Transcripts For CNBC Squawk Box 20140325

Meanwhile, on capitol hill, the senate moves ahead to provide more sanctions on russia, but the measure could get hung up over proposed reforms to the International Monetary fund. Those changes are opposed by more republicans in the senate and the house. That is the one thats gone. The republicans continue to set up those that dont have that in it in the house. When you get to committee, i dont know exactly what happens, when you get to conference. Investors, meantime, are going to be keeping an eye on a new batch of Economic Data in the United States today. We get the s p caseshiller home prices for january out at 9 00 a. M. Eastern time. Economists are thinking well be seeing a 13. 5 year over year rise on home prices in the nations largest markets. But, again, there will be a key read that economists are watching. At 10 00 eastern time, we get consensus forecasts, calling for a 4. 9 drop in february new home sales. And at the same time, well be finding out how competent consumers are feeling. The confidence boards, Consumer Confidence is expected to tick slightly higher from the february reading. Lets get over to andrew. He has some of the mornings top stories. Thank you, becky. Disney doing some online shopping. The entertainment giant buying maker studios for 500 million. The company could rise if the Company Meets performance milestones. Maker is one of youtooup tubes Largest Networks. It helps produce and view videos across more than 55,000 different channels. That deal will make disney a major online distributor. You can look at that disney shares right there, 79. 85 is the price tag right now. After months of speculation, cloud Source Company box filed to go public last night. Weve had the ceo on this program. He plans to raise about 250 million. The stock will trade under the New York Stock Exchange under the ticker box. Box plans to use that money for the general corporate purposes. And then this story, i have to tell you, the maker of oakley and ray bans and so many others striking a deal with google to design and distribute the internet connected eye wear. The two companies will Work Together to create innovative eye wear. There has been a view, parker was working on a separate pair of glasses. I dont know if thats still the case and luxottica is a huge competitor. Well see. The google glasses are pretty ugly to start with. They want to get luxottica to try to help with the way they look. However, luxottica has some ugly glasses that look like google glasses. They do nothing, theyre just ugly. But you know what . They look good on full figured guys. Every time now hes not even here and youre going to insult him. He loves to here wouldnt you like it if a major he said yesterday in his column that you know youre the one who he said you know who you are out there and you forced me to pick. You said that yesterday he said he wasnt he was going to blame you, anyway. They were 350, only team ever, and you heard about them from me. Look, im not a basketball fanatic like you are. Im really not, either. You watch all sports. Here is the most interesting Business News today. Andrew, will you make this interesting for me . Ill try. Japans sumatomo is in preliminary talks with rbs about buying the british firm citizens this Company Might buy the u. S. Operations of the a little Business News for you in the morning. And we wonder why. Can we get back to the shockers . Did you actually read this story, andrew . Did you know about it . Were you interested in it . Ive seen the story. Can you tell me one reason why i should care about that . If youre in the banking business and you work for rbs, this would matter to you. Okay. Youve got nothing. Lets go to the securities and Exchange Commission launching an investigation into the increasing number of complex deals on wall street that can create some new opportunities for fraud. The wall street journal and all the wall street firms are looking into it, as well, for new opportunities. Nael, the journal says investigators at the s. E. C. Are examining if banks and company are using a bond deal to high risks illegally, which you remember how all these offloaded entities were part of so many scandals, even before the financial crisis. Securities packages of corporate loans and jets that are assembled and sold by wall street banks to investors and theyve gained popularity after the financial crisis as investors chase riskier Investment Products that arent necessarily as easy to package and put together any more. And the white house is expected to propose an overhaul to the nsa Telephone Program that would end with both collection of phone records. The New York Times reporting that the Administration Plan toes ask congress to approve changes that would end the systemic collection of that information. But the government would be able to access the information when needed by getting from a judge. The report says the overhaul would propose that Telephone Companies keep the data, but the company will not be required to hold on any longer than they normally would. Speaking of fraud speaking of fraud, five former employees of ponzi schemer Bernard Madoff were convicted yesterday. Each one was found guilty of securities fraud and falls falsifying books and records of a broker dealer. The sixmonth long trial was the longest in history and it was the first trial to result from a massive fraud revealed in 2008 when madoff was arrested. The contention was this was not a fraud that could have been perpetrated by one man, that there were many people stopping up that fraud and that they all personally benefited from the fraud while stealing money from investors. Stocks fall back into the red on monday. With us now to talk more about this is u. S. Equity and deaf rif is strategist at ubs. Also joining us on set, rod seppi. Guys, its great to see both of you. Nice to be here. I know youre both positive on stocks, but serat, you think things could get shoppy from here . Do i. I think weve had a few really good years. But i think as rates move up, youre going to have an issue where deleveraging is going to come into place and people will take profits off the table. You saw yesterday with the internet stocks, i think the next couple of months at least are going to be choppy and fundamentals are going to matter again. Companies are the ones you want to invest in, not just buying the market. I think Sector Analysis are moving forward. Would you agree with that . I would. And actually, the way we see it, the fed, after 5 1 2 years of suppressing volatility, is actually more likely to cause volatility because if you look at it, the tests they have in hand normalizing rates and reducing the Balance Sheet is something that they need flexibility. And in that type of environment, we like the sectors that have large cash balances, financials, technology and health care. But you did see the market closing up around 1950 . We do. Thats right. But its going to be youve already seen peaks and valleys in volatility over the last year. And we expect that to continue because, again, with the path that the fed has to take to get back to normal, its not going to be an easy process and obviously you have other issues such as russia and china in the background, as well. We have some people who have come on the program and said okay, this is an okay time for stocks, but a year, a year and a half for now, you see the fed set to raise rates. You dont think thats the case . We dont think so. If you look back, when the fed begins raising rates on average, stocks still go 33 higher for about two years until the bull finally peaks. So we think thats not going to be an issue. Does that sound like a possible scenario . I think actually three to five years will be pretty good. What the fed is doing now is signaling because they know volatility is coming, just as you said. If they didnt signal, people would get surprised and say wait a second, where is this coming from . Because the markets hate uncertainty. We all know that. But if rates are coming up, then theyre going to say what is doing well on the market . Companies that have refinanced already companies have the assets to grow and finally spend money and grow in areas such as industrials, such as discretionary. Those are the ones in the next 18 to 24 months that will do well save volatility in the shortterm. Do you have specific names in those sectors . Sure. If youre looking at industrials, we Like Companies like danaher. I think thats a Global Growth company doing very well. If you look at cloud computing, companies will grow as more and more corporations and technology dont want to do. They want to go and use other companies but theyre spending money. So you want to be part of the company that gets the money. What do you think about a company like box . I think companies in that space need capital and theyre growing because a lot of corporations do not want to insource any of this any more. So areas Companies Like excenture doing it, as well, those are companies that you want to be part of it and will grow down the road because their demand for their products is going to increase and their information that they keep is going to be extremely where do you stand broadly on the ipo market right now . I think cramer was on yesterday or the day before and well, i think biotech, if you dont have earnings, you have to be careful. There are some good Biotech Companies out there that have earnings and are coming back a little bit and might be an opportunity to start putting money back in there. But be very careful. Its like the internet back in 1999. If you dont have earnings and all you have going on is speculation or were in stage two and we potentially could be getting something, investors could be careful. Those are the things where you could hit a home run but easily strike out. What you said about what were looking at, i mean, all you really did was describe the First Quarter. And that is what 1 in choppy trading. So thats what weve seen for the past three months. Is that your forecast for the rest of the year . I think the market will be better the rest of the year, but 1 , we could be down 10 in the next six months. But its been hard to make any headway. We were hoping to get above 2 . What i would say is if youre going to try and trade this market, youre going to have a difficult time. Stay invested, put more capital to work, but i dont think being out of the market is coming back in, thats a losers game because this market can turn pretty fast on the down and on the up. What specific areas do you like . Well, ill go back to the commentary on ipo. To us, the Capital Markets themselves reasonably healthy and thats one of the reasons that we prefer financials. In general. Thats an ongoing youre saying the ipo market via the financials because of the fees . Derivatives, yes, exactly. And among those names, citigroup has been suppressed because of emerging market exposures. But as you see the ccarr shares coming out, thats benefited those recently. It sounds like beijing at this point is starting to move more aggressively to well, i think china changed over the last five years, as well. It was more of a manufacturing led economy and its more of a consumer led economy right now. Prices have been going up 15 he year. A lot of companies have moved assets or moved what theyre doing in china. China is going to grow, whether its 5 or 6 . A large base. I think a lot of that is discounted. What people dont want is a china to have a hard landing. Do either one of you see the prudent situation of ukraine ever being able to utilize our stock market here or is it just the oil markets in general, the ruble . What would you have to do . You would have to move in and what about thats i never heard of that place. He could do ukraine and if he keeps on moving is there anything there . Just the idea that its not a one off. Is there any reason to no . Its just a function of, you know, hes looking at the old soviet empire. Much of it he wants to pull back. Just like a risk. Thats right. I think the other part is its not discretion. Other countries also start doing that. Could china say now that russia is doing this, can we do that . Exactly. With other countries that decide, does iran want to do more things now because they know theyll have more support . That, i think, is something that we need to watch for. It could spook the oil markets or spook Global Growth. I think you have to be careful on that. But, you know, if that does happen, it might be more of an opportunity because long onner term that might be more negotiations amongst all the different countries. Of emanuels, do you know ari . Rahm and i go back can you get through to him . Ill try. Okay. Email . I dont know. I dont know how to you know, i keep asking, maybe squeak or rahm would be better. Rahm, hes going to switch parties. I really think he might switch parties. Im not why . He has to run that city and hes hanging out with steve forbes. He would move everybody to the he might. He has to actually run a place rather than just, you know, sounding good. Were going to see him later this week. Who is we . We. He is going to chicago. Im going to be in chicago. Were going to have him on the air. And im going to talk to sque ziek, too. Really big shoes. Rahm is going to be on. Steve forbes oh, yeah, yeah, good. Chicago. Thank you. Coming up, we have some snow in the forecast hoping that doesnt of getting chicago up in the northeast. How much can we get by this afternoon . We have tanss. Snow starting . Not here, though. Mostly north. Im not the weather man. Im not accepting any more snow here. And the Warren Buffett fathead made popular by his appearance on squawk box, it can be yours coming up in this mornings executive edge. Ive ed. Change engineering in dubai, aluminum production in south africa, and the Aerospace Industry in the u. S. . 