Transcripts For CNBC Squawk Box 20150227

Its the buzz story of the morning. Heres the question blowing up on social media. Take a look at this dress. What color do you see . Bring that closer. I saw gold and white. What do you see joe. Gold and white, yeah. If you think it is a simple answer just try polling your friends and family though. Some say gold and white. Others say black and blue. This whole thing started yesterday when a scottish musician posted a picture of the 77 dollar off the rack dress on tumblr and then it went viral. It broke the traffic records viewed 21 million times and counting. Celebrities sports stars and many others weighing in on social media as well. Kim kardashian tweeting what color is that dress, i see white and gold. Kanye sees black and blue. Who is color blind. Well tell you what taylor swift and others have to say later. Thats our lead. Thats interesting. Whaen when are we doing the llama story . Both of these stories make me think it scares me. That were talking about this too. Yeah. But first heres much lesser stories were watching this morning. The big test for the markets today is a growth read. And that is on second the second read on the 4th quarter gdp number. Remember when we were down toward the end . Due at 8 30 eastern. Also on the docket chicago pmi spending home sales and Consumer Sentiment and in europe germanys parliament approved the greek bailout extension that came after germanys finance minister urged approve that athens would not be allowed to blackmail its partners. Funding for the department of Homeland Security will expire at midnight tonight unless Congress Takes action. The senate is set to vote this morning. I dont know. I pig your it will get done. Dont you . Well i hope so. I hope that we dont see a situation where, in this time when were warning about potential dangers of the airlines and airports watching things like isis happen i hope this is something we take seriously. Lets get to this mornings top stocks to watch. Jcpenney shares under pressure after an unexpected loss for the Fourth Quarter and warned of margin improvements for the year. Its decline of more than 1. Thats a big drop. 11 drop for that stock and questions raised after people thinking that retailer was back on track. Also gap earnings beat the street. The Company Announcing a stock buy back and dividend hike but it does say that west coast port delays will hurt its profit for the year. Another retailer crocs. Shares dropping after a forecast of wider than expected decline if First Quarter sales and Weight Watchers looks to be a losing stock today. Subscribers dropping 15 in the quarter. The company is offering a disappointing forecast for this quarter as well. Also herbal life posting better than expected earnings but sales will drop this year. Its blaming currency related issues for the weaker forecast. Lets check on the markets this morning and see what we can expect. So far we have the dow jones indicated down about 8 or so. The s p 500 down 174. Everybody is watching the nasdaq as we slow in on an all time high. Interesting as apple is down. Its that announcement because apple hit 775 and you know we made the point no tree at least so far, except with the jack in the bean stalk, did that tree actually grow to the sky . It grew through the sky. It did . Usually trees dont go to the sky. Usually not but eventually somebody is going to have a billion dollar company. Trillion dollar market cap. Some day. Some day. It just depends on when. Yes. Nasdaq closed within 11 points of 15,000. Right. I started reading a book the other day and i looked at when it was written because they were talking about how rich this woman was. So rich. 17 million. She was like the richest person in the country. What year . 1959. Yeah money overtime. And i read it now im not saying 17 million isnt a lot of money. No, but inflation. But there are more than a few guys worth 17 billion and then putin is worth 100 billion. Were not for sure. Hes still not happy. Europe back on track. Europe. Then well get back to the gold dress. Europe you can see france trading higher but all those except for in grease up based on germany saying okay lets do it. But that situation isnt completely done yet. Lets take a look at asia. Mixed results there with the hang seng showing the most movement and its down. Check out oil. The 10 year note. We get used to it being around 2 or so. Same with the dollar which in term of the euro has stabilize although its still a pretty good time to visit the continent if you have plans to do so this summer at 112. Then the yellow medal. Precious yellow medal. Like the tech heavy nasdaq. Well take a quick look down 4. 4. 4. 50 so far this morning. I love hearing you use some of these phrases you hate. That way i can mail it in even more than normal. I can just have some i dont do that. We have crutches when youre waiting for boards to flip. Things you say to get yourself through it. Well at the end of the day. Its your single best idea. Whats the other one . Keep in mind. If i had to string them all together. Keep in mind, at the end of the day, and going forward, that all eyes will be on that was a good one. Thank you, someone gave me that. On the fed. All right. Lets talk more about some of the big news yesterday and the fall out from that. Everybody from broadband copro vieders to providers to content makers. Aman joins us from washington. Whats the latest. Yesterday we saw the fcc Vote Along Party Lines as expected 32 to pass the Net Neutrality rules. What that means is the Big Broadband providers are not going to be able to have differential pricing or tiered speeds. They want all access on the internet to be even for all websites out there. That gives them access to their customers. Its something that the Big Broadband providers including comcast fought against in a bruising lobbying battle that saw protesters show up at the head of the fccs house last year. Block his drive way and prevent him from getting to work. This thing took off on the internet. Internet commenters making millions of comments at the fcc about their views on Net Neutrality. Yesterday it passed 32 and now its going to be up to the courts. Listen to one of the commissioners on the fcc that voted against this yesterday. Spoke out strongly against it. Said its going to lead to more regulation and more taxation and its going to break up some of the freedoms that we enjoy on the internet. Here he is. Theyre already lawyering up to seek a judicial review of these new rules and given the many glaring legal flaws theyll have plenty. But if this order manages to survive judicial review these will be the consequences. Higher broadband prices slower broadband speeds less deployments, less innovation and viewer occasions for american consumers. Also in the no camp yesterday was verizon which won the internet for the moment yesterday in a lot of viral things on the internet yesterday but verizon putting out this press release objecting to what they call 1930s style rules. What did they do . Put out the press release in morris code to emphasize their point and if that wasnt enough they translated the morris code into legible english but in an Old Fashioned typewriter font as if it was delivered by a fax machine. So everybody is making the point in the most creative way they can here. Including some protestors that showed up yesterday wearing costumes and banging drums and all of that kind of thing. This one not your typical regulatory procedure. A lot of attention on it. The verizon thing was funny. I saw it yesterday but it made me realize that a lot of people blamed verizon for this from the beginning because of the rules set up to ensure Net Neutrality. Verizon took them to court over this and got the rule overturned which lead us to title two as many see as a much bigger problem. Just the whole regulation. Is verizon playing the same card . I heard that the lawyer that originally did all of this for verizon is no longer there. Has taken leave or been asked to leave potentially. Are they still going at this the wrong way . Just in terms of the style of the way theyre going after it theyre mimicking some of the things theyre seeing from the protestors but ultimately what happened here i think is a populous move. Swamped the fcc in terms of their ability to deal with this in the traditional inside the belt way washington fashion. A lot of folks say that tom wheeler would not have landed where he landed yesterday if it was not for the millions of comments out there and then the prodding he got from president obama in november who came out and said he wanted these socalled title 2 regulatory authorities applied to a Net Neutrality. So clearly there was a swing here and part of what it has to do with becky is the fact that voters out there, internet users, they know the content providers. They know netflix and twitter and love these brands they spend so much time with. They dont know and love the cable providers, the comcast, the Time Warner Cables and verizons of the world as well. When they do have dealings with them its in the form of a bill. In terms of the people looking at this debate theyre leaning toward those they dont interact with on a daytoday basis. They did the poll yesterday. I watched the way it was explained on national newschannels and even the way it was explained the way it was framed was just beyond belief. I had to change the channel but the way it was explained was that the big guys like netflix and others theyre not going to be able to pay more money to get faster lanes now. Were all going to have access the way it was explained was so naive and sophomore pedestrian. And when you present it that way people say i want Net Neutrality but when you look at the actual specifics it is just part of the general decline in i dont know, and its easy for you to say it was populous i have something right here that the dnc or somebody sent out, dnc email, great news look at this becky, the fcc just approved president obamas plan to ensure free and open internet. And thats not the way you said well the agency voted. It passed . Really . They were appointees of ball balm that are democrats. It passed on a totally Party Line Vote and tom wheeler the chairman of the fcc im with you on this. I know you are. Im not yelling at you. I have been talking about this for too many days i know. The chairman of the fcc yesterday was asked directly whether or not president obamas intervention in this debate back in november effected where the fcc lands. Almost all observers assume that it did. Of course it did. But chairman wheeler said yesterday that the fcc is an independent agency and simply voted the way it voted attend of its own process. Horse feathers. Bull feathers. Anyway. I have been talking about it too long. The journal has a great op ad. Lets call it obama net. Welcome to 1930. Im not going to read the New York Times for you. Im not even going to read it. Everything in this country is now im going to read it to you later. This is how you torture joe. Read him the New York Times editorial page. In the old days here are the center lines and here is where people were on the two sides of a lot of issues and now its like this. Im not sure how we got here. Do you disagree with my general point that consumers out there look at the content brands the netflix and twitter they use. The big bad monopoly guys. No do you agree they develop a relationship with those brands that they dont have the internet backbone providers because theyre part of their lives all day. My whole life is spent trying to understand how the profit incentive actually drives innovation and how its not selfinterest. I know adam smith thought of it in 1776 but people still dont understand it and the idea you got verizon or comcast or at t these profit mongers are spending billions of dollars building out pipes. You need a return on invest. Its not a dirty word to say you need a return on investment to justify spending and building out the infrastructure and when you cant get it because the government takes it for granted that youre going to do it anyway. So im blue in the face already. Yeah and look thats the exact point that the carriers were making yesterday and through this whole debate. If we dont have the ability to make more money from these services were not going to invest in them. Exactly. And its not going to get any faster. Congratulations, mr. President. Congratulations wheeler. Maybe well have five years of totally slow growth. But thanks aman. Ill be okay. Its friday. Ill get through this. But ive watched a lot of things happen that i cant do anything about. All right as we mentioned were going to talk more about this decision and its ill pact on the tech sector and the internet providers. Dan is here on set with us and dan just looking through, sorry, joe, the New York Times didnt write an ad. I was hoping to taunt you through the morning with it. They did write little changes for internet users. What do you think this means . This is fantastic. This is going to be the best thing ever for telecom attorneys and lobbyiests. Its the telecom attorneys and lobbists act. When it was written i was an economist working on that subject and we worked for all the competitors. In the 96 act they did two thicks they didnt do here which is that they required unbundling of the network which spawned all of these competitors. There was 31 ipos most of which we were involved with and that was like back 20 years ago and all of those things are gone now. All the competitors. So the reality is all of this stuff is fantastic for lawyers and lobbists in washington but it means nothing. Theres nothing in those rules. We havent seen all the specifics. Devil is in the details. But i dont think anything changes. Your parent comcast when they bought your other parent nbc, they agreed to most of this already. Right. We made that point earlier that it was a solution to a nonkpis nonexistant problem. I dont think this changes anything. So