Transcripts For CNBC Squawk Box 20140326

Futures this morning after those gains, youll see there are still green arrows indicating a higher open, as well. Dow futures indicated up by about 44 points. S p futures indicated up by close to 5 points and the nasdaq is up close to 14 points. An rue, ill send it back over to you. Lets talk about the deal of the morning. Facebook is now getting into the wearables market. The social media giant acquired a Company Called oculus vr for about 2 billion. They make Virtual Reality headsets. Their main product called the oculus rift is primarily used for gaming. Mark zuckerberg posting a statement on facebook saying after games, were going to make oculus a platform for many other experiences. Imagine enjoying a courtside seat at a game, studying in a classroom of students and teachers all over the world or consulting with a doctor or facetoface just by putting on goggles in your home. I know where i know. Youre waiting for the sound effects in the what has driven he ever what drives all of us . Money . Sports . I thought about this. What is going to drive bitcoin . One is sports and one is stock. El yolt spitzer would still be governor if ken langone wasnt standing behind him. If he was using bitcoin, it wouldnt be governor cuomo. It might be president spitzer at this point. Take a look at the shares of facebook. I dont remember we had a different company, also started on kick starter. Avagant was the company they had on. And i dont get it. It made sense to me, but 2 billion price target versus the 19 for whats app and then him talking about how there is a big future for this. I get that. If you can do classroom learning, if you can be at a sports arena. Well, no, but if microsoft had said, you know what . Were not just software. None of these guys seem to ever go into divergent enough to stay current. There has to be more than one or two senses involved with the no, im just saying well, why, what kind of attachment did you think i was just talking about . What just happened if youre looking at a basketball game. If this is a fully five sense experience where basically you wont even you know what . One of these days with social media and with this thing, you can be in your basement 24 hours a day, youll never leave your house. You wont even need to meet anywhere. Craigslist, it will put all that out of business. How are you going to feel if youre wearing electronic sensors on your hand. You broke that thing you wear on your wrist. Does it even work any more . King Digital Entertainment will begin trading this morning. Shares of the Company Behind candy crush what the hell is that, andrew . Candy crush . Yes. Its an Online Gaming company. But what does it do . Its like the jewels or something where you have candy pieces that move down. Why is that its like tetris. Like what . Tetris. You never knew what tetris was . No, i dont know. Ive also read this is very good for children, its matching colors and sitting on a screen all day long, though, how good is that overall for kids . Its for sensory priced at 22. 50 a share. That was the mid point of the expected range. Virtual reality does appeal to me for video games, honestly, it does. And youve been on veeptly down somewhere where you did flying, didnt it . Oh, at disney, yeah. You really feel like youre soaring above the grand canyon. They have sense coming in and yeah. You need attachments. You should somehow have all five senses covered. You know what, though . I have to say, the soaring thing has helped. Did it, really . Yeah. Everybody said it was the coolest ride. I was in the second. You saw the people in front of you. In the front row, it can be you can lose your stomach. I felt like they need a new movie. I felt like it was more than a decade old. I dont know why. Whose park was this . Somebody elses. Oh, not universal because that is so current. Right. Were harry potter. That was my mistake. With your fios and your under the ticker king, you spul king is what its going to trade under. Originally, i happen. 567. 6 million last year on revenue. Candy crush saga was the years top grossing app franchise on apple devices and king digital ceo will be making his first appearance on squawk on the street later this morning, which is i think thats a much bigger thing for him than the ipo, probably. How he did that, apparently worked his way up. Uhoh, hes sharing with his father, rupert murdoch. James murdoch was elevated as a position as a cochief operating officer. My dad didnt start diddley, you know . Here i am. And youve done it on your own. Weeks old. People you know, im really trying to milk this thing, you know . I know, i know. I give you credit for that. Lets talk about a new Senate Report that says Target Corporation missed multiple opportunities to thwart hackers responsible for the Holiday Shopping season data breach. The reports from the commerce, science and Transportation Committee says there was no indication that the retail giant responded to warnings now being installed. The panel is holding a hearing on how to protect information from cyber attack. One of the witnesses will be john mulligan. This probably was prompted by a story that was out a couple of weeks ago. There was an investigative report, and i forget which one of the newspapers did it. Business week. It was an investigative report that took a look at this. They had installed a top of the line security that sent off alarms when somebody was trying to get into the system. I think what probably happened is they didnt realize that it was as massive of a data breach that had been expected. So they didnt respond in time. It was suggested that people knew and they didnt take this up. They knew that there was something going on. I dont think they realized the extent of the breach. But they didnt respond to the alarms that had been put off. And im sure those are the questions that congress will ask today. President obama hes in brussels for a summit with european leaders today. The european leader unions, that is. Russia and ukraine topping the agenda as the tensions in the region remain quite high. Joining us now is more on this, cnbc annette. President obama is set to arrive here in brussels. And they will talk with eu leaders about economic sanctions on russia. Could russian troops, really, ready to move into the ukrainian territory. That would trigger economic sanctions. Obama is here in europe and he wanted to convince europeans that economic sanctions are very sensible move. And it seems as if he actually succeeded in convincing european leaders. They seem to be in favor of sector sanctions. Talking about that, we are, as well, talking about potential gas supply from the United States to europe because currently onethird of gas is coming to russia. That might be in danger of coming down the path of sector sanctions on russia. So european leaders are calling for some restrictions on those laws currently in place in the United States. Allowing gas exports to free trade partners, which, of course, the European Union is not yet. With that, im sending it back over to you. Annette, thank you very much. In the meantime, blackrock has a warning for Big Companies. He says dont emphasis dividends or share buybacks if they come at the expense of future growth. The Money Management giant acknowledged the pressure for near term performance. But he reminded companies that they have to focus on the longer term. He says it concerns us that in the wake of the financial crisis, Many Companies have shied away from investing in the future growth of those companies. Lets take a look right now at whats been happening with the markets. We told you already the futures have been indicated higher this morning after yesterdays gains. You still see the dow futures indicated to open up by about 45 points. S p futures are up by more than 4. 5 points and the nasdaq is up by about 14 points. Taking a look at oil prices, youll see that wti was up about by about 13 cents, closing at 99. 33. The tenyear note after the Consumer Confidence numbers that were better than expected yesterday came in and is now yielding 2. 748 . Plus, if you take a look at lets see, currencies, the doctoral right now is up against the euro, which is trading at 1. 3796. The yen is at 102. 28. And gold prices have just come down just over the last couple of days or so. You can see that i think yesterday we were up about 20 cents. This morning we were up by 3. 90. Sitting right at 1,315. 30 an ounce. Coming up, we have a war of words over bitcoin. This is really Something Else. This time, Marc Andreesen is firing back about his comments about Virtual Currency. Well have it all. You dont want to miss it. Nt w. Good morning. We have a doozy for you this morning. Warren buffett recently promoted the perfect bracket challenge. We had a chance to ask him what he thinks about bitcoin. Well, basically, its a its a method of transmitting money. Our checks are a way of transmitting money, too. Or money orders on. You can transmit money by money orders. People do it. But you can replicate it. A bunch of different ways and it will be and the idea that it has some huge Intrinsic Value is just a joke in my view. For bitcoin investors, thems fighting words. Marc andreesen, addressing a Bitcoin Conference in san francisco, calling out what he says is old white men crapping on new technology they dont understand. By the way, he also tweeted that out to his followers. Again, andreessen has defended bitcoin and talked about how he really thinks this is the internet of the future. Later in the day, he followed up with those comments with multiple tweets. Here it is. Im not sure why it would be news, but war b buffett doesnt. Understand technology. He said to himself for decades. Warren buffett is a world class expert in many areas, and in those areas he has forgotten more than i will never know. Dozens hundred oefs them, but warren has maintained for decades that he knows nothing about technology and does not seek to know anything about technology. When people who dont understand tech attack new tech, its fair game to call them on it. People should know what theyre talking about. When people who dont understand tech attack new tech, it is fair game to call them ow on it. People should know what theyre talking about. I seek to educate. To that end, i would be happy to spend as much time with warren as he wants teaching him all about bitcoin. The Internal Revenue service said yesterday that bitcoin and other Virtual Currencies are to be treated as property and not currently. That means you have to pay a Capital Gains tax if you buy something at lets say 10 and it appreciate toes 600, when you spend that bitcoin, you have to pay the Capital Gains tax on it. If you do that, you have to i thought about whats different with this because i thought the same thing initially, its no different thatten if youre trading currencies. Thats just if youre trading. But if youre taking bitcoin and using it to pay your rent or youre using a bitcoin that has appreciated in value you have to pay a i didnt write off those crapty swiss francs i brought back from davos. The thing that made me happiest about this whole thing was it said in the article that buffett famously said in a tv interview. And i said, wait a minute, is he talking about us . Yeah. So it got everywhere and it got played everywhere. He famously said it on a famous show anchored by famous people called squawk box. I went back and forth with marc last night. A lot of times hes watching the show in the morning because hes on the west coast and he doesnt go to sleep until 4 00 or 5 00 in the morning. So i asked him if he could call in this morning and he dodged me by saying he would be asleep during our show and wouldnt be up. I said if you have a day job arent you getting up by 6 00 because were on is war b taking him up on his invitation, as well, do you know . I dont know. I dont think anything is going to be the next internet ever. I also see what warren is saying is bitcoin could become a commodity. Here is something i do understand. I get it from marc andreess enperspective. This is new innovation. Because youre there first, you can say bitcoin is something that is going to exist. From his perspective, maybe the guy who is a vc capital investor, youre looking to be an early investor. From warrens perspective, hes telling you dont invest in this. We dont know whether its going to stick around or not. Warren does says hes not into technology, but hes brilliant. No one can ever say warren is not brilliant. He can put two and two together and figure out the potential for i would think for if we can get him on the show is whether he believes that its bitcoin itself that has promise orb just new Virtual Currencies. I could see over the next 20 years Virtual Currency including potentially bitcoin being something. Theyve invested 50 million in bitcoins specifically. Whats the cutoff date for old, too . I might be an old white guy. I have more hair than him, ill tell you that much. Take that. How does that feel . He may call in later this week. I asked him about it. What is old . Whats the cutoff . You think of me as old, dont you . I do not. I do not. When you look at me, i think youre saying youre old. Now youre projecting . Maybe. Youre a very young man. I think you are. But i want to know, andreessen is 50, isnt it . No. Hes 42, maybe 43. That shows you how important hair is. Anyway marc is 42 years old, born on july 9th. Oh, boy. Im sorry. Oh, im old. Coming up this summer. He used to have a beautiful head of hair, by the way. He did . Yeah. Absolutely. All right. Handsome young man. Youre so pc. Anyway, when we come back, were going to talk about another rally for the dow. Will the economy continue to impress the markets . Well kick off that discussion in the next hour. No snow for the new york area yet, but other areas of the northeast expecting big snow amounts. Lets get the National Weather forecast now from alex wallace. At least the Major Population Centers dodged it. But you cant see that out along the cape. Getting socked with the snow and the wind. Nantucket, 60mileperhour wind gusts and snow. Thats not a fun situation. But you can see you just head west a little bit. Basically, nothing. This system is just a little farther to the west, it would have been a completely different story. For now, between, as you mentioned, domging the bullet for some of the big population centers. Along the case, warnings in place and into maine, as well. This time, windy, snow adopting those visibilities. Even outside of where we have the snow around boston, 25 to 30mileperhour winds, those will be high throughout the day. But even stronger, chatham, 60 to 70mileperhour winds as we move into the afternoon as well as evening. So a lot of wind issues. We will start to see that coming down a bit as we work our way on into tomorrow afternoon. Still, there are 30 to 35mileperhour winds. The storm systems well up into the canadian maritime. A lot of the big cities along 95, you could have been dealing with a lot worse. More squawk box, coming up in a bit. A bit. These days, everything your business does is done on the internet. And tomorrow youll deveno more. Thats what comcast business was built for. Slow dsl from the phone company was built for stuff like this. Sign up for internet and voice and find out how to get four weeks of tomorrow