Transcripts For CNBC Squawk Box 20140501

It was weird. It was fitting that that happened. It was good. We were hoping for it. We should tell you about the s p 500 as well. It added more than 5 to close at 1,883. The nasdaq closing at 4,114. We decided that good news was good news now and bad news is no longer. We got a 0. 1 gdp number earlier. Right. Economy starts with i did like this, andrew. It was hurt in the First Quarter, hurt by frigid weather. Yes. Frigid weather. You know what thats an indication of, the warming. Youre reading the wall street journal. Just think about the logic in that statement. Thats not what i want to talk about. What i want to talk about, also a day they decided to continue to cut its not like there was bad news that was going to cause them not to taper. There was nothing but there was a little bit of bad news in there. There was bad news. A lot of times market set new highs on bad news. Then i started thinking about it again, kbe qe is very, very powerful. What was the maximum we got to, 85. 85. Its not the money itself, its the psychology of once they say but is it . Isnt it possible, 45 billion, were still doing it month after month after month and the market is responding to all this excess liquidity, i think. Either that or we better do 3 and everybody better be right. Youre suggesting at the end of the year when its all gone that thats bad news . Maybe its coincidence instead of leading. Normally the markets wouldnt work like that. The fed still has the pedal on the gas, big time. 45 billion. Thats big time. They did qe 1, then they did qe 2. The first two were defined. They came out and said were going to go 500 billion. That will be the first one. Were still cranking out basically 50 billion a month. Were still in full qe, you know, heaven, whatever it is. But maybe thats not it. Maybe the 0. 1 is back end loaded. Maybe theres all kinds of stuff built up now. Maybe we get a handle on the third or Fourth Quarter. You would think. When it was all said and done, we hit the gavel and the market closed at a new high. The market cooperated with cnbcs own narrative about having coming into being i just miss it. I get 23 years. I had to stand off you had to stand up with us, please. I apologize. There we are. Kohn was here. Sue was at f n. There you are, joe, on the right. Faber and i, you can see us a little bit. Sue was at f n. She was sue mcmahon. The rest of us came back at the merger with cnbc insana and griffith. Isnt that amazing to see how many people work here. Its like a family. It is. Its like a family thats had a lot of kids. Yes. Its everywhere. Thats what mark, our president talked about. Global enterprise. It used to be sort of global. Now its in nine or ten langs, talking about they think we have two different languages in india. Squawk box is a brand that will be the real celebration, that will be next year. 20 years for squawk box and one variation or another. But only held together by one constant. Right there. You want me to point at you . Im pointing at you. Joe kernen. The producer, thats right. And mack whos not here again. Anyway, a handful of key economic numbers are wedged in between the fed meeting and the jobs friday. Jobless claims is at 8 30 eastern, economists expecting 320,000 unemployment claims filed for the first time last week. Then personal income and spending are also out at 8 30 a. M. Then at 10 00, a fresh read on the nations Economic Activity with the ism Manufacturing Survey for april. At 10 00, we get an update on housing construction. Its all leading up to tomorrow. Youre here. When are you going out. Im going out to omaha after the show tomorrow. After the show . After the show. Ill see w. B. Over the weekend and be back with you on monday morning. You leave here tomorrow. Is it like nixon, you walk on the helicopter, you wave. And then the helicopter takes you to the gulf stream . How does that in this case, since were so close to teterboro, were driving. Youre driving . Someones driving you . No. Im going on a plane from newark to chicago. Why are you stopping in chicago . Refuelling . Theres no direct flights. Tell the pilot to make it direct. Pilots. The pilots. Another big morning for quarterly results, some of the biggest names well hear from before the bell, exxonmobil and conoco phillips, two Big Oil Companies as well as mastercard and drug distributor cardinal health. Also out today, tmobile, viacom, dominos pizza, beazer homes and generac. This came out of nowhere, didnt it . Cinderella story with as many times as people have lost power, quite a little system they have. Someday if you ever are in the burbs. I may have to get generac. Unless you want to go to a hotel for three weeks when the power goes out. The wall street journal is reporting that coke is responding to Warren Buffetts decision to abstain from the shareholder vote, a topic he talked about with becky quick on april 23rd. We abstained because we didnt agree with the plan. We thought it was excessive. And i love coke. I love the management. I love the directors. But so i didnt want to vote no. Kind of unamerican to vote no at a coke meeting. I didnt want to express any disapproval of management but we did disapprove of the plan. Heres where it gets interesting this morning. Weve obtained exclusively a new letter that activist investor David Winters sent to cokes board of directors. Hes ccd is to Warren Buffett. This letter is a direct result of the interview that becky did and we did a day and a half ago when he called into the show, because dave winters is furious and hes now asking coke a couple of very pointed, lets say, questions. Take a look at what these are. He says, we would like to know whether mr. Muhtar kent or howard buffett, who is the son of warren and is on the board, made the Compensation Committee and the full board of directors awear of Warren Buffetts views on the 2014 equity plan. Did mr. Buffett speak with any other cocacola directors regarding his view of the 2014 equity plan and if so, when . Wed like to know whether cocacola reached out to Institutional Investors before the Shareholder Meeting to drum up support even after it knew its largest shareholder opposed the plan. If cocacola did reach out to investors, did it state or imply that it received generally positive feedback from other investors . Now, cocacola says its Compensation Plan offers flexibility but no changes are being made to the plan at this time. And warren said on our air that he had dinner with muhtar kent in omaha, he talked to him three other times, i believe. Therefore, the question gets raised, what, from those conversations, came back to the cocacola board. Ill tell you, cocacola was reaching out to me when we were writing that column and talking about it, telling me that its a great plan. Its not any different. So how much did everybody really know about the fact that Warren Buffett was at least behind the scenes upset about this . And we also dont know exactly how warren characterized his feelings at the dinner and then subsequent to the dinner. Even when he was talking to us and to becky, he said, ive learned over the years, if youre having in fact he mentioned dinner. If youre having dinner with someone and you belch at the dinner table, youll be eating alone soon. You wonder if he was willing to tell us afterwards. Maybe he didnt raise it in i think theres more diplomacy going on here. I think im sort of coming around to the view that the public abstention as opposed to voting against it was really his way of privately trying to move the deal. Afterwards. Nobody that wasnt at the dinner, people face to face may not say things. And he also expressed how much he admires muhtar kent. David winters is assuming that he told muhtar kent exactly how he felt at the dinner. Only Warren Buffett knows whether he actually expressed dissatisfaction with the plan at the dinner or not. If he didnt because its a big difference. If he said i dont like this plan and they went out and got some support from other shareholders, thats different than if he said, you know, i dont have a strong feeling one way or another. And besides, even if hes the largest shareholder, hes not a majority shareholder. Not like it would matter if he told them dont do it. I promise you this, we will find out the answer in, literally, over the next 72 hours. Over the weekend well have Warren Buffett these questions and have him on the program on monday. Did your columnist retract anything . He had the dates all wrong as to when the interviews were. There was a major league timing issue with that. Right. Which totally changes the thrust of the story. People see what they want to see with a lot of these things anyway. At t reportedly approached im trying to think i can say what pf means to cover myself. I didnt say anything. Those are just letters. Just letters. The wall street journal says the price tag would be 40 billion. Directvs current market cap is what it is. Directv is the second biggest paid tv operator with 20 million customers. At t is a land line based business with 6 million customers. This has been talking about this for five years. For a long time t. Would create a tv giant close to the size of comcast with time warner. Theyll have close to 30 million subscribe subscribers. 30 million is a key number. Yes. At t and directv are not commenting on the story. Check out the shares of both companies right now. I can remember at least two or three years ago where you didnt know royce randall, is this going to be directv, whats happening . To me, this is about a larger issue and it goes directly to the comcast time warner deal. Theres two things. One is if they reach a deal or at least anonsnounce a deal anye soon. This would push it over this would clearly push it over the line, the comcast time warner deal. I would argue the story itself suggests to regulators the world is changing. It points at a bigger issue which Brian Roberts talks about all the time, in this new world we live in, you want to have a National Footprint. If you want to buy the sunday ticket, you cant be a local cable operator. You have to have all the pieces. Even at t suffers from this. They are in certain municipalities. If you have directv then you have the National Foot print, you can build out your broadband in certain places. It gives them flexibility and puts them on a comparable footing with comcast in a posttime warner era. The dominos are falling quickly. Its the age old argument, whenever you put Big Companies together, it doesnt necessarily mean its anticompetitive if they have a bigger footprint and are allowed to do more in terms of synergies and costs. I would argue in opposition to your argument that at t mobile would have what we wanted is to have everybody have all the spectrum and to build it out to rural areas and do all that. We decided not to allow at t to buy tmobile for competitive reasons when in fact it would have been good overall for the country overall. You still dont see it . Im on the other end of that. Id be a fan of this deal, absolutely. I dont understand that. Many of the Global Markets are closed today for may day. May day, may 1st. Lets get to ross westgate. He is standing by in london. Were you part of the celebration yesterday, ross . It was all over. Did you see the town hall meeting that we had yesterday . Are you proud to be a longtime cnbcer . The closing bell was fantastic, everybody in the studio was out for that. It was great. Really great. Were proud. Did you enjoy it, joe . I did. We had six cannons pointed different ways with confetti. We were all waiting for it. It was loud. Its a big studio. Kind of indoor fireworks which i think we dont do that enough, right . We should do those pretty much every day. We have our own indoor fireworks every day. At the beginning of squawk box we should do that. Whats closed today, ross . Take a look at this map here. Everything thats sort of gray, gr gray blue is closed for the may day holiday. Which is a celebration of labor day. Margaret thatcher, you may be interested to know, decided that the uk would not celebrate this particular holiday. She viewed it as more of a communist holiday which is why she decided not to take that in. It was up for proposal. A little bit of history i put into that. The rest of the continent is closed, apart from three separate markets today which of course include the ftse 100, the irish market, the iseq and the imx. The ftse 100 not doing too badly, up 0. 25 . Weve had good data out earlier, the manufacturing pmi coming in better than expected. Came in at 57. 3. 55 was the expectation. That boosted sterling up to the best levels against the dollar for nearly five years. Here we are, 1. 6910 is where we stand at the moment on the back of that. Can it go further . Well have to wait and see. The number of individual stocks, lloyds, first of all, this was the bank was nationalized by the uk government, theyre back in private ownership up 4. 7 . Theyre going to spin off their tsb business as well. Bskyb. The pay tv operator up 3. 6 . Monthly revenues up 5 . 