the irony of this rule is it actually might pave the way for the merger with Time Warner Cable to go through. Because if your fear of a larger, bigger badder comcast, right is that we cant regulate them . Now we have regulation. So theres no legal reason to with hold the merger. But does it make that merger as lucrative as they thought it would be beforehand. Absolutely. Theres no regulation or unbundling. Theres no reason not to do it. This is the last chance robert has to buy new york and l. A. I think they still want to do it. The only thing that gives me pause is the politics. I can sit there and look at the rules, look at the laws look at the overlap in competition because comcast and Time Warner Cable dont actually compete on a local level but then the politics comes in. So the fact that ballobama did influence the shift to title 2 makes you say well does he actually have influence over the doj . If he wants to block this for this to be an issue you need the Mainstream Media to point that out and they wont do it. If bush did it on Republican Administration influenced an agency theyd be all over it. But the other thing is this is a 32 vote. So in two or three years but theres uncertainty now on how things work. You dont think at the margin there will be less investment. So the Telecom Companies knew this was coming. Two months ago. They didnt know until two months ago. They knew back in october when obama wrote the letter, right . Why . We thought it was independent. But when the auction closed they spent 44 billion. They wrote that check full knowing this was coming but youre right theres a lot of uncertainty. So youre sitting there and looking at comcast trading at 21 times earnings or 19 times earnings for Time Warner Cable or its flip flopped. Id rather say buy the guy thats just doing this whether there is title 2, apple. Apple is going to continue to innovate or continue to march to that trillion because on Earnings Growth alone, the buy backs in the stocks actually reduce the number of shares of the market cap gets shrunk but the reality is apple is going to innovate under any circumstance. Theyre operating in countries all over the world. In china. Talk about regulation. Theyre doing well in china. So i think apple still looks good. I think that, you know the comcast Time Warner Cable merger still has a chance of going through. The inner connection rates 100 million. Spending 3 billion a year on content. This is a rounding error. None of this matters. So you just have to take a step back. Dont get the politics. Look at the actual fundamentals. You need broadband in the home. There are two providers. Your Cable Company and your phone company, right . You need an ipad and iphone and you need a smart watch. You need cheap on demand television. So i think cable is probably still going to workout just fine. Apple is going to do great. Netflix is going to do great. This thing isnt going to matter at all. The government said it would be a light touch. Do they usually regulate things with a light touch . How do you know theres not price fixing down the road. Now youre worrying about problems that dont exist yet. If you get the ability i think wheeler should have come on tv and said read my lips. No rate regulation. What happens when everyone goes in to the guys sitting in their ivory towers now. Government officials. We we love when theyre the ones with the strings saying i need a waiver here and you see them twiddling their thumbs its going to be tons of that. Who sucks up to the regulators. Absolutely. My first point about the attorneys is your answer is buy apple . I dont really care im going to invest lets just buy apple. None of this matters for the country. You can still buy apple. Cable is going to do just fine too. I dont see how it matters. You can still recommend apple. It doesnt matter. Even though it slowed down innovation, theres a third as much investment in europe now. Everything is slower in europe now. Are you not a patriot . Ask john malone that. Hes investing like crazy in broadband networks. Hes an american and republican and everything is going well. They have much faster speeds on average in europe. I think it will be fine. Its going to be five years tied up and it can be a Different Administration in 2016. Somebody else can stack the deck at the fcc and tell thelda what to do at that time. Its all good political theater. Thank you. We have the dress, the llama and Net Neutrality. Coming up americas new enemy number one. A new survey shows its no longer china. Plus a bit of music trivia. On this date in 1980 i will survive won the first and the last grammy ever awarded for best disco recording. On youtube go watch. Youve seen kevin kline. That is awesome. The greatest shot. What was the name of that movie . In and out i think . Yeah. My finger starts and then pretty soon im going to be on break running around here. As we head to break, here are some other things that happened on this date in history. You can call me shallow. But, i have a wandering eye. I mean, come on. National gives me the control to choose any car in the aisle i want. I could choose you. Or i could choose her if i like her more. And i do. Oh, the silent treatment. Real mature. So you wanna get out of here . Go national. Go like a pro. In our house, we do just about everything online. And our old internet just wasnt cutting it. So i switched us from uverse to xfinity. They have the fastest, most reliable internet. Which is perfect for me, because i think everything should just work. Works . Works. Works works . Works. Works. 7. 3 billion. The results of our quarterly cnbc global cfo consult are in and the bullish view of the economy keeps charging. The council represents some of the Largest Companies in the world. 90 see growth in the economy. Thats up from 72 in the Fourth Quarter. But they arent less certain about the market. Half of the respondents believe the dow wont reach 19,000 until next year. For full survey results you can head to cfo council. Cnbc. Com. Its the final trading day for a great month for stocks reversing the worrisome january start to the year. The dow and snp are on pace to have their best february since 1998 and you remember next year we were partying like its 1999. The nasdaq is tracking for its best overall month since january of 2012. With us to talk major themes leading this market is jonathan the chief u. S. Market strategist and managing director at rbc capital markets. I dont remember whether you were getting cautious or full steam ahead. We have a 23 or 25 target on the s p which is street high. Full steam ahead. We came back into your thinking because its weird. It was goldilocks everything is great and then oh no its goldilocks. Whats going to go wrong and now its everything is great. Best economy in the world. Oil prices are 50 which allows the consumer to have all of this extra money. Whats not to like. Ill tell you what i sympathy concerning the cfos and why they like the economy and dont like the market. They look at the market being up this much and what they just assume is that its getting ahead of itself. Stocks are cheap but the valuations on stocks when you consider the alternative in bonds when you look at alternatives across the world. U. S. Growth rate is expected to be faster in the developed world over the next decade or really almost every year over the next decade. I just think that concern is unfounded. So is this the year we get a 10 or 20 full back or no . I dont see it. We have an expectation of something in the neighborhood of about 12 to 14 this year but i think the more important thing is this is going to keep running up until the next we hit the next recession and i think thats going to be several years further out and i think that the concern that the fed is in some way going to take the punch bowl away i think is also overstated. But what about the concern that the bunchpunch bowl has been way too big and caused money to go where it shouldnt go and theres a day of reckoning coming . I dont think Interest Rates are low because of the fed. I think Interest Rates are low because rates are low in europe because they have issues and when somebody sees a negative yield in a bond in germany, then what they do is they swap it and end up buying treasuries and it pulls down our yield. Our Interest Rates are down because of weak Global Growth and not because of the fed. What is the okay. Because in all of history i can never remember a time when the fed has been easier with an economy that looks pretty good. You cant find historically any time when we were at zero Interest Rate where is were headed possibly under 5 unemployment. Its impossible to find it. When people worry about the fed doing the wrong thing, what are the negative consequences . How does that play out in a negative way . And if its not going to play out this time why not stay at 0 forever. Step back. So far year to date you have about 20 countries around the world that cut Interest Rates because theyre concerned about Global Growth. Right. And yet you have the fed moving in the direction of tightening to bring this back to normal. We havent moved anywhere. Yesterday they said were not tightening. Were just normalizing. So the expectations are its going to take us two or three years to get back to almost 2 fed funds and as an equity guy if you told me that at the end of 17 were at a 1. 75 or 2 fed funds this market is going to have another 30 or 40 upside. It just seems that its too easy that way. All we have to do is just stay at zero . Then we do that forever. Ultimately you need the economy too. Thats why when you see qe in europe i dont think its going to have a huge impact. The problems is not that they dont have easy money policy. They have bad demographics and structural issues not fixed by money printing. We have a much more vibrant economy. Well see. A few more obama nets and well see. We have internet and health care. Im not moving on. We are. Thank you for coming in jonathan. Adding to our structural problems. Were not subtracting. When we come back this morning, do you want to know how long youre going to live . We have a simple task that could give you the answer. Well try this out next. 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This is a test thats not just your cardio that theyre worried about. Its your flexibility. Its a lot of things that go into it. If youre not stretching and doing these other things that can be a sign of bad things to come. If you score low enough on this its not likely youll live another 5 years. I tried but its hard in heels in and dress. I told the joke a vegan, an atheist and cross trainer walk into a bar. The reason i know that is because within a minute they all said im a vegan, an atheist and cross trainer. And he is the personal trainer because he enjoys every bit of pain this guy causes and at one point he put me on a bench and he said put one leg out and stand up. And you stand up. I couldnt do it and he kept adding levels to the bench to get higher and higher. I had to get up to about here and then i can do it. What do you have to do . Put your leg out and sit down and stand up with one leg and one is out. Its based on whether youre in shape right here. I can do that. Well if youre low enough its hard to do. So he to put a couple but you work on it and all this indicates is if you can do what they say, then you have worked out. You are in shape. The goal is to get back down and back up from a sitting position with minimal support. Used in all age groups. Results are based on a scale of one to 10. Your risk of dying is five tiles greater over the next five years. Its whether you exercise and stress. Just getting down is 5 points. You can get 5 points for that. But you lose a point for every hand arm aor knee you need for support. Half a point when you lose your balance at any time either on the way down or coming back up. I was going to try. These guy versus this down to a science now. People say you need a trainer, you dont have any discipline. He suck med into doing it but you work on balance. Nothing that you do whenever youre doing any exercise youre doing it on one leg. Youre always using this ball where your core has to keep things stable. I stretch my lower back at the beginning, at the end. I think you are doing way more stuff than you could months ago. Its amazing. Its a lot of stretching but you want a body that works when youre 90 or in the case of irving cahn 109. He lived to 109. He was on our show. He started on wall street in 1928. And he just died yesterday. He had been on squawk box. Got to see the video for that. If you live to be 109, do you remember jack running around at 95 or something. Thats right. Coming up buried treasure in trash outside. Wellknown retailers. Well meet a man turning dumpster diving into big bucks. 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. In our house, we do just about everything online. And our old internet just wasnt cutting it. So i switched us from uverse to xfinity. They have the fastest, most reliable internet. Which is perfect for me, because i think everything should just work. Works . Works. Works works . Works. Works. This is buried treasure out there if youre willing to sift through the occasional banana peel. Matt malone ends up in this position almost every night. Its worth it. Whats the biggest payload you ever hit in a dumpster. I would say the one over here. All the servers. The way we visit malones unloading 10,000 worth of computer equipment he discovered down the street. A huge score for this security analyst by day and by night in search of Shopping Centers and industrial parks, a professional dumper diver that sells his finds online in austin. A city of start ups where even the trash is hightech. Somebody if they focused full time at it could make easily six figures. So off we go on our nighttime dive to the first dumpster of the evening. Malone hops out and checks it out but its a bust. You never know what youre going to get. You go to a dumper and its one or the other. He scores a bunch of industrial lights. A huge hundred bucks in a few minutes. By now its nearly midnight but we checked one more place. Whatever he sees tips him over the edge. Pay dirt. Tasers hidden cameras, leather watches, all brand new. Youre like a kid in a candy store. I am. Its like going shopping but without having to buy anything. Back at his warehouse malone tallies up the hall. Nearly 9 grand worth of garbage in two hours. Anybody who has ever went with me one time including my motherinlaw, are shocked at what we actually really throw away. We are a society of waste, waste, waste. New, new, new. To him this isnt trash. Whats unuseful to somebody is useful to somebody else. Its recycling refined. Halle jackson nbc news austin texas. Lets meet the dumpster diver him. Matt malone is the founder and chief technology officer. Matt thats amazing. Brand new watches. 