ready internet for free. And youll be ready for tomorrow too. Comcast business. Built for business. [ male announcer ] when fixed income experts. Work with equity experts. Who work with regional experts. Who work with Portfolio Management experts, thats when expertise happens. Mfs. Because there is no expertise without collaboration. Good morning. Good morning. Welcome back to squawk box here on cnbc. You interrupted it happens a lot, you know . All of a sudden its like there you are. All right. Im joe kernen along with becky quick and andrew ross sorkin. Andrew ross sorkin, the headlines this morning and you said joe kernen and becky quick, by the way. Youre not in the post today, in that skz with all the fashionable i was sure you were going to find a way to get yourself in there with all these fashionable but you didnt. Anyway goodness. The malaysian this is still happening. The search for the missing Malaysian Airlines jet continues. I guess the weather has improved in that part of the world. Airline and boeing are facing the potential lawsuit in the case. Chicagobased law firm ribeck law, have you ever heard of that . Has filed a petition for what is known as discovery. The firms trying to determine if theres evidence pointing to possible design and manufacturing defects in the boeing 777 jet. I heard this yesterday. They immediateemailed it to me. Theyre looking for anything and everything. They said its for millions and millions. You jumped down my throat when i implied the gm thing was going to open up a huge market for ambulance chasers. No, i didnt. Yeah, you did and i said wait until that oh, well, i think thats a serious all my point is that means you give these guys a scintilla and this one, the 777 is the safest yeah. And it was ridiculous the cars, the ambulance goes by. Theyre everywhere. How many lawyers do we have per person in this country . Thats not to say the families dont have an absolute valid justified reason for wanting to know what happened. But this was a particularly poorly rush out looking for anybody to be guilty and blame everybody. And in truth, i i do this if your family is harmed, you need a great lawyer, too. Does the Airline Business have a trust or how does it work in these awful instances . I know ive just taken the whole conversation down five levels, but i dont know. Im not sure what has happened. I know that the families have a lot of frustration with Malaysian Airlines and it was the malaysian government. They want to sue the malaysian government for murder or something. It was poorly handled. We werent getting information and they were putting out there and denying that things happened. The plane b literally disappeared from the face of the earth. Theres no rhyme or reason what right. Cnn is up did you see the ratings . Up 1100 year after year. Is it lithium batteries . If its not those guys, their reputation is not coming back if its not by pilot. And some general is saying he knew it was parked in pakistan. The families were holding out hope, hoping that it was parked somewhere. But where did he get that . If its definitely 20,000 feet below the ocean, where did that come from initially the information came and said he could take the south pass or the north pass. Meanwhile, the president yesterday voiced my greatest fear is a big nuke in any big city. The stock market goes to zero. That is the black swan that nothing ever recovers from. Well, you know, i learned a little bit more about the situation in crimea and ukraine back until the 1990s signed an agreement in budapest that the United States and the uk signed on to. They agreed to give up their nukes and a promise from russia, the United States and the United Kingdom that they would have sovereign rights. And if that yeah. They said that. Then you cant do it. But there are nukes that its a horrible precedent if well, there are some that we dont we havent kept track of. And hes saying this at the same time were cutting back on nsa stuff. Id like to see these guys talk to if you hear the old saying, yeah, ive got this thing, im bringing it in the country, youd like to know that. Anyway, facebook is buying oculus for 2 billion. Its the companys first ever hardware deal. Facebooks Ceo Mark Zuckerberg says the Company Plans to expand the use of the headsets well beyond video games. I know what youre thinking. Weve already talked about that. Get up earlier if you want to hear that conversation. Ill say it again, i do not understand. Why . Youre not a gamer, though. No. But is facebook now a game company . Well, i think theyre doing all they have so much money. The company has never made a dollar. But with no users or very few users. Where is our audio . Whats app. And the government is out with its latest report on durable goods. That will come at 8 30 eastern. Congress is looking for an increase of 0. 8 . The latest reading on Mortgage Applications from the get that from the Mortgage Bankers association. As well as the governments weekly report on oil and gas inventories. So you just dont go anywhere. At 10 30 a. M. At 10 30 a. M. , dvred or just be watching. Lets get a look at the markets this morning. We told you already about the dow closing up by 91 points yesterday. The futures have continued to pick up. Right now, the dow futures look like they would open up by about 55 points if they would open now. S p is indicated up by 6 points and the nasdaq is up by 17 points. In europe, in the early trading there, you can see green arrow wes, as well. The biggest gainer is the dax in germany up by 1. 25 . Can cac is up by almost 1 and the ftse is up by just over 0. 5 . The nikkei closed up by about 0. 3 . The shanghai was slightly weaker. The hang seng was slightly stronger. And oil prices, yes, if youre waiting for those oil and gas inventory numbers, you need to know this. Right now, wti is up by 16 cents to 99. 35. Yesterday, natural gas rebounded from a 2 1 2 month low and a threeday losing streak. Well see if the inventory is having impact on that. The tenyear note, the yield is 2. 746 . Well get some of those economic numbers to influence that later in the day. And the dow this morning has been stronger, at least against the euro and the yen. Right now, the euro islty 1. 3794. And the yen is at 102. 32. Gold prices have come up a little bit. Gold yesterday was up by about 20 cents. It 14ri7d back towards a 1 1 2 month low. 1,314. 80 an ounce. Finally, take a look at copper prices. Copper was up about 2 . It was its best day of the year yesterday. But if you look at this over the course of a year, its still down about 12 for the year and this morning its weaker. Stocks bouncing back on tuesday after a twoday decline. What will it take to keep the s p 500 on a bullish track . Our next guest says holding a level of 1875. Joining us right now, joe k kinnehan at td ameritrade. Whats key about that level . Well, i think for us, in order to continue up to 1900, weve gone there, but we havent held it. We need to hold it as a close and a little bit above it. Weve gotten there, flirted with it. Now over the last few days, last few weeks, actually, 1830 to sort of 1877ish level. It would like to see us get above that and see the market continue higher. Again, if were going to get to 1900, ive heard people talk about 2100 for the end of the year. That would be wonderful, maybe a little overstated, especially with joe talking about the nuke in the markets this morning. It would go to zero. It would. I dont even really want to joke about it, unfortunately. But thats the first thing you said that ive agreed with. Weve done that a lot today, by the way. Famous. Bitcoin. We have coughed a lot. We think we have it all figured out. Well, its just like anything else. You cant really you cant protect yourself with no, the end of the world only happens once. Except for global warming. But putting the envelope aside for the moment, the accepts that were going higher from here, weve had so many people coming up in the last two or three weeks that have suggested we have a horrible rocky road if not a downward roller coaster, not even up. Youre giving a sense of how remarkable its been. If you look at the last year and a half, i would say youre not wrong looking at remarkable. Thats not to say we cant have a small collection before the end of the year, also. But i think one of the things that you know, people talk about a bubble, bubble, bubble, one of the things that i know is that when everybody is afraid, thats not really a bubble. Its funny to me when i look at peoples positions, those who are long the market are almost kind of embarrassed like, yeah, im still long here. Those who are short, i love their position. Theyre like, were going down, no doubt about it. So i find that an interesting conundr conundrum. Were continuing to see that. And the longs are always so nervous on any piece of news at all. We saw what we call the high flyers with the teslas and cmgs and netflix shows some weakness in the last week or so. And i think a lot of people are like, theres the sign. The top is in. Were definitely going down. Thats not to say we cant have a rotation. It is the end of a quarter. So one of the things i think youre seeing is a little bit of the sector rotation, a little bit of the sense of lets get out of these stokes that have done so well and see what is the next area to go higher. Weve been talking a lot about volatility. And with the fed now in a position of starting to wind down qe and eventually looking at raising interest rates, and thats the talk, we had several guests yesterday who started talking about how thats going to increase volatility. The central bank has been tamping down volatility, but now its ramping it back up. Have you seen any of that yet . Weve seen the vision go from 15 to 14. Now, the vix isnt a perfect measure of volatility, but its the standard in the industry right now. With that, if you look out, theres nothing looking at the futures to see what were saying three and six months out. Theres nothing unusual about the trading pattern for volatility going out in time. Theres no big gaps between months. Does that make sense to you that later on this year as the fed gets towards the end of that, the volatility will increase . Just like any other instrument that youre sort of playing for, were at the low enof the range. So the risk that if youre buying volatility now, you have a chance for it to go higher and certainly you have a chance for it to go higher right now. Volatility is trading at 14 at the low end of its range. When you talk about the people who are telling you the longer are comfortable with those, the longer are very embarrassed to long and the shorts are comfortable with the position, youre talking about heavy duty active traders, right . Heavy duty active retail trader or people i talk to who do it professionally, either one. Actually, the retail traders i wont say have more confidence than what they have on. But they, i think, are a little bit more of a believer. How about whether things are going up or down . In the stocks they hold are going higher. One of the things about the retail trader, there were so many bad things, but the best thing that came from for retail traders, so many of them have learned, i dont have to be all in. Theyre only in perhaps on portions. Its not i have to own 1,000 shares up by a few hundred to see what happens. If it goes low, ill see that as another buying opportunity if i want to get in. Of all the things that have happened, thats the number one benefit that came out of 2008. Thank you very much for joining us today. Always a pleasure to be here. You have one more here for every 265 people. And brazil is close, one out of 326 people. New zealand, one out of 391. Italy, one out of 488. Germany, one out of 593. Were the best place and maybe its because we have more lawyers. I dont know how to read this, do you . We are a litigious people. You can make fun of lawyers until you need one. When you need a good one, you better there are times where you may need one because you are, you know anyway, i dont know anything about any of this. But coming up, what does Vladimir Putins end game . Does he want to put the ussr back together, Humpty Dumpty . We would eventually do something, wouldnt we . When he moved into poland, you would figure. Later, the sweet 16 is set. Were going to talk about the business of the tournament and College Sports with ncaa president mark emmert. Squawk is coming right back. Com. Alright, that should just about do it. Excuse me, what are you doing . Uh, well we are fine tuning these small cells that improve coverage, capacity and quality of the network. It means youll be able to post from the breakroom. Great did it hurt . When you fell from heaven . awkward laugh . A little. laughs im sorry, i have to go. At t is building you a better network. [ male announcer ] how could a luminous 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. Welcome back to squawk box. Take a look at u. S. Equity futures this hour ahead of the market ohm coming up in about a little over 2 1 2 hours. Doe would open 611 points higher, s p 500 up a little over 7 points and the nasdaq the looks like it would open up about 19 points higher, as well. It may not feel like spring, but one thing is certain. Baseball season is about to begin. We know which team spent the most money, and the Los Angeles Dodgers have knocked the yanks off the payroll perch. Part of an offseason spending spree, a lot of ps here, that has the average salary approaching 4 million for the first time. Dodgers are ending the yankees 15year streak as baseballs biggest spenders. The dodgers have a projected payroll of 235 million. Thats 31 million more than the yankees player payroll. You just think of brad pitt and billy whats his face. And then for the yankees, im not going to say anything because i live here. But the way the reds do it, you know, farm club, they dont forget the dodgers. Its not a private gugenheim, i know. The insurance. I hated this all along. Theyre using Peoples Insurance money to vanity buy. It seems like a riskier investment. They forget how to do the but you dont like an owner being able to have all the glitz and the vanity of owning a sports team with other peoples money, with opm. Its kind of your thing. But its always been like minority investors and the mets and all these other places. That was going to be a if whats his if einhorn got involved with the minority announcer with i think einhorn should be able to invest his own money. This is more of its not public money because its a private company. If you remember i dont know. Something if youre going to be a minority investor in a team, you have to realize youre going with the owner. The guys in the majority owners. Yeah, i know. I would love the majority owner. Have you ever been to dodgers stadium . Oh, no, i want to do that story. Can we do it later . I dont think anybody is letting we have a germaphobe story. Youre the only one here. I welcome germs. You know why . I battle them. You get sick as often as i do. Yes. We will come back in just a little bit. Did you know that the easter season is the third biggest selling time for wine . We have that story, a little squawk booze news. And tomorrow, in chicago, we have a huge lineup, including mayor rahm emanuel, steve forbes, bill ford and the chancellor of the city colleges of chicago, cheryl hyman. Back in just a moment. Ent. Abo. This is humira. This is humira helping to relieve my pain. This is humira helping me lay the groundwork. This is humira helping to protect my joints from further damage. Doctors have been prescribing humira for ten years. Humira works by targeting and helping to block a specific source of inflammation that contributes to ra symptoms. Humira is proven to help relieve pain and stop further joint damage in many adults. Humira can lower your ability to fight infections, including tuberculosis. Serious, sometimes fatal events, such as infections, lymphoma, or other types of cancer, have happened. Blood, liver and nervous system problems, serious allergic reactions, and new or worsening Heart Failure have occurred. Before starting humira, your doctor should test you for tb. Ask your doctor if you live in or have been to a region where certain fungal infections are common. Tell your doctor if you have had tb, hepatitis b, are prone to infections, or have symptoms such as fever, fatigue, cough, or sores. You should not start humira if you have any kind of infection. Take the next step. Talk to your doctor. This is humira at work. 