Transcripts For CNBC Squawk Box 20150219

Theyre set to earn 1. 53 a share. The numbers cover the critically important Holiday Shopping season. So well see those numbers as well. A programming note because you dont want to miss it we have an exclusive interview with walmart ceo at 11 00 eastern time this morning. Then on the economic front, employment is front and center. At 8 30 eastern time well get weekly jobless claims and later in the month we have to watch for fed numbers and other leading economic indicators. Couple after stocks to watch this morning, regenerons eye drug was the top one from rivals in diabetes related vision loss but results show that the effects are strongest in the more severely affected patients. Well talk to him at 7 30 eastern. Been a big winner over the years as we said earlier, up 3,000 over six years. And marriott also issuing guidance above current forecasts. Thats a combination of profits topic estimates but the rental Company Revenue fell short and sunedison sales failed to meet forecast. Solarcity under pressure. The company reporting a wider than expected loss. Foot locker shares going higher after they raised the Quarterly Dividend by 14 and then increased the buy back program. Lets get a check on the markets this morning. Yesterday we did see the stock market down slightly but youre still looking at the dow with closing yesterday at above 18,000. Youre looking at dow futures down by about 20 points. S p few turs off by about 4 points and nasdaq down by 2. 5 points. Yesterday we did see choppiness all through the morning after the fed minutes that came out yesterday afternoon. We continue to see where things are headed this morning but if you take a look at whats happening in europe and the early trade you see green arrows most of the way. Ftse is down but slightly. In asia most of the markets are closed for mayor holidays. The nikkei closed as well. Take a look at whats been happening with oil prices. Crude oil snapped a three day rally. It settled down to 52. 14 and dropped another 3 . Its down 50. 33 so this is the first time its giving background in another week or so. Take a look at whats happening with the 10 year note. At this point in the bond market yielding 2. 068 . The dollar at this point looks like it is unchanged against the euro at 11396 and gold prices yesterday fell below 1,200 for the First Time Since january. Closed at its Second Lowest settlement of the year. Its up about 17. In Washington News the annual council of economic advisors that report to the president is out today. This is the administrations view of the economy. John harwood joins us with the details. John id like to know exactly how everyone feels in the administration about it because we hear so many conflicting things. I dont whether we raise rates in june or september or what. But what does it say . Essentially this is a piece of argumentation for the president s middle class economics, as he calls it program and what it does is this report dissects the phases of the American Economy since world war ii. It talks about when we had income growing, productivity growing and people up and down the income scale sharing in that. That was an initial period that ended in 1973. Then we have a period fuelled by the surge of women into the work force which added a tremendous surge of output to the economy and then theres a period in which women kept growing in the economy but productive slowed and that put a drag on incomes and finally the most recent period productive resumed its growth but we didnt have growth in the labor force. In fact we had people leaving the labor force, including men that have been leaving for a long time for various reasons and we also saw a continued acceleration of the inequality of income. So the administration framed that argument as an advocacy for the policies it proposes to go after inequality by taxing the rich and providing new benefits especially and child care and education to raise the productive of people at the bottom and immigration to preserve the supply of new labor at a time when so many baby boomers are retiring. What hes trying to do is shape the debate on what washington is going to do. Not just in the next two years but for the next president. Yeah, unfortunately we do a lot of this shape the at the bait but nothing seems to get done on both sides. Well i mean youre right about that but we do have an economy right now that is producing and throughout 2014 was producing more than a quarter million jobs a month and growth is pretty strong. Were looking at 2. 8 growth over the next year or so so theres good positive trends at the moment. The question is how do they get sustained and whose policies are going to drive the next phase. All right. Okay john. Good to see you. Welcome back no im the one whos back. Hey, joe the blue devils. Duke had a great game last night but did you see, joe, what rudy said about the president . No . Did you see that story . No im just getting back into all of this stuff. Tell me. He gave a speech last night on behalf of scott walker and said that he didnt believe president obama loves america. Really . That he said he wasnt raised like you and me. He said to his audience he wasnt brought up to love america and pretty provocative. I think a lot of people will be talking about it today. We have scott walker on. We do. You should ask him about that, actually. The post has this weird cover. Its weird because Huffington Post the headline in Huffington Post is about all the lives that isis has ruined and the next story is the outrageous cover of the new york post. Im not sure i dont know they get to argue on both sides of things but a lot of strange things happening. I want to show you something john something that i saw when i was out in california. What was it . It was something that happened in world war ii. There were four chaplains of all different denominations. Reformed jewish chaplain and catholic chaplain and methodist chaplain and one more and the ship was sinking and these guys gave out all the life vests and didnt keep any for themselves and just held each other, you know, had their arms around each other and prayed and sang songs as the ship went down and it was just a different time. I went to a war museum and saw a lot of things i was very moved by and then i look at the world were in right now and it was in such stark contrast. Seeing differ religions all coming together. I actually have the picture. They were called the dorchester chaplains. I tweeted it out. Joe where are these men now adays . What happened . I totally relate to what youre talking about because i just got around to reading unbroken over the weekend. The story that evoked some of the same feelings that youre describing and interestingly this relates to the economic re report of the president. Do you want to know how im going to make the link. I kind of wish you wouldnt. I dont see how the two are related but go ahead. Heres my point. That period that we had after world war ii when the economy surged, when you had people coming into the work force. You had education levels rising. It was also a period in which the country had had a very broad shared experience of going through war and there was a greater sense of community that had some economic benefits to it that distributed those economic benefits widely because so many people had been through the same thing. Now our National Security burdens are bore by a tiny number of people. We saw that dramatized in the american sniper movie. Its a tiny amount of the population put thargting their lives on the line. And that diminishes the sense of shared values that had economic ramifications during that post war period. I saw it in a different light and that is that as a country we seemed so behind certain things in terms of all being together in it together. Thats what im talking about. Well i would contrast with the rhetoric thats comes from the white house over the past six years has been very devicive in my view. I dont think that its a consequence that were all at each others throats at this point. Okay. Thats fair enough. But were talking about a period where the entire society and its politics are much more divided because we dont have a base of shared experience the way they did after world war ii. Weve got plenty of shared experiences. But maybe not in there was another one john. We didnt have a the overwhelming bulk of the population engaged in a war effort. I remember that 9 11 brought us together too and i hope thats not the kind of thing very briefly. I hope its not the kind of thing were facing serious issues obviously. Anyway im glad i did that when i was out there. Its very sobering. Also, john seeing a lot of the plains in the museum and a lot of them signed by the pilots. The name lieutenant colonel, pow five years, p. O. W. Seven years. Incredible things they went through, amazing. Thank you. Duke i dont know. Theyre okay. I got to start watching because there was instead of watching basketball i watched you told me to watch gone girl. Yeah. Yeah and i watched it. I didnt know he was going to get his throat slit. Dont give it away. I was standing there dont tell people what is going to happen. Things are going to well and next thing i know. It caught you by surprise. It was a good movie. It reminded me i know you and ben afleck are not i saw whiplash. Great movie too. Really good movie. Do you know what else the judge. Did you see it . Ive only seen the first half of it. Robert downey jr. , phenomenal. We have a live report from our friends at the weather channel. Plus in china its the year of the sheep and while many are celebrating, some are not. We will explain. But its a special day here on squawk. Were wishing andrew a very happy pirth happy happy birthday. Dont do that. Dont do that at all. Are you 30 . 30 something. While many are celebrating eunice reports from beijing on who is not celebrating today. In china, these fathers and mothers are preparing for parenthood taking a course at a maternity clinic on how to best handle their newborns. But attendance is down according to the instructor. No thanks to the animal sign governing the new lunar year the sheep. Translator we have seen an obvious drop in the number of pregnant women coming to our clinic this year she says. The superstitious idea that the sheep brings bad luck still exists in the chinese community. The sheep is the black sheep of the 12 animals in the chinese zodiac. The domesticated farm animal is seem as timid, weak, decemberstined to be a follower. Hospitals here are seeing a flock of people trying to avoid having a baby in the year of the sheep. Including expecting mothers having csections before the new year kicks in. No one is sure how the sheep got its bad wrap. Each zoidac animal comes with its own virtues. The dragon horse, and tiger are lucky. The sheep compassionate. Several leaders were born in the sheep year including bill gates and steve jobs. For Chinese People its common sense. They want to have a baby in the dragon monkey years, so sheep year i think means bad luck. Meaning when it comes to babies in china, the sheep doesnt seem to stack up. As she said common sense, right . Among the stocks were watching this morning tmobile u. S. Is out with quarterly numbers. It earned 12 cents a share. That was 7 cents better than expeck asians. Revenue well above consensus as they added net subscribers in the quarter. Also barrick gold is selling two mines. It will help reduce net debt by 3 million. America is also cutting the number of jobs at the toronto headquaters nearly in half. Now to todays National Forecast and maria joins us from nashville. Is it cold there too, maria . It is extremely cold for sure. We are already in the single digits. Wind chills down below 0. Were here outside the nashville symphony and you can see the fun dane fountain behind us is symbolic. The flow has been slow. Very slow downtown any time of the year usually bustling. Basically a ghost town. Crews have been stretched thin as well. Nashville, the city itself has about 30 trucks at their disposal and the priority yesterday was getting to those secondary streets so people could get out of their houses back to work and back to Downtown Music city. We also talked to a few country artists feeling the pinch as well because of the weather, not getting the folks into the caves and the restaurants to hear their music, are having to cancel acts all together because they actually cannot get into town. The problem today, of course the temperatures, record lows possible. The record today five. Were getting close to that right now. Believe it or not not getting out of the teens. Nashville in the deep freeze since saturday. Now word that theyre under the winter storm watch. Thats set to take Effect Tomorrow starting as snow as unfortunately more freezing rain possible in the forecast by the time saturday morning rolls around. A tough few days for nashville and many more to come it looks like with the next round of weather. Back to you. All right maria. The ground hog was right. You say it was because of the lights. No. Hey, look it may be that we created this cold weather by putting the lights on him and forcing him to see his weather. We created the cold weather by the warming. Oh i forgot. It is the year of the sheep. All of us just follow along. I havent really looked at why its happening but i just believe in it. They say its because of the warming that its cold. I just believe it. It is cold. Its cold. Because its warm. Its cold because its warm. The planet is warming so its colder. Lets tell you about another business story. This business has a hard time in cold weather. Electric car battery maker says apple is poaching auto engineers to build a battery division. A123 is suing the tech giant. The court filing offers more evidence apple may be developing a car. They were developing a dashboard. What are they trying to do . I dont know ive seen the prototypes. Youve seen it. If you ever get a car youre going to want an apple car. It looks like an ugly minivan but its so functional and the Carbon Footprint is so low. You can do zip cars now. But is it a zip . They dont really do zip anymore. How do you get around . Just rent a car. Just from alamo or whomever. Do you insist on a hybrid . I swear this is true. Because i flew into San Francisco and had a car take me down to monterey did you get a prius . No i didnt get a prius but every car is a prius i swear. I thought i was seeing double. The idea of being in one of those small cars when a big car comes by. But you do notice in San Francisco