10,000 worth of stuff that you found in one night. How did you get started on this whole thing . I got started with security which by the way nbc was the one that picked that dumpster. It was nice of them. Good pick. Thats a big score. You dont do that every night. As ive been going out more and more we have. That would be 3. 65 million of the year. Youre not saying seven figures. The hard part is selling it. I was wondering. Do you have a fence . Well, yes ebay and amazon. So when you get new products you can just put it right back on the shelves. You were showing me your pen. Its a cyber pen but its something we pulled out of the dumpster but its a recording device. Why did they throw that away. We got several body cams. Why . City of austin was testing them and apparently they were just done. Weird. It is amazing. What concerns me about this though is the idea that Small Businesses are throwing away all of these things. And Large Businesses but businesses are throwing these things away and they have some of our personal information stored on it too. Thats the other big part. You think about what all is in the computers and applications. A lot of times when a store closes, this week i have been going through and calling people saying i found your stuff do you want me to return it or destroy it, what do you want me to do. But they threw away an entire office. Their employees payroll their w2s, their check. People dont realize that box in there for seven years or however long it was in there, theres data in that box. What should you do if youre trying to get rid of something. Do you have to take a hammer to it. For electronics, you can destroy them. For each facility . No a store brings people in. So if their motto is to bring people in its public domain. Outside in the back of a store. It sounds dangerous. If they put up a sign with no trespassing you shouldnt go there. It should be legitimate because when you walk into a store ill ask the manager and be like are you throwing stuff away. And theyll be like yeah. You dont go outside of a pasta restaurant and dive in that dumpster. No restaurant industrial dumpster . Like youre wiping a banana peel from your eye. I dont ever get in a dumpster. Only reason i did there is its security stuff. I have an avalanche truck that i pull down the back. You might find a body sometime too. That would be gross but usually what i find is more technology. More paperwork and stuff like that but the original article was the archaeology. Sure because theres a lot of security and archaeology. Figure out what the company does and what the security aspects are. Thank you very much for joining us today. We really appreciate it. Thanks. When we come back this morning, in retail and in real estate its all about location. Thats why the owner of saks is teaming up with commercial property giants. Right after this. 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 . Shares of retail giant hudsons bay jumping this week after the Company Announced a joint Real Estate Venture with Simon Property group. Gary storch is ceo of saks. Are they both reach . Each one is in the respective country. E. You didnt want to do your own reit . No. This is far better. By partnering with them we established a growth vehicle. This is all about growth. Can you tell us what you did and how it works . Absolutely. We put some of our properties into the joint venture. And they put cash in some of their properties into the joint venture. And these joint ventures have a mandate to grow. They will be growth vehicles and the credit will diversify further away from hudsons bay stores. Then we have the ability in the future if we choose to keep ownership or spend them in a public ipo at that time. They could become reits in the future, but theyre not now. So theyre actually growth vehicles. Not some way to sort of spin off or break up. Is it the real estate or the Retail Business . Everything . Its the real estate. Its the real estate for some of the saks and lord and taylor stores. Is it the Good Real Estate . Those are special properties both our new york flagships. So we kept them out. Well look at them in the future. Meanwhile, this is great for the business. It deleverages the balance sheet, provides capital for growth. Some of the capital is being used to renovate our stores. So its a way to do some of the things you wanted to do and this is how you get the funding to do it. Theres been discussion about breaking retailers apart. The problem is all those ideas have been destructive. They tend to break apart the company, deleverage it. You tend to end up skimping what you put back into it. Its never been you have ownership stakes in the joint ventures. We have significant ownership stakes. Our partners have committed hundreds of millions of dollars. But with their commitments, we would be 80 owner. That could change over the years as they put more and more in. But its very much something that we have a high degree of partnership to control with them on. You know i wonder about that though. It sounds innovative and interesting. But at a time with 0 Interest Rates, why not just issue the money or issue bonds . Its about growth. Not only the Retail Businesses as our core continues to grow but we can keep growing these for our joint ventures. And they become more significant in the future. Growth through m a activity as we have. It was created by acquisition of taylor buy buying saks fifth avenue. There could be more on the horizon. Then we grow through our core retail operations. Whos left to buy at this point in the retail world . Theres been a lot of consolidation. There are plenty of people. Weve discussed this many times in the past. I think it is inevitable. They have to build both the infrastructure for the internet the omnichannel and its harder to run good stores because the bars been raised. Its been a great shopping experience. One of the best solutions is to combine, combine. Across the banners the way weve done with the purchase. Worth 100 million. Go ahead. Just wondering, how would you rate the business with oil prices where they are . Have you seen a jump . Its better than last year. Were strong on the internet. Were strong with value on saks off fifth. Thats our only banner that were adding significant real estate to. And finally were in luxury. Luxuries are good when the stock market is good. Guy with a surgical mask walking by. Oh yeah. I see that. Thats weird. But thanks gerry. You put one on when you leave, right . Youre outside. What are you going to catch outside . Im surprised you dont have one of those. You have ten times as many germs. Did you see the guy that tweeted in . Jokes on you. Coming up apple announcing a big event. Investors getting excited. And then is the bacteria going to beat us . Not this is the bad ones. Not if dr. Zeke has his way. Anyway, his idea for getting scientists to develop new antibiotics. 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. 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. Hes out there. Theres a guy out there whose making a name for himself in a sport where your name and maybe a number are what define you. Somewhere in that pack is a driver that can intimidate the intimidator. A guy that can take the king 7 and make it 8. Heck. Maybe even 9. Make no mistake about it. Theyre out there. I guarantee it. Welcome to the Nascar Xfinity series. Its the final trading day of february with the nasdaq approaching the key 5,000 level. We will look at the potential headwinds for stocks. Americas richest estest oil man harold hamm has had a huff year with the prices of oil plummeting and a billiondollar divorce. And before a simple dress broke the internet a llama chase captivated social media and become a Smart Marketing opportunity. Its friday february 27th and the second hour of squawk box begins right now. Live from the beating heart of business, new york city, this is squawk box. Good morning, again and welcome back to squawk box here on cnbc. First in business worldwide. Im becky quick along with joe kernen andrew is on assignment. But look behind us. We have workout friends. I think theyre gearing up for a run. I dont know what this music is. They had special music. I dont know what it is. They need eye of the tiger or something. Making us feel like slackers here on the inside. Rocky. That was just a slow leadup. You were right. Joining us for the rest of the hour is larry bosity. Thank you for being here. I think we already had had this music cued up for larry. Its perfect. Running up the stairs. Yeah. Were going to get more from larry in a minute. Music is really cued up for joe. Lets talk about or top stories. Germanys parliament has approved the greek bailout extension that came out after wolfgang after the finance minister urged approval in assuring that athens would not be allowed to blackmail its partners. Good idea because you know who comes next. But police did clash with any government protesters that are angry about the terms of the countrys bailout deal. Cars were set on fire in the back street oefs the capitol. And riot police were deployed. Apple turned around yesterday. The company talked about a major unveil. Now we have a countdown. Follow the watch, i guess. The company inviting media to an event on march 9th in San Francisco and tech watchers expect to hear pricing and availability information for apples watch. The tagline for the event, spring forward. Maybe its what day do the clocks change, again . Is that the Network Spring forward . No its the i know. Thats for daylight savings time. Fall backwards, spring ahead. So its good they werent doing this in october or whatever. And google shelling out 25 million to buy the. App web domain. Some other notable purchases, amazon bought. Buy for nearly 5 million. And a company named. Tech bought the. Tech domain for 6. 7 million yesterday. But googles 25 million bid is the most any company has paid if so far. The nasdaq is now within 12 points of 5,000. There are a few names holding it back. Dom chu tells us about these ball and chain stocks. Good morning, becky. So if we were to turn around some of the stocks in the nasdaq 100, the biggest ones in the nasdaq composite overall index, we may not just be above 5,000. We may be in record territory right now. Heres what im talking about. If you look at the nasdaq composite over 3,000 stocks a lot of them listed in the Nasdaq Stock Market the nasdaq 100 are the big e companies within that index. Year to date the performance has been almost identical. If you break down the real stocks that weighed things down if they had gotten back to flat for the year we could be above 5,000 and almost to 5,048. Thats the closing record high. Yahoo shares are down 11 so far this year. Theyve taken four points away from the overall nasdaq 100. Look at this one here. Then theres intel which is down 7 year to date. If it got back to flat it could add 10 points. And this is one of the biggest ones. Microsoft down 5 year to date. If it had just gotten to flat we could tack on another 16 points to the nasdaq 100. So you take these three large cap stocks. If they had just done nothing this year just been flat we would be over 5,000 for the nasdaq composite and almost knock on the door of the record levels. 