European central bank and the bank of on england are holding policy setting meetings today. The ecb is trying to deal with the slow recovery and inflation thats too low. Well have a live report from our colleague, Geoff Cutmore in frankfurt in just about ten minutes. First, andrew has some of the morningss top stories. Good morning. Thanks for that. A number of stories out about the Retail Industry this morning. Some of the nations largest stores will be reporting december comps today. Also, costco, one of the first out of the gate. The warehouse chain posting a better than expected 3 increase in december comp. The retailer was helped in part by online sales. Macys cutting 2,500 jobs as part of a reorganization. The Company Plans to close five stores, but open eight others. Macys says the move will save 800 million per year. The company reporting a profit above wall streets consensus. Take a share that i a look of shares of zs today. The specialty retailer cited quarterly outlook. Shares of bed, bath beyond coming under pressure. The houseware retailer, i go there all the time, they posted quarterly results. Im not sure how that happened given the amount of shopping the sorkin family does at at bed, bath beyond. Thats an old bit that we used to do here. We would say, rainey weekend, rainey saturday . What better way when you cant go outside than to go and spend seven, eight hours at the bed, bath and beyond. I could stay there forever. Look through the linens, bedding, duvets. I like to buy the stuff that they say you can buy on tv. Maybe theres one in davos and we can hang out there. Although im invited to so many bizarre, crazy things parties . Yeah. From every country in the world. And they start their cocktail parties at like 5 00 and run three like 2 00, 3 00 in the ive never felt so wanted. Yeah. Do you get invited to all these . I do. So everybody. But do they have some vodka . Probably. Well talk about the markets. I have a lot of thoughts on this. How ridiculous is it to base it on five days . Thats silly. Wait a minute. Just listen, if things are moving, and not only that, but every year the first five days are on different days of the week. So this was a did you read how this monday, my birthday, was the most depressing day of the year . School starts, new years, it just happened to be on a monday this year because christmas and new years were both on wednesdays. So youve got all this, the way people feels, and that is what causes buy or sell fogs and its different every year. There was a huge run up in the second half of the year. But theyre talking statistics. Six days, seven days. If we were up, you would be cheering all the way. You dont know the year is going to be i dont think it is much different in five days. Im willing to file for an extension. If they say the first five days so goes january, so goes but we havent have we looked at the stats of what happens when its a wednesday . Yeah. You see, that makes it totally different. I think we have to do some math. Im not giving any credence. Im going to do a little work here, try to find out. Seriously . Im going to try to find out. Its worthwhile. Im start to go sweat. And i never sweat. And im on drugs. Youre just starting. Look how close we are. How can you not get this . Because you come in sick. You dont want me to be here . Im willing to go home. But im starting to sweat, i feel it. Im govern some unbelievable cough syrup. Anyway, when they say definitely dont drink with it, which to me means youve got to pop one open, right . If it says definitely dont, you can its going to really. No. Probably bad advice. In tech news, apple and samsung have agreed to a mediation in their smartphone patent site. The ceos of both companies are going to attend the session with inhouse lawyers only. The rivals are facing a trial in march over apples claims that samsung inflinged its patents. The two have gone to trial twice, if you recall, in the last couple of years. And juries have awarded apple a total of roughly 903 million. They never got the Christmas Card from tim cook. He did send you one. All the work ive done trying to convert you. I kept saying the iphone changed my life wasnt enough to get a Christmas Card. He definitely sent you one. He said he sent you one. He got guilted into it. Im sure theres no way he sent one to two of us and not you. I am sure. Fine. You lose it and its his fault. Ibm plans to invest more than 11 billion to establish a new Business Unit for watson. The tech giant, more revenue from the super Computer System that beat humans on jeopardy. Ibm says its the size of stacked pizza boxes. And theyre saying as many things as they said it was going to. The applications after winning its not what i think is going on here. I think they started to detect some malicious level of intent in this thing. I think this is a way of ba burying a real story. Starting to talk back, you know, and we want you to play a game of chess with this person. You play a game of chess. You play jeopardy . No. You play jeopardy. So its like a teenager . I think its much more on the level. And i noticed the way it buried on jeopardy and with that to know the feeling . Yes, exactly. Anyway, fairfax financial is going to buy another 2 billion worth of blackberrys debt. The deal will provide the struggling smartphonemaker with a much needed cash infusion and the news will double fairfaxs holdings to mrbs debt. The firm holds a 9. 9 equity stake in that tech company. Lets check on the markets this morning, as we mentioned. The futures are indicated higher this morning. At this point, at least, the dow futures are up about 64 points above fair value. S p features up just over six points. Steve liesman writes in, listening to our debate about the january indicator and the first week indicator. He says its not statistics, its trivia. In other words, give it up. So hes right on that count. If things are positive, if theres a positive overall environment, you know, it doesnt matter how many days it is. And in markets even after that big gain, its acting friendly and the adp number and well see what happens tomorrow. The tenyear did back back up a little. The adp number was better than expected and the markets still dropped. By the s p was up most of the day. There were some big components in the dow that put excess pressure on it. There was a big drop in oil prices today. It was down for the sixth time in seven sessions. Yesterday, oil prices settled at their lowest level. Also, the tenyear note which pushed back above 3 is right now yielding 2. 991 . If you take a look at whats been happening with the dollar, it was up yesterday. Gold prices, at least this morning, are up, barely, just over 1. 1,226 an ounce on. Okay. It is now time for the Global Markets report. Geoff cutmore is standing by in frankfurt the. I dont even know what to describe that is. Its a metaphor for the euro. Geoff is a handsome man, but the shot is not only because of what is behind him. Youre talking about the big euro symbol over my shoulder. We are once again staking out the ecb, waiting to get a bit of news on Interest Rates. The november move was a surprise to us. What exactly can mr. Draghi pull out of the bag today here . There are some pressures on him to react to what is seen as a disinflationary trend now. The ecb has as its target rate about 2 on core cpi. We had a print come in for december that was 0. 7 . At the moment, it feels like he does need to do something about these prices that continue to declining in the eurozone until more confidence comes back into the regions economy. And we had some november numbers on bank lending, which show that the lending into financial numbers continues to dechina here. Some negative points i think hell have to talk around today as he tries to convince the market that, a, he is still ready to act and, b, he has has some tools left in the toolbox. But benchmark rates are at 25 basis points. Theres not a lot of room here. Thats pretty much zero if he ask anybody in the markets. But there is one phrase that may comfort him and that phrase is rising angels. I dont know if youre hearing much about this, but this is the line were getting some some of the fixed next desks. They talk about eurozone sovereign debt, they point to ireland which manages to get away just under 4 billion worth of debt this week. The first issuan theyve been able to make since they came out of special measures and they point to that and say this is evidence, at least, that were traveling in the right direction right now for the eurozone. Back to you guys. Okay, jeff, were trying to figure out your shot. What is that thing, to your left behind you . It looks like the Empire State Building of a knockoff or something. What the heck is that back there . Is that a building in frankfurt . Is it real . What is that thing . Yeah. Yeah, yeah, thats thats not a knockoff. Its just another building here in frankfurt. I dont know if it has any no, actually, when the camera focuses in on it, it looks more like a churchy type of thing. Its just a long way away. There is a Little Landscaping that has been done there. Is that weeds . Is that a trash can . Where are you . It makes me wonder about germany. Are they running short on municipal funds or something . Yeah. Look, joe, i told you the last time that this is a fairly salubrious part of town. You go a block that way and youre in the frankfurt red light district. But they keep the bankers quite close. And we have the euro tower behind me, which is what houses the European Central bank. But since youre coming over, were going to get a chance to chat when you come over. For sure. It will be good to i didnt even know you had a passport, so it will be good to get you ow of the states. Ive been over there a lot. I told you i was on im still, you know, just throw that underwear away. I was so afraid on that i. Anyway, Geoff Cutmore, thank you. As it moves, its a snails pace. Oh, my god. And before you get on, they use the near things. What . On each car to make sure that theres i went on a date in one of those capsules. Was it a first date . No. This was not a mile high its a 500 yard high no, but it was spectacular, actually. And we were the only ones in the little cube. It was like midnight. It was great. I would be all over you, holding on to you if you take me up in that. It wasnt scary. Oh, my god, im afraid of heights. I admit it. I always have been. Anyway, and its not i dont mind helicopters and things like that. Its when im attached and i can look out and see the people. I imagine the people putting the bolts into it when they were making it and if i were out there i dont know. I dont like the eiffel tower. Do you like bridges . Bridge gates . I dont mind those. I would dive. Cut right into the water. This is my favorite story of the morning because it explains why ive been late a couple of times. It was really on the other side. This is the other way. This was funny until you realized that people do need to get places and, you know, ems people and the missing 4yearold. Governor Chris Christie is coming under fires after emails. Hey, theres some traffic coming. Yeah . Well, the kids are their parents voted for barbara whatever her name was. It suggests that one of the top aides pressed for the creation of traffic problems. In the city of ft. Lee which we know so well because cnbc was based in ft. Lee for years. The mayor there had declined to back christies hes a democrat and he still and then they wouldnt, i guess, return his calls when he said whats going on . If you do close, like, one or two lanes of the bridge i feel like ive lived through some of this for a while. September 9th, the first day of school. There were times that you would sit for an hour in a. Bad traffic a lot of times because everybody a lot of people from northern new jersey are trying to get into new york city. If you close a couple of those lanes, it really backs things up. Theres massive gridlock. It does cause a there is an investigation going on. He said misled, i think, but he said his aides misled him. Because at first but theyre pretty senior aides. Yeah. This would be like if valley jared had done this to i dont think theres any other aide in the country as senior as valerie jared. Here is Chris Christie suggesting the lane closures were politically motivated. I worked the cones, mat. Unbeknownsted to each other, i was the guy out there. I was the guy working the cones out there. You really are not serious with that question. The fact is, let, you know, senator wineberg find something to occupy themselves. They always will. And almost always will include being critical of this administration. But i dont get involved in traffic studies. I dont get involved in lane closures. I didnt work the cones, just so were clear on that that was sarcastic. That was a couple weeks ago. And now that the emails have come out he has a much stronger response now. That its unacceptable and new jersey people dont deserve it. He didnt fire the aide yet. You have to assume the aide will be fired. There was a fall guy that was in the. In the port authority. One of them was a High School Classmate of his. One guy already got fired, right . Two guys stepped down. But not the chief of staff. And so the question is do they get fired and do they then turn around and say he actually knew . Right. Thats where this all is going to get sticky. There was a posting by ezra cline to say hes not going to go so far to say the governor knew about the this, but the governor created a environment where bullying was allowed. Youve seen the video clips on youtube. When someone asks a snarky question, hell fight back. Thats always been part of his image and thats something that republicans around the country have rallied around and said, yeah, this is the way we like to see somebody response. But now part of that is hes had aids that walk around wind him and say some of these things and thats coming back in this environment. If i close a couple of lanes, it doesnt seem like it could determine your political future, but the way its handled there have been people that can question whether he can wear well. Four more until the three more until the next election. Hes a passionate guy. I like him a lot. Times in this world, the twitter in this crazy world were in right now where, you know you know who id love to talk to in the coming days . Ken langone. Ken is a big supporter. That is going to be interesting. I would be needling this democratic mayor in some other way. But if theres a way to just needle him but i dont understand how this needled him. Democratic mayor wouldnt even return his call. His whole city was called with gridlock and he was calling saying, please, governor, help me and they wouldnt call him back. But why would people blame him for that . There was something very peculiar about that. Coming up, exxon mobils ceo is putting a date on u. S. Energy independence and it is sooner than you might think. Plus, ford knows if you are been naughty or nice on the road. Joe, you have a ford. So they know whats going on. You are never really driving alone and thats coming up in todays executive edge. Boy, is it one story. And then are you sick with a cold . Robert frank tells us how to escape in style. First, the National Forecast from the weather channels alex wallace. Good morning to you. Tracking some uncertain weather in the middle of the country. Frozen precipitation