74,000 net new customers. Keep your eyes on viacom, the Guardian Newspaper suggests when the results are revealed this morning, theyll also say theyre in talks to acquire channel five, currently owned by Richard Desmond who owns the express group. Thats where we stand in a thin session today, because of all those market closures. Back to you. Not so fast. You glossed over that. Andrew wasnt listening. You said the uk decided not to celebrate it because they view its is a communist holiday . Is that what you said . Well, that was the view taken by Margaret Thatcher, because it was a labor day communist is all right. Just say it. Dont take it show me the chart of the people thats what the historical thats what the historical basis of that was seen as by Margaret Thatcher as to why she decided she wasnt going to celebrate it. The uk is open and then i do see a large swath of sort of communist europe is there, closed. I knew i was opening up a can of worms by saying that. Lets talk to andrew. It was her opinion. Did you consider not coming in today in solidarity with this is a communist did you know it was may day . I didnt realize it was may day. They close the markets and the uk stays open because its a communist holiday. I have to get off the set then. I dont think you knew all these implications. This is a situation, ive come and im yom kippur. Exactly. Youre here. I get it. Thanks, ross. You know what, thats exactly how ill look at it. Its a belief but you sort of want to be here anyway. I like to work. The markets closing out the month of april on a high note. Wednesday with the dow closing at a record high. The trading day also made special. Lets show this again. Special because cnbc rang the closing bell yesterday. Did you see how i was out of the original shot . But did you see who did stake his way in there . Yogin. He knew exactly where the sides of the camera were and he positioned himself, unbeknownst to me, for the shot. We also heard from janet yellen. Were still at 45 billion a month. We also had a 0. 1 gdp number. Everybody knew it was going to be down, probably 1 and change because of the weather. That did surprise a few people. Lets see what our next guest has to say about it. Chris rupke, what was the number you were looking for before it came out, chris . I think i had an optimistic number on it, 2. 0 but it went the wrong way, 0. 1. How much do you attribute if it went to weather or not, we dont really know. The Winter Weather was making the consumer go into a hole and not stick their head out. We were surprised that Consumer Spending was completely normal in the First Quarter. In fact it was high normal, 3. 0 . Some of that was spending on utilities and housing and obamacare. Consumers were completely normal in the First Quarter which was odd. Anyway, thats really just history. First Quarter Ended a month ago on the calendar and were looking forward to greater growth in the future. We understand that. Yes. But yesterday, we have people that work here and there are some that think we can explain this slow recovery because of a lot. Theres others that seem to have apologized every single time we have a bad number, they give you sort of camouflage. Rick will Say Something and zandi will come on an say its weather. The economy is improving. We basically lost a half decade. We have explained so many bad numbers. Weve had how many spring swoons where the gdp was supposed to recover and it didnt. This goes on and on and on. Is it different this time . This will be a 3 year because were not wrong. If you look at other data like the Unemployment Rate, the future is not uncertain. Theres not the degree of uncertainty out there that the fed says. The Unemployment Rate has been coming down exactly the way it should. Why are they saying it. For the past three years. Maybe we shouldnt look at gdp. People would say the disincentives to leaving the work force i know. I dont agree with that. The participation rate. People say its the baby boomers retiring. That could be not to downplay the recovery or i call it an expansion, you know, the 0. 1 that we got in the First Quarter, if it runs 3. 0, second, third, Fourth Quarter its only going to be 2. 3 this year. So im just waiting to are that blow back to come where people go, oh, growth didnt make it. Last year was 2. 6 . 2013, this year its going to struggle to get to 2. 3. What are we going to do with that . It should be greater than 3. If its going to be 3 without the weather, it should be greater than 3. Exports were quite weak. Where are we going to be for the year then . Give me your number. It will be tough to make it to 2. 6. Its probably going to be 2. 4. Thats not good news. Its bad news. It doesnt matter. The Unemployment Rate could fall 1 Percentage Rate next year for the right reasons. I think were looking all looking to growth because people think growth has to be 3. 5 . But the stock market is oh, okay, i hear you. The stock market is performing on the basis it likes growth. That it likes growth. It actually doesnt like employment, oddly enough. Unless you argue that more people being employed means more people buying stocks. There are so many other numbers that are at record highs, retail sales, nominal sales, actual Cash Register sales. Most people think that things are definitely getting better, upticking. A lot of people are at 3 . We know the good news. Were starting to see weird stuff. The math doesnt work now because of the 0. 1 that we got in the First Quarter. It will have to run 4. 5 rers, so somewhere this year to kick us back there. Coming up, possible suitors lining up to buy the clippers. Also, a weird tesla story, both coming up in this mornings executive edge. Squawk box coming right back, when we return. Heres a good one seattle. What did geico say the mariner . We could save you a boatload foghorn sounds loudly whats seattles favorite noise . The puget sound foghorn sounds loudly all right, never mind doesnt matter. This is a classic. What does an alien seamstress sew with . A space needle foghorn sounds loudly continuously oh come off it captain geico. Fifteen minutes could save you fifteen percent or more on car insurance. Suitors are lining up for the los angeles clippers, larry ellison, apparently is part of a tree kbr trio, part of david geffen and Oprah Winfrey that may be looking to buy the team. Two others, chairman of mandalay entertainment what do you think of this . If youre adam silver, and the other owners, this would be a great thing for the league. You have to think. Unfortunately its the great thing for don sterling because hes going to get a lot more before it was worth before all this happened. In a perverse way, do we want them to bid up the do we want him to get a billion dollars out of this . I think its fine. Im okay with it. I think it will bring some respect back to that team, to the clippers. People will focus on the clippers. And then to have as david geffen says in the piece, to have a prominent africanamerican woman as an owner of an nba team, thats a remarkable thing, too. I used to live out there. I can tell you its kind of now its good that brooklyn has the nets. The ugly duckling. The clippers never got the respect. They never spent the money that geffen said in that article hed be just as happy to buy the lakers if they would sell to him. If youre the nba, would you prefer Magic Johnson and guggenheim to buy it, they can probably afford to pay more or would you prefer the geffen oprah ellison. Id prefer magic. You would . I would. I tell you why the lakers i might rather have. You know what the lakers have . What do they have . The laker girls they always say it like that. There are no clipper girls, are there . Noio. There might be. I know there arent laker girls at the clippers. The laker girls are with the lakers paula abdul was a laker girl. She was. Probably the most famous laker girl. I would say. People are apparently leaving flyers on tesla cars in San Francisco warning drivers that owning a tesla meant they are involved in, quote, organized crime. The flyer accuses tesla of manipulating congress and questions the safety of these lithium ion batteries that power the cars. They blow up if you get wet or bumped. Thats what these flyers are telling the owners, the flyers have already they say im sorry. They say these batteries have burned planes, cars, homes and children. There have been tens of thousands of lithium ion battery fires and explosions. Tesla has over 7,000 nonautomotive designed batteries in each car. Thats what theyre saying. That means theres 7,000 chances of having a catastrophic fire. All, in a sense hyperbole. They are saying that google is a silent partner with tesla. The flyer also says that google hushes up bad news about tesla by driving a tesla you are supporting spying, they say, its not clear who is behind all this. The flyer ultimately urges tesla owners to give the car back. I dont think this is going to be a very successful campaign. Did it mention common core in there . Anything about birthing . Thats a cool conspiracy if you think about it, that not only is it dangerous but that google who controls whether there is news about something, google could suppress it if theyre in league with tesla. They want to know where you are to get more personal information. Nothing about the nsa there. No. Thats amazing. I will tell krogh, when it was happening, people do point out that the batteries cover the entire bottom of the car. If you were to believe any part of that, that one battery could do it if you hit a pothole or something, its ram pan tpant f that. Cell phones, 10 billion cell phones, you dont think wed know by now what the increased Health Problems were. For years people thought the cell phone was the new cigarette. Or aspartame. Unlikely with as many people who have had it. I hope youre right. Is good news really good news for the markets . That discussion, coming up next. If i told you that a free tensecond test could mean less waiting for things like security backups and file downloads youd take that test, right . Well, what are you waiting for . You could literally be done with the test by now. Now you could have done it twice. This is awkward. Check your speed. See how fast your internet can be. Switch now and add voice and tv for 34. 90. Comcast business built for business. Take this simple test. Press your tongue against it, like this. It moves do you feel it . It can happen with every denture. These movements may irritate your gums. But you dont have to bear with it. You can try fixodent plus gum care. Thanks to its formula, your gums become one with your denture. This helps stop movement and helps prevent gum irritation so you can keep enjoying life. [ apple crunches ] fixodent. And forget it. Anbe a name and not a number . Tor scottrade. Ron im never alone with scottrade. I can always call or stop by my local office. Theyre nearby and ready to help. So when i have questions, i can talk to someone who knows exactly how i trade. Because i dont trade like everybody. I trade like me. Thats why im with scottrade. Announcer scottrade proud to be ranked best overall client experience. The dow closing at another new fresh, alltime record high. How is that . How many different bays can they closed at a new high. Its not fresh. In celebration of cnbcs 25th birthday. In celebration. The stocks shrugged off the dismal how do stocks shrug exactly . Shrugged off the dismal gdp report and news that the fed had pe pared back bond purchases. Joining us, two guests. Are you down in pennsylvania, hank . You must be, right . Are you near haverford. We are, right near the college. The solid is that liberal arts . Very solid, good reputation. Im going to listen closely to the things you say. Did the what was your number before bread and how did you have to scramble to explain it . You mean the record close on the dow or the gdp . The gdp number. No, i think we br expecting a weak number, somewhere in the 1 . This is definitely below expectations but, look, thats very backward looking. I think the market is looking forward and realizes that the gdp bakness in the First Quarter had everything to do about weather. And were going to get a rebound in the Second Quarter and were going to get better growth in the next three quarters than we had in 2013. All right. So the does the economy and whether it does 3 matter to whether you add or take money away from investments at this point . Or is it other things youre looking at . Well, look, i think were looking certainly were looking at gdp but were also looking at corporate fundamentals. You have a terrific Balance Sheet, record profit margins, companies are returning cash to shareholders and share buybacks, dividend increases. Theyre beating earnings expectations. This is all positive. The backdrop is we have a goldilocks economy thats not too cold or too hot. Thats good for the stock market. I saw a chart yesterday of cash on corporate Balance Sheets. It was like at a tenyear low or something. The person making the case was that it was consensus that the Balance Sheets are in great shape but its not true. Does everyone say that or do you have actual numbers . Well, look, certainly in the space that we follow in the large cap space, theres plenty of cash on the Balance Sheet. Maybe if you lack at the total market, that might not be the case. But in our space it certainly is the case. Just look at the record levels of Dividend Payments and share buybacks. I think thats a tangible confirmation. So lou, i tell you what i wanted to ask you, because we had a conversation earlier. As sort of a journeyman in a positive way, been around a long time. The qe that we see, do people trade on qe based on ten months into the future . Or can that 45 billion thats still going in every month, does that excess liquidity prop up stock prices, even though we know its slowly ending . Its still going in every month. Is the spigot still open, is the punch bowl still spiked and everybody gorging . That was the question at the beginning of the year when they first announced the taper and the market made a high and sold off over the next few weeks or ten days. I dont recall now. We were thinking maybe its the idea that we finally mark an end point to qe, that stocks wont get the same burst from it that they have. It seems to, as guys noted, the dow made a new record alltime high yesterday. And the qe tens. So i guess thats going to be the case that until it stops, theres going to be some support. It might be less support, because we do know the end and it is diminishing. 