5,048. And of course 5,132. Coming up on the 15year anniversary anniversary. Thank you so much. Joining us now is an analyst who has covered since the dotcom bubble. The nasdaq later collapsed and took Companies Like commerce one with it. So is history set to repeat itself . Joining us right now is david garrity. Its great to see you. Thank you becky. So its been 15 years. You think about 5,000 over the course of 15 years and how much theyve grown, is this is fair valuation right now . I think were in a situation now where on a compositional basis, theyre making up what versus they were in 1999 2000. Youre looking at significantly different companies. Youre looking at Companies Growing revenues actually have earnings, Free Cash Flow and actually many cases are buying back their stock. Things that typical Large Companies would do. That isnt to say that were not in a situation now where you dont see some heightened valuations on some companies becoming public. We had some like lending tree that did grow well but missed expectations. Stock fell off. Horton works in terms of internet security. Also disappointing summit as well. But were not in a situation now where things are as elevated as they were in 1999 2000. Yes, i did. After they went out and bought a company. Down from a thousand . It happened actually they went out and bought a company which was involved in doing it. It was a lot of body shop work they were doing. They were big in business to business. Time flies. Youre not a tech analyst to me. Terms of my roots, no. Im not an analyst. I came out of the industrial side and went to the tech side. Why did you switch . I still think garrity hes an auto analyst. From Ford Motor Company and gm getting involved in companies facilitated the transition. You made a good career choice. Thats what i was going to say. Would have a lot more difficult in the last 15 years. Just changing to a tech analyst, that was your greatest call ever. The government was going to bail me out. You said im going to go to tech or steel. You chose tech. That was a good move too. Well thank you. So now, larry, what are you do you worry about froth now . Well of course i am. I do think that davids underlying viewpoint is right. That theres more solid companies in there than there were 15 years ago. But on the other hand theres still companies that get away with it. Look at amazon. All they do is get paid in revenues and sooner or later youve got to make some money, it seems to me. My view on amazon has been negative on the point they have to reward their investors. You cant be running a business of that size. They have a new guy that can sling the bs though. Jay carney is i like it when they wheres plouffe go . Twitter or something . Uber. Ill never believe a word from either one of those companies at this point. But savvy move for amazon right . They got probably another five years of gobbledygook. The important thing to remember for these companies is the ruling that came out of the fcc yesterday with respect to interNet Neutrality and the fact you arent going to have two differential pricing structures. And that obviously benefits not only the established players on that side of the business but potentially also a lot of the Venture Capital and startup activity on the internet. What do you think about that . Arent you a little bit worried that the fcc now has a major platform to exercise their will in terms of pricing, in terms of what is fair and reasonable. Isnt that somewhat of a concern to you . The thing to focus on if you go into the details of the rule they dont have the ability to set pricing on broadband. The only thing theyve said is theres not going to be differential priceing. Youre not going to be able to pay to play. It does still leave a relatively open field. It doesnt control the sector as much as people might fear. I didnt think anyone had seen the details. Its 300 pages. Have you seen it . Not in its entirety. I havent read all 300 pages. But in terms of what i have seen so far, analyses of it theres no control, no pricing being set on broadband pricing. And that obviously doesnt necessarily limit the return for the infrastructure providers, the telecommunications companies, the Cable Companies who obviously spend billions of dollars on the infrastructure to support it. David, the light touch weve exerted on the internet has paid huge dividends. Is there any historical precedent where a heavy touch by the government has resulted in benefits or innovation or a faster buildup . Has it ever happened . Is there any reason to think its going to happen this time . We could look over the infrastructures that supported Economic Growth in the United States. If we go back in the 20th century, we had the eisenhower with the interstate highway act. Over moving freight. If you look before obviously the railroads and how theyre regulated by the interstate Commerce Commission was there. So we have substantial economic and historical precedent that says yes, you do need regulators. No one is saying any regulation. But i dont know if you need end to end regulation. What worries me is this brings in more opportunity for crony capitalism now. The market place isnt deciding how things work out. Youre going to talk to some guy in d. C. And say i need a waiver on this or i need to do this. And hes going to sit is there and think about this. I cant believe the way it happened either. That the president said do this to an independent agency and they did it. I think the thing thats interesting in terms of about how if we go back october of last year commissioner wheeler, you know, really hadnt taken a view with Net Neutrality. What you had was a grassroots effort by users of the internet small startup companies, individuals coming out. Basically going to the commissioners and then also going to their own congressional representatives and indicating their interest in having a relatively open internet. Obviously i talk my own book here. I worked for a late stage Venture Capital fund. Were interested in making sure the platform out there is supporting the growth of the startup companies. You think all the people who are protesting know exactly what this is, what title two is . The question is do the people opposing it know what it means either . I think Net Neutrality is a good idea. I think some of the ground rules have been laid. I think title two takes it to another level that wasnt necessary. Do you think title two has helped the Telecommunications Industry . There is going to be a lot of human crime coming up around this. Some said look just because we have the ruling dont expect it to go forward. Therell be a lot of legal action taking place. So weve got uncertainty for three or four years to try and we will have a Different Administration but maybe we have a Republican Administration in 2016 and this could all be for naught. There may be uncertainty down the road but not necessarily going to have a change in terms of the differential pricing by the industry. We heard theres going to be a change from ceos of Certain Companies on how much theyre going to spend. If they do shame on them because therell be competitors out there that will continue to spend. I would argue this is theres only like three companies doing it. If all three say theyre going to do it whos going to do it . You can look at projects on the way by google and facebook in terms of making wireless more available. Even google said were getting what we want its in specific cities theyre cherry picking where they want to build out to. If youre looking across the country, thats a different story too. They overrule what had they have taken in the states. And thats almost unprecedented in terms of their power. The fcc, you mean . Yeah. David, very quickly, you said you havent liked amazon. Has that been all along . When did you start to get concerned . I got concerned about amazon when you look at the valuation relative to other companies. People come back and talk about if you make all these adjustments and put together what their interest and earnings might be on a basis without reinvestment, then it comes up interesting. My thought is amazon is in a situation where their own size is working against them. Their growth is slowing. At some point investors will fall out of love with the growth rate. But thats been an argument for a long time. Im sticking with it for the moment. Okay. David, thank you for coming in. Good to see you in studio. Pleasure. Coming up dr. Zeke emanuel wants the government to fund a prize for a development of new antibiotics. Why its a crucial field of drug development. Thats coming up next. Then at 7 30 eastern, harold hamm joins us on set to talk about the drop in Energy Prices and the potentially devastating effects on the american domestic oil industry. Then a closer look at mcdonalds stock up more than 5 this week. Squawk box will be right back. Monday morning, a squawk box fan favorite. Ask warren. Three hours with Berkshire Hathaways warren buffett. Post your questions for the legendary investor. Just use the askwarren and then tune in to see his answers at 6 00 a. M. Eastern. In our house, we do just about everything online. And our old internet just wasnt cutting it. So i switched us from uverse to xfinity. They have the fastest, most reliable internet. Which is perfect for me, because i think everything should just work. Works . Works. Works works . Works. Works. There are 40 new antibiotics currently in development compared to the 771 drugs and vaccines in Clinical Trials awaiting fda approval for cancer. What is one way to spur innovation . Well, maybe by incentivizing it. With us now is dr. Zeke emanuel, vice provost and chair of medical Health Policy at penn. Hes also a senior fellow at the center for american progress. Doctor, its good to see you. As always. Nice to be here. Normally the Market Opportunity itself is enough in a market place to get companies to do things. Why isnt it profitable . Why does it need a kick start . Well, because antibiotics are used for a very short time and therefore you unlike cholesterol controlling drugs that you take for life and we seem unwilling to pay a premium price for those antibiotics for whatever psychological market reasons. Were willing to pay 100,000 for a cancer drug that prolongs on average. But not willing to pay a premium price for antibiotics. The government has done something called the g. A. I. N. Act to fast track these drugs. But i think more needs to be done. Were losing the battle against bacteria. Theres no doubt about it. Well you know i remember doing some work and you know this. If you inoculate a big flask full of medium within three days, if there was no if there were no if it didnt run out of room one bacteria can turn it would cover the globe almost like sherwinwilliams. They have plenty of opportunity to mutate around current drugs. It is scary if something happens we arent prepared for. Usually theres ways to do it with like orphan drug or a patent exclusivity or greasing the marketplace to do it. You think we should raise the money through taxes and offer like a prize to private industry to do this. So i mean you can think of the proposal as lets try a prize. We know its worked for netflix. You really get new people coming in new ideas. The second thing is you know i proposed the u. S. Government combine with europe and japan because antibiotics and the drugs are commonly used across all those countries. And we have shared agreements on how to actually oversee and regulate and approve those drugs. But we could do a Public Private partnership. I have no problem with them kicking in money. Other welloff foundations or people kicking in some of the prize money. The idea is to create a prize that really energizes the whole research area. Over the last decade or so theres been a much larger retreat from antibiotic development except for really small companies. I think what we really need is a much more widespread excitement in Cancer Research which is my area of expertise. And one of the ways to get that excitement is to make a competition out of it and to create a big prize than that you give out over time. If it works, we can continue it. We can say, hey, we found another way to incentivize the market. For drugs we really really need. And antibiotics. Theres never going to be a time we can say weve got enough antibiotics, we can stop for cholesterol lowering drugs or Blood Pressure drugs. The problem with antibiotics as you point out is bacteria will find a way to be resistant. Its a neverending process we need there. Doctor ive been around the pharmaceutical industry for awhile, and youre right. It isnt a good economic proposition for most pharmaceutical companies to chase antibiotics. Because as you say, even if you win and you get the patent you cant sustain a price very long when in the marketplace. So i think your idea has merit. The question is this. Can you also find some way to put some price floor so the pharmaceutical companies can continue to profit if they have a groundbreaking drug to fight antibiotics . Well so part of my idea is you should make just the discovery financially worthwhile to drug companies. I grabbed a number out of a hat. We could negotiate it. But i said 2 billion for the prize. It has to be a breakthrough. Not another me too drug. And the idea there is if it takes a billion dollars to develop an antibiotic all the way from the start to the approval, youre really already giving them an roi out of the box. I think a sufficient prize. And remember 2 billion sounds like a lot of money. The Health Care System is just 3 trillion in the United States. You know these antibiotic resistant infections more than 20 billion. It sounds like a big amount of money, but i think its really quite reasonable in the scheme of things. All right. Get ready, zeke. I know youve got to catch a plane. Youll be able to say that and not answer it. But im a fan of your brother. Im a fan of both your brothers. Good. So am i. Good. And so we got maybe a runoff coming. Im wondering how does it feel to almost feel like a republican when the far left goes after rahm for some of the what i think are necessary things hes done. Now you see what republicans are up against with parts of the progressive wing of that party. How does it make you feel . Does it recalibrate your idea of how far left some people have gotten . Look my view is we have to be responsible in governing and some ideas that ive come up with may not agree with certain parts of the left. Some ideas dont agree with parts of the right. The big ie goal and what motivates all threw of us emanuel brothers weve got to make the world a better place for our children. Thats the key. We have to do it for education, health care, government and you know, were willing to stand by that and fight hard for it. I think thats what motivates us. I never thought rahm and scott walker would be able to have a drink together and say can you believe what were going through. I dont think they can still have a drink together. Dont count it out. I might suggest that. No. Not happening. Not happening. I knew youd draw the line somewhere. Go catch your plane, zeke. Thank you. Thanks. Take care, guys. See you later. Coming up a llama chase in arizona captivated twitter yesterday. And it became a smart social marketing opportunity. We have that story next. Then oil man harold hamm will join us right here on set. Stick around. Squawk box will be right back. 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. 