we will see you tomorrow. Its a big day for us. We got jobs friday that does it for us today. Right now, time for squawk on the street. Thursday morning, welcome to squawk on the street. Im melissa lee, Carl Quintanilla and david faber live from the stock exchange. Jim cramer has the morning off. The fourweek moving of a range the loews since march of 08. Take a look at the picture in europe. The bank of england standing pat. The ecb standing pat. The press conference, by the ecb, still going on now. Overnight in asia, 2013 high by the nikkei, the boj didnt do more at its meeting overnight. A road map starts with the markets and the dows hot streak. All right economy stop this in its tracks . The jobs report out tomorrow has barclays cut its gdp estimate because of sequester concerns. Dell shares moving higher after our own david faber broke the news that carl icahn not busy or anything is a major stakeholder and demanding a leveraged recap that could put more money in shareholders pockets. David has the latest. Samestore sales arent the same. The first month macys, targets and kohls stopped issuing report cards. Notable beats from limited and costco today. A few hours away from a media event, expected to unveil a revamped news feed for facebook. That will that keep the stock moving higher . We begin with the markets, one day after the dow hit new alltime closing highs, the second consecutive session, four points high of 12,300. Good news on the labor front initial jobless claims falling to 340,000, driving the average to its lowest level in five years, as wall street braces for fridays jobs report out tomorrow morning. A lot ahead here. Certainly, a nice rally in yesterdays session. We continue to see the breadth of the rally continues strong, xlv, we had highs in health care, financeals, discretionary, staples, transports, you name it hit a new high yesterday. Macro interesting to watch, claims were good, as you said. Barclays does trim its gdp estimate for the coming quarters half a point. Raises their yearend jobless rate prediction, in part because of sequestersome it going to be good or is the sequester going to be like a build that damages us little by little over time . Should we draw anything from the dinner last night between the president and number of senators, which apparently he picked up the bill, too. I dont know if that is a sign of any progress. Corkers on record saying it was sincere is, constructive. I think he has invited paul ryan to the white house for lunch today. Ap has that this morning. The charm offense continues. Corker seemed to suggest that dont expect anything for the next maybe month to six weeks in terms of something. If you were to get some sort of broad agreement, one would imagine that would really be a catalyst. Yeah, that was are the crux of the barclays note this morning when they were trimming the gdp estimates. The progress on the talks just has not been there. And so they are now anticipating that the sequester, while each agency is a little bit more flexibility in terming how they are going to distribute those cuts, how are they going to furloughing the employees, the cuts remain longer than expected that will have the drag effect on the gdp. The dinner yesterday, that was in washington . I believe so. Not at the white house. A restaurant. Jefferson hotel. Federal offices were closed because of the snowstorm but they were still able to make it to dinner . Yesterday, remember factory orders were late. And that, in part was due to some delays because of the weather. Cant hit the return button on the computer because of the snow. We are thankfully still waiting for the promised snow here in new york, perhaps not to come. Major delays at the airports i in this area and other parts of the country. There are some flurries as i was walking in, very light still. Big question then, does the claims tell us anything about the broad economy. The chief economist from shoot toe securities joins us from new york. Welcome back. Thank you. Baby steps, progress . How do you couple this with what is happening with the personal income data, bearish data we have got the past few weeks . I think what youre seeing is a situation where companies have decided its more likely to add a few workers than fire works. That is in the claims data. The net macroimpact is prod doubletivity dropped, labor costs risen, as a result of that Fourth Quarter operator earnings were squeezed more than people anticipated in the backdrop of very, very limited Topline Revenue growth. So, the question really is how long can companies go on trying to get 8 to 10 Earnings Growth for 2013 and do it without cutting back on employees . Im afraid i just dont see that coming through. And that comes through as well from the trade numbers this morning as well, which showed when you take out the deterioration and the balance on pete control yum, look just at the goods component on a nominal basis, there was no realism. Prove. At all. Actually, a slight deterioration in the trade. Exports growth slowed down, import growth picked up a little bit. I think the real story is the macroeconomic dont justify a sustained acceleration in employment and just a question of how long it will take before companies begin to focus on earnings again and pare back on employment. Adp, as we know, was a beat yesterday. Stuff written this morning how they are Getting Better at targeting nonfarm payroll. Are you expecting a beat tomorrow . You know, im 175,000. A little bit stronger than the consensus. Again, im believing that we are going to have more squeeze in corporate profitability in the First Quarter of this year around the First Quarter squeeze on top of the Fourth Quarter squeeze that gets companies to pull back into the Second Quarter of the year. I think we got a few more weeks to go that is not