45 billion a month is a heck of a lot of money. Thats what i mean. If you go back to when they said they were going to do it, if you looked at that as all right, we just completed a lets say a 600 billion buyback, qe, they could have said at that time, if you add up the kbe theyqe that done for the past four months, now were going to embark on a new qe, that would have been another round of qe. Instead we looked at it like qe ending or tapering, but the money is still there and still coming in. You just made a new alltime high. Right. Kbe 1 and kbe 2, the market rallied up until the day it stopped. When qe has been around or strongly foreshadowed, the market has gone up during the last five years. When qe was not around, the market has had some trouble. So qe is still around. I guess well still get a burst from that. Now theres other things going on in the world and maybe the qe does an offset. I hear the music in the background. May day is haymarket riot. I believe it was 56. You were surprised to see andrew in here today. I mean, ywhen you got up, your thinking should i . The producer said he would be there. I emailed back that it was probably a mistake on her part. Hank and lou, im hearing stuff about corporate on the Balance Sheet. Whats wrong with the Nations Housing market . Was it the cold winter . And ahead of the break, a look at yesterdays winners and loser. Surely you can be serious. I am serious. And dont call me shirley. May day. Whats that . The russian new year. Whon a certified preownedan unlimitedmercedesbenz . Nty what does it mean to drive as far as you want. For up to three years and be covered . It means your odometer. Is there to record the memories. During the mercedesbenz certified preowned sales event now through june 2nd, youll get complimentary prepaid maintenance and may qualify for a twomonth payment credit. Only at your authorized mercedesbenz dealer. Welcome back. Time for towards squawk planner. Another big morning for earnings central. We have reports from exxonmobil, mastercard and kellogg. Well get weakless jobless claims and personal income spending data. Automakers will start to roll out Monthly Sales figures. That is your squawk planner for the day. When we return, hes known as the father of indian i. T. , cnbc first 25 member. Narayana murthy, next. That and much more when squawk box returns in just a moment. I dont want to think about the alternative. I dont even know how to answer that. I mean, no one knows how long their money is going to last. I try not to worry, but you worry. What happens when your paychecks stop . Because everyone has retirement questions. 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We are very happy to have joining us now number 13 on our list this morning of icons, reb leaders. Ryan muthy is the founder and also executive chairman. Hello. Started this company 1981. Good morning to you. Congratulations. The question i have, in 1981, what was the insight . And did you think that emphasis would ever be what it is today back then . We lost him. I think we lost him. When you were asking the question i think i could hear him say he was having a problem. Because he said hello. He said i dont think im hearing you. You know, its going to be at least a threesecond delay because were beaming it to the satellite and beaming it back down the. Are we going to try again . I think were going to work on it. Amazing story about this company, though. When you think about what it created. It also changed management. And outsourcing. And a whole question about employment and wage costs that i want to talk to him about. Well, you know how many times ill be at home trying to get remote access. You call a local number. It sounds a little bit far away. Ill finally ask where am i. Were usually over in india, bangalore, working on i. T. Stuff. In 1990 this guy had an offer of 1 million, takeover offer. They rejected the bid. Right. Today do you have the market tip at your fingertips . I dont. I think forbes estimates 1. 7 billion. It wasnt until 1999 that it really took off. The rules changed in india. He was one of the first capitalists in a socialist place. I also wanted to talk to him about that. The whole idea about being a capitalist in india. Its even more capitalize than we are at this point, right . It depends on who you ask. Thank you for joining us. We apologize about the technical difficulties. We were just talking about your history and the importance of emphasis. I mentioned you had a Million Dollar takeover offer in 1990 that you rejected. It was probably the right decision. What was the insight when you started emphasis and did you ever think it would be what it is today . Well, you know, while we could not clearly predict where we would be, one thing we are very, very certain and that was to seek respect from every stakeholder. You know, customers, employees, investors, partners and society. Through the journey of emphasis, respect has been the most important objectivity of the company. That was constant. One of the great successes of emphasis was effectively outsourcing a lot of business that was in the United States and elsewhere. And im curious how you see this playing out long term in terms of what started as a little bit of an arbitrage on employment, wages and prices. Now that coming together, where that all goes. Oh, yes. I think even the fact that there is, you know, huge talent available in countries like india, even the fact that there will be new opportunities like health care, like emerging markets, like egovernance, economics, i do believe that the future looks very, very bright for the social Services Industry which competes on differentiation, all through developing customized drafts for standard packages. Therefore, as long as the innovation spirit is alive in the software Services Industry, i believe well have a chance to play in the Global Market with success. Now, the world really is flat. The other question, you are seen as an icon in india and elsewhere as a capitalist in a place often considered a socialist country. You said famously, i always believed im a socialist in my heart and capitalist in my head. Theres a huge debate about globalism going on in the United States. I wonder how that is playing to whats taking place in india and what you think of it. Well, you know, i think there is a realization now that the only way that we can solve the problem of poverty is through the creation of jobs. Jobs with good income. And people have realized that entrepreneurship is the best way to do it. And they also know that entrepreneurship flourishes under capitalism. Therefore, there is an acceptance of the fact that capitalism is the way forward even amongst people who are through the capitalism area. If you could put one other person on this list, i dont know if they will be from india or elsewhere, who would you put on . Oh, thats a wonderful question. I think all of you guys, the cnbc people, you have done a remarkable job. You people are very wise. So therefore i dont want to hazard any guess at all. I think you guys know who you are doing. So i will accept whatever you have done. Okay. We will leave it there. Congratulations on being part of the cnbc 25. It was one of those great, remarkable stories. Thank you so much for joining us this morning. Stkpwhrb it was a very gracious answer. He meant that we should be doing the picking. 31 billion market cap. A million was too low. Coming up, avoiding taxes and rating the economy. Roger altman is our guest in the next hour. Next hour. [ 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. As the company thats all about printing. But did you know we also support hospitals using Electronic Health records for more than 30 million patients . Or that our Software Helps over 20 million smartphone users remotely configure email every month . Or how about processing nearly 5 billion in electronic toll payments a year . In fact, todays xerox is working in surprising ways to help companies simplify the way work gets done and life gets lived. With xerox, youre ready for real business. Thats why i got a new windows 2 in 1. It has exactly what i need for half of what i thought id pay. And i dont need to be online for it to work. It runs office, so i can do schedules and budgets and even menu changes. But its fun, too with touch, and tons of great apps for stuff like music, cause a good playlist is good for business. I need the bosss signature for this. Im the boss. Honestly i wanna see you be brave lets make a deal. Billions of dollars proposed in transactions flying around the globe. Is this trend going to continue . Well put that question to our guest host, roger altman. Whats wrong with housing . Still feeling a chill in the nasty Winter Weather . Plus, gassing up is going to cost you more this summer. Chief oil analyst at gas buddy gives us his predictions. What are you doing . Second hour of squawk box begins right now. Good morning and welcome to squawk box on cnbc. Im joe kernen along with andrew ross sorkin. Becky is off today. Anybody with hatch a brain could figure this out. If you know anything about berkshire. En route. This is it. Its the berkshire weekend. Woodstock for capitalists. Do they still call it that . Its a weird name for it knowing whats going on. At a pickity age. Im really sick of talking about this guy. The futures at this hour are after another alltime high yesterday up to six points. It is going to be a busy morning for economic numbers. And even busier tomorrow. 8 30, the weekly report on initial jobless claims. At the same time, personal income, Consumer Spending. Yesterdays gdp was a really lagging indicator. Were making it even more lagging. The trade right now is on an improving economy and doing much better. 3 for the year. The. 1 is an outlier. Out with april manufacturing index. And then well get some housing data at some point as well. I have to make this really simple. While the government releases Construction Spending for march, boeing will put out a new version of its stretch version of the dreamliner. 7879 should be completed in the next two months. One of six new jet models boeing hopes to get into service by the end of this decade. Okay. We have a little macro to talk about. International monday tore fund approving a 17 billion loan program for ukraine. Changes including raising questions, freezing minimum rage and raising energy prices, all steps that could hit households hard and strain the tenuous hold on power. Imfs Christine Lagarde said the program is about making real change. Under the program, we are not designing sanctions. We are designing reforms. We are trying to improve the situation that so that stability is restored, the Exchange Rate is supportive of more sustainable growth. And we are encouraging transparency and new Business Practices in a country that badly needs those changes. Meantime, ukraines acting president says russian militants have won the east and Security Forces were helpless to stop prorussian separatists. Russian president flood mere putin matched troops on the border with ukraine. A quiet First Quarter. Guess what, guys, deals are back. This is crazy. Its heating up. Roger altman is here this morning, former deputy treasury secretary. And founder of ever core partners. One of the advisers to astrazeneca in the pfizer deal. Roger is personally working on that. Good morning to you. Hey, andrew. I dont know if we can talk about it or not or if youre involved. At t looking at directv. You have had a historical relationship with at t. And the implications of what that could be. First, are there talks . You know very well if youre involved in these things, its not appropriate to talk about them. So lets talk about deals generally rather than those individual that means you are involved then . No. Im just not going to talk about something that is not public. Can we talk about the astrazeneca question, though . It depends on the question. This is going to be great to talk about it. Because we need roger, we know what side of the aisle hes on. He was a clinton democrat. Lets start about deals, tax inversions. How should this Company Think about tax inversions . The iconic nature of a company like that. For the first time thinking they want to effectively relocate for practical purposes at least the holing company is for tax purposes for a 5 spread on taxes. Its a billion dollars a year. And the uk tax system as being better than hours. What do we have to do . You have a shortterm problem and longterm problem. Im talking about political timetables. Of course screams Corporate Tax reform. We need to reform Corporate Taxes in this country. Both sides, you know, republicans and democrats agree on that. But tax reform takes a long time. Thats why i say its a longterm problem. If you just study history, the 86 tax reform act, other examples took a long time. Three and four years actually from beginning to end occur. It is not going to happen quickly here. So the shortterm question is, should we just sit back and let all of this happen. Right. Or should there be some interim step. I dont think its good policy. In other words, its not good for the United States that major corporations think relocating for tax purposes did s the is this a game changer, though . 