Transcripts For CNBC Squawk Box 20140213

I think we should give full disclosier first. Comcast is the parent of our company, cnbc. By the way, the ceos of both companies, they were be joining david faber right here on squawk box coming up at 7 00 eastern time. Ive already had i was walking and thinking im going to leave this show with neither rain nor sleet nor dark of night. And i saw that was written into the prompter and i thought for a second, whose motto is that . The post office. Who wants to compare comcast to the post office . No one wants to be compared to the post office. I get my mail every day. You once talked about how effective they were and then we talked about they lose 8 billion a quarter. I want the post office toen continue. And i certainly dont want to make any postal workers mad. Should we talk about this . I think we should talk about it now. Its worth talking about. It has a lot of ramifications. Did we just pull the rug out from under them . I think charter eped it to be done, right . He wanted someone to do it. The problem was charter was close her to 132. Time warner wanted 160. Comcast oh, look at this. He looks mad there. And michael, the cfo, had been negotiating last week with charter to take pieces of thats what i heard. Did this come as a huge surprise . And there were big fights. Michael left the meeting in a big hough, threatened to say if you guys cant get your act together, were going to do it ourselves. I dont think charter believed that was what was going to happen. We can talk to brian. He can tell us more about that piece of on it. Here is the thing. Im a Time Warner Cable customer. As a customer, i am thrilled about this. I apologize. Were going to have the ceo on. Theyre done a lousy job on a relative basis. Comcast is about the speed isnt as good, the service isnt as good. They have not spent the same type of money comcast has. Now, if youre a content creator, not so good, okay . Because all of a sudden the Cable Company has a lot more power on that. The Net Neutrality discussion is getting raised again. If youre a netflix, unclear where you would stand in this. Comcast offers netflix. They do. But theres a question of whether theres a new competitor of netflix. If i decided i wanted to start netflix, could comcast take me on or would they charge me more for certain pipes. Youve seen how much the economies of scale makes sense here. Huge. And thats what malones point was, this has to get bigger because theres so much money to be saved in this. Now, is he happy as a b benevolent is he happy that the industry is going to be much more nimble and all these people wont be . Yeah. Well and he will get some. He will get something from this. Hes not getting nothing. On a scale of one to ten lower than five . We can talk to david faber. We want to do that. If they knew that comcast was going to come in with this offer i dont think he was ready to go through these numbers. The numbers make sense for comcast in a way they might not make sense for charter. Well, for comcast, theres no overlap here. If youre looking at the regulators, the argument is were not overlapping, were simply picking up where Time Warner Cable existed. Youre not taking a competitor out. Youre your point is youre replane placing the competitor with a different competitor. Youre not taking out competition in those markets. The question you raise about the content issues and what that means down the road its a longer term story of what the issue looks like. But the regulators signed off on Nbc Universal, its hard to think that this is a different bar unless you look at it fr from people thought that might be how about the upside . Theyre going to be able to spend upgrades. Its expensive. Theyre going to have to bring the cost down on a per home basis. By the way, they might be able to bring the cost down across the industry, so that could be a benefit. If you look at it from a Time Warner Cables customers perspective, theyre going to be lining up rallying for this to happen. Wifi access, comcast and time warner has been installing wifi access across cities across the east coast. If they put that together, you could see a whole creation of a massive wifiing network. So there are real technological benefits. You are an owner of comcast, as well. And i am. Im a customer, im an owner, im an employee. But my point is, you own shares. You own these shares. I do. And theyre going up. Well, theyre going up, but this is a huge dilution for your ownership stake in comcast. The way the money is being spent, your money, your shares which are being diluted, are you satisfied as a shareholder . Yes. As a shareholder, i am over the moon. You are . Im doing back flips. But this is not affecting your view on the antitrust im trying to thats why i just gave you all the downside. Im with you. Seeing if you because im trying to figure out how i feel based on how you feel. And i dont know whether im going to be the opposite of what you say or the i havent decided yet. I have a pretty good idea that i might come out in favorite of this deal. You think so . I think i havent looked at everything, but yeah, like im not going to be looking at that. What is that h thing that you always add up . The way to do the formula. Some other news deal to talk about, dow jones reporting that the mercks could sell part of its business. It includes well known brands such as coppertone sunscreen and merck officials will reportedly begin meeting with buyers next week. Good news for m a land, by the way, if youre in the banking business. Berkshire hathway is considering acquiring part of graham holdings. Berkshire holds 1 is. 7 million shares of graham. And it said in an s. E. C. Filing that it is in talk toes exchange its stake for some of grahams assets. Graham owns cap lynn education, fixed television stations, the online magazine slate and several others. Slate . Jacob weisberg, slate. You love slate. I love jacob. In our corporate news, cisco posting better ththanexpected earnin earnings. Cisco raising its Quarterly Dividend from 2 cents to 19 cents a share. Indicating its growth slowdown may be easing. The ceo John Chambers cautioning that they continue to face issues. Cisco now forecast ago 6 to 8 drop in revenue in quarter. Keep an eye on that as hardware spending sags. The outlook is about in line with consensus. Were talking to an analyst who covers the company and were going to do that in just about 20 minutes. All right. Back to the cable deal no. We may mention this again at some point. A number of other stocks on the move in extended hours, including cbs, earnings and revenue beat the street and the network announced a 1. 5 billion stock buyback program. That stock, thats pretty amazing, ive got to say. What was the low, do you remember . Cbs . Yeah. Remember . No. What was the number . Well, im just saying you would have been it would have been a good move to buy it at the height of the financial crisis, andrew. Thats my only point. It was so you dont have this institutional memory. 4. 16. Thats neither here nor there. Shares under foods coming up pressure. Its cutting its 2014 Sales Forecast for the second time in three months saying competition is eating into its growth. And coceo walter rob is going to be on squawk on the street to talk about the quarter at 9 15 eastern. And another name hit hard in after hours trading, net cap. Earnings of the provider of data storage disappointed the streets at 16 cent net cap. Net cap . No, net app. Oh, there is only one t. Its nettap for me. Netapp. Chipmaker nvidia. Why is it two syllables if its nvidia . Why four syllables . I dont know. Chipmaker nvidia getting a boost after Fourth Quarter earnings. Thats not bad. Yeah. Earnings and revenue top consensus results were helped by the chipmakers pc gaming components. Angies list, shares of a local Services Review site dropped sharply following its report of weaker than expected earnings and disappointing Current Quarter revenue and dpiedance. Have you ever used that . I have no. Craigslist . Years ago. I sold furniture when we moved. It was a little creepy. That bothers me a little. I also bought something. I went to somebody elses place and bought some furniture years ago. Used furniture . Yes. Thats weird. It wasnt a mattress, was it . No. It was a an ethan allen armoire. I feel like talking about crabs again. I used to rent furniture. You did . Yeah. Thats even weirder. From a rental center . Yeah. Thats so depressing. I rented a tv and a stereo when i lived in london. And then it gets re lets talk about todays economic agenda. Weekly jobless claims and january retail sales. Economists say the weather is a key factor to watch in both reports. Headlines reports are expected to decline by 0. 1 last month. Coming up at 10 00 eastern well get December Business inventories. You saw the nasdaq picking up. This morning, the futures are under pressure. In fact but dow futures are down by about 67 points below fair value, s p is off by over 7. 5 points and the nasdaq is down by 18. Oil prices picked up yesterday by about 43 cents. That was its highest settlement since mid october. This morning, theyre pulling back to 99. 72. The tenyear note at this point is yielding at 2. 756 . That is just below the yield of yesterday. But that yield of yesterday was at the highest level in over two weeks. The dollar is looking like its down across the board. The yen the dollar yen is at 101. 93. The euro is at 1. 3662. And gold prices this morning are looking like theyre down just barely, down by about 3. 1,291. 90 an ounce. And Federal Reserve chair janet yellen was scheduled to head back to capitol hill today, but the Senate Banking committee has now postponed that hearing due to weather. The Washington Area expecting a significant snowstorm. Weve got no word yet on new data. When we get that, well bring it to you. Speaking of the weather, we should get the latest Weather Forecast. It was bad out there this morning for those in the new york areas. Another winter storm slamming many states today. Keith gartman joins us now from the weather channel. When is it over . You try to pick your question there. When is it over is a good question. In new york, not until late tonight, early tomorrow morning, but we will be changing over to rain. That will make it a little better. We have Winter Weather alerts up and down the eastern seaboard. Winter storm warnings in effect, Winter Weather advisories in the light blue. This track is a little bit to the west. That allows that warm air in. You can see already the rain snow line moving in to parts of maryland, washington, d. C. It walg something snow there earlier. 3 inches an hour. Thats this right here lifting into pennsylvania. New york is on the fringe of it. So its not a question of whether or not new york will change over to rain. It will. Its the timing on of it as this warm air continues to rock on in from the ocean. Basically, to the east of the 95 corridor, it doesnt mean theres not a great deal of snow. Showing you the system, moving into new york, boston, probably changing over to rain later this afternoon. Its raining in new york around 7 30 tonight. This gets tricky because on the backside, youll probably get enough cold air to wrap in to give aus last shot of snow early tomorrow morning in new york and then around rush hour in the boston area. Generally speaking, though, these back end snow spots dont put that much snow down. Probably another inch or just just adding insult to injury there. What are we talking about . Some pretty big totals. This is largely to the west of 95. But our purple is 8 to 12 inches. Then we have a big area of 12 to 18, as well. Were thinking interior parts of massachusetts will see the most snow. By the way, becky, i dont think its weird to buy used furniture. Its the whole shabby chic thing. When i was in college, i bought i my junior year. It was used at that point and i kept it until a few years ago. When i think about it, my entire house is used furniture. The second you buy it, right . No. Theyre called antiques. I just realized that. Everything in my house is yeah, someone else owned this thing like hundreds of years ago. Old used furniture, which is even stupider. What does it have to be, 25 years old to be an antique . Well, what am i, them . Well, all of us. Youre a great antique. Im a beader meyer. Do you know what that is . Yes. You do . So its weird, the snow, theyre even giving roads. If youre west of 287 youre going to its weird the way theyre doing it. And then theres another one coming tuesday. Yeah. Oh, tuesday . Yeah. No. Oh, can we get him back . We need him back. Is he still there . Tuesday again . Must be flying back. And then by 2100 dwb its going to be 80 degrees everywhere. So we could get him back for that forecast, too. Well talk to keith next time and get a better jut update on this. When we come back, more about the acquisition of the day. We are going to talk to an analyst who predicted comcast would make this prediction. Also at 7 00, we have Brian Roberts and Robert Marcus, both our guests. More squawk right after this. Ciscos results are out. Scott, last time he they definitely talked about emerging markets and they even alluded to nsa type backlash and but they said it wasnt material. In this latest one, what is the real fly in the ointment here for the forecast . Can you tell . Theres several things. What we have is a company that has Technology Changing behind this business. We had the snowden effect is what its affectionately called now. Having an impact on the business in china and asia and were starting to see signs in other areas, as well. So i think this is a business that is under a bit of pressure from several fronts. They are doing a an effective job at working to try to offset some of that pressure. But i think its going to take time before we see before we see them come out on from under this. The snowden effect is reminding me of the weather almost. Anybody can use it, right . You cant really put a finger on it. You can just sort of its like this nebulous number. Its the snowden effect, too. A lot of companies would be envious of 11 billion in revenue and a quarter, though. This