and northern california, there are prius everywhere. Everywhere. And they are all ugly. Part of it by the way, batteries dont work well in cold weather. A lot of these hybrid electric cars in michigan you never really buy one. The battery only lasts half the time its supposed to last. All right. Well well have chairs. We have a lot to talk about. We havent seen you in a long time. I know. Hard to believe. And its your birthday and we found out what sign you are. Youre a pices. Depends what magazines you read. Some say im aquarius. I think you act like a feces. Coming up its my birthday. Im sorry my little buddy. Thats like the skipper talking to gilligan. Thats not good. Coming up ceo takes 30 people out to dinner oh okay. Takes 30 people out to dinner. Not unusual. How about a 300,000 check though. Not something you see every day. Well have the details. Maybe some of that Supreme Court justice. First as we head to break heres a look at yesterdays s p 500 winners and losers. [ male announcer ] your love for trading never stops. So if you get a trade idea about, say organic food stocks schwab can help. With a trading specialist just a tap away. Whats on your mind lisa . Id like to talk about a trade idea. Lets hear it. [ male announcer ] see how schwab can help light a way forward. So you can make your move wherever you are. And start working on your next big idea. You, my friend are a master of diversification. Who would have thought three cheese lasagna would go with chocolate cake and ceviche . The same guy who thought that small caps and bond funds would go with a merging markets. Its a masterpiece. Thanks. Clearly you are type e. You made it phil. Welcome home. Now whats our strategy with the fondue . Diversifying your portfolio . E trade gives you the tools and resources to get it right. Are you type e . Opportunities arent always obvious. Sometimes they just drop in. Cme group can help you navigate risks and capture opportunities. We enable you to reach Global Markets and drive forward with broader possibilities. Cme group how the world advances. Automotive innovation starts. Right here. With a control pad that can read your handwriting, a widescreen multimedia center, and a headup display for enhanced driver focus. All inside a redesigned cabin of unrivaled style and comfort. The 2015 cclass. At the very touchpoint of performance and innovation. See your authorized mercedesbenz dealer for exceptional offers through mercedesbenz financial services. In my world, wall isnt a street. Return on investment isnt the only return im looking forward to. For some every dollar is earned with sweat, sacrifice, courage. Which is why usaa is honored to help our members with everything from investing for retirement to saving for college. Our commitment to current and former military members and their families is without equal. Start investing with as little as fifty dollars. We are in the chairs looking at stories that are interesting this morning. One of them i dont know if you guys recall just a couple of days ago mgm did its Earnings Call and on the call they were trying to explain how vegas was back and Somebody Just spent 300,000 on a dinner. They didnt say who did it. But it has now been revealed that that person was shane smith that runs vice who had gone to dinner apparently and mgm said it was 12 people that went to dinner. Theres other people now saying it might have been close to double that. 24 people. But still 300,000 for the dinner. A lot of wine was drunk. Apparently in those that figured this out, david carr who is no longer with us sadly put out a tweet at the time about a month ago because he was in vegas for ces and said no brainer quiz what media exec did i watch win 100,000 at black jack last mite, hit, gambling not his only vice. He made some money. He made some money at the tables and then gave it back. Maybe some wine truffles. We think it was in the bellagio. Money still flowing in have a gas. Its supposed to stay in vegas. The money did but not the story. This is close enough because its the year of the sheep i used to go to the desert a lot. When you lived in l. A. And every year we would do the same things. But one place we always go is the living desert which is incredible and there should be therapy goats because we always go to the same place and we sit surrounded by goats and they come up to you and theyre so gentle and sweet and you understand why people that grow up in farms have a certain serenity. Ive seen them go after people. But not these goats. Theyre a different species. One has 54 chromosomes and the other has 60. Would you have a goat in your house . I know you have dogs. Theyre very sweet and very gentle and weve known some of them for ten or 12 years. You recognize them . My kids do and remember their names. Some are no longer they just cost a couple but some of them are still there and then the other place we always two is the air museum in palm springs. You were talking to john harang gets harwood about it. We went out there and it was all fun and games and you get there and theres so many things. I had tears in my eyes looking at so many Different Things but one of them i mentioned earlier and it was the chaplains. Four of them. All different faiths and they had only been chaplains for less than a year. They were all first lieutenants and they were on this ship sinking and gave everybody else the lifeboats and they joined arms as they went down with the ship and there was a jewish gentleman, a methodist, a catholic and one other and as it says here they gave their lives to save them. Theres a million stories like that if you ever get the chance to go out there but its not all fun and games and i came back thinking about how different this world seems to be right now. I think it was the same day that people 21 Coptic Christians in egypt had been be headed or something. Isis. Are we moving forward in this world . Are we making any progress or are we i dont know. It just seems like we have lost our way and maybe not here but at least in certain parts. Its add guy reminder and basic goodness of human kind. Right. And seeing so many of the heros. I guess its like a tom brokaw greatest generation. Maybe it was the greatest generation. Its amazing. Cool museum. It is. I want to bring up a story i have seen. We talked about the Winter Weather and the cold thats come through as a result. Usa today points out as the snow piles up so does the auto crashes. There was a piece on nightly news last night where jeff rossen pointed out you have to be careful on these roads and first instinct is often the wrong instinct. If you slam on the breaks and turn thats the worst thing you can possibly do so just a reminder to everybody if you get in a situation where you get stuck on ice, what you should do is take your foot off the brake and the gas and try to slowly guide your way out of things. Did you see the people in boston diving off thats here too. Crazy people jumping off the roofs into snow banks. Are you sure theres nothing thats the thing. Make sure theres not a fire hydrant underneath. The major has been telling people to not do this. Social media spawning event right now. What about a spiked fence . Remember that guy. Everybody is doing this and taking videos. Dont. The mayor is telling people not to. What if its all frozen . Can you imagine if its ice inside. What are these . Are they still doing those videos . Are they still making those movies . I dont know. These are the guys that someone in their family died right after saying hey watch this. Hey watch this. Still to come this morning theres a lot of college kids involved. On her way. Thats going to be fun. I love animals. Anyway, well meet the youngest person on the forbes 30 under 30 list. New person for me to hate. Poised to revolutionize how you look at online ads. Hes of legal drinking age but just barely and then well welcome the legendary investor and also scott walker. This is cool. President ful hopeful scott walker will be in studio today. Hopefully none of our union guys are around. Maybe doing Union Busting in new york. First as we head to break, check out these pictures niagra falls frozen over. Squawk box will be right back. Welcome back to squawk box this morning. Our next guest dropped out for college for a start up. He was looking to prevent Internet Users from ignoring the ads they see online. Hes the youngest person on the forbes 30 under 30 list. Hes the coo and cofounder of a Digital Marketing platform focused on post click engagement. That seems like a lot to me. Before we go anywhere tell us what does it do. Yeah absolutely. So its a new type of Digital Marketing technology where after you click on an ad we have interactive overlay that asks users questions. This is after i click on the ad . Sometimes i thought i can just get to a site and something is going to pop up on me and ask me questions. Yeah, so the idea is that is going to become more effective and im going to be more inclined to click on it and not ignore it . What about the annoyance. I cant click off of the stuff fast enough to get it go away. What makes me want to engage . Part of it is we have this idea of value based exchange. So one of the reasons we all find ads so annoying is quite frequently theres nothing in it for us. Its always the brands demanding something, whether its our attention or asking us to buy something. So part of the hypothesis and what we have been able to prove is by engaging through the quiz questions and different experiences, if were offering you something, it doesnt have to be a coupon it could be content, we actually find a higher engagement rate. Ive seen it on content sites where to get to the content, if youre not a subscriber i can answer these questions and read the article for free. Thats what youre talking about. Exactly. And compare that to the experience of the coupon. Who is more likely to go through with it before clicking off . Trying to get to the content or trying to get to the coupon. Trying to get to the content. The content is more valuable. Content is more valuable. Its depends by brand. We work with rebok where a 20 off is enticing to certain consumer but with others content is more valuable. Is it the advertiser that pays you or the content company . The publishing platform. Our Business Model goes both ways. We work with advertisers directly and we use us to enhance their Digital Performance but also a unique solution of a brand like a yahoo or mit tech review would use. How does your mother feel about you dropping out of college. Both of my parents are in education. So it was a bit of a tough conversation. Do they think youre going to do this and then go back . Whats that conversation like . So actually i still take one class at a time over at harvard right now on monday nights but due to the weather in boston we havent had class yet this semester. He was saying that he lives in boston and i said were you jumping off your house to get into the snow and he said his roommates have and they all work for hill. So im very curious about because this happens a lot. You hear about the two kids in the dorm room but one becomes the ceo and runs the place and then you have to live with these other guys who are your friends but youre also the boss. How does that actually play itself out inside like your house. Well its really special group of guys. Ill say that first. The other thing is im not home much very often. Hopefully theyre not either and if you see them at home you should tell them to go back to the office right . Theyre good about it. We dont take it awkward and theres a separation between work and home environment. Are they friends from school. Yeah. Whats the longterm plan for this company . Is this a company that goes public . It gets sold to an advertising platform . Whats the longterm everyone says they want to remain independent but if a ceo is watching this and want to call you up and buy the company youre available . This is a big competitive advantage for certain ad type of technologies so i wouldnt be surprised if theres an acquisition but the opportunity is there. Other people could try to do this tomorrow if becky and joe. The data. Were collecting a ton of really unique data and creating the most effective ways for brands to do this. Youre collecting it through cookies and things like that. And direct questionnaires as well. Users are providing data. My thought was going to be how should we think about the privacy issues in regard to advertising because one of the things we keep hearing more and more about is how much of our data is getting sucked out while were doing what were doing and then either potentially exposes us or not. Its all about transparency. So its all user provided data so theyre answering questions and they know that data is going to be used for remarketing purposes. Do we really know because sometimes we click that thing and you just say okay because you never really read it . Our goal with data is not to have it be a privacy issue but simply to help make better recommendations on the products you might be interested in. Jonathan how did you get interested in the ad space . Youre awfully young. Seems like a business oriented this like go pro where you were surfing and found it. It came from being a college student. We were online watching hulu and we did something that a lot of folk versus done at home which is instantly open a new tab and went to facebook. That kind of experience made us realize that theres an opportunity to create a company around engaging with advertising and really there was an opportunity that we were missing because we were on facebook. So do you have another idea after this company . We have so big ideas. Elon musk is probably my favorite entrepreneur so im driven by him to think outside of the box and outside of this world. So you dont make the things those Little Things you put in the little bit piece . No. Different business. I prepared for the total wrong i love those Little Things. I thought you were going to ask him about the alligators on the shirt. Lacoste. You know those that you put in your crocs. Ill look into it. A differ kind. You like them right . Love them. I love harvard. One night a week though that sounds like my junior year in boulder. When will you graduate . Its like a nine year program. I have a lot of credits yet. Nine years of your life. Thats like high school. Thats good. Thank you for coming in. Congratulations again. Appreciate it. Time for the squawk planner. We have weekly jobless claims. Walmart will post the latest Quarterly Results and in washington