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. Welcome back, everybody. It is the second constitutional challenge for the nations new health care law. Today, the justices will hear oral arguments in whats been nicknamed the hobby lobby case. At issue is whether or not bosses can deny their females contraceptive devices based on moral or religious beliefs. Gentlemen. Yeah, right. I have lots of opinions on this. I do. Actually, one thing i did read this is a losing topic. One of the things in front of the Supreme Court is not Birth Control. Its these things that some religions its after Birth Control. Plan b. Or these intrauterine things where they say its like it can interfere with a they think fertilization has already occurred, so and look, i understand that. And its going to be a very interesting case. With the Supreme Court just ruling a few years ago that businesses have political rights, its very hard to then say you dont have religious freedom. Oh, my god, youre coming down on that side. I was just afraid to talk to you about any type of reproductive because of the control of your body. No, because of the descriptions of it, because of it being the morningafter pill, because of it being the interuterine because some religious people believe life begins at contraception and who do you like, do you like kentucky or louisville friday night . Well, i didnt have louisville. No, i dont have either one of them. Do you like iowa state or connecticut . Im trying to change the subject because im amazed. Do you want to weigh in on this . No, im youre a god but look, this is a situation of just the employers being forced to pay for those things. I think if it werent further than that, if you were talking Birth Control pills, things like that, i think it would be a different scenario. Well, i may have to hold on, i feel like im to the left of you and thats weird. So lets say we work for comcast and if we do work for comcast. We dont have to lets say that. Did you not know that . And etna is our and etna is our health care provider. Are they . You have several choices, but yeah, etna is my health care provider, too. If comcacast decided they wouldnt pay for that, you would be okay with that . No. I think they might get some pushback, not from me, but i think they there are a lot kinds of things they wont pay for. Fertility treatments past a certain point. Theres another way to undercut this law that i think was just passed in a horrific manner and has done a lot of damage. But other than that, im not willing, you know this is below my pay fwrad. Thats what barry diller said. This is below my pay grade to have an opinion here. But youre a woman, right, becky . I am. But look, youre going to have people say that you should be able to do anything along those lines. I think thats a difficult question. Then what do you do with the arizona law . Your religious belief allow you to they are religious beliefs to do they allow you not to serve certain people at the counter . No. When your religious beliefs are whats the word that they use when they are sincere religious beliefs that go along with these things . Its not about serving people. Its about are you forced to pay for these services down the line. I saw the big article and thats not whether hobby lobby. I do think that the United States government should make sure that people have access to but making somebody pay for them, thats a different story. Theres a big piece on the guys from hobby lobby that brought this about. It was in the New York Times. Even the New York Times made the case for why this person but he started his company in an evangelicaler sort of a from day one, its been evangelical. This is not a bait and switch, i dont want to pay for this, here we are. This is somebody with sincere religious beliefs that two along those luines. And again, i think all those services should be available to any woman who wants to choose. Im just not sure that guy has to pay for it. Youre not asking the person that believes that to do anything in his family. Youre talking about someone outside of his family that is making the decision about their about what they do. Youre asking him to as a libertarian, thats where it gets me and i agree. I think all of these services need to be available. Everyone needs to have the right to choose. Thats their right to choose. But it doesnt mean that someone who is religiously opposed to it needs to pay for your right to choose. If its, like, under the auspices of health care i dont know. Im uncomfortable now. Can we just move on . It sounds like were arguing from the same side. This is a club i dont want to join. Lets talk about a much lighter story in that case. A new fathead is now going to be available for purchase. Fathead. Com which sells the big oversized decals and the big heads, these are the one thats we showed off on squawk box. Fathead is saying its going to be launching a an official Warren Buffett fathead. The proceeds of the 29. 99 decal go to two detroit charities. Still no word on when squawk box fatheads will be going out. It was something that they wanted to make sure was available. Power of. Whoa, whoa, whoa, that is the smile, buffett smile someone who has 60 billion. Me, why am i smiling . Hi, joe. Didnt i never got that fixed, did i . It just never seemed how do they fix those . Its your unique stamp. You shouldnt fix it. You should leave it. Lauren hutton. I always liked her its working out, working out for you, too, and madonna. Braces. Did you have braces . I never did. Some people have braces and then you dont want to retainer and it goes back. Letterman. Hes never beat nbc no matter who we put up. And i think its that thing in his teeth, you know . Could be. None of the night line guys have a they do okay. Thats right. Youre still here hanging out with us. Boy, that was dicey. So we got through that, i think, right . Well see about the blowback later. When we come back, were going to talk about revelations over the weekend about the nsa reportedly tapping into huawei. Now, had you awei is going on the defensive. We have a nice, calm conversation to talk about right after this. Before we head to the break, though, lets get the National Weather forecast from the alex wilson. Youre going to see snow showers around the in, next area. The big winners will be up in the parts of maine. Wizard storm warnings posted down towards sections of the cape. Winter storm out for you guys. These are where the heftiest snow totals will be. Even into the evening hours, be prepared for a messier evening commute. By tonight, dealing with snow from d. C. Up towards boston into interior sections of the northeast. And tomorrow, snow and wind will be the story all the way along the coastal sections of new england. Its going be a very tough morning commute, to say the least. Through tomorrow, were looking at accumulations of 1 to 3 inches from philly to d. C. The biggest winners are going to be along the cape. A foot to a foot and a half possible there. 8 to 12 inches possible into the sections of maine and that deeper shade of purple. Wind will be going on with that snow, as well. Snow, as well. About Business Internet . Ok, how about thirty seconds . At comcast business our internet is fast. Up to 5x faster than slow dsl from the phone company. And our phones better too. Sign up for internet and voice and find out how to get four weeks of internet for free. Time to make the call. 8005016000 comcast business. Built for business. What does an apron have to do with Car Insurance . An apron is hard work. An apron is pride in what you do. An apron is not quitting until youve made something a little better. What does an apron have to do with Car Insurance . For us, everything. I takbecause you cant beatrning for my frzero heartburn. N. Woo hoo [ male announcer ] prilosec otc is the number one doctor recommended frequent heartburn medicine for 8 straight years. One pill each morning. 24 hours. Zero heartburn. Good morning and welcome back to squawk box here on cnbc. Im joe kernen along with becky quick and andrew ross sorkin. Hollywood, i like to call him. Although its going to be done here in new york, right . Explain to everybody what is this is. Andrew, showtime is huge. Its the home of homeland and episodes and and soon to be billions by andrew ross sorkin. I wrote a pilot. Just a pilot. But with some bona fide david levine. And great writing partners is it any good . 13. They wrote rounders, one of the great movies of all time. Years ago, run away jury. Do you remember . I do remember run away jury. Who was john grisham. Who was in that, who was the female . There was, and i you saw that . We digress. So billions is about a its like about an attorney general or a prosecutor in new york and youre going to make it really anti its about a godless no, no, its about the nuance of it all. Its about the nuance of this whole when you look at it, did you ever see the wire . And you think the drug dealers are the bad guys and the police are supposed to be the good guys. Thats invariably how you come to it. But when you really get down deep into it you and realize who these people are, nothing is black and white, everybody is gray, and i think it will really not change peoples perception, but allow people to understand what the prosecutors are very andrew you would never think of the hedge funds guys, the charitable endeavors of he wasnt the head of the seventh district. I dont know too many prosecutors who have provided for and by the way, thats one of the layers to this story. But it is the Federal District that pubara represents that you would then be looking at this prosecutor inspect. Yes. So theres a legal side and then theres a the bottom line is that theres going to have to be a lot of reporting on whats going on in this world. And theyre going to need pretend cnbc anchors to do a lot of the reporting and its going to be us. No, you said pretend cnbc anchors. Like we do here, as you do on this show when you participate. We would be pretending. I was on damages. I still get money from glenn close. Im sure and all the cameos well have arrangements made for everybody. Were on the case. Its really about how it affects me, joe kernen. Anyway, in the headlines, russia being warned of more economic sanctions if it further escalates tensions in ukraine. I figure weve got crimea, no one is going to do anything. Well get them back in the g8 if this is all he does. So he may just lay low for a while, a couple of years, and get back in. I think hes very skillful and he works us and we were just, you know, completely unable to deal with him. Its been a superfalous response. Anyway, following russias annexation of crimea, its been kicked out of the g8. Other nations canceling plans to attend a summit in sochi, instead. Wow. Youre canceling that . Putin is shooting off fireworks. The g7 nations had made plans for their own summit elsewhere. In corporate news, blackberry reportedly tried to sell itself to Chinas Lenovo last year, but was warned by the canadian government that it would block such a deal, according to the cbc. Thats the canadian network. It is. They have now gone back and really looked through at the same time . At the same time. All right. Contemporaneously at the same time they did it. It takes blackberry abandon the sales after being told that an investment from either from either i assume thats china . Unless theres a place called chian. You know what this is. I do, i do. Or russia would be opposed. And the Houston Ship Channel remains closed for a fourth day as the coast guard continues to clean up an oil spill. Officials had thought they miblt able to partially reopen the key shipping lane area yesterday, but that didnt happen. The channel supplies crude to more than 10 of the u. S. s refining capacity. Lets talk about huawei this morning. A major revelation from hed ward snowden. Ironically, he was concerned about chinese hacking. Joining us now, hes beaten the Vice President of communications, bill huawei. The story came out just two days ago. Did you have any information before this that you might have been hacked potentially by the nsa . No. Like any enterprise, our Corporate Network is under constant poking and probing and prodding and attack. And we have rather vigilant and dynamic procedures in place to deter such activity. But no, this came as a bit of a surprise. In the past 48 hours, what have you done differently . Well, at this point, we are seeking to learn whether and to what extent has been alleged has actually occurred. And then well adjust ourselves accordingly. And whats your suspicion . Well, you know, i think that weve seen a great deal over the last few years an increase in terms of cyber miss mischief. The revelations over the last nine months have precipitated a growing lack of trust in Information Technology equipment and networks. Were seeing this as sort of a watershed moment where industry now needs to come together and address that crisis of confidence in networks in the industry. So we when i say we, the u. S. Is considered your company a Security Threat to this count country, do you consider the u. S. A Security Threat to your company . Well, i might challenge the premise of the first part of the question. I dont believe that we, the u. S. , consider my company to be much of anything. Huawei has not allowed people in the u. S. To form an opinion about my company. In fairness, were a young company, were a very Innovative Company let me give you an opportunity. 2003, cisco sued huawei for stealing source code. 2005, the u. S. Air force hired rand and concluded there was a Triangle Network working together to do things to concern us about our security. What do us to things that were happening over a decade ago . To a great extent, a lot of information over the decade has been misinformation and never ub stashated. And this is where i think, you know, we share some of the responsibility for americans not having had the opportunity to understand the company. So youre saying rand was wrong, that huawei was never in any way spying on American Companies or spying on any American Military intelligence . 