100 deals are already been done. So youre in the boardroom at all times with all these companies. Are we going to see a series of these transaction . I think so. Does it change the dynamic in washington . Is there Critical Mass of the populus going to go, this is a real problem . Not in 2014. Theres not going to be not only is there not going to be Corporate Tax reform in 2014. Theres not going to be any major legislation in 2014 since the election is coming up. Thats true. Explain one thing to me real quick. If thats true, and i believe in the next two or three years there will be a shift, if youre the board of a major u. S. Company considering making that gamble, thats a 10, 20year game plan. Youre betting on british taxes or whatever you do the inversion in. Right. So the question therefore becomes, that is effectively a gamble that at least the next 10 years we will never get this, correct . Well, i dont know about 10 years. I think we will achieve it the next three or four years. No corporation would want to think about going andrew, no. First of all, we dont know when it will occur. You have a lot of present value at work here. Even if tax rates would equalize in four years, the present value of redomiciling now may justify it entirely. You have never said 22 . All you have ever said maybe is 25 or 26 that you talk about. Theyre already at 22. When do you think we will get to 22 and britain is going to 21 . And the other question, and this is where i want to take this, roger, this is tragic right now what is happening. And you say to get tax relief done i know it takes a long time. But you have to start it. You need leadership. You know leadership is going to be a 50 role. Its going to be pal active, addressing the symptom and trying to prevent corporations from doing it with a hammer. Its not going to be changing the underlying rate which would fix the arbitrage thats can causing it in the first place. The underlying rate has to be changed. The Corporate Tax rate in this country has to come down. The differential between the United States its not going to. Yes, i think it will. I think it will. Will we have a new president . I said post2014 is the first time to do this. Perversely, the controversy over inversions will accelerate. In some perverse sense, it may be advancing the reform, which we should hope is the case. But theres two ways of doing itment wont the left, the far left, wont they want to do it the way i just said. Where you wont be allowed to move it. Instead of 20 you would need 50 to rebuild the domicile. On the percentage of your shares . Yeah. That requires legislation also. That wont happen this year, joe. And republicans wont go for it that way. There isnt going to be this is my judgment. Theres not going to be legislation. Do you think politicians will ever tell us the truth about tax rates . There will still be a certain number of politicians that say the actual Corporate Tax rate in the United States is one of the lowest on the planet. They will still say that. The market is speaking here. As i said, one of the possibly perverse benefits of these inversion trades is i think it just makes completely clear the need for Corporate Tax reform. I wish it would happen this year. I dont think theres going to be a change. Do you think we should be focusing on the minimum wage right now instead of this is . I think we should be focusing on this. I thought you wanted a tax credit instead of minimum wage. I happen to favor increasing the minimum wage. And expanding the itc is even stronger, if thats what youre talking about. Thats what im talking about. One last thing. Companies, we see it state by state in the u. S. , toyota, california, now moving to texas. Politicians can understand that companies will go where they are treated better. Maybe youre saying theres a realization it may not be state to state. It may be country to country. Thats when we finally get off. I think theres a great deal of alarm over these issues. Theres two issues. Theres the actual rate we have to deal with and territorial system. Its one that the money is stuck over there. And the rate. You have to do both. Picking that point, a lot of people misestimate the size of the benefit office inverting in terms of, a, using that trapped foreign cash. Right. Productively. And, b, simply the annual benefit of having a lower tax rate. The synergy represented by those tax benefits depending on the situation can be huge. One last really quick thing. The view among the Democratic Party is let the money come back, right . Either vacation or Something Else that its not going to be used for investments that create jobs. And we see what happened last time. People will look and say it didnt work. How to you actually make that argument in this environment . Well do the that as a team. Maybe we can talk a little bit about that when we come back. Thank you. Great conversation. And theres a way of doing it. Theres a way of leadership. You need to get the capital back. I dont disagree with you. But how do you do it . We need to get it back. And we should the far left on this is going to say this is going to create in equality. The beneficiaries will be shareholders. You can use it for we can do this. How do you do it . What is wrong with the housing department. We will talk el that question next. Stion next. I bought a car, comes over. And youre like. If youre getting. A good deal or not. Led up. Truecar. Com. All the information. You should be paying. You know, and with truecar. Com, my feeling is that. We got a fair price. 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 well, it looks like starting to look like recovery in the housing market. In the winter, bad weather was blamed for stalled sales. Its 38 degrees on the east coast in may. Anyway, we have a twofer. Diana olic and steve liesman. The affordability is off the charts great. Compared to two years ago, it hurts. It hurts a lot, joe. You look at these rates. You say were at 4. 5 Mortgage Rates. That should be historically great. I bought my first apartment at 8 that was a long time ago. But when you look at these rates and you compare them to what the spending power is right now, especially because you have home prices so much prior than they were before. So we look at that 3. 5 last year versus 4. 5 this year. We look at pending home sales. They track each other exactly. Last june we saw the rates jump 3. 5 to 4. 5 . They bump up a little bit last month. But really not enough. Its all because of prices. Prices peaked in 2006, dropped dramatically. Now they are coming way back up. Theyre still 20 below peak. Why isnt everybody able to buy a house, right . The problem is you have to look at how we bought houses in 2006. We didnt put any money down. We didnt need any money to buy a house in six. So of course they could soar as high as they want. We need to look back to 2000 when we needed to put 20 down. People dont buy a house based on the Mortgage Rate or price. They buy it based on the monthly payment. When you compare it abouting to 2000 when we had regular mortgages, youre looking at more expensive houses, 50 to 60 . Forget the boom. Its affordability. Thats he what were hitting this spring. Are you here to say its weather . No. I have one chart. Im not even going to tell the story. I have three charts. Lets get his out of the way. Thanks, joe. Thats the whole reason i did. Net percent banks tightening credit standards versus loosening standards. What happened . It went way up. Did it ever go negative sustained . No. If you look at every other incident where standards went up, theres a reasonable sustained period where they loosen up. So what that says is they want up. And when it comes down, its not like whats basically happening is banks are not tightening further. It has to undo the tightening from the last period. Thats not happening. You have banks with high credit standards that have never loosened up. That was for prime. Subprime is worse than that. Dodd frank is out there. Thats a big issue. There isnt the Balance Sheet in the economy for Housing Loans the way there was before. Part of the shadow Banking System has disappeared on. Nevercomingback. There are rules now that say banks have to hold more on their books. Deleveraging. People are reducing now. 15year fixed. I refied. Im paying twice as much more than i have to because i want out of debt. 10 years, i want to own that house. Rising income. You can afford morehouse. At the same time if you dont want to have more debt, what you do is you refi and pay off your existing mortgage rather than going into a bigger house. I would have thought that a banker would tell you, and we have a banker here. Hes not in this specific business. But you should go get yourself a 30year fixed given what the rates are now. Thats what a banker would say. Thats not what people are doing. They are shedding debt. Mortgage debt especially. Im assuming in 30 years im hoping im going to look like a genius. People dont necessarily act rationally all the time. I may look like an idiot. Are you still going to be in your house in 30 years . Youre not going to be in your house in 30 years. You are looking at people much more mobile, a smaller time horizon of home ownership. Can i ask you this question, all the analysis showed pent up household formation. After the sharp falloff in 2008 with kids moving back in, theres now going to be a recovery. Its going to be a major recovery. How do these all square . Household formation is coming back on the renter side. It is not necessarily home ownership. We fell to the lowest level in 19 years in the First Quarter on home ownership. Household formation is good on the rental side. People are renting, just not buying. They actually loosen standards when it comes to consumer loans like credit cars and autos. Its not happening in real estate. It isnt the Balance Sheet. Im getting a mortgage. Another one. Shoe. I already have one. But i have to get another one for a different fico score on prime Mortgage Loans in 2013 actually rose. It should be falling. If standards were loosening, they would be falling. I have to give them everything again. Its unbelievable how closely they are watching. Watch out for your appraisals. Thank you, guys. When we come back, another big consumer issue. Will it be a brutal summer for gas prices. Chief oil analyst for gas buddy. Com. He will give us his prediction when we return. Time now for todays aflac trivia question. Who is the shortest player ever to play in the nba. The answer when cnbc squawk box continues. Aflac. Aflac, aflac, aflac [ both sigh ] ugh you told me he was good, dude. Yeah he stinks at golf. But he was great at getting my claim paid fast. How fast . Mine got paid in 4 days. Wow. Thats awesome. Is that legal . Big fat no. [ male announcer ] find out how fast aflac can pay you at aflac. Com. [ male announcer ] find out how fast aflac can pay you whon a certified preownedan unlimitedmercedesbenz . Nty what does it mean to drive as far as you want. For up to three years and be covered . It means your odometer. Is there to record the memories. During the mercedesbenz certified preowned sales event now through june 2nd, youll get complimentary prepaid maintenance and may qualify for a twomonth payment credit. Only at your authorized mercedesbenz dealer. E financial noise financial noise financial noise financial noise you stand behind what you say. Theres a saying around here, around here you dont make excuses. You make commitments. And when you cant live up to them, you own up, and make it right. Some people think the kind of accountability that thrives on so many streets in this country has gone missing in the places where its needed most. But i know youll still find it when you know where to look. Now the answer to todays aflac trivia question, who is the shortest player to ever play in the nba. Mugsy boges. 1838 on the s p. It is still in position where we cant tell. When we return, a time to be optimistic about the economy even after yesterdays weak gdp report. Tony will joan us with his view on growth and markets next. Huh, 15 minutes could save you 15 or more on car insurance. Everybody knows that. Well, did you know that game show hosts should only host game shows . Samantha, do you take kevin as your lawfully wedded husband. Or would you rather have a new caaaaaar say hello to the seasons hottest convertible. Ohhh. And say goodbye to samantha. [ male announcer ] geico. 