its the final day of the white house summit on countering vieolent extremism and thats todays squawk planner. Hello. When we come back this morning, the politics of trade and the role of the almighty tlar dollar. And then later our guest host is the private equity legend in the process of closing the deal on what could be the biggest, priciest u. S. Hotel sale ever. Also Wisconsin Governor Scott Walker stopping by the set today as he considers a run for the white house. Squawk box will be right back. Ameriprise asked people a simple question can you keep your lifestyle in retirement . I dont want to think about the alternative. I dont even know how to answer that. I mean, no one knows how long their money is going to last. I try not to worry but you worry. What happens when your paychecks stop . Because everyone has retirement questions. Ameriprise created the exclusive confident retirement approach. To get the real answers you need. Start building your confident retirement today. Anything . No. You . No. Aflac what are you guys looking for . Claims legend has it these hills are full of em. It can take months for an Insurance Claim to surface. Claimin takes patience. Aflac paid my claim in one day. They got some newfangled kinda one day payin machine . Hehehehe yea, i got aflac at work. Aflac. In just one day, we approve and pay. One day pay, only from aflac. Aflac. Welcome back everybody. The white house is working on a trade agreement enjoyed bipartisan support. However some believe a new bill aimed attackeling currency manipulation by trading partners could derail expansion talks. Joining us with unsight is tony the managing director of Hamilton Place strategies. Also is scott paul he is the president of the alliance for American Manufacturing and scott, lets start with some of your thoughts on this. You think that currency manipulation is an issue that does need to be tied to these talks. Explain why. Absolutely i think we erode the benefits of free trade if we let this most of 21st century protectionism continue. We have a history of trying to open markets with our Free Trade Agreements. Weve addressed intellectual property and tariffs. But we have some Companies Gaming the system. China and japan in particular. I think our concern is were not going to get that level Playing Field for american workers, for American Business unless we deal it. Its not only me. Its paul krugman. Its rob portman the former usdr under the bush administration. So these arent folks that want to kill a deal. They want to make it work right. If you look at currency manipulation, thats in the eye of the beholder. There are people who could look at what our Federal Reserve has done for last seven or eight years and say weve been engaged in the same currency manipulation. Sure, they can say that. They would be wrong. I mean the imf, wto have laid out strict guidelines on what it is. It includes the following tests. You need to have a current account surplus. The United States hasnt had one of those for decades. Im not sure we ever will. Massive holdings of foreign currency reserves. In the case of the United States, we hold a little more than a hundred billion which is a tiny part of our economy. When you take a snapshot of japan and china in comparison to that, you can see a world of difference. So its a nice talking point but the reality is these are wellestablished rules. Reagan, jim baker back in the 1980s did the plaza accords to get Monetary Policy right. And we need to do it in the tpp because its the foundation for trade policy in the 21st century. So eurozone manipulates the currency. Germany . I dont think you could say that. Germany doesnt . You dont think germany is benefitting from having countries in the eu that their economies are basically the euro is like the drachma. Youve got the periphery countries. You saw where the swiss franc went. Why wouldnt the deutsche market be there if it wasnt for the euro. Thats the same thing. You could look at the swiss and say yes theres they stopped manipulating. But germany still has the benefit of the weak euro to export to the rest of the world. But were not talking about a Free Trade Agreement with europe. Were talking about japan. Look, i dont think tpp is going to pass unless you get something done on this. You have chuck schumer. You have Jeff Sessions. I dont know another thing they agree on. Im shocked if they agree on anything else. So this things not going to pass unless theres currency in it. Tony you have the opposite view. You think this thing wont pass if currency manipulation is attached to it. Actually, there wont be anything to pass if currency manipulation is attached to it. Because, honestly any country in its right mind wouldnt sign a trade agreement where the United States gets to unilaterally decide what is manipulation measure it, and then apply slap on duties to any other country. In fact, the United States wouldnt agree to a trade agreement where another country gets to sit as judge and jury on these issues. Scott mentioned art lapper. Take a look at what art lapper said. He said japan wouldnt qualify as a currency manipulator under his test. So it is in the eye of the beholder. Brazil would have a very different view on this. By the way, you know people like Jeff Sessions who is back in this provision, he is the one who accused the fed of trying to debase the dollar back when it was doing qe. There are a lot of views on this. And the problem is that its not that its not even really an advantage for a country to do this. If you think about a world with Global Supply chains and markets. There is no great advantage of trying to manage your currency. But we do know that no country would sign onto t rkspp with these provisions in it. Ironically the great winner in that would be china, not our trading partners. Because tpp is you should see tpp as almost a bullwork against china. This is a regional trade agreement where were going to set standards on how we trade and across a whole array of industries. Theres a reason chinas not in this agreement. Its all the other pacific rim countries who are going to be part of this agreement. Scott, how do you respond to that . Look. I think tonys right that this sets the foundation for whats going to happen in the future. I disagree on what should be in the agreement. If were going to have a 21st century trade agreement, we need currency in it. Wait a second. What about his idea that the is is laid out so the United States can decide whether your currency will thats not the way it works at all. How does it work right now . Were party to the to the imf. There are procedures in place. Same with the wto. So it would be inconsistent for an agreement as large as the tpp to not include some currency disciplines. Who would decide the currency disciplines . By the wto . By the imf . Its the same set of criteria is it right the United States its the United States gets to be the judge and jury on it, scott. Absolutely not. I mean theres two elements to this. One is through our trade laws. We have systems right now where you can bring a trade case. Its adjudicated. The u. S. Has a strong record of upholding its trade law enforcement. But its these kinds of in the tpp you would have criteria that are internationally agreed to. So this is something that japan has agreed to as pa rt of the imf. You would make it enforceable but teletpp. If japans not doing it right now, i dont see what it benefits. The benefits of free trade would flow greatly to the United States. You said they are doing pipt. I think they have a history of it. I think theyre disturbing trends. I look at the weak ness of the yen. But weve got to help manufacturing and make sure we have a level Playing Field for our guys moving forward, absolutely. Tony, quick last word. Look. We wont have to have this discussion about how impossible it is to implement this thing because this is intended to kill tpp. It would kill tpp if it succeeds. And its a wrong policy. Its never good to weaken the dollar and slap on tariffs. Thank you both for your time today. Coming up weve got Barry Sternlicht. Stay with us. Theres nothing more romantic than a spontaneous moment. So why pause to take a pill . And why stop what youre doing to find a bathroom . 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Com greece raising the secure financial lifeline requesting extension of its loan agreement. Will the rest of europe accept greeces terms and head off a potential grexit . Scott walker is one of the standouts in a crowded gop president ial field. He will join us on set to talk labor, immigration. And the rise of re generon. Stock up more than 3,000 in six years. The ceo will be here as the second hour of squawk box begins right now. Live from the beating heart of business, new york city, this is squawk box. Welcome back to squawk box here on cnbc first in business worldwide. I am joe kernen along with becky quick and its your birthday. Its your birthday andrew. Andrew, its your birthday. Its your birthday. Happy birthday. Why did you have to do that. Its your birthday. Youre 38 years old. Your sign as a pisces but youre right in the middle. Pisces and aquarius. I asked if you were a fishes. He still uses that joke and thinks its funny every year. Every year. I just i know. Youll see. Our guest host this morning is the ceo of private Investment Firm Starwood Capital group with more than 42 billion in assets under management. Barry sternlicht is joining us for the next two hours. Always in demand. People love when your on barry. They do. Its true. Well get to barry in a minute. But first becky has your morning headlines. Thank you. Among our top stories at this hour, greece is desperately trying to avoid running out of cash within weeks. Athens requested a sixmonth extension to its eurozone loan agreement. That move is boosting hopes for a lastminute compromise between the new greek government and exu leaders. Also Oil Prices Plunging once again this morning on a rise and fears of oversupply. In Corporate News we are watching shares of tmobile. The company earning 12 cents a share for the Fourth Quarter. That was 7 cents better than expected. Revenue was well above the consensus as they added 2. 1 million subscribers during the quarter. Weve got weekly jobless claims hitting the tape at 8 30 eastern time. Expecting 290,000 first hief time fileants. Forecasters calling for a rebound in february following two months of declines. And walmart set to report Fourth Quarter result. It will give us a read on the Holiday Season and the decision to spread black friday sales over five days. And later this morning youre not going to want to miss it because Carl Quintanilla is going to be sitting down with Doug Mcmillon on squawk on the street. Turning to the race for the white house. Sheldon add l son and stanley hubbard. That maybe this guy is just a maichb. Maichb. Scott walker joins us now. I would have introed you different governor. Weve been together every step of the way on this show since your first election your attempts at that point to i dont know to get your states finances in order. And the say credit cows of the left that you took on. And you earned enemies nationwide. Im not going to recuse myself. But maybe andrew is here to grill you happy birthday, by the way. Thank you. Buttering me up early. Im just going to lob him like this. How many elections have you had in the last six years . Three elections the last four years. In the last four years . Thats right. In the last four years i won three elections. Last two i was the number one target. Nationwide. Galvanized. Nationwide. Prounion forces galvanized. Head of the Teachers Union afscme, all made me their number one target. We took the power away from the Big Government special interests and put it in the hands of the taxpayers. And your state is so true blue. You did it in wisconsin which was really the birthplace of the public union wasnt it . Collective bargaining starts there. Afscme started there. Although many years before the Republican Party also started in wisconsin. Like the midwest, its a state where even though theres more democrats than republicans in most polls, in the end they vote the person over the party oftentimes. Thats how you decide elections. I took almost unanimous support amongst republicans. I won independents. I think largely in times of crisis they want leadership. It would seem if theres an objective person watching the way the governor of illinois approached that states problems and the way you approached it i would think most reasonable people would say it looks like the way to do this maybe isnt just raising taxes to cover everincreasing state budget. And maybe you have i think even the people of illinois did you win the ideological battle of which way to go . The New York Times hasnt declared you a winner, ill tell you that many up. Theres a lot of truth to that. Theres a major difference. How much better is wisconsin doing than it was . Theres a reason that Bruce Browner is now the leader of illinois. Illinois has one of the worst ratings in the country. The 234u governor proposed major changes there. And their Pension System is not fully funded. I this week did another opening for a business a Manufacturing Company in southeastern wisconsin that came up from illinois. Why . Because our tax burden is down. The economy is moving up. Weve got a stable workforce. Weve got all the advantages you want. Theres still plenty more work to be done but there is a sharp contrast, no doubt about it. We can go right to the election coming up. You are have staked out a position, probably to the right of maybe the other person that people talk about the most i guess, because you both have double digits. Thats governor jeb bush. Youve got are you happy to have the Koch Brothers associated with your name . Because thats another theres more philanthropic endeavors named after koch. But you look at how theyre pigeon holed by the progressive media, they seem like really bad guys. You want them on your side . Ill take anybody and everybody should i choose to be a candidate. And right now were technically in the exploratory stage. Jeb bush is a good friend of mine. I have a great admiration for him. But i think for us to win not just as republicans but ultimately as americans, we need new faces from outside of washington with bold ideas and a track record that could do it. I said off camera what about bush walker. And you said youd serve with any of these guys. Just about. I like marco rubio a lot. I know a lot of the governors. Were blessed in the Republican Party to