case. Are you essentially looking through the next number anticipating more weakness later on in future months . Thats exactly what we are doing. We believe this number is baked in the cakes, the claims numbers, fourweek moving number show there is no change in the labor market. The jolts data show you no major change in the labor market. None of the other indicators we look at show us there has been any nearterm change in the labor market. We expect it to come in right around average, a little bit better than the consensus, we still, as we look forward in terms of looking it he squeeze on corporate profitability and corporate focus on earnings begin to think we are going to have a Second Quarter dip in employment, into the decline in employment, but a slow down in the pace of employment the Second Quarter, bring it back below 150,000 workers per month. Steve, as an economist that sees weakness in future months in general in the economy, questioning the strength of corporate profits at this point, are you a bit surprised the markets are at record highs . I mean is this our view is the equity market is following what happened in the economy. The economy returned to the precrisis high several quarters ago and got the equity mark threat because the risk concerns came out of the system. We are seeing the equity market a lagging indicator. Equities in the economy highly correlated on a longterm basis. On a quarter over quarter basis, it is not a particularly good Economic Indicator what is happening in the equity market and one of the times the equities are lagging whats happening in the economy. Absolutely. A lot of americans shaking their head at that divergence. Steve, appreciate it. Of course, tomorrows big jobs number means another chance for you to nail the number. Tweet us your predictions for nonfarm payrolls, make a guess any guess. Our handled, at squawk street, hash tag is nail the number h months prize, this limited collection, right, mug, of the post 9 oneyear anniversary at the exchange, autographed by all members of squawk on the street. You will have until one minute before the friday release, 8 30 a. M. Eastern time to submit your predictions and get in on the contest. Good luck. Consensus is what for tomorrow . Had 155 . I think so. I think the mug is limited edition. Might even have serial numbers. Only made a few. Another reason to tweet your prediction, right, david . No doubt. No doubt. I dont even have a mug. Wind up on ebay faster than you can you know if you ever wanted to learn how to forge davids signature. Right there. Feel free. Others have already done it unfortunately. Ecb president mario draghi holding a News Conference now. Simon hobbs is here with the very latest out of thissers were. Simon. Good morning to you, melissa. Mario draghi is being extremely relaxed about the situation in italy. This is the first News Conference we have had since the italian election. He is suggesting the financial conditions in europe are relatively good. No hint at an Interest Rate cut. Yes, they discussed it nor is there a hint they would ease collateral rules, a way of giving countriance easing and keeping germany where it is. The euro is spiking. As far asitically is concerned, a lot of the automatic a lot of the adjustments, Structural Reforms that mario monty put in place will still put through, the net issuance of italian bonds only 30 billion this year, simply rolling over what they already have. The same time, he says if you look at the contagion around europe, there isnt any this time around, very different from last year you should be aware that todays spanish tenyear yields fallen to a twoyear low. No Interest Rates coming from the ecb. No change on the colate ras. They have lowered their growth forecast but they say that was just is about the Fourth Quarter. Inflation forecasts arent coming down. Back to you. Thank you, simon. Get the latest on the dell news. Shares are moving higher in the premarket session on the news that you broke yesterday, david. Thanks, melissa. Early faber report today. We got confirmation report that carl icahn has, in fact, built a significant position in shares in dell, something we told you yesterday and suggesting the company pursue a leveraged recap rather than the 13. 65 a share leveraged buy outcurrently under way by michael dell, the companys ceo and founder around the private Equity Firm Silver Lake n a letter that was released by the special committee of dell this morning, in other words, icahn didnt put the letter out, it was put out by the special committee with the rebuttal of his letter, he details his plans for a leveraged recap and what would be as 9 special dividend. Yesterday, we did tell you he was looking for a 9 dividend. Following finance 5. 25 billion, 2 billion through icahn enterprises, another 3. 25 from carls own pocket. Not many guys that can say i will make you a loan for 3. 25 billion. I want a commercial rate. I will make you a loan. 1381 the stop. I want to talk about that. There is a question there that a number of people are asking, which is simply this a stock trading about 18 a share, moved up to 14 based on 1365 buyout. Now they can pay as 9 dividend and the remaining highly levered company, stub equity, will be worth 1381 does beg some questions. He seems to be using about an eight multiple to the company. Lets not forget it was trading about three times instead of he is saying now it will trade at eight times. Microsoft trading at five times. Ibm, less than eight times. Quite aggressive in getting to 22. 81 is his overall value for the company, says mr. Icahn. He is joined in that view by a number of other significant shareholders. Talked about southeastern, own 8. 