15 minutes could save you 15 or more. Welcome back to squawk box. Coming up at 7 30 eastern time on the east coast here. Lets get you through some ofrlt headlines. Automakers will be out with april sales figures. General motors expected 4. 7 increase compared to a year ago. Analysts see 4. 7 gain for ford. 12. 3 for chrysler. One of this mornings early winners, shares of directv. Wall street journal reporting at t approached a possible buyout bid. Such a deal 40 billion. Comcast time warner deal. Sales of sony under pressure. It cut its fiscal year forecast by 70 . Almost 300 million in additional costs for its exit from the personal computer business. I wonder what dan thinks about that . Is he still in the stock . I dont know the answer to that. That was like a self question. I was asking myself. You were. I dont know. Roger doesnt know. My big complaint about disclosure, you find out when they buy it but you never find out when they are out unless you see later. You heard earlier about, wow, m and a is back. He was in mexico with a corona. I was on vacation. Thats what i mean. You werent even part of the whole they need to do their business. Kenny chesney would say nothing wrong with being in mexico. No shirt, no problem. Is it still time to be optimistic about economic growth. Tony does the best imitation of tony. Its a compliment. Im from staten island. People say are you from austin. Or even england. Tony from staten island, who had three camaros. Continues to be bullish on cyclical growth in the u. S. Hes here to tell us what he is advising. Roger altman, evercore partners. 1 . Just go. It projects strong growth this year. 2. 5 to 3 . No longer the new normal. Thats the cyclical, meaning a year. It has its annual secular form newport beach. The last time in our whole building. You may want to think about coming down. 22 stories we will occupy in a couple weeks. Come visit. We can do a show like you once again. Come on out. The shortterm story looks good. Here we are going along having a nice conversation. Growth over the mortgage has been running the last five years, 2 . Can it get any faster. I think about it in the way i think about my prius. The engine is just so slow. I go up hills in california. The thing wont move much. So the fed puts a lot of money in the system to hope banks will lend. Its one of the reasons it hasnt picked up a lot. It seems like over the shortterm it could pick up, how fast can the engine actually go if theres isnt a lot of credit creation. If the households on average are getting older. Were at the golf course, grandkids rather than factories that cant produce as much. Maybe it cant grow as fast. It matters a lot to Interest Rates. So youre not saying that the new normal is over . He was on the show earlier. I did read that some people think we are emerging from the slow growth. The view is excellent. We still have it collectively because of the major forces that i mentioned. The fed has mentioned it at the last meeting. They cited more precautionary savings. Do we try to keep up the with joness by borrowing off our house and credit cards like we used to. Probably not. Banks wont even allow it. So it just seems like you cant grow as fast. Another thing in terms of testing, nominal gdp grows 5 , 6 , 7 . The 10year treasury correlates with nominal gdp. Where the fed fund rate ultimately goes, how high will it put it when it starts raising rates . The fed usually would say the neutral rate will go to 4 . We think it will probably be less. Bank of england said while we think the neutral rate, the one that doesnt promote much is 3 . It used to be 5 . It may be developing in the u. S. Where the highest the fed fund rate goes is 2 , 3 . It has major implications for Interest Rates. The stock market will love that. In fact, in the next cycle if they dont go very high. You reminded me of a marty stein field price. For what we can expect in some of the financial markets. We dont need to sell things based on the scenario. And the u. S. Becoming more Energy Competitive could be, as we are seeing thats another thing. Can i ask a theoretical question. When we started tapering, we said, okay, the party is over. They are essentially in tightening mode. Really . Yeah. The latest thing i said was qe infinity ended in november. And a new qe started for the next 10 months. Thats still 450 billion, isnt it . The first point is tapering is so 2013. The focus of markets will be on the policy rate and how high it ultimately goes. But if many had concluded that a half trillion of qe would be the equivalent in terms of the stimulus it provides. If it reduces its purses when it stops, it is orgably, a full percentage point. We dont know how to purchase these things. Is the wedge still in between are stock prices high based on the fed . No. Deputy cio it is italian. I will try to say it fast. Sc in italian is shh. Heres the thing. It is exciting. Yeah. The 10year has been really boring. Thats what you want in bonds. Since last june. Remarkable stable between 2. 5 and 3 . We will project soon the next six months or so. The range shifts to 2. 75 to 3. 75 . Still a benign outlook. It is up 2. 5 . It looks like a positive year for bonds. Just the unusual. Last year was a bit of turmoil after the taper tantrum that ben bernanke set off a year ago in may. The yield is stable. Slowly rising. Again, the key is the growth rate, how fast the economy can go and therefore how high the funds rate will go. That will determine how high rates will go. It hooks like a benign outlook but slowly rising. You need to ask the tmz questions. Ask whether Muhammad Said the s word, whether he cursed. Why denigrate tmz like that. Dont you have any good political questions. Bill groceries as he changed at all . Hes amazing. Is he more sensitive . I will ask this. I dont know if you can answer this in an honest way on tv. No, no. It is difficult. Business week article with bill on the cover where he says am i jerk or whatever it is. Its this very sort of, you know, looking inside himself thing. What did everybody think of that . I read it. Look, i live in newport beach, one of my two homes. I have a place in staten island. 30 minutes from disneyland. Do i want to work with Vince Lombardi or work for bill gross . Hes a gentle man, a great teacher, great wisdom. We love working for him. I do purchase as i just said, i live in staten island. I travel across the country and come back every weekend to be with my daughter. I travel every week to go work for bill gross because i love it so much. Thats a great answer. Good to see people come out and support hip. Five years. Thats a lot of miles. I use them wherever i can. Good shortterm growth, benign Interest Rates. You will see a lot more mergers. Because all cash transactions at these Interest Rates are reported earnings. You are seeing record multiples. They live in new york beach but a second home in staten island. Where else are you going to go for pizza . You have to come back. Phil, you have breaking news . I hope its big. A lot going on here. What is it . You need some news, huh . Joe, we can report this morning Ford Motor Company will be announcing that coo mark fields will be replacing ceo Allen Mulally as head of the operation at ford running daytoday operations. A press conference with bill ford, and Allen Mullaly and mark fields. We dont have the exact timing when this transaction will take place. We have been reporting for some time that the board was eager to make this transition. There will be a press conference later this morning. Mark fields, as many have expected, as we have reported, will be taking over as ceo of Ford Motor Company. Guys, back to you. Okay. Thank you, phil, for that news. Good to confirm it. Now we know. This is great. Tony, thank you. We want to thank tony for joining us. Earnings from exxon mobil. Jobs will be in focus for the markets. We are one day away from the report. What market strategists are expecting. What it means for your money when squawk box returns in is just a moment. Just a moment. Why relocating manufacturingpany to upstate new york . I tell people its for the climate. The conditions in new york state are great for business. New york is ranked 2 in the nation for new private sector job creation. And now its even better because theyve introduced startup new york dozens of taxfree zones where businesses pay no taxes for ten years. Youll get a warm welcome in the new new york. See if your business qualifies at startupny. Com International Monetary fund approving a twoyear 17 billion loan package for ukraine. Following a Board Meeting as part of the deal. Ukraine must raise taxes, freezing minimum wage and raising taxings all steps that could strain the interim governments tenuous hold on power there. Further escalation of tension with russia and unrest in the east. Acting president says russian militants have won the east. And Security Forces were helpless to stop prorussian separatists. Lets take a look at stocks to watch. Cardinal heating, 1. 01 a share profit. Textron with First Quarter profits of 31 cents a share. Overall profit fell 24 as textron delivered few Bell Helicopter s and Unmanned Aircraft systems. Yelp lost 4 cents. It sells more mobile ads. Avon earned 12 cents a share in the First Quarter, nine cents below expectations. Revenue below. Coming up, well talk deals and Corporate Taxes with roger altman. I have a couple other ones i want to talk to you about. Top of the hour, jim paulson and josh feinman. Squawk coming right back after this. This. [ grunting ] im taking off, but, uh, dont worry. Im gonna leave the tv on for you. And if anything happens, dont forget about the new xfinity my account app. You can troubleshoot technical issues here. If you make an appointment, you can check out the status here. You can pay the bill, too. But dont worry about that right now. Okay. How do i look . Thanks. [ male announcer ] troubleshoot, manage appointments, and bill pay from your phone. Introducing the xfinity my account app. I was confused. We have Quality Control issues. Go ahead. We can move on to other issues. I want to talk about cocacola for one second. We had news this morning. We should probably bring it up at some point. Dave winters sent a new letter to cocacola in light of what has happened, the wall street journal reporting that cocacola revamped its compensation programment he is raising questions about coming on air and said that he had talked to muktar. Now he is saying, okay, those happened writer prao i to vote. Did they go back and actually tell them of these things. He said we would like to know whether mr. Muhtar kent or mr. Howard buffet on the equity lane. Did he speak with any other cocacola directors regarding that plan and if so when. Do they have to . How does this work . What should shareholders think of this . Should ask that seriously of a lawyer. My educated guess, or semi educated guess would be no, its not a requirement to do so. Right. One would think it would be a good thing to do. But im not sure were ever going to know those facts. We keep hearing a lot of deals in the headlines almost every day these days. And theres going to be a lot more. Thats what i wanted to say. But theyre not all being completed. Theres lots of talk going on. You talk about pfizer, astrazeneca, direct of, at t. Which finally changed. I think there was a lot of misunderstanding about that. Even in this past First Quarter, only a month ago, total volumes had not risen. In the First Quarter, the volume was down a year over year. What has changed is the return of large strategic transactions. And i think thats the new development here. And it remains to be seen whether for the full year mergers as a whole will be a lot higher than they have been. They have been in a bit of a rut. Particularly if you look at the number of deals which for wall street as a whole is the more relevant. So we are seeing a lot of large ones. Thats new on the scene. I think thats driven by the zero cost of cash which i said a minute ago makes it almost any price. Thats why you are seeing record multiples in the sector. What inning does that suggest were in . Because in a way the m and a business can be at odds. A i barometer of confidence. I think were in early innings. Given the forecast, which our friend just laid out, benign Interest Rates and decent growth it will be more surprising on the up side than otherwise. You have continued low cost of cash, a bun band credit for prime bombers. Not for nonprime. And you have higher confidence levels as it is showing. Thats the prescription for larger deals. I think we will see a lot of larger deals. Whether the totals as a whole rise much is unclear. Because the rest of the world remains quite weak from a deal point of view. But i think youre going to the see a lot. Joe, you want to jump in on this . No. Let me ask you a different question. It is a banking question, regulatory question. The front page of the New York Times yesterday, it seems for the first time prosecutors might try to bring charges against banks. They are talking to regulators