is still a pretty successful company, no . Its still a very viable company. This is a company that not more than about a decade ago, the golden child of the internet. Its still a strong and growing company. The internet is going to have to re engineengineer their productp up with it. Scientific atlanta, theyve made more acquisitions than any company in the world almost. What do they need to do now . Thats what got him to where they are now. What else do they need to do . It is cloud related. What were seeing out there is a pretty aggressive shift in the cloud and its probably just beginning. The ceo is likely to be a year where you look back and see a big change taking place in the industry. When you shift the cloud, the architecture needed there and the platforms to do that is a different style of equipment than cisco is used to producing directly. So theyre shifting their product strategy. Theyre shifting to work more with things. If any company can get traction with this stuff, its going to be very good at sales. Im going to start asking about the internet of things. So eventually everything is going to be tied together. Sensors. Theres going to be an internet of on everything tied together. Is that what you mean by that . Think about where we are today versus two dwreers ago. Everyone has a tablet today. Most people have a phone, if not two. Even the coffee shot down the street is connected wirelessly. Were connected to the internet in ways we havent been before. Its going to require some changes in the way we build out that internet as a result. This encompasses lots of different areas, as well. Well see changes to moves in Wireless Networks in medicine, were going toitz in connected cars. Were going to see it in more wireless devices that we use every day. Youve got smart watches, lots of things that are going to be coming out. All this load, all this data thats going to be coming out of the internet is going to need to be handled in a more scalable manner. Thats where cisco is headed next. Its going to take a little bit of change, a little bit of adoption in new brothers, but theyll get there in time. What actual product are you is cisco involved in the software of this or theyre involved in the hardware for the actual backbone of this whole network . Thats a good question. Theyre involved in the hardware, mostly. There is a software in that. Cisco is going to strive for a higher margin business. But at the same time, theyve been known to sell the hardware. And its we wonder why i could apply to cisco, you know what i mean . For a job. And they would say what are your skills here to help us do what were you see, people need to go to Higher Education in this world. What you just described to me, i wouldnt know where to i dont know. We need to get people weve got a lot of transitioning to do with our workforce, too, scott. By the way, can comcast skills, that might inspire more sales. Thanks, scott. Coming one were got a report from where the weather is nice. Carl quintanilla is going to give us his olympic sized update from sochi along with an updated medal count. But first, media analyst rich greenfield made the call that time warner should have some patience and that comcast would snag this deal. He said it first. Were going to talk to him in a moment. Snap thinking up gamechanging ideas, like this dozens of tax free zones across new york state. Move here. Expand here. Or start a new business here. And pay no taxes for 10 years. With new jobs, new opportunities and a new tax free plan. Theres only one way for your business to go. Up. Find out if your business can qualify at startupny. Com sometimes they just drop in. Always obvious. Cme group can help you navigate risks and capture opportunities. We enable you to reach Global Markets and drive forward with broader possibilities. Cme group how the world advances. Here in philadelphia you can access a philly cheesesteak anytime, day or night. Just like you can access geico anytime, day or night. There is only one way to celebrate this unique similarity. Witness the cheesesteak shuffle. Cheesesteak, cheesesteak its the cheesesteak shuffle huh every day, all day, cheesesteak, cheesesteak every night, all night cheesesteak, cheesesteak 9 a. M. Cheesesteak 2 p. M. Cheesesteak 4 a. M. Cheesesteak any time ruh geico. Fifteen minutes could save you fifteen percent or more on car insurance. Good morning. Welcome back to squawk box here on cnbc. Im joe kernen along with becky quick and andrew ross sorkin. Among the stories that were following today, the deadly storm that slammed the see the yesterday now making its way north. Hundreds of thousands of people in georgia and the carolinas have lost power. And the National Weather service has warned that storms down there could be of historic proportions. Accumulations up to 12 inches are possible in the new york city area, even more in the suburbs. More than 4,500 flights scheduled for today have been canceled and the weather has postponed Federal Reserve chair Janet Yellens congressional testimony that have been set for today. Which i saw the entire. Watching syracuse at the buzzer. He had they had, i think, six seconds, he ran down, threw it up and they had to look at it on the tape and see it. March madness. It went to zero and it went through. Guys, we have some breaking news. Its announced, the deal that weve been talking about all morning. The deal of the day is now officially announced, buying Time Warner Cable in an allstock deal. Joining us now to break it down on the squawk news line, rich greenfield, good morning to you, rich. You called this early. A lot of people didnt think this was going to happen, that it would go charters way. Lets talk about from the investor perspective for a second. If you were john malone this morning, what do you think . I think sometimes the student in industry schools the teacher. I think this is a case where Brian Roberts did a major one upping of what is seen as the dean of the cable industry. But i think what you have to keep in mind here is that Time Warner Cable, having new york and l. A. , you know, several Million Subscribers in the two most important cities in the country, this was a this is an unumbrellaed unique asset that was never going to come available for sale again. So this was kind of a once in a lifetime shot for brian. And comcast to get control of those two markets. And remember, Brian Roberts not only controls nbc, but he also is really focused on driving interactive advertising. Hard to do that if you dont have new york and l. A. So it always made sense to us that they were going to want to make a run at this. They had the Balance Sheet. They had the wherewithal. Unless they were worried about the regulatory, this is a deal they just had to have. Lets talk about that for a second. And youre right about the National Advertising form. Some investers havent focused on yet at all. One of the reasons na john malone may have thought he had this in the bag or didnt have competition was because of the regulators. Walk us through the issues as you see it in terms of how the regulators are going to look at this. Well, you have to look at the growing competitive landscape, which is youve got National Providers like, you know, directv and dish that have a National Reach. You have increasingly National Competitors in other industries. Look at the wireless business. Verizon is buying verizon wireless. Verizon wireless has a National Reach essentially for their video services. While those are not the same today as what cable delivers, those lines are blurring quickly as the business moves into broadband. You know, i think the reality is how you define the market is changing and remember, time warner doesnt compete with comcast in any single city. If anything, this makes you know, this will make time warner a better competitor to the other players like verizon. Rich, as you know, im a customer of Time Warner Cable. So am i. So we will be beneficiaries of this. If youre a content company, though, you have to be crying in your soup this morning, no . Look, this is going to create the largest multi channel provider, even if they have to sell a few subscribers, even if they agree to Consent Decree rules lake they did in the nbc deal. Theres to doubt a 30 Million Subscriber Company Versus 20 Million Subscriber company is going to end up with better deals pup heard les moondez last night talking about retrend necessary 2020. You have to think about everybody who has been talking about what they could squeeze out of mvpds. This chax the tra jchanges the trajectories of those companies. Do you think they ultimately get a pass from regulators . Look, i think everyone will take a very hard look at this. They think they can obviously get this done by tend of the year. Where are you . Handicap the regulators here. I think this has a very, very high chance of getting through. I think brian will simply have to agree to a longterm extension, meaning years and years extensions to Consent Decree issues that they had to do in the nbc deal. But at the end of the day, these are not companies that compete with each other unless youre going to tell directv that they cant surpass a certain number of subscribers. Very importantly for your viewers, there was a 0 cap that used to be on the cable industry. That was taken down by the courts twice. There is no 30 cap. Even if there is a mythical 30 cap, there is a multi channel households in the u. S. Right now. It would be very easy for 30 million to sell a few subscribers. Rich, if im Reed Hastings of netflix or if im tim cook who supposedly wanted to get into the tv business or im a kid in the garage who thinks that they have the next big content business, what do they think . You know, the reality is you may fear Net Neutrality abuses. The reality is theres a lot in the guts of the internet that is preventing you from getting the best quality experience. Fearing an Internet Connection or a few issues that wheeler has identified as being very significant the experience that you realize when youre watching netflix at home in the evenings, the experience you get is driven by how the Companies Like comcast, how time warner im with Time Warner Cable, so the experience is awful. But thats a separate issue. Its how those Companies Deal with all the interconnections that occur within the interpret. I know you dont personally care about that, but its what drives your ultimate experience. Those peering and Internet Connections is really the issue that has to get worked out. Thats an issue for comcast, thats an issue for time warner. In fact, based on recent netflix data, you get a better experience with time warner than you do with comcast on average. That may be hard to believe, but thats the truth. Oh, dont tell me that. Rich, thank you for your perspective this morning. We appreciate you being on the program. Hopefully well talk to you about this again soon. Coming up at the top of the hours, weve got comcast chief Brian Roberts and time warner chief rob marcus. Theyre both going to join us as special guests to talk about this transition. Still to come this morning, we get a snapshot of the Global Markets after the u. S. Equity markets put the brakes on that recent winning streak yesterday anterior at least mixed markets. Nasdaq did okay yesterday. Today is a day to just stay home and watching squawk box all morning long. Look at that snow. You dont want to go out there. That can wait. Weve got big deals, big earnings and more from sochi right after this. Ameriprise asked people a simple question in retirement, will you outlive your money . Uhhh. No, that cant happen. Thats the thing, you dont know how long it has to last. Everyone has retirement questions. So ameriprise created the exclusive. Confident retirement approach. Now you and your ameripise advisor can get the real answers you need. Well, knowing gives you confidence. Start building your confident retirement today. [ male announcer ] right now, love is in the air with the adt valentines day sale. Get adt pulse installation starting at only 49 and show your loved ones just how much you care with the gift of Home Security and home management. Thats an incredible savings of 350 and an incredible feeling knowing you and your loved ones are safe and secure. With adt you get 24 7 Fast Response monitoring that helps protect you from burglary, fire, and high levels of carbon monoxide. Plus, Remote Access to your home when youre not there. Even control your thermostat to help save energy and money. So dont wait. Get adt installed now, and get everyday security starting at just 49. You may even save up to 20 on your home owners insurance. Call 800adt9006 now. This special offer ends february 17th. Welcome back, everybody. You can see right now futures are indicated down by about 70 points fout dow futures. S p off by about 8 points below fair value. Joining uts right now to talk more about the markets is daniel morris. He is tia press managing director and Global Investment strategist. And dan, you look at whats been happening with the markets, there was a lot of concern and things kind of came back. We have had some weak numbers. Its healthy, frankly, that we have pulled back a bit because you couldnt keep the same trajectory. But weve retraced most of the losses weve come back. Right. So i think we look at how things might be over the next several months. I think a lot of this is the adjustment to tapering. Its going to take a while for investors to see whats the impact on the economy, whats the impact on earnings . As it happens, i think were going to see some volatility. Netnet, flattish to up, but not a real sustained trend until we get a better indication of how the economy is going to go. And your gut tells you what, this is a head fake or this is a slowdown . We dont see it as a slowdown. We think theres not going be a problem with the economy at all. So its just going to take a while for people to kind of see that in the numbers because theres a lot of uncertainty. So he would be telling people to buy on these dips because you think the markets will be up by the end of the year . Yes. And what kind of gains do