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. Among the stories front and center tivo and others buying aeroassets. The entire sale brought in wow. We should have thought about this larry. Less than 2 million. Only about half as much as the bottom of aeros expected range. And twitter announcing new antiharassment tools. Changes include the ability to track phone numbers so abusive users cant create new accounts. Even for the two, youd have to put up the two. Id like to help run it or something. And one month in the tax season and 83 of those that have filed have qualified for a refund. The average refund about 3100. And americas new nemesis is its old nemesis. According to a new gallup poll americans once again the same one who is were laughing at mitt romney when he said this once again consider russia the u. S. s greatest enemy. China topped the list last year. But this year fell to third. I guess isis is not a nation state. No. Although theyre trying to call themselves a state. They didnt ask about Global Warming which is obviously the biggest threat facing all of us at this time. A llama chase captivating the internet yesterday and it became a social marketing opportunity as well. Two llamas got loose in sun city arizona, after an event at an assisted living center. An entire neighborhood came out to help sheriffs deputies catch the pair. It was a Smart Marketing opportunity for gm. The company tweeted the gmc canyon truck saying sometimes you need precision and the right size truck to get the job done right. They gave the hash tag for it. Good way to play off the news. I dont know what this says. I didnt see it so i dont know why it was so interesting. It was like for a couple of hours people were watching this everywhere. Llamas around parking lots and down streets. It captivated a lot. Its like americas funniest home videos. I guess we watch those two. The dalai lamalama i could see. Coming up oil man harold hamm taking a hit from Falling Crude price and a very costly and public divorce. He joins us on set. Take a look at u. S. Equity futures. 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. 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 you the tools and resources to get it right. Are you type e . Welcome back, everybody. Crude oil continuing its slide lower while the u. S. Rig count falls to its lowest level since 2011. Could the Ripple Effect reach much further into the economy than people are expecting . Harold hamm is the chairman and ceo of continental resources. It is great to see you, harold. Good to be here. Thanks. Lets talk about whats happening. Continental was one of the first to say were cutting back on what were doing next year in terms of capital expenditures. Youve seen this before. Youve been through oil declines and oil advances. What do you think is actually happening this time around . Well you know this thing has gone on 40 years with opec. You know thats just the way the games played. They try to wipe out u. S. Production and sometimes theyre successful. This time we hope theyre not. Everybody in this type of an environment, all you can do is conserve cash cut back wait for prices to come back. But it will adjust. Production levels adjust. And so will prices. Its a matter of time until that happens. You said youve seen this before and you think this is opec trying to crush the u. S. Drillers. Part of this is opec is a lot less powerful and theyre fighting amongst themselves. Saudi arabia doesnt want to say well cut production and allow everybody else to cheat. How strong do you think the cartel is at this point . I dont think theyre very strong. Saudis made up their mind theyre not going to take the brunt of the cut. They saw our success and the american shade revolution if you will. Its been a great threat to saudi arabia. And so thats what this is all about. Thats one part of it. There are some other parts geopolitically as well. Sure. And, you know what they intend to do with russia and some other places. So they turn the ruble to rubble and certainly theyre having an effect in the u. S. And all we can do is cut back and cut capx. So thats a response that we have to the market. Harold youve been a spokesman, an outstanding spokesman i think in terms of the ability or inability of u. S. Refineries to ship oil to foreign places. You also point out 20 of the refineries in the country are owned by people outside the country and they can export that oil. What are the chances, you think, that that rule was put in the Nixon Administration to be overturn snd. Well you know that was an enforcement tool of price control back in the 70s. Certainly its an unintended consequence of whats happening today with it. But i think it could be done away with with executive order. I would expect the president to do that. You would . I would. I would serve my products the same as the refineries do. What i didnt realize is American Companies have this order youre not allows to ship. But u. S. Oil can be moved. Were producing 9. 2 Million Barrels a day. Right now the spread between our price here is being disadvantaged by this rule and rural prices 11 a barrel this morning. Almost 12. You look at it and think hey great . It doesnt work that way, becky. You know basically all the Refined Products have been rural market prices. They ship it overseas and in fact 4. 2 Million Barrels a day is shipped out every day, Refined Products to the world. So theyre selling theirs. So theyve got a windfall profit going on. Well, harold one of the things youve talked about is youve seen this before. Youve seen prices go up and down. Whats happened in the past is when prices plummet like that people stop new production. Eventually wells can get shut in in the price falls below what theyre making a profit at. And that in turn eventually brings prices back up. You think thats what happens this time around . Thats what it is. Thats why i say it will adjust. It will adjust fairly quickly, i believe. A lot of people think the rig count, it takes awhile to shut that down. But thats going down really fast. How fast . Weve lost 600 rigs. 600 of the 1950 rigs already has been thats since november. So how quickly does it turn this year . Youre talking about by the end of this year middle of this year . We see it turn around actually in production. Start happening as fast as march, april, may its on a downward trend. And we should lose were estimating about 1. 5 Million Barrels a day of u. S. Production in the first year from may to may of 2016. So it happens real quick. Thats still a year. If youre a consumer, youre still looking at Lower Oil Prices over the course of the next year . You could. But quickly people start forecasting that were going to be undersupplied. So i mean this whole thing is about a forecast of being oversupplied in the first half of 2015. So once they see that youre being undersupplied, its going to go the other way. Will all the oil in the fields in canada that would have been delivered by keystone will that be delivered another way now . Will it get out of the ground and be used with rail or trucks or something . Well it is going by rail. Will it all be used that way eventually . Well, a lot of canadas oil is railed. And certainly a lot has been put on other pipes. People have made the case that since were at 9. 2 here and we did it domestically that it makes us bringing what they call dirty canadian oil down here makes it less important because weve got an embarrassment of riches domestically where weve got it. I figure anybody but the guys that hate us would rather buy the oil. And canada last i heard doesnt hate us that much. Dont like some of our hockey teams. But id rather buy from up there than the middle east. We dont have enough here to where we dont need that up there, right . Well were getting close. Then theres some truth to it that we dont need that pipe line then . Well you know for instance right now we should be energy subsufficient by five years in this country. Only about 5 Million Barrels away from that. So were at a point with 24 , almost 25 of the refining here in this country owned by other countries thats the problem there. Well, theyre going to bring their oil. We cant stop that. So were probably at a bottom of imports in this country right now. I mean, we cant stop venssezuela from bringing their oil in or canada who have refineries here. Last year you took off the hedges, you pocketed a nice gain by virtue of doing that. Now youre open. So you got to be one of the people hoping that these oil prices come back quickly, i presume. Well we are. You know we hope they will come back quickly. We do have hedges of natural gas. And our company just finished the last quarter. Beat all the streets analyst estimates. So we felt good about that. Weve had a good year. Where are the hedges in natural gas . A little over 4 be you cans. Harold we should ask you too, youve been part of a nasty public divorce. You wrote a check for almost a billion dollars at first your ex didnt cash. What happened . Where does that stand right now . Well you know that became a famous check that got the job done. It did. So its taken care of . Its in the rearview mirror. Moving on. Congratulations. Glad to hear that. I think all of us were stunned to see a billion dollar check that was originally not cashed. It laid around for a week or something. It wouldnt have laid around your house that long . No. I couldnt have cashed that fast enough. Thank you so much for coming in today. Its a pleasure seeing you and well hope you come back again soon. We want to hear what you think as prices continue to fluctuate. Appreciate that. Mcdonalds shares up 5 this week. After a lackluster end of 2015. Well take a closer look with an analyst next. Background noise credit belongs to the man who strives valiantly who errs who spends himself in a worthy cause and who, if he fails at least fails, while daring greatly sfx background city noise tdd 18003452550 [ male announcer ] your love for trading never stops tdd 18003452550 even on the go. Tdd 18003452550 open a schwab account, and you could earn tdd 18003452550 300 commissionfree online trades. Tdd 18003452550 so if you get a trade idea schwab can help you take it on. Tdd 18003452550 were getting a lot of questions tdd 18003452550 about organic food stocks. Tdd 18003452550 [ male announcer ] sharpen your instincts tdd 18003452550 with indepth analysis by schwab experts. Tdd 18003452550 and if you want to run your idea tdd 18003452550 by a schwab trading specialist, tdd 18003452550 our expertise is just a tap away. Tdd 18003452550 whats on your mind lisa . 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Five or six sessions. And around 10 in the last month. Joining us now to give us some insight, r. J. Holloway. It did go up the day the Management Change was announced too. And its been trending higher since then. Is that just sentiment or are there actually some positive things you can point at that account for that . Yeah. I dont think theres any one particular thing that you can point to. We did see some heavy call activity earlier in this week which i think is pulling up the stock. And i think the bigger question is what is driving that call activity. I think you can point to two things. I think as you mentioned, i think sentiment towards the new ceo, but the market generally accepts. I think more directly probably you have an active investor behind the scenes that could be pushing up the stock as well. I think this name is attracting a lot of interest from that front. R. J. , i think one of the things easterbrook has to deal with its a decentralized company. You go to mcdonalds in france and you see kiosks and stores appointed differently. Much more appealing, in my mind than the United States. Because they have their own Management Team and authority. Hows he going to centralize some of that stuff to get best practices against over all the stores. Yeah. I think he can have some overarching centralized themes. I think a couple things easterbrook has to do out of the gate, is change the stores. I think taking a change out of what 3g also did with burger king is helpful. Reimaging. I think again what you talked about in some of the local markets, what theyve done in europe, theyve done a great job there. But they have to tailor that to each regional situation. You cant have a one size fits all approach. And generally if you look at other things just refranchising. I think also if you take a look and executive compensation to the franchisee profitability. I think those are things that they can do to centralize and put the company back on the path to recovery. What is executive compensation tied to now . More so on the top line. So what the Sales Numbers are doing, i think you tie it to franchisee ebita. Make them more apt to make the changes that needed happen at this company. Okay. I love mcdonalds. I like the worst fast food is great for me in my opinion. But in moderation. Everything in moderation, r. J. Thats the key. Thanks. Absolutely. See you later. Thank you. Coming up, the growth dilemma in the u. S. And then the government expected to revise Fourth Quarter gdp lower. Well bring you the numbers and the instant reaction at some point. 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. 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Structural story is not as powerful as so many people seem to now believe it is. It was but its weakening. That was former Goldman Sachs chairman jim oneill on squawk box yesterday. I want to see what larry thinks about this and the prospects of the economy. He also thought that the dollar you know basically i think this guy yesterday was saying these trends that you think are going to last forever just dont count. Like the dollar will always be strong will always be doing better than europe. Oil will always be coming down. That you have to look at it and wonder how long it lasts. You know i think were going to see the Fourth Quarter gdb compressed in the next hour. Closer to 2 . I think the First Quarter Something Like 2. 