across arkansas. Want to be careful along that 40 corridor. Snow in st. Louis. By tomorrow, well watch this shift farther north into the upper mississippi valley. Tomorrow. Tomorrow night weve got some snow to deal with. A couple of inches. No huge deal out there. The highest totals, 3 to 5 across central portions of wisconsin. Now, while the snow is going on here after getting a chance to warm up as we head into the northeast and the rest of the country, the rest of the country is in this deep freeze. That arctic air mass restreets, the warmer air returns. Now that brings wet weather that well be dealing with as we head into the weekend. Showery conditions for us here. Into the northeast, good news is at least we establish our saturday up and down 95 with dryer skies. More squawk box coming up in a bit. Now listen to me, duck. I have an associate that met with, uh, an unfortunate accident. While hes been incapacitated, somebodys been paying him cash. Now, is this your doing . Aflac . Now, if i met with some such accident, would aflac pay me . Nice. This is your stop. [ male announcer ] find out what aflac can do for you and your family. Aflac . [ male announcer ]. At aflac. Com. Welcome back, everybody. Rex tillerson talking about energy and the ability of the United States to be selfsufficient. Were already the Worlds Largest natural gas producer. Were producing last year our crude Oil Production surpassed levels not seen since the 1980s. And its expected that well continue to add to crude Oil Production capacity over the next two or three years. So i think it is realistic that the u. S. Could be energy selfsufficient, Energy Secure by tend of this decade. Guys, some of the numbers are pretty astounding. It looks like we will overtake saudi arabia in terms of being the Largest Crude Oil producer by the year 2016, which is just around the corner at this point. Were already the largest natural gas producer. Its pretty stunning to see how quickly some of those numbers have really come back. We never when this when we talk about this singulairty, we never fact we dont know what technological advances are coming. Its the old argument, all these you know, and theres another story today, china control wear earth metals and we have technology that can get at that. No one knew horizontal drilling was going to open up these vast amounts of hydro carbons. I think this is really exciting. I dont think you can overstate how much this is going to help our Manufacturing Base and help us compete with the low labor costs. I want to know what the geopolitical implication comes. We have relied on the middle east and how much should we snicker and go like this . How much should we pay to protect . That, too. For a very long time, weve paid a lot of money to be the Global Police or, really, the police for the middle east because we had we had interests there. Looking at china, in china, they have shale reserves greater than what we have in the United States, its just more complicated to get to that. But part of that is because theyre in regions where theres not infrastructure to bring oil and gas back. If china builds out its infrastructure, you could look at massive reserves there. You think about how people said it wont be internet companies, it will be what the intent does to everybody else in terms of productivity that will be so great. Think of the jobs in building out the infrastructure. Then when you have the low cost energy that goes as input into everything. Its a very powerful, compelling and optimistic story that will maybe rekindle your faith in the american dream, i hope, some day andrew. I hope so. I wanted to. You must have to be a redneck nor, a rough neck. You may have to be out on an oil rig to get a decent job. But those are going to be high paying jobs. Fantastic. Im all for it. But it does involve going to places west of the hudson. North dakota, south dakota, you know, places where theres not a lot of museums. Not much culture. Im okay with that. For a couple of days. Your car knows more about you than you might think. Ford talking about data and privacy at ces in las vegas yesterday. He says the gps units allow the automaker to know when drivers are speeding and where they are while theyre doing it. Now, he was trying to describe how much data ford has on its customers and explain that the company uses very little of it in order to avoid raising privacy concerns. But, guys, this was way more information than i thought they by by the way, this is true not just with vehicles. If they walk around with your iphone, they know where it is. If youre walking, you cant get a ticket. But if you go in a car with your iphone, its the same thing. Thats a problem. I would argue that apple and google probably know more than ford. But isnt it like its like so much of this meta data, you cant do anything with it. Im concerned, if theres a time when everybody keeps out how to keep track of it and what to do with it. It is interesting, if there was sort of big brother of the traffic cop. Where there it was colated to anybody going over 80. They can do that now with your ez pass. If you drive through the lanes and you get there too fast, they can issue a oh, like rosy louise, the boston marathon, she took a subway. Marketers are going to try to figure that out. I dont know about you, but do i ways in the morning to see what the traffic you get involved with the logistics . Sometimes i do, to see if theres traffic. If we should be going in different directions. Just sit back. Dont your nails need it said it knows were going to work. It knows in advance. So at some point theyre going to say, do you want to stop at the dunkin doughnuts . I get point. I blahty game. You do . You report back to them . I say theres a vista over here, theres an accident here. You have to be very careful over here. I still flick my lights if theres a cop. Did i just say that on tv . I used to, but as ive gotten older, i am more crotchty, like you should get a ticket, you crazy young man. When we come back, were going to track the markets behavior he ahead of this big jobs report. Later in the show, senator mark rubio declares a war on poverty. Right now, as we head to break, take a look at yesterdays winners and losers. [ male announcer ] this is the story of the little room over the pizza place on Chestnut Street the modest first floor bedroom in tallinn, estonia and the southbound bus barreling down i95. This magic moment it is the story of where every great idea begins. And of those who believed they had the power to do more. Dell is honored to be part of some of the worlds great stories. That began much the same way ours did. In a little dorm room 2713. This magic moment you stand behind what you say. Theres a saying around here, around here you dont make excuses. You make commitments. And when you cant live up to them, you own up, and make it right. Some people think the kind of accountability that thrives on so many streets in this country has gone missing in the places where its needed most. But i know youll still find it when you know where to look. You wouldnt have it she any other way. Our toes. But your erectile dysfunction it could be a question of blood flow. Cialis tadalafil for daily use helps you be Ready Anytime the moments right. You can be more confident in your ability to be ready. And the same cialis is the only daily ed tablet approved to treat ed and symptoms of bph, like needing to go frequently or urgently. 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 allergic reactions like rash, hives, swelling of the lips, tongue or throat, or difficulty breathing or swallowing, stop taking cialis and get medical help right away. Ask your doctor about experiencing cialis for daily use and a free 30tablet trial. Good morning and welcome back to squawk box here on cnbc. Im joe kernen along with becky quick and andrew ross sorkin. We are now about two hours from the Economic Data point of the morning. Weekly jobless claims will be released at 8 30 eastern. Economists say the first time filings likely rose slightly in the latest week to 340,000. Consumer delinquencies dropped sharply in the Third Quarter of last year. The economy started heating up a little and the Housing Market improved. It was stated it was released yesterday. The American Bankers Association said Bank Payments dropped significantly. The aba doesnt track traditional mortgage payments. Lets take a look at the markets this morning after hour out of the last five days trading lower. The futures are indicated higher. You can see right now the dow futures are up by about 65 points. The s p futures up by just over 6 points and the nasdaq is up by about 13 points. In the early trading in europe, you can see at least at this hour green arrows there, modest gains. The best performer is the dax in germany up by 0. 4 . Youve got slight gains from both the cac and the ftse 100. And in asia overnight, the nikkei was down by about 1. 5 . The hang seng was down by 0. 9 . Me again . You again. What happened to you . I dont know what happened to me. Kirsten. Lets get a check on the markets. Nobody is going to understand the joke. Lets get auto check on the markets today ahead of tomorrows jobs report. Joining us is michelle gerard, chief economist and phil orlando. Well start with the jet get the back drop of the economy, michelle, after yesterdays adp report. What are we going to do tomorrow . Well, i dont think it first of all, adp may have some issues around december and has a tendency to trend stronger. So i think people took it even with a little bit of a grain of salt. The bottom line is, it doesnt change very much. I dont think tomorrows number is going to suggest the labor market has changed very much. Were kind of debating in terms of the 195, is it 220, 230 . The point is, we havent moved much off that 200 mark. It hasnt changed since when . It changed three months ago, right . Chill, kirsten. Just call me. Call me for dinner. The truth is, joe, we havent seen unemployment growth change in the last three years. We averaged about 180,000, 190,000. In terms of the economy growing another 10 or 20,000, its not going to make a meaningful difference. We need to get to 250. You were saying this earlier. 250 or more to set the stage, i think, for the economy to expect the economy to be able to go meaningfully stronger. When we got this yesterday, both liesman and zandy both sort of indicated that we could look for this year for unemployment to drop even faster than it had because were ratcheting up. And it was sort of going along with the thinking that were going up to 2. 5 or 3 . That we are, in fact, ratcheting up global well, if we do you dont buy that . I am more skeptical. I dont know why businesses are going to be mover aggressive hiring this year than last year. Would you know if they were . I would there would be some indications of that. The hiring plans, the confidence numbers in terms of business are better and i think the lack of kind of fiscal overhang, the uncertainty surrounding fiscal policy definitely is going to be less in 2014 than weve had. So maybe businesses are a little more optimistic. I dont get a sense, though, that the animal spirits are Strong Enough. So, phil, i dont know whether you want to just assume shes right and then what do you do with stocks . Let me jump in. Michelle and i had a nice conversation in the green room this morning, so weve debated this issue. We have a slightly more constructive view tomorrow. Were at 230 or 235. Where does that word come from . More positive. Weve been running now at that 200k plus rate for about four or five months. Yesterdays adp report was pretty interesting. One of the reasons why we think adp is more of a leading indicator is because the data, as they break it out, they give you jobs from small sized companies, Medium Sized Companies and large companies. They do a good job of capturing large companies. They dont do a very good job on the small size. Yesterdays number, 100,000 of those the 238,000 jobs came from small companies. That means that the bcs will capture that in a month or two. That would suggest fous that this job trend is likely to continue into the spring. Wow. If that happens, then i mean, as we were saying, if we were going to get better employment growth, that is really, then, i think validates the expectations that people have, many people have that the economy can do better in 14 than weve seen in recent years. I was reading something this morning that suggested that because the economy is improving, thats going to push Interest Rates higher and that in turn is going to hold back economic growth. Its like this crazy sicycular argument. Is this economy going fast enough to get people worried that the longterm Interest Rates are going to 4 . Cuff a better economy with low inflation and rates dont go up . Couldnt you have the best of both words . You could. And you do have the fed trying to do its part. But i also suggest that theyre not going to be quick to raise the Interest Rates. Basically, they can control it. Theyre worried about a bubble. We have another filing nowhere. Youve got core pc at 1. 1 , 1. 2 . Exactly. The fed would prefer that number doubles over the next couple of years. Why are you, stocks . I just got some tweets. The New York Times, this traffic jam is a much bigger story than benghazi ever was. You know, a couple of lanes closed. But its a republican. But the democrat benghazi was like c14, isnt it . We want to keep our priorities, dont we . Benghazi versus a couple of lanes blocked in ft. Lee. Anyway, where do you see the s p at the end of the year . 2,100. Man, finally, someone with some yeah. With moxy. With a little correction along the way or no . What does the year look like . The year its not even that much. No. Its a 15 total return kind of year from where we started. Thats half of the 30 we did last year. So we still think its going to be a constructive year. But in terms of you did a lot, phil. I like it. The mix is very much hard not to. We think well have a decent start to the year. Economic data is picking up. We think Fourth Quarter corporate earnings will be pretty good. You might have a correction in the middle of the year as some sort of instability around dr. Yellens chairmanship takes hold. Thats interesting. Youre now citing dr. Yellen as the reason for the instability. Usually people say i dont know what the instability. Youre stating ms. Yellen may be no. Eight years ago, i went back and we did some work on this, we looked at the first year of every new fed chairman going back into the 1920s. It was a remarkably similar pattern. We could see a correction based on that. If your forecasts are right, then well feed into that instability. If the data is stronger, the markets will question this guidance of lower for longer. Thank you. And that is a really good point. I have to say, our view in 2014 is the fed is going to be very challenged with the idea of provided Forward Guidance to anchor lower rates, but wanting to be data dependent. So we say that and is we can switch, but if the data are stronger, thats going to be a problem for the fed. In terms of trying to keep rates down. Exactly. Like yesterday, rates move on the front end of the market. Coming up, what happens in vegas doesnt always stay in vegas. Sometimes it makes national headlines. The ceo Party Crasher talks to cnbc about getting tossed from a rival star studded get together. And if you needed to get away from all the cold weather, robert frank has a few trips to escape from the polar vortex in style. Id like to do that. Squawk box coming up. Fifteen minutes could save you fifteen percent or more on Car Insurance. Everybody knows that parker. Well, did you know auctioneers make bad Grocery Store clerks . Thatll be 23. 