you expect this year . Weve got 30 gains last. Probably more likely high Single Digits. Total return i think would be pretty good. And as an alternative, what other areas would you tell people to watch . This is the best equity play if youre still looking at it balancing out. Well, you need to keep an eye on emerging markets. This is the time that you want to be going in because valuations are attractive. But if you the look at the value of the portfolio, i think it will be over the course of this year that people are going to want to reallocate to emerging market equities. And once earnings turn, then its going to be, i think, a real potential for that market to rally. You cant look at the emerging markets as one market, though. These are a lot of individual markets. You think there are some areas that are safer than others . Well, safety is more difficult to come by these days because of the global macroeconomics. Less risky. Yeah. Less risky. Very right to turn to the region. Its very important when you talk about valuation. Whether that is good or bad, thats another question. So on i think it is a matter of understanding what the dynamics are in the different regions and thinking about whats going to be the driver of earnings growth. Would he have this traditional model of it being driven by commodity demand or by exports to the west. You know, is that model still viable . Maybe, maybe not. Still trying to look at internal domestic demand. But thats in the context of Rising Interest Rates because they have to defend currencies in a lot of cases. Ive been told repeatedly if youre going to play the emerging markets, you should not only do it at funds directed at the emerging markets because the margin usually for the Mutual Fund Company or the bank thats offering the mutual fund is so much higher than trying to play it through either u. S. Multi national or some other form, but the actual funds themselves thats sort of a lousy way to do it. Do you agree with that . Well, i think you always have this debate about if you want to get exposure to emerging markets, should you do it by buying directly emerging markets. I think people want to think about how they want to maximize their exposure but in a way that makes sense with the portfolio. Emerging Market Growth was down with nestle. So it comes down to where you think youre going to be able to tackle and more the drivers of growth more than necessarily what the differences might be in the margins. Yellens speech got put off today. Well hear from her tomorrow in the senate. In the shortterm, the market looked at what she said to the house earlier this week and said this is really a dove. Shes really going to be there to support us. Is that the right view . I think that probably wouldnt be the best interpretation. I think what we want to hear and be convinced is the case is we know what the path is going to be like for tapering. Theyre unlikely to daefate from it. I think whats been difficult about adapting to qe3 is before with one and two, we knew when it was going to stop and it did. Three was infinity. Weve now stepped back from infinity and we think an end and i think we want to stay on that path. Dont scare the horses. I think thats probably the most important thing the fed can do in terms of communication more than necessarily giving a dovish impression. I like that. Dont scare the horses. They do scare. Yeah. Weve seen that. Dan, thank you very much for coming in today. Coming up, im focused on something were going to have to talk about. We dont have chairs any more, but you know the hope for man kind has always been harnessing fusion, the power of the sun. And fleischmann and ponds, we thought we had cold fusion for a while, the reaction generated more heat than you put into it. Scientists made a huge advance yesterday and got more out than they put in. And youre talking about just putting hydrogen together to make helium. An Endless Supply of clean energy that youve never and they were successful. Its coming late and theres its hard to do, but theyve succeeded. This is so were talking about all this other stuff. How about Time Magazine with quantum . Quantum leap, the tv show . No. Quantitiup physics. Its a longer story. Coming up, the story of the morning, comcast buying Time Warner Cable. Comcast chief Brian Roberts and Time Warner Cable rob marcus will be with us at 7 00. First, carl, is going to tell us what he has coming up from sochi. I have some things for you today, carl, to look at. Because ive got some things for you. How about that . Ive always got something for you. You know that. Anyway when we come back, joe, weve made some progress on the on medal count and well get you up to speed on that. And an amazing night of snowboarding here in sochi where it is warmer today than most of the continental United States. Squawk box continues live from the winter games in just a moment. 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The snow is coming down, but the weather is spring like in sochi this morning. Carl quintanilla joining us now and looking even more gq than looked yesterday. Carl, by the way, we should say your video yesterday of the vodka, the hangover, is that done . Are you good . Im okay. I managed to ski yesterday, as you know. Everything worked out there. People are saying welcome to the sochi summer games. 63 degrees today. Its going to be 65 tomorrow. People have stopped tweeting about the weather here. It elicits anger from you guys on the eastern seaboard where its obviously very tough. We do market with a gold and womens snowboarding. Kaila farington was the half pipe winner, a big surprise. She didnt even qualify directly for the final. She had to compete in the semis to advance. Sdpsh has a great story, guys. She grew up on a ranch in idaho where her family raised cattle. When her family needed money for training, her dad would literally sell part of his live stoke piece by piece, head by head, to support her training. And we asked her about some of the sacrifices that her family has made. When i was going started coming up and getting in bigger contests, my family would have to sell a cow every time i would need to go somewhere. Thats what supported my snowboarding and got me here. Congratulations to her. The russians, meantime, continued to deliver on some high profile events. I dont know if you saw figure skating last night. In the pairs program, volosozhar and trankov, this is their second gold medals of these games. I love this, to win on their home ice since 1936 and an incredible reaction there, wow, when they finished. An amazing night for figure skating last night, especially for the russians. Metal count is pretty good, guys. We were tied for first until a couple moments ago. Norway now has 13. We have 12. Canada 10. Netherlands 10 and russia has nine. Finally tonight well get some more good events. Slope style skiing, womens crosscountry skiing and speed skate after shani davis finished eighth. The first time we havent had an american on the podium for speedskate since 1988. A lot going on and a big day of hockey still ahead. Carl, what i have for you is video of me skiing, number one, like about 20 seconds of that. And then i have a picture of one of my dogs that i think i want to set up with zarah. I want to set her up with lucky. Lucky is a boy, right . He is. Im not sure how hes going to perform, shall we say. Shes a full figured gal. Okay on. I dont know were going to have to approach this delicately. But lucky tries to get it done, right . Right . Hes a dog. Thats all you need to say. There might be be any puppies in our future, but i think zarah is going to wear the pants. Lets put it that way. She doesnt now. But well have more on that and some skiing. You cant tell how steep things are on these videos. Youve got a monitor, right . Yeah. I see it. Lets go. Im ready. No, were going to do it in the seven. Its a tease. Back in the next hour, all right . Okay. All right. Sounds good. Carl, well check in with you in just a little bit. When we come back, pepsi co. Is expected to roll out results in a few minutes. Hugh johnson will join us in a few minutes. First, Brian Roberts and rob marcus will join us to talk about cable. 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. Aflac, aflac, aflac [ both sigh ] ugh you told me he was good, dude. Yeah he stinks at golf. But he was great at getting my claim paid fast. How fast . Mine got paid in 4 days. Wow. Thats awesome. Is that legal . Big fat no. [ male announcer ] find out how fast aflac can pay you at aflac. Com. [ male announcer ] find out how fast aflac can pay you life with Crohns Disease ois a daily game of what ifs. What if my abdominal pain and cramps end our night before it even starts . What if i eat the wrong thing . What if . What if i suddenly have to go . What if . But what if the most important question is the one youre not asking . What if the underlying cause of your symptoms is damaging inflammation . For help getting the answers you need, talk to your doctor and visit crohnsandcolitisadvocates. Com to connect with a patient advocate from abbvie for onetoone support and education. Through rain, sleet, snow and dark of night, you cannot stop the deal making. Comcast ainquiring Time Warner Cable in a mega deal. Well talk about this connection, next. The wicked weather has reached our door. After creating havoc in the south, the ice and snow is now hitting the northeast. The ceo of generac will talk to us about keeping lights on. Another cnbc first 25 faceoff, the contenders, former fed chairman ben bernanke taking on mario draghi. What will win . Well let the viewers decide. Squawk box begins right now. Lets get back to our top story, comcast to buy Time Warner Cable in a mega deal. The key players, comcast chairman and ceo Brian Roberts, Time Warner Cable ceo and chairman Robert Marcus. And david faber, not ceo of anybody. Did he break the story last night. Ceo of news breaking. Hes been following the cable drama. Nice work, buddy. We are here at 30 rock in midtown. Youve become familiar with this place. We sat down with jeff immel. When i first reported comcasts interest in potentially acquiring Time Warner Cable, i had the caveat which said its unlikely because theres concern amongst comcast executives of what the fcc would require comcast to do should it actually pursue a full acquisition. You dont want to sign another Consent Decree, for example, is what many people had been telling me. Why have you chosen to go ahead with this deal, given many people had been telling me you were at least unsure whether, from that perspective, it was the right move for comcast . Well, david, we wouldnt be doing this if we didnt think we would get it approved. We spent a love of time thinking about it. Its a special transaction for time warner and comcast, for shareholders, employees and mostly our customers. Well be able to bring better products, faster internet, more channels, on demand, tv everywhere. And a National Local platform thats really special. So were optimistic we can get this approved. When you say pro competitive, what will be the argument you can make on that . Lets talk first of all, the new products, the xfinitc products have momentum, customers are buying them in our markets. We are able to, we speeded up the internet 12 times in 12 years. We now have over 50,000 shows on demand. Its an x1 entertainment operating system is in the clouds. The First Company in the world to do it. We have the scale to bring those products to new york, los angeles, many other markets. Secondly, all of our competitors are national, directv, dish network. Cable is an older system thats local. In the new world with business services, a market thats growing and were the new entrant. We are able to go offer crossregional fiber connections to businesses in markets where we didnt operate, like, new york if you were coming from north jersey. Theres a lot of benefits. Theres things such as the horizontal ownership cap that the fcc used to have of 30 . No multichannel Video Company had more than 30 . No longer exists. It was vacated by the courts twice. This transaction, we dont compete. Were not in the same markets or same zip codes with time warner. Theres no overlap. Theres no reduction of competition. Were just able to bring better products to their markets. But what weve said today is that were prepared to divest up to 3 million customers, which will bring our new Company Combined below 30 , even though that 30 was vacated by the courts. Ten years ago when we bought at t, broadband and adelphia, we were at about the same number. In ten years all that intensified video competition and other competition brings us right back to where we were ten years ago. I have many questions of course. I want to get back to my colleagues. Content companies, if youre les moonves, what are you supposed to think . Netflix, how were you supposed to consider this transaction . Mine cut out. I heard the question, an draw. Ill try to do it. I find this issue of programmers somehow being disadvantaged by the combination to be somewhat ironic given what we as mvpds, multichannel video providers have experienced over the last five it ten years. I dont think we have to worry at all about programmers defending themselves here. One of the things this transaction allows is about 1. 