5 even thats the max. And so theres some troublesome signs as well. Youve got a very i think, a struggling real estate market. Youve got soft retail sales. Youve got the strong dollar which hurts us in terms of exports. I think weve got a low growth product over the next six months at least. And i think the idea of the fed increasing rates in the first a of the year i think thats out the window. I think maybe september, maybe at the end of the year. But i dont think were going to see an economy that justifies a rate rise until at least late in the year. We did have an analyst that spoke with us earlier this morning. Kind of laid out something i hadnt thought of before. If youre looking for Interest Rates to get back to 2 the next two, maybe three years, what does that mean for the stock market . It makes the stock market a much more attractive place. It does but i think always the threat of a rate rise has some Chilling Effect on the stock market. You can see it already this year. So if you could say as a given itll be that for the next two years, the stock market i think would increase enormously. But i dont think its a given. Even though i do think were overestimating the strength of the u. S. Economy visavis the rest of the world that is better. But remember, china is slowing growth. Europes coming back slow. Nothing going on in brazil. So well still be stronger than them, but i think we do have obstacles to overcome as well. I think well did you get up yesterday and watch the show . I did. Yeah. You better. I didnt do it by threat, but i wanted to make sure i caught things you misstated. We both get up whether we want to or not, dont we larry . People laugh at that. Youll see. Wait until you youll see. Well maybe not you. Bullard yesterday said we average 3 plus for the year for sure. And he also said thats one full point above what were really entitled to. Both of those things disturbed me. He does seem more dated from what you and i see. But he is in a very small group of people when hes in that place. I think so too. I think hes overstated things. Are we really just a 2 country now . Thats all were entitled to. What happened . Until we decide to have an administration that stimulates business and thus the economy, thats what were going to be. We talk about job creation. We dont do much about job creation. For example, i was interested in the president s idea on Community College is free. I heard a speaker say theres 5 million to 7 million jobs open. I would like them cataloged and then go to the Community Colleges and say instruct and teach people these skills. Divide it government state, individual, and companies that profit from it and see if we have something. I like that fourway split. Well have more from Larry Bossidy ahead. Theres a guy to be on that has more money than you. Theres a lot of those. Were talking about monday morning. Dont forget. You have a chance to send in questions for warren buffett. Starting at 6 00 a. M. Eastern time we will be live in omaha with Berkshire Hathaway chairman and ceo warren buffett. Well ask the questions you submit. You can post them using askwarren. You can use twitter, facebook instagram. But keep them coming. Well try to get to as many as we can on monday morning. Also still to come this morning, market fallout from the Net Neutrality decision. Well look at the stocks moving in the new world of internet regulation. Author Walter Isaacson and analyst Craig Moffett join us after this. Ring 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. 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. 80 of the poor in africa are rural farmers. 96 of them are doing rainfed agriculture. Theyre all competing with each other; theyre all making very low margins making enough to survive but not enough to get out of poverty. So kickstart designs low cost irrigation pumps enabling them to grow high value crops throughout the year so you can make a lot of money. Its all very well to have a whole lot of small innovations but unless we can scale it up enough to where we are talking about millions of farmers, were not going to solve their biggest challenge. This is precisely where the kind of finance that citi is giving us is enabling us to scale up on a much more rapid pace. When we talk to the farmers and ask them whats the most important thing. First of all they say we can feed our families. Secondly, we can send our children to school. Its really that first step that allows them to get out of poverty and most importantly have money left over to plan for the future they want. What the fccs ruling on Net Neutrality will mean for your investments. We tap all corners of the net market from netflix to apple. Is your portfolio about to be throttled . She turned cinnabun into success. She will join us to talk to us about her role at focus brands. And read all about it. A classic tabloid could be up for sale. Plus more on the dress that broke the internet. As the final hour of squawk box begins right now. Welcome back to squawk box here on cnbc, first in business worldwide. Im becky quick along with joe kernen. Andrew is off today. Two dresses are causing quite a buzz this morning. The first is a hollywood mystery. The pearlladen dress worn by Lupita Nyongo has been stolen. Made from 6,000 rare pearls is worth 150,000. People are worried the pearls were resold. And weve been getting tweets all morning long. Check out this dress. Tell us what you think. Is this dress black and blue or white and gold . Lets take a quick poll. We both see white and gold. What do you see . I see white and gold. But i cant figure how this went viral. I cant either. What do you see . I see white and gold. All right. Thats our panel for the moment on this. Taking a look at what we think on these things. It has gone viral. Its been on several sites that are out there. What do you see . White and gold. Members of congress were commenting on it yesterday. That was originally on tumblr with the headline what color is the dress. Everyone the today show dog is in on it saying at least can we say im a golden lab. See we cant even agree on that. I havent seen it. Lets get to other headlines this morning. Heres whats happening at this hour. We are 30 minute ace way from a revision. Growth is expected to be revised to 2 from a preliminary reading of 2. 6 . Germanys parliament extending the expansion. And in washington funding for the department of Homeland Security will expire at midnight unless Congress Takes action. The senate is set to vote this morning. Its the final trading day of february. Today. Yes. And check out these stats because it was a good month. The dow and the s p are on track for their best month since october of 2011 and the best february since 1998. As for the nasdaq best february since 2000 and its at that level we wondered whether wed ever see 5,000 again. And its been a long time coming. Earnings for most these companies have probably tripled in the meantime. Its been 15 years and finally the nasdaq is getting close. But today were down about eight points on the dow. These are all premarket trades. We could be in a completely different situation by 4 00. Check out the markets in european at this hour. Well take a quick look at whats happening. Not much going on earlier except for in greece where we are down almost 3 . Not much happening in the euro. The 10year was sort of quiet. I think gold was just over 1200 last i looked. We can tell you about stocks on the move this morning. Gap reporting better than forecast earnings. The stock buyback and a dividend hike. But it also says the west coast port delays and a strong dollar will hurt its profits for the year. And Weight Watchers posting a 15 drop in subscribers. The company is also offering a disappointing forecast. All right. It is a big day for netflix. The company, the season three house of cards just a company of hours ago i guess its out and celebrates a big win in washington. Julia boorstin has the story. Thats right. A victory for netflix whose stock has been on a tear this year. Heres what the, if any said about the fccs new rules. The Net Neutrality debate is about who picks winners and losers online. Internet Service Providers or consumers. Today the fcc settled it. Consumers win. Netflix wants to make sure there are no buffering delays this weekend when subscribers flood to see the third season of house of cards with more competition than ever from amazon and others. Because netflix is losing dozens of titles in its library in the next month, they need buzz generating exclusive shows like house of cards and daredevil launches next month to help it keep subscribers. The content costs are one reason that netflix raised an additional 1. 5 billion this month. Now, there is always a resolving door of shows as deals expire and others start. But now subscribers may be paying more attention since theres so many places to find everything but the exclusives. All right, julia. Thank you. Lets get more perspective on the future of the digital and investment landscape. Plus of the soon to be launched apple watch. With us now, cnbc contributor and ceo of the detroit no. Is it the newark no. Oh its the aspen institute. You picked aspen to have your institute. Hey, were basically washington. How about manhattan. Thats a good one. Now youre talking my language. Walter isaacson is here. And Craig Moffett is a Research Analyst at moffett. Bear with me one minute. Craig, earlier we had someone make the point that because of what the fcc did yesterday, that the comcast time warner deal is likely to get approved now because the big behemoth people are worried about are not going to have quite the teeth. You were at 80 and then you went to 70. And then 60. And then to 60. Where are you now . Still at 60. You can easily make either argument. Which tells you either argument doesnt add information value. But the first argument is that now that you have the regulatory backstop it makes it easier for the doj to approve the deal. The counterargument is no look. This is just emblematic of a really negative environment for cable and broadband providers right now. Its hard to see this deal getting approved. Either of those is as convincing as the other. I tend to come out a little bit more on the side of the latter. And thats why we lowered the probabilities because you can see the political winds are blowing in the face of this deal. Okay. But you havent lowered since yesterday. Thats right. Walter weve talked about this so much that and i dont know whether youve seen it or not. But let me ask you this. Would either the private sector or the government could we trust either to have a very light touch and a lot of forbearance . A lot of people said id rather have the private sector saying were not going to throttle rather than having them say were not going to price fix. Do you expect this to be done in a light handed way now that its become is it called law now . One obviously hopes it would be done in a light handed way. But to your question its a problem on either side. If you have a monopoly or duopoly or dont have a lot of competition on who gets in a netflix comes along, you dont necessarily want a monopoly to say i get to choose which lanes to have coming into your house. It could have been worked out in the good old days in the political process. He was working on it. You have great democrats on that. Nowadays congress cant get anything done. Probably the best way to have done it is let it play out through the political process. But for the time being, i think you can argue that you dont want i know you disagree on this but you dont want somebody who has a monopoly into my home to say what you can get. Thats a different issue. Do you have any problem with the way this was handled by the fcc . If the president said to the fed i want you to lower rates and this is what i want you to do and then a week later they lowered them wouldnt that raise eyebrows . There was a wonderful wall street journal piece about a month ago giving the entire back story of how the white house pushes this a bit. The president ran on this. This was one of his electoral promises. Hes now acting on his promise. I know that surprises people but yes, he did push for this. He did want it. And thats what the fcc is. Its appointed three democrats two republicans. And so the fact that its somewhat politicized should not be a shock. Its not a shock. Not quite like the fed. Craig, does this get worked out thererough the courts . Were going to see arguments back and forth for the next three to four years . Absolutely. First this has to be published many the federal register. Then after its published youll get a series of lawsuits from the carriers saying that they want to overturn the reclassification to title two. At the same time youll probably get lawsuits saying that you cant forebear from price regulation under title two. And all that will take years to work its way through the process. Do you think they have a case because one of the republican commissioners yesterday was already saying that he thinks theres a lot of stuff in here, that theyll have a good leg to stand on in these lawsuits. The commissioner makes a good argument. Ultimately, though i think the probability is that this will stand up in court. And remember the reason that they did this its funny. You get all these Bumper Sticker arguments from the left saying this is about protecting free speech and against blocking. The right saying its about price regulation. And the reality is somewhere in the middle. But the reason that they did what they did was not about Net Neutrality. The Net Neutrality issues were settled years ago. The issue is the Legal Framework that they chose in order to be no ensure enforceability. And that Legal Framework, title two, is goes back to 1934. Its very problematic. But ultimately what i think the courts will probably say is that the fcc has whats called chevron deference as the agency to reclassify it if they want to. My guess is it will probably stand. It goes back to the chevron case. With the epa. Oh another activist. You know the one thing you really want is to have innovation that allows people to have more choices coming into the home. Thats you know using broadband and wifi and the spectrum and other things having overbuilding with having municipalities. One good thing in this regulation is you want municipalities to overbuild. So what you need to do in the long run and i think this doesnt help really is encourage competition and new ways of getting people to have a pipe into the home. Right. Maybe google or who knows. One thing i know is i keep hearing the president say im done. I cant do anything else. And he is not done. He can do a lot. I dont think he said hes done. He kind of said that was you. He didnt say it. He said i can only do so much with executive order. Sooner or later there has to be legislation. He said that a few times. 