how they can charge banks more broadly without revoking their shorter or selling the reputation to the point where it goes out of business. Do you think its doable, feasible. If so, how does it change the dynamic here . Thats a hard question to answer because it depends so much on the precise accusations or charges. The precise ones. And how you pursue a case without, for example, forcing them to withdraw from the United States or forcing an institution oregon putting an institution at risk of really systemic in stability. I dont know the answer to that. Because i think its uncharted territory, which is why they are having the the conversation you just referred to. The other was with sandy weill. He had an interesting comment. He said he believed regulators should ultimately be supporting the industry. That it is to regulate the industry but in a positive way, if you will. Notversarial way. The mentality post 2008 is not that. Mentality is no matter what the events of 2008 and the tax payer rescue of the banking many are never going to happen again. Their mentality for the foreseeable future is safety, not support. Theyre not quite the same. Right. Maybe in some long, historical sense his point of view is a good one. For the time being, and i mean the next quite a bit of time, thats not going to be the case. And you see the regulators the screws are continuing to be tightened in terms of the leverage ratio and the pushing aside of risk weighted assets tests because they dont like those anymore. And so the pressure on the larger institutions from a capital point of view and the impact on their returns is going to continue. Joseph . Yes. You have never been in quiet in your life. I know. Thats okay. Hes trying to avoid criticizing you. No. My only youre in a position now where you see the tax inversion. And you see the harm that it can do. We could look back five or ten years. But you wont criticize someone for using the the wedge issue of minimum wage to completely avoid the things that need to be done in this country. We could look back five years. The people he is trying to help could be helped by keeping these by going to keystone. I do think roger altman, thank you for being here. Being here. Stamps. Com is the best. 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Find your sleep number setting only at a sleep number store. Know better sleep with sleep number. Earnings take center stage after the dow hits a record close. Jim paulson and josh feinman. Golf tips from a legend. Well speak to senior pga tour pro. With the summer driving season just around the corner what are you doing what will consumersing paying at the pump. The chief oil analyst at gas buddy. Do i even have my lights on . Squawk box continues the show and begins right now. May day, my day. May day . What the hell is that. May day, thats the russian new year. Welcome back to squawk box on cnbc. The futures at this hour are waiting for claims number. Down five points after hitting an alltime high yesterday on the 25th anniversary of really a Ground Breaking moment i think in American Financial history, the founding of cnbc 25 years ago. It was a great moment. Mark hoffman ringing the bell. Ford holding a News Conference at 9 00 a. M. Eastern time. Phil lebeau has details on what we can expect and the news he proe broke earlier. We will be hearing from ford ceo and mark fields, co, who will be replacing alan mulally. They will announce the official transition. We dont know the exact timing. Almost everybody says the same thing. This is not going to be a long, drawnout process. Alan will be moving on to another venture outside of ford. What it is remains to be seen. Mark fields, who is effectively has been running the company on a daytoday basis for six months now, will transition into the job. A press conference later this morning. This is the transaction, guys, we have been talking about for some time, that we have been waiting for. The most mulally era will begin at ford. A lot of challenges ahead for mark fields. Historically ceo is rarely followed by another successful ceo. Guys, back to you. Okay. Thank you, phil lebeau. Do you think thats true . I dont think thats necessarily true. You can have a couple of good ones in a row. For the big three, you have to go back decades to find two good ones in a row. And you have to go back a long way to find a ceos tenure that ends smoothly. Usually, its hey, you screwed things up. Gets out of here. The big three before mulaly, you are looking for any good ceo before mulally, arent you . Well, thats true. Where do you have to go back with g. M. To find the good one . You have to find one where they consistently posted profits towards the end of their tenure . Was roger smith a good one . He had profitable years but not profitable years consistently all the way through. They had periods where they would lose money, market share, and they had to consistently downsize. And a series of guys historically not thought of very well. Joe, because we are a society that loves numbers. Between 2006 and 2008, under alan mulally, ford lost 30 billion as the industry was imploding. Since then, ford has made 42 billion. So overall he put them in the black. They made about 12 billion net profit under his tenure as ceo. Stock is up 92 , 95 since he took over in 2006. Immediately went up, remember, two, three, four years ago it was here. Right. It made all that month in the first year or so after the financial crisis obviously. Right. I wonder if well ever know what it serendipitous . Absolutely. He said we will mortgage the company in order to finance the turnaround. If he had come in say eight months, nine months later and tried to mortgage the company, the credit markets pretty much seized up. He wouldnt be able to do it. He is fortunate timingwise he was able to go to capital markets. Now, you also have to give him credit. He had to shed the brands to ultimately sell them or close them down altogether and focus on ford and lincoln. Lincoln hasnt been the success he thought it would be eventually. But they believe ultimately lincoln can okwork. That remains to be seen. Profitable, growth, around the world and in north america its been a successful tenure. All right. Thank you, phil lebeau. You bet. We have to talk exxon. 2. 10 a share. Expectations, 1. 88. Stock is up immediately. That will help the dow a little. Maybe we have already seen it move up a little. And that was net income this company in the past has made 10 billion. 9. 1 billion. 8. 44 capital expenditures. Sometimes people look at oil equivalent. That was down 5. 6 . People look at upstream and downstream as well. 7. 78 billion. Downstream is also much lower. 8. 13 million in terms of downstream. The revenue in the quarter, which was a number that has changed, 106. 7 billion. Sometimes its not comparable to what we see on the first call. 109755. But it is still a pretty sporty number whenever youre up near 110 billion in revenues. Exxon, i think that is a new high for exxon. And it should be a new alltime high. It should not be surprising. Saw a record close on wednesday for the dow after the Federal Reserve signaled it is optimistic about prospects for the economy. What can we expect from the jobs number that comes out tomorrow . Joining us now is james paulson, chief investment strategist. Jim joins us today from los angeles. Josh feinman at deutsche asset and Wealth Management in new york. Were both expecting you to give us some saturday, insightful comments. If you say it was all weather, we can send this right now. Cash, is that what you think . That was not a i problem yesterday . Everything is fine . Well, you know, the weather had an impact. No question. Larger than expected, in fact. Other transitory factors. The sequential monthly data is starting to look a little bit better as q1 was ending. I think it will. Fridays employment report will be on the big firm side. Josh, consensus can be right . Once in a while. Is there anything more crowded than the field youre in right now with your opinion about, you know, prospects for the economy . Yeah. I think a lot of people believe that. The fed certainly believes that. That was the meeting yesterday. Just because a lot of folks believe it, doesnt necessarily mean its wrong. But the other point that i would make, and heres where i think consensus starts to fray a little bit. I think the economy has good pros specialists for growth. I think theres a lot of slack out there in the labor market. We have an eci estimate that got overlooked by the gdp report. Inflation still very low. Still a lot of slack. I dont see the fed rushing to the exits here. In your view, those were positive things. Yes. Because we just had someone earlier say its going to be the falling Unemployment Rate that is the most positive thing happening as far as dynamics and the economy right now. It is positive. Exactly. We still have a lot of wood to chop. Paulson, im used to you with the pollyanna stuff. Are you worried . Well, were always worried. I think the proof is in the market. The market went to a new high yesterday, joe. This comes despite a flat First Quarter gdp. Geopolitical issues in the ukraine. Pretty hefty correction in momentum stocks. I think the market is telling you the momentum on the ground is pretty good. I really think the debate is not that First Quarter number relevant. I think more of it is the debate are we growing two, two and a half or growing at three or better . I dont think thats in the consensus. Thats another big catalyst. Not that were just muddles along at two and a half. But has the economy geared up to 3 or more . And if thats the case, i think thats what could take stock up to that 2000 level. Another big wild card out there i think, before the year is out the consensus will decide whether the Economic Cycle has bottomed or whether it hasnt. How that comes out is going to ever big impact on the markets overall. If it hasnt bottomed, i think it will be a challenge for the Global Recovery and for the stock market. I think were going to find out it has bottomed. That could be another catalyst for growth. If it does, it will be the first time in this recovery since early on that both the developed and emerging world were accelerating at the same time. When you asked the question about whether the market is recognizing 3 or above, what youre saying is you are youre saying youre expecting it to be 3 or above. Youre making that forecast. The market hasnt seen it yet. Thats what i think. I think thats i think people i agree the consensus thinks we didnt flat line in the First Quarter or it is really concerning. On the up side. I think so still. I think they are, yeah. Its still to come yet this year. Just in bull markets in general, jim, they go up on anything, dont they . They just go up and up and up. That is true. 1 . They just go up. Look what were doing, though. We are sort of refreshing this thing. The market really hasnt done much since last summer. And at the same time bond yields have been flat. Were used to the two, three, quarter. Sentiment is not out of control because we have had momentum checks. We are setting up for another run. That might not be the last call for the year. But i do think the rest of this weeks reports could be the starter. Maybe its going to take another month. Start with you, josh, and end with paulson. Appreciate it. Good to be here. If youre mad about prices at the pump now, wait until the summer driving season. Well find out where prices are headed. As we head to break, just out the squawk box market indicator. Indicator. Theres a new way to buy a car. Its called truecar. And truecar users. Save time and money. So when youre. Ready to buy a car, make sure you. Never overpay. Visit truecar. Com today. 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. Because you cant beat zero heartburn. Woo hoo [ male announcer ] prilosec otc is the number one doctor recommended frequent heartburn medicine for 8 straight years. One pill each morning. 24 hours. Zero heartburn. Welcome back to squawk box. Take a look a lot shares of exxon mobil just reporting. Those shares out. It was up a little bit more earlier. Shares we thought were surging. It earned 2. 10 for the First Quarter. Estimates of 1. 88. One number not in the quarter, capital speexpenditures down 28 from a year ago. Im surprised. I thought we would have a little bit more of a push this morning. Gas prices have been rising. They tend to rise in the summer months. Could this time be different . This time may be different. The founder of the Oil Price Information Services Company gas buddy. Hes here to gasbuddy. Com. Is dotcom technically part of the title . Usually they like to look at that. Yesterday might be as bad as it gets for the Second Quarter. Youll be paying less on the first day of summer than you are this weekend. Maybe less memorial day. That is surprising. Tell us why. Number one, there was too much money with the price of cruise and chasing lean. Theres 45 billion thats Long Crude Oil betting on higher price outcome. 10 or 12 billion in gasoline. When you talk to refineries, theyre worried about gasoline. It may go up in little spurts. Generally the next five years or so it will move down. You dont have the millenials and young people driving anymore. An aging demographic thats driving less. And the average car is 11. 