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. Theres wine and theres spirits. We are talking at this point about the business of wine. Im not going to say its booze. Its really not, is it . Thats how i buy wine. Thunderbird. Anyway, it finally arrived. Spring has arrived. Easter will be here before you know it. Our next guest notes that easter is the Third Largest holiday for wine sales and consumption. With us now to tell us why is tom stefanchi. Yeah . Yes. Hes president of deutsch family wine and spirits, the largest wine importer in the United States. Were going to try some. It sounded like it was with regret that i said im now a wine drinker. Beer, i get too fat. Liquor, you dont want to be like mad men or something, right . Everything has its occasion. . Im excited. Thank you for coming in. Were not going to spit it out. Anyway, we drink pinot grigio. This is half price, and im going to try it and see whats the name of it . This is the best pinot gre grigios come from a small area which is a d. O. C. Established by the government as the best area to grow pinot grigio. And that is where that comes from and great value at 12. What do you think . 12. I like it. I think better than brands at double the price. Why havent we heard of deutsche . Its the biggest importer of wine. Is it called its always been called deutsche. But we know the brands, not the importer. Right. Its a father son operation 33 years in the making. I think it reflects our owners. Theyre humble guys. They want you to know about their brands. Theyre not so interested whats the most expensive brand . Do you bring in any we sell wines from 8 to 80. Okay. So you dont bring any of the rothchild type stuff in. No. Who buys that . What is that adult chocolate milk. Adult chocolate milk is a spirit brand. And its we talk about that as youre tasting your youth at 40 proof. Its premium vodka and chocolate milk. And i have some patron in the freezer that is coffee flavored patron, which is pretty good. You put some milk in it. Its like the dude. Its like a white russian. Its like that what the dude drank. Hey, ive got a cocktail here. And sangria. We dont even have to mix it. Whats cool about this, its premade. Sangrias been around for a while. Were now making a premium sangria. So that is called epa. And its made with organically grown grapes and real fruit juices. So its got twice the antioxidants as a typical glass of red wine. Sweet. Whats that called . Its called epa. Thats from the simpsons movie. Thats epa, isnt it . Epa is almost like opa in greek. A spanish cheers. It tastes sweeter. Does it have more calories in it . Its got to. The calories are about the same as red wine because the alcohol is low. A lot of the calories in wine come from alcohol. And thats under 9 alcohol. Theres a pinot noir. So the pinot noir is the most expensive of the wines we brought. Thats 36. That pinot noir is named the calling, and its a collaboration that peter deutsche, our owner, joined with ni jim nantz who you would know from cbs. Is it from california . Yes, dutton ranch which are some of the best pinot areas. Its close to the ocean. Very cool climate. And pinot is extremely sensitive to being grown in the right areas. Easter, big, huh . Priests . At mass . You know what it is . What you find with wine is wine spikes when people get together to celebrate. Thanksgiving is the biggest. And then you have christmas and easter is a big holiday for people to get together. Meals with family at home or out at restaurants. And wine follows food. So you see a big spike in wine consumption for that reason. Okay. Brunches and stuff. We will keep this at the table. Thank you. Who is the kathie lee and hoda at this table this morning . Oh, boy. I think i just laughed really loudly. You did. Coming, weve got the exclusive results of the cnbc all America Survey. Plus, how many countries depend on mother russia from keeping the lights on to putting food on the table . Well fire up that discussion in the next half hour of squawk. Were back in a moment. Work with equity experts. Who work with regional experts. Who work with Portfolio Management experts, thats when expertise happens. Mfs. Because there is no expertise without collaboration. Mfs. Save you fifteen percent or more on car insurance. D Everybody Knows that. Well, did you know pinocchio was a bad motivational speaker . I look around this room and i see nothing but untapped potential. You have potential. You have. Oh boy. Geico. Fifteen minutes could save you fifteen percent or more on car insurance. Depending on mother russia. Will putins power play with ukraine lead to more dominos falling in Eastern Europe . Facebook looks into the future. The social media giant buying Virtual Reality goggle maker oculus. What is the strategy behind this 2 billion deal . And it may not feel like spring just yet, but the Real Estate Market is about to heat up. Zillows ceo gives us his forecast for the buying season. Squawk box begins right now. Good morning, everybody. Welcome to squawk box here on cnbc. Im becky quick along with joe kernen and andrew ross sorkin. After finally breaking a twoday losing streak yesterday with a gain of about 91 points for the dow, you can see the futures are indicated higher once again. Dow futures are up by about 65 points above fair value. S p 500 futures up by just over 7. 5 points. And nasdaq up by close to 20 points. The tenyear note, meantime, at this point yielding 2. 75 . We do have a lot of economic numbers coming later this morning. And that could bonds are trading. King digital will begin trading on the New York Stock Exchange this morning. The Company Behind candy crush saw its ipo price at 22. 50 a share, right in the middle of the expected range. That gives king digital a valuation of about 7 billion. The Obama Administration is extending mondays deadline for Health Insurance enrollment but only for some. Anyone who has started an application by them but has not yet completed it will be able to continue that process. Its unclear at this point how long theyll have to finish that application, but the suggestion is somewhere till the middle of april to even ask for an extension. And by the way, this is all done on the honors system. The government will not be checking to see if you actually start it had before. Blackrock Ceo Larry Fink out with advice. Wide ranging, meaning to every company in the s p 500. Fink sent a letter to the leaders of those companies telling them they have to be careful at the cost of longterm growth. I actually think this may be one of the most important stories of the day if not the year. To have a big shareholder traditionally not considered an activist. 4 trillion under management. This is a company thats considered hugely considered not a friend of management. But as a result, this is going to change the face of activism and whats happening. And if you actually have them really pushing back for the first time, its a question about how publicly theyll be pushing back. This is broadbased. If they invoke their shares at upcoming meetings based on anything else that goes that way. Blackrock is the largest shareholder. The thing that irritates me about this, andrew, is that all along you have told me that corporations, when theres demand, they will expand to meet the demand. Correct. So hes saying just by definition, dont return idle cash to shareholders for buybacks or for dif dendvidends. Not if you have better places to put the money. So how do you youre kind of orchestrating demand if its not there were also in a position where we have gotten used to share buybacks and dividends because its been a long time that they havent had anywhere else to put their money. Hes probably saying you may take some heat from investors if you hold off and dont do some of these things. But if you see the opportunity, do it. Dont you think most corporate managers, if they see an opportunity for growth because of increased demand, that they know that one will follow the other . You cant expand no, this gives them cover because if you are in a position like that stuff doesnt pay off for a while. You have the largest shareholder whos now saying yeah, we want to see the growth. I always want growth, but if theres no demand, theres no reason to expand capacity. I would make the argument and theres a number of ceos who have talked about the limited risk theyre willing to take in this environment when you do make a mistake on a huge capital expenditure, youre going to get slaughtered by the activist investor. Ive always said that its because of uncertainty and taxation and regulation. Regulations, all of these things. You told me its a lack of demand because of the hangover from the financial crisis. I think its a combination of those things. I think as a result were living in an environment right now if youre a ceo and you want to make a big capital expenditure, you may not and say to yourself maybe im better off giving the money back because otherwise the shareholders vote me out at the end of the year. Now theyre going after corporations everything from apple to cocacola. Nobodys safe. If you bring back all the money from abroad, one of the things youve always worried about is it goes to dividends and shareholders rather than to hiring. To bring back the money and to just expand your work force or to build more factories without the demand to do it makes no sense. Youre going to lose money. Theres 100 , you should not be building a bridge to nowhere. Right. You cannot fabricate thats what i dont understand. But to the extent there were executives who wanted to take risk and are now more anxious about it because they think that look, you look at a company like ill give you a great example. Ibm spends a lot of money on r d. This is a company thats struggled, in fairness, over the past couple of years in terms of hitting all of their numbers. Over time, if youre the manager of that company, youre going to be nervous that an activist is going to show up. You might not want to spend as much on r d. You might need to actually i think thats what this is about. I think it gives the ceos cover to do the things they should be doing. Id love to have larry on to talk more about this. I emailed him. As a shareholder, he would benefit from reducing outstanding shares. He would benefit from the yields going up on the companies that he owns. I dont know. We know hes you know, he was almost treasury secretary in a democratic administration. As far as business guy, hes one of the guys you point to on the left side, which is unique in some cases. Facebook making another highprofile acquisition buying oculus for 2 billion. Jon fortt joins us with more on Mark Zuckerbergs strategy. We just figure they got money and they can buy stuff that might end up working out because a lot of the other leading Tech Companies didnt seem to diversify when they had the chance. Reporter well, speaking of ceos taking risk, right . Heres Mark Zuckerberg doing exactly that. He doesnt have to worry shoch about shareholders because hes got control of the company. Heres what hes doing with a Virtual Reality company. 2 billion. 400 million of that in cash. The rest in stock. Hes really betting that this is going to be the thing after mobile. We had screens on our desks, screens in our pockets. Hes thinking now were going to have screens on our faces, but not in the way that google has been pushing with glass. Of course, sony is also pushing on Virtual Reality. The way oculus works, you put on these goggles. Thief got a couple of lenses in them that create this immersive illusion because theyre so close to your eyes. The l. E. D. Screen so high quality it looks like youre in a different environment. Theres also a camera that tracks your head movement. The scene moves as you move. It feels like youre in it. The development kits, theyre already taking orders for those. Just 350 bucks. A lot of the same components that cell phones, smartphones have in them. Now, zuckerberg himself is facing an interesting conundrum here with this buy. The Gaming Community where this kit from oculus was initially targeted, very skeptical about this. The creator of minecraft, the popular game, was talking to the folks at oculus. Hes actually backing away from working with them now saying he doesnt trust facebook to make this a stable platform that he can afford to invest in. They would tune it for one thing, gaming, and then kind of yank the rug out from people. You saw zyngas fortunes change in particular when facebook changed the rules of the platform. Facebook probably going to have to invest further in creating this Virtual Reality community, assuring gamers and developers that theyre really serious about this. Theyre not just going to create farmville in Virtual Reality, that they want to expand this into businesses that other people can build and make money on, guys. So people tweeting what was the last one . How much did they pay for the last one . 