100 absolutely wrong. So what happens with cisco . Back in that day, there was an issue and a lawsuit associated with a minority section of code in the product. And that case was settled with both parties and we moved forward. Whats your relationship like with the Chinese Government . The same as our relationship is like with any government in which we do business. Our industry is heavily regulated, which means we need to ensure that the gear we bring to market needs to be appropriate, the specifications required within that market. If the nsa may or may not have a back door into your services, which you may or may want believe, i dont know, do the chinese . Again, the revelations over the weekend are still new and were still seeking to understand what may or may not have happened. Huawei takes its products very seriously. We know there are penetrations and we address those when they happen. If youre a client of huawei, what are you supposed to think of all this . Were a 40 billion company across 150 markets with carrier customers, Major Carrier customers in every nato market, in every oecd market, and most of the developing world connecting about onethird of the worlds population. This company is proven and trusted and we anticipate that well continue to work with our customer toes maintain that trust. Okay. Were going to leave the conversation there, especially giving you the news. Other companies in the future. Wonderful. I look forward to it. Thank you. Coming up, the prophet, Marcus Lemonis tells us about his latest attempt to save a toy company. And later, Charles Plosser will be our special guest, which is awesome. More squawk next. More squawk ne. Goal is to grow. Gotta get greater growth. Growth . Growth. I just talked to ups. Theyve got a lot of great ideas. Like smart pick ups. Theyll only show up when you print a label and its automatic. We save time and money. Time . Money . Time and money. Awesome. Awesome awesome awesome awesome awesome awesome awesome all awesome i love logistics. Phone your account is already paid in full. Oh, well in that case, back to vacation mode. Boots and pants and boots and pants and boots 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. Some Brokerage Firms are but way too many arent. Why . Because selling their funds makes them more money. Which makes you wonder. Isnt that a conflict . Search proprietary mutual funds. Yikes then go to e trade. Weve got over 8,000 mutual funds and not one of them has our name on it. Were in the business of finding the right investments for you. E trade. Less for us, more for you. The funds prospectus contains its investment objectives, risks, charges, expenses and other Important Information and should be read and considered carefully before investing. For a current prospectus visit www. Etrade. Com mutualfunds. Welcome back, everybody. Right now, its time for todays squawk planner. Housing will take center stage later this morning. The caseshiller home price index will be released. At 10 00 eastern, the markets will be absorbing the new home sales. Plus we have the latest read on Consumer Confidence released at the same time at 10 00 a. M. Thats your squawk planner for this tuesday. Joining us right now, the profit himself, mark lemonis joining us in studio. Thank you for being here. Thank you. Just in from l. A. . I feel like i just woke up. Thats the perfect time to get all the true answers out of you. Hes going to talk to us about his latest attempt to save a company from ruin. More squawk right after this quick break. 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. 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. [ girl ] my mom, she makes underwater fans that are powered by the moon. She can print amazing things, right from her computer. [ whirring ] [ train whistle blows ] she makes trains that are friends with trees. My mom works at ge. Its a new episode of the profit. It airs tonight. Heres a quick prae view. Give me this line in the sand. I started at one number, im down to a much smaller number, one that makes me wildly uncomfortable. All the debt on the Balance Sheet is cleared. I want 30 of the business. Thats a test of whether you really are guys that compromise as opposed to everything will be a line in the sand. I want to be able to have control over the financial side. Financial control is simple for me. I dont want you taking on any debt or partners without me okaying it. I think thats fair. What do you think, peter. You want to shake on it. Do we need to run this by your dad. No, i dont think so. He trusts my judgment. If i had to ask him everything i did, this place would slow to a halt. We have a deal . I feel good about it. This is a 1. 1 million check. I think this is just another day. Lets do it. We have a deal. We have a deal. Heres your money. Thank you. When i give you this check, you know im 100 in charge. Oh, boy. Ill say. Thats scary. What are you scared about. I just thought of a bunch of stuff. The star of the shown, the turnaround king himself joins us now, Marcus Lemonis. He invests his own money trying to make struggling businesses mack a comeback. Im starting to understand this. This is like a huge sort of a scheme for you, i think. You dont even care about tv. You can go in here and sort of push these people around and maybe get really good deals on businesses. I dont know im pushing youre building a huge portfolio. Youre going to be Warren Buffett. The tv is a means to an end for you to get good deals on these interesting companies. Youre finally catching on. This is how this is working. I want in on this somehow. Theres a 9 00 time slot available. Bring your checkbook. I want to talk about, seriously, is this company. Im intrigued. Its a toy company. And Toy Companies are just cool to think about. Yes. 1. 6 million in sales. But if they could get into a big box. Yes. I mean, 1. 6, that would just scratch what they make, i want to ask you what they make. The fossil replicas. We had a Birthday Party when a big block came, you scrape the stuff out and find a fossil. Is that what its like . No. The Company Started 20 years ago as a fossil replica maker, it makes skulls, they build molds and kids can pain the them thats dropped to 8 of their business. Its expensive. They started molding into more common tours. Everything they put out looked like dollar store products, noen brad, no licensing, the cars are plastic, not a lot of sex appeal to them. I take them to manhattan from california, i take them to the nascar headquarters and they actually look me in the face and say, they look at the nascar gentleman in the face and say why would we partner with nascar . We have a car. We dont need you. The guy from nascar looks at him and says are you kidding. That Partnership Deal didnt go off, i take it . Heres what happens. When i do a deal with people i shake their hands. If they act like idiots through the process, it doesnt give me a right to walk away. I gave them three basic tenents. They cant take on debt. They were 900,000 in debt, i paid it off. You cant take money out of the company and you cant change your salaries. In the end they said we dont want you in control. Too late. Too bad. I walk out. Do you get your money back . What happens is, all these deals, they cant cash the check. Its a little odd. They cant cash the check until the paperwork is finalized. In some cases, though, i spend money. I built them out a 100,000 lab, assuming assuming the deal is good. These are basic tenents. Im not asking to change their operations. The father comes in, thats why you see me ask. The father comes in and says this is not okay. I dont want you controlling my business. When you asked for the firstborn son they had to draw the line. They had to draw the line, no first born son. What kind of diligence do you do prior to the show. None. Zero . Youre walking in totally blank . The premise of the show is trying to be as real and authentic, take you through the diligence with me. You usually agree before the first commercial youre taking them on. Ive been there three days. I agree on a handshake. What do the financials look like for me when i shake somebodys hand. Its a Million Dollar deal, not a 100 million deal and i ask them for three basic things and they say yes, i dont know what else im supposed to think. You think you have a gentlemans agreement. What happens if you find out later theres an accounting problem or this or that. Then i leave. They havent cashed my check. In real life we have to go. These are details. Thats how i do my deals. I like the name. Stupid name for a toy company. Really . That makes skulls. Thats 10 of their business. Then i dont know. Maybe i need you to help me. You would yell at me. Can i come on. Yes. I have to clear it with mark but we can try. Wow. I want to do that. Can i do that . Yes. You have to bring a check, though, well 50 50 on the deal. You get to decide. Never mind. Thank you. Thanks for joining us. That makes a difference. No, no, no. Marcus, well see you tonight and hopefully back here next week. Thank you. Up next, squawk newsmaker, Philadelphia Fed president Charles Plosser gets ready to join us on set for the next hour. Well explore the economy, jobs and the future of Interest Rates. Squawk box will be right back. Welcome to a special presentation of squawk box. Todays guest host, Philadelphia Fed president Charles Plosser. Hes one of the first fed insiders to speak since last weeks Central Bank Meeting and Janet Yellens first News Conference as fed chair. Forecasts for the economy, jobs and the future of Interest Rates. Thats next right here on squawk box. Good morning, everybody. Welcome back to squawk box here on cnbc. Im becky quick along with joe kernen and andrew ross sorkin. Weve been watching the futures this morning. They have been indicated higher after a decline yesterday. Dow up by 40 points, nasdaq up by 10 and s p up by almost 4. The yield is 2. 728 . Its a busy day for economic numbers. Two key housing reports coming up. At 9 00 eastern, the january reading on home prices. And 10 00 eastern time, the government is out with its new home sales report for february. At the same time, well be getting the conference boards march Consumer Confidence index. Well have a few numbers to sink our teeth into. Walt disney will be buying networkmaker for 500 million that deal could be worth as much as 950 million if maker reaches certain financial targets. Maker is one of the Largest Networks on googles youtube. They distribute videos to more than 380 million subscribers across more than 55,000 channels. And eyewear maker luxottica, the Company Behind ray band and oakley brands. The goal is google glasses that dont look like geek glasses. Then you dont know, if theyre good at it, youre not going to know somebody has on these google glasses. In 20 years well all wear glasses. Theres all kinds of weird things you can do. You can be videotaping everything thats happening. Theres political operatives that think this would be a great tool to get in on the other side to do more of these behind the scenes tape recordings. Youll have to watch what you say everywhere. I think when ben white is on hes taping you. Weve looked into his glasses. And those are geeky already. They arent even google glasses. A lot of times, remember you know hes still asleep right now . Hell hear all about this. He writes his column and goes to bed. Its a hibernation, a deep slumber. He looks good. I know. We have a couple other headlines to bring you this morning, after months of speculation, Cloud Storage company box will trade under the Ticker Symbol box, box. Im glad you keep spelling box, box. Just for anyone who doesnt some people may know it starts with a b and an o but not sure how it ends. My son max has only three letters. He knows the m. M is complicated. It could be bokks. This is a good reason max is learning how to spell his name. He has three letters. Hes very good at m. He can get the a, very good at x. Youre Walking Around spelling stuff. Youre doing things for 3yearolds. Pretty much. You think our audience should be treated like 3yearolds. Its hard. How to get to sesame street bob is planning to use that money box. Box for general corporate purposes, at least thats what hes saying this morning. Hour guest host is morning is plosser. Mr. Plosser, thanks very much for being here this morning. Pleasure to be here. Good to see you. We have a lot to talk about. The markets reacted a little bit strangely last week when janet yellen was speaking. I think they thought that maybe she was saying the fed was going to raise Interest Rates sooner than the market had anticipated. Were thinking maybe the middle of 2015. Did we mishear something . Or was there a wrong interpretation . Did the fed change its position about when it expects to raise Interest Rates . I dont think the fed changed its position. It tried to say explicitly in its statement, we believe that the Forward Guidance or the expectations have not changed as far as were concerned. So its a little bit puzzling that the market will react the way it did. What you need to do is Pay Attention to what she said after her reference to the six months which was that it was going to be data dependent. It would depend on the outlook for inflation and improvements in the labor market, those were the things that would matter that would dictate when we consider raising rates. When she said six months, did that surprise you . No. I think there was a lot of evidence, a lot of surveys that suggested six months wasnt a wildly unexpected time frame. But i think it is better to get away from talking about time frames and talk about Economic Conditions is a much better way to think about it. Maybe it was a mistake to put a time frame around that and maybe thats what the market freaked out a little bit about . Perhaps. I dont think that was a mistake. I think, again, it was consistent with what our understanding of surveys were telling us. I dont think it was that unreasonable. I think its more important to talk about the Economic Conditions. Do you think the reaction surprised chairwoman yellen to some extent and maybe did she already know how important it was to walk a fine line to not destabilize things . Im sure she did, already knew that. Right. Is she hypersensitive now . I think you have to ask her that question. I was a bit surprised that the market reacted as much as it did. Maybe the market is testing dont you think these guys naturally would test her since shes new and it was her first you mean the market would test her . Yes. I think they would initially assume, look, weve had bernanke. We know what hes going to say. Were used to him, comfortable with him. Well see what she the market, everybody in the market seemed good. They sort of do. I mean, collectably it comes out. There was a weird headline that ran on dow jones news wires. Suggested Interest Rates would rise in the fall. That would put us on a time frame for the fall. She was talking about the wind down of qe. Dow jones news wires ran a headline that said she said it was going to be making corrections in the fall. On these shortterm time loans its hard to know whats being a lot of that was reversed the next day. Greenspan. Kneejerk reaction. Theyre looking for a rookie waiting for some i mean theyre on the edge waiting for a rookie mistake. Theres two things in flux. You have a new chairman and you also have a new policy. Both these things happen at the same time. I want to button one thing up here. Six months. First of all, yes, the trouble you have is that bonds have terms on them. They dont say, this matures when the fed makes a change. It says, a year, two years, a month, two months. Thats why people get hyperabout this stuff as you know. The question becomes when the calendar begins. Do you see quantitative easing ending in october, november or december . And when can i start counting six months . Well, if you look at the schedule as weve laid out, at least the schedule weve alluded to that we were going to continue to reduce purchases at the pace of roughly 10 billion, meeting Going Forward, if we stick to that schedule, bond purchases would end probably either in october probably november or something in that range. Whether its october or november. Its hard to say. But yes, then but i dont count months. I couldnt the that we cant it is silly for us to contemplate raising rates until we stopped purchases. Thats the first message. All right . Then the question will happen that well consider is whats the state of the economy . How does it look Going Forward . What are our forecasts . After all since december, our forecasts for the Unemployment Rate is for the end of the year has dropped about 0. 