have a lot of good quality perspective candidates out there. Somebody is going to take on washington. The problems we have in america are largely different. The last state of the union address, what i heard was somebody who said i want to grow the economy in washington. Six of the top ten wealthiest counties in america last year were in and around washington, d. C. I think most of us as americans, we want to grow the economy out in the cities and towns and vil anl villages out across the country. I think theres a fundamentalal shift that needs to happen. Were watching something i think most of us thought went to war in iraq i didnt notice anybody spreading iraq wasnt spreading across the entire middle eastern scene. Now we have a new guy in libya and theyre forming a state with the sole objective to hurt obviously Christians Jews western democracies and theyre telling you what theyre doing. And theyre beheading people. Weve never seen a bad actor like this. What do you think about all the is . Its a worry not just in the middle east. I get a threat assessment from the fbi. And i worry about it not only spreading around the middle east without getting into specific details and violating the confidence of those updates, i worry about it across america. I worry about it in other places around the world. Weve seen whats happened in europe. We most noticeably saw what happened in france. Its not if theres an attempt on american soil its when. Ive got two sons 19 and 20. For them and those younger, i want to make sure it never happens on american soil. I think we need to take the fight to them instead of waiting for them to come to us. Its beyond american allies. Israel we need to step up with. Uniting kingdom, france germany, japan. But i think others. Look at jordan, turkey saudi arabia, those who are not traditionally military alleys. Governor is that an argument for american boots on the ground too . I think you should take anything. If youre serious about it. Ronald reagan was arguably one of the best president s for foreign policy. We had he lowest levels of military engagement in the world. Why . Because the people around the world particularly our adversaries knew he was serious. When he fired air Traffic Controllers early in his presidency presidency, they didnt know he wasnt serious. And more importantly in ussr at that time and soviet union and elsewhere, they knew not to mess with us. We need a leader a commander in chief but to get back to that place, do you need to put boots on the ground given we have gone into countries and withdrawn . You shouldnt take it off. Im saying at this point to prove the point that you want to make you think you need to. When you say youre going to draw a red line and somebody crosses it you need to act on it. We were talking about this off set. When youre a parent my kids are 19 and 20 but when they were young we never said one thing and had the other parent back away to it. The kids knew they were going to push the line every time. Thats the same thing with foreign policy. Youre going to draw a line in the sand. I dont care whether its in syria or iran or anywhere else around the world. You need to say if you cross this now, maybe he shouldnt have made that commitment in the first place. But whether its special ops or other engagements out there, weve got to do what it takes to keep america safe. Back to domestic issues. We had john harwood on earlier talking about the Economic Analysis came out of the white house today. On income inequality income disparity. When we were in davos, Larry Summers had had sat on a panel that came up with i think, ten ideas. And theyre most of them are basically the opposite of what youve done in wisconsin. Raised taxes on the rich fund more education, embolden unions. Embolden unions. Raise the minimum wage. Is your message and that is you know the republicans did well in the last election. We have a very short memory in this country. We been swinging back and forth every two years on what we think the right ideological moves are. Is union taking on unions going to be something that resonates or is it going to hurt you . I think particularly Public Employee unions most look at what they do. In my state, nbc did an exit pole after my recall election and found 40 of the Union Households voted for me. A pundit said how could that happen i thought you were antiunion. No im proworker and protaxpayer. A guy who works a second shift at a factory, his wife is a nurse, they say i pay 25 of my health insurance. I match my pension or my 401 k . Why is that unreasonable for Public Sector employees to do the same thing . And we say its reasonable. We have to pay high property taxes. We pay high taxes. Why dont we see our taxes go down and see our neighbor do the same thing. They think its a matter of fairness. I think conservatives could win the fairness argument if we put the power back in the hands of the taxpayers. And for income issues. I think we ought to talk about how we lift americans up entirely from growth. Let me ask you quickly. You were at a dinner last night with Rudy Giuliani spoke. You were sitting just a few chairs away when he said i do not believe and i know this is a horrible thing but i do not believe that the president loves america. He doesnt love you. And he doesnt love me. He wasnt brought up the way you were brought up and i was brought up with the love of this country. What do you think of those comments . The mayor can speak for himself. Im not going to comment on what the president thinks or not. Ill tell you i love america. There are plenty of people democrat, republican independent, in between who love this country. I think we should talk about ways we love this country and we feel passionately. But do you agree with those comments . Were you offended by those comments . What was your reaction when you heard them . Im in new york. Im used to people saying things that let me ask you, do you think america is exceptional . Id like to think america is exceptional, yes. In the same way belgians think theyre exceptional and europeaning think theyre exceptional. Or is america actually exceptional . Id like to. The simple answer would be yes. That would have been a simpler answer than i would like to think it is. Right . Yes now im grilled on my birthday. There are certain people that might think, you know that may play into that perception. And im not going to touch this hot potato either. Im just telling you yeah. So the president has two degrees. I think w had two degrees with didnt he . You have no college degrees. Is that a problem . No. I left my senior year of college to work for the American Red Cross like a lot of people i had a chance for a job out there and took the opportunity. How many credits did you have left . About year if i went back. And ive got two kids in college. Im not disparaging college. Both my kids with i want them to have a degree. If people say thats a problem like one of my former governor colleagues said the other day if you look at apple, facebook all those have similar ceos and founders. If i hadnt had that physical biochem course how important is it that the field narrows quickly . If you look at the last election, there was a period of which there was a cast of thousands all trying to beat each other up and arguably that process was not a good one for the party. There were 23 debates. I think Reince Priebus did a nice job of narrowing it down speeding up the process, getting it done by the spring. Do you have any team debates . No i think its about eight or nine total. It narrows it down by twothirds. It shifts, it starts in the key Battle Ground states in the midwest and elsewhere. I think in the end itll be a good process. We had George Pataki on the show a couple days ago. It just feels like theres just more and more names coming up. Thats a sign of optimism. To your point about america, i think a lot of people love this country, would like to see it do better. Id like to see everyone do better. Not pit one group versus another. Id like to see us have a stronger presence in the world to make sure that the things we talked about, the radical islamic terrorists out there causing havoc elsewhere dont come to america. Governor, thanks. Come back. Will indeed. I like the set here. It is. Its very elitist, though isnt it . When we come back weve got a busy hour still to come. Were going to get thoughts from Barry Sternlicht, his thoughts on the economy and where hes investing in europe and the u. S. And at 8 30, the ceo of regeneron will join us. Then the voice of american greed is going to join us. Actress stacy keach will join us. Were back in just a moment. Opportunities arent always obvious. Sometimes they just drop in. Cme group can help you navigate risks and capture opportunities. We enable you to reach Global Markets and drive forward with broader possibilities. Cme group how the world advances. Welcome back to squawk box this morning. Our guest host this morning is Barry Sternlicht. Starwood capitals ceo. We have a lot to talk about. Where hes putting his money in europe and here. Before we do that since you made your name and your life at starwood and there was a bit of starwood news this week with the ceo being pushed out and a new one coming in i think, i want to get your thoughts. What do you think happened here . Fritz Van Paasschen were talking about. I know who youre talking about. I do Pay Attention to things like my alma mater. I think starwood had an issue in the market place which i think the board probably kept hearing from shareholders and maybe even hotel owners. Which is theyre moving slowly. And Marriott Hilton have done a better job addressing the millennials. They hint a lot on innovating. It was soft innovation. Technology. But as far as new product lines like the hilton gardens or courtyards or some of the things marriott had done starwood got caught with a Big International footprint. Much bigger than hilton. That turned out not to be the right thing to do. Because he had moved into china and elsewhere. We were the biggest upscale company in china. They did a good job of continuing to grow. In fact, frits focus on international. With all the travel problems and places like paris, it hurt them. Is that something you could have seen, you think, a year out . It was the right term it was the right strategy. The growth and travel is going to be in asia. It is quite valuable over there. But you know its hard with a Hotel Company. You put in shortterm they dont pay you well. But sometimes those acorns grow into oak trees. So would you have pushed him out . Was he the right guy . Wrong guy . I probably shouldnt say that. I think its very important that a leader in the Hotel Industry be both creative and compassionate. Youre running a firm with 100,000plus employees and go to battle for you every day. Was he those things . I dont think that was his greatest strength. B i think hes a very smart guy. His strategies his style of management was quite different than mine. In what way . Well i was really in the field. I really like people. So, you know my closest relationships were the housekeepers and the people in the kitchens. And i grew up that way. So for me i think and i think that sets an example. Its like tell a hotel person. Everybody knows what youre doing. The whole way you behave is really important as a leader. We need a charismatic leader in the industry. At hilton chris is very good at that. I think arnie has done a good job of that at marriott. I think mark at hyatt has done a good job of that. Its important because this is a team and its a very inbred industry. Everybody went to cornell school. The whole industry. Is it surprising to you that they are doing the transition seems to be so abrupt . I mean they have an interim ceo opposed to having a plan. You heard gurglings about this. I have to say they are hard to do business with. We were a large owner of Starwood Hotels. Starwood capital, our firm, actually we created Starwood Hotels and they had they name from us. I gave it to them. I think also they dont have a financial strategy. Ive been on the board of estee lauder for years. What do you think happened . Is there a back story we dont know about that you do . Meaning, it seems odd to me if you just thought the company wasnt doing so hot, you would actually take some time and figure out who the next ceo is. If you cut them off at the knees and put in an interim ceo happened. Clearly something bubble ld up. I think most people thought they were moving their offices to mumbai after being announced. Something happened. What happened, i have no idea. I actually got a phone call from adam aron yesterday and email from frits. I wish him luck. Its like watching your kid grow up. You want them to be competitive and innovative. I think the company has to get back to that spirit of innovation. Thats leading, not following. So well see. I mean were launching we have a new Hotel Company in europe that were launching in london with 70 hotels called the principal group. Were launching two new brands. Just made them up. And its not it hasnt opened. How does that happen . Serendipity. I dont know. I mean with its emblematic of the wave of foreign capital coming to the United States and, you know you have a jewel box. That is a trophy. Thats kind of like even though theyll have a yield on their capital, it could be a good deal for them. I think our record will be passed. Even with the foreign currency fluctuations with the strong dollar. Its fascinating. People are saying my currency is depreciating. So the race is to get out of those currencies so they can see what those governments are doing. Its both. Its more expensive. So the Real Estate Market youve seen the foreign buyers kind of disappear from new york city. And the russians are gone. With the crash in oil, some of the middle eastern money seems to be pulling back. Were being replaced right now with Chinese Capital. Theyre thinking about depreciateing their currency right, so theyll lose purchasing power. Also theyre being told to diversify. You saul the waldorf sale. Im sure youll see three more. Yesterday it was announced on buying the Chinese Insurance Company that bought the waldorf just bought an Office Building in new york. If you think about it you know theyre way underweighted here. They have almost no footprint. And theres a number i saw yesterday that they expect Chinese Capital this came from auction. Com which is a company i have an interest in thats online selling houses. The amount of chinese interest in that vertical is doubled year over year. So 31 