19 billion. Reporter yeah. A little bit more. About ten times more, roughly. You add it all up, any profits . Buying any profits with either of these companies . Reporter absolutely. Oculus doesnt even have a shipping product yet, so this is very different what whats app which has hundreds of millions of users. Thats a global play. This is betting, you know, differently than the wearable economy or Something Like that that the next interface is actually going to be something that we wear on our faces. Whether that means there are advertising possibilities for letting people tour real estate, for letting them test drive a car virtually, it will be interesting to see if it pans out. Yeah, we immediately took it into the gutter with the sex applications. That drives all technology, right . By we, we mean joe. Yeah, its a royal half the internet, half the bandwidth, dont act like youre innocent out there. I told joe hes going to have to wear gloves with sensors on them. Were talking about attachments. Anyway. Now we talked about bitcoin. That would work for bitcoin, too. I said spitzer would still be governor if bitcoin had been around. It would have never been anyway. Thank you, jon fortt. I see where youd invest 2 billion. I thought it would be fine because he would have been at home with his oculus. The results of cnbcs all America Survey are in. We go to Steve Liesman with some of the highlights. Steve. Good morning. Andrew, really interesting survey we did, minimum wage, health care, views on marijuana as well as inequality. Let me start where we always do with our survey, looking at i dont know why that ones first. It shouldnt be. There we go. Looking at economic views right here. And really what we see is its flat. Very, very slight improvement of those who say its fair or poor coming down a little bit. Those who are saying the economy is excellent or good, coming up just a little bit. Inside that, if you look up here, what we had was a Little Movement from poor to fair and fair to good. A couple Percentage Points that maybe suggest a touch of improvement. I want to show you one other thing which is something to think about, which is a little improvement in the gap. And i dont know if we want that to happen. But the gap between what people who make less than 30,000 and those who make more than 100,000, theres now a bit of a steeper path right there. Steeper slope right there. And if you look at the orange bars, thats where we were in 2007. Which we consider more normal times. So you would expect perhaps people who were doing better in this economy, have better views on the economy. Before in the worst of a recession, it was flat. Getting a little slope now in terms of income group. Take a look at expectations for the future. Again, up just a little bit. Not as good as we were after the election went. A lot of democrats were optimistic. Even after the lehman crisis, people were very optimistic. Just up a touch saying the economy will get better. Moving on, the reason why things are on the flat side is whats happened to wage and housing expectations. Wage gains come down by about a percentage point. People expecting only 2 gains in the next year. Expected home gains, 2 . Down just a little bit from where it was last time. What about views are we going to the marijuana one . This is one of my favorite ones. We asked people, should we legalize it or not . Do you think it would be okay if there was a business in your town selling marijuana . 56 of america said it was okay. How about in your neighborhood . 48 said yep. But when it comes to would you invest in a business that sold or grew marijuana, only 34 . And 28 would work at a place that sold or grew marijuana. So differing views as you come down the scale here. Guys, when we come back, what i think is the most important statistic that explains the politics in this country of views on inequality. Ill just tell you, the question we asked people if you could choose, is poverty or wealth the result of circumstance or actions youve taken . And you can expect how the parties answered this. But its very, very different. Joe . Yeah. Youre right. You talk about earned success, youll see. I know exactly how the parties feel about that. When we return, depending on mother russia, is what we may be doing, moscows influence on former soviet territories is still very strong. Could this lead to putin expanding his influence . Find out next. Return on investment wall isnt a street. Isnt the only return im looking forward to. For some, every dollar is earned with sweat, sacrifice, courage. Which is why usaa is honored to help our members with everything from investing for retirement to saving for college. Our commitment to current and former military members and their families is without equal. Welcome back, everybody. President obama in europe dismissing russia as a regional power, but at the same time expressing concern about where russian leader Vladimir Putin has further territorial ambitions. Our chief International Correspondent Michelle Carusocabrera joins us with more. Weve been talking about this this morning. We think of this segment as almost back in the ussr. What if he can restart at least part of the former soviet union . Lets show you a couple maps of ukraine just to give you a sense of why its possible. The eastern half of ukraine is very much russian speakers. The closer you get to russia, of course, more than 50 of the population speaks russian as their dominant language. This comes from the ukrainian census of 2001. If you look at also the way the voting went in the last election, yanukovych, everything that is blue voted for him in a big way. So you can see how theres this big divide within ukraine itself. What about the rest of not all the former soviet republic because remember there were so many of them, but the ones in Eastern Europe, belarus, lithuania, poland, et cetera, we can run through some of the deep, deep ties that exist still between these former soviet countries. And how difficult it would be for them to completely break ties with russia. For example, poland imports 90 of its oil from russia. Slovakia, nearly 100 reliant on russian gas. Bulgaria, there Russias Lukoil controls its oil refinery. Lets go to the next page and you can see the Czech Republic, second largest Tourist Group were russians. Never been. If you can go, its beautiful. Hungary, their largest noneu trading partner. Slovenia, wheres their biggest market . Its russia. The ties there are so very deep. When i was in ukraine, id say are you going to choose russia or the west . Tle theyd say we cant make that choice. Its both for us. The eastern half would say russia, of course. In the west, they never want to dismiss russia. Weve got to keep remembering how closely linked they all are, even though theyre not officially part of the soviet union anymore. Who visits the Czech Republic more than russians . I bet a lot of western europeans in america. Its because prague is so beautiful. But if you had to have a single country that is number one. You said it was number two. I just wanted to know if it was the United States. I dont know. Maybe its a european country. I would think, yeah. Im going to look it up for you. Okay. Thank you. Is that where its on the coast. Its part of croatia. Yes, exactly, another c country. See, i havent been there. These are things that arent going to be changed overnight. Theyre not going to be changed in a year or two. This is stuff that is no, and it also suggests why the populations might be p predisposed to not necessarily fighting off any kind of russian territorial expansion. So where does that leave us . I mean, if he decides he wants that region in moldova look, i think the bottom line comes down the line in the sand, nobodys used that phrase, of course, this time around. Western ukraine . I think its anything involving nato. The minute you get to a nato country whos not going to go to poland, then we are contractually obligated to defend these 28 countries that are a member of the north atlantic treaty organization. I mean, thats the nato. We were talking earlier this morning about the idea that there was the budapest agreement where we promised ukraine if they got rid of some of their nukes that we would defend their territory, and we didnt. And we already havent done that. Right. That was the whole yeah. I mean, that was when he did it, that was the anyway, lets bring in andrew, director of the russia and Eurasia Program at the center for strategic and international studies. In your heart of heart, andrew, what do you really see happening . I think hes pretty slick, and i think he just does this and nothing happens to him, and he gets back in the g8 and then maybe down the road he starts doing something. Do you think its imminent that he decides that another domino falls . Well, hes everybody outside of russia is certainly hoping that he decides no t s n push the envelope and see whether another domino falls. Because if he were to do that, then we have to respond with a quite serious economic response, which is going to have quite a drastic impact on the russian economy. So i certainly dont expect to see any kind of, you know, 1968 czechoslovakia, you know, tanks coming across the border, thousands of troops into ukraine. But i would certainly expect that the russians are going to try to continue to destabilize the eastern part of the country, perhaps create a provocation that could provide a justification for some kind of intervention. And certainly try to prevent the may 25th elections from taking place because the russians dont really want to see a more legitimate, in their eyes, or in the worlds eyes, government elected in kiev. And would we do anything if he did that, create some event that would you know, a false provocation that allows him, in his mind, or at least justify to the world that hes going in there and taking that part of the country . Would we do anything . Yeah, we would have to do something. And the president did state that that was the case. Now, theres certainly some wiggle room because they talked about these kinds of intermediate types of activities short of, you know, a largescale military invasion. But the response would be further selected economic sanctions that would be placed upon russia. Go ahead. We hear the president in the past, in all Foreign Policy decisions, hes always looking for a consensus and a lot of people to join him, but hes not going to get it this time. And europe feels upstaged by obama show of strength. Its much easier for us to talk tough and put tougher sanctions in because we dont have as much to lose. Hes not going to get anyone to go along with him on this, is he . Well, youre absolutely right. Thats what michelle was pointing out earlier. I mean, theres a very asymmetrical dependence or Economic Engagement of european states versus the United States with russia. So they have a lot more to lose. And also, youve got, you know, 27 members of the eu, 28 members of the nato, their consensus organizations, so typically youll go to the lowest common denominator. And thats something that mr. Putin is betting on. One of the ironies, though, is that as was pointed out earlier in your segment, the countries that are geographically closer to russia and are much more economically dependent on russia, they are the ones that are, in general, calling for a stro stronger stance against russia. You know, and they have a long history of not very sometimes not very pleasant relations with moscow, so to speak, that lead them to take that position. Okay. Andrew, thank you. Were going to leave it there. Michelle, thank you. Probably germany. You would think. You would think. Rich germans go down to the Czech Republic, probably. I got that from melanie. Id go with the rich germans as the number one. Yeah, i think thats right. Thank you, andrew. I think thats right. All right. Thanks. Coming up, we are going to talk hoops and the business of College Sports with the president of the ncaa. And tomorrow, weve got a special edition of squawk box in chicago. Mayor Rahm Emanuels going to join us. Forbes media chairman steve forbes and ford executive chairman bill ford. And then the chancellor of the city colleges of chicago, thats all tomorrow starting at 6 00 a. M. Eastern. Were back in a moment. [ tires screech ] chewleys finds itself in a sticky situation today after recalling its new gum. [ male announcer ] stick it to the market before you get stuck. Get the most extensive charting wherever you are with the mobile trader app from td ameritrade. How much money do you think youll need when you retire . Then we gave each person a ribbon to show how many years that amount might last. I was trying to, like, pull it a little further. [ woman ] got me to 70 years old. Im going to have to rethink this thing. Its hard to imagine how much well need for a retirement that could last 30 years or more. So maybe we need to approach things differently, if we want to be ready for a longer retirement. If we want to be ready for a longer retirement. 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. Coming up in just a little while, a breathalyzer test with the shark tanks kevin oleary. He saw us drinking and wants to know what those three sips did to us. Zillows ceo spencer rascoff. Good morning, spencer. Squawk box will be right back. Welcome back to squawk box. In the headlines this morning, Mortgage Applications fell 3. 5 last week according to new figures from the Mortgage Bankers association. It comes as Mortgage Rates rose to the highest level since january. Refinancings also fell, down 7. 7 . And made up the smallest proportion of total applications in four years. And we are an hour away from the latest data on durable goods orders. And economists think that the orders rose 0. 8 last month, which would partially reverse a 1 decline in january. Well be watch this is a pretty important number typically if youre trying to gauge what type of gdp growth were seeing. And gps device maker garmin is rising in premarket trading. Garmin was upgraded from buy to neutral from citi which says its convinced that its vevo fit will be a big hit. Andrew, with smartphones and all that stuff, i didnt understand why garmin is still viable. Garmins got a business. What is it . You just heard the latest. They do things. Keep me updated. You know what . We can talk about mapping a little bit with our next guest who is also a disrupter. In the meantime, yesterdays departure of Michael Kavanaugh raising lots of questions about succession at jpmorgan. Kayla tausche joins us with more on who might replace jamie dimon. Kavanaugh had been close to jamie dimon at citigroup and then at bankone and most recently at jpmorgan. In the last year, the two had had been taking meetings with independent lawyers and advisers to discuss the future structure of the bank he was the chosen successor which is why after the initial surprise at his departure, theyre now already starting to talk about whos next. One name keeps coming up. That is gordon smith. He joined jpmorgan seven years ago. Most recently hes been ce, on of chase, the Consumer Bank. Insiders say hes successfully run a heavily regulated business as washington has been cracking down on Consumer Financial products. He also has 170,000 people in his unit from Mortgage Bankers to call center employees. And people say the diversity of that experience could prepare him to be ceo. Thats experience that matt zames doesnt really have. Most recently he unwound the disastrous whale trade. Some insiders are questioning whether a trader could or should be running a firm as unwieldy as jpmorgan. Then theres mary erdos, a longtime jpmorgan loyalist. She joined in 1996. She runs asset management. Shes grown assets there to 2. 