4 years old. When you turn that over, you get a lot better mileage. Its what i would call the ben bernanke sort of change. So were finally there. Yeah. This is it . I think this is it for maybe the Second Quarter now. In the Third Quarter you might see a surprise spike to hurricanes. We export about 1. 2 Million Barrels to diesel. And 750,000 barrels a day of gasoline. If you get some damage or some shutdowns in the gulf of mexico that could have really interesting consequences. Are you on diesel or gasoline . Im sorry . Are you on diesel or gasoline . What do you mean . Your car . Your vehicle. You dont know whether a porsche runs on diesel . 911 carrera. I thought you were a diesel guy. No such thing. Diesel will get more transaction in the next few years. To get to 36 miles per gallon you have to use a bigger molecule. That will be diesel. People dont realize if they pay 3. 80, 4. 10 for diesel, they are getting more bang for the diesel. 40 different vehicles being issued in the next few years that will run on diesel. Dont buy a diesel car. Why not . They smell. They make sounds. 85 mercedes. Worst car i ever had. I thought everybody has to buy a diesel. If youre going to buy a vehicle, buy a tesla. Trade in your prius. Lets say we are july 1st. What does it look like . 3. 50 or less. We are 3. 65 now. We may get a nickel or so higher. And then well get to that number. If we dont have a hurricane, a lot of places will be below 3 a gallon. Very, very dramatic swings in gas prices. Do you care about ukraine and whats going on there . I think i care about it. Were very insulated against that. We are producing 8. 3 Million Barrels a day, which is the highest since you had your diesel back in the 80s. It could have outcomes with codependency in europe. But we have 70 billion worth of crude as well. Were going to be producing 10 billion barrels a day. Thank you for joining us. Im going to trade in my hybrid bike and see if i can get a diesel. I think a cayenne you can buy diesel. But i wouldnt. David winters sends a new letter to coke. Weekly jobless claims. Personal income and spending data. Later, a record close for the dow. Cnbc celebrating a 25year anniversary. On the right. On the right. He knew. I just missed it. Did you see my little face . Is now the time for investors . Anyway, well discuss its in just a bit. Just a bit. Financial noise financial noise financial noise tdd 1800345255050 tjust waiting to be found. Ties tdd 18003452550 at schwab, were here to help tdd 18003452550 bring what inspires you tdd 18003452550 out there. In here. Tdd 18003452550 out there, tdd 18003452550 there are stocks on the move. Tdd 18003452550 in here, streetsmart edge has tdd 18003452550 chart pattern recognition tdd 18003452550 which shows you which ones are bullish or bearish. Tdd 18003452550 now, earn 300 commissionfree online trades. Tdd 18003452550 call 18886486021 tdd 18003452550 or go to schwab. Com trading to learn how. Tdd 18003452550 our trading specialists can tdd 18003452550 help you set up your platform. Tdd 18003452550 because when your tools look the way you want tdd 18003452550 and work the way you think, you can trade at your best. Tdd 18003452550 get it all with no trade minimum. 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We abstain because we didnt agree with the plan. We thought it was excessive. And i love coke. I love the management. I love the directors. But so i didnt want to vote no. Kind of unamerican to vote no in in a coke meeting. I didnt want to express any disapproval of management. But we did disapprove of the plan. He did talk to management including muhtar kent. David winters has september a letter to cokes board of directors. He says, we would like to know whether mr. Muthaar kent or howard buffett, son of warren, made the Compensation Committee or full board of directors aware of mr. Warren buffetts views. Did buffet speak with other cocacola regarding the views of that plan. If so, when . He wants to know whether cocacola reached out to investors before the Shareholder Meeting to drum up support. If cocacola did reach out to investors did it stay or imply it received generally positive feedback from other investors, trying to suggest that maybe they were disingenuous perhaps. We dont know. And also raising this question, it offers flexible but no changes are being made. Well see how the story place out. Becky and i will be in omaha at the annual meeting. And i imagine this question will come up and hopefully be answered. Fed chair janet yellen speaking at the inspect community bankers. Plus, another piece of the jobs puzzle. Take a look at u. S. Executive futures. Futures. Aflac. Aflac, aflac, aflac [ both sigh ] ugh you told me he was good, dude. Yeah he stinks at golf. But he was great at getting my claim paid fast. How fast . Mine got paid in 4 days. Wow. Thats awesome. Is that legal . Big fat no. [ male announcer ] find out how fast aflac can pay you at aflac. Com. [ male announcer ] find out how fast aflac can pay you 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. Whon a certified preownedan unlimitedmercedesbenz . Nty what does it mean to drive as far as you want. For up to three years and be covered . It means your odometer. Is there to record the memories. During the mercedesbenz certified preowned sales event now through june 2nd, youll get complimentary prepaid maintenance and may qualify for a twomonth payment credit. Only at your authorized mercedesbenz dealer. Welcome back to squawk box. Just seconds away from jobless claims and march personal income. Rick santelli is standing by in chicago. Steve liesman is in the studio. Joel has come into the studio. Chief economist at sorry. That was rough. Lets not talk about it. You know what, lets not. Home of comcast. Yeah. But it was man, seventh game. Thats even more painful. Anyway, are you going to behave yourself today . Me . Yeah. Its not me. Im going to let you and rick leave your mikes on. Your complicity in all of this stop talking right now. Give me the numbers, rick. Theyre coming up right now. Yes. Personal income and spending. Income up 0. 5. Much better than we are anticipating. Slightly higher to. 4,. 5. Up 14,000 from 330,000 to 344 now. 2. 77 million. I know the markets arent going to look favorable on a jump in jobless claims. I have to say at least the credit markets didnt actually move in an aggressive fashion. We were closer to 300. I see rates really havent ticked down much. Were 265 in a 10year. Two basis away on the 30year bond since june. Its may dayment a lot of markets arent trading today. Well have to monitor. So much news, so little time. Suffice it to say, tomorrows job report will show continuity. Is it improving the economy or job growth . The question is how much better it could have been or how much lighter it is based on history and other bouncebacks after recessions. Back to you, joe. Okay. Rick, thanks. Talked to steven and joel now and get more on the numbers. Chief economist. You have all your stuff working. Finally got it. Are you okay . Finally got it. What do you make of it . Do you have things right now you want to say . Theres a nice bounceback of durable goods. We knew that. Again, it fits in with the theme of a spring bounce back in the sense that march was better than february, which was better than january. What we have seen is the worst month was january. Yeah. It slowly improved. The weather is kicking in. I think well have a lot better spending as we go through the rest of the spring. And the income numbers really do hold out some hope that spending will continue. Let me just throw that out at you. I dont have the details in front of me as far as that goes. But the fact that it is wages and salaries is really critical. Thats been the lagging aspect of this recovery. Thats where we havent had enough in terms of the spending power of households to be able to drive the economy. The missing link has been the weak income growth. If were now beginning to see that kick in, i think thats reflective of the tightening labor market. Thats key. Is this number figured into the gdp from yesterday or an upward revisit to it . This number is already in there. Normally when we get this number its a nonevent. The government has already calculated it. Basically we have to go back and look at january or february to rationalize it with march. But we do get the march detail, which we didnt have before. Thats right. It shows that am sexuccelera. Maybe we could pivot, joe, if you dont mind. Talk about the book. I wondered what that was. Big picture of economics. How to nature gate the new Global Economy. Let me just ask you a question, joel. How do you navigate the new Global Economy . Well, you use your friendly economic gps. Really what the book is all about is the idea that too often we think that as business people, or as the average individual looking at the world, there are simple and black and white answers to any of the problems were facing. The purpose of the book is to show how economics provides you a perspective. The answer to an issue depends on the context that you are trying to deal with. Where you are in the economy. What are the issues youre face something. The only one i have ever seen that has an acid test. A different kind of acid test. Tax cutting acid test. What do you mean by that . First of all, it came from the idea that in a previous world i was a professor. Actually a tenured professor at the eisenburg school of business. I taught finance. One of the tests is an asset test. It is the idea that you dont cut a tax unless it significantly creases Economic Activity. You can get rid of it, but does it reduce Economic Activity significantly. What i tried to do in the book. And i chose some examples that were really out there to get people you hate lower the death tax, the estate tax. I hate lowering it. Ill tell you what. It is fairly basic as an exist. It doesnt fall on the people that create wealth. I go around a lot of businesses and ask, how many people sit around . Im not going to add another 5 million or 10 million to my wealth. After i dry my heirs may have to pay a tax on that money. Changing it is not going to change the behavior. No. I did say that. Thats wonderful. Rick is telling something wrong with your theory. Why are you here for may day . Isnt capital supposed to be sitting on its butt and Never Working . Workers come to work every day. Maybe they take one day off. This would be the day you take off. It is social justice. With the estate people argue irrespective of the effectiveness, i agree it is worthwhile. The idea that steve, what youre talking about is an issue youre talking steve, youre talking, rick, youre talking fairness. And i believe the first person to say if i was designing a tax structure from scratch, i dont think it would be in there. But thats not the question. Youre talking about changing your tax. If youre changing tax, whats the Economic Impact of it . Thats really what youve got to keep in mind. And ive got a tax thats a lot so you really think you would move from a passive to a proactive way to deal with this . Another point i bring out in the book is this. We talk a lot about not double taxing dividends. Why doesnt anybody talk about the fact that we double tax the income of Small Business owners. They have to pay all the payroll taxes, not just for themselves but for the businesses as well. If im a slow business person, and i am, and im the employer, i pay Social Security and medicare tax for myself and for my business. Why do we not worry about double taxing Small Businesses i worry about it. I worry about all taxes. I agree. Weve got to worry about it. Taking a dollar from farmer a, giving it to farmer b or taxing it, giving it to uncle sam puts a level of in efficiency. No academic professor in any university is going to tell me that dollar is more productive in anybodys hands but the guy who sweated to make it. But the reality world is we have a tax structure. Youre reality. Thank you, everybody. Remember the time where he goes, little bill says to this horrible englishman, youre talking about the queen on independence day. And just smacks him and knocks him out. Do you remember that part . Here we are talking about all these taxes on communist may day. Coming up, well talk about at t. New details after the break on that. Check out the futures after jobless claims and personal income data. A very big jobs day. Squawk box coming up after this. This. Financial noise financial noise financial noise today is thursday today, we greet you. Treat you. Care for you. Today, you can come to Cleveland Clinic for anything, everything or just to get that thing checked out. Big, small, and yes, the best heart care in the nation. Its here everyday, for everyone. Thats the power the power, thats the power of today. Cleveland clinic. Call today, for an appointment today. At your ford dealer think . They think about tires. And what theyve been through lately. Polar vortexes, road construction, and gaping potholes. So with all that behind you, you might want to make sure youre safe and in control. Ford technicians are ready to find the right tires for your vehicle. Get up to 120 in mailin rebates on four select tires