3 . So i think well assess at that time what conditions in the economy look like and thats going to judge when we think its appropriate. You also moved away from the Unemployment Rate as a target. So should we assume that that Still Matters to you quite as much or should we assume that i think the unemployment matters a lot. I think i would prefer us not to sort of dismiss the Unemployment Rate as some sort of irrelevant statistic because it isnt. We talked about this before. Ed luzier had a piece in the wall street journal maybe a week or two ago he suggested actually stop looking at the Unemployment Rate, look at hourly Hourly Earnings and number of hours. Number of hours worked. He was trying to suggest actually that things have not gotten maturely better. There are lots of different statistics you can look at in terms of the economy, in terms of labor markets. The question is, which one do you think is the best guide for assessing the state of Monetary Policy . Often times thats a different question. I think the Unemployment Rate still is a pretty good indicator. Its not the only indicator, clearly. Luzier has been a jolts guy. Every time hes ever come on here. Lets dial in one of the things you think is going to happen. You have to put a dot out there. Janet yellen was talking about the dots. She said dont Pay Attention to the dots. But theyre important. When do you see the first rate hike and what is your estimate for where the rates will be at the end of next year. 02015. First of all, let me remind you what the dots are. They are not forecasts of what Committee Members think will happen. That is not what they are. Theres a big mistake that people interpret these. These are forecast of what we think the committee will do. These are projections about what each Committee Member thinks would be the best policy to deliver the best outcomes. Thats a different conceptual question. Fair enough. First place lets be careful about what the dots in fact mean. Thats the first thing. The second thing i would point out is that when the dots first came out, if you remember i was a member of the subcommittee with janet yellen that developed these and came forward with them. I tried to stress to people that what the dots really look like at any point in time was not terribly interesting because the reasons i just gave you. The value of the dots in part are is how they change over time. Because how they change over time reflects how Committee Members are adjusting what they think is appropriate policy in response to Economic Data coming in. So how are they changing . That is the important message. Not the level, not the individual numbers. I appreciate the explanation, charlie. Im not going to let you get out of telling me where your dots are. I have my dot is at 3 at the end of 2016. Okay . Interesting. 2016, not 15. Where are you in 15 . 2 something. 2 something. Im more than the median. You think the optimal policy is to begin raising rates earlier in 15 than perhaps your brethren on the committee. Possibly. I work backwards. If you look at the forecast and the assumptions that many people have, in 2016 we are going to be pretty near almost anybodys definition of full employment. But youre only at 3. Let me finish. Anywhere close to full employment as well as having inflation pretty close to 2 . I think it is inappropriate to have real Interest Rates, a funds rate at 2 , which was zero real Interest Rates when youre at full employment and near your inflation target. So i work backward from saying thats not the right place for us to be then. That means we have to start a bit earlier and gradually raise them. Thats a much more gradual. If you think were at two something at the end of 2015 and raise it to 3 something by the end of 2016, that suggests less than a quarter percent hike. Thats not aggressive. We have a lot of people that suggested once the fed starts raising rates theyll have to raise more quickly and aggressively than they have in the past. Ive suggested that. We dont know that. Our desire, the feds desire is everything will go gradually and smoothly. Well be able to gradually adjust rates back to where they need to be. We dont know if thats going to happen. Ive often said Financial Markets arent always patient. If they get ahead of us, we may be faced with a situation well have to raise rates faster than we otherwise would have chosen to do. Thats one of the great unknowns about this whole exit strategy. Were above where we were when chairwoman yellen made those comments. In fact, we recovered that day. You can see its going to be interesting the way the market responds. Someone earlier today said that for two years, the fed has orchestrated no volatility in the stock market. By definition, as they exit, theyre going to engender volatility. I think theres a risk of that. I think one of the things ive said often times, were in a world where weve never been before in terms of conducting policy. As we unwind from this, the question is how will this play out . What are the risks . If we have in fact been in a situation where the fed, through its policies, has been distorting risk premium or distorting relative prices of some kind in Financial Markets, if thats the case, within we stop doing that, those prices will have to adjust. By definition. I dont know what the consequences of that will be. Will it be abrupt . None of us do. I dont think any of us do. Stay tuned. Thats fun. Watch cnbc. You could argue the volatility is around certainty or uncertainty around fed policy as much as it is around the actual policy, what is the exit, what is the reaction function of the federal reserve. Certainly some of that is. The question is how far, if you really believe a lot of the actions weve taken have had big effects in the Financial Markets, the question is when we stop doing that, which we will at some point, those things will have to adjust back to where they want to be, the market wants them to be. What will the consequences of that be . Thats a big question. This is an amazing day. Theres so much uncertainty about fed policy and charlie is the first guy, anybodys had a chance to question. He has the whole burden of the entire fo many. C statement, all the fed policy for next year on his shoulder for the next hour. Thats scary. Thats serious stuff there. Hes the big hawk and hes talking about maybe in 2016. The very end of the year. Thats news to me. That tells you something, too. Thats the big story we have to talk about next, the idea the fed said it will be lower than normal. What does that even mean . Is there Something Else happening in 2016. An election. Well wait till the end before this guy pays the piper. Dont talk politics. Well have much more with Philadelphia Federal reserve president plosser over the next hour. Coming up, an update on the search for Malaysia Flight 370. Check out the futures this morning as we head to break. More squawk box right after this quick break. S protein in jellyfish, impact 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. With investment information, risks, fees and expenses 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. The search for missing Malaysia Airlines flight 307 got blocked by nasty weather. Its the nature of apparently that part of the planet. Yes. We are joined from kuala lump lumpur. I havent watched it quite as much as some people, anybody thats had cnn on, sri. It took 12 days for them to know definitively like what seemed like they should have been able to piece that together for the first coup them in the first couple days. Our hearts go out to the families. Absolutely. This is what the families are so absolutely agonized about. The fact that the search operations, remember, this is using stateoftheart 21st Century Technology as well as from rudimentary technology, eye balls on the decks of ships looking through binoculars have yet to turn up a single trace of the missing airliner, the b777. At a press conference was the acting transport minister who said he told reporters that the search in the northern corridor has now been called off and the search efforts are now being concentrated on the southern tip of the southern corridor. So were talking about an area in the region of around 249,407 square nautical miles. Consider what it was prior to that narrowing down. It was just over 2. 2 million square nautical miles. As i said, very formidable task. You touched, joe, on one of the reasons why its difficult and challenging. Mother nature continues to be against the operation. It was called off today, all the aircraft surveillance aircraft, the Reconnaissance Aircraft involved were grounded in australia and perth because of very serious sea swells, poor visibility, Gale Force Winds and low altitude clouds that complicates these search efforts. Theyre now being characterized as debris recovery efforts. We have found, as i said, let me continue to stress this, any evidence of the remnants of 370. What is absolutely critical now and the acting transport minister talked about this to reporters, is that this is becoming a logistical and technical focus, technically focused operation now. So even more sophisticated assets are going to be brought to bear here in the search, especially for the black box flight recorder. This is where the u. S. Navy gets involved. A tract pinger locator is what is being described will be deployed by the u. S. Navy. This has been used to search for downed naval aircraft and commercial airliners in depths, water depths of up to 20,000 feet. It will be deployed tomorrow. In the words of one australian official, it will make the task a little bit more simpler but its still akin to looking for a needle in a haystack when the hay stack itself has yet to be defined. Those are the challenges that the search operation has to contend with at this stage. The search does go on, though. Joe, back to you. We appreciate that. Its one of those situations where you worry about, its a salvage effort now. Its not even necessarily a rescue effort. You worry about the people whose lives are at risk dredging upin all this stuff. You dont want to have to do a salvage of the people that went to salvage it. I never thought of that part of the world, 1,500 miles southwest of australia. I dont even think ive considered where that is. Coming up, a lot month are from our guest host, Philadelphia Fed president Charles Plosser. Back in a moment. So our business can be on at ts network for 175 a month . Yup. All 5 of you for 175. Our clients need a lot of attention. Theres unlimited talk and text. Were working deals all day. You get 10 gigabytes of data to share. What about expansion potential . Add a line, anytime, for 15 a month. Low dues, great terms. Lets close new at t mobile share value plans our best value plans ever for business. [ girl ] my mom, she makes underwater fans that are powered by the moon. She can print amazing things, right from her computer. [ whirring ] [ train whistle blows ] she makes trains that are friends with trees. My mom works at ge. Were going to talk Market Strategy plus much more. Philadelphia fed president Charles Plosser, guest host. Well be back after another quick break. Ok, heres the way the system works. Lets say you pay your guy around 2 percent to manage your money. Thats not much, you think except its 2 percent every year. Does that make a difference . Search cost of Financial Advisors ouch over time it really adds up. Then go to e trade and find out how much our advice costs. Spoiler alert. Its low. Really . Yes, really. E trade offers Investment Advice and guidance from dedicated professional financial consultants. Its guidance on your terms not ours thats how our system works. E trade. Less for us, more for you. Welcome back to squawk box this morning. The securities and Exchange Commission launching an investigation into the increasing number, complex bond yields on wall street that may be creating new opportunities for fraud. Thats what the wall street journal is saying, theyre reporting that investigators with the s. E. C. Are examining if banks and companies are using the bond deals to hide risks illegally. The securities are packages of corporate loans and debts assembled and sold by wall street banks to investors. They have gained popularity, parentally after the financial crisis as investors chase riskier Investment Products. We can talk to mr. Plosser about that, too. Blackberry tried to sell itself to Chinas Lenovo. That happened last year but was warned by the canadian government it would block such a deal, that reported by cbc, not cnbc, cbc being the canadian network. Michael lewiss the big short about the housing crisis being turned into a movie. Adam mckay, the director of anchorman movies will be directing it, according to variety, by paramount. I hope its a parody. I hope its like anchorman. Are they doing it as a comedy. I think they should do it as a comedy. Id like to see too big to fail as a musical im thinking. Theres a guy, recently, i kid you not i guy who writes musicals who approached me and said he wanted to turn too big to fail into a broadway musical. You did not dismiss that out of hand. Im actually supposed to meet with him. Theres money involved. Do i know you like the back of my hand like the back of your hand. Are you serious . I kid you not. Im telling you the truth. Can you dance . I cant dance. Chuck prince can dance. Come on. Thats right. Thats right. Another down day. Yes, im excited about this, this project. Im not kidding. Another down day for the markets. Im not giving it high odds. There was an enron play on broadway. There was. That lasted about a day and a half. On broadway . On broadway. Until it was off broadway very quickly. Lets not get too excited. Dont dismiss this. Lets wait for lunch. After crunching the numbers, Standard Poors sam stovall said its better to buy than bail. It took two months to get back to break even, on average. Sam is chief equity strategist at s p capital iq. Hes chairman of the investment policy committee. He comes from a long line of famous stock market people. My generation it was bob stovall. Thats right. Still around, pop turned 88 in midfebruary. He and i are going to be doing an event in late may for