5 billion worth of synergies. Thats mostly because we dont have any overlap in our markets. Were able to reduce some of the overhead, some of the duplication where we both have to produce guides and network operations. The vast majority of that synergy that makes this deal in the first year when you exclude the deal transaction expenses, the vast majority of that is not coming from program savings. To andrews point, though, you know the programmers are going to start to scream why not. It gives them an opportunity. Theyve won the battle seemingly between cable and con ten or distribution and content. Nonetheless by the way, im interviewing Leslie Moonves later on cnbc. When they say too much market power, too much market power, too much market power. Theres going to be a thorough review. I dont think thats the case. Theres over four, in many cases five video markets, selling their services. Its a competitive business. Time warner had some very public battles and its a balance that needs to be struck between operators and distributors and content companies to bring consumers what they want. I think this transaction will help speed up the technological innovation, really bring new products. We dont overlap and i think its under 30 . I know joe has a question. Im going to go through you, faber. This is a unique opportunity to ask brian something im afraid to ask him. Youll be the one doing the asking. Of course were having trouble with the chairman and ceos audio, yes. It will be from actually i wanted your opinion on this, too, david. Did brian rob erts get the bettr of john malone here . It made sense for the world that there should be cost saving or is he going, foiled again by Brian Roberts. What do you think hes feeling . Great question. Rob has heard it and is smiling. Joes question is simply, you seem to have bested john malone, somebody you have known for many, many years, of course. Whats he feeling today . Is he happy because theres consolidation or is he unhappy because, of course, charter and liberty is 27 shareholder wanted to own Time Warner Cable . I think youd have to ask john. But hes built a Wonderful Company and ultimately we studied many different iterations of what was right for comcast, what was right for time warner. This transaction feels special. Will allow our company to go. Well be able to divest some customers. Were happy to talk to john or anybody else about that opportunity. But at the same time, ultimately we have to look at whats right for comcast. The thing that compelled me was when you take out the billion and a half synergies, were paying about 6. 6 times cash flow to buy premiere markets and a premiere company. Thats because of the synergies. When you look at that, that may be the most attractive acquisition weve done. Sounds to me like hes getting the better of you. Why are you selling it only 6. 6 times, rob . I spoke to you a couple weeks ago. Ive said something ive been saying for months now. My primary objectives have been maximized value for shareholders and put ourselves in a position to deliver great experiences to our customers. This transaction accomplishes both of those objectives. If youre looking at the world through the lens of winners and losers, i think the customers are a big winner here. And Time Warner Cable shareholders are big winners heres today. It was only two weeks ago you unveiled a significant new plan, if you will, for Time Warner Cable to create a great deal of value. What changed in these two weeks since you and i were on our air discussing that plan and 132 from charter was no way sufficient . I think ive been consistent on this one. Plan a like most Management Teams for us was run the business as best we can, execute on our operating plan and maximize shareholder value by doing that. But always, as stewards of Investors Capital be open to alternative ways of maximizing shareholder value. I have no doubt this transaction presents a maximization of shareholder opportunity for us. You said 160. Do you think stock will go up by the way . I have no idea. We think for the long term. Thats how we built comcast. Weve been disciplined. We are announcing its our intention at the close of the transaction to ask our board to increase the authorization of 10 million of stock buyback. Were confident we can execute. One of the thing weve done over the years is integrate well, do it in at t broadband and other cable acquisitions. The opportunity under neil smiths leadership. We added positive subscribers, had one of the best years weve ever had last year in 2013. To build on that momentum, integrate a company is wonderful as Time Warner Cable and really then be able to see where this industry goes and help lead it, this is a very special day for our company. Brian, though, you talk about the long material. Of course you have built this company for that. Im sure youre thinking many years down the road. Some look at the current environment in cable and they see people pulling out video, for example, broadband considered to be the key product. Growth has slowed if not stopped entirely when it comes to video subs. Time warner cable lost a number of them over the last year. Why do this deal when you could expand internationally, expand in content and conceivably youre putting yourself in a larger position in what seems to be a weakening industry . First of all, it is a competitive business. Anyone that doesnt realize that, you know, youre absolutely right. Its hard. Were working every day to convince customers to buy our products and you have to improve those products. To find a deal with this kind of synergy that can be accretive in the first year, a majority of them, thats unusual. Thats because thats why we did a stock for stock deal. Were in the same industry. We just dont operate in the same markets. The business is a wonderful business. Yes, video has matured. People want their content on every device, on every platform whenever they want it. Just the olympics, in breadth of context, its not just one channel anymore as we know. Theres real changes. At the same time, broadband, with wifi and the fastest broadband connectivities and going to small, medium sized businesses and targeted advertising the smart home of the future, those things more than offset the maturation of the video business and the competitiveness. So as long as you invest in your network, have the best products, we think its going to be a great business. And in this case, you know, what rob said for his shareholders is also true for the comcast shareholders. We found a way to find a win win outcome. In terms of the calculus in doing this transsactiaction as opposed to another one, what is the breakup fee and how did you think about that issue . Sure. Naturally when you evaluate a transaction you take into account both the transaction itself and the probability it will in fact be completed. In our estimation here is that this transaction will clear regulatory hurdles and be completed. So when you take that and you couple it with the fact that the value being offered was very close to 160 a share, and we think the long term Value Creation opportunity is even greater than that, for us this was a clear decision. Rob, what is the breakup fee . There is no breakup fee. Theres none . Wow. You guys are going to the mat on this all the way on regulatory, correct . Well, we have the same closing expectations of every other cable transaction. So we have a well certainly try to make our case and we think we can make a credible and, i think, constructive case and were hopeful we can get this deal approved. We wouldnt have done it if we didnt think so. I hope i get the same permissions joe kernen has when my cable is not working, brian, given you will now become my provider in new york city. Hopefully brian will take as good care of you as we have. Thank you. Discount on triple play ive been offered. That was by burke, actually. Youre in good shape, faber. This is good. This could be good. Coming up next, that was a fascinating conversation. Coming up next there was no discount. The beverage and snack giant rolling out Quarterly Results just moments ago. We talk to the ceo first on cnbc. Keeping the lights on when the weather is wicked. The ceo of generac is going to tell us if business is booming right now. Back in a moment. Get a leg up on the trading day with the morning squawk newsletter. Go to squawk. Cnbc. Com and sign up now. Morning squawk is a snapshot of the days top stories, guests and some fun water cooler stories that well be xasquawki about all morning long. Sign up and get morning squawk delivered in your inbox every weekday. Squawk box on cnbc, profit from it. Theres a saying around here, you stand behind what you say. 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. The dow will open 47 points down, nasdaq will open down as well. The s p 500 would open off about 6 points as well. Lets recap the deal of the morning. Comcast buying Time Warner Cable. The allstock transaction is worth roughly 159 a share and would make the largest Cable Network in the nation. Pepsico announced a new fiveyear 5 billion productivity program. Joining us right now to talk more about it, from purchase new york, hugh johnston, pepsis chief financial officer. Its great to have you here this morning. Thank you. Thanks, becky. Good morning. Great to be here. Were excited to publish results today. These are better than expected numbers. What happened that the street wasnt expecting . I think its a variety of things. I think the company is performing really well the portfolio we worked on is working both from a product and from a geographic perspective. Weve become more productive over time. Were driving more cash out of the business. In addition to the strong results, our longterm guidance we announced 2014 in line with and in addition to that, our cash return to shareholders will be up 35 which were particularly excited about. Some of the cash returns, lets talk about some of the packages. You also talked about how youll be doing 5 billion in share repurchases, a 67 increase from the prior year. Youre increasing your annualized dividend by 15 . Youre able to give more cash back to investors because . Well, really, if you look at it over the last couple of years, the cash generation of the business has increased pretty substantially. We found ways to use Capital Expenditures more efficiently and our working Capital Investment is down. Were convinced its permanent. As a result of that we thought it was appropriate to deliver that cash to shareholders, both in the form of dividend and share repurchase. We think that shareholders will receive that very, very well today. Lets talk about two things. First up that 5 billion productivity program, what is that . It really is a continuation of what weve been doing here for a long time. Were actually this year in 2014 just finishing our prior threeyear 3 billion program. That was very much the result of a lot of investments that weve made and information technology. Were stepping that up even further as we built capability in the company to look across the organization globally. Both in terms of the way we manufacture products and distribute products. We think that we can continue that billion dollar a year program for another five years. So, again, were becoming more and more efficient while were driving the top line and were freeing up money to invest in innovation and invest in our brand. We really have a dynamic cycle working in the company right now which is what makes the performance so heartening. We think it could continue for quite a period of time. One of the things you say, you expect inflation for 2014 to be low Single Digits for commodities. Thats interesting because there are some concerns about whats happening right now, if we could be set for hyperinflation at some point because of what Central Banks have done. Do you think about that at all, worry about it . We look at it quite a bit. When you have a portfolio of 200 countries you have the ability to balance these things out quite well. We also have a program where we forward buy on commodities. By the time we get to this point in year, we have line of sight of what to expect from commodities. The good news on that is it gives us the ability to price effectively before we get too far into the year as well. Weve done that. I know youre a Global Company but youre somebody who has a good idea of whats been happening in the United States. There have been questions about the economy. What have you seen in terms of what people are purchasing . I think for the most part, what we see is a gradual strengthening in the economy. The good news for us in the u. S. Is our businesses run anywhere from value businesses to premium businesses. Weve had innovation this year. Weve had six 100 million new products launched over the past year. And as the economy strengthens, consumers are willing to pay for those products and innovation. It does give us the ability to launch Premium Products into the marketplace. Very quickly, weve spoken with indra in the past, though. She has talked about how pepsi can see things, when the job market is not great, it shows up in terms of whether or not people will buy soda for their lunch. Have you seen any of that with the weakness weve seen, the last couple of labor reports . We really havent. What we see right now is a continued gradual strengthening in the economy. Emphasis on gradual. Were cautious. We take a conservative posture as we walked into the year. Its a volatile uncertain world. We do see a gradual strengthening in the u. S. Economy and were generally feeling pretty good. Thank you very much for joining us. Great talking to you. Thanks. Appreciate it. Coming up, the latest from sochi from skiing to snowboarding, from curling to hockey. From german shepherds to chihuahuas. Carl quintanilla will join us to take a look at whos carrying the lead for the quest for gold. When you see lead, it could be lead. What is that called, a homomyn, andrew . And pants and boots and pants and boots and pants. Voiceenabled bill pay. Just a tap away on the geico app. Huh, 15 minutes could save you 15 or more on car insurance. Yup, Everybody Knows that. Well, did you know that some owls arent that wise. Dont forget about im having brunch with meagan tomorrow. Who . Seriously, you met her like three times. Who . Geico. 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. Take a look at the futures right now. We have red arrows with the dow looking like its opening down about 48 points. The s p 500 down about 6 points, nasdaq down 15 points. Not great on the day when we have a mega deal. Comcast looks like its up today. We are off the weakest levels of the morning. True. Comcast does not look up. Comcast looks down 54. 40 to 54. 