50. Now. 75, 23. 75, hold em. Hey now do i hear 23. 75 . 24 hey 24 dollar, 24 and a quarter, quarter, now half, 24 and a half and. 75 25 now a quarter, hey 26 and a quarter, do you wanna pay now, you wanna do it, 25 and a quarter sold to the man in the khaki jacket geico. Fifteen minutes could save you. Well, you know. Welcome back, everybody. Making our headlines this morning, las vegass iconic welcome sign will now be powered by the sun. Officials linked solar panels on hours to the glittering neon sign. I guess if theres a place for solar power anywhere, it would be in the desert. Ces is stealing the show in las vegas, tweaking one of the buzz stories of the event. Tmobiles ceo stopped by the at t party uninvited. Cnbc caught up with him yesterday afternoon. This particular day, all i can tell you is the humanity that surrounded me and escorted me out, i said to the woman, do you are you sure that at t wants to throw me out . And she said, yes, in fact, i talked to the ceo and she wants you to leave. So im not sure what that was. The ceo is a woman. Yeah. Tmobile reported a boost in Customer Growth and offered to get this, to pay customers to switch from their rival services. So if you have a contract, they will now pay to buy the contract out. I dont know how they can make the math work, but god bless them if they can. So he wanted to see mclemore . Thats what he said. But he showed up in a pink tmobile shirt. Yes walks around in this pink tmobile shirt with a blazer on wherever he goes. And he crashed the party. Do you think randall would have been pleased with that . I dont know if this goes all the way up to randall. I doubt it. The fwie said, and i asked the security guard, do you really want . And he said i talked to the ceo and she wants you thrown out. Oh, the security guy. Like, okay, the ceo is not a woman, but no, no. Coming up, escaping the cold in style. If youve had enough of the single digit temperatures, balmy, 22 degrees. I said 22 has never felt so good. The pipes in my building part of my apartment cant use certain sinks in two bathrooms. Really . Yeah. Its weird because the building should have been warm all along. Thats what i thought, too. 22 feels pretty good. You just want to bake in the sun. Robert frank has a few destinations to consider, next. [ male announcer ] eeny, meeny, miny, go. More adventures await in the lexus lx, rx, and new sevenpassenger gx. Dare to be spontaneous. Afghanistan, in 2009. On the u. S. S. Saratoga in 1982. [ male announcer ] once its earned, usaa Auto Insurance is often handed down from generation to generation. Because it offers a superior level of protection. And because usaas commitment to serve current and former military members and their families is without equal. Begin your legacy. Get an Auto Insurance quote. Usaa. We know what it means to serve. And it feels like your lifeate revolves around your symptoms, ask your gastroenterologist about humira adalimumab. Humira has been proven to work for adults who have tried other medications but still experience the symptoms of moderate to severe crohns disease. In clinical studies, the majority of patients on humira saw significant symptom relief, and many achieved remission. Humira can lower your ability to fight infections, including tuberculosis. Serious, sometimes fatal events, such as infections, lymphoma, or other types of cancer, have happened. Blood, liver and nervous system problems, serious allergic reactions, and new or worsening Heart Failure have occurred. Before starting humira, your doctor should test you for tb. Ask your doctor if you live in or have been to a region where certain fungal infections are common. Tell your doctor if you have had tb, hepatitis b, are prone to infections, or have symptoms such as fever, fatigue, cough, or sores. You should not start humira if you have any kind of infection. Ask your gastroenterologist about humira today. Remission is possible. Welcome back to squawk box. If the plunging temperatures have you thinking about getting away, robert frank has a few ways to escape the cold in style. And he joins us now. This is fantastic. Yes. This is good escapism this morning. Whether youre wealthy or prewealthy, i picked out good beach places where you can warm up. We start in st. Lucia where today it will be 82 degrees. Its called sugar beach, a new resort. They upgraded this place with a 100 million renovation. Its 100 acres of rain forest leading right down to that white sand beach. You get your own butler. Most of the villas have their own plunge pools, a spa with treehouse treatment rooms, 700 a night up to 3,000 a night. They do have a Linger Longer package as if you need to be convinced last night, allows you a seventh night free. Matt damon rented out this entire resort recently to renew his vows. Its in nicaragua, another place, mukul beach, its the mayan word for secret. 250 million resort, first five star resort on the emerald coast. It has 37 villas, spa, beach club, 18hole golf course. Its pretty inexpensive, starting at 550 a night, getting up to 6,000 a night for a whole estate. If you want to warm up like a rock star, well, get this, in st. Barths, the eden rock rock star villa, it has a four king bed suites, four suites in total. Sun deck, private access to the beach. Butler, personal staff, a choice of cars in the rock star garage and get this, stateoftheart Recording Studio with a console used by john lennon to record imagine. This place, a little expensive, 15,000 to 20,000 per night. When i stayed there, the water in the pool was a little cloudy. Just one butler . Theres the evening butler and the morning butler are the same person . At the rock star villa . For 20,000 a night you should get a butler and four fulltime groupies. Whats the evening guy know about getting you ready in the morning . Its ridiculous. Is there a pool guy. There probably are lots of guys. Eden rock is crawling with staff. Anyway ill put that on my wish list. All these places at 80 degrees or above. That was my main requirement and theres still vacancies. Wow. Are planes taking off right now . Do we know from here or from there . From here. Some of these places are hard to get there commercially, too. I think now that most of the storms are past. Im not talking about teet teeterborough. I did talk with net jets. They gave me a list, palm springs, california, naples, another one is a small island east of nassau in the bahamas. Thats where the rich are going. They dont have to worry about flight delays. Thank you for making us feel worse about where we are this morning. I warmed you up. No, you didnt. Janet yellen making the cover of time. Shes about to become one of the most powerful people on the planet. Find out what she told the magazine about the economy, jobs and housing, right after this. Activist investor Dinakar Singh will be our next guest, right here on squawk. Ld dinine at 25th and hoffman. And the little room above the strip mall off roble avenue. This magic moment it is the story of where every great idea begins. And of those who believed they had the power to do more. Dell is honored to be part of some of the worlds great stories. That began much the same way ours did. In a little dorm room 2713. This magic moment janet yellen speaks. Find out what the incoming chairman is about to say about jobs and the Housing Market. Dinakar singh opens up about his playbook for the new year. And getting hospitals and doctors to convert their files into digital record, well, its proving to be costly. Can the government get this under control . Squawk box begins right now. Its time to begin isnt it i get a little bit eager i admit good morning, everybody. Welcome back to squawk box on cnbc, im becky quick along with joe kernen and andrew ross sorkin. Dow futures up by 64 points above fair value, s p 500 up by 5. 5 and the nasdaq up by 11. The tenyear note yesterday pushed that yield back above 3 , this morning its just below that, 32. 89 . Retailer macys is cutting 2,500 jobs, 1. 4 of its u. S. Work force. It says it will save about 100 million annually. Macys is reporting strong Holiday Season sales and is raising its 2014 earnings outlook. Costco says its resulted were helped by an improvement in online sales. That toing has barely budged today. Apple and samsung have agreed to a mediation session in their ongoing dispute over smartphone patents. Apple chief samsung ceo will be attending that session along with inhouse lawyers. Also the bank of england announced that as expected it is leaving its key Interest Rate unchanged at half a percent. And take a look at the cover of Time Magazine this week. Its a big one in the financial world or should be maybe. Janet yellen sitting down for her very first interview on the record following her Senate Confirmation as the next chair of the fed. The issue hitting stands tomorrow. The 16 trillion woman is the title of the story. Its a great picture. Joining us now, from new york, the author of that piece, rana forooh foroohar, shes Time Magazine assisting managing editor. Steve liesman is also with us. Rana, the big question id have is whether you think that were going to see any real change in her policy. The thing i was struck by throughout the piece was both the issue of unemployment but also sort of, you know, how thats going to be a big issue but on the other side, this sort of all tides lift all boats. A rising tide lifts all boats. Thank you. It was the kicker of your piece. Thats right. I think that youll see a lot of continuity. She was one of the key architects of the later stages of quantitative easing. She was really Ben Bernankes righthand woman, as the vice chair. I dont think youll see dramatic difference in policy. She is someone who stressed again and again shes very concerned about the human impacts of unemployment. She is committed to the feds dual mandate of keeping unemployment low and keeping inflation low. As we all know, theres no conflict between those right now. We dont have a recovery thats Strong Enough to drive inflation up right now. She says, this comes towards the end of the piece, she takes on the issue that shes effectively creating inequality, right . That seems to be the big issue. Weve talked about this at the table. Yes, yes. Well, you know, she speaks directly to the criticisms about the feds asset buying program over the last few years and this idea that its bolstered the markets but what has it done for the real economy . The fed knows this. Theyve been talking about this issue internally. Her belief and theres a direct quote in the piece is that it has done something for the real economy that Monetary Policy can still push the money flow in the real economy, get businesses in Consumer Spending and actually she says shes optimistic that this coming year is going to be a shift and that there is going to be more spending, that companies will get off of that 2 trillion in cash on the Balance Sheet. Right. This is the issue theyve taken on the whole time. You mean inequality. You dont buy it. When you do an allin analysis, you find wealthy people have suffered because of low Interest Rates but theyve gained a lot because of high equity markets. Theyve also benefited from Mortgage Rates being low. But thats also helped regular folks. Ive not seen an analysis, which is really my point, that does an all in and look at whether or not theyve benefited on that or done worse. I also question the idea, what else would you have them do . Right. This is the tool they have. They do not have the ability to distribute money. They have the ability to raise and lower Interest Rates using the funds rate or through using quantitative easing. This is how they operate. This is what they are designed to do. What i thought was interesting here is yellens optimistic outlook. And the question about whether or not she is the same as bernanke is a little bit irrelevant in the following way. I think the circumstances will be different. I dont think yellen and bernanke will face the same set of facts on the ground. I think thats right. And the optimistic outlook is important but what im also interested in is how she reacts to that optimistic outlook. You had gerard on saying the questions to janet are different from the questions to ben. But Michelle Girard also pointed out that, look, if the idea that the economy improves and we did see an improving economy can the fed realistically try to keep this idea with the Forward Guidance that the rates will be low for a very long period of time and does the market buy that. Thats a huge issue. When i asked her about that question, she stressed, well, well keep communicating and tell market we are going to keep rates as low as needed to bolster things. The question is does the market believe that. Is that going to hold . Thats right. I think going to the point earlier, the facts on the ground are going to be different. Theres a lot of consensus right now within the fed when things are going well. The economy is on the upswing. What if europe blows up or theres a big china debt crisis. Greenspan got credit for the dotcom bubble. He may not have deserved it. It depends on what youre taking on what kind of chairmanship youre taking on. Maybe not got credit. Got blamed for it. Well, yes. Did she talk at all about a bubble in the financial markets. There have been critics, a lost critics that said while shes not thinking about that long enough, shes not worried about longer term inflation. I think shes a data driven person. Everyone i spoke to about her, i interviewed 20 people close to her over the years. Shes not an idealogue. Worth reading. Thanks. Theres great anecdotes about her in there. Shes a brooklyn girl. She is a brooklyn girl. Thank you so much. We are going to introduce our guest host. Steve, thank you. Well continue this conversation, too our guest host for the morning is one of wall streets top activist investors. Dinakar singh is head of the hedge fund tpgaxon. What do you think about what weve just been talking about . Will janet yellen be able to keep rates low if wall street thinks the question is improving . You know, were not macro guys but if you start companies, it matters for everyone. We look at rates right now. I suspect the fed will find out that once they start raising the ability to control the back end is going to be not gas they think. Think about the last ten years. Asian Central Banks for the buyers for the treasuries in the last couple years. In a year or two, all three of those will be gone, give or take, right . The incremental buyer will be someone who buys a treasury as a good investment. The gap between asian Central Banks and the fed buying it because theyre doing it for mechanical reasons and an investor buying it because its a good investment with a wide one. Fed controls where the short end trades. It doesnt control the back end. Liesman said the fed had no choice but to do qe. Like we all there are a lot of people who would say the first qe. We never heard of qe. When they first did it where would we be today. I dont know. I dont know what the counterfactual is. Qe 2 and anything that came after that remember when he said this is absolutely shock and awe when they did qe infinity. Yes. The first qe was a novel approach, wasnt it . The first qe we had never done it before here. I think for all this, this is like surgery in a way youve never done before and youre learning as you go along. It was necessary. We were in that bad a shape . I dont know whether it was the best idea or the worst idea. Or delusional. If it got people to the point where they stopped being scared of an immediate shock tomorrow, fine, good enough. You said trying to get out, they may not be able to control it all in. What if the adverse consequences we dont even know yet how we get out there. When youre trying to figure out the dose to give a patient by observation its tough. A little more medicine, see what happens. Sometimes you find the impact is bigger than you think. We are at a point now where at least people arent nervous about an immediate shock to something tomorrow. For the first time in a bunch of years we start in january without people nervous about a shock some place. Maybe thats a complacency. Thats good news. Is it good news or bad news. When we thought there was a shock tomorrow we saw returns of 30 last year in the overall average for the markets. Does that mean its a lot tougher to get returns . I think youre paying a whole lot more and the risk youre getting for are less. The bigger issue as well, theres a price to pay for all this stuff. We talk about the government and rates, actual cost to the u. S. Is paying on its debt is lower than it was five years ago even though the debt is higher. Average Interest Rate was 1. 