2016 is a long way off. Just this week you know, keystone within his right. But other stuff you wonder. Its good to be president. Elections have consequences. But not the 2014 one, not to him. Anyway there used to be three branches we thought were equal. Executive branch i dont know. When we come back online and mobile Payment Service stripe looking to take on paypal. And they have the packing of paypals founders. The ceo of stripe explains the early investors. And later gdp data that can move the market. Plus we have kat cole. She turned sinnabun into a billiondollar business. She will talk about her new role at focus brands. And cramers look. Squawk box will be right back. The future of the market is never clear. But at t. Rowe price we can help guide your retirement savings. Our experience is one reason 100 of our Retirement Funds beat their 10year lipper averages. So wherever your longterm goals take you we can help you feel confident. Request a prospectus or summary prospectus with investment information, risks, fees and expenses to read and consider carefully before investing. Call us or your advisor. T. Rowe price. Invest with confidence. I love my shows, but i cant just sit around all day. Thats why i have xfinity. Their cloud based dvr lets me take everything i recorded, anywhere i go. Which is perfect for me, [whispering] because i have responsibilities. I mean thats really interesting, then how do you explain these photos . [people gasping] objection your honor. Sustained. With the x1 dvr library you could take anywhere, xfinity is perfect for people on the go. Welcome back to squawk box. The futures right now they were down 8. Now down about 14 now on the dow. Down about 6 on the nasdaq. Payment processing startup stripe has raised 200 million in funding from some of the valleys biggest names included Sequoia Capital and all of the founders. Its claim to fame sony used stripe when it chose to stream the interview after the hack attack. Stripes cofounder is here. Thanks for being here today. Good morning. First of all, tell people what stripe is. So stripe is a Software Platform that the next generation of internet businesses are building on. If you look at all the internet businesses makes the headlines today be it ecommerce Companies Like kickstarter or marketplaces on your phone, not only did d. O. The businesses themselves not exist ten years ago but the Business Models didnt exist ten years ago. And they all have fairly complex payment needs. And stripe is the platform that lets them start faster and grow faster. How does it do that . How does it actually work . So before stripe what a lot of people were doing, maybe they worked with merchant banks or integrated paypal. But there was a lot of ancillary work they had to do on top of that. And so what stripe does is give them to do that. Whats the biggest difference between you and paypal . I know you operate differently as well. One of the differences and one of the things we believe in is giving the merchant direct control, giving the business direct control of their experience. If you look at a lot of the most successful apps and services right now, like i said like a kickstarter, they want it to be directly within their app and have thaex peerns with the customer every stage of the way. Its about the customer not about you necessarily. For us its about putting the business in control. Giving them the software to do their job. Not necessarily taking control away from them. What i wanted to bring up is your story. You dropped out of college to do this. M. I. T. And harvard. Howd you guys get interested in this . Yeah. You know, stripe was very much a product of our own experiences. We had built web products before and apps before. And genuinely the hardest part about it is accepting money for what we built. This is a fairly common experience. And didnt get their needs. You know if you look at internet businesses its very different. And so we set about building it. We dropped out of school in 2010 and have been working on it since. Which were you . I was at harvard. Why were you unable to get into m. I. T. . What did they say to you . Something was wrong in your background or something . Were you disappointed that no, im just kidding. Yeah. Tell me something. You say the prime difference to beckys question about differing yourself from paypal they have to redirect and you dont have to. What does that mean . Im no geek on this stuff. So in broad terms what it means is on the paypal site you have to go out of the application or out of website. They steal you away from the website. And to the point we dont think we can predict all the interesting Business Models and innovations people will come up with. If you look at some of the most Successful Services today, like uber and lyft. With them you dont do anything to pay. You get out of the car at the end of the trip and its automatically billed to your card in the background. We dont want to be too prescriptive prescriptive. We want them to build whatever experience they want. And not say this is how you direct your customer. Youve got 200 million that youve raised. You said that banks dont really get this you dont think. Do you think one of them is going to want to buy you and could they . Were interested in building stripe as a longterm independent business. And so we dont think thats super relevant. Longterm its run that way. So you think an ipo is in the picture down the road . We dont have any plans. What was the most exciting step along the way you said this is real and going to work . Its always a meaningful moment to get your first real customer. Definitely the experience of seeing people use this in the wild to build a business that might not have existed otherwise. Thats really exciting. One of the things youve always believed is by providing high quality software, it can help businesses get off the ground faster than they might otherwise have. So in the case of the interview, this is something that was put together over the course of a few weeks. They built a facility to sell and stream a movie to millions of people. I think thats the kind of thing that, you know would not necessarily have been possible five or ten years ago. Whos the boss you or your brother . Hes the ceo. And you can handle it okay . Im dealing with it. Were you roommates in cambridge . We were not. You live in Harvard Square . Yeah. Down the road. Whos older . Hes two years my senior. See, thatd be bad if you were ceo and you were slapping him around. This is better. This is more logical. Your mother and father would approve of the sequencing of the jobs, probably. Right. Exactly. Thank you so much for coming in today. Thank you. This is a terrific idea. I wish you all the best. Cheers. Be sold in two months. Former jpmorgan board member by the way. Andrew would have said something if he were here today. We want to build the business organically. You have to say that. Youve answered that question a hundred times, i know. Exactly. I heard it. Each word. Coming up betting on gold medals at the gold nugget. For the first time now in the u. S. , you can place your bets on your favorite olympic events. Details after the break. And later, she turned cinnabon into a food powerhouse. Now shes looking to do the same for carvel. Focus brands group ceo kat cole will join us. Ill tell you how many calories the cinnabon has. Financial noise financial noise financial noise for the first time the Nevada Gaming Commission is allowing gamblers to bet on olympic events. The amendment was approved unanimously yesterday. However, the Gaming Commission isnt allowing people to bet on every sport. The chairman has the power to remove an event from betting action. But many believe that any game decided by points or time would be included betting on sports where winners are determined by judges like figure skating will probably not be allowed. Yeah, thatd be pretty easy to those guys i already wonder. They get so nationalistic with their own thats why you throw out the high and the low when it comes to the olympics. You cant control it by being one country. I wish you would have been able to bet on michael phelps. When we come back this morning, we do have some breaking economic news. Well get the first revision of the Fourth Quarter gdp and instant reaction. Right after the break. Welcome back to squawk box. Breaking news. Our second look at Fourth Quarter gdp. 2. 2 . 2. 2 . Thats down from 2. 6 . And of course it does hold that two handle many traders deal with. They were thinking it was going to dip under 2 . Lets look at some of the internals. We like to look at consumption. 4. 2 this time. Thats about as expected. And its. 1 lighter than our last look at 4. 3 . Pretty much as expected as well. If we look at this number the thing b that jumps out at me is the average of last year isnt much different than previous years. First quarter and Fourth Quarter were on the weak side. Of course, those were bookends to do firm quarters. Especially the Third Quarter with the five handle. 5 on the nose. Interest rates havent moved much. Were hovering a bit above 2 . Do keep in mind the high yield was the 17th of february at around 214. We saw last year at 2. 17 . And when you factor in this 2. 2 , youre looking at 2. 25 . Figuring all quarters. Becky, back to you. Rick thank you. Have a wonderful weekend and ill see you again on monday. You as well. Thank you. Right now lets get reaction to the data from our panel of guests. Steve leisman, lindsey piesa. And steveLarry Bossidy. Steve, i heard you talking through the numbers. Theres a lot of commentary it could come out under 2 . I like the internals of this growth number. The spending number at 4. 2 final sales of domestic buyers revised up to 3. 2 from 2. 8 . The Business Investment number not as strong as it should be but stronger than the initial print. It was originally 1. 9 . Plus one of the big reasons for the decline or the restatement is that they revised down inventory. Now theyre 88 billion. That sets us up a little better. They were initially reported very strong. So a little less inventory to work off. You still have federal Government Spending following 7. 7. 5 rate. And the other thing thats out there is this strange thing that happens. Theres a dissidents and on the way here so you dont get the benefit of the import price change until this quarter or the next quarter. It takes that long . It takes six weeks and theres hedging and forward and people buy forwards. So you dont get the impact of Lower Oil Prices in the gdp, help on the import side until a little bit better. Thats according to ian shepardson. Steve and nick dont offense agree, but they see this the same way. Were talking 2. 2 . Are you equally relieved . Certainly not a sigh of relief. I think there is a slightly better profile than the preliminary print, but were still talking about sub2. 5 growth. So on average when we look across the last 12 months were talking about 2. 4 which is very much on trend with what weve seen for the past five years. And this is very disappointing because despite the fact that we have had an incredibly accommodative Monetary Policy stance, we havent been able to grow beyond this. Can i point out she did that in her head. She could not have come to the table with that Fourth Quarter moving average which i just calculated. Well done. Thank you. Do you think that the better internals as you called them and you cited as well does that make a better platform for the First Quarter . In other words, you know a lot of people are thinking to get 2. 5 in the First Quarter is the best we can do. Does this say we will do a little bit be rt . I dont think so. Were still seeing that businesses despite the fact theyre a wash in cash very healthy Balance Sheets theyre not in structures in equipment, and not in fulltime high wage employees. So i think that is the key to suggest that we have a catalyst to abovetrend growth. We need 25 faster growth to hit in order to hit 3 . Is that possible . Its possible. Were you surprised bullard was so bullard did and later in the day meser did. And its going to be tough. Were tracking with the cnbc rapid update 2. 