98. It was looking up 20 minutes ago. I told you that its now trading lower. You knew i had told you that. Well continue to watch. Markets do bounce around. The wicked weather stretching from atlanta to new york. 500,000 people without power. More expected to be at risk before the storm is done. We of generac. Hell talk to us about the business of keeping the lights on when your utility cant. Squawk box will be right back. Ameriprise asked people a simple question can you keep your lifestyle in retirement . I dont want to think about the alternative. I dont even know how to answer that. I mean, no one knows how long their money is going to last. I try not to worry, but you worry. What happens when your paychecks stop . Because everyone has retirement questions. Ameriprise created the exclusive confident retirement approach. To get the real answers you need. Start building your confident retirement today. Welcome back to squawk box. 7 30 on the east coast. Nbc universal parent comcast buying Time Warner Cable in a 45. 2 billion dollar stock deal worth just under 159 per share. The deal coming after months of a long battle in which cable operator Charter Communications had been trying to buy Time Warner Cable. We spoke to comcast ceo Brian Roberts just moments ago. Its a really special transaction for both Time Warner Cable and for comcast, its employees, and customers. Well bring more channels, on demand, tv everywhere on a local National Platform thats really special. Take a look at where those shares are atrading ahead of the market open, comcast, 53. 75. Take a quick look at Time Warner Cable. Thats gone up, obviously 148. I will also say the big surprise for me in that interview, no breakup fee is unbelievable. It is almost as if comcast has a free option to buy this company. I find that remarkable. If youre a comcast shareholder you have to be thrilled about that. I dont understand why time warner why is the stock down . Dont use google quotes. You have it right here. That is correct. The broad market is down, you could talk about the dilusion issue. It was up 3 or 4 when we first talked about it. In the morning it was up that much. It did close higher that day. Comcast stuck has run, even in the past two days, back up. Its up from 24 a couple years ago. Right. Lets talk about the snow and the freezing rain. Its been crippling travel. Grounding flights and knocking out power to hundreds of thousands of people. Lets get the latest from David Malakhov and the weather channel. He joins us with more from atlanta. David . Becky, this will be the iconic destruction of this ice storm here in atlanta. The historic craigie house in the Piedmont Park area is gone. Let me step out of the way so we can see the destruction by the ice that built up on top of the roof last night. It came down and the whole building crumbled, almost like a bomb went off inside the building, the owner said. This is a building from 1911. Its been here for a century. And it has been the home for the daughters the american revolution. It has survived a big tree that fell on it in 80s. It survived the wrecking ballast year when the owner bought it. Now it is gone. The iconic destruction right here tells the of you how much ice came down in Metro Atlanta last night. Throughout the entire region here in the south, we have 500,000 people, more than that, 560,000 people without power. Power crews going down the street right now to put up those power lines and cut down the trees that have been accumulated with all of the ice. This storm, now moves up towards washington, d. C. Where it is dumping snow and shutting down parts of the federal government today right here in atlanta. The State Government and the local government, the schools, everything is closed right now. A lot of people stayed home and took a snow day, joe. All right, david, the powers out, you said in quite a few homes. I dont were going to go to generac which makes these natural gas generators that turn on automatically. I was going to say there hasnt been much power at this point on the east coast. The last two years. We had irene. We had sandy. Weeks at a time. I dont know if our guest aaron, do you think he knew the whole country was going to be ripe for i dont think he knew atlanta was going to need generators. Aaron jagdfeld, the ceo of generac. They reported earnings 1. 11 a share. The stock is up, its indicated, aaron, up about 4. 49. 89 is the close. Indicated 53. 50. Tell us about the quarter that just ended but also comment on, is suddenly the entire country ripe for a generac generator . Now atlanta needs generac generators because were going to have snow down there . Its been a tough winter. Theres a lot of people that could use our product in the southeast today. For us for the Fourth Quarter we came in stronger, actually our home standby business was the driver there. Its been a remarkable product category, really just its frankly pretty new over the last decade. People are finding that the grid is unreliable and they need a product like that. Who knows why the grid will be unreliable. I dont want to be a fear monger but people wish us ill. They like to attack target. I mean, im sure theyre thinking about attacking the grid at some point, too. I dont know whats going to cause the power to go down but if you can afford it, you dont want to stand in line for gasoline for one of those generators that run for six hours, right . Yes. You bring up a good point. Weve always talked about Mother Nature driving what we do on the residential side. Last april in california there was a high voltage substation that was knocked out by, people are calling it a terrorist attack. They snuck in. They didnt catch any of them. Yes, they snuck in. They cut the communications. They took basically i think 100 rounds of shots at 19 transformers over a 20minute period and this is a transformer that feeds silicon valley. Stuff like that, they think maybe that was a dry run for something bigger. Hopefully not but thats the kind of stuff you have to have a backup plan. Thats where a product like this comes in handy. What has happened with sales, aaron . We know in this area because of what happened with sandy, power being out for over a week for a lot of people that that did promote sales here but what about the rest of the country . Yes, actually weve seen increases in every single region of the country. We look back at 2013. Again, i think that speaks to the fact that this is a product category that has 3 penetration of homes. Youre not talking about moving the needle a whole lot to have a big impact. Every region of the country, theres 250,000 people every day in this country without power. You get the big events leak a sandy, the ice storms and what not that cause widespread grid damage but its the every day kind of garden variety outages that i think are what people are concerned about, as the grid ages, basically its failing. Theres a lot of that testics that show this and Power Outages are on the rise. They have been for the last 20 years. Thats federal Government Data that you can see on that. And we think were in the right place at the right time with the product category were in. Hurricanes knocked down power, too. It doesnt have to be snow obviously. Whos your competitor here . Someone told me about another is it a kohler . Whats the advantage to yours, to kohler . Our products are theres a couple advantages. First of all we have a lot of different options for people. When you look at different buildings, a business or a home, not every building or structure has the same backup type of need. The breadth of our product line gives us a huge advantage. We have pricing advantages but its our support network. We have over 5,000 dealers servicing the product. Thats what you want. If youre a homeowner and spend the money on a product like this, you want to make sure if you need service you have someone available. Thats a key advantage. I didnt bring up the possibility of a zombie apocalypse, obviously. Thats always in the back of my mind. Gee, i wonder why. Have you made ive asked i dont you in the past, are you working on quieter generators . Nothing is going to attract zombies quicker than a loud generator. Are you making progress there . Yes. You asked about this before, joe. We introduced a new product. At the International Builders show just last week we introduced the quietest generator in the marketplace. It has to be really quiet. You can have a conversation like were having over the top of that generator. Its extremely quiet. All right. Aaron, thanks for playing along. I appreciate it. Dont miss the talking dead this sunday. Sunday night. Sunday night. 10 00 p. M. And time, is that right . Yes. 10 00 p. M. No, walking dead 9 00 p. M. Talking dead is at 10 00 p. M. Im promoting you. Promote me, thank you. 10 00 p. M. Eastern time with our friend, chris. On that other network. We have more to bring you. An update from sochi and two cnbc contenders, two financial meltdowns, two central bankers, two different monetary policies. Ben bernanke faces off against mario draghi, we have that when squawk box returns. Like this dozens of tax free zones across new york state. Move here. Expand here. Or start a new business here. And pay no taxes for 10 years. With new jobs, new opportunities and a new tax free plan. Theres only one way for your business to go. Up. Find out if your business can qualify at startupny. Com sometimes they just drop in. Always obvious. Cme group can help you navigate risks and capture opportunities. We enable you to reach Global Markets and drive forward with broader possibilities. Cme group how the world advances. Thats my biggest nightmare. Were going high def on monday. I wonder if carl was hoping for high def . It was created for carl. Carl quintanilla joins us from the games. Im terrified. The mere makeup is going to change, joe. Its going to be a new world for you. The last hour we told you about ka Katelyn Farrington winning gold. We have the Gold Medalist from salt lake 2002. Kelly clark is the most olympic decorated ski boarder. She fell on the 720 but came back and pulled a more complicated move, the 1080. We asked her how she was so bold to do that . I knew i could land that run. First run in the contest, to come back, last competitor, come back to make it to the podium is a huge victory for me. Match of the day is definitely going to be mens hockey, guys, the first look at the mens team versus slovakia. Slovakia has zacharo. He is so big, guys, as he walks around olympic park people are taking their photo with him as if hes andre the giant. Hes like a spectacle here in sochi. The mens hockey team for the u. S. , theyre staying in the olympic village, something the nba players did not do in london. They stayed at a special hotel. Not the case with the hockey guys. Okay, carl, well have different makeup. I dont need makeup, i need a surgeon fob high def. Bob eubanks got work done. Who does your haircut . You get your haircut in the green room, right . You might ask them if they have a scalpel. Heres how were going to look on monday all of us. Put up that shot. That looks good. Thats what i was saying. Going back to your ski tape yesterday, when you fell, i complimented you. I thought you looked pretty good. Had you already drank the four shot when you fell . No. They werent related but its funny you bring that up. I happen to have some video of my own. Theres me, yes, obviously in sochi yesterday. But i have some video of you, joe, falling as well. I have video of andrew falling, too. I dont know why i didnt have this ready yesterday. I fall bigtime here. It hurts. My knee. That hurts a lot more is that you, sorkin . Theres me. Oh, my god. You fell and you went oh, my gosh. My leg. Pretty much. Because you look like that hurts. Carl. Check out my actual skiing, though. You con see your slope looked flat. You cannot tell. This is the womens world cup run. And you cannot tell how steep that is there. That doesnt look that bad, does it . T. Looks like he took a shot of the double black diamonds and then went on a green. No, no, no, no, no. That is the downhill course at beaver creek. Thats pretty good. Youre cutting into the mountain there, joe. I had to cut into it and pilot my ski. Thats what my instructor told me. Dont be a passenger. When youre on the bunny slope. He takes a picture next to that and then he goes on the bunny slope. That was the actual slope right there. I got a lot of grief for not wearing a helmet. We didnt have time to get one. You should wear one, yes. You cant tell. It was an argument to get you to wear a helmet, too. You have to wear a helmet. I look dorky in a hat. Might as well wear a helmet. As joe likes to do, becky, stir the pot. Thats what its all about, right . Ive been known to do that. Im going to stir it with lucky next time we get a chance. Lucky and zahra sitting in a tree kissing. Well pull that all together. Put them together and see what comes out. What kind of mutant freak dog would that be . Didnt they have a super bowl commercial about this . They did. We get a stepladder involved. Shes a lot of woman, carl. Theres my bitch, right there. Talk about skiering the pot. Carl, well see you in just a little bit. Back from the brink. Which central banker did a better job at saving the respective economies . Do you know what you get when you cross a bulldog and a shih tzu . Yes, some bs. A top 25 faceoff, right after this. Airlines battling tough weather conditions, will it hit the stock . Plus, Neel Kashkari will join us for a special interview. Cnbc compiling a list of the 25 greatest influencers in business over the past quarter century. Who should make the list . Weve been batting that around this table for the past week or two now. Today though we have a faceoff for you. The battle of the central banking big wigs, sara eisen will be making the case for mario draghi and Steve Liesman to argue for ben bernanke. Kick it off. Its always easy to argue with steve. Draghi is a hero. He single handedly saved wrurp from imploding, before he came on the scene and took a number of steps to fight the crisis. Heres what did he, he dug deep in his tool kit, innovated and moved quickly, cutting Interest Rates. Remember the money he infused to the banks. And the real genius moment came with the omt, its a lot of alphabet soup. It was a program in which the ecb could buy bonds in an unlimited amount, countries could sign up for this. Heres the kicker. They had to accept conditions, strict fiscal rules that was the key psychology from the markets. He never had to use it. The mere idea of it was enough to calm. The fact that the ecb was going to be a backstop in the markets. Perhaps his greatest trick, though, just uttering those magic words. We all remember them. Whatever it takes. Mario draghi said i will do whatever it takes to save the euro. That was back in july 2012 when everything was chaotic in europe and it looked very, very ugly. Those words marked the bottom of the crisis. You see it on the euro, Financial Markets bottomed out. Europe turned a corner. Really, another huge major victory for mario draghi comes in the politics. Steve will tell you bernanke saved the world, putting in place a number of tools. Mario draghi had to deal with 17 different governments, 17 different prime ministers, 17 different par lips, latenight meetings, base fights and Angela Merkel backed him up. He tamed the politicians and thats perhaps the real skill and grace when it comes to mario draghi. Youre a bright and talented reporter, so i find it hard to understand how you could possibly give the award to the imitator, rather than the originator. Its like youre picking a clone pcmaker over bill gates. Theres considerable debate over what ben bernanke did in the face of the deepest financial crisis since the great depression. His lasting effect on the World Economy and central banking probably forever. Theyll be saying bernanke, not draghi. With markets in free fall, ber behnke created massive free stops. Never existed before. He brings the Interest Rate down to 0 from 5. 