6 or Something Like that. That means that quarter trillion double triples. For companies if youre time warner cable, its the same thing. Rates have been terrific for earnings. Companies are using that cash to buy back stock, which we like. The only bad news is if your stock price is high and youve levered back up to level with rates, the game gets tougher from here. Dinakar, according to an investor, your fund was up 19 in 2012, up 19 again in 2013. When you look at up 19 , that sounds great. When you look at an index fund being up 30 , its been tougher for hedge funds to market themselves. The point of a huj fuedge fund y and maintain and not get sucked into dips. Is it harder to get clients to come in when you look at market returns . I think it depends what you do and whether people believe what you do. We run long and short both. Markets being up on the margin hurts us. People get excited. Your shorts get squeezed, all that sort of good stuff. On the other hand if youre running huge net exposure and up 19 and the market was up 30, that doesnt sound good at all. I think its a tougher year for Hedge Fund Investors to figure out what to make of their Hedge Fund Returns and based on that, what to expect going forward. Premarkets dont go up 30 a year or 20 or 15 over the long run. Trying to figure out where you on the equity market cycle couldnt all your longs go down and shorts go up . Yes. How do you know youre not exposed . I guess you said that, you have to believe we know what were doing. I think everyone has turned the dial up on how bad things could be. And tried to position their portfolio to withstand a bigger shock than before. You feel versus the index, the s p itself, thats 100 expose even youre only 15 or 16 exposed . Correlation. Typically you end up having the correlation be a little bit higher. If you were really bad, every long was down and every short was up, youd be 100 exposed too, wouldnt you . Sure. I think at some point if you have enough liquidity, at some point it will work its way through. I dont know where the market settles, higher or lower. Wherever it settles if people are call for one day, people are doing just fine. It would have been nice to have shorts in 08 and 09. Yes. I think you need to make sure you can hold them. If you cant hold your ground and youre forced with liquidity at the worst time, the fact that youre going to do this in the long run do you buy that for the whole industry. 2 and 20, just the average hedge fund to do 19 when the market is up, 30, its tough to explain. True. Over the last years we were up 38 give or take. Thats not far from the market even though if you can be roughly in line with the market in the two best years in a long time, no one is going to give you a long time. The flip side is what happens next year. Its hard to generalize about all funds but do you really think everybody is not that correlated . Its a huge spectrum. How are many closet indexers. If you look at the hedge fund business, the long short portion has become more and more net long. Its 50 long and beta on top of that. Hedge funds, the long short funds did a whole lot better because stock picking was a Good Environment and partly because theyre more long. Funds that were less long did well. So multistrategy funds, macro funds, eventdriven funds, depending on the type, Single Digits to the low teens. Dinakar will be with us for the rest of the program. Hes our guest host today. Cutting calories. Find out how much the nations top Food Producers have trimmed from their products in a very short amount of time. Then the flip side, a machine that can add to your waistline but it would be worth it. Progress in fast food. Squawk box will be right back. [ male announcer ] at optionsxpress, our clients really appreciate our powerful, easytouse platform. No, thank you. We know youre always looking for the best fill price. And walk limit automatically tries to find it for you. Just set your start and end price. And let it do its thing. Wow, more fan mail. My uncle wanted to say thanks for idea hub. He loves how he can click on it and get specific actionable trade ideas with their probabilities throughout the day. [ male announcer ] open an account and get a 150 amazon. Com gift card. Call 18882800149 now. Optionsxpress by charles schwab. Welcome back to squawk box. Making headlines, a study find something of the nations longest Food Companies have far exceeded calorie cutting goals. They cut the equivalent of 78 calories per person per day. The total is more than four times the calories those Companies Cut to pledge next year. They also kraft, kellogg, cocacola, pepsi, hershey and conagra. Pepsi cos ceo indra nooyl will join us tomorrow. Nbc channel 4, theyre doing this story. Immediately, to me, it was just earth shattering. An explosion went off in my head. If you love burritos as much as i do, the next story is for us. Welcome the burrito box. Its being billed as the worlds first burrito kiosk. What . Automated. Five different varieties available for 3. The first kiosk is located inside a mobile gas station. Theres an interactive touch screen menu that lets you choose between flavors, then adds sour cream, tabasco sauce, guacamole, any of that. The machine plays a music video as it warms your food. Ive said in the past, andrew doesnt believe that the si singularity is possible, that we could eventually choose how long we want to live. Youre telling me the machine adds the sour cream and guac itself . I think they have it prepacked and theyre heating one up. The greatest world we could create. It does not commute. We have to look into how this burrito box works. Thats not the same as buying sushi at a gas station. No. Thank you. The condiments come out separately. All theyre doing is warming the burrito. You shouldnt be buying commandments s anyway at a g station. All it does is heat up a burrito. Another side of spend a little more money in walgreens, will you . Another side of Health Care Reform thats hitting a rough patch. We dig into the waste surrounding the effort to digitize medical records. Squawk box will be right back. Aflac aflac got em. Yeah, hes clean, boss. Now listen to me, duck. I have an associate that met with, uh, an unfortunate accident. While hes been incapacitated, somebodys been paying him cash. Now, is this your doing . Aflac . Now, if i met with some such accident, would aflac pay me . Nice. This is your stop. [ male announcer ] find out what aflac can do for you and your family. Aflac . [ male announcer ]. At aflac. Com. Over the pizza place on Chestnut Street the modest first floor bedroom in tallinn, estonia and the southbound bus barreling down i95. This magic moment it is the story of where every great idea begins. And of those who believed they had the power to do more. Dell is honored to be part of some of the worlds great stories. That began much the same way ours did. In a little dorm room 2713. This magic moment i losim a year short ofbably qualifying for my retirement. They had some cutbacks. I was the most skilled technician and also the highest paid. For my unemployment to end now, i wouldnt have money to go on an interview. My retirement is going away as a result of this. I do have a husband, thank god, or i would be homeless. Tell republicans restore Unemployment Benefits now. Amazon started in a garage. Hewlett packard, and disney both started in garages. Mattel started in a garage. The ramones started in a garage. My point . You never know what kind of greatness can come out of an american garage. Introducing the 2014 motor trend car of the year. The all new cadillac cts. Aint garages great . Now the answer to todays aflac trivia question. Which country was the first to fully legalize marijuana . The answer, last month uruguay was the first country to legalize marijuana. Aflac. Obviously one of the first states to do the burrito machine. Colorado. Colorado. I mean, when you think about it. The federal government spent more than 22 billion to incentivize hospitals to convert their files into digital records but a new report shows some of the systems that the government is subsidizing dont even meet its own standards. Here now with more, dan haley, Vice President of government and Regulatory Affairs at athena health. At athena health, is that our buddy. Thats our buddy. Billy bush. Whos now on sabbatical. Jonathan says hi. This does not surprise us because weve had jonathan in a few times. But just go into exactly what youre talking about and how bad this is. Sure. Well, what the study that just came out this week indicates is that or found is that theres a potential that Electronic Health records could be used to commit medicare billing fraud. Which isnt a new concern. Its an important concern but it isnt a new concern. The same finding was made by the centers for Public Integrity a year and a half ago. Whats important to note is that what they found is a potential for doctors to use, misuse, Electronic Health records to commit billing fraud. Like any powerful tool, an Electronic Health record can be used for its intended purpose, improve patient care, or misused. Just like a baseball bat can be used to hit a ball or break a window. The important thing is, there are safeguards to built to prevent fraud. Thats called the criminal justice system. Whether a doctor commits fraud using a pen and paper or an Electronic Health record, youll be prosecuted and face jail time. Technology doesnt commit fraud. People commit fraud. What concerned me about the New York Times article this week is 22 billion have in fact been spent by our federal government, real dollars, not potential dollars, not theoretical dollars, real dollars to incentivize doctors to adopt and use meaningfully use Electronic Health record technologies and a lot of those dollars are being used to subsidize systems that, frankly, dont meet the standards that the get set for its own program. Weve got Main Medical Center recognized say 13 million loss which is huge for them. They are laying off hundreds of people, fired their cio, all tied to implementation of their Electronic Health record. Youve got a small hospital in montana just this week suing a major Electronic Health record vendor specifically because that Health Record does not meet the federal standards. Whats most frustrating, we spent a lot on obamacare and when that came down to it, it didnt meet the standards of the government. Heres another 22 billion. Like so many things that the government does, it seems like a good idea. Whos going to disagree or argue with Electronic Health records . Why dont they make it at least live up to the standards theyve put into effect in the first place. 22 billion, if it didnt work, its wasted . 22 billion and counting. I hasten to add not all of that 22 billion is wasted. There are plenty of doctors and hospitals who are effectively, meaningfully using Electronic Health record technology. It gives unethical people a chance to they can get around it. Well have to cut it short. Youll have to come back. We love athena health. We dont care who we get from there. We need more private sector it helps us understood. We love squawk. Thank you. Appreciate it. Good to see you. Take care. When we come back, we have another snapshot of the nations labor market. We take a look at at layoffs in the work force during december. And marco rubio declares war on poverty, the details at 8 00 eastern. Stick around. Squawk will be right back. Well another great thing about all this walking ive been doing is that its given me time to reflect on some of lifes biggest questions. Like, if you could save hundreds on Car Insurance by making one simple call, why wouldnt you make that call . See, the only thing i can think of is that you cant get any. Bars. Ah, thats better. Its a beautiful view. I wonder if i can see mt. Rushmore from here. Geico. Fifteen minutes could save you fifteen percent or more on Car Insurance. [ male announcer ] eenie. Meenie. Miney. Go. More adventures await in the lexus lx. Dare to be spontaneous. The challenger jobs report is out. Steve liesman joins us. The more input and data we can get on jobs, the better. December cuts total 6223 and it is the lowest monthly jub cut level. John, i went back and looked and these are late 1990s or mid1990s employment numbers here. These are very low. You know, steve, if i were a keynesian, i could be telling the government and the fed to get its foot off the gas pedal right now, not go into 2014 with a sense were still going to keep stimulus going, hoping that unemployment will go down even further. This engine is really rolling. John, lets talk about total cuts for the year. 509,000, down 13,000 from 2012. There was a number, the total number, the best since 1997 . Yes. We havent seen cuts this low since, like you said at the beginning, back in the late 90s before the dotcom crash, layoffs were low, the economy was really rolling. Think about that. Thats a 97 number. Weve been into this recovery for five years, not recovery but this expansion, its just been a slow expansion. We dug such a deep hole that unemployment is still high. Theres a lot of people still unemployed, 11 million, right . Is it does seem like all the numbers are pointing positive. John, i want to pick up on that. I think a little exception to what Michelle Girard was talking about in the last hour when she was saying theres one number out there. There are now four good numbers on jobs here. Let me tick them off, the adp number, 217,000 over the past three months. It is meaningful. Both employment indicators in the isms, manufacturing and services where it rose in december to high numbers. Nfib, yesterday afternoon i reported the best jobs numbers since 06 and gdp is suggesting improved job