the executive forum, a program part of nyu. I remember him, was he chief Market Strategist at dean witter . If you go back to e. F. Hutton, reynolds and company, my grandfather was the first employee of reynolds and company that later became dean witter reynolds, et cetera. Thats amazing. Three generations. Okay. Its been good to be long since the bottom of right in the middle of the crisis. You basically have been. Yes. I remember as youve come on. You get criticized to are that. You sound look a permable. Its hard to criticize someone when its gone from 666 on the s p. Devilish number, wasnt it. It was an oman. Are we in a secular bull at this point still . I believe we are. It doesnt matter sman ti semantically. I think we have to look have we gone too far too fast, when am i, the investor, somebody like me who has to extract my emotions, what are we going to do Going Forward . In this day and age of instant information, i can experience fear and greed at the exact same moment. I will use history as virtual volume. What you found is 58 times whats the average market break . What i basically found was that youre more often better to buy than you are to bail. You know, it takes a little bit of time for the market to decline by 5 . Usually investors get very worried about whats going to happen to their portfolios and they either start convincing themselves or their Financial Advisers that its time to lighten up, move toward the very defensive areas of the market or get out all together. My feeling is, no, if it takes us only two months to get back to break even from a pull back and only four months to get back to break even from a decline as great as 20 , and thats basically 85 of all declines since world war ii, youre better off actually taking a reverse position by saying, i want to find out the right thresholds at which to get into the market, not worrying about when to get out. Be nice to have dry powder, right . Should you slowly be taking profits on part of your position and when you get a break then really go in . Sure. I think there are three ways you can do that. First after if you continue to be employed you can put some of your excess money into cash to be used as the dry powder. If you are in retirement mode, maybe you dont end up using all of the Capital Gains and dividends that you are being paid. Maybe you can put some of that into a reserve as well. Maybe what you do, you sell half on a double as the Stock Traders almanac likes to mention. Use some of the proceeds to build reserves so when we see these declines, at least mentally you can say im being positively proactive. That way im not going to let my emotions rule my decisions. Am i supposed to wait for this moment . Well, you can. Certainly you could also have the other viewpoint that why wait at all. Usually its after the market has advanced by 8 before it would decline by 5 . Im better off reinvesting my money altogether. A good book, the intelligent assess allocator says diversify, balance, ignore, ignore people like me saying buy or sell and let a diversified portfolio work for you. As the money trickles in from the musical too big to fail the musical, and the billions on showtime, use the money from that. When am i supposed to take this big hunk of dough as all these things keep coming in. Youre bringing up a good point. If the market starts to decline when you put money in, i find that in this cycle. The average decline in a pullback is 7 . The average in a correction is 14 . The average in a bear mark set 28 . You could say that sir Arthur Conan Doyles 7 solution actually was a good recommendation on decline levels to add to your funds. Every time you see 7 . Every time you see 7 or if youre so impatient you get upset if you miss a slot in a revolving door, do it every if it goes up 8 before it drops 7 . You can overthink it. Just make sure you are well diversified. You can take that approach. Why are people watching tv such as this unless they want to try to get ahead . Robert ludlum, the bogle approach, that was after the bogle no, thats Something Else. The borne identity was bogle. Okay. Thats something different. Lets get back to our special guest this morning, Philadelphia Fed president Charles Plosser. We had a guy on yesterday who was really smart. Peter fisher. Ive seen two ways of looking at the way the fed has been accommodative but a lot of it hasnt made its way into the real economy. Buffett says that makes it easier to pull back, that the Balance Sheet isnt that big and we dont have to worry. Others point out that because banks havent really used the money, that all that accommodation was actually selfdefeating, that banks became more tight fisted about lending. Because it put a cap on the terms, so they werent able to make money with the yield curve. He thinks that its possible as you exit that things actually loosen up for people based on the banks being more generous with credit. Is that possible . Lots of things are possible. One of the things ive learned in this job, never say never. A lot of things are possible. I dont think we really know very precisely any of those kinds of things. I think our Balance Sheet is very large. I am worried about the exit and sort of what the unintended consequences might be. I have expressed doubt that a lot of the Asset Purchase Program has filtered into the sort of main street economy. A lot of its been used for sort of what i would call Corporate Finance, restructuring and sort of reengineering of Corporate Finance without leading to much new investment and new jobs and output. I worry a little bit when we unwind from all this, what are the consequences for readjustments that will happen . So i think theres a lot of big question marks. Do you think that as buffett says that it isnt, the size of the Balance Sheet is not we shouldnt say its 5 billion or whatever because it hasnt really left gone into the real economy. Will it be easier to pull back . I dont know that that makes much difference. The question is that what happens to those reserves as the economy continues to grow. Are those reserves, as long as theyre sitting in the Banking System, not much is happening with them. When we start to flow out, thats when the feds going to face a challenge. Theres a blog that shall remain nameless that loves to write incendiary pieces about everything. Maybe thats how they hope to make money. They took richard fishers one of your associates comments about boosting asset values as saying that its just benefited the wealthy and did you see that piece . Yes. We talked about this here. Yes. But that he definitely said that it didnt help main street at all, all it did was make the rich richer and we knew it all along. They took that for their own right. Eye balls to their blog, i think. Even richard has been outspoken in saying that but i mean, it wasnt totally just counterproductive. Right. No, i dont think it was totally counterproductive. Ive always argued basically that i thought the marginal benefits that we the economy benefited from in the course of our asset purchases were pretty meager, not zero necessarily but meager. The risk for unintended consequences were quite large and risky. And, therefore, we should be very cautious in blowing up that Balance Sheet in doing what we did because the costs outweigh the benefits, in my mind. Not to mention with rates at zero for this long, it punishes people who are retired, living on savings, who have done things right their whole life and done what theyre supposed to do and are now in a position of 0 Interest Rates, they wont be able to get by for forever on that. Its a very challenging position to be in. Absolutely. Could you see youre in the camp that thinks the economy is improving, obviously, or else we wouldnt be tapering. We get to somewhere near 3 by the end of the year. Is there anything that can happen geopolitically . Could the ukrainian thing turn into something that destabilizes our markets or unlikely . Its certainly true when you talk about what happens in ukraine, im way out of my depth. You have to think about black swan type events at the fed. You do. Clearly i think most people are at least currently are thinking from an economic point of view, theres an unlikely traditional spillover that are likely to be very large. The question is their financial event that causes sort of great panic and freezing up the Financial Markets in some way. As the ruble went to zero, it wouldnt be the financial crisis, would it . It wouldnt be a financial crisis. We havent really talked about china. China is the other place. Thats the big one hanging out there. If he moves into ukraine completely. If he says i like ukraine. I think even if he takes yes. At that point youre talking about this was not a one off. I am looking at empire rebuilding. Do they have a ritzcarlton or not . I dont know. Is it a big what kind of country are we talking about here . Is it something youd want to keep . Doesnt matter. Im going to look it up and find out. Thank you. More for you in just a moment. President plosser will be with us when we come back. And barry diller is joining the board of a Security Community startup. And in the next hour, senator marco rubio is taking on regulation. Hell join us live. Squawk box will be right back. Velocity 1,200 feet per second. [ man 2 ] youre looking great to us, eagle. 2,000 feet. Still looking very good. 1,400 feet. [ male announcer ] a funny thing happens when you shoot for the moon. Ahh, thats affirmative. [ male announcer ] you get there. Youre a go for landing, over. [ male announcer ] the all new cadillac cts, the 2014 motor trend car of the year. I takbecause you cant beatrning for my frzero heartburn. N. Woo hoo [ male announcer ] prilosec otc is the number one doctor recommended frequent heartburn medicine for 8 straight years. One pill each morning. 24 hours. Zero heartburn. On my journey across america, ive learned that when you ask someone in texas if they want big savings on Car Insurance, its a bit like asking if they want a big hat. scuse me. Or a big steak. Or big hair. I think we have our answer. Geico. Fifteen minutes could save you fifteen percent or more on Car Insurance. Live shot of the windy city there. Breaking news for you this morning, iac media chairman barry diller is joining the board of live safe. This Company Announcing a 6. 5 million raise series a financing that will be led by aic. They make a Smartphone App that allows users to report and receive community alerts. Well talk to the live safe ceo jenny abrahamson, coming up at 8 30 eastern time. Coming up next, much more from our special guest Philadelphia Fed president Charles Plosser. In the next hour, a special hoops edition of this segment. We have green arrows. Thank mr. Plosser for that. Back in a moment. [ male announcer ] help brazil reduce its overall reliance on foreign imports with the launch of the countrys largest petrochemical operation. When emerson takes up the challenge, its never been done before simply becomes consider it solved. Emerson. Emerson. 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. Welcome back to squawk box. Were getting back to our guest host, philly philadelphia president Charles Plosser, but first, Steve Liesman is here. Were launching later this morning what we call the cnbc rapid update powered by moodys analytics, a way to put dizzying amounts of data into context. Well poll seven top wall street economists, including bark clays, deutsche bank, moodys, goldman sachs. These forecasts change with incoming data. Thats way theyre called tracking. It tracks data releases, into gdp points and gives investors a way of gauging the importance of the data. We developed this idea with mark zandi. He says this statistic translates the blizzard of Economic Data into what it means for real gdp growth. No other statistical measure measures the economys overall growth in realtime. Weve been testing it for a few months. Now were ready to go public. Ill be reporting about it on cnbc, follow it on cnbc. Com rapidupdate. Youre providing new data for mr. Plosser. Exactly. And miss yellen to study. Some guys at the fed may have interest in this, because theres no way to do it. Lets talk about the data coming in and what it means for the federal reserve. A paragraph in the statement got a lot of attention. It said that when we get back to normal unemployment, when we get back to normal inflation, a normal economy, the feds funds rate may still be below normal. You voted for this statement. What does that mean to you . I think different people interpret it different ways. I think its a desire on the part my view is that some people would like to see, well, thats going to be necessary in order to be at full employment, that they view these headwinds and other rationales. Other people say this is a way of committing to be lower for long in order to help the economy. Those are two very different stories. Theyre incompatible with each other. Other people have different rationales for it. What does it mean for you . My interpretation is that i think we want to get back to more systematic policy, normal policy. And frankly, when we get to something that looks like full employment and inflation target we ought to be pretty close to that. But we may want to slowly adjust to that in order to get there. Theres a gradual adjustment process to get us there. Primarily the desire is not to shock the markets too much. The question is will we be able to pull that off . Will the market be patient with us enough in order for us to actually do that. You made a huge deal of putting 6. 