billion in purchases of chinese nationals buying stuff in the u. S. Versus 15 last year. Thats what theyre expecting. Its interesting. Weve got to press the pause button. Weve got barry for the next two hours. Thank you for answering those questions about starwood so candidly. Well come back to you in a sec. Listen to this in the meantime, people in alaska are the happiest people in america. Thats according to a new index released by gallup healthways. Results are based on interviews and take in physical social and financial well being as well as community pride. Hawaii, south dakota wyoming, and monday round out the five happiest states. After the break we will reveal the five most miserable states in america. Then the ceo of regeneron will join us on set. One of the companys drugs performing better than competitors in a key test. Stick around. Well be right back. Anything . No. You . No. Aflac what are you guys looking for . Claims legend has it these hills are full of em. It can take months for an Insurance Claim to surface. Claimin takes patience. Aflac paid my claim in one day. They got some newfangled kinda one day payin machine . Hehehehe yea, i got aflac at work. Aflac. In just one day, we approve and pay. One day pay, only from aflac. Aflac. E financial noise financial noise financial noise financial noise automotive innovation starts. Right here. With a control pad that can read your handwriting, a widescreen multimedia center, and a headup display for enhanced driver focus. All inside a redesigned cabin of unrivaled style and comfort. The 2015 cclass. At the very touchpoint of performance and innovation. See your authorized mercedesbenz dealer for exceptional offers through mercedesbenz financial services. [ male announcer ] your love for trading never stops. So open an account with schwab. And when a market move affects, say a Cloud Computing stock youre holding, we can help you decide what to do. With tools that help you see how market activity is affecting your positions. So when the time comes to decide whether to scale in or scale out. You can make your move wherever you are. And start working on your next big idea. Welcome back to squawk box thonk. Among the stories that are front aerocenter germany rejecting greeces application to extend their loan agreement. Also the euro falling on that news. And we should tell you this morning, pinterest in talks to raise in a round of funding. That would double the sites valuation to 11 billion. Also samsung buying mobile wallet startup looppay. And to launch a cell phone pamts service to compete with apple pay. Before the break, we told you about a new index that ranks states using several categories including Health Financial stability, and community pride. Alaska was ranked the happiest state in the union. How about the most miserable . That would be West Virginia according to this poll. It earned that distinction for the sixth Straight Year ranking worse in the country in two categories. Motivation to achieve goals and physical well being. West virginia was followed by kentucky, indiana, ohio, and mississippi. And coming up the meteoric rise of regeneron pharmaceuticals, its one of the best performers in the s p since the market bottom in 2009. Up more than 3,000 . The companys ceo will join us on set next. Tigers, both of you. Tigers . Dont be modest. I see how youve been investing. Setting long term goals. Diversifying. Dip you got our attention. We did . Of course. Youre type e well, i have been researching retirement strategies. Well thats what type e s do. Welcome home. Taking control of your retirement . E trade gives yools and resources to get it right. Are you type e . Welcome back to squawk box. We are talking pharma this morning. Meg tirrell joins us with a special guest. Hey, meg. Vision loss associated with diabetes. Comparing it directly with two drugs from roche. And it looked like a win for you guys. Maybe you can explain the significance of this study. Sure. The study was what they call a comparative effectiveness study. They wanted to look at the different freedoms for diabetic and see which would come out the best. Before we get into the study, we should remember this is a whole new era in general. The enemy was not each drug. It was the macular adema which causes blindness. Up until recently the best treatment was to take a laser and burn out parts of the eye and hope that would save the rest of the eye. You know it had some effect, but if you looked at our data that was our basis for the approval, its a much better idea to treat with eylea. The question is what is the best antiagent. If you look at the study, its certainly in those patients who had poor vision when they started the study 20 80, lets say. You looked at them compared to three drugs. Eylea performed the best. This is a governmentsponsored study. What they looked at we the drugs are their cost. One is a cancer drug but its used off label because its its 1 500th of the dose of the eye drug. But still, a big difference. And what the new england journal and editorial recommended is for people with worse vision they take your drug worse. But for people who start off with okay vision they should use the cheaper drug. What do you make of that . Were happy to hear they recommend our drug to the people who need it most. But its worth debating what to do in patients who have a little better vision. Youre going to miss p on the show i heard, when she won the best in show she didnt win for one thing going for her. She had a lot of things going for her. I think a lot of things were studied in this nih study which was not just the visual outcome. But they studied how much laser therapy you needed to rescue if you werent doing well how many injections you needed and how much adema you had in the eye. Even the people who had good vision where the outcome was the same eylea performed better. It performed twice as well. Its kind of amazing. Theyre saying use the other because it saves money in the process. If its your vision youre thinking otherwise. Cost has been a big issue. So everybodys really focused on this. Another thing to ask len about is cb surks came out with a new paper saying the drug wills cost 150 billion a year potentially at peak if theyre given to everybody who cant tolerate statins. What do you make of that in you remember . Its wrong. I can tell you its not going to be 150 billion a year. And thats a little bit of i would say, gainsmanship. Theyre trying to obviously come in and get the discussion going with a little bit of fear to the system. Its just not true. Were going to come out with a fair price. Its not going to be used by all those millions of people. And i think that its good debate to have. We need to discuss the problem. It doesnt do us any good to spend all these hard years in the lab for so much time. You know my partner from the beginning has worked and killed himself to invent these drugs. It doesnt do him or us any good if people cant afford them. Do you worry about the move not just from cvs but also express scripps . About trying to set limits and decide how patients are going to be prescribed drugs and which drugs. Do you worry about them in the process . Theyre in the process whether i like it or not. I would prefer theyre not, but they are. So we have to respect the process. On the other hand we have to do it realistically. We have to remember what everybodys incentives are. Theyre very worried about the course. Some of them dont have risk and theyre worried about how much of a discount they can get because thats how they earn their keep. At the end of the day, were still all fighting for the same thing. At least at regeneron were fighting to make sure we can bring safe and effective drugs to patients and that they can afford to get them. If they cant, then were going to make sure through our various patient assistance programs they can get it. Well thank you so much for joining us. Thanks for having me. Coming up when we return the 100th episode of american greed premiering tonight on cnbc. The show has profiled 161 criminals representing more than 3,000 years sentenced and drawing attention. Actor stacey keach joins us next. You may recognize him as the voice of american greed. Ameriprise asked people a simple question in retirement, will you have enough money to live life on your terms . I sure hope so. With healthcare costs, who knows. Umm. Everyone has retirement questions. So ameriprise created the exclusive confident retirement approach. Now you and your ameripise advisor. Can get the real answers you need. Start building your confident retirement today. We live in a pick and choose world. Choose choose choose. But at bedtime . Why settle for this . Enter sleep number. And the ultimate sleep number event going on now. Sleepiq technology tells you how well you slept and what adjustments you can make. You like the bed soft. Hes more hardcore. So your sleep goes from good to great to wow now we can all choose amazing sleep, only at a sleep number store. Right now save 50 on the ultimate limited edition bed. Edded edded edded edded can it make a dentist appointment when my teeth are ready . Tell the doctor how long you have to wear this thing . Can it tell the Flight Attendant to please not wake me this time . The answer is yes, it can. So, the question your customers are really asking is can your business deliver . Welcome back to squawk box. All day today were celebrating the 100th episode of cnbcs american greed by looking back at some of the shows greediest scoundrels. A small wall street firm offers to host a Public Offering of zzzz best stock. There is just one problem. Once a decision had been made to take the Company Public barry called me into his office and said i have a confession to make to you. And i said what is it. He goes one of the jobs that youve been trying to hard to raise money for, he goes one of them was a fake. And i was, you know, stunned. So who was the dirtiest con . Here with us now is the actor stacy keach. He is the voice of american greed. When you begin speaking people will know immediately. Thank you. Im not the dirtiest con. But you do have that voice and it is an amazing thing, 100 episodes. Who was the dirtiest con in your mind . You know, its a tough one. But i think that tonights episode has one of the guys that is probably as prominent as anybody in the realm of scum bags. Barry mingo. Zzzz best. Zzzz best carpet cleaners. He was a millionaire by the time he was 17 years old. He started when he was 16. The thing about these guys is that so many of them are so charismatic and as an actor, its a great resource for me. Because i get to watch these behaviors, you know these sociopathic behavioral strange when you were first tapped to do this did you think you were going to do just a couple of these things . We didnt know. We had no idea. But, you know, in speaking with our producer Chuck Schaffer when we first started we had a very short season. I think our first year was six episodes. Something like that. And then we got picked up for another year and another year and another year. Now were at 100. No shortage of scoundrels, huh . Or greed. Barry mingo, hes out and doing something again, isnt he . No. Is he still in jail . Yeah. Hes still in jail. He got out then he was trying to teach accountants how to spot fraud or something. Yeah. He did seven years. Then he became a pastor in the church and he scammed all of those people. No, he did . Absolutely. Then he started his own fraud organization. Yeah. He was consulting. Nobody knows fraud better than i do. And he brazenly and then he ripped all those people off as well. Beyond the fact that youve created this dramatic show what do you think it is about greed and these scoundrels that people like to watch . Well you know i think everybody we all have an element of greed in us. We all want more of something. Whether, you know, hopefully its a good thing. Love or chocolate or something. Hair. Yeah. Cross that off your list. Not going to happen for you. But, you know its something we can identify with. Do you ever root for the scoundrel . Or always for the cops . You dont always root for the cops. And you dont root for the scoundrel, but youre fascinated by the scoundrel. Because we all want to trust somebody that we you know that engages our sympathy or our trust. Twoept we want to invest money. A lot of people have invested their life savings for their futures and for their kids and for retirement. And they get burned. How many people do you think start out, you know not necessarily wanting to end up there and somehow something goes amiss here and they cover it up with a little move here. You mean they start out with a legitimate not necessarily legitimate. But they have to cover loss and then they get in deeper and deep perp about 50 . I wouldnt say quite that much. Some of them are just bad from the beginning. Yeah. I think so. But youre right. Some people start off and the ponzi scheme develops as a result of necessity. In order to rob peter to pay paul. And they get deeper and deeper. Horrible. I think thats compelling too. You going to do european greed or is this just american greed . Weve talked about international. International greed. Yeah. Weve talked about it. I have an acting question. Craft of acting question. The voice, i know its your voice. But do you put it on a little extra when you do it . I do. Theres a little bit more gravitas with american greed. And was it always that way . No, no. Did it develop over time . It was developed over time. Yeah. Its something yeah. John houston had this great voice and i had the great privilege and honor of working with him a couple times. And i sort of call him to mind when i american greed. Theres a certain basso quality that its a character. The narrator is a character. Its like you know youve done a lot of projects. Is there one project you wish you had been in over the years . Oh my gosh. Many. Many. Yeah. Thats a tough one. Well well, i wrote a book a couple years ago. I talked about i came that close to playing Jack Nicholsons part in one flew over the cuckoos next. Do you have predictions for this weekends oscars . Oh, gosh. Its a tough one. Its a tough race. Best movie . Best actor . Actress . Very hard. Theory of everything was one of my favorite movies this year. But american sniper is a great film. Birdman is a great film. Im being diplomatic. Well thank you for coming in and congratulations again on 100 episodes. Thank you. It airs we should tell everybody tonight on cnbc 10 00 eastern time. And heres to the next hundred episodes. Coming up