growth. John, i need to use your knowledge to do the other side of this. Where were the job cuts . Well, job cuts in december came out of electronics. We saw retail cuts, the macys cuts today are an example of what happens after the season is done. Some companies kept some of their stores open. Well see more of those cuts . January to take advantage of the Holiday Season, but now they start to cut them. Weve seen banks cutting their mortgage, kind of refinancing, foreclosure areas. They dont need as much of that anymore. These seem to be the normal cuts you see happen even in good times. Where werent there the cuts . Where are the places people are out there looking for work now . What industry does this data show they should be focusing on . Well, the areas of the economy we know are strong, even though health care cut jobs, we know thats a longterm job creator in this country. Jobs are consistently created, month after month. Professional Business Services has been taking off. There are many sectors of the economy right now that are adding jobs. Yes. One other area, john, i noticed was the government cutbacks were reduced this year. That was another area where there was somewhat better results in terms of job cuts. Well, again, if you are a keynesian, you might say, all right, keep on cutting, government, lets take some of the fiscal pressure off, too. This is the time we want to try to get at those kinds of issues. The economy will roll right into full employment. Maybe thats a couple years out but its rolling. John, thanks very much. Youre the second job expert in two days to tell us that that we have an upward shift in the job market. Well obviously see if thats the case when we look at the jobs numbers on friday. We get jobless claims at 8 30. Steve, thank you. Pleasure. Challenger going with the sweater under the jacket, sorkin. See that . Good luck, right . I dont know. I got one look. I have one look. Although im going to have sweaters. Im in a sweater of the month club in davos. Theyre putting together combos for me. I feel pampered. Its very cool. Lets get back to our guest host for some of his top stock picks of the year. Dinakar singh is capital founder of tpgaxon. If the u. S. Was totally outlandishly in bubble territory, it would but at this point, you dont think its cheap but you could still find some things here . Absolutely. Look, i think for us, we want to make money by picking stocks but we look around the world and try and think through where we think things are unusually cheap and where theyre expensive. If you look at the u. S. And japan, which is a market we talked about last year as being one of our favorites, things arent that cheap anymore. Almost every good stock is 15 and 20 times earnings. If i have to make money i have to find a place where the e will change or the p e will get rerated a lot. Something meanleful has to change. Japan, we still love because the market isnt cheap anymore. But its one place in the world where many companys have low margins. You can find Companies Like hitachi where margins could double over the next few years. You cant find that in the u. S. Anymore. Ha hitachi is in the middle of their cycle. Macys, the Department Stores arent a category, meaning people hate Department Stores. Theyve traded at low multiples. They look at the aggregate numbers and say Department Stores are losing share. Whats that missing is there are two good ones and two bad ones. Theyre losing share in part to macys and Companies Like dillards. Macys, for example, trades, we think its 11 times earnings. Every other retailer of any substance trades 13 to 20 times earnings. Macys is doing better than the gap, better than limited. Betterlooking ceo. They are crushing it in terms of cash. Theyll buy back half their market cap. This stock creates 11 times earnings. Huge discounts to macys, gap, limited, you name it. You can see the stock be up 40 over the next year. Hospitals which i think another topic of the morning. Thats a part of the health care you like. We think hospitals are the biggest winner for obamacare. People have been uncertainty about health care programs, theyve basically held off doing things. People getting procedures . Yes. Youve seen shockingly bad admissions in hospitals the last four or five months, partly random, flu season and things like that. Partly because people dont know whats happening to their health care programs. Community health is turning 11, 12 times earnings. If theres more insurance money for people to go and pay their hospital. No one will check anything. Hospitals will clean up. I think for us, thats one of the mull plier, 10, 11 times earning earnings. Energy sector, here to a case where you can buy a company for 6, 7 times cash flow, we think ebitda will double over the next five years. With all the noise behind it, now its going to be a boring Growth Company going forward. The u. S. , the bad news is, lets say the fed is right and rates will be at 4 in four or five years. Most multiples and sectors in the market are probably 10 plus percent above where theyve been. Four or five years from now, rates are normal and multiples are normal, your entire return in the s p will come from earnings growth. Maybe thats 8 , maybe 10 , 7 . I think its 30. Look back over the last five years, first margins are covered, then valuations are covered. If people in the 80s or 90s could have signed on to 4 , they would have run the multiples up up. You know doesnt the discount the cash flow model. 4 short rates mean you probably have. Youre talking about short rates . Yes. By the way a normal 7 or. Thats normal. Market of a high teens multiple isnt crazy. Thats where it is now. It strikes me that most of your return in the s p in the next four years is going to come from earnings growth. And youve seen the big step up in margins, thats already happened from the bombed out levels of 09. You see the big step in valuations happen, the last year or two. Its got to be growth that drives it. I think where were more bearish than the average guy, it strikes me that the last couple of years profits have been above growth. When i look at many companies, it strikes me you could see the reverse going forward. As rates drift higher, competition picks up margins we see the Revenue Growth that wont go to the bottom line as much. Yes. We have another hour and 20 minutes. Stick around. Where are you in energy . There must be a specific place with the fracing and all that. Well come back to that. Mario draghi, hell be speaking and monitoring his comments. At the top of the hour, senator marco rubio shares his plan to redirect funds directly to states and why he says the Current System is a failure. Squawk box coming right back, after this. D tablet approved to treat symptoms of bph, like needing to go frequently. 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 allergic reactions like rash, hives, swelling of the lips, tongue or throat, or difficulty breathing or swallowing, stop taking cialis and get medical help right away. Ask your doctor about cialis for daily use and a free 30tablet trial. Isnt it time you discovered the sleep number bed . The only bed clinically proven to relieve back pain and improve sleep quality. And right now, its our lowest prices of the season. Save 300 to 800 on our newest innovations. Plus, 18month special financing on all sleep number beds. Only at a sleep number store, where queen mattresses start at just 699. 99. Sleep number. Comfort individualized. Afghanistan, in 2009. On the u. S. S. Saratoga in 1982. [ male announcer ] once its earned, usaa Auto Insurance is often handed down from generation to generation. Because it offers a superior level of protection. And because usaas commitment to serve current and former military members and their families is without equal. Begin your legacy. Get an Auto Insurance quote. Usaa. We know what it means to serve. Welcome back, everybody. The bank expected to maintain a key lending rate of a quarter percent. Joining us right now is the president of the Peterson Institute for International Economics and a former member of the bank englands rate setting Monetary Policy. We put these things aside, thought things were getting better. When you look at whats happening with the overall economy, is this something we need to start paying attention to. Its robust stagnation. They put a floor under things. Nothing good will happen. Theres a ceiling on growth because of the slow wage growth and the tight fiscal policy. Very little structural forum. It will take five years to pay off where it exists. Theres issues in the euro area. The only issue really remaining is this asset quality review, their term for trying to do the stress tests on their banks. That will take place over the summer into fall. The ecbc has come out with that decision. Its left rates unchanged. If you look at the eurozone versus whats happening in the United States, versus whats happening in japan, versus whats happening in china, do they get left out on this . They certainly do. They are the laggard. The ecb should be doing something. What should they be doing. They should be aggressively trying to get credit out to small, Medium Business throughout southern europe, particularly by intervening directly to help liquidity in certain banks. Theyre in charge of the bank supervision. They should be forcing new capital to be put into the banks and get that over with so the banks are not withholding lending. You think theyre not doing it because its a weaker organization than the fed, than the bank of england . Because youre dealing with so many countries that have a seat at the table . Its a fair question. Unlike the bank of england when i was serving there or the fed, those are both very much subject to the elected legislature. You can change the rules on them at any time. The ecb is protected by international treaty. Nothing can happen to it. Its the most independent central bank in the world. Its true, however, there is a germanled voting bloc that is blocking activist policies. Thats another reason they didnt move today. Theres a new german person on the board and she was in the going to let anything happen in her first meeting. So the germans have been putting up these walls, maybe thats part of the problem. Yes, its part of the problem. Its also ideological that they dont believe in the kinds of interventions that have been successful in the u. S. In japan and arguably in china. We always say you cant argue the counterfactuals. When people start questioning what the fed has done, what other Central Banks have done, is this almost the counterfactual because they havent done these things. Thank you for putting it that way. I heard earlier today joe talking about this with your guest, talking about the fed doing this unprecedented thing and we still dont know whats going to happen. Thats nonsense. Central banks have been buying and selling securities, private securities he was talking about the qe infinity. It wasnt infinity. Its still a small portion of gdp even though its larger than it used to be. As Milton Friedman told us, money supplies only matter as far as the Financial System transmits it. When velocity picks up, the fed will have to pull back. The more velocity, the more health, the easier it is for this. Why did we never hear of qe . Because the japanese chose did miller ever did it . William Mckenzie Martin did it in the 50s and 60s. They were buying . Government bonds but they were also discounting a huge range of bank notes in the same way the bank of england did. Historically it was larger in size but we also have a larger crisis. Would you argue there was no option . You always have an option but it was the best available. What did a Balance Sheet go up, ten times in value almost . It happened in a period where we never saw a recession was bad. People argue that the late 70s, early 80s was bad. It was a different nature of recession. The pain seemed to when you had stagflationary recession when supplies are cutting back, its not just demand shock. When its about oil prices coming up, not about a panic in the markets, theres a different response. The fed screwed up in the late 70s. We never know whether the fed is crewing is up until five years after they do it. I think were now five years out and the record is that the bernanke fed didnt screw up. I dont know. Why hasnt it been done before . For many countries outside the u. S. , if you tried to do this, your currency would fall apart. Why didnt korea just do qe in this whole nasty crisis thing . If they did, it would be a disaster. Youre absolutely right. A small country and a country without fiscal monday tear credibility cant get away with it. There are a lot of countries that can. Japan has done it. China is doing it. Uk is doing it. You couldnt do it with it a bitcoin. Your bitcoin would be worthless. We have to jump to a break. When we come back, dinakar can finish that thought and hell share some of thinks targets to for next year. Back in just a moment. Im beth. And im michelle. And we own the paper cottage. Its a stationery and gifts store. Anything we purchase for the paper cottage goes on our ink card. So you can manage your business expenses and access them online instantly with the Game Changing app from ink. We didnt get into business to spend time managing receipts, thats why we have ink. We like being in business because we like being creative, we like interacting with people. So you have time to focus on the things you love. Ink from chase. So you can. Of the dusty basement at 1406 35th street the old dining table at 25th and hoffman. And the little room above the strip mall off roble avenue. This magic moment it is the story of where every great idea begins. And of those who believed they had the power to do more. Dell is honored to be part of some of the worlds great stories. That began much the same way ours did. In a little dorm room 2713. This magic moment welcome back to squawk box. We get back to Dinakar Singh. Hes with tpgaxon. You were trying to say what . Before we left this conversation. I was just saying on the rate side, overall, the u. S. , whats happened the last couple years, qe was risky because people worried it could end up with inflation and cause the dollar to weaken and money to flow out. It didnt really happen. Imagine someone taking steroids, he took them and nothing happened. Youve been saying steroids are bad but nothing has happened so far. The question whether theres going to be a price to pay later on or not well see. At some point, a country cant do this forever. Dinakar, the bigger thy neighbor. Whats not politically incorrect . When youre the best house in a bad neighborhood, thats what happened. They gave us cover, the rest of the world fell off a cliff which gave us cover to devalue our own currency but they were devaluing quicker. Thats a great point. We left japan for stock picking. Things were changing. The u. S. And with it, china and Everything Else devalued while europe and japan sat there. People talk about low rates in japan. The reason why jjb did very well is because people were smart. If you could get 0 in a currency that goes up 20 or get 5 currency in a currency that goes down 20 . Whats happening now is interesting. Youre seeing now that the game is changing for the first time japan is saying, wait a minute, were not going to play this game, were sitting out while youre playing this game, were