3 trillion. Now, its still just a fraction of the firms revenue, but she has an incredible wealth of experience that a lot of people have been talking about for some time. We also want to talk about their ages because erdoes and zames are in their 40s. Deciding on when dimon retire, that could come into play. There could also be others that enter the horse race. We know there are a lot of wellregarded executives at a firm as large as jpmorgan, but those are the three to watch. Why do we keep talking about this parlor game . There are three reasons. Number one, its a 200 billion market cap dow component. That in and of itself is important. Number two, its a firm thats been criticized as too big to manage. So you want to be figuring out who will be managing a firm that is that large. And number three, some sources have been comparing this to jack welch leaving ge, noting that whoever takes the reins from here might have a painful transition. Its just a matter of who. Guys, its really a popular discussion right now on wall street, but thats the latest from what were hearing. Kayla, play out the parlor game. Who outside of jpmorgan do you think is interesting . Its an interesting question, andrew, and its one that really gets to the heart of what will jpmorgan look like in five years when jamie dimon does decide to retire. He has said, and he and Mike Kavanaugh had had discussions about at what capital level you have to get to before it is economically prohibitive to stay as big as it is. Do you split the bank to become an asset and Consumer Bank and also an Investment Bank . That would introduce a lot of potential candidates from the outside to that bank. I think at this point, the board is really looking at gordon smith as the only person internally that could run a firm as large as jpmorgan is in its current form. But in its current form is really the big question here. As of right now, we got into this discussion last year when there was the referendum on jamies leadership, whether he was going to keep that chairman role. Who from the outside could run this firm. And there was really a shortage of people that could. I know, kayla, you know, youre, like, 22, and andrews, like, 30 something. And you think jamie dimon is some geezer. Hes a baby. In five years, hes going to be 63. How many times are you going to do this report over the next five years and hes still going to be 63 and people he could go on to do Something Like treasury secretary as somebody as discussed. Joe, well do this report every time someone has been anointed as a successor to him leaves the bank. This is a pretty big deal. How would you replace one of the best banks ceos ever . Why would you even talk about it before hes 70 . Because he has said that he probably has about five years left in him. Hes not going anywhere. Obviously hell have a job until he doesnt want it anymore. Same with lloyd blankfein. Until theyre not interested in doing it anymore. Tausche, okay. Should you still be doing your job . I dont know. Anointing to replace me at this point. Whos in the running . No comment. All right. No, he is and he looks so young. People talked about him going on to do Something Else. I know. It is a day and age where guys i think Chuck Scarborough is 70 now. Hes nowhere near youve got a lot of runway still. Dont worry. Im not worried about me. Even though scarborough came to mind. No, i saw him yesterday. Hes been on 40 years. He was on Brian Williams last night. They were talking. Its just that in this day and age, 65 is such an an age to talk about. In truth, the longer he stays, and this is not a suggestion he should leave, the more opportunity there will be for people to the extent that you think zames is in line at 42, hes going, this guys going to stick around until hes 70 . Ive got to find another job. Youre transferring your own feelings here. Being a bank ceo now is different than it was when jamie dimon started at jpmorgan chase. Excuse me. Is this like you . This is what youre doing. Its a losing game. Youll be in hollywood producing your tv show. Ill still be here. Doing cameos. Doing cameos. Thank you. If i could say one more thing, the job of being a bank ceo is very different now than it was when jamie dimon took the reins. Hes done a fantastic job. His run hasnt been untarnished, but it cant be fun to be in the public eye and be as scrutinized as he was. And that was one of the reasons kavanaugh did decide to leave. He said the pressure was too much. He didnt want to be in the position dimon has gotten himself into in a few years when he would have been chosen for that job. So it cant be fun. Who wants to do that for 20 years . Or kavanaugh could have left because he knows jamies going to be there for at least another eight, seven years. I think there are a lot of external forces. Last year the top three guys made 250 million. 250 million. Another good reason. Can i make one point . Then we really have to run. With apologies to Mike Kavanaugh, one day maybe he will make 250 million. Hes not a founder. The three top guys were the founders. Ive seen that number used. But there are concerns in banking whether they can keep the top talent. 100 . When theres a lot more poen in private equity and other places. No question. Home sales, those numbers have been hurt by winter weather, but will homebuyers turn out when the warm weather returns or will they keep hibernating . Spencer rascoff joins us with his outlook on this. Spencer, what do you think . Its the middle innings of the recovery. Home values came down from about 30 from the peak, and theyve bounced about 20 off the bottom. And snou home values are appreciating about 6 year over year. So theres very limited inventory because of high rates of negative equity. Around 20 of all mortgage holders in the u. S. Have no equity in their home. And that means they cant list even if they want to. And thats causing multiple bid situations in a lot of the country, and thats whats driving home value appreciation is limited supply. Weve all heard about how these private investors, these Institutional Investors have come in and bought a lot of homes instead of homebuyers making a first purchase or second purchase, trading up. Weve heard about how they stepped into the market and now are kind of satiated. Theyre not buying any more. Does that affect prices . The colony americas or blackstones, Companies Like that are still relative small given the total size of the u. S. Housing market. They havent actually bought enough inventory to really move the needle nationwide. Whats driving it is limited supply and low demand because of Mortgage Rates and pentup demand. People didnt want to buy on the way down. And thats whats driving home values. If thats supportsing values now, just the idea you have limited inventory, if home prices continue to appreciate, if theyre up another 6 to 10 over the next year, are you going to see a flood of homes that come on the market . Yes. Whats going to happen over the next 12 months is we think its going to end up about 4 appreciation over the next 12 months. The Housing Market is starting to cool as more inventory comes online as negative equity frees more people to list. The two exceptions, the anomalous markets are manhattan and the bay area where theyre strong in those two areas. In manhattan, such Strong International buyer interest that these economies seem sort of impervious to normal market dynamics. Of course, theyre also constrained geographically. They cant have the urban sprawl. So the selfish manhattan question, whats that market look like . It continues to be on fire. But at what up what . Around 10 year over year in manhattan. Until the end of time, it would seem. Do you think thats going to be the case until the end of time . Well, you know, the foreign buyer interest especially at the high end is definitely driving the market. Between asia and the middle east, its creating enormous price. The bedroom communities around manhattan . Are also appreciating around 5 to 10 year over year, but they dont have the same effect. It was a rough selling season so far, wasnt it . Well, you know, the housing data that you look at weektoweek, monthtomonth basis, that can be impacted. The real season for a homebuyer extends over a couple of months. When is it . It starts pretty much now. Starts now. Starts in kind of april. Were about to start and it will go through august. Thats kind of peak buying season. It has to do with school years. People want to be in their new house in time for the summer to get ready for the school year. Retail sales are certainly affected by weather situations. But the Housing Market over the course of the full season doesnt really get affected by the weather. Spencer, i know what you guys do by putting stuff online is amazing. Ive checked my home value. Im sure everybody does. They go online, check their home values, their neighbors all kinds of things. What ive been surprised by, the traditional Real Estate Broker is alive and well. We just had realogy last week talking about that. Im surprised that online has not made more inroads that people take 6 . People take 6 because they provide a lot of value in the transaction. The same way Investment Bankers provide value in ipos, for example. I do not expect Real Estate Agents to go away at all. In fact, i think that they are a very integral part of the transaction. I dont think that will ever change. What has changed is who is a successful Real Estate Agent in an air ya in which you and i have access to the same information as a Real Estate Agent. So a successful agent has changed. The profile of a successful agent has changed to be more of a transactional consultant. Somebody more of an expert in the local market, a great negotiator rather than just an information gatekeeper. But the fundamental structure of the franchise or franchisee model, for example, and the agent Business Model, those are safe and sound. Spencer, before we run, we just talked about it in the last segment, we were talking about garmin briefly. You use maps. Apple maps, google maps, microsoft maps. I know they do gps watches and heart rate monitors. Do you want to take a disrupter stand on all this . I was very when gps got put into smartphones, i was skeptical about the standalone singleuse Companies Like garmin. They have powered through in the same way that for now, anyway, singleuse Camera Companies have powered through. Gopro. Yeah. And its because there are still use cases where a singlepurpose device can be better than a multipurpose device, whether its a slr or garmin instead of gps in a phone. Thank you for settling that. Thanks for coming on. Coming up, the ncaa basketball tournament showcasing some of the worlds top student athletes and the in next big nba stars. Well have the president of the ncaa. Why he thinks College Athletes should not be paid to play. And later, the maker of candy crush going public today. Well talk hot ipo prospects in the 8 00 hour. Back in a moment. Alright, that should just about do it. Excuse me, what are you doing . Uh, well we are fine tuning these small cells that improve coverage, capacity and quality of the network. It means youll be able to post from the breakroom. Great did it hurt . When you fell from heaven . awkward laugh . A little. laughs im sorry, i have to go. At t is building you a better network. In a we believe outshining the competition tomorrow quires 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. Welcome back to squawk box, everybody. The futures are indicated higher. Theyve built up through the morning. Right now those dow futures look like they would open up by about 63 points if the market were to open right now. The s p 500 looks like it would open up by 7 points and the nasdaq would be up about 17. Listen up, all you germophobes. California lawmakers are backing away from a law that bans ba barehanded contact with them voting unanimously to repeal and revisit the rule. It follows opposition from chefs and bartenders who say they were caught off guard. Governor brown signed a bill last year requiring restaurant workers to wear gloves when theyre preparing food like rice or maybe a mint in a mojito. It provides exceptions, if youre washing your hands a lot. Local regulators were granting them inconsistently. California is among the last states to adopt a barehand contact ban. Its already in place in 41 other states and recommended by the food and Drug Administration more than 20 years ago. Regulators say that barehand contact by kitchen staff is a leading cause of foodborne illness. Ive got gloves on there. Yes, you do. Independent and highend restaurateurs say the law is restrictive, wasteful and undermines existing hygiene practices like telling people to wash their hands when theyre in the bathroom. Right. Yeah. You know, the reason im freaked out about this, we talked off air about that article i read yesterday from the wall street journal that laid out the cold. Because weve had a cold running through our house for the last four weeks. By the time right. The most contagious is the two days before you ever show any symptoms. So youre Walking Around thinking oh, its fine to give you a little kiss on the cheek because youre not coughing. But meantime, youre getting sick and infecting everybody. And by the time youre sick, it doesnt matter. No. When you have a cut or something, you know, you let a dog lick your cut. I dont. Thats how you dogs like their own cuts. I use neosporin. Youre modern. Neosporin is a good thing. Andrews not sticking with you. You know they did a poll on who should replace piers morgan. Larry king bring him back. Hes 86 or something. Yeah. He did well. All right. Not sensitive at all, by the way. Bring him back. When we come back, it is the most wonderful time of the year for College Basketball fans. The madness is on, but before the sweet 16 tips off thursday night, were going to be talking about the business of College Sports with the president of the ncaa. Mark emmerts going to be joining us next, so stick around. Lets say you pay your guy around 2 percent to manage your money. Thats not much, you think except its 2 percent every year. Go to e trade and find out how much our advice and guidance costs. Spoiler alert. Its low. Its guidance on your terms not ours. E trade. Less for us, more for you. Lets say you pay your guy around 2 percent to manage your money. Thats not much, you think except its 2 percent every year. Go to e trade and find out how much our advice and guidance costs. Spoiler alert. Its low. Its guidance on your terms not ours. E trade. March madness, as you know, is in full swing. Like a little withdraw. Whats today, wednesday . Tomorrow, the sweet 16 games will restart no, the tournament restarts tomorrow. The sweet 16 games start tomorrow. March is the real money making month for the ncaa. Three years ago the ncaa cut a 14year deal with tv rights with turner and cbs for nearly 11 billion. Ncaa total revenues for the 2012, 2013 fiscal year more more than 900 million. Many others are asking, should student athletes be paid . Dr. Mark emmert is the president of the ncaa. He joins us now. You know, i kick it around back and forth on what should be done. I think im with you. These guys, theyre going to have potentially great careers from what happens in march madness, and a lot of the money that is raised that doesnt flow into the coffers of tv executives, it does great things for the schools and other people coming up in the system. Watching these guys compete, it doesnt look like they need money to have the heart to compete like they do. It looks like theyre doing it for the love of the game, which is what makes us all riveted to whats happening. Am i right . Well, i sure think so. The excitement and energy of march madness, this really magical sporting event, is driven in large part by the fact these are student athletes. Theyre not, you know, professional athletes. Theyre not what some people are arguing they should become, unionized employees of the university. In fact, theyre young men playing for their school just like all the other now 450,000 student athletes in the ncaa. And the great coaches also a lot of what they do is try to make sure these kids, since not all of them end up in the nba, i think its not a big proportion, really, so