when you use the Ford Service Credit card at the big tire event. See what the ford experts think about your tires. At your ford dealer. Welcome back to squawk box. Im phil lebeau are breaking news regarding ford meter company. Sit official. Mark fields will be replacing alan mulally at ford. Guys, stick around a little later on squawk on the street. Coming up at 11 00, we will hear from ford chairman bill ford first on cnbc about this transaction from mulally to fields. Again, effective july 1st. Thank you, phil. At t approached directv on a possible deal. The price tag they said would be at least 40 billion. Directvs current market capitalization is the the second biggest paid tv with 20 million. At t has the handline based tv business. A combination would create a tv giant close to the size of comcast with Time Warner Cable deal in hand. Close to 30 million subscribers. They are not comment on the story. I can tell you i have confirmed the story with a number of sources and can give you a little bit of background whats happening here. This is very early days, my sources say, in terms of where this stands. But the calculation is this. Given the comcast Time Warner Cable deal on the table, the view is at t and directv want to merge and they have been talking about this for a very long time, what you want to do is announce a transaction while the Time Warner Cable and comcast deal are on the table for regulators in washington to force the issue. Meaning, either regulators approve the comcast time warner deal and the at t directv deal, which might have more overlap and be harder or they kill both deals taillights. It could put pressure on both transactions and really make this a washington story in terms of whether regulators would go forward. Thats at least the conversation going on right now behind closed doors between at t and directv about whether Something Like this should move forward. It is very much connected now to the comcast Time Warner Cable deal. They delayed it . It makes it more opportune to do it now. It makes it more opportune to do it now. They have wanted to do it. If you were to bring a transaction like this to the table, what happens . I understand what youre saying. For the last three, four years, they have wanted to do this. Its been one of a number of transactions. Its something they have looked at. Given this other transaction, theres now a view that potentially now could be the moment. Other people say maybe right now is not the moment. Maybe what you want to do is let comcast and time warner merge. Let that be approved. That would force the issue. If you were to announce after an agreement was already passed you would have a better chance. Thats really what this is all about. Coming up, jim cripplers take on the top stories. Squawk box will be right back. Tomorrow, its jobs friday. Join us for a special look at the state of the economy and how markets will take the governments april employment report. Mark zandi, gary stern and more. And matthew rose previews the big berkshire meeting. Shire meey relocating manufacturing to upstate new york . I tell people its for the climate. The conditions in new york state are great for business. New york is ranked 2 in the nation for new private sector job creation. And now its even better because theyve introduced startup new york dozens of taxfree zones where businesses pay no taxes for ten years. Youll get a warm welcome in the new new york. See if your business qualifies at startupny. Com everything looking good. Velocity 1,200 feet per second. [ man 2 ] youre looking great to us, eagle. 2,000 feet. Still looking very good. 1,400 feet. [ male announcer ] a funny thing happens when you shoot for the moon. Ahh, thats affirmative. [ male announcer ] you get there. Youre a go for landing, over. [ male announcer ] the all new cadillac cts, the 2014 motor trend car of the year. In todays market, a lot can happen in a second. With fidelitys guaranteed onesecond trade execution, we route your order to up to 75 Market Centers to look for the best possible price, maybe even better than you expected. Its all part of our goal to execute your trade in one second. Im derrick chan of fidelity investments. Our onesecond trade execution is one more innovative reason serious investors are choosing fidelity. Call or click to open your fidelity account today. Welcome back. Jim cramer joins us now. Lots to talk about. Exxon mobil. Im curious about the directv at t negotiations. Ill take your lead here. I think that directv at t always talk with each other. Ive got to tell you, this is david fabers story. When i read through i kind of say, i dont believe. Were not talking price. Why would they want directv . It has all this latin american business. At t said were not going to go international. It created a whole new world. I think it makes sense that everybody has to talk to get bigger. Right. I think a lot of this, by the way, has to do with the regulators. We just reported earlier that the conversation is actually in large part because of Time Warner Cable and comcast. If you put both deals on the table at the same time you have a better chance. Look, the field is very, very competitive. And i think that is what matters. Tmobile sprint. Thats another one. Tmobile has some Pretty Amazing numbers today. The telco business and the drug business are two sectors that have the fever. They have the fever to slightly this morning. I thought they might be up a little more given the beat they had. Well, its a Production Growth story. You got to listen to the call too. These guys, i think chevron, up huge, has a little better momentum. This group has been strong. Bp, signaled things when they raised the dividend. Royal dutch reported better than expected quarter and all those that happened this week, exxon has been moving up. Moving up in anticipation. This group has earnings momentum, exxon the least momentum of the group. No one ever got hurt buying exxon and thats going to be the wrath youll here today. Well get jobs numbers tomorrow, playing into that. How do you play today . Look, i know this is kind of contra, but these numbers dont matter as much to me as they typically do. I think theres a bounceback. You guys were talking, april, apparently, there are few companies i talk to about april where april isnt better. Its possible we get back on track. But i dont want to be political. I just think it could be back on track. Okay. Jim, well see you in a couple minutes. Great to see you in person. Briefly during cnbcs 25 anniversary. And the markets cooperating very well with us. That was nice to get to the highs. Joe. Thank you. People just watching the first on cnbc coming up. Arnie sorensen and alan krueger well, know that wasnt alan krueger two guys the ceo of tmobile, one guy not, one guy was alan core danny. Just fix all that. Someone is watching. Im watching. I realize. Hes won eight major championships, former number one player in the world. Tom watson joins us next. Astrazeneca wi squawk box will be right back. Beautiful day in baltimore where most people probably know that geico could save them money on car insurance, right . You see the thing is geico, well, could help them save on boat insurance too. Hey okay. Im ready to come in now. Hello . Im trying my best. Seriously, im. Im serious. Request to come ashore. Geico. Saving people money on more than just car insurance. [ banker ] sydney needed some Financial Guidance so she could take her dream to the next level. So we talked about her options. Her valuable assets were staying. And selling her car wouldnt fly. We helped sydney manage her debt and prioritize her goals, so she could really turn up the volume on her dreams today. And tomorrow. So lets see what we can do about that. Remodel. Motorcycle. [ female announcer ] some questions take more than a bank. They take a banker. Make a my financial priorities appointment today. Because when people talk, great things happen. Our next guest inducted into the world hall of fame in 1988, releasing theers have of his dvd set, lesson of a lifetime 2 which includes over 20 new lessons and been in studio before, but joining us on remote tom watson. Tom, terrific. Great to see you. Thanks for joining us. Thank you, joe. I watch the first set and it told me a lot of what to do, worst problem is between my ears. Is this going to help me there. It was predetermined or determined in our last interview just this much below a hack. This this new version here is actually it talks about, for instance, when you get on the first tee what to do. What to think about on the first tee. Many most people on the first tee have the first tee jitters and that, you know, is simple things like that. Over the years of experiencing the pressure we have tricks of the trade mind you that we can use to try to alleviate some of the pressure. That and theres all kinds of psychological things that help. I have just an overall question for you. Im going to look at these and obviously youve extended you can learn from the first set of dvds, but this is the one where, you know, you can take it beyond that and maybe, you know, work on some things that arent just, you know, technique. Well, there are certain things on there that i didnt put on the first dvd because i didnt think of them, honestly. I remember after the finishing up the first dvd, i started to think about other things that would apply and one thing in particular was the 40yard wedge shot. People have a hard time when theyre close to the green making an abbreviated swing and hitting the shot consistently. And i show what to do there. Its kind of is pretty sim. What the where you should be in your dress, where you stand up to the ball and how you stand up to it that allows you to make a shorter swing and be consistent about it. Can i ask you, what i was getting to, if i go out after not playing for six months, and think that im going to be able to do these field shots and touch shots and then, you know, under a little pressure, if theres if im playing in a tournament or something, should i be expected to be able to perform without being able to fall back on practice . No. Thats my problem. The full answer, no. Thats my problem. If theres any pressure at all and you know what youre supposed do, but if you cant fall back on sort of the muscle memory, i think its impossible to do it. Maybe i shouldnt be frustrated. I think what youre talking about is routine, what happens after a sixmonth layoff is that you lose track of your routine. What you when you practice a lot, you create a routine. I talk about that in these new lessons of a lifetime lessons, and about how do you what to do and to eliminate the pressure and one of them is to create a routine that you can bank on. You can go to when the pressure is on and you rely on that routine to take you through the shot. You know, you have a routine you go through and you should be thinking about one thought in the golf swing. It could be the back swing, the follow through, but you arent allowed to think about one thing at a time. Im not smart enough to think about more than that or have time enough in a golf swing. Tom, youve seen some of the conjecture about what to do with the game and youre a purist and im sure when you see a hole the size of a manhole cover to make it easier to get into the hole and try to bring back the 5 million golfers we lost over the past ten years or something, what should we do . This is everything goes through these cycles . I guess we shouldnt panic on something that was invented a couple hundred years ago, should we . This is what we need to address right here, the amount of time that people spend on this device is taken away from all kinds of, you know, of quality of life, and one of them is golf. Golf takes a long time to play and one of the things we do is try to address lets play three holes or six holes or nine holes rather than a full 18 holes. Just to get out to enjoy the game of golf. You know, were trying to im trying to address how do we increase the number of young people to get into the game and thats this cell phone stuff is hard. It takes a lot of their time. Can you make it easier for me . Thats my problem. He couldnt make it easier for me. But thats what you need. Its like they need to get like in tennis ne started with the they started with the oversized rackets, that changed the game. The drivers are bigger. Youre exactly right, joe. The drivers are bigger. Its easier to hit the ball. To take it beyond that, i have reservations about making s. All right, tom. Im sorry. Were going to have you back. You cant fix andrew, believe pe we only have five seconds. Thanks for having me on. I appreciate the opportunity. Great to see you, tom. Thank you. Join us tomorrow. Squawk on the street begins right now. Welcome to squawk on the street im carl quintanilla, with jim cramer and david faber. Ford confirming it has chosen mark fields as its next ceo. Hes going to succeed alan mulally who will retire on july 1 after more than seven years on the job. Fords actually getting ready to hold a News Conference right about now. Were going to dip into that in a second. As people familiar with fields by now, running a lot of the important meetings, joined back in 89, ran mazda for a couple years, pride of rutgers univty