going to get involved, too. You see them juice the economy up. Do you think what theyre doing is to the extreme more so than what weve done . Yes. And does it end badly . I dont disagree this year may not be a bad year in japan, it may be a great year but i wonder what happens in the year after. In a much different way than i think about the United States. One reason why im more cautious than the average person is because there are things that have been settled down for now. In a year or two are going to get much more controversial. Right . On all fronts. Its true in europe and japan. They are good answers, these equations. You could see how this could work out well. Its going to become more of a drama and discussion. I think in some ways were in a sweet spot right now. Do i worry that youll have seen the growth stepup happen and youll get closer towards the bigger questions on these issues. I dont think it will get back to 09, 10, 11 issues. Even the recovery is getting long in the tooth historically. Yes look, from a bad point. Yeah, right. Some of this, the markets get some of this, europe, if you look at europe, consumers traded big discounts. People forget the fact that domestic europe is a problem. We continue our conversation with dinakar after the break. That is not fair. It says joe there and it says up next. Am i joe . You are. You are leading an interview by the way as well. Up next, senator marco rubio lays out his plan on how to take on poverty. And a traffic nightmare for governor Chris Christie. Who thought this would be a scandal . Lane closures sat the gwb used as possible political revenge. So ally bank has a raise your rate cd that wont trap me in a rate. Thats correct. Cause im really nervous about getting trapped. Whys that . Uh, mark . Go get help i have my reasons. Look, you dont have to feel trapped with our raise your rate cd. If our rate on this cd goes up, yours can too. Oh that sounds nice. Dont feel trapped with the ally raise your rate cd. Ally bank. Your money needs an ally. Gaining the upper hand on the fight against poverty. Real Free Enterprise is about a broad and growing economy that creates opportunities for everyone. Senator marco rubio joins us to discuss how the federal government can get states involved in this 50year war. Booze news from beam. We talk bourbon and why a highprofile entertainer is now backing the company. And the Rocky Mountain high just got a little higher. Is that a joint, man . That looks like a quarter pounder, man. And a price that is jane wells with a look at how colorado is handling the extremely high demand for Recreational Marijuana use as the final hour of squawk box begins right now. Colorado Rocky Mountain high ive seen it rain and fire in the sky welcome back to squawk box here on cnbc, first in business worldwide. Its murphys law. I wish you wouldnt say that on air. I know i cant say that. Im joe kernen along with becky quick and andrew ross sorkin. Well bring you the numbers and the market reaction. The futures right now are positive. I want 11 s p points. I dont know how long my extension is. Double the gains youre looking agent right now potentially. Yes. Got to double. Thats possible. We get back to we close maybe extend for two years. We need 1849 on the s p to be up for the year. And then maybe january, you know, doesnt know that it was only six days instead of five days. Maybe it thought the first full trading week. May be able to fool january and then set up for a good year. This is total wives tales. Its not an ironclad rule. It doesnt have to be. I like to stack the deck. I got it. Lets talk about some of our headlines this morning. The ecb and the boe are both keeping Interest Rates unchanged. The ecb president mario draghi is set to have a News Conference at 8 30 eastern time. Retail stocks on the move as well, macys shares rising. The retailer is cutting 2,500 jobs as part of a reorganization and offering an upbeat, fullyear outlook following a strong Holiday Shopping season that stock is up better than 6 this morning. Our guest host, Dinakar Singh was talking about this, too. This is a major position for him. You think this could be up how much this year. We think 40 is base case. Earnings solidly in the 4s. And they would if they traded at a 13, 14, 15 multiple, which is far lower compared to other retailers oob youyoud still be some money. Increased liquidity, positive business performance, increasing dividends have 12. 5 cents a quarter. It was 40 cents a year. Its know going to be, i quickly deduce 25 of 40. The new yield will be 25 above that. Right . Youre looking at 2. 4, add about 65. 6 add 65 basis points. 3. 1, 3. 2 will be the new yield. Thats a significant, you know, if you believe that its going up, you get 3 , thats where the tenyear is anyway. Well talk to phil lebeau about that in a moment. In the meantime, a couple other stocks on the move, l brands. December samestore sales rose by 2 . That is below what the street had been expecting. It cut Fourth Quarter outlooks citing lower margins. They had to offer sales to get things out the door. Shares of Family Dollar under pressure, the retailers earnings missed by the mark by penny and cut fullyear guidance. Its falling short of consensus. That stock is down by better than 7 . 61. 50 is the last trade. Get comments from phil on this. I dont remember the whole history of did ford cut the dividend at some point . I dont know what the high alltime was but i do know, not only did they cut it, they eliminated it for a number of years. Creeping back here. 2007 all the way through i think they brought it back in 2011, late 2011 or early 2011. And they moved it first it was a nickel, moved it up 10 cents last year. So this is part of their game plan of putting some of that cash that they and the other automakers have all put up pretty good numbers. They have a good cash horde and are putting that cash back to use. One interesting note here, when you take a look at the ford family and its shares and how much of the common stock as well as the class b stocks the ford family, theyre the only ones who own it, when you look at that, this dividend here basically increases were a payment increase of 34 million for bill ford. So for a lot of people who sat there and said, you know, the ford family is not getting anything, not that they were feeling sorry for the ford family but during the lean years they didnt take anything. Now theyre getting some of that pay back, if you will. Yes. You know, whenever you have a like named ford at a company like ford you dont expect him to do a lot of the stuff he did. Hes an exception to the rule. I think maybe he was which generation is he, fourth or fifth . He got beyond some of the bad genes of the first generation heirs. Hes been a phenomenal ceo not a ceo, obviously. He was a for a while. No ego. He handed that off to mulally. Thats what youre supposed to do. Fault them for getting a little out of the company at this point. Hes fourth generation, just so you understood. Fourth. Yes. Just so people understand also, he should get more credit than he probably does get for the fact that he knowingly stepped aside when he realized he was not the person to run that company day to day. He went outside the box by bringing in mulally. How many guys named ford would have done that. Thats the point. Thank you, phil. Okay, guys. Dinakar, youre a new jersey boy. I am. Originally. Political news, bridgegate dominating the headlines, new jersey governor Chris Christie coming under fire after emails suggests that one of his top aides pressed for traffic problems in the city of fort lee. The mayor declined to back christies reelection. The closure of the access lanes to the busy George Washington bridge created massive gridlock. I experienced it myself and sparked a state investigation. The lane closure were politically motivated, here is christie responding. I worked the cones, unbekn n unbeknownst to everybody. I was the guy working the cones out there. You really are not serious with that question. Fort lees mayor was on kudlows program last evening. Calls are going to be made. Call the families that waited two to three times longer f eern ambulance to arrive while a loved one was clutching their chest. Call the thousands of parents who couldnt get their kids to school on time for the first day of school and the three or four days thereafter. Call those people who had to deal and endure this. We will see where the scandal ends up. Two heads have rolled so far we think . From the port authority. But not as part of his administration. So the question is going to be they were political appointees. The question will be if heads roll inside the administration. If heads do not roll from inside the administration, there will be problems. One was a friend from high school. There were pictures of the two of them. I wonder if someone rolls on christie. Coming up next, booze news this morning from beam, the companys president will join us after the break. As we head to this break, check out the squawk box market indicator. Welcome back. How is everything . Theres nothing like being your own boss and my customers are really liking your flat rate shipping. Fedex one rate. Really makes my life easier. Maybe a promotion is in order. Good news. I got a new title. And a raise . Management couldnt make that happen. [ male announcer ] introducing fedex one rate. Simple, flat rate shipping with the reliability of fedex. Welcome back to squawk box. If you arent familiar with tequila, get ready, the beam brand about to bring sexy back. Not really. With a new celebrity partner, you were hearing Justin Timberlake before. The Spirit Company north american president bill newlands joins us this morning. Youre teaming up with Justin Timberlake for sauza 901. Is what its called . Exactly. Everybody seems like p. Diddy has his own tequila. Why has tequila become the thing that every celebrity wants to be part of . I think one of the interesting things about justin and what he did, hes interested in tequila. He went to halisko and put together the taste profile of what this could be. He came to you or you came to him. He started this himself. He was looking for someone who could build brands and bring the marketing and sales muscle behind a great product he put together. How does Something Like this work . Do you pay him a licensing is an endorsement celebrity fee . Does he take a cut of every sale . Not at all. How does this work . We jointly own this. So this is really he was the founder of the thing. Weve had Great Success when weve dealt with founders. Were much more interested in founders than we are with celebrities. The fact that he happens to be a celebrity is terrific. Hes got 30 million followers on twitter. Which is great for us. But what we were excited about is hes the founder of the business and he put together a great product which we think we can leverage along with our sauza brand. You dont think tequila is a crowded market. Not really. Tequila has changed quite a bit. It used to be a margarita or a shot occasion. Its turned into a sipper, much like you see bourbon is the hottest category in our industry today. Thats been a sipper product as well. So you get to the point where people are appreciating tequilas for the differences that exist within them. Right. Final question, Justin Timberlake isnt isnt Justin Bieber but do you worry about the age issue in terms of marketing to young people . Were always careful with that. We are probably at the forefront of our industry of making sure that we are doing all of our marketing to people of age. So this is an important aspect for us. All of our efforts and Marketing Efforts will certainly be focused on people of age. Thanks for joining us this morning. Appreciate it. Thanks for having me. You bet. Still to come within marco rubio on his fight against poverty. Squawk box will be right back. Barreling down i95. S this magic moment it is the story of where every great idea begins. And of those who believed they had the power to do more. Dell is honored to be part of some of the worlds great stories. That began much the same way ours did. In a little dorm room 2713. This magic moment make it happen with fidelity active trader pro. Its one more innovative reason serious investors are choosing fidelity. Call or click to open your fidelity account today. In my world, wall isnt a street. Return on investment isnt the only return im looking forward to. And my parachute definitely isnt golden. [ male announcer ] for some, every dollar is earned with sweat, sacrifice, courage, which is why usaa is honored to help our members with everything from investing for retirement to saving for college. Our commitment to current and former military members and their families is without equal. Start investing with as little as 50. It has been 50 years since president Lyndon Johnson decleared war on poverty. Senator marco rubio is continuing this battle on capitol hill. At least were talking about it again. Joining us now, florida senator marco rubio. Good morning. Its such a its not just poverty, senator. But we want a vibrant middle class. Right. We talk about income distribution. Its really a paradoxical discussion that we have again and again. And republicans ought to have a much better story than theyve had in the past, especially with what has happened to people in need over the past five years, because the people that the president so wanted to help, if you look at metric, food stamps, disability, participation in the work force, you look at any of those things, you would say theyre headed in the wrong direction. Simply widening the safety net to a much greater number of people is not what any of us wanted in this country. Yet the republicans seem to have a hard time getting that message out. Well, again, we hope not. We hope that will change. Heres the problem as i see it. The problem is not simply the income and equality that the president is focused on, the problem is opportunity and inequality. The cashier at a Fast Food Restaurant makes less than the e consider of the company. Thats not the issue. The issue is if that person working caz caas cashier gets s there forever without the ability to move up. We have to address the structural causes of that lack of opportunity. And they are social, they are educational. They are economic. And the problem with our current safety net programs is that they help alleviate some of the pain of poverty. They do absolutely nothing to help people emerge from that poverty. Right. Thats what we should be focused on getting out of. To succeed, senator, we need people to succeed by having an opportunity to work in the private sector and to earn their success. Right. And to do well. But to do that the government anything that we get the government to do to try to make it easier to succeed in the private sector, a lot of times its counterproductive. We need to find ways that the government can be productive. Not counterproductive and whether its education, immigration, whatever you need to look at. A lot of times the government is so ineffective at doing anything that we waste money trying to help the people but no one connects the dots when end up in a worst position than they were. In order to help people have more mobility you need to do two things. Have a vibrant private market creating these better jobs. Right. You have to have people with the skills and capabilities