5 unemployment threshold in there. Now you got rid of it. Are we supposed to think the world is clearer now as to how the fed will react to incoming data or is it less clear . I dont think its much different. One of my problems with the thresholds was that it didnt tell anybody what in fact we did. How are we reacting to anything . The thresholds have passed. We still havent told anybody how were going to react. The challenge is how do we get closer towards describing a reaction function that provides actually information about what were going to respond to and when. Right. I want to talk about the health of the banks and what you think is going on in terms of risk. The wall street journal has a story, the s. E. C. Is probing dealings by banks and companies and loan securities. We had the stress test last week. Is there any place in the Banking System right now that you worry about . I think banks generally are Pretty Healthy right now. Thats a good sign. I think the fed is very concerned about the health of the Financial System more broadly and whether or not our policies are putting at risk stability or increasing volatility. They will be looking at these sorts of things. I think the sign so far is things are okay but as the word goes, we will be vigilant will the in monitoring. During the commercial break i mentioned china and the shadow Banking System there. What do you think of the shadow. Baing system here and how much you worry about that . One of the challenges will be as we keep Interest Rates low for so long and put more and more regulation on the Banking System, there will be a tendency for regulatory arbitrage, things will flee into the shadow Banking System. Have you studied things Like Lending Club and some of the other emerging systems . I think theres emerging technologies as well as in the shadow Banking System. And they will come and they will go but i you know what i want to ask him. You have 30 seconds. Keep going. I just look at you and i know. Back of the hand. What do you think . Bitcoin. I think theres a lot of innovation going on in Payment Systems of various kinds. Bitcoin is an example of that. Whether bitcoin will fly or whether it will survive as a survivor in this new world of a Payment System do you want to regulate it. I dont think we have the authority to regulate it. I dont think it will replace the dollar. What buffett said an andreasen said, buffett dismissed it, andreasen believes it. If you take transaction fees to zero, even though it is a credit card or check or whatever, its still viable because you take transaction fees to zero. Bitcoin may be around, its just hard to say which companies or companies will work as a result. Andreasen knows that well. Andreasen thought about it a lot and he had to sell it to his investors. I cant dismiss him out of hand. Id like to. Its volatile. Risk. Risk. An hour is not long enough, charlie. Special thanks to Charles Plosser. Thank you very much. Coming up at the top of the hour, top, we can help people with this. We get a read on the markets and senator marco rubio will join us. He wants to regulate the impact of the government on the economy. Good luck. An apron is hard work. An apron is pride in what you do. An apron is not quitting until youve made something a little better. What does an apron have to do with Car Insurance . For us, everything. So our business can be on at ts network for 175 a month . Yup. All 5 of you for 175. Our clients need a lot of attention. Theres unlimited talk and text. Were working deals all day. You get 10 gigabytes of data to share. What about expansion potential . Add a line, anytime, for 15 a month. Low dues, great terms. Lets close new at t mobile share value plans our best value plans ever for business. Ido more with less with buless energy. Hp is helping ups do just that. Soon, the worlds most intelligent servers, designed by hp, will give ups over twice the performance, using forty percent less energy. Multiply that across over a thousand locations, and theyll provide the same benefit to the environment as over 60,000 trees. Thats a trend we can all get behind. Go [ male announcer ] its chaos out there. But the mclass sees in your blind spot. Pulls you back into your lane. Even brakes all by itself. Its almost like it couldnt crash. Even if it tried. The 2014 mclass. See your authorized dealer for exceptional offers through mercedesbenz financial services. A slump for the nasdaq. We talk to top strategists from rbc and barclays and help you, hopefully, avoid costly investing mistakes. Our squawk newsmaker of the hour is taking on regulatory costs. Senator marco rubio will add his plan to hold Congress Accountable for the Economic Impact of regulation. Iac chairman Barry Dillard joining the board of a community startup. Well ask the ceo of livesafe how she got the backing of one of the biggest players in media. I know well be safe and sound i like that song. I dont like it. Welcome back to squawk box. Heres on cnbc first in business worldwide, im joe kernen along with its on commercials, too becky quick and andrew ross sorkin. Whats that . Its on a mazda commercial. Capital city. What was the song before this one that was popular . There was one before. You know, dave . All right. No. Thats a group. Lets get a check on the markets here. A onesided conversation. Yes, u. S. Equity futures up 65 points. Wheres plosser . Up 65. Lets see whats happening in asia. Its not just him, obviously. We do think were the center of the free world. Youre talking about the royal we. Im talking about squawk box. Japans down, hang seng is down. Did we look at europe . Theres europe. Even better. Nice. Very nice. 76. Germany up 1. 5 . We have corporate headlines. Disney doing online shopping. The entertainment giant buying maker studios for 500 million. The price tag could rise to 950 million. Maker is one of yabus Largest Networks, helping to produce and distribute videos to 380 million subscribers worldwide across more than 55,000 channels. Those videos have more than 5 billion views every month. Maker has programming on youtube, including polaris. Billed as the deaf nation for geek culture, the platform which focuses on Global Beauty and fashion and cartooning. How do you pronounce that . Cartoonium. Which features animated shows like care bears and strawberry shortcake. The deal would make disney a major online distributor. Disney up almost 2 in the premarket now. 81. Also after months of speculation, Cloud Storage company box filed to go public last night. Im about to spell that word. What is the symbol. Box. How is that spelled . Box. It will change under the ticker box. Thats for henry and max this morning. Also in washington, the white house ask expected to propose an overhaul to the National Security agencies Telephone Program that would end the bulk collection of phone records. The New York Times reporting that the Administration Plans to ask congress that would approve changes that would end the systemic selection of bulk phone call information. The government would be able to access the information when needed by getting permission from a judge. Which youre supposed to be able to do already. The roar also says the overhaul would propose the Telephone Companies keep the data but the companies will not be required to hold on to it any longer than they normally do. I dont know if that will help the situation or not. It basically sounds kind of like the same thing except the information is technically scored with us. With us being the taxpayers and the government. I guess its supposed to make us feel better. Slightly. We are watching the futures this morning after yesterdays losses. The nasdaq got hit particularly hard on biotech weakness yesterday. How should investors be playing the market today . Joining us is jonathan gollup. We have investment manager of the barclays investment division. Hans, you think u. S. Valuations are reaching a Tipping Point. Why . I think events are reaching a Tipping Points and certainly a valuation. From the u. S. Perspective, at roughly 17, 18 times earnings, you need Earnings Growth to come through. Absent that, markets will be hard pressed to maintain the values they currently have right now. I think the problem were dealing with, though, is the problem of the known unknown, which is the most difficult time to be in Capital Markets is when liquidity is starting to recede. And with the u. S. Federal reserve starting to pull back quantitative easing, with the chinese trying to get a handle on their shadow Banking System were in the early stages of liquidity. What we do know is when you make money cheap long enough, people do adventurous things that go badly, go wrong. The thing we dont know is the nature of those levered bets that people made and how badly sideways they might be. So this is a decidedly dicey time and you know, caution is required at this point. Although were probably not going to be getting higher rates anytime soon. We had Charles Plosser, the Philadelphia Fed president on for the last hour. He talked about it. Hes one of the more hawkish members out there. He sees Interest Rates at 2 something percent at 2015 and 3 something percent at the end of 2016. Without the fed easing the short end of the curve, theres no way youre going to get Interest Rates much higher. Look at where credit spreads are. Theyre reasonably wide considering the lack of leverage on the part of corporations. I think that all i like equities more than bonds right now. I think this fear that bonds will crush investors by having Interest Rates run away from them is probably misplaced fear. Do you think hans is right to think valuations are at a Tipping Point . No. Valuations were a Tipping Point when they hit 24 in 1999. 24 times earnings. 24 times earnings. Right now you have on a forward basis, theyre at like 15. 5 which is about one multiple point above average. You dont bail on stocks when you are when youre still in the middle of a recovery and multiple is at 1 point above average. Hans . That works. Its a good point. It works if your earnings are growing and it works if the quality of your earnings are high. The problem is, big cap space right now, theyre not. Earnings growth in q4 was all of 0. 97 . Its all margin management. Do you think we are looking at a 3 economy potentially for the rest of this year . Sure. The good story in all of this is the u. S. Economy is probably stronger than people are giving it credit for. The slowdown is weather related. Well catch up there. That is the trade wind at the back of stocks. If that starts to translate into earnings, i would agree. We could go higher. Our expected returns this year are on the order of 8 , 9 . Thats not bad. You need the earnings to come through, right . Or youre just trading on multiple expansion which is not terribly durable. You sound like you think it will happen, we will see 3 growth and as a result you will get Earnings Growth of 8 to 9 . Are you talking Earnings Growth or price appreciation . Well need to see the Earnings Growth. Our story has been it will come through capex which will be the virtuous turn in the cycle. Heres the thing, though. Weve seen it play out in the First Quarter. We had a volatile First Quarter. Stocks were down 6 , recovered up 2 . Were on a total return basis of 1. Thats churn for very little return. Thats what we have in store for us this year. I listen to the tone of the comments and were talking about 8 to 9 returns and a low Interest Rate environment and while the fed may be tapering or trying to pull out of this money printing business theyve stated theyll do it incredibly slowly. Theres still plentiful liquidity. If you have an economy thats accelerating towards 3 and earnings that will grow at 8 to 9 right. I just dont see any kind of speculative threat here that would say, you know, that were at a Tipping Point. There are risks out there but stocks being too cheap im sorry, stocks being too expensive doesnt seem like it will be one of them. Well leave it there for now. Jonath jonathan, hans, thank you both for joining us. Well talk about senator marco rubio about the cost of valuation. I want to bring something up, hes writing opeds, elerian. He wont come on. He says hes going to. Hes still in the press. But see, when you write, you cant ask him any questions. So what really happened at pimco, mohammed . Hes helping our case to come on here soon. Did you really say youre sick of cleaning up his doodoo . Youre not supposed to say that. Sanchez is gone from the jets. I want to talk to him. Where is he . Im sure theres a quiet period. Whenever that ends he will come on. Well talk to him about global stuff. He told me yesterday dates he was looking at. Just take a closer look. It works how you want to work. With a Fidelity Investment professional. Or managing your investments on your own. Helping you find new ways to plan for retirement. And save on taxes where you can. So you can invest in the life that you want today. Tap into the full power of your fidelity greenline. Call or come in today for a free oneonone review. In a we believe outshining the competition tomorrow requires challenging your Business Inside and out today. At cognizant, we help forwardlooking Companies Run better and run different to give your customers every reason to keep looking for you. So if youre ready to see opportunities and see them through, we say lets get to work. Because the future belongs to those who challenge the present. Gunderman group is growing. Getting in a groove. Growth is gratifying. Goal is to grow. Gotta get greater growth. Growth . Growth. I just talked to ups. Theyve got a lot of great ideas. Like smart pick ups. Theyll only show up when you print a label and its automatic. We save time and money. Time . Money . Time and money. Awesome. Awesome awesome awesome awesome awesome awesome awesome all awesome i love logistics. Know marco rubio is fired up about americas regulation system. He says its impeding investment and Free Enterprise this morning. Hes unveiling his new National Regulatory budget bill. Joining us now is senator rubio. Its timely because of something we were talking about yesterday. There was a piece New York Times in the business section over the weekend, the New York Times had no problem explaining why entrepreneurs are fleeing france and heading to london. They even quoted a couple of guys who said, i think i actually have the quote that we ran yesterday and i asked my colleague andrew about it. But the guy said, here it is. It was called as entrepreneurs flee. But he said okay, were not going to show it. They never seemed to tie any of our problems in this one to regulations and taxation. And i was told by my colleague, andrew, its a matter of degree, that the regulations in this country have not risen to the level where theyre detrimental to any type of corporate activity. I didnt say detrimental. I said marginal on a relative basis. Neither taxes nor regulations are really a problem. The senator knows. He didnt say that. That was your second choice. Did i see the article. I think the point is this, heres the part im focused on is the aspect of growth called innovation, innovation, doing Something Else no one else is doing is the way you can explosively grow an economy. Theyre a barrier in terms of the cost associated with compliance. Second because often times innovations are use as a tool by an established industry or established company to keep potential competitors out. We do need regulations. We want safety and we want to make sure that the customer is protected, the consumer is protected. Regulations should never be use as a defensive weapon by an established industry or an established company to keep out competition. Thats why yesterday i chose to go to the headquarters here in washington, d. C. , a car service company, which is not being allowed to enter many markets in florida because the established