theres a lot of other things that are going on at the same time in terms of academics and education that make a big difference. And these guys can instill that. Like coach k, you know he instills that in a lot of his kids, right . Well, absolutely. Everybody thinks that theres that large proportion going on to professional careers. In fact, its a couple a percent. Its about 5500 Ncaa Division i basketball players, about 60 to 90 get drafted every year. So were worried about whats going on with the 5500. We want to make sure they get degrees, make sure they have the education that sets them up for the rest of their life. Thats the game changer here, not the few that go on to the nba. To be able to graduate with a degree from a Good University with no debt, with all your expenses covered, for most of those young men, thats a terrific incentive to be a part of this. The naysayers will say, though, since it is a small proportion and these you know, the guys that were watching, so much money is made, maybe they should get a piece. I guess thats where they would say it, right . Thats right, but thats a fundamental misperception. Theyre looking at the topline revenue, not where that revenue goes. That 900 million you mentioned in the intro is, in fact, the revenue that flows into the Ncaa National office and flows immediately back out to the schools and universities and pays for all the other sports that are participating in ncaa sports. If you like the soccer championships or the lacrosse championships or the frozen four on ice hockey, thats all paid for by the revenue that comes in from march madness. Mark, you can look at the studies and most of them would suggest that only 20, 22, 25 of the 120 division i athletic programs traditionally make money every year. Yeah, thats right. Thats the other interesting fallacy here. Theres 1100 colleges and universities in the ncaa. Last year about 25 of them had positive cash flow. Virtually everyone else has taken money from the universities to put into their sports programs but does that raise larger questions about whether that money and im not turning the conversation around in an odd way needs to be used for academic and educational purposes as opposed to the athletic programs. Yeah, so as a guy who spent 30 years on campus, i know the debate that rages on a university or College Campus isnt how much cash is flowing out of sports to other places, its how much money is going into sports from the campuses. Youre right. Thats a very common debate on virtually every University Campus in america. All right. Doctor, i was going to talk about some of the increases you see in web viewing is. Its just astounding to me how huge. Popular it is. These are numbers any businesses would go for with the increases year over year. Its better than i think it might be better than nfl playoffs. Its not quite as big, but its awesome. Anyway, i think youre doing its close. Yeah, anyway, doctor, thank you. Well have to have the doctor back on. So many issues to talk about. We didnt even talk about who he likes. I could go on for a long time. Tv business, the rights business, all of that. Coming up, though, if youre looking for investment ideas can you name one sweet 16 team . I have no idea what youre talking about. No, thats not true. Back in a moment. [ male announcer ] how can power consumption in china, impact wool exports from new zealand, textile production in spain, and the use of medical technology 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. I dont have to leave my desk and get up and go to the post office anymore. [ male announcer ] with stamps. Com you can print real u. S. Postage for all your letters and packages. I have exactly the amount of postage i need, the instant i need it. Can you print only stamps . No. First class. Priority mail. Certified. International. And the mail man picks it up. I dont leave the shop anymore. [ male announcer ] get a 4 week trial plus 100 in extras including postage and a digital scale. Go to stamps. Com tv and never go to the post office again. Including postage and a digital scale. Geico motorcycle. See how much you could save. Investment strategy this hour. Well be talking hot ipos. Facebook buying into Virtual Reality. Doc . Dont say a word. The social media giant acquiring occulous. Will it be a big part of facebooks future or a 2 billion flop . Doc, im from the future. Do you know what this means . It means that this damn thing doesnt work at all. And shark tank wants to keep you out of the drunk tank. Party pooper. Kevin oleary joins us with the maker of a breathalyzer device for your smartphone as the third hour of squawk box begins right now. You know that . Ive heard of it. Every stoplight. Hes so happy where he is now and all the colleges he didnt get into, the letters he received life is too short. Darius is a genius. We should have him on. Ive met him playing golf. Hes genius. Anyway, welcome back to except hootie. He didnt need hootie. This is cnbc, first in business worldwide. Lets get a check on the markets. Equity futures looking solid this morning after a good day yesterday, which was when it rose yesterday, it was for the first time in three sessions. The dow closed at a twoweek high while the nasdaq came off a fiveweek low. Overseas in asia, well take a quick look. Positive certainly in the hang seng. In europe, which is probably responding to what we did yesterday, more or less. Really good day in germany. All that is in the face of, you know, all this hand wringing about what Vladimir Putin is ready to do. I think hes dont want to rock the boat too much. He knows what he can get away with. Whats the latest border, 1990 . Part of russia before then. What do you think is going to happen, sorkin . Hes going to stop, isnt he . I think he will stop, but it will take a year or two before he really stops on this. Everything he laid out is a very good reason for going into that section of moldova. We already gave him moldova. He hasnt taken that . Well, you gave him moldova. I dont know about the rest of europe. If he takes Something Else in the baltic region, i think did you see the former soviet union. Shocking to look at. It was this huge spread. It wound down and broke down. What if its on its way back. Slowly putting Humpty Dumpty backing t ing ting t ing ting i. And theyre very tightly connected to russia still. In the russian economy, if it wasnt for oil, he hasnt been transformative. And he wasnt popular until he started his popularity fell until the olympics and this nationalistic streak and this talk of bringing back our former gr glory. We have other headlines this morning. Facebook is buying into the Virtual Reality market. The social media giant acquiring a Company Called oculus vr. They make Virtual Reality headsets. Its main product is primarily used for gaming, but facebook Ceo Mark Zuckerberg has more users in mind. He says were going to make it a platform for many other experiences. Imagine enjoying courtside seats or consulting with a doctor face to face just by putting on goggles in your home. That deal includes 400 million in cash. Just over 23 million shares is of facebook common stock. The deal expected to close at the end of the second quarter. Checking facebook shares is right now. You can see its down slightly. 64. 76 is the price tag. Also, a new Senate Report saying Target Corporation miss the multiple opportunities to thwart the hackers responsible for the data breach. The report says there was no indication that the retail giant responded to warnings that malware was being installed. The panel holding a hearing today on how to protect personal Consumer Information from a cyber attack. One of the witnesses will be targets chief financial officer. Take a look at shares of target as we speak. Those shares up slightly in the after hourings. 59. 14. You did the interview with him. You were the first. They did say that they didnt see it coming. Then now that this report has sort of come out, both this piece and then that business week piece, theres a little bit of a flimflam. When i read the business week piece, it seemed to me it could have potentially been that people who are in charge of the security didnt necessarily understand where what they were looking at and how it played out. My guess is that the ceo certainly didnt know at that point. Theyll have to answer to congress and the cfo is going to have to say himself what he knew when and how it all played out. A lot of this also didnt come out until the government informed them. Thats when things started moving into action. Right. Are we going to talk about the big headline of the morning or not . Its not really i mean, thats how nerdy we are. We were off camera talking about this. Black rock Ceo Larry Fink out with wideranging advice oh, i wasnt talking about that. The business implications of Gwyneth Paltrow and Chris Martins split. Coldplay, jean shorts, theres a lot of business to be done here. By calling it no, now i see what youre saying. Put the prompter back. To you, i saw it yesterday and i was like, this is long overdue. The vanity fair piece building that whole thing. Billionaires involved potentially. Like ive said, i dont understand the actress front man for a group attraction that seems to pervasive with gold goldgoldi goldie hawns daughter. The black crows guy. The next guy is even schungier. Pamela anderson has gone through them. Thats why i wanted to play the drums in high school. They grind on stage a little bit and they faint for it. I wanted to play drums, a guitar, anything. You want to come back as a rock pretty much. What i dont understand with you is you run the whole gamut. Maria menounos, Gwyneth Paltrow. All of my imaginary girlfriends. Your hall pass girlfriends. Pilar has her own choices. Matt lauer . Thats how we role. Andrew, dont tell him anything you dont want spouted out. He started it. This is you. This is the nerdy thing we were talking about last break. That is that blackrock Ceo Larry Fink out with wideranging advice. By wide ranging, we mean to every country in the s p 500. He sent a letter to every Company Leader saying they must be careful not to overemphasize dividend buybacks at the cost of growth. My take on it was that you cant manufacture demand. So it sounds to me but i dont think hes trying to do that. So youre saying hes a big investor. Blackrock happens to be the largest. And theres a lot of activists who say, we want money. What hes saying is, were big investors too. We want you to keep growing and not be forced to do things that arent in your best longterm interest. I think hes providing cover to some of these Big Companies that have been rattled by some activist investors on the rampage right now. Spin off units. Exactly. This is the, well, maybe do what you think is right, spend the money where you think. I took it as, larry, we all want jobs. We all want higher gdp. Wed all Like Companies to expand and build more plants. But thats like the government deciding. You cant do it if the demand isnt there because it doesnt make economic sense until theres a reason. I understand your argument entirely. Steve liesman just emailed in. I dont know if you saw this. About Gwyneth Paltrow. Not about Gwyneth Paltrow. A quote from fink. Its very important as leaders of business we focus on the long term. Obviously we have shortterm pressures, but it will be good for the entire economy that we have greater job growth and investments in this country. We need to be balanced in how we happened l this large pool of cash. Wait, steve sent that to us . He just talked to him . Apparently. Fink sends this letter every year in front of proxy season. This is the third year in a row hes done that. Thats interesting because weve talked to larry in the midst of proxy season. They tend to follow isi. They have their own internal guys who look through these things. But he can swing a vote. He may own 4 , 5 , 6 for some of the largest companies. Its interesting. It is. I really wish these guys would loosen up the pursestrings. Thats one of the reasons you know, ceos and corporations are doing a lot more with less. And it doesnt help the overall but youre right. Demand has to be there. It cant be falsely manufactured. You cant falsely manufacture, but i wish they would expand. Maybe were finally reaching that point in the economy where things take off and we break out of that cycle weve been in. I think we need to do the tax thing too and make it easier to build factories here with this natural gas stuff. Bring back some of that money and build it here and add jobs here and do all that. Then well be at 3 or 4 . Then all our entitlement issues start becoming much less pressing. Should i run . You know, a lot of people are apparently. 2016. Joe, joe, joe, joe. I see scarborough showing up, the other one, in new hampshire. Joe scarborough is going to new hampshire. He wont comment on whether or not hes running. Im not running. I just want to get that out there right now. Good. We need you here. We can put an American Flag behind you. Im not going to be peoples sexiest man alive. I turned that down too. Its because youre serious. You like to focus on whats important, like business news. So lets get back to stocks. But if you say youre not going to run, does it make people want you to run . I think it works. For your public that has been clamori clamoring, know joe is staying here. Neither joe is running. Thats a relief. Joe is staying here because he wants to talk about business. Stocks bouncing back in tuesdays trading. Small caps could be a key area. The s ps 600 Small Cap Index is up a little less than 1 this year but up more than 26 over the last 12 months. David, what do you think . This conversation weve been having about what the economy is poised to do and whether were really about to break out, do you think this might be the time . Well, i do think there are signs that the economy is expanding. Clearly thats what the fed is telling us with the sixmonth comment and the qe tapering, that they see the economy expanding at a pace that likely doesnt need monetary stimulus anymore going forward. Weve got some good signs. Obviously the weather in the First Quarter impacted the economy somewhat. But we are on a gradual path back to a normalized level of growth. Importantly, it feels like were moving into a more normal cycle. Weve been in this fedoriented cycle since 2009. It feels like were moving into a more Economic Cycle. The fed is stepping back. Banks are starting to lend more. Were going to see more of the true Economic Cycle, and i agree, we need to see the topline growth, but we want to see that true Economic Cycle because thats where security selection and fundamental analysis really pays off. Although, you saw the markets overall have spectacular years over the last year and a half, even longer. That was because the fed was basically propping things up. The fed was making it so that all boats were floating higher. If you get to the point where youre relying just on the economy, as you mentioned, theres going to be winners and losers. How do you dig in . Who do you think are the best positioned at this point . Well, youre absolutely right. That dispersion and differentiation, there are sectors that are up 1 already. That differentiation is what were looking for. For instance, you look at the energy sector. Were in a situation where weve got very, very low levels of natural gas in storage. If we have a hotter than normal summer, we have increased demand for natural gas because the Manufacturing Sector picks up. Youre going to see increased demands for natural gas. Thats going to require additional production. Thats going to be positive for those enps operating in a variety of shale plays around the country. The banks, another area. The yield curve steepening. Obviously, thats a positive, but as the fed pulls back, youre going to need to see that liquidity replaced, hopefully from capital in the traditional source, which is commercial banks. As they lend, thats going to improve their Earnings Growth rate, and thats going to improve the opportunity for stock gains there. A couple of areas where we think theres opportunity. But, yes, clearly we need the Overall Economic growth environment to support that. All right. David, great talking to you. Thanks for joining us. Thank you. All right. And coming up, the maker of the popular smartphone game candy crush goes public today. The ipo market has been really hot this year, but could investors get burned . Were going to dive into the frothy ipo market after the break. Later, were going to continue our whats working series with an indepth look at media stocks ahead of the opening bell. [ 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. 