guest host barry minkow im sorry. Barry sternlicht. Not funny. Weighs in on the health of the Real Estate Market. Then the Venture Capitalist investor who grew up living poor and above a laundromat is now worth a billion dollars. Weve seen a big increase in home prices since 2012. And i wouldnt bet on that continuing. Home prices are not theyre at about the right level based on history. So maybe they wont go anywhere in the future. In the near future. That was Robert Shiller on squawk box yesterday giving us his take on the future of home prices. Our guest host today Barry Sternlicht is part of tripoint homes. His point is weve seen an awfully big run very quickly. Maybe for the near future there isnt so much gas left in the tank. Dont agree. Why . I think its a major asset class thats trailing asset bubbles, the inflation of prices. And were growing organically. There was an issue on actually labor in places like texas thats going to clear it up as the frackers come off and do wall boarding. Not wall boarding but making wall board. But really we were having trouble in houston finding workers. Dallas. Some of the markets are doing well. Seattle, San Francisco bay area. Apartment rents are super high and keep going up. So the buy sell alternative is staying in balance longer than people thought. Its cheaper to buy a house and finance it than it is to rent in many markets. Its one of confidence in the American Consumer. Hes making shortterm decisions. He doesnt trust the government right now. Hes concerned. He doesnt understand the impact of his health care programs. And hes confused. It all goes to our national politics. Youre just not seeing the consumer. Hes buying a car, but hes not making that house expenditure. And hes financing a car at zero. From just what happened with the housing bubble bursting . I think investors including ourselves through our company, we bought a lot of houses and backed away as the equation fell apart. But that was Good Business buying houses and renting them. 6 yield which you cant find anywhere today on 17,000 houses we have. So i think the housing sector is going to be a major asset class in the country. I would like to play the American Housing market if i could. If i could buy anything why cant i buy a housing read. But it goes back to financing. I think people are nervous about taking the mortgages. I actually you know i was looking at a statistic that jpmorgans deposits are at an alltime record high and loans were about what they were at the peak of the lehman crisis. Deposit has gone straight up loans are flat. Banks are sitting and not lending because theyve got other things to do. Were just not generating consumer demand. It is the fact that the middle class is not moving up even ats the average Family Income in shrinking. They dont know theyre nervous. I mean its a general we own a lot of malls. You see it in the retail sales too. So i think its all about the same thing. We need a little confidence. Were going to have more with Barry Sternlicht in a minute. He is our guest host for the next hour. But coming up we have Quarterly Results from walmart. Plus miss p will be here. The best dog now wait a minute. I think my dogs are the best dogs. Objectively someone picked this dog. Will join us on the squawk set. Stick around. Barbara just bought a bike. She wrote a tweet about it. You cant learn much from that. But take data from millions of tweets combine that with your companys supply chain and sales data. Apply ibm analytics and expertise, and all of a sudden, you can learn which bikes to build what to make them from, where to sell them. Because barbara and the world just told you how to build a better bike. Theres a new way to work and its made with ibm. The road. It can bring out the worst in people. But the mclass scans for danger. Corrects for lane drifting. And if necessary, it will even brake all by itself. It is a luxury suv engineered to get you there and back safely. For tomorrow is another fight. The 2015 mclass. See your authorized dealer for exceptional offers through mercedesbenz financial services. Daughter do you and mom still have money with that broker . Dad yeah, 20 something years now. Thinking about what you want to do with your money . Daughter looking at options. What do you guys pay in fees . Dad i dont know exactly. Daughter if youre not happy do they have to pay you back . Dad it doesnt really work that way. Daughter you sure . Vo are you asking enough questions about the way your wealth is managed . Wealth management at charles schwab. Retail detail. Walmart making headlines this morning. Well break down the news and talk Quarterly Results. Social and capital collide. Meet the billionaire disrupter who had some of the biggest startups. Plus a regal beagle on the set. A thorough going over. Are all that thorough. Am i seeing right . Wheres she putting her hands now . Westminsters top dog is here now. Hate to go out on a date with judge eddy franklin. What it takes to win in the dog shows as the final hour of squawk box begins right now. Live from new york where business never sleeps, this is squawk box. Welcome back to squawk box here on cnbc first in business worldwide. Im becky quick along with joe kernen and andrew ross sorkin. Joining us in studio this morning is Barry Sternlicht. He is Starwood Capital founder and ceo. Were less than 90 minutes away from the opening bell on wall street. Been watching the futures this morning. And after a slightly lower close yesterday, you can see red arrows once again today with the dow futures down 27 points. Heres whats happening right now. Germany is rejecting greeces application to extend the terms of the bailout. That news spooking investors worrying that athens could run out of money in the coming weeks. And check out shares of crude prices right now. Or rather check out prices of crude. Among the catalyst a rise in inventory and worries about oversupply. And walmart expected to earn 1. 5. A share. Thats on revenues of 132 million. Carls got an interview with that. Billion. Did i say million . Billion, youre right. Good number for a quarter. Not so bad. Few stocks on the move this morning. Tmobile u. S. On the rise this morning. The mobile operator earned 12 cents a share for its latest quarter. 7 cents above estimates. Revenue also above forecast. And marriott reporting quarterly profit of 68 cents a share. The Hotel Operator also giving some upbeat guidance. From running aol back in 2004 to an expansion, our guest has been a Major Technology interrupter. He is the founder of the Venture Capital fund the social capital partnership. Hes also one of the owners of the Golden State Warriors and our guest host to brought him here is Barry Sternlicht. Did we pronounce the name okay . You did great. I practiced last night. We spelled it four ways to make sure. Joe told me on the way in he said the only reason hed come he came in early only reasons i was looking forward to coming in was to watch you practice and mess it up. Which is what usually happens. You did a great job. Thank you for being here. Now you got that out of the way. You we have to ask questions. Okay. So heres the question. The question that i have is actually just about valuations in the valley right now. Because it seems like its gotten completely and utterly crazy. I dont know if im right or wrong about that. There was a Fortune Magazine cover that had a unicorn on it talking about 80 kpaebs that have a billion dollar valuation. Were seeing things line looppay, uber. I mean does this make sense to you . Its reminiscent to what happened in 2007, 08 and 09. We were funded and we felt like we had won the lottery and felt we did everything right on facebook. Unbeknownst to us lehman all this stuff happens that were completely out of our control. The next was at 8 billion from the russians. Now were sitting here crudes falling through the floor. It feels reminiscent to that time. On the one hand i respect these companys abilities to raise investors at whatever price they can. But it does feel like theres a top ticking thats happening at some level. Some of these things are priced to such approximate, youre going to have to see absolute flawless execution. You could see a massive recapitulation. Its interesting you compared it to 2006 2007 2008 maybe. Not looking at 1999. To be honest with you we were building a business. Facebook felt at the time just completely the world was our oyster. In many ways these things that were completely out of our control had a massive impact on our ability to both fund raise, recruit talent, and scale. Youre just standing still. Not in rounds. To barrys point switch the sult nuance here theres not a lot of pricing at early stages. So if youre looking at as and bs, if youre connected to the deal flow on the ground those are fairly priced. Its when theyre es, fs, thats when you see the 15 billion valuations wrich allhich are all meant to exploit the missing out. So much of the complex of assets are yielding nothing. And the fidelityiesfidelities, all these guys. They have nothing on so much. The markets fall. They can get alpha. But if they go in a round, theyre going to put in a Million Dollars. Doesnt matter. If they want to play in this space, they have to go around. Theres not at the end of the day that many of these. Uber at 40 billion you can put in a billion bucks and if youre right its 80 billion. But if they cant move this into the space and struggling to find a way to make money. Thats why theres more money on the midstage rounds which dominic chu did a report yesterday that showed that when you see an ipo on these companies, they used to pop 100 on the first day. Now its 25 because there are so many other investors who get in earlier. We were there from the very beginning stages. What was interesting is the last few rounds were well priced fairly priced. When you combine that with a market thats sort of a little bit choppy what we saw was a little bit of trouble on the way out. This is going to be fantastic. But to your point, who won in the box ipo . Well the early founders won. I think the early investors were rewarded. To your point, these last few stages can become very awkward in a market that isnt perfectly going up. So Retail Investors who feel like they often get left holding the bag maybe are the one who is that happens to again. In many ways actually, if you have these sort of difficult rounds that pierce through the bottom of the last private round, its actually great for the Retail Investor. Now the Retail Investor can come in at a better price. But you look at an uber. Is uber worth 40 billion . Absolutely worth that much. Okay. And the vn because that is probably the First Company and literally the only company so far in Silicon Valley that is having a meaningful disruption in the con sujs and spending patterns of consumers. I dont think you can say that about facebook or google or apple. When youre no longer buying a car and youre saving on average i think i saw 10,000, 11,000. Thats cash flow thats going to go into the free market to spend on you name it. But the point is it is shifting around how gdp is provisioned. Thats a massively powerful service. So from that perspective, it has the potential to be enormous. Now, some of these other companies we can debate whether theyre worth 10 billion, 15 billion, but uber is a mon trosty. Its having some trouble off shore, right . If you assumed it was going to get into china, we can take china off the table now. Because the two biggest guys just merged. Let me ask you briefly about a story in fortune. Says that Kleiner Perkins tried to acquire your company and you said no. What happened . I dont think its well first, it was not i wouldnt say it was an acquisition. You dont have to answer this question. Okay good. Look. One thing i will say is that Kleiner Perkins as a brand is an unbelievable brand in the valley. And john door unbelievable investor. Its fair to say we have deep respect for them. Beyond that i think were doing all the right things. These guys are the second highest ranked in the valley today. Theyre known as early stage and theyre sought after because of the expertise in facebook. Talk about just mention a couple that we talked about visiting you. Your views on a company like that and what theyre doing and their future. So you know you look at Companies Like workday and for us again we see the Public Markets get a little discombobulated on how to value that. But take a step back what is it really doing . Its migrated a massive opportunity set which is running the Human Resources platforms. Running the general ledger of companies. These are multitens of billions of dollars. Theyve migrated it to the cloud. Theyve done it first. And they have a huge roster of customers. We look at a business like that and people question can it be a 15 billion company, 20 billion company. You say it can completely replace all of s. A. P. And a big chunk of oracle. You look at that business and you think this is the beginning of a massive trend. And so you know to your point a lot of our success over the last few years has been ignoring a lot of the consumer and making huge massive bets in areas of enterprise that have are now just starting to percolate. Theyre going to create billions in value. Do you ever short the companies you see getting displaced . I think its fair to say that theres a lot of opportunity to do that. Very politic. Thank you for coming in this morning. Come on back. And you know he owns a Basketball Team too. This is an amazing thing. Part owner. Part owner. Hell own the whole thing sooner or later. Thank you. Appreciate it. Still to come this morning, wall street will be watching walmart. The dow component is expected to release earnings shortly. Well bring you the numbers and instant analysis. We are still looking at moderate declines. S p futures off by 4. Nasdaq down by less than. 5 point. Stick around. Squawk box will be right back. In this episode of squawk box, his park is bigger than his bite. And the streets of new york can be rough. Its a game of man versus dog with a very high price tag. Find out how the 4yearold beagle stole the show this year at westminster. My choice for the best in show is the beagle. Oh another beagle get a chew toy and stick around. Squawk box is coming right back. Financial noise financial noise financial noise my choice for the best in show is the beagle. The beagle oh miss p, a 4yearold beagle from canada won the best in show at this years Westminster Kennel Club dog show. Since the big win, shes been to the top of the empire state