to do those new jobs, particularly in the modern economy where the higher paying jobs all require a higher level of education than ever before. Theres where the gap exists. We are not accurately or effectively delivering to people the skills they need for the middle class jobs of the 21st century. For example, this is one thing i want to focus on. If youre a 30yearold single mother working full time and raising your kids you cant just drop everything and go to a university for four years. Weve got to figure out a way to allow her to access skills while she works full time and raises her family, because thats the only way shes going to triple her pay. And are the things i want us to focus on. That is where government can be effective. We cant forget the first part of it, policies on regulation, on the National Debt and taxation that also create and foster a vibrant private market thats creating these betterpaying jobs. We know now this is going to be an issue that the opposing party of yours wants to run on at this point. So the republicans, you know, better get a decent plan together instead of just, you know, cut taxes, help corporations and that will eventually trickle down and, you know, the middle thats not Free Enterprise. What you just described is not Free Enterprise. Thats corporatism. I believe in Free Enterprise, not corporatism. If somebody has a better idea, they can quit their job and put their boss out of business by telling a better story. People associate that with corporatism at this point. But in the back of everyones mind, you know that private sector jobs are what generates taxes to fund the government to allow us to help everyone. So theres a chicken and egg thing. Sooner or later you just cant escape it. Im trying to thats not on the back of my mind. Thats on the front of my mind. Of course you have to have a private sector job creation. It didnt go too well for a party that should have been able to explain that better. In 2010 the republicans took a majority in the house based on rejection of big government. The 2012 president ial elections didnt go well. But i is sure you, there are defenders of corporatism in the democratic party. Heres the question. Most of the jobs being created db not most but a large percentage are lower wage jobs. Its the reality of where we live today and unfortunately these jobs are not stepping stone jobs. The job had people said you go to work at mcdonalds and thats where you start or you go to work at walmart and thats where you start. Thats no longer the case. Thats a fundamental problem. It is but im trying to understand what you do about that in a meaningful way. Education is one thing. I wouldnt dissuade you. Its a great way to go. Its a 20 to 30year i dont think youll see the results of that for 20 or 30 years. Im curious what you do right now. First of all, i dont believe youll see the results in 20 to 30 years. I think youll see them immediately in terms of empowering people being able to fill some of the jobs to be open. Beyond that the jobs youre describing are accurate, many of the middleincome, lowerskilled jobs have been outsourced or have been replaced by technology. The truth is, though, some of the higher paying jobs are being created through a combination of factors. Number one is lack of a qualified work force. Number two is we are in many cases deporting or asking to leave some of our scientists and potential job creators through our broken immigration system. Number three, i would say we have a tax code and a regulatory code that is incentivizing investment and reinvestment of profits overseas instead of here in the United States. We have got to change those things. You mention that third. You know, thats what i mean. It used to be that would be first. In the real world that probably is a pretty good answer, that you need to make us more competitive, our companies more competitive in this country because its a Global Economy right now. And the more we can do in terms of regulation and tax policy and territoriality and all that, the more we can do, sooner or later would probably help us get down the Unemployment Rate and help us jen right those jobs. Right. You mentioned it third because you cant say that given the history of the last couple of elections. You have to do all three. Thats my point. You need the money to do the first two. You need to do both. The point im trying to reiterate, youve got to do both. Have a healthy, vibrant private market. We dont. You have to have people with the skills and capacity to do both. We dont have a government thats doing that, unfortunately. Correct. Thats what were trying to do. The headlines are covered with stories about governor Chris Christie. The take on all this is that hes a bully. Do you agree with that assessment. Im not going to comment on that story. I dont know anything about it other than a couple headlines ive seen. Well let new jersey focus on that. You say its a new jersey issue. It becomes a party issue, no . No. Im not going to comment on every story and every controversy in the country. I mean, like i said, theres a process under way, the legislature is looking at it, governor christie has made a statement. This thing will work its way out. Im not going to comment on something i know nothing about other than a couple press reports. Its hard to keep track of everything with all the different players. Thats something that gets bipartisan support and attention in terms of being one of the missing pieces to the puzzle. Where we are as a country has a big problem. This is not an environment thats conducive to solving it in one big piece of legislation as the senate tried to do. The house has expressed a will isness to deal with immigration in a sequentialed ordered way where they take individual issues on its own. I think we should explore that route. To get anything done requires both the house and senate to agree on it. I think thats an appropriate approach given what theyre willing to do. Maybe thats what will happen here. Would you say the republican platform in 16, is it going to deemphasize social issues that republicans seem to be behind the curve on . I think that misses the point. One of the greatest eradicators of poverty is marriage. When a kid is being raised in a married family, their likelihood of being in poverty drops dramatically. Thats a social issue. Should we deemphasize that. They can be raised in a samesex marriage successfully. We dont know. We dont have empirical evidence. Thats a new dynamic emerging in the country. Thats at a state level. It will be soming to watch. Youll pick up seats in the house . I dont know the answer to that but i believe well have the majority in the senate. All right. All right, senator. Thank you. See you later. Thanks. Up next, jobless claims numbers. We have that add half toms big nonfarm employment report. And the demand for recreational pot in colorado is much higher than expected. Go figure. Jane wells will bring us that story in just a moment. Or their new product tanked . Or not . What if they embrace new technology instead . Imagine a companys future with the future of trading. Company profile. A Research Tool on thinkorswim. From td ameritrade. A Research Tool on thinkorswim. You wouldnt have it she any other way. Our toes. But your erectile dysfunction it could be a question of blood flow. Cialis tadalafil for daily use helps you be Ready Anytime the moments right. You can be more confident in your ability to be ready. And the same cialis is the only daily ed tablet approved to treat ed and symptoms of bph, like needing to go frequently or urgently. 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 allergic reactions like rash, hives, swelling of the lips, tongue or throat, or difficulty breathing or swallowing, stop taking cialis and get medical help right away. Ask your doctor about experiencing cialis for daily use and a free 30tablet trial. Welcome back to squawk box. Initial jobless claims moved down 15. Thats from a revised 345 down to 330. As far as revisions, originally 339. Continuing claims moved from 2. 815 to 2. 865 million. Thats really those are really the only data points of the day, of course. The ecb left rates unchanged. Historic record lows. We do see that that pushed our Interest Rate complex possibly. Cause and effect, only politicians seem to think they have a patent on being able to do that. There seems to be something to it. Its about the time that all of this was coming into our time zone. So we are slightly below 3 . And of course we have the last of three options today. Weve somewhat moved from a d on the threeyear to a c on the tenyear. We see what happens with the long guy, 30year bond today of course at 1 00 eastern. Back to the table. I dont know whats going on out your way. How is traffic . Hows bridgegazi going . I made it to work. I havent seen it myself. Ive been here in since before traffic started this morning. One thing, were getting a lot of mail on this, rick, people are immediately assuming that christie knew everything about this. And yet if you look at the history of the president on start at a and go through z on the things that happened, he wasnt aware of a single thing. Irs. Go through them. Theres ten things. We believe him that he didnt know anything but were already questioning christie. You nailed it. Heres the one thing we all need to say. Whether its the irs which by the way general media has the big broom to sweep these things under the rug. Why do employees whether at the irs or the port authority, why would employees have so much flesh in the game to do things to have people elected . Im sorry, i guess its possible. It doesnt make common sense to me. Then youre saying that christie did it . If lower level people are doing things, i think for the guy on top, it doesnt really make sense to me, especially that it goes from the bottom of the triangle up. I would think that most of these things go from the top of triangle down. What do we know . Whether chicago or new jersey, its whether its tommy guns or tony soprano. Youre suggesting christie did know. Im not suggesting he did. Im saying a logical man looking at it, whether its the irs or the bridge, it doesnt quite make sense. I dont think the media swept the irs under the oh, come on this is a huge story. Weve been talking about this i never stopped talking about it. You dont think theres a liberal bias. I didnt say liberal. I think theres an intelligence bias. Thats a different issue. When the irs issue came out we started thinking that the president we do talk about it. Were the best. Im just saying that i dont read about it in many places. I dont get it. I dont think we read about it as much as anymore. I dont think well be reading about the christie situation, the gate situation with the bridge what is this called. Bridgegate. Bridgegazi is what theyre calling it in chicago. Are they cawley, bridgegazi. I had no idea what anybody was talking about when i first heard it. Now its a come cal water cooler buzz. Being a person that was encumbered by weather issues and transportation, trust me, when you put peoples transportation in jeopardy, it seems like theyre more worried about it than things like the irs. Getting to work on time is important. For those of you who do work. Lets weigh in on what youre seeing with the jobless numbers. What do you think about the report . I think its okay. I think a bit of a puzzle whats been beginning on with claims. You had bad weather in december. That will continue through january. The gbottogobottom line is the numbers have not correlated all that well with the jobs numbers. Youve been between 300 and 400 or 400 and 350 and youve done 180 to 200,000 on total job growth. The idea is claims in the 300,000 range are necessary but not sufficient conditions for there being strong job growth. Well watch these continuing claims and the emergency claims as they roll off. That will be something that well follow ahead. But overall, theres been a bunch of indicators that suggest tomorrows job numbers should be reasonably strong in the 200,000 range. I dont know if you saw, after adp, the average went up for dow jones to 181 to 200,000. Well watch for the unemployment record. For the record why are you talking about other people . Whats your work showing. I do that later. Its thursday. Im late. Im late, joe. I will do my scatter plots. What i do want to point out youre hanging on all these other people. I want to know what your work is telling you. Do you know what my number was for unemployment in 2012 . What . 6. 9. We would end 2013 at 6. 9. Im a point away. A year ago. Im bragging. Thats what my work did. It felt about right. Yes, so i got no comment on this media stuff. Have fun at that. Im just watching the numbers. Youre just enjoying it. I am enjoying it. I like andrew being in the hot seat on this. Come on. You agree with me on this, right . I dont know youre saying so its okay. I dont know what anybodys saying. The idea that we didnt report this stuff seems weird to me. I felt like we reported the irs thing con stanley. We reported it enough for your taste. When it included people with patriot in the name. We reported it a lot when it included democrats as well. We reported it as if we thought the president knew what was going on. Thats what happens. It happened. On day one or day two . Were on day two of the story. You think obama knew they were targeting conservatives. At least christie fired two people over a bridge. Its unfathomable to me, unbelievable. Fifth amendment, gee, theres nothing going on there. Huh . Which amendment . I dont know what to say. Youre talking nsa stuff now. He didnt know anything about that either. Draghi is saying he expect key rates at the present or lower levels for an extended period. The ecb president is having a press conference. Im going to crawl into my hole and listen to draghi. Youre going to crawl back into your hole. Yes, and listen to graggy. That seems like something wed say. Under my rock. Under your rock. Said it for us. Joining us now with more is jim paulson, also our guest host Dinakar Singh is the founder and ceo of tpgaxon. Welcome. I know youve been more concerned about the markets lately. What do you expect is happening at the beginning of this year . Is this anything we should be concerned about or giveback from the end of last year. Its probably healthy. Its probably a pause after such a big run in the latter months of last year, becky. And in some sense youd be more concerned about a nearterm correction if you just kept running. I think the pause is probably a good thing. I still think we go higher yet before we correct later this year. I just think that economic momentum remains extraordinarily good. For now, every time its better than expected, thats good news for the market. And well see what the job number brings tomorrow. But you know, theres some chance we get a really big job number. If you get a 250 job number or something, and a bigger drop than expected in unemployment, that would be another big catalyst upward. I think eventually this good news is going to turn a little bit more concerning if it continues to be good news, we may start looking at it as possible overheated news. That might come later in the year and cause turbulence for the markets. We go to 2000 and where do we end the year. We come back to where with we started the year, joe. Okay. Thats just a guess. Im looking at the tenyear yield, headed 3. 