taxi cabs and established Transportation Companies dont want the competition. That was never the reason for regulation. Weve unveiled a National Regulatory budget bill which well file today which basically says every year the federal government will come up with a regulatory budget, a number of what regulations should cost the economy. And if the existing regulations in any given year exceed that budgeted number theyll have to reduce regulars per agency until they are under that budgeted cost. Senator, weve seen how many regulations are introduced per year. Theres people that follow this. The regulations that were introduced 20 years ago, you never take them off the books. Every time we add new ones, its almost like accumulative. Did president obama appoint some guy that hell look at all the old regulations and get rid of a lot of them . Did anything was that just to look good . Did anything come of that that was actually productive . You know what im talking about, right . Yes. Heres the problem with that. It would be the same as if you had a massive leak in a ship and youre electric trying to shovel out water with a small pail or a cup. For every regulation theyre cutting theyre implementing hundreds of new ones to replace it. The give and take is overwhelming. This is not about antiregulation. We do need some regulations in order for the free market to work, particularly for the Public Health and safety and to protect consumers. But you go too far on this stuff and innovation becomes difficult if not impossible in many sectors in our economy. If you look at the parts of the economy where you have massive amounts of growth, theyre unregulated spaces like the creation of apps where a company sold recently for 300 million per employee, you see areas like tesla, there are states like new jersey that wont allow you to buy one because Car Dealerships and established industry does not want people to buy a car over the internet. Let me ask you about tesla. Thats an interesting regulation. S there are a number of dealerships, obviously. In your state, you would have no problem with allowing tesla to sell direct . Absolutely not. Its an established product. I think people should be able to buy those products. You cant buy wine online in florida. If you decided to buy directly from the grower, the maker, you cant do it, you have to go through a threetiered system that has to go through a distributor and wholesaler to sell it to you. Its using regulation to crowd out competition and choice. How do you explain Chris Christies decision in the case of what happened in new jersey and tesla. I dont know. I havent use heard his comments on it. The bottom line, time and again what you see are established industries and companies who use their access to government to impose and protect regulations that protect their status quo at the expense of competitors. Imagine if Blockbuster Video had an able to pass a regulation that said the only way you can watch movies after they leave the Movie Theater is if they rent on a dvd or videocassette. Youd never have netflix or video streams. Some say every regulation thats introduced from here on out should be viewed through the prism of what it does for job creation. Thats paramount in all of our mind. And i think that fell on completely deaf ears and on this administration. I dont think they ever consider job creation. Ive seen the epa tell me to the decimal point how many lives they will save with carbon caps or something. They say well save 6,200 lives if we get rid of sulfur, yet they never are able to calculate any job losses based on the regulations that theyre imposing. To me its staggering. In an environment where we hear so much happy talk about trying to help people that are in need to get a job and the regulations just keep on coming from the same people expressing this faux empathy for people that dont have a job. Right. Thats what the National Regulatory budget is geared to do, force a cost benefit analysis on every new regulation and existing ones to get under the budgeted amount. Thats exactly the cost benefit analysis we do not have happening right now. When a new regulation is proposed, theres all these proposed benefits of what the regulation may or may not do. No one is looking at its cost, cost of compliance, its cost of job creation. And especially its cost in terms of snuffing out potential innovation in that space. Senator, are there any regulations you do like, though . Sure. For example, i want our water to be clean. When i turn on the top in my home, i want to make sure there isnt poison in there. I want to make sure the airplanes i get on can make it to my destination safely and im happy to know there are regulations that oversee how those airplanes are maintained. Id like to have the worlds best sunscreen available in the u. S. Which is not because of the fda dragging its feet. Im also glad to know in terms of the chain of custody, the medicines that we take in the u. S. Are not corporate fitunter. They she never be used as a weapon to crowd out competition or competitors. Thats why Big Government fails. Big government helps the people who have made it at the expense of people and ideas that are trying to make it. Senator, while i have you here, as a star in the party and we saw nate silver, if he says that the gop has a chance to take the senate, they might really have a chance, you know, if we hear from him. Im trying to figure out whether the party will be able to snatch defeat from the jaws of victory between now and november. I always bring this up with you. There are libertarian aspects of the party that think the government should just stay out of social issues and maybe thats a way to do it. Which Republican Party will be running in november of 2014 . Is it going to be the pragmatic one that cares about jobs or the one that seems to want to get into all of our personal affairs . I think youve asked an important question. Id say where the Republican Party is unified and strongest is on the belief in limited government and the ability of Free Enterprise to create prosperity and upward mobility. While i dont believe governments roll is to tell people how to live their lives or worship or not worship, i would say values do matter, hard work, discipline and selfcontrol. Those values have to be taught and reinforced by strong communities. I dont think theres anything wrong with saying you dont need a bunch of diplomas to succeed, you need the right values as well. Our country is strong because of those values. While theres not much government can do to impose those values, the emotion of those values is having a real Economic Impact. The social and moral well being is directly related to their well being. 2016, not necessarily about you in particular but i was going to ask you about Chris Christie and whether you think he still has a chance to run or not given all the things that happen over the past two months . Sure, absolutely. I think people are spending a lot of time getting overheated about elections that are four years and three years away. This stuff is increasingly covered as a sport. There are people that cover politics on a daily basis as if it were march madness, every day. They want to be prognosticating and so forth. Elections for anything involve a campaign where people have to go out, give their ideas and try to convince people to vote for them instead of one of their opponents. I think he and a number of other people look viable. Hes looking good. Hes getting down to fighting weight. Hes down 120 already. Hes looking good. Im going the opposite direction. I think thats where i you will meet somewhere in the middle. Wrestle or box . Whats your thing . Well see. Senator, thank you. We appreciate it whenever you come on. Thanks for having me on. Coming up, Community Safety app livesafe getting a big backer this morning, barry diller. We talk to the companys ceo at 8 30 a. M. Eastern. Google glass may soon be getting more fashionable. Plus, Anthony Weiners new gig. Stick around. Theres the bell. Hell work p from busser to waiter to chef before opening a restaurant specializing in fish and game from the great northwest. Hell start investing early, hell find some good people to help guide him, and hell set money aside from his first day of work to his last, which isnt rocket science. Its just common sense. From td ameritrade. Cut [bell rings] this. Is jane. Her long day on set starts with shoulder pain. And a choice take 6 tylenol in a day which is 2 aleve for. All day relief. Hmm. [bell ring] roll sound action breaking news for you. Mike cavanaugh, the cochief executive officer of jp morgans Investment Bank has been named copresident and cochief operating officer with the carlyle group. D heres the important part. Cavanaugh had been mentioned as a possible eventual successor to ceo jim my dimon. For those who are trying to read the tea leaves this puts matt zames, the coo of the bank as the true heir apparent to jamie dimon. What this also means to carlyle is interesting. People have always said that carlyle, the founders still run that firm and theyre always trying to build a bench. Hes probably about as strong as youre going to get. We just had David Rubenstein here. In terms of how much money you can make . Better shout over. Just multiple. Exponentially more. I dont have cavanaughs pay but zames was paid about 17 million back in 2012. Carlyle, thats one deal. Show up and you make that, dont you . If you punch a time clock. You show up on january 1st you make that. Other breaking news in the ongoing fight between carl icahn and ebay. Ebay issuing a letter that will go out publicly in ten minutes. Shareholders emphasizing the benefits to customers and share hoe e holders and on keeping ebay and paypal together. He said he only wants 20 of paypal to be spun off to shareholders. Ebay says the following, theyre citing the following benefits for keeping the business together. Paypal grows faster because of e bay. Data sharing leads to more profitable growth. Ebay provides efficient capital for paypal and commerce and payments are converging. Theres a lot of questions carl icahn said about mark andreasen. Theyre asking shareholders to discard a proxy card sent out by carl icahn. Lets get a check on some of the stocks in the news this morning. Drugstore chain walgreens earned 91 cents a share, missing estimates by 2 cents. However, it says it is seeing an increasing earnings contribution in its Stake Alliance booth. Mccormick reported fiscal First Quarter profit of 62 cents a share. One recent headwind for mccormick, higher cost for Raw Materials and packaging. Safeway declared a special stock dividend. Safeway shareholders of record as of april 3rd will receive shares of blackhawk on april 14th. Blackhawk is a distributor of gift cards and other Digital Commerce products. By the way, we should talk more. Wearable tech may soon be getting more wearable or more fashionable. Google is collaborating with oakley and rayban to develop a new breed of eyewear for its google glass products. It was developed by luxottica. No financial terms were disclosed. Google glass has a thumbnail size screen attached to its eyewear frames, including a camera that can take handsfree picture and video. If you cant tell people that are wearing it there are some bars that have banned these glasses. I think it all means be careful what you say all the time. You know, you just want to make sure with this next story wait a minute. Remember john candy in the original splash . He used to walk around dropping cha chains. Watch out for people wearing these glasses if theyre wearing a skirt or something. The whole idea of having glasses that can take pictures its terrible. On subways. Im worried about people trying to look up my pant leg or something. Imagine if you were wearing a skirt. If this next fellow was wearing google glasses. Anthony weiner has a new wig no, no, a new gig. Not a new wig. Hell write a monthly political column. You know what . Is this is a match made in heaven for Business Insider. Where else . The name of the column weiner the column launches this week. Thats a match made in heaven. A lot of flack is being had for this appointment. Thats perfect for that joint. Go ahead. I like henry. Fine. Becky . Okay. When we come back, a basketball addition of our Million Dollar home series. Well be taking a look at some of the hottest real estate in cities that have recently celebrated a National Championship victory. Right now as we head to a break, take a look at the u. S. Equity futures. Right now the dow futures are 81 points above vafair value. S p up by 8, nasdaq up about 18. Sacrifice, courage. Which is why usaa is honored to help our members with everything from investing for retirement to saving for college. Our commitment to current and former military members and their families is without equal. Welcome back to squawk box. Livesafe allows you to alert police and other members of your commune to the danger in realtime. Now media giant ise is leading a 6. 