8 i believe on First Quarter tracking gdp. Not a whole lot a data in. Theres still a ways to go. Larry, in answer to your question, im relatively optimistic. I dont feel weve seen the full impact of Lower Oil Prices in consumption yet. I dont feel like consumers have gotten used to this idea that theres a little bit extra money left there. Maybe some of it is soaked up through other ways. But also you have a million more people got jobs in the prior three months before as the year ended. Thats a bunch more paychecks out there. Whether or not theyre good jobs or parttime jobs theyre still paychecks that didnt exist. I think some of that islindsey, the question becomes does investment follow the demand or lead the demand . Go ahead. I think it leads the demand. I think the whole intention of Monetary Policy is to incite investment and spur Income Growth and demand. You draw down Interest Rates, all of a sudden businesses want to grow. They pulled out in available labor. And thats when you see the wage spries spiral. We have not seen that because businesses are not investing. See, thats why we bring in larry here. When youre in the Corporate Jet and your bodies are there and youre talking are they talking about building factories and buying equipment or are they talking about the golf game . What is the conversation . I hope it isnt quite as exact as either one of those. But i would say this. That theres still concerns about whether or not this is a good time to be making big investments. I mean remember, some have been burned by russia. Most have been burned by europe. Now its clear in china they dont really like americans making many unin china. So theres been a lot of things out there that had had to be rethought, it seems to me. That was the occupy wall street side of things you got there. Youre in your Corporate Jet talking about golf. Wouldnt you be . Hope not. But anyway so i do think its a conundrum. I dont think people are cynical or negative but i think theyre cautious. Is there a possibility anybody can entertain that europe could surprise us this year . The recent High Frequency out of europe, you had germany had better employment numbers. Some of the purchasing managers index. Now, capital if if they can get get greece together and not create a massive financial stemmic risk or avoid that theres some possibility. But theyre talking about minus one to plus one. It would be to the downside. Oh really . Youre not optimistic. Not as of yet. You brought up the point earlier, should we be Walking Around thumping our chests though . Are we doing so much better than we thought than all of these other countries around the world . You know without getting into it we havent made any progress on taxes which puts us at a disadvantage. In terms of business tax reform. I dont think theres much hope now given the distance between what the president wants and what the congress wants. So were working against disadvantages it seems to me which stem our growth. And so i think thats a matter of concern to everybody. And were just going to be in a low growth environment for the next couple years it seems to me. We dont have to be but we are. Its disappointing. But it does appear that we will maintain this range around 2 which is positive. But very modest. That were going to reach that 3 threshold. If potential is 2. 2 and we can do 2. 5 well still be in a place where we can soak up excess capacity in e the country. Joe explains it as the right to grow which is sort of one way to look at it. Your potential . Has it come down to 2. 2 prst . . Right in the range there. Its a function of how many people were letting in and how much theyre working. I thought we were in the United States its morning in america and i want 4 . I cant have that anymore . Give me 2 population growth and 2 productivity growth. Two plus two is four. You did that in your head too . Yeah. Steve, thank you. Were a long ways away from 2 productivity growth. Its ban long time. Lindsey, thank you. Thank you both for joining us. When we come back this morning, focus brands kat cole. Shes trying to do the same thing for ice cream and pretzels she did for cinnabon. Cinnabon tweet b first Undercover Boss now better call saul. Its official our buns are more faymous than kim kardashians. 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. E financial noise financial noise financial noise financial noise 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. What does it mean to have an unlimited Mileage Warranty on a certified preowned mercedesbenz . What does it mean to drive as far as you want. For up to three years. And be covered . It means your odometer. Is there to record. The memories. During the mercedesbenz certified preowned sales event now through march 2nd, youll get complimentary prepaid maintenance and receive your first two months payments on us. Only at your authorized mercedesbenz dealer. Im a civilian. Im not your lawyer anymore. Its over. Im mr. Low profile. Just another [ bleep ] with a job and four pairs of dockers. If im lucky four months from now im managing a cinnabon in omaha. That was from amcs breaking bad. Walter whites lawyer saul goodman predicting his future career as a cinnabon manager. And in the recent premiere he was doing just that. Kat cole is here. We saw how cinnabons are made. Its beautiful. And its a wonderful product. You grew the brand into a billiondollar business. And now, i mean i dont think that would be that hard. No, no. Youre great at that. But those things sell themselves, do they not . Theyre amazing. Right. But shes now Group President at cinnabon parent company, focus brands. Is the question thats come into more prominence there is a sort of societal move away from splurging on things like this. School School Lunches are now bean sprouts and such. People are still indulging. People are still treating themselves. But they are in smaller portions. Flavor variety. Something that gives them a little bit of a treat and affordable indulgence. Why the higher comps though. Theres got to be something happening. Not people suddenly finding sweet tooths. Sure. You think about where cinnabon and auntie anns are in malls. One, i think is big part of it is the multichannel presence of those brands. The brands are being built outside that core. The awareness is eclipsing what the typical franchise business could create on their own. Theyre in airports when im walking between gates and i smell it. And thats what does it with the cinnabon. The aroma, certainly. How did uyou leverage what you already have . The first step was to take advantage of what we are and what consumers love about it. With cinnabon it was that were an inresistible indulgence. The rule is dont try to be something youre not. We had launches for sugar free and low fat. Nobody wanted them. Auntie annes. We have something highly differentiated. But to stay relevant we needed to launch smaller portions more variety, and get creative about where we showed up such as burger king and taco bell and other restaurants. You know its difficult in that business to stay on the edge of things. I mean youve seen krispy kreme and other products come and go. How have you been able to keep it fresh and new and contemporary . One is stay insanely close to the customer through social media, with our franchisees, our Leadership Team worldwide actually working in the businesses. And the customer and the employees, by the way, usually have all the answers. They know what people are asking for. And we ask questions such as what ends up in the garbage . What are we selling that actually isnt being fully consumed and what can we learn from that . Social media and our ability to be very accessible on social media has allowed us to be receptive to our fans requests. And that has driven the innovation cycle of the business. What about what you just said . You asked employees what ends up in the garbage. Give us an example of something you learned and how you changed it. When our team was first forming four and a half years ago to turn the franchise business around and then support the global multichannel growth. We did nothing but spend the first few months in the bakeries. We asked employees three questions. One, what are we doing that fans love . What did we used to do that we dont do anymore . And tell us about something that happens in the business where you have to say no. You dont want to have to say no. If people have money and are physically present and you have to say no if you can fix just that problem first, you can really build a business. And for us on the cinnabon side we had a problem with our beverages. We used to sell them the frozen beverages. But through the recession, we had taken costcutting measures. And that ended up cutting out some of the flavor and the quality. And we instantly put the high Quality Dairy base back in and ended up elevating the flavor profile and sales took off 6 just from making that small change all because the employees told us that was the answer. That customers were telling them this doesnt taste the way it used to. Thats right. Now, youve done a wonderful job at cinnabon. Youve been promoted to a broader platform. Will you take what you did at cinnabon to that platform . How do you think about the new job . We feel very different about the new job. We have six brands and theyre all at very different points in their life cycle. Theyre all franchise brands. So we have one common goal, to build the brands on behalf of our franchisees so the businesses stay healthy. The way we do that will not always be the same way we did with cinnabon. There really is no number two. Auntie annes is the number one pretzel player but there are others out there. Theres more head to head competition. Carvel tons of ice cream. The one thing we do have with all of those brands similar to cinnabon is world famous highly differentiated brands and grocers and other restaurants want Premium Brands to plus up the offerings they already have. We have built a muscle at focus to deliver that. Theres not necessarily another one with the cinnabon scent. I think of all the things you did with cinnabon. From going into the vodka, just the scented things that walk through. You dont necessarily want a room deodorant that smells like schlotskys, right . No. Moos has fresh mexican offerings in wholesale. So there are definitely ways to bring these brands to our fans that might not be vodka but that are really delighting people around the world. Your workforce, whats the division between men and women in terms of running the places . It skews female in the mallbased businesses. And male side in the streetbased businesses. Wow. Im just gland youre standing up for that. Because you should be uhoh. You should be able to have you should be able to have what you want. Absolutely. As long as its not and dont deny it and pretend its something that it isnt. Yeah. Be able to treat yourself. Exactly. Kat, thank you. We appreciate it. When weback jim cramer wraps up the week that was on wall street. Stick around. Well be right back. Good luck. Opinions. Theres no shortage in this world. Who do you trust . Whose analysis is accurate . How do you make sense of it all . A simple unbiased stock score consolidated from the opinions of independent analysts. Is that too much to ask . Nope. Equity summary score powered by starmine, will help you execute your ideas with speed and conviction. And its only on fidelity. Com. Open an account and find more of the expertise you need to be a better investor. In our house, we do just about everything online. And our old internet just wasnt cutting it. So i switched us from uverse to xfinity. They have the fastest, most reliable internet. Which is perfect for me, because i think everything should just work. Works . Works. Works works . Works. Works. Lets get down to the new york stock exchange. Jim cramer is standing by. Jim, i know youre ready for action today. Weve seen a couple of retailers out this morning. Gap looked like the numbers were good and streets rewarding than jcpenney, a big surprise. What happened . Gaps very tough on itself new ceo saying the gap actual main Flagship Store disappointing and were going to fix that. Jcpenney, no irony at all, saying, everythings great, i dont know what youre worried about. Cash flow good. You know what . Frankly, the numbers were mediocre and people felt this team was going to come out with a real head of steam out of the Holiday Season they didnt. Im disappointed on every single line item. And they got do better. They spent too much time talking about the new their internet strategy without talking about what they have to put money in. It was a disappointment. They seem to be oblivious to the fact it is a disappointment. So many people wondering if jcpenney could ever turn it around. When you see Comp Store Sales that fall by 20 , 30 , people say look out could be the end of a retailer. I guess the wore is still out as to whether or not you can make that turn. I think that they bring it up, they say, listen what occurred is still with us and its still negative. I mean other than sefora a win for them the other retailers can notice and come after those customers there isnt anything here i felt you could hang your hat on. Theyve got the new team coming in. But i felt wow, its a mediocre retailer. Theres a lot of other choices. Its no what i wanted to see. Ross stores was the star last night. Margins expansion, beneficiary of the port situation. Ross stores the guy to watch. Now it is again. Weve been talking mcdonalds. An analyst earlier, the stocks momentum interesting to see. You think its justified based on the new Management Strategy . I think that the franchisees demanded the head of the previous ceo, theyll simplify. Ad campaigns working. Well discover maybe februarys better. A lot to like to mcdonalds. Listening to larry, find out which mcdonalds are doing well and replicate it. You ought to be chairman, right now, that makes the most sense. Whats working in one place might work elsewhere. So i think theres a lot of low hanging fruit to fix at mcdonalds. Larry, ready to jump into the board game again . No no thank you. Jim thank you. We will see you in a couple of minutes. Absolutely. Cant believe the cinnabuns in engelle wood cliffs . Yeah. Youre missing out by not being there. Good, good. Yeah good. Save them. Hide them. Next read all about it iconic new york tabloid could be up for sale. Details after the break. Squawk box, live from new york city where business never sleeps, well be right back. In new york state, were reinventing how we do business so businesses can reinvent the world. From pharmaceuticals to 3d prototyping, biotech to clean energy. Whether your business is moving, expanding or just getting started. Only new york offers you zero taxes for 10 years with startup ny business incubators that Partner Companies with universities, and Venture Capital funding for high growth industries. See how new york can grow your business and create jobs. Visit ny. Gov business mortgage zuckerman, owner and publisher of the New York Daily News exploring the sale of the tabloid. The Real Estate Developer telling