5 , 4 , eventually people start to expect better economic news. And even if its good news but not as good as expected, it becomes bad news. So i think were going to go up for a while but eventually have a correction again. So we should sell at 2,000. If we were going to trade, sell at 2,000 and buy back in at 1,850. Thats what youre saying. Good luck with that. You told me to do that. Did you tell me to do that or not. I think it will be difficult to call the timing on this, joe. Thats sort of what youre saying. Yes. Id be more cyclical earlier in the year, joe, and if rates back up 3. 5 in the tenyear, if we go above 1900 in the s p, id start moving more defensive. As long as youve been bullish. I hope we dont have another 30 year where you stayed bullish for so long. And get run over. That could happen. I dont think the bull is over. I think the bull will continue beyond this year. I wouldnt get too cute trying to time this and miss out what might happen in 2015. All right. One of the biggest disconnects we see is on the industrial side. If you look at the market, it is looking ahead and requiring and expecting good growth. Emerson electric, ge, its not trading at 18, 19, 20 times earnings. If you look at a benchmark industrial, they talk about their areas of growth, asia is still their best for the next year. 23 you look at china, almost every cyclical in china is turning at nine times earnings. For us, not everything is cheap there. Yet, for example, we owned a real company in china thats eight times earnings, net cash Balance Sheet and could end up being an enormous winner for reform. Theres a big disconnect between companies in the u. S. That are exposed to emerging Market Growth and requiring it trading at 20 times earnings and those markets themselves where stocks are bombed out and are trading at single digit multiples. Youre buying that rail company in china . You know how to do that . We are. Cheap stock. How do you do that . Would you know how to buy a rail company in china . Your job is too hard. Isnt it government owned. Partly. Thats why the government area that owns it wants their money. Thats why they have a huge dividend. They are required to pay half their money each year in dividends. Some companies are good and some are bad. There are some ministries and states that are terrible and some run them really well. Sounds like a lot of work. Thats why ill let you do it, i think. Paulson, thanks. Weve been monitoring the Ecb Press Conference taking place as we speak. Mario graggy says he expects key rates at present or lower rates for an extended period. Up next, colorados pot problem. Jane wells has a preview. Andrew, colorados joint venture into the marijuana business has led to milehigh demand. Problem is, theyre running out of supply. Well have that story, next. Fifteen minutes could save you fifteen percent or more on Car Insurance. Yeah. Everybody knows that. Did you know there is an oldest trick in the book . What . Trick number one. Lookest over there. Ha ha. Madeest thou look. So endeth the trick. Hey. Yes. Geico. Fifteen minutes could save you. Well, you know. And it feels like your lifeate revolves around your symptoms, ask your gastroenterologist about humira adalimumab. Humira has been proven to work for adults who have tried other medications but still experience the symptoms of moderate to severe crohns disease. In clinical studies, the majority of patients on humira saw significant symptom relief, and many achieved remission. Humira can lower your ability to fight infections, including tuberculosis. Serious, sometimes fatal events, such as infections, lymphoma, or other types of cancer, have happened. Blood, liver and nervous system problems, serious allergic reactions, and new or worsening Heart Failure have occurred. Before starting humira, your doctor should test you for tb. Ask your doctor if you live in or have been to a region where certain fungal infections are common. Tell your doctor if you have had tb, hepatitis b, are prone to infections, or have symptoms such as fever, fatigue, cough, or sores. You should not start humira if you have any kind of infection. Ask your gastroenterologist about humira today. Remission is possible. Dinakar is smart. Wow. Were back. Colorado residents have been able to purchase Recreational Marijuana for a little more than a week. The state is already running out of pot. Wow. Jane wells joins us now from denver. Did we send you there or you went to get pot and you couldnt get any . No, no. I love covering this business. I love covering vegas but i dont gamble. I love covering this business but i dont use, i really dont. One week ago yesterday it started here, 3d cannabis. The first Lesson Learned in the great colorado experiment into legal recreational pot, demand is much higher than they were prepared for. Is this place going to run out of pot, at least in the short term. In the short term we will, yes. Reporter that is David Martinez with 3d cannabis which had to shut down two days to restock. Even when it opened back up, it is rationing how much each customer want die. Whats the deal . In colorado sellers have to grow at least 70 of their own pot. Since licenses to grow for Recreational Purposes and are also new and theyll have to tag all the plants, the first stores have been using a portion of their medical marijuana supplies which the state is allowing in a onetime transfer. But it isnt enough. How long before supply and demand is back into equilibrium. Were hoping by the summer but it could be a year or two years. Reporter theres a 21 sales tax, two to three times street value but the customers we saw, most of whom coming from out of state were not complaining. We drove here because we heard about it. We wanted to see what the hype was about. We thought it would be cool for a vacation. If you buy it here, you have to use it here. You cant take it to the airport or take it out of state or smoke in public. Guys with be pot tours, later well show you one, have been providing private residences and the first pot club has opened here. Back to you. Recreational users are hording it all up, does that mean medical users arent going to be able to get what they need for medicinal purposes . This is the big thing. Because the medical providers, some of them are very committed to those patients which pay a much lower sales tax. Only a little over 7 versus over 21 for recreational. They want to set aside some for a new lucrative market. They dont want to get rid of it for the medical. They cant get rid of it. Both types of marijuana are past, theyre in the state constitution. They cant get rid of the medical side. Its just a matter of ramping up heres the other deal, becky. They cant get financing to expand and get more greenhouses because theres no traditional banking. Theyre betting on the private equity and other ventures to help them expand. Its crazy. When would we know one of the reasons people think this is a good idea, maybe we can get rid of the criminal element associated with all of this, the whole black market aspect. Im hearing if its too expensive legal, theres still going to be people where you can buy it cheaper. When do we know when the whole criminal element is gone and theyre successful in making it legal . I dont think i dont think the criminal element will ever be completely gone. You cant buy moon shine anymore. Some places do. Really . Price is an issue but not a Single Person that i talked to lining up to buy yesterday was complaining about the price. Yet. I think its still very knew, exciting, the fact that theyre getting a standardized tested package, clean product, carries a premium. Whether it carries a 200 premium, at least in the short term, i dont know. Well be watching the rest of the day, too. Fascinating stuff. Jane wells. Thank you. When we come back, jim cramer will be joining us. And much more from Dinakar Singh. Squawk box will be right back. I lost my job about, probably about six or seven months ago. Im a year short of qualifying for my retirement. They had some cutbacks. I was the most skilled technician and also the highest paid. For my unemployment to end now, i wouldnt have money to go on an interview. My retirement is going away as a result of this. I do have a husband, thank god, or i would be homeless. Tell republicans restore Unemployment Benefits now. Welcome back. How is everything . Theres nothing like being your own boss and my customers are really liking your flat rate shipping. Fedex one rate. Really makes my life easier. Maybe a promotion is in order. Good news. I got a new title. And a raise . Management couldnt make that happen. [ male announcer ] introducing fedex one rate. Simple, flat rate shipping with the reliability of fedex. [ male announcer ] introducing fedex one rate. Welcome back. Making headlines this morning alcoa has settled foreign bribery charges with the s. E. C. As part of that the company will be paying 384 million. And in other news this morning an interesting story ive been thinking a lot about this morning black rock has agreed to end its Analyst Survey worldwide as part of an agreement it reached with the new York Attorney generals office. The firm had been surveying wall street analysts to get clues on their views of companies before the opinions were publicly is e issued, so apparently before the company was going to earn it wasnt that clear, though, was it . It was not public already . I thought it was sort of public but they got a little bit what was happening they were sending out a survey to all the analysts on wall street what do you think of this company, do you think the stock is going to go up, do you think it will go down, do you think it might change of what youve already published. Your ranking or rating on this thing. And the second piece was many were arguing that black rock was giving those analysts that participated in the survey higher rankings. The question whether you got more information from these surveys and the analyst had a report out to certain people but then was telling black rock something else. Mr. Schneiderman mr. Schneiderman. Didnt they settle for 400,000 . Its not a true settlement, they are paying 400,000 which is the a. G. s cost. They are paying their legal fees. It is more interesting than my burrito machine. Definitely. Lets get down to the new york stock exchange. Jim cramer joins us now. I dont know whether you heard, but can you imagine a kiosk serving up custom burritos, me and you, you got some money, right . Lets tart ostart one in colora where does that sound . Where people get the munchies and you go in and order your custom you have a natural question here. I mean, could this be the next growth leg for fritolay . Or you can talk about the so, black rock is another assault on, i dont know, do you think there was any Insider Information that got out from this . Ill tell you whats hilarious, look, ive been around a look time, i didnt know they were doing the survey, i didnt know it was some sort of leg up. This is what makes people at home say do you know i cant even be in this business. I mean, heres a big firm and theyre doing some survey, maybe theres some sort of, like, linkage between what they know and what they dont know. Ill go buy cds. I just wish i didnt know that this stuff was going on. Obviously it was bad. But i got to tell you, i dont think that blackrock got any real edge, but it doesnt matter, its what the people at home think. Do the people at home think they got an edge. What do you think of schneiderman, a net positive or a net negative for wall street . Its not trying to i think hes a net positive. I think hes very thoughtful of what he does. Hes not trying to run for president. He seems to be a reasonable person when he comes on, he seems to make a lot of sense. Kind of a populist. But that position has always had a populist. All right, thanks, gem. Well see you in 4 1 2 minutes. When we come back well have more stock ideas from our host, and also make sure you join squawk on the street today. Jim and the gang will be talking console wars and more with the general manager of Microsofts Xbox division. Squawk box will be right back. So i c an reach ally bank 24 7, but there are no branches . 24 7. Im sorry, im just really reluctant to try new things. Really . Whats wrong with trying new things . Look mommys new vacuum cat screech you feel that in your muscles . I do. Drink water. Its a long story. Well, not having branches lets us give you great rates and service. Id like that. A new way to bank. A better way to save. Ally bank. Your money needs an ally. Of the dusty basement at 1406 35th street the old dining table at 25th and hoffman. And the little room above the strip mall off roble avenue. This magic moment it is the story of where every great idea begins. And of those who believed they had the power to do more. Dell is honored to be part of some of the worlds great stories. That began much the same way ours did. In a little dorm room 2713. This magic moment afghanistan, in 2009. On the u. S. S. Saratoga in 1982. [ male announcer ] once its earned, usaa Auto Insurance is often handed down from generation to generation. Because it offers a superior level of protection. And because usaas commitment to serve current and former military members and their families is without equal. Begin your legacy. Get an Auto Insurance quote. Usaa. We know what it means to serve. Something you dont see every day, the stock closed at 70. Its up 143 points, intercept pharmaceutical. And its going to end up being a company thats worth over 3 billion after this. There was a theres a liver disease, nonalcoholic its a condition that could lead to cirrhosis. Eventually it could become the most common indication for a liver transplant. They had a trial of a drug and they stopped it early. The efficacy was so great that the 230 patients that were enrolled in it, the ones that arent getting it, will get it, it worked that well. Thats why its up. Lets get back to our guest host. We only have about 45 seconds left, but a quick thought on what to expect in 2014. I think it will be an okay return year markets at best. And so i think its going to matter much more what sector you pick, what stocks you pick, because just buying that will get you the kind of results youve gotten the last couple years. Youve gotten more specific. When people come on here, you say industrials. You are a little skeptical that all of the industrials will do well in this. U. S. Industrials are expensive. The market is already paying for the pickup in growth and you can buy the same growth in other parts the world for literally half the price which is extraordinary. Thats an interesting call because a lot of people have come on and just said the industrials over the last couple of weeks. Thats why they are 20 times earnings. Its been a pleasure having you here. Make sure uf joyou join us tomorrow. Were actually early to. Squawk on the street begins right now. Good thursday morning. Welcome to squawk on the street. Im carl quinntinia at the new york stock exchange. Welcome to the official start of earning season as alcoa reports tonight. A ton of news from retailers. Chris christie speaking on the bridge controversy in a couple of hours. The ten year is one to watch. Jobless claims were in line and janet yellen with an interview in Time Magazine. And europe and the ecb and the bank of england were unchanged