4 of the company. They wanted to lever up even more extensively and pay as 12 special dividend. That is southeastern. A lot of questions whether a company that missed seven quarters in a row in a highly competitive business in which the business seems to be eroding, yes, it is generating free cash flow, should be leveling up broadly like this for its shareholder base. Jim chanos has been short the stock, appeared earlier on squawk box. Here is what toad say about the fundamentals. The problem with the dell model is that you get paid up front and thats great model when your business is growing, cause more cash comes in, you know, before the payables. But as your business shrinks, it works the other watch although dell has a lot of cash, most of it offshore, which is a whole separate issue, theres tons of payables here, the networking capital, not net cash, is only a few billion dollars. That being said, another great letter from icahn. Share little bit with you. He goes down a couple of different avenues here. If the board will not promise the proposal in the event dell shareholders vote down the private transaction, you are not vote on a recap, simply voting on the deal, you need to have them undertake receipt cap he is proposing, we intend to run a slate of dlaerkts will implement our proposal. He is threatening a proxy five. He wants them to combine the two votes, have the annual meeting vote so i can conceive isably run the slate. At the same time, you vote up or down on the transaction. My favorite line, you know, if you dont do that we anticipate years of litigation will follow challenging the transaction and the actions of those dlaerkts participated in it. Carl can still write a really mean letter. Scares me a little bit u the way he threatens the litigation, gave us chimp you were careerful yesterday to walk people away from the notion that this go shop period will bring in new players. Does it get extended . How serious is lenovo . Thanks for mentioning that, hp, i learned that last week, i worked on it to the extent that frankly, accident think it was news because there was nothing behind it that i was able to if youre hp why not get a free look at dells books . If youre lenovo, why not . Blackstone is also in there, maybe taking a more serious look at it, but thats private equity firm so they have got to make assumptions. Silver lake has already done a lot of structural work here on taxes, a lot of other things. Blackstone, well, they would be having to accept higher risk, lower return somehow if they would come up with a number that would exceed that of silver lake and michael dell. Interesting, but again, unlikely, i think, that you get anybody making an overbid here. Just quickly, david, in terms of the up or down vote is icahn 6 stake that throw into question whether or not they will get enough votes to actually go through with absolutely. You need 42 of the outstanding. 16 , you take the other 84, split that you get 42. 1 or maybe its even less its a novote you got southeastern at 8. 4. Not sure where carl is, assume a significant stake, 5, 6 , others. The maths tough. Not to mention a lot of people bought stock above the deal price so not going to vote in favor. We will see. Amazing. Headlines on rig today and carl and keeps them coming. Pingers in a lot of honey pots. Without him, i dont know what we would do for news. Thank you, carl. Thauz. Welcome. When we come back, veteran banking analyst dick bove, how do you play the financials here . The stress test results due out tonight, 4 30 p. M. Eastern time. One more look at futures, claims gave us a little support. See where we go. Squawk on the street is back in a minute. [ kitt ] you know whats impressive . A talking car. But ill tell you what impresses me. A talking train. This ge locomotive can tell you exactly where it is, what its carrying, while using less fuel. Delivering whatever the world needs, when it needs it. After all, whats the point of talking if you dont have something important to say . announcer at scottrade, our somecexactly how they want. T with scottrades online banking, i get one view of my bank and brokerage accounts with one login. To easily move my money when i need to. Plus, when i call my local scottrade office, i can talk to someone who knows how i trade. Because i dont trade like everybody. I trade like me. Im with scottrade. announcer scottrade. Awarded fivestars from smartmoney magazine. Chain store sales also on the front burn they are morning. Costco reporting a 6 jump in comp sales for february, beating consensus estimates. Limited beating expectations, 3 increase in samestore sells led by gains at victoria secret. Bring in richard jaffe, analyst at stifel nicolaus. Good to speak with you. Good to be here. Thank you. An interesting month. I know you dont cover the Department Store chain, really, havent gotten any read from the Department Store sector, macys, targets and kohls stopped reporting their monthly sales. Im wondering as an analyst, does it matter, the samestore sales reports fact nor really well or these things merely distractions for most investors is . They are clearly a data point for investors and useful as long as they are kept in perspective. Obviously, they research the weather and holidays such as easter distort the numbers month to month on a yearoveryear basis. Important to keep it in perspective. They were helpful, they are gone and puts premium on our boots on the ground research. Right. Any upside surprises or downside surprises in your sector universe . I think the general trend has been encouraging. Week to week, we saw an acceleration in sales whether improved through the month of february. We knew we were facing a headwind with the absence of tax refunds, the payroll tax increase and its very unseasonable weather following three years of very warm januarys and februarys. It was going to be tough sledding it really was. But seeing momentum improve as the weather improv