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. We got a fair price. Ruecar. Com,. My feeling is that. Ing. And youre like. Iyou know, the salesman icomes over. , theres no buyers remorse, you know. Im happy with my purchase. Its the truth. When youre ready to buy a car, save time, save money, and never overpay. Visit truecar. Com welcome back to squawk box. King Digital Entertainment pricing its ipo at 22. 50 per share. The developer of the widely popular candy crush saga game set to start trading on the New York Stock Exchange today. Theyre offering up 22. 2 million shares. That puts the companys valuation at roughly 7 billion. So from king and alibaba and grub hub to box, is the ipo market too hot to handle . Thats the question. With us, kathleen smith. Does any of this make sense to you . I think we are at points in the market that are definitely frothy. But keep in mind the ipo window has been closed until the end of 2012. In 2013, the renaissance ipo index of a basket of newly Public Companies was up 54 . Almost double the s p 500. And its still ahead of the s p 500 so far this year. So investors have been making outperforming the overall market, making money in postipo trading. Thats why we have such an exuberant market. Heres the problem with talking about a bubble. You could have talked about a bubble in 1996, and you would have been off about by four years. So are we in 96, 97 or 2000 . I think its good to use the baseball analogy because you never know when the game will end. I think were threequarters of the way through the game. So if you are an investor and you get a call from your broker that are says, would you like some of box, would you like alibaba, grub hub, would you like this king today . What is the answer . Well, those are special investors that are getting those calls. I think most investors are not really participating much in the ipo market in that way. Most investors since the internet bubble and a few other major corrections in the stock market have gone to portfoliobased products and really arent into the ipo market one by one. Were seeing many more institutions and hedge funds who are participating. But broadly speaking, especially if you cant get access to them up front, if later today, for example, king becomes available, if you will, because it will be publicly traded, and you are investing in individual securities, does that make sense to you . I think most people would be more cautious about an ipo and not run in and buy those shares on the first day. We know in particular the ones that spike up 100 in a day, the follow through on those tends to be a lowodds type of investment. So basically, investors should not be running in to buy these. They should watch them trade. They should make them a small part of their portfolio and participate that way. Do you think the jobs act, which allowed some Early Stage Companies to go public without as much disclose sure and skutny perhaps as they might otherwise, has been a good thing or bad thing . We dont see the jobs act as having made much of a difference. I think most companies are pretty good at disclosing what they need to. Its saved a little money because they dont need to do a heavyduty review. Still, the disclose sure is pretty good. We have a shorter time frame to look at them because they dont sit in registration. They sort of lift up the veil a little closer. For those really digging in and studying these, its made it just a little bit more of a rush to do the analysis. Okay. So inning seven. Thats where youre at . Inning seven. Okay. Kathleen, thank you for joining us this morning. Appreciate it. And king digital ceo is going to be making his first appearance on squawk on the street later. Dont want to miss that. Joe . Were just a few minutes away from durable goods data for february. They expect an increase of 0. 8 . We had a drop of 1 in january. First, the morning buzz stories from the wide world of sports. Including rule changes in the nfl and of course the news from coldplay. Andrew likes to listen to coldplay. Opportunities arent always obvious. Sometimes they just drop in. 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. This is mike. His long race day starts with back pain. And a choice. Take 4 advil in a day which is 2 aleve. For all day relief. Start your engines you are gonna need a wingman. And with my cash back, you are money. Forget him. My Airline Miles will take your game worldwide. What im really looking for is i got two words for you rewards. Theres got to be better cards than this. [ male announcer ] theres a better way with creditcards. Com. Compare hundreds of cards from all the major banks to find the one thats right for you. Its simple. Search, compare, and apply at creditcards. Com. First rounds on me. [ indistinct shouting ] [ male announcer ] time and sales data. Splitsecond stats. [ indistinct shouting ] its so close to the options floor. [ indistinct shouting, bell dinging ]. Youll bust your brain box. All on thinkorswim from td ameritrade. In squawk sports news, the nfl announcing several rule changes that will go into effect this season. The instant replay process getting an overhaul. Immediately after a call is challenged, the nfl officiating command center in new york will begin reviewing replays. Officials in the command center can advise the referees on the field on what to look for in the play. The referees on the field will have the final word, though, on the ruling. The league also voted to ban these rollup blocks to the side of a players leg. You sort of roll into it, and it can cause, like, knee damage. And a tweak to the touchdown celebration rule. Players will no longer be allowed to slam dunk the ball over the crossbar after scoring. Infractions will result in a 15yard penalty. Supposedly if you hang on it, you can move it or break it. But it adds a little drama to the whole thing. Kind of fun. Having the guys on the field have to go over and look at the little screens, this was something they probably i guess that makes sense. Yeah. But you want to get it right. Its been graded in the march madness. Theyve gotten some good calls. They just want to make sure. You can never see it. And you dont want to steal it from somebody. Takes a little time. Theres a lot of see how many billions of dollars are riding on this . People do bet on these. Im glad i dont. You got two left, right . Two teams left . One left or two left . Two as of last night. I guess the tipoff is tonight. Tomorrow. Tomorrow night for the next one. Huge games. You have four, dont you . Three. I had wichita stay. Six of eight in the elite eight. All right. I think you have a better chance of winning at the end. When we come back, breaking economic numbers. Durable goods. Those orders are just a few minutes away. Then we have shark tanks kevin oleary. Hes joining us with one of the sharks Favorite Investments ever. All five of them buying in. As we head to a break, take a look at u. S. Equity futures. In a world thats changing faster than ever, we believe outshining the competition tomorrow quires 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. Welcome back to squawk box. Seconds away from durable goods data for february. Rick santelli standing by. The numbers, please. All right. February durable good orders headline number rises much more than expected. Up 2. 2 . Now, lets strip out transportation. Only up 2 . Transportation kicked in a bit. Now lets look at the durable goods orders, nondefense x aircraft, thats down 1. 3 . This is definitely not a good number. It gives us an idea about, you know, capital spending. If we look at the shipments versus the orders, a little different picture. Its up fivetenths. Even thats a disappointment. On the original release last month, its worse. Transportation down 0. 2. So the revisions arent spectacular either. So this one is definitely going to be aircraft. I cant run through it. Steve liesman and the boys will ultimately. But aircraft orders, my guess, boosted this number. And this comes a the a very critical time. This is still a february number. Many are still going to hang their hat on the weather implications. We did see mba down a bit to the lowest since january. So we can still argue as to what the effects are. But this definitely had a bit of an influence, bringing yields down a little bit. Yes, yields do go down on weak data, but we have a nice futures trade. It was only dinged a couple ticks from up 69 to its current level up 63 points. Back to you. Rick, can i just give you a total shoutout on that . I was reading through to try and figure the numbers. You were dead on, on this. The orders for defense and civilian aircraft, that did drive the gains. Swings in those areas can cause choppiness. Boeing alone reported twice as many orders than a month earlier. Youre right, thats what it was. Yeah, and, you know, im not trying to dismiss it. Obviously durable goods are a very volatile area. The reason we do x transportation is because of the process of how these orders get in. In the end, the number everybody is going to be paying most attention to, truly, is the orders nondefense x aircraft down 1. 3 . That follows a month where we had a decent jump. Up 1. 7, but that was revised after that to only up 0. 8. Were going to continue to handicap this. One other thing id like to point out, theres a lot of talk about stabilization in europe. If it was such a good picture, they wouldnt be nervous about the deflationary pressures they perceive, potential talks of qe. Were seeing the Euro Currency slip a bit. Not as much as one would have suspected given this talk out there, but it is down close to a oneweek low. Rick, i also want to say, i saw you yesterday on squawk on the street where you had the easel out and laid out whats been happening with the yield curve and why, and why that matters so much with the bond markets with what the feds been saying. I just want to say that was fantastic. It was an incredible explanation. Really, really useful. So thank you. Oh, thank you. Theres nothing people in chicago love chasing more than interesting curves when it comes to treasuries. Great explanation. Very well done. Thank you. Okay. Thank you, rick. Right now lets get over to Steve Liesman. Hes got a little more on the cnbc exclusive allamerica economic survey. Steve . Yeah, andrew, and in this statistic, i think we can explain more about the differences in the United States than any other piece of data we have ever gathered in the sevenyear history of this survey. 800 americans polled across the country. We asked a simple question. Why do you think people are poor or wealthy . Due to circumstance or due to their own actions . You can see here that 53 of the public says people are poor due to circumstances. Only 43 of the public say people are wealthy due to circumstance. Take a look here at the other one. 35 think its due to their own actions, poverty that is. A little more charitable about poverty. A little less certain about the reasons for wealth. But thats not what i want to emphasize here. What i want to emphasize is this unbelievable split between democrats and republicans. Take a look here. 58 of republicans believe that people are poor due to their own actions. 67 of republicans say people are wealthy due to their own actions. Flip the other side. 54 of democrats think poverty is the result of what people have done. Heres the other side of that same coin. Due to circumstance, 68 of democrats due to the circumstance. 56 of the democrats think thats where wealth comes from. Huge difference. Now, we probed a little deeper. We gave people options as to why poverty and wealth are there. Are you poor due to lack of hard work . 13 of the democrats. Moving on. Are you wealthy due to hard work . 58 of republicans think thats the source of wealth. Only 22 of democrats. Moving on, i want to show you two other areas. How about due to education . Democrats more likely to think wealth comes from education. Less so from republicans. Here, folks, is a place we can all get together. Roll the sounds track. When it comes to poverty, both parties are agreed that education and poor education is a major source of poverty. 