building. Shes starred on broadway. And now probably the top thing shes done she is here on squawk box. David frye is the Communications Director for the Westminster Kennel Club. And Will Alexander was miss ps handler in her star turn. Thank you for joining us both of you. We werent in town this year but we love going to the westminster dog show. My entire family. We used to have three dogs. We have two now. I cant get her attention worth a darn. And you say, hi like me please. Hi. You need a piece of bacon. Theres someone over here that has little treats for her. Did you say its liver or bacon . Its bagel. And shes so laser focused. I dont know where to start with the question. You told her focus or you said Something Like that. Watch, yeah. You said watch. How much of it is breeding and how much of it is training to actually win . Oh its both. No question. And she had it naturally too. I just had to bring it out of her. When i got her as a youngster, it just took time to give her that star presence. She has it now. Lets say if i hung out with her for awhile could i finally get her to come up and lick my face. . Would the like me . She can differentiate that. Im boring her right now. Shes tired. Shes not the only one. People at home are yawning right now. She sleeps in bed with me. She was so tired this morning we had a wake her up to get her up. Was the beagle was it a surprise . When was the last time . We had a beagle with inin 2008. Miss ps great uncle uno. No kidding. And a bit of a surprise because a lot of the big guns wed been reading about for years in the show but she was the number nine dog overall in the country this year. Wasnt a huge surprise. In anything we do we follow the money. Wheres the money involved here . In expenses. Thats where ethe money is. If youre doing it right, taking care of your dogs doing Health Checks the expenses will far outweigh. Its a hobby. Being as expensive or limiting as you want it to be. Can she expect endorsements . She already is a purina pro plan dog. The ninth to go best in show. Shes got that going for her. But i think shes going to have some puppies and get a lot more attention. Well find other things for her to do as americas dog for the next year. In terms of what is it . The bone structure are there five most important things ki see . Its a combination. Shes a very athletic beagle. People always said they havent seen her athleticism in a long time. She can work all day and never get tired. They are working dogs arent they . Beagles . Shes a scent hound. Do poodles have an advantage sometimes just from being, what is it . We think of them as an elitist breed. I mean they are a great athletic dog. I think sometimes people are thrown off by that hair cut that we see them in in the show ring. But theyre a water retrieving dog and smart. Theyve got a lot of things going for them. And they are flashy in the show rings. That fancy hair cut was done for a reason. Mine . The poodles. Protects their vital organs. Tell me about oh. There. Got her. There you go. Oh, my gosh shes so cute. I got through to her finally. German shepherds are smart. I finally got a German Shepherd and she is unbelievable. Anyway thank you. Like i said we have two dogs. We lost one. The golden was 13. She was great. Dogs are great in our lives. They are. We come home after a week it was like its just so well its cliche. Unconditional. And you never have to question what the dogs motive is. What are they up to here . Never. Theyre spontaneous and have unconditional love. Great to see you miss p. Becky . Joe, thank you. Hard to follow that up. But when we come back this morning, dow component walmart expected to release Quarterly Results in the next few minutes. Well bring you the numbers as soon as they hit the wires. And make sure to keep it locked here on cnbc. Stick around. Well be right back. Ameriprise asked people a simple question can you keep your lifestyle in retirement . I dont want to think about the alternative. I dont even know how to answer that. I mean, no one knows how long their money is going to last. I try not to worry but you worry. What happens when your paychecks stop . Because everyone has retirement questions. Ameriprise created the exclusive confident retirement approach. To get the real answers you need. Start building your confident retirement today. The conference call. The ultimate arena for business. Hour after hour of diving deep, touching base, and putting ducks in rows. The only problem with Conference Calls eventually they have to end. Unless you have the comcast business voiceedge mobile app. It lets you switch seamlessly from your desk phone to your mobile with no interruptions. Ive never felt so alive. Get the future of phone and the phones are free. Comcast business. Built for business. The lightest or nothing. The smartest or nothing. The quietest or nothing. The sleekest. Sexiest. Baddest. Safest,. Tightest,. Quickest. Harshest. Or nothing. At mercedesbenz, we do things one way or we dont do them at all. The 2015 cclass. See your authorized Mercedes Benz dealer for exceptional offers through mercedesbenz financial services. Welcome back to squawk box this morning. A number of stocks on the move. Priceline shares are soaring but the outlook is a little light. Also tmobiles results getting a bump there. And watch oil. Related stocks today are under pressure as crude prices plunge. Our guest host today is Barry Sternlicht. Weve talked about a lot of things but not too much in the oil price moves. How does that affect your business or does it . You mentioned earlier just the oil money coming into real estate and how thats kind of pulled back a little bit. Yeah. I think the sovereigns of the middle east are reassessing with the current price climate. I think for the American Consumer youre going to see things like lodging will do better this summer. People will do more driving, obviously. I think its bullish for that. Will find its way into retail sales. Christmas was kind of funny. Ive been surprised it hasnt been a little faster. I know its just a small amount unclear whats going on there. We would have expected more than what did show up towards the end of the christmas season. That was bullish. I think in general the developed world which is the world thats easing and printing is going to get a boost from lower oil prices. And i think you get confused. Was it the quantitative easing or the oil prices. Im sure the politicians will take credit. Its interesting, this central bank thing, these governments need to reform the governments. They need Structural Reforms including the United States and entitlement reform. This is sort of just more morphine in the system which i think fundamentally you need a driving Global Economy with competitive valuations. Its a seriously scary chapter. I mean you heard it from even the Silicon Valley guys out there. Its so companies go get valued at 2 billion and at six months later theyre 10 billion. But youre hearing this smart investors are really nervous. Theres a big dike of the worlds economies. And the pliegsoliticians are plugging in holes. The opposite our last guest was talking about how things outside of your control impact and cause things to crash. But how often are things outside their control actually lifting and boosting those bubbles too . How much of it was the quantitative easing that led to the valuations . Being a large real estate and Energy Player we never see valuations we havent seen before. I think as a real estate guy, are you breaking your ive been doing this almost 30 years. Do you you have to look at your comp sale pl like more than half the treasuries in the world yield less than 1 . So investors are saying that real estate looks pretty good. Certainly chinese are saying that. They own enough of our treasuries. One of the sovereigns over there said that to me. So its kind of like their mindset. Were not used to this Pl Real Estate guys are not used to seeing, we own a property over in new york city. Itll probably sell some 2 yield. And they say thats sort of nuts but the guys saying the alternative is im going to get 30 basis points in the german bunde. Its turned the entire investing world on its head. This is one big bubble. Or is this a bubble or new reality . Because governments will not take the hard steps of reforming their labor programs in france and germany. What a mess. Is it lower longer forever . Is it going to be japan, 15 years of this . And then real estate looks good. Well continue this conversation in just a moment. When we return, well have walmart hopefully with earnings and be out with a street reaction. See where the stock is. Plus jobless claims which always matter. Stick around. [ male announcer ] your love for trading never stops. So if you get a trade idea about, say organic food stocks schwab can help. With a trading specialist just a tap away. Whats on your mind lisa . Id like to talk about a trade idea. Lets hear it. [ male announcer ] see how schwab can help light a way forward. So you can make your move wherever you are. And start working on your next big idea. These days, the most important person in your business could be a software developer. So, hows the app coming . Weve got to make something great. Hows the app coming . Weve got to do it fast. Lets do this on bluemix. You can build apps with analytics, big data, even ibm watson. That could give us the edge. Lets do this on bluemix. It can provide code for you. We could be first to market. Because being best is priority one. Being first is priority one. Theres a new way to work and its made with ibm. Were just seconds away from jobless claims. Rick santelli is standing by. Rick, the numbers, please. Well were about 19 seconds away. But just to i thought it might be a good time to look back in time for the next 15 seconds. If you recall around october 10th of last year is when we had our lows cycle for initial claims. 266,000. That takes you back to a comp in the year 2000. So there you go. Were looking for 290. The number is 283,000. So that is a drop from the 304,000. That is unrevised. So down 21,000. And once again, theres a lot of moving parts to this. Of course emergency claims were taken off the table. Various points in 2014. We continue to see, of course the notion that job growth is improved. The variance in the job numbers are compressed. I think all may be tied together. Interest rates, 2. 08 . We tested last years closing levels. The minutes yesterday brought us down from those levels. And even though there is a bit of a reprieve, the treasury market is acting different than it has in the last month and a half of last year and many traders are taking note of that dynamic. Welcome back joe. Thank you, rick. And thanks for that. What do you think of the currency manipulation . Are we currency manipulators too, rick . I think its the funniest thing. Its ironic you mention that. Im thinking about doing that on the Santelli Exchange today. We look at china and various countries on manipulation. All countries manipulate their markets in some way. Its just a question of how much. Some of those Winston Churchill quotes. We were just arguing about scale here. Yeah, i think we manipulate. We manipulate interest rates. And to point fingers at various countries is really kind of rich when you think about it. By the way, happy anniversary there, big guy. For who . For us. Oh, for come on. Think back six years ago. February 19th about this exact time. Short memory joe. Was that the was that when we were talking about throwing some tea in Boston Harbor or something . Yeah, yeah i think you kind of nailed it there, exactly. Is that when it was . Its been six years already. Today was the day . Today was the day. You know, everybody whos a part of it should sign some type of document. Thats so good. The birth of the tea party was on andrews birthday. Rick we share this day. That just seems fitting. Thats great. And i think youll look good in a triangle hat and a red jacket. You never know what happens down the road buddy. I think so too. Thanks, rick. Were we going to look at walmart here . I think so. I dont actually have the numbers in front of me because my computers frozen up but looking at the screen it looks like they came in with revenue roughly in line. 1. 53 billion in line. Operatings on the dollar. But adjusted it was 1. 61. 1. 61, take a look and see how that compares to expectations. We said we were looking for 1. 53. So thats 8 cents ahead of expectations. Continuing operations though are 1. 53. It depends on which numbers analysts are looking at. Usually we use adjusted. So that would be 8 cents ahead. But who knows. Samestore sales up 1. 2 . Sams club revenue 14. 87 billion. Looks like the number theyre actually using the most is 1. 53. Usually we would use adjusted. The underlying eps was the 1. 61. Now, the guidance is 95 at this point. 95 to 1. 10 for the First Quarter. Is that 1. 14 for the First Quarter. So that may explain why the stocks down 34 cents. For the comps, walmarts u. S. Comp store sales were up 1. 4 for the quarter. Sams club comp sales without fuel increased 2 for that same period. 4. 70 to 5. 05 is what theyre looking at for next year. 5. 15 is the estimate. We have to find out if thats adjusted or not. They also adjusted the dividend. So its raising it by that looks like it raises it by a penny a quarter. Samestore sales, though is 1. 2 . Lets get more reaction to walmarts Fourth Quarter numbers. Joining us is paul from deutsche bank. I realize these are early flashes on these numbers, but whats your knee jerk reaction on what youve heard . Yeah. Certainly the Earnings Guidance for the upcoming year is a bit light. Certainly lyly well have to find out how much is other margin head winds such as health care and investing back in labor which is something that has been ongoing now for the past few quarters. I also take a step back and look at the u. S. Comps up 1. 2 . And frankly, thats the best sales growth weve had out of the past few years. The company says it plans wage and training investments for its u. S. Associates and some incremental investments for global ecommerce initiatives which will total 26 cents to 29 cents. If we add that back then that gets us up almost to on an operating basis where they were right . Exactly. Yeah thats not theyre saying these moves that you just mentioned, theyre ensuring that walmart Hourly Associates will earn at least 1. 