5 million series a finance i ing. Barry diller is joining the board of livesafe. Joining us on cnbc, jenny abramson, the ceo of livesafe. I tried to explain it but maybe you could do a better job. We are a personal safety application that allows people to leverage something that most of us have in our phones, our smartphone, to keep themselves and theyre communities safer. It happened after the Virginia Tech shooting. One of our cofounders was shoot three times in the Virginia Tech shootings and survived. She and her along with another founder that had been mugged decided there needed to be a technological way of dealing with shootings, Sexual Assault and bullying. This is like the modern day blue light system on campus . Blue lights are like pay phones. You couldnt find a pay phone anywhere if you tried to. Schools mostly have the blue light phones. Could you also have something in your pocket that not only can you turn to in an emergency but as critically, you know, most of the time someone knew something in a shooting or someone knows something and doesnt report it. This gives you a way to do that. How does it work . I can think of things, if i have my cell phone i could call the police and message somebody. The app lets you use geolocation, camera, video. You essentially pick a tip and once youve done that you can take evidence. Take a picture of the person youre seeing doing an assault or whatever theyre doing and then you can send it in and then the safety officials, whether its at a school or in another setting can chat back and forthwith you. What we find is students dont like to call their parents. They really dont like to call the police in many situations. This allows them to really chat back and forth. Would there be a push notification if they knew you were in an area that something was going on. They can push notifications to you, including extreme weather. Our push notifications dont rely on cellular networks. In the community, too. This could be everywhere. Yesterday i got so scared, there was a guy in a scream mask in Staten Island put his arms around a little girl. She got away and ran to her school. This guy is on the loose. A the lo of people dont want to stop in those moments but if they have a way to quickly take a picture and send something in, they will. Its extra eyes and ears. How did you get barry diller to join the board . I say that because he hasnt joined many private company boards. Ario is probably the only other one we know of. Hes the ultimate disrupter. I think a lot of people have gotten excited about livesafe and want it in their schools, for their kids, in their communities. I think when someone has shared it with barry and he met and got excited about what he could do. I think hes in many ways genius in terms of consumer and mobile app. Whats the revenue model . I know this is a Public Safety thing. People think theres this is for the good of the world. Which it is. Which it is. But it is also is a business. We are a sass model. Institutions pay as an institution. The consumer cant sign up and get it. Maybe over time that will change. Right now were going through institutions whether its a sports team, a school or a military base might need this to allow anonymous reporting which we allow of various incidents of someone above you or Something Else. You provide the back end to the school or the institution. Yes. Did you ever see new york city or a major municipality saying, you know what, were all going to go to this and this would be a way to cowl into 911. Its a great question. In three to five years i cant imagine a world where every application doesnt have a mobile safety application on them. Whether its through private sector or municipality. Thank you very much. Everyone go to livesafe mobile. Let me take a picture of you as the culprit. You can make money. Yes. Can we ask who would have thought youd make money from online dating. Can i ask what you charge an institution . It varies based on volume. Its a little complicated to say. If you want to give me a few more minutes ill come back and share that with you. Your referee for the matchup when we come back, dolly lens will be joining us. On thursday, ill be in chicago with mayor rahm emanuel, steve forbes and bill ford. You dont want to miss it. Back in a moment. [ cellphone rings ] hello . [ male announcer ] over 12,000 Financial Advisors. Good, good. Good. Over 700 billion dollars in assets under care. Let me just put this away. [ male announcer ] how did edward jones get so big . Could you teach our kids that trick . [ male announcer ] by not acting that way. Ok, last quarter. [ male announcer ] its how edward jones makes sense of investing. Makes sense of investing. Are you still sleeping . Just wanted to check and make sure that we were on schedule. The First Technology of its kind. Mom and dad, i have great news. Is now providing answers families need. Siemens. Answers. But with less energy, moodiness, and a low sex drive, i had to do something. I saw my doctor. A blood test showed it was low testosterone, not age. We talked about axiron the only underarm low t treatment that can restore t levels to normal in about two weeks in most men. Axiron is not for use in women or anyone younger than 18 or men with prostate or breast cancer. Women, especially those who are or who may become pregnant, and children should avoid contact where axiron is applied as unexpected signs of puberty in children or changes in body hair or increased acne in women may occur. Report these symptoms to your doctor. Tell your doctor about all medical conditions and medications. Serious side effects could include increased risk of prostate cancer, worsening prostate symptoms, decreased sperm count, ankle, feet or body swelling, enlarged or painful breasts, problems breathing while sleeping and blood clots in the legs. Common side effects include skin redness or irritation where applied, increased red blood cell count, headache, diarrhea, vomiting, and increase in psa. Ask your doctor about axiron. Welcome back to the cnbc Million Dollar home competition is back. Seven Homes Across America are battling it out to see which one is the best bang for your buck. Since were in the middle of the ncaa basketball tournament, all homes are located near schools which have won championship games in the past. Homes compete on various shows throughout the day on cnbc. The champion will be announced on closing bell this afternoon. Here are the details on the Million Dollar homes in our first pairing. This traditional ranch style brick home sits on threequarter acre in a quiet neighborhood. Its just five minutes away from a vie bran the downtown and the university center. This custom built tuesday can style ranch sits on five secluded acres just outside the city. Theres a hot tub out back and a basketball hoop in the driveway. In case you want to practice your own game. This 5,400 square foot home is built for entertaining. This kitchen has stateoftheart appliances and centrally located between the dining room, living room and nook. The Gourmet Kitchen in this 6,700 square foot home opens on to a cozy fireplace studded seating area and enclosed back porch, a Perfect Place for a timeout. The master suite of this fourbedroom, 4 1 2 bath home has easy access to an outdoor jacuzzi and a fireplace that you can enjoy from both in bed and in the bathtub. Six bedrooms mean guests reliving their College Years can crash comfortably. The master suite is the architectural slam dunk with a fireplace in this spalike bathroom. One of five in the house. If youre looking to relax, the secluded backyard is for you. The heated Swimming Pool has a water fall and the gazebo has a fire pit. All of this could be yours for 990,000. Youll feel like youre court side where theres a wet bar, billiards and a wine cellar. Tell us where the homes are. No. Youll have to guess where the homes are. One is in louisville and lexington. Youre watching. I watch your tweets on everything going on with you. Youre visiting all the places. Thats great. Friday night is the big game. It would have been Wichita State against louisville which would have been great. You no he what that says to me, you can buy a lot of house in kentucky. Those houses, both of them are absolutely spectacular. So much more here. I know. Really hard to pick between the two. Which is the better market. I think its more about which is a better house. Theyre both good markets. Its which is a better house. The lexington house, there at least its close to everything. Three to five minutes away from town. You get every amenity. Youre not missing anything from the fire pit to make the smores to the pool, to the jacuzzi. Its a ranch on a small, under an ager, l eacre, good for reti every group, which i love. Its a great exit strategy. The other one is on 5 acres, lots to do. 20, 30 minutes away from town. You know, great house its location. The age old rule of real estate, location, location, location. You look at the house you get for it. But its a better house. But its 20 to 30 minutes away. A better house, you can plop a house anywhere on five acres. The winner is . Its clear. The winner is not Morgan Brennan even though every guy here has already beaten me up saying Morgan Brennan has to win. The winner is dominic chu and his house and the wildcats. The brick beauty. Yes. That one is moving on to the next round. I still like the tuesday can mansion. You like Morgan Brennan. I like both. I like chu but i like the mansion. The Million Dollar brick beauty winning round one. Thats going to move on to the semifinals. Let us know if you agree, tweet us using the hash tag Million Dollar home. You can catch dolly on squawk on the street. Later shell crown the winner during closing bell. Do you think kentucky can beat louisville. You mean Million Dollar homes. No, the game friday night. I do. I do. That guy hit every free throw. I saw your pictures. Thought that was great. Coming up, ebay firing the latest shot in its activist fight with carl icahn. And the shakeup with jim cramer. Thats coming up next. Make it happen with fidelity active trader pro. Its one more innovative reason serious investors are choosing fidelity. Call or click to open your fidelity account today. Lets get down to the New York Stock Exchange. Jim cramer joins us now. There is Business News, jim, but watch how i do this. We were just talking about Million Dollar homes in the louisville and lexington area, so how can i not ask you, did you think before Wichita State that uk could beat louisville . I heard that uk was going to be a disrupter not unlike uconn but i didnt go for that and i do believe that louisville beats them thats integral to my final four. Me, too. How about the twins, those guys . Did you watch the Wichita State . I did. Did you see him hit the free throws, i wanted Wichita State, i wanted to jump through the tv set to miss one for gods sakes but he never did. No. I got to tell you when i look at who people dont have, it is uk that is the one that would destroy the most brackets honestly. That is the one where if you have uk and uk wins youre going to be one of a handful of people because that is the one that was the outside. They were defending champs, too. I know. Its funny when i listened to that great report, like, dont you want to move there, jeetz, the places are inexpensive. Did you see a waterfall in my pool for 995 or 990. I know. What else did you see today, jim . Did you watch plosser . Well, yes. I frankly the fact that he says, listen, its panic makes me feel good because people are panicking. You guys just did this box ipo you mentioned that. Theres so Many Companies that are coming public that are multiples to revenues people keep selling the existing multiple revenue plays and we need to see the ipo market dry up and you know it hasnt dried up yet. Its kind of nerveracking. Do you think we also had a guy and i thought he was interesting. He said if you look at multiples purely on a historical level maybe they are not expensive, but is growth in corporate profits, is it really anemic . Are multiples high based on the growth rates right now . Not if we get worldwide growth. I was watching this morning lets say the sanctions we havent talked enough about them, sanctions knock russia out, a volkswagen sells hundreds of thousands of cars there. Germany is the one that could get hurt and you need to see europe get strong. Thats been the strength underneath why people felt a lot of International Companies are going to do well because obviously china not doing well. Dont want to see europe derailed by the sanctions. Why isnt it moldovia . Why happened to the i . It went to the same place as the the in the ukraine. Thanks, jim. Great tie and shirt combination. You can check it out in a few minutes. Were a few minutes away from caseshiller home numbers and well get a preview from the former chief economists for fannie mae. Fannie mae. 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. I just ah woke up today and i said i need something sportier. Annnd done. Ok maxwell, just need to ah contact your Insurance Company with the vin number. Oh, i just did it. With my geico app. Vin is up to the loaded. Ok well then jerry here will take you through all of the features then. Why dont weeeeeeeeeeee go out to the car. Ok, ill just be outside. Ok, yeah. His dad is my boss. Yeah. Vin scanning to add a car. Just a tap away on the geico app. In just a few minutes well be getting the latest read on housing with the caseshiller home price index so lets talk about where we are in the recovery and get a quick preview. Joining us is david bernstein, hes the chief economist for nationwide insurance. What do you think . What should we be looking for in this number . I think well see a small gain with the seasonally adjusted number and a small decline in the actual number and both of them will leave us up 13 from a year ago. What does that tell us about where we are in the economy when it comes to housing . You know, the Housing Market certainly got hit by the bad weather. But even before we had the bad weather, housing was slipping a little bit because of high Mortgage Rates and the rise in prices. And were really going to see a pickup in job growth in order to see the Housing Market come back strongly. It will come back just because weather is going to be better but we really need the jobs to push housing much higher. You sound skeptical that well be looking at great news over the next three to six months . I think over the next month or two we may not see great news. I think beyond that the job numbers will be better. I think the housing numbers will pick up. Its no a sure thing, you know, we need to see a rebound from the bad weather but if we start to see the Payroll Employment numbers over 200 and maybe over 250 for the next several months, then that should give housing a pretty good boost. Theres been a lot of complaints about how investors have gotten in on the deal. Its no locker just home buyers themselves. There are a lot of big institutional buyers that came in. They are now gone. What does it do to the market . Or at least they are pulling back. Well, you know, the bad news is in areas of the country where prices have fallen so much if investors arent as big a part of the market the prices wont go up so much but thats actually good news for the potential owneroccupant particularly firsttime buyers who are finding the prices have gotten pushed up quite a lot over the last two years and while not unaffordable was making housing less affordage. So, i think to the extent there were fewer investors it frees up the market for firsttime buyers. David, thank you very much for joining us. Pleasure talking to you today. Good to be here, becky, thank you. Okay. Are we finished . We are. Can you spell box one more time . Box is how you spell it. Squawk on the street is coming up next. Everything that kills me makes me feel alive good Tuesday Morning welcome to squawk on the street im Carl Quintanilla with jim cramer at the New York Stock Exchange. Faber is off. Got new data on housing. Caseshiller is just out and well talk to Robert Shiller in a little bit. In the meantime turnaround tuesday apparently in play. Futures are higher. A lot of data coming our way this morning. Tenyear yield plosser and williams are on the take today. Plosser with some important comments to squawk box in the last couple of hours. Europe mostly in the green. Germany up