35 of democrats think thats true and 33 of republicans think thats true. But all these other splits here, all the other ways we are split on this issue of poverty and wealth. Education is one place where the parties come together. So were going to do anything about it, strikes me thats the place to start. The problem is they both have different ideas about how you fix that. Couldnt you stop there, becky . No, the problem is youre absolutely right we need to fix education. The problem is how. Everything flows from that split. And we kind of knew that was true, just have never seen it before in data. There it is in bold. If we could level the Playing Field in terms of opportunity, that would be the way to do things. No one wants to just divide everything up in an egalitarian wait as far as outcome. When you try to figure out how to provide the opportunity, the equal opportunity for everybody, thats where i lived in a place for six years that did a good job of providing the same thing to everybody. Can i just say, it sucks. It destroys the greatness of humanity to have that kind of society. But were talking a lot ant inequality. It strikes me one of the things we might want to get to is more of an understanding, more of an agreement on causes. If were going to deal with solutions. Theres no question that the inequity starts at a very young age. Some people say its before you even go to kindergarten that all of this starts to develop. If youre trying to fix the Playing Field later, its impossible to figure out how to do it. Youre right. You have to start really early, and you have to fix the education system. And its not perfect here. You remember why we were founded. Its not futile. Its not a futile system. It never was. Thats why everyone came here a couple hundred years ago. Because you didnt have to be born into it. Hopefully we never lose the idea that were different here. I know andrew thinks the opportunity has been lost to some extent. Weve become a little more futile, right . I dont know. Thats what some some of the stayti statistics we know wealthy people, instead of raising quantity of children, are chaising quality of children. As a result that, they guarantee opportunity for their kids. That doesnt mean that same guarantee excludes opportunity for the poor. No, but if you look at education today, it is much tougher to get in and much tougher to get an Affordable College education than it was, lets say, 25, 30 years ago. But the richest rightwing Hedge Fund Guy wants to give money for education in charter schools. But then the rich limo liberal hypocrite de blasio type thinks you just allow close down hes been back pedaling from that. But hes going to get flak from his liberal hypocrite friends. You can read all the detailed responses on cnbc. Com. Well have more on it later, about what people think about the stock market, marijuana, inequality, health care. We have a hugely wide survey this time with lots of interesting answers. Thank you, steve. My pleasure. Dont ever agree with jerry brown, but how great a country do you have if everyone is wasted and stoned all the time . I lived in that country. No, if everybody is stoned. Colorado. Do we want a whole country where everyone is stoned . As opposed to drunk . I dont think under necessarily be either. Im not advocating. People get stoned in the morning. When i think about my kid were going to drink wine after this. If youre doing to drink, youre going to stop ten feet after the stop sign. If youre smoking pot, youll stop ten feet before the stop sign. You can have one drink. With todays marijuana, andrew tells me, you take one hit, and you can be absolutely we cant talk about it. I dont even know what youre talking about. Joe, how would you have answered the survey . You okay with selling pot in your town . No. Neighborhood . For any reason . No. Not in your town, not in your neighborhood . Not really. Youre in the minority. For medical reasons, maybe. Im pretty open about, you know i know this. Im surprised by that. I just dont want the whole world to be stoned. But youre okay with people drinking beer. Coming up, shark tank meets squawk booze news. Thats up next. A popular investment from the sharks let you finds out exactly how drunk you are. You know, people are already getting stoned if they want. Its not hard to get, whether its legal or not. But should you do this before you get behind the wheel . Should you check yourself out with the breathalyzer on your smartphone . That is a pretty good idea. Thats next. Later, were going to continue our whats working now series with a look at media stocks. Return on investment wall isnt a street. Isnt the only return im looking forward to. For some, every dollar is earned with sweat, sacrifice, courage. Which is why usaa is honored to help our members with everything from investing for retirement to saving for college. Our commitment to current and former military members and their families is without equal. [ male announcer ] when fixed income experts. Work with equity experts. Who work with regional experts. Who work with Portfolio Management experts, thats when expertise happens. Mfs. Because there is no expertise without collaboration. Mfs. Can you start tomorrow . Yes sir. Alright. Lets share the news tomorrow. Today we failrly busy. Tomorrow were booked solid. We close on the house tomorrow. I want one of these opened up. Because tomorow we go live. Its a day full of promise. And often, that day arrives by train. Big day today . Even bigger one tomorrow. When csx trains move forward, so does the rest of the economy. Csx. How tomorrow moves. If you missed mr. Wonderful on shark tank last night, have no fear. Kevin oleary is right here. He brought along the new shark tank darling. Kevin is the cohost of shark tank. Charles yen is founder and ceo of brethometer, which was featured on the show. The First Company to received 1 million in funding from all five sharks on the shark tank. This is something where if youve had i dont know now. I dont feel drunk if i have two glasses of wine. What would i blow . I can find out now. It really varies from person to person. It really relies on your weight, your bmi overall, and how quickly you metabolize alcohol. How much time. Yes, and time obviously. If youre a female that weighs 120 pounds or a really tall guy thats about 180 pounds, they obviously metabolize alcohol differently. Do you have to enter data into the system to tell it those things . Never. It works off your breath molecules. Thats cool. So its generic. Heres a real question. When you use this thing, if you feel a little lightheaded and this somehow suggests to you that youre still okay to drive, i mean, has that ever happened . First and foremost, we always advocate theres no replacement for good judgment. This is more so a second reference point, right, to kind of understand where you are. By no means does it replace good judgment. And its just for alcohol, right . Currently, yes. Youre lightheaded because of the cannabis. Its not going to help for that. If youre lightheaded for that, dont drive. Think about me as a parent where my daughter has some 25yearold friends over. What i make them do now is keys go in the basket at the door. You dont leave until you blow in this device for me. If you dont pass, you dont leave my home in your car. You take a cab or ill pay for it. I dont care. Thats smart. And Everybody Knows that daddy does this now. It has changed the behavior of if you want to get out of my home with your keys, youre blowing in this. Because, you know, how else would i a bunch of 25yearold girl, id say get away from me, number one. But this is what its for. This is why this device is there a plastic case that goes over it so everybody can use it . I think we should do a demonstration. 0. 08 in most states, right . Yes, in all states, actually. Its looking like the federal safety Board Commission wants to reduce it to 0. 05. But ultimately, in terms of dwis, it can vary from state to state. I just happen to have a bottle of the oleary red. Not that i want to promote my own winery. This is spectacular. You have your own winery . Obviously i do. Have you had anything to drink . No. So you abstained this morning just for this segment. Because the alcohol is going to be in my mouth, its going to blow have high. Use this 20 minutes after your last drink so its in your blood. Cabernet franc, this is oh. Selling early in the morning. Is it good . Its nectar from the nipple of aphrodite. Oh, my. Why dont you fire yours up, charles. Okay. But right now what its going to be giving us is not your true blood alcohol content. No, but youre going to see the alcohol molecules in my mouth from just having a sip of wine should be picked up. Is it ready . Its going to be ready in probably ten more seconds. If you have a look at whats going on here, its calibrating the device. Its going to tell me when to blow. Wait a second. Show the camera over there. There we go. Ready . You see that little blue light at the bottom . Thats where im going to blow in. Its going to be ready. Just take another sip for anybody whos counting. Just put your lips together and blow. Ready . Oh, so you blow at it, not in it. Right. You blow right towards the blue hole. And its counting down. Its now analyzing my breath. Ill probably blow a 2. 0. There it is. Youre heading straight to the slammer with that. Youre going to fall on the way into the cell. Could you automatically send that, that share that to your ps or something . We can easily connect the device. Were looking into integrating with vehicles, for instance. So if it does know that youre r your child is over the limit or even has any alcohol present in their body, we can immobilize the vehicle and sent coordinates to the parent. I like that. Charles shows one of the attributes of successful shark tank deal. He was able to articulate his idea in 90 seconds. He asked for 1 million, which is one of the largest ever. He was so good at explaining why his team could execute that every single shark wanted in on the deal. It was better to collude than to compete. Its one of the rare deals where everybody has a piece of it and were all promoting this device because we think hes going to be a monster. I misspoke. Of course that was not casablanca. It was whats her face . Lauren mccall. Can you take a picture of the person doing it at the same time . So theyre not trying to masquerade. Theres a couple things we can do. Youre talking about fraud. One is now that theres fingerprint capabilities, theres also yes, we can leverage a camera. I want you to check my iris so i know its my kid. Can you work on that . I dont want my kids friend to do it. My kid is only 3 1 2 years old. Its a little complicated. This is already for sale in stores and online. Its the hottest thing in the valley right now. Congratulations. Thank you. Very cool. When we return, we do have a lot to talk about with jim cramer. Hes getting fired up ahead of the opening bell. And tomorrow, by the way, its a special edition of squawk box. Andrew will be in chicago with the big lineup, including mayor rahm emanuel, steve forbes, and many more people. Thats tomorrow starting at 6 00 a. M. Eastern. Count 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. [ 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. Customizable charts, powerful screening tools, and guaranteed onesecond trades. And at the center of it all is a surprisingly low price just 7. 95. In fact, fidelity gives you lower trade commissions than schwab, td ameritrade, and etrade. Im monica santiago of fidelity investments, and low fees and commissions are another reason serious investors are choosing fidelity. Call or click to open your fidelity account today. Welcome back, everybody. Right now its time to get to the New York Stock Exchange. Jim cramer joins us with more. Its great to see you this morning. Same, becky. Weve been talking about the ipo market this morning and just wondering what you think about king Digital Media. What do you think about this pricing 22 1 2 right in the middle of the offering but 7 billion . Well, you know, this is one of those things that drives me crazy because this company peaked. It was doing better six months ago than it is now. At the same time it is profitable so its not selling at a wild multiple ala zynga, but its one of these things that happens, oh, god, get this deal over with, if it breaks down well see big selling in the ipo market. You just wish it wasnt happening, becky. You wish they werent bringing it and you wish that the thing would just go away, but it aint going away and i think its the real test of this ipo market because the momentum peaked. Fabers not there with you, is he, jim . Hell be coming. Hell be coming. Correcting joe and his movie. Ingrid bergman would never say i knew it was lauren bacall. But i messed up a quote, anyway, jim, i thought maybe he was there and hes watching, thats good, in correcting me in sort of a supercilious way. Which we appreciate. Jim, im sorry, are you sick and getting the dreaded cold . I am coming down with it. Im sorry . Its rapid fire. Its a virus. Its a long one, too. It lasts. You played with it. And i want to be i was sick all day. Im in your camp. All right, jim, i hope you feel better. Thank you. Well see you in a few minutes. A lot coming up on squawk on the street. Okay. Coming up, before the opening bell rings well bring you stocks to watch. Well feature media stocks in our whats working series. Let it go let it go 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. announcer scottrade knows our and invest their own way. With scottrades smart text, i can quickly understand my charts, and spend more time trading. Their quick trade bar lets my account follow me online so i can react in realtime. Plus, my local scottrade office is there to help. Because they know i dont trade like everybody. I trade like me. 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You can afford a sleep number bed, you cant afford another mediocre nights sleep. Know better sleep with sleep number. Many are still calling this a stock pickers market so today were taking a look at whats working in the media sector stocks. Our next guest likes three companies in the space, disney, 21st century fox and discovery, but 21st century fox and discovery are having a tough year so far. With us to defend his pick is the Senior Analyst and managing director at nomura securities. Good morning to you, anthony. How are you . Defend yourself. Well, i mean, disneys been a great call, fox and discovery the growth over the next three years is probably a little bit underappreciated by the market. Fox has affiliate fee growth owing to its sports rights and both have faster growth owing to international and we had a report out yesterday talking about discovery half of its revenue comes from international receive you revenue. And put some price tags on the stocks. I think fox goes to 40 bucks and i think discovery goes to 100 so that would be, you know, 20 upside for discovery and 25 or more upside for fox. So, of all the stock of all the Media Companies out there right now, fox is your winner . Yeah, id say fox right now and, again, its sports rights, its over half of their affiliate fee, negotiations with distributors have yet to be contracted for 2016 so maybe its early, andrew, but we really like the 15 to 16 growth. And, look, taking a step back on media, these stocks have better growth than the market. They return a lot of capital to shareholders and when you look at the earnings multiples compared to other sectors of the consumer, they trade 15 to 16 times earnings, very reasonable relative to growth and when you look at everything thats going on in the internet and Digital Media contents king. Give me the Downside Risk, though. The Downside Risk has to do with advertising, its fragmentation of linear viewership and although we have digital revenue streeps from things like netflix and apple itunes the question is if the ad market because of ratings or even because of macro and ad demand starts to slough off, do you have replacement from new digital Revenue Streams fast enough. Anthony, 10 or 15 seconds max. Sure. Apple, comcast, apple tv, what does it mean . Do you think its happening . Well, you know, the reports have been unclear what the Business Model would look like. The main theme to take away, you have scarce content players and many distributors and thats good for content, so the Media Companies welcome the new entrants on the distribution side. Well leave it there. Thank you for joining us. We appreciate it. Everybody, a fun day here today. It was. Thats it for us, everybody. Well see you tomorrow, byebye. Good wednesday morning. Welcome to squawk on the street. Im Carl Quintanilla with jim cramer and david faber is back at the New York Stock Exchange. Great to have you back, david. What a morning we have in store for you today, king digital goes public right here on the floor and facebook another multibillion deal, futures are higher this morning. Ten year above 274 and europe is also having a nice morning as the ecb suggests it is prepared to fight deflation if necessary. The roadmap begins with what else but candy crush. King Digital Entertainment maker of the hit game going p