75 above todays minimum wage starting in april. The following year, Current Associates will earn at least 10 a year. So while were still having this minimum wage debate taking place, this is the Company Getting in front of that. Is that big news . Its big. I think it actually is good news. Frankly part of walmarts problem has been concerns around inventories being out of stock. Its been about bad customer service, long lines at the checkout counters. Theres been a lot of disgruntled workers. And frankly this does sound like you know the new ceo, both of the u. S. Walmart team and Doug Mcmillon at the helm taking steps to correct those evils. So approximately 500,000 full and parttime associates will get 9 an hour by april. And by february 1st of 2016 theyll earn at least 10 an hour. And this is a big, significant change. Going to cost them a lot. Cost them 26 cents to 29 cents. Mcmillion making kmentss. Right. Mcmillon says they can enjoy a closer relationship with their advisers. Associates will have more control over their schedules which speaks to what you said about having disgruntled workers. Maybe trying to address some of the massive problems. To your other point, though what you mentioned in terms of the its funny. Walmart is 10 of total u. S. Retail sales. The largest retailer in the country, largest employer outside of the federal government. But they do mention that they have been dealing with significant head winds from Currency Exchange like other global companies. So that is a head wind that theyve been facing as well. I never think of it that way. You forget how big they are around the globe when you realize how big they are in the United States. Yeah. 28 of their sales is from outside of the u. S. Thats been a growing part of their business. So certainly, you know the walmarts of the world similar to costco and others do have some pressure here. Whats the Biggest Country outside of the u. S. Is it mexico that they operate in . Walmax is very big as well as their uk unit. So the mexican peso has been calm compared to other currencies. They operate in canada . Absolutely. Thats 24 drop in a currency. Thats tough. Yeah. Paul, whats your rating on the company right now . And with the changes that weve just heard does that change your perspective at all . Yeah no. We have a whole rating on walmart. 86 price target. Were around that now. Like you said, theres certainly a lot of moving pieces here in this print. But more or less once you add back some of these adjustments, i think it will be more or less in line with overall street expectations. But again, i think it is a modest look as we focus on u. S. Seamstore sales that did accelerate sequentially. Again, its the biggest comp theyve put up in a few years. I think that does speak to a lot of the questions weve had about the consumer and are they benefitting from, you know this environment that includes lower gas prices. Theyre also announcing training initiatives and lowcost ways to get your ged. And also lowcost ways to get college degrees. Thats 40 . Its 40 of the workforce. I dont know how much is domestic but 1. 3 million employees and were talking about 500,000 workers. So spending a billion dollars to give a pay raise to 40 of its 1. 3 million employees. So not everybody is its not across the board. Not at all. Thank you very much for joining us today. We appreciate pit. Thank you for having me. Also a programming note for you, walmarts ceo Doug Mcmillon will be joining Carl Quintanilla. Barry sternlicht is looking for a buyer of his hotel. And hes had some offers. Hes also looking to front 2 million for each of its 114 rooms and suites. Well ask him about that and the hotel empire next. As we head to a break, take one last look at walmart. Youre looking at that stock down only morningarginally. Squawk box returns in just a moment. Can it make a dentist appointment when my teeth are ready . Can it tell the doctor how long you have to wear this thing . Can it tell the Flight Attendant to please not wake me this time . The answer is yes, it can. So, the question your customers are really asking is can your business deliver . Startupny. Its working for new york state. Already 55 companies are investing over 98 Million Dollars and creating over 2100 jobs. From long island to all across upstate new york, more businesses are coming to new york. They are paying no property taxes no corporate taxes no sales taxes. And with over 300 locations, and 3. 7 million square feet available, theres a place thats right for your business. See if startupny can work for you. Go to startup. Ny. Gov. The bakra hotel in midtown new york already making headlines before its opening day on march 9th. Its in talks to be sold to a chinese ensuring for a whopping 230 million or a record 2 million a room. So they say per key. If the deal closing, this would make the baccarat the most highly valued hotel in the u. S. Our guest is the man behind the deal. Barry sternlicht. It wouldnt even have existed how many years ago in this hotel chain. It just started. We bought the company by accident. And then i decided to take them into the hotel space. Yeah, it didnt exist. Theyve been actually baccarat is about to celebrate its anniversary as a goods producer. I thought i could introduce it to the world and make it more relevant and use this as a showroom for the brand. Its epically beautiful. Itll open march 9th. It is spectacular. I think its the nicest hotel built in new york since the st. Regis. I think it will take its place. You need pretty high rates. Were signing rates at 950 a night. Corporate rates. And transient rates will pass a thousand bucks. Its only 113 rooms. You see it youll never see anything like it. Our party will be april 16th. It is under contract to the chinese. I think the record of just over 2 million, i think it will be passed. If its such a great thing, why are you selling it so fast . Im a fiduciary, i represent them. They decided theyll sell it. Actually two offshore investors in our fund. It is fascinating. I mean it is a world of haves and have nots. I think if youre not only is it beautiful and epically gorgeous. 17 chandeliers, 2500 baccarat glasses in the lobby. Youve got to see it. Youve never seen anything like it. But i think the people who have a lot of money, they want to buy things. And they want to buy real things. Whether its a Hedge Fund Manager buying 40,000 acres of land somewhere. The world is so people are buying real things. And property particularly to the chinese, this is just the beginning. Im sure hes going to flip this at a profit and im going to be embarrassed. I should put a no flip rule in the hotel. You are seeing that. Youre seeing deals you saw this blackstone purchase in new york city. They took out all their equity on that trade. He just bought this stuff. He basically doubled his equity rapidly like that. Youre seeing again, you see this in the cycles. The guys investing for 8 returns and 6 returns. And there are investors in the world today just gobbling up yield. Weve bought 25 malls, we just closed a big deal in norway and sweden 1. 5 billion transaction. We have no problem placing the capital. I mean its the sovereign wealths of the world and u. S. Institutions are chasing that magic 8 return which they dont get anywhere else. Real estate has a funny thing. Because, debt is so cheap, right . Youre financing so cheaply that you can produce were producing double digit cash yields on equity. You cant get anywhere else safely. And at that level, if probably never goes up in value and youre expecting a 13 yield. Which a hedge fund you give them all your money. We can do that. So we just closed a 5. 5 billion fund. The hotel in miami, what is it per key . Well we havent sold it yet. What are you thinking its valued at . North of a million a key. Wow. I dont know why anyone what theres no crystal in the lobby . Who wants to stay in a hotel with no crystal in the lobby . If theres no crystal in the lobby, i dont want to sleep there. Youre starting a hotel down in miami without crystal . I dont see the connection barry. Its part of crystal. I dont see the connection. I dont know why i need that in my hotel. One is a green w. I feel bad for the chinese. Anyway thanks barry. Much more from him throughout the show. Cnbcs american greed celebrating its 100th episode. Catch it tonight at 10 00 p. M. Eastern. Here now is the voice youll recognize. Stacy keach, the voice of american greed. Take us to break if you would. All right. Up next on squawk box, from stockbroker to American Television personality jim cramers life is investing and making people money. He joins us next with a look at todays trading session. Squawk box is coming right back. When the moments spontaneous, why pause to take a pill . Or stop to find a bathroom . Cialis for daily use is approved to treat both erectile dysfunction and the urinary symptoms of bph, like needing to go frequently, day or night. Tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex. Do not take cialis if you take nitrates for chest pain as it may cause an unsafe drop in blood pressure. Do not drink alcohol in excess. Side effects may include headache, upset stomach, delayed backache or muscle ache. To avoid longterm injury, get medical help right away for an erection lasting more than four hours. If you have any sudden decrease or loss in hearing or vision or any symptoms of an allergic reaction stop taking cialis and get medical help right away. Ask your doctor about cialis for daily use and a free 30tablet trial. E financial noise financial noise financial noise financial noise welcome back to squawk box. Im courtney reagan. Update on walmarts earnings. The Worlds Largest retailer for the Fourth Quarter reporting earnings per share of 1. 61 versus estimates 1. 53. Revenues coming in slightly below wall streets consensus 1. 31. 5. U. S. Samestore sales coming in up 1. 5 . That is the best reading in several years by a decent margin. However, the First Quarter and full year guidance a bit below wall streets expectations part of what happens pulling down the stock and part of the reason for the lower numbers is because of an announcement that the company made today that has to do with employee training and wages. The Company Plans to spend a billion dollars on. Heres the soundbyte from Doug Mcmillon on the announcement. One of the most immediate changes well raise our starting pay and well provide opportunities for further raises based on performance. For our Current Associates well start by raising our entry wage to at least 9 an hour in april. And by february of next year all Current Associates will earn at least 10 an hour. So walmart there increasing pay that it gives to most of its employees. The company has long said only 6,000 or so of the 1. 3 million u. S. Associates were making that federal minimum wage level and the average rate before today 12. 92. 49 years of dividend increases, i think, a penny a share, per quarter, four cents a year. Now like 2. 3 a year. Down to new york stock exchange. Jim cramer joins us now. You know, its nice when private Companies Take initiative then we dont need to argue what they do in congress. Right. Henry ford did. So many people work at walmart its helped the gdp, as strange as that is. If you x out the fuel it wasnt a bad quarter. Forecast is a downer but walmart doing better with gasoline. The stock had had a run. Take this with a grain of salt. Other retailers are all on fire. These guys could be too, but taking actions that are important and do lower the earnings. While i was briefly out, jim, the market continued to make some new highs again. Here we are in 2015. Maybe it does turn out to be another year of that high single digits, what everybody said. Its weird when the consensus is right. I think europes turning. I think its obscured by greece. Some of latin americas turning. China not turning. United states strong, i like it. I want to congreatatulate Chuck Schaffer and stacy keach, 100th episode of american greed. Our signature selfmade programming, fantastic. It is. Fun having him here today, too. Hes great hes just great. Real deal man. All right. See you later. Thanks, jim. When we come back well have more from Barry Sternlicht. Plus a special birthday present for andrew. Stick around squawk box will be right back. It is a special birthday today. If you havent figured it out already, andrews birthday. We have a special guest for you today. No come on out, guys. I cant believe that oh my gosh. Hey guys. Oh my goodness. Max, henry, all here to wish you a happy birthday. Now in new york, this is easy. Easy for them. Daddy how are you doing, bud . Come here. Wow. I cant believe hey, max, how are you . This is amazing. Max cant be seen youve got to sit up so everybody can see on the camera. You want to be on tv . Everyone can see you, bud. Look fantastic. Wearing your suit. I cant believe youre wearing a suit. So everybody can see you. Wearing your suit. Look fantastic. A big birthday. So we dont fall off, is that better. Unbelievable. How are you doing. There you go. Nice going, bud. I cant believe you did that. Cupcakes, too . Happy birthday the whole way through. You are really something. Who picked out the cupcakes . Who was it. Look. You both . Youre responsible . Youre responsible . The pink one. Give him a mike. Pink one. How about you . Henry, want to talk. Pink one. You want i agree, the best ones. Thats kyles favorite too. Crazy. Totally get it. Happy birthday andrew. Thats very nice of you. I cant believe you did that. Barry, favorite flavors, i dont know to ask you at the end, all of the favorite flavors . Leadership in the United States. Is that in the box. Look under the cupcakes. Thats your concern, consumer confidence. Lack of leadership in washington. I think it permeates everything we do. And not play golf. Lets fix the world. Lets lead. By example. Barry, we want to thank you for being here today and spending a very special day with us. Just got back why so many cupcakes . You didnt mean me. I meant the guy in d. C. All right. Guys thank you so much. A lot of chocolate cupcakes. Ties both ties . She had to tie both. A clipon. You both have clipones. Thats nice. Happy birthday. Thanks for being here. That does it for us today. Join us tomorrow. Now its time for squawk on the street. Good morning. Welcome to squawk on the street. Im david faber along with jim cramer, live from the new york stock exchange. Yes, we are. Carl quintanilla is at walmarts headquarters in bentonville, arkansas. The retail giant out with better than expected earnings and announcing a wage hike for workers. This morning, carl will have a live and exclusive interview with walmart ceo, Doug Mcmillon in the top job for ruffleoughly a year now. Futures, as we sta