25 . He got creative again, buying government bonds and mortgages to drive down Interest Rates. When the economy still didnt generate enough growth, he bought trillions of more bonds and found a new tool, Forward Guidance in which he pledged to keep rates low for years. He restored growth, they never meeting his forecast for a robust recovery. He helped bring down the Unemployment Rate but millions of americans remain un and underemployed. Critics complained he bailed out wall street. No one would dispute the feds 4 trillion Balance Sheet that hes passed on to his successor. He was the he set the new standard into basing the currency. It hasnt been to base yet, it still could be. You think its hard when thats pd. You think its hard to open the spigot full bore . What did volcker do . Thats whats hard, raising Interest Rates when you need to slow an economy. Just being accommodative and giving everyone all they want . Here, take as much print as much as we can. You get an institution like the fed. Im with you, sara. Ill take draghi. At least he tried. I appreciate that. At least he tried not to beggar thigh neighbor. A slam dunk for bernanke. You disagree with what bernanke did. Thats fine. Thats fine. He set new standrd as in dumping money into the system with his helicopter. Youre saying he set new standards. He gets a rogue award of notoriety. This is about who was more influential. I will be with steve that everything after bernanke is derivati derivative. Thats true. Thats actually not true. Hold on. Sarah its not true. If you look at the Monetary Policy innovations that draghi put in to calm the markets and satisfy politicians it was brand new playbook. Also, mario draghi wears skinny ties. Hes way better dressed than ben bernanke. He said new standards in turning money. Way to go. Thanks. Thanks. Pick online, this headtohead, cnbc. Com 25 cast your votes. Well be right back as we debate this right here. Life expectancy in the u. S. , real estate in hong kong, and the optics industry in germany . At t. Rowe price, we understand the connections of a complex, global economy. Its just one reason over 75 of our mutual funds beat their 10year lipper average. T. Rowe price. Invest with confidence. Request a prospectus or summary prospectus with investment information, risks, fees and expenses to read and consider carefully before investing. We asked people a question, how much money do you think youll need when you retire . 500,000. Maybe halfmillion. Say a million dollars. [ dan ] then we gave each person a ribbon to show how many years that amount might last. I was trying to like pull it a little further. You know, i was trying to stretch it a little bit more. [ woman ] got me to 70 years old. Im going to have to rethink this thing. [ man ] i looked around at everybody else and i was like, are you kidding me . [ dan ] its just human nature to focus on the here and now. So its hard to imagine how much well need for a retirement that could last 30 years or more. So maybe we need to approach things differently, if we want to be ready for a longer retirement. Two major dockets, the forecast and comcast. Winter weather is here again. Updates, who will get hit the hardest and when the power will be turned back on. And comcast striking a deal to buy time warner. You might want to put on a bathing suit because youll be channel surfing in no time. Could this deal spark more consolidation in the secretarier . Well find out as the final hour of squawk box begins right now. I dont remember this music. This isnt the original. No. No . No. I would know what monty halls music is. This might have been the pilot. Welcome back to squawk box here on cnbc. Why are they theyre going around, lets make a deal. I see. This must have been year one. First in business worldwide im joe kernen. Along with him. And becky quick. There you are. People used to come all dressed up in weird things. Pick me, pick me. I dont remember this music. What was the real music . It wasnt this. It was a remake. That doesnt sound anything like it. If this isnt taken, we should use it for that other horrible thing we have. The elevator music. Whats the name of that . How does it go . Two major there it is. There you go. Im in pain. Two major two major stories were following this morning. The forecast obviously. And comcast, two casts. The Parent Company of Nbc Universal which also owns cnbc reached an agreement to acquire Time Warner Cable in an allstock transaction that values twc at 159 a share. Thats more than 45 billion. The ceos of both companies joined us in the last hour. More on the deal in just a minute. The south and the northeast both getting pounded by another winter storm. Hundreds of thousands out of power, major travel delays. 6,700 flights canceled. Thats so horrible when it happens to you. Another 4,500 already gone. Today well speak to thomas fanning. Well get an update on when well get the power turned back on for a lot of these people. Hes the ceo for Southern Company, an Electric Company in the south. Dow jones looks like it would open down now about 57 points ahead of the open. S p 500 headed also towards the down day, at least a down open off seven points. The nasdaq looking like it would open down 17 points. Lets see what happened overnight. The nikkei down there as well. Close to off, almost 2 . Hang seng down as well as was the shanghai. Lets go over to see whats going on in europe right now. Ahead of the close there. Youre seeing the ftse off, the cac off and the dax is off. A little bit of pressure globally. All right. Lets get more on the big cable deal of the morning, comcast buying Time Warner Cable for 45. 2 billion in stock. Comcast ceo Brian Roberts and Time Warner Cable ceo Robert Marcus joined us in the last hour. Here is mr. Roberts. This transaction, we dont compete were not in the same markets, were not in any of the same zip codes with time warner. Theres no overlap, no reduction of competition. Were just able to bring better products to their markets, but what weve said today is that were prepared to divest up to 3 million customers, which will bring our new company, combined, below 30 . All right. Joining us now on the squawk news line, amy young, Vice President at securities. Can this deal pass musters . Theres no overlapping regions, so from that perspective theres no competitive issues. How about weve been talking about no breakup fee. Is that crazy, amy . If youre the board of Time Warner Cable, is that the craziest thing youve ever heard. It could be. Time warner cable, that company has been on the choppi ishoppin for a few months now. Shareholders want them to sell. This is a free option now, to the extent they would want to walk away, you know, weve seen this movie before in a couple other instances where there have been clear deals that have regulatory issues. This is going to be something thats examined. Why do you think time warner didnt push harder or wasnt able to grab that . I think there are other alternatives to look at charter who clearly looks like they were going to prepare to go hostile on Time Warner Cable. I think this is a much more attractive deal for Time Warner Cable shareholders, clearly, given the price. Interesting point. How do you think it played out . For a while it looked like maybe comcast and charter would get together and do it together. Do you have any insight into how that fell apart that way and comcast decided to buy the whole thing . I think at the end of the day, Time Warner Cable is the best corporate governance. I think shareholders were maybe concerned about the leverage for Time Warner Cable charter if that Company Combined. Clearly comcast has the best Management Team out there. Theyre the leaders in the space. We say that a lot, yes. The stock is called lower today. It ran up, i think, on prospects for this deal. The market initially liked the idea of comcast being able to buy time warner. It was about a month ago when it was first approached. Its down less than a dollar at this point. Down 78 cents. Theres going to be an exchange ratio. A lot of investors could be buying Time Warner Cable as a way to play this optionality on cable m a. Two notes by the way. I just got an email about this. One of the reasons time warners cable board may not have wanted to breakup fee is to give them the option for charter or somebody else to come up with a higher bid without having to pay that fee. Why didnt you think about that at the beginning. Im a clever guy, but im not that clever on my feet. I like what amy said, too, just the idea that charter was about to go hostile. Y you want to get involved in hostile. Given all the cash you have on hand, would you prefer to have a different mix . Comcast is 50 billion of debt on their Balance Sheet. From an absolute perspective, thats still a lot of debt, right . I think the other thing is theyre buying back 10 billion of stock at the close of the deal, which i think investors clearly welcome. I think expectations were they were only going to buy back 3. 5 billion this year. Okay. Amy, well end it there. Appreciate it. Thank you. Do you remember mr. Roberts . Do you remember . Have you seen it . Thinking mr. Smith. Famous movie. Henry fonda and jack lemmon, a classic. Before my time. Before my time, 1955, actually. I cant say that about too many things. When i see it, thats the first thing i think of. Our other big story, a storm causing major Power Outages in the south. Tom fanning, the chairman and ceo of Southern Company is joining us. Tom, i know this caused some problems. I think you have about 120,000 customers in georgia without power right now. Is that correct numbers . No. Actually theyre a bit higher than that. Let me tell you, its pretty remarkable. We predicted there would be 500,000 out with this storm. In fact across the southeast, south of atlanta to augusta weve seen the most outages. Half of those, the storm continues right now, you should know, half of those have been restored. Wow. We think well finish the rest of it most likely by friday night, perhaps into the week. So what is the actual number right now . In georgia we have 230,000 outages right now. Thats where they mostly are. Theres about 15,000 in alabama. What happened, mostly ice getting on the wires, getting on trees and knocking down wires . Oh, yes. Listen, this has been crazy. You know, you have freezing rain, sleet, snow. Freezing rain is the thing thats the worst because it t e takes trees down, no matter how robust the wires are, if a tree falls on it youre out. The staging for this has been fantastic, arguably the best preparation weve ever had. The state of georgia for the criticism they had on the snow jam of two weeks ago have been terrific this deal. Governor deal, Georgia State patrol tells us to clear the highways to access the problem areas, d. O. T. , Georgia National guard has been terrific. We talk about this winter is never ending. We like to explain about it just from the perspective of dealing with cold, getting in to work, shoveling all the time. How would you rate this . Yes, so the weather patterns in the southeast have been remarkable. Past two years have been some of the mildest years weve ever had. Warm winters, cool, mild summers. This january specifically has been a lot colder than normal. Some 15 colder than normal. How does that weather add up to your bottom line . What does it mean . We think sales are up some 15 for the month of january, of course, theres a whole year to do. But significantly higher than what we budgeted. Okay. Tom, we want to thank you very much for joining us this morning. Good luck getting all those customers back up and good luck dealing with the storm. Let me give a shout out to the thousands of guys who have been working through this thing. This has been a 24 7 effort. Theyre working through midnight and around the clock getting people back up. We appreciate that. Bone up your security. Terrorists want to shut down grids now, tom. So im sure youre on top of that big time. Right . As a matter of fact, i chair something called the Electricity Sector coordinating committee. Its electric owned utilities with coop communities working with government to repair for and respond to any cyber, physical threats and natural disasters. I can tell you, this industry is doing a great job. Thats good. If they knocked it out it could be more than a couple of weeks. Thats what scares me. I think were in as good a shape as we can be. We can always be better and were continuing to be vigilant about it. Coming up next jack lemmon won a best supporting actor. He did . Yes. Did i not know. He was first actor to win supporting and lead actor for save the tiger jack lemmon. What year. 1973 for save the tiger. He played a character in 1955. 18 years apart. Senator bob corker will be with us after the break. As we head to the break, check out the squawk box market indicator. A little red this a. M. Mr. Roberts. Good movie to mention. 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. voseeker of the sublime. Ro. You can separate runway ridiculousness. From fashion that flies off the shelves. And you. Rent from national. Because only national lets you choose any car in the aisle. And go. And only national is ranked highest in car rental Customer Satisfaction by j. D. Power. natalie ooooh, i like your style. vo so do we, business pro. So do we. Go national. Go like a pro. Since theres no place to go let it snow let it snow let it snow the full faith and credit of the United States is in Good Standing after the debt ceiling extension was passed by the senate. Joining us now, senator bob corker, member of the banking committee. I dont know, just senator extraordinaire, explains all this stuff. Hes nice. People like him on both sides of the aisle. Did you see the wall street journal today, senator . I did, yes, sir. Theyre so mad at ted cruz. It does look like a boneheaded move. He did the procedural thing that made instead of just doing it where it was going to get done anyway, a bunch of his colleagues had to walk the plank and look bad so they can be called on. Do you agree with that . What was the point of this again . All about you and mr. Smith goes to washington crap. So i was one of those that had to walk the plank. Needed to do what i needed to do. We have 45 republican senators. Okay . 43 of those republican senators knew what had to be done yesterday. 12 were willing to make it happen. We have two senators, lets face it, that are really upset that they werent able to use this to raise a lot of money for their pacts and campaigns. Thats what this was all about. Everyone understood that. There was no game plan. I asked before we went out to vote, okay, we blocked closure. We put the country in economic turmoil, we traded tremendous distress for the next several weeks. What is the end game . There was no end game. Look, its unfortunate that things are the way they are but im glad we got done what we needed to get done. Look, joe, i hope this is joe. I cant hear that well. Its me. Yes, look, we do need to put fiscal reforms in place. We do. Theres no one thats been more adamant about that. But candidly, the shenanigans of this fall are what took us off that topic and kept us from being able to move ahead with fiscal reforms while we had this side show under way that had nothing to do with fiscal issues. But anyway, something good happened yesterday. It was unfortunate it happened the way that it did. Lets move on and deal with some of the bigger issues our nation has to deal with. Definitely. Which include fiscal reform. Before you move on, senator corker, who was the other senator . Ted cruz you were referring to who was hoping they could make money for their pacts on this. Who was the other senator being difficult . I didnt mention any names. You all are mentioning names. I said there are two senators that i know are very disappointed. A clever man. Theyre not able to use the next two weeks to raise money to try to defeat other republicans. Rand paul. Theres a third senator that can probably raise money off of this, harry reid. This is exactly what harry wanted. Yes. I didnt look over at harry during the time we were doing what we needed to do but im sure he was rubbing his hands together hoping we would, you know, do what not do what needed to be done. Anyway. All right. Well, i dont know whether youve noticed the stock market ended last year pretty well and were turning around this year. Can we now safely say were not, for the next at least 6 to 9 months that were not going to get blindsided by some problems in washington and we can just trade on our own economic fundamentals at this point . Are you on the back burner and out of the way . Yes. I really do think, joe, from the standpoint of congress, you know, doing damage to the economy over the next nine, ten months, i dont think thats going to happen. I will say on the other hand, this election coming up in november should be about which Party Responsibly can put our country on stronger fiscal footing. And hopefully its those kinds of issues now that well be debating and not the shenanigans of shutting government down to benefit one or two people in congress who may want to serve another position. We should point out, i dont want to speak for you, but i was saying that maybe Congress Wont be getting in the way. The white house will still have all of its ability to continue to obstruct probably the private sector. We should point that out as well. Im not saying thats on the back burner. At least you guys. The guilt goes both ways for what weve seen the last couple of years. I will say, look, lets face it. I do think the Health Care Bill, they will continue to do things that candidly, i dont know how you do without legislation but theyre doing anyway. I do think theyll continue to try to cause the Health Care Bill not to do as much damage as it ordinarily would. Its doing damage to our economy now. The one thing i think we could do, which wont happen, would be to try to rectify those problems. I think were in the state were going to be between now and november. And the American People cannot wont worry now when congress is in washington over the next ten months. Im back in tennessee now. But, again, there are a lot of big stakes coming up. Our country still, as you know, still as ive said already has tremendous fiscal issues that need to be dealt with and hopefully that will happen after this next election and hopefully thats what its going to be about. When do you think will we hear about keystone before november . I dont know. I wrote a letter with john hovan the other day, being the Ranking Member on Foreign Relations and knowing that the state department has to make this decision. Its obviously everyone knows its in our National Interest to do it. Thats what the state department is to look at. Environmental reports show this should happen. This really is now solely a political issue and will john kerry step forward and recommend what he knows has to happen . Will the president do whats right for the country . I know theyre trying to navigate their base, joe. Theyre trying to figure out, you know, do we try to help out a few senators like Mary Landrieu and others . Do we upset our base . When do we do this . I mean, everything thats done at this white house is based on politics and so, i think theyll make a decision based on what they think is best for them. Unfortunately not what is best for the country. Im still stuck on the blind item. Will you pull your ear if i guess right . Is it mike lee. Im sorry. Whos the second senator . Again, i dont we have a couple senators that im sure you don you own a snow blower . Hundreds of thousands of dollars being raised. Whos shoveling your driveway . What . Whos shoveling your driveway . I have a fourwheel drive. I dont have any power. I had to go to my Office Building to get ready for this outstanding program. I thank you. Always great being with you. We appreciate what you did yesterday, too. Thank you. We have to get him a scarf. Coming up, well talk to an executive change at jcpenney. Well have the details when we return. That 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 medications, and ask if your heart is healthy enough for sexual activity. Do not take cialis if you take nitrates for chest pain, as this may cause an unsafe drop in blood pressure. Do not drink alcohol in excess with cialis. Side effects may include headache, upset stomach, delayed backache or muscle ache. 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Hell be replacing ken hannah who will stay on through that date to ensure a smooth transacti transaction. Cnbc posted a profit 2 cents better than the street was expecting. It also announced a stock buyback program. David faber will interview les moonves during todays squawk on the street. Find out the numbers and get market reaction, next. Well, did you know that old macdonald was a really bad speller . Your word is. Cow. Cow. Cow. C. O. W. E. I. E. I. O. [buzzer] dangnabbit. Geico. Fifteen minutes could save you. Well, you know. Ameriprise asked people a simple question in retirement, will you outlive your money . Uhhh. No, that cant happen. Thats the thing, you dont know how long it has to last. Everyone has retirement questions. So ameriprise created the exclusive. Confident retirement approach. Now you and your ameripise advisor can get the real answers you need. Well, knowing gives you confidence. Start building your confident retirement today. Welcome back to squawk box, everybody. We are just a few seconds away from jobless claims and retail sales. Jobless claims is the big number people will be watching. The estimate, Steve Liesman informs me is 330,000 versus the 331,000 we saw last week. Theyre looking for retail sales to be down 0. 1 . Versus if you look ex auto, that will be up by 0. 1 . We saw the futures. Things are looking weaker. The dow futures are down by more than 75 points below fair value or right at 75 points below fair value. S p 500 futures are now down by 9. The nasdaq is off by close to 20 points. Rick santelli standing by at the cme, Steve Liesman is in studio. Rick, over to you. January advanced retail sales, not out yet. Wonder if the weather is affecting these High Frequency servers that are super glued to the data sites. Dont see jobless claims yet. Steve has the jobs. Jobs at 339, rick. All right. 339. Was there any recession to 331, steve . Unchanged 331, ridesing to 339. All right. I have the fourweek here at 336. The prior was 333. Right in line, not a big deal. Continuing at 2. 95 or 2. 96. What was your number, rick . I dont see it but im guessing around 2. 96. Its 2. 953, my friend. You were off by 0. 007. Do i want a signed tote bag . Come on, steve. We hold you to an exact standard, rick. We dont want i dont you to report the tenyear at 3. 7 or 3. 6. We go to the third decimal point. I dont have retail either by the way. I like the conversation that were having this morning, mr. Roberts reminded me of that great movie. I guess i can play enson pulver. You forgot the two most important people, joe, you forgot cagney and the thin 34ma i know. What did you get, steve. I just had it. There it is. Minus 0. 4. Big miss here. Big miss this morning. Minus 2. 4. What about ex autos . Im looking. I dont have my dplass on. Unchanged ex auto. That was a little bit closer. I wonder where it missed. As soon as i get my table ill inform you. Im getting data trickling in. Im showing down 0. 4 month over month on retail sales. Thats what i had. Ex autos unchanged. These are good numbers, though. Keep in mind, last month, it was considered good, not because we were up 0. 2. T. Was revised down. We had up 7 on ex auto. That was cut in half to up 3, this time unchanged. Its trickling and its a group effort. These are being posted online. These numbers are being posted online because the snowstorm in washington has shut down u. S. Federal offices. Let me go to the website and see if i can find it there. Rick is right. This revision to minus 0. 1 from plus 0. 2 from december, weve been whittling down that gdp for Fourth Quarter. Last time i checked was 2. 6. Oh, god. We probably will get another downward revision. Every effort will be made to post the figures on the agencys websites around 8 30 a. M. Today. Here we are. They could have told us they were going to do that. Did you see liesman talk about bernanke earlier, how effective he was at opening the spigots, almost in heroic fashion . Would you say the entire exercise, trying to pick draghi versus bernanke, is that like the leper with the most fingers, rick . I think its kind of a draw, you know. I think when we have central bankers, you know, going head to head, there definitely has to be a curve here that we grade on. I really think, maybe if we considered them firemen, that they would get a pluses because nobody wielded fire hoses better than those two, although, you know, i dont know draghi. Where do you put greenspan in this by the way. I was a big, big, big greenspan fan until about two points i didnt agree with. Before y2k i thought it was a bad idea to make so much liquidity and around 03 when he significantly pointed out on numerous oaks two big issues, the demographic time bomb that harry denton accurately forecast in his 1994 book how well have big problems with entitlements, demograph demographics, whos working. Hes doing that thing with his hands again, rick. Hes going like this with his hands again. You did, too, didnt you . Im like a tattletale, arent i . The other problem i have with greenspan, they dont want to be in the bubble popping business. Hes going like this, rick. I want to give the numbers. I enjoy what rick is saying. Motor vehicle, big miss, minus 2. 1. Furniture down 0. 6. Electronics up a little bit. Building materials and garden supplies ill get to that in a second. Another miss here. Clothing and accessories down 0. 9. Sporting goods. It looks like in january the consumer took a break. That could mean its weather related. It could be a weather related thing. Across the board. Be neutral about this. We dont know. There are lots of things that you wouldnt go out and shop for in the cold weather and the snow. Cars. There may be a lot of things you do shop for, though. Thats true, rick. But how do you get there . I heard stuff the Delivery Companies are doing well. Heres what did well. What have you got . Building material, garden and supplies. That could be salt and shovels that. Could be the people who are buying for the snow. This doesnt have a specific weak link to it. We should summarize. Few viewers and listeners, down 0. 4 on the headline, unchanged ex autos which is significant. Down 0. 2 ex auto and gas. The new thing everybody likes because they want an easy number, the control number is down 0. 3 versus up 0. 7, reviced to only 0. 3 last time. Not only do i think the revision of Fourth Quarter gdp, steve, is going to be well below 3, i think most estimates for First Quarter will be well below three. What youre saying might very well be reflective in the futures. The dow futures are down triple digits, the weakest of the morning. You might be able to give it a pass for the weather. It doesnt look like the market on a knee jerk reaction will give it that pass. Yields are down, this is significant, the biggest fundamental for Interest Rates for 2014 without a doubt is the barometer of nervousness in the equity markets. Yesterday, we basically closed right on a big 38 retracement of both 5s and 10s. It was too close to call on a closing basis yesterday. Were below both of those levels right now. As a matter of fact, the fiveyear, the yield curve is five basis points below the significant level. If you want to know whats going on, watch the fiveyear and kind of wrap it in the net change of the equity markets. Rick, we could talk about this Economic Data and how the market moves with it but what ive been noticing recently is the kind of return to a period we had a while ago where it looks like stocks and the dollar euro are joined at the hip. I dont know if youve been following that at all, seems like the euro is straining just a little bit, not huge. That coincides with the market falling off. That will happen a couple days ago when the market seemed to reverse from its doldrums. It happened with the dollar strengthening against the euro. Its way more the yen, though, all throw of the major currencies are getting pounded today against the yen. When that carry trade even on an isolated oneday basis moves in that direction, its like stocks trying to fly over the alps with an anvil, you know in. When it and, it aint. Whatever is happening with the currencies has been leading the market. There was a period about a year ago when all you had to do is know what the currencies were doing and stocks were doing the opposite. I know we can always have the asterisk of weather and forever the rest of my life ill have a giant asterisk in terms of Central Banks. In the end, the sustainability of the economy, even when theres no doubt at least for most people of any type of recession, it just it seems as though its constantly like the old marcus welby, its the heartbeat, dink, dink, dink. Im not concerned yet. We got the numbers in 2010, 2011, 2012, 2013. It seems as though theres no sustainability here. Ill tell you what, more and more, i think its going to be a health care issue. I think nothing demonstrates that when you dont have a rulebased system, nothing demonstrates that more than kind of the discretion. Very quick answer, rick, which is what we expected, some kind of weakening that came out of the strength of the third and Fourth Quarter. Perfectly normal. I looked at that kind of strong quarters we had, some kind of decline in the First Quarter would have been perfectly norm up to a percentage point. There is no, you know, theres plenty of volatility inside the gdp. So i think you could tell a good story that says you had that weakening you expected, inventory drawdown and weather on top of it and not get too concerned about the economy. I understand what youre saying, rick. This is the short answer . Yes, youre right. It went on a little bit. I have more to say. Can you at least say what . Volcker and bernanke no. Giving people everything they want, not denying them anything, for shortterm gains, its so easy to do versus giving something, tough nemedicine whi someone needs to end up down the road in a better position. Thats magically understated. Did you see that story on argentina in the journal where the store shelves are empty . I find it fascinating that theres people who love these countries, i cant figure out. You dont understand what it takes to do things that have never been done before. Let me keep printing. Well never have any pain. Give the markets more heroin. You have to debase the currency, never happen. Tons of people will tell him hes forever going to be wrong. He agrees with us now, joe. Forever wrong until what . For a decade. Forever long. Im right there. Every game has to have a time period. Race to the bottom, just because everybody else is. I dont know, i think you underestimate what it took. Squawk box heading to gold mines. Rio tintos earnings are out. We will discuss those results and the gold market. As we head to the break, take a look at gold prices. You can see that on the screen. Were coming right back in a moment. Welcome back to squawk box, everyone. The futures again have taken a turn for the worst. Those numbers we just got, the retail sales were worse than had been anticipated. Retail sales declined by 0. 4 . The street was expecting a drop of 0. 1 . Based on that you can see the market had moved beyond triple digit losses. The dow futures are down by 86 points, we saw a low of 108 points after the numbers first hit. The decline of down 90 is worse than what we saw before we got those numbers. Lets key crecap some of the mornings top stories. Comcast is buying Time Warner Cable for 45. 2 billion in stock. The ceo told us he is confident regulators will approve the transaction. Take a look at the shares right now. Comcast down by 2. 5 . Time warner up by 8. 5 . Rio tinto just out this morning, reporting better than expected profits. Lets talk gold prices and the state of that business with rio tintos ceo sam walsh. Youve turned this business around in a big way, sam. In large part theyre cost cutting. The big question, i think, in the market is, are we gown to the bone . Are we cutting into mussel . Whats going on next . Good morning. This morning we announced results for 2013. So increase 10 increase in 10 dividend increase. Cost production, we really just got started. We committed to a further billion dollars of cost savings that will take our run rate to 3 billion compared to 201. Youve been trying to shed assets you dont love. One of those has been the iron ore business you have in canada. A lot of people looked like they were circling but they dropped like flies this morning you said you dont need to sell it. Is that a function of the fact that you cant sell it or a function of the fact you dont want to sell it anymore . Its a function of value. And ive said all along, im about delivering shareholder value. This is not about a fire sale or market day at the bazaar. We didnt get value, quite frankly, as we go forward, we dont need to make a major divestment. That doesnt drive us. Give us a quick sense of where you think the value of gold is going. Were at the highest level since november. There still remains speculation that we could see a plunge below 1,000 bucks if youre not a gold bug. Yes, ive given up speculating on commodity prices. I have a team of experts that help me there. All it shows me is youre going to be wrong. Importantly when you look at the medium and longterm, you look at our products, demand is robust. Demand is strong as the global developing world continues to develop. You cant build infrastructure. You cant urbanize without the commodities that we supply. Geopolitical question for you. What is your take on what china is doing in terms of the commodity space . Is this a good thing for the world or a bad thing . I think that china will try and ensure that it achieves resource security. Theyre looking at the same things in relation to food, water and certainly air quality. I think that in the scheme of things weve seen other countries, certainly the u. S. But weve already seen japan and korea and others ensure they had resource security. Its a natural reaction. And the market is actually big enough for everybody. Sam, this is a different type of mining question this morning. You know, a lot of people think that gold is related to bitcoin or that bitcoin is sort of a version of gold. Do you have a view on bitcoin these days . Yes. If youre taking me to one of our mining operations, ill be able to help you. Bitcoin, thats a little bit off the mark for me. Thank you for joining us this morning. Congratulations on the results. It is quite a turnaround story. Great to be on. Thank you very much. Coming up, we head back to sochi, russia and the 2014 Winter Olympics for an update. Well find out where the u. S. Stands on metdals and what the competitors think of bitcoin. In the new new york, we dont back down. We only know one direction up so were up early. Up late. Thinking up gamechanging ideas, like this dozens of tax free zones across new york state. Move here. Expand here. Or start a new business here. And pay no taxes for 10 years. With new jobs, new opportunities and a new tax free plan. Theres only one way for your business to go. Up. Find out if your business can qualify at startupny. Com welcome back to squawk box. The futures are indicated lower. Weve been through a lot this morning. You can see the dow is off 85 points and the s p futures off by ten. These are not the worst levels of the morning which we saw after the report of retail sales from the government at 8 30, and the dow was down by triple digits because retail sales were down. Raises a lot of questions about the economy and you can see that playing out in the market. The 2014 summer olympics no, no, its actually Winter Olympics, certainly winter here, are under way in sochi, russia, its easy to make the mistake because its much warmer there than here and we should have known because its the only way you go anywhere, if its not puerto rico or greece. Did you call and say whats the Weather Forecast and they said 60 and you said, okay, im coming . Reporter you know me so well, joe. Absolutely. Yeah. Some of the competitors were competing in tshirts today, believe it or not. Look, we have a little bit of bad news to tell you about first and we want to let you know. Nbc news has confirmed that a track worker was hit by a bobsled today prior to a training according to hospital workers. The individual is still alive. We dont know the severity of the condition. When we have more details about the individual, we will let you know. Getting back to the sports stuff, the medal count keeps rising. Lets show you who is number one, norway with 13 total medals. Usa second by the way with 12 at this point. And canada and netherlands tied with ten and russias got nine. The american highlight last night absolutely the womens half pipe. Idaho native caitlin farrington, dazzling the judges, shock the other three former Gold Medalists in the field. She took gold. The usa finished first, third, and fourth, get this of the nine medals the u. S. Has won so far across all events four of them have come from snowboarding including all three u. S. Gold medals. Mens speed skating, not a highlight. Shawnee davis quest at history did not work out. The twotime olympic Gold Medalists finished eighth in the 100 meter. He looked so glum when he finished. Hes the second american man in two days to fall short of a hopedfor threepeat so still no american man has won the same event at three consecutive wh t winter games and shaun white finished fourth in the half pipe. He was so bummed out. All right, the russian highlight. The russian pair figure skate ing once again putting in an impeccable performance. Winning gold easily in front of the home crowd. Remember, this is so important for the russians because they won the gold medal in this event every single year from 1966 to 2010. Then they lost in vancouver so this was a big, important comeback for them when it comes to pride. Speaking of pride in curling the u. S. Men picked up their first win beating denmark. Then the evening the danish men pulled off an upset over the defending World Champion sweden. Dont forget you can see womens curling tonight on nbc between 5 00 and 8 00 p. M. Eastern time and you can see team usa face off against japan. Other highlights mens hockey starts today, mens figure skating. Freestyle skiing slope style holy smokes, crazy, crazy stuff. We went up there this morning. The stuff they do on skis is unbelievable. Womens speed skating and the skeleton as well and the snows melting up there. We were sweating. Its just so crazy to see the weather here compared to what you guys are going through back there. Michelle, the reaction from the russian skaters last night, i didnt see it live . Was that reaction finishing knowing they did great, that was before they knew they won the gold, right . Reporter yes, absolutely. Theres a lot of talk about just how the russian respond to a lot of these things, a lot more stoic compared to other groups out there or ethnic groups, articles in the paper about how they dont like to rub things in other peoples faces. Oh, god, werent they just beautiful last night . You, yeah. Wow. Okay. Michelle, thank you. Coming up, the stock of the day. Can you guess what it is . Make sure you know what it is. Make sure you stay tuned also to squawk on the street because david 15er will be interviewing cnbc chief executive less moonves who probably has something to say about the deal. Reporting profits two cents above estimates and announced a 1. 2 billion stock buyback program. Stocks of the day, comcast and Time Warner Cable, comcast buying twc for under 159 a share, comcast and time warner told us this morning they were confident that the deal will be approved by regulators. So, youre satisfied with the explanation on the no breakup fee now . That makes sense . It makes a little more sense. I still think comcast got the better of uwc. Make sure you join us tomorrow. Squawk on the street begins right now. And an historic day in cable as comcast agrees to buy Time Warner Cable. Good morning and welcome to squawk on the street. Im david 15er along with jim cramer. We are live from the New York Stock Exchange on a snowy day here in new york city. Carl is in sochi where it doesnt snow. Were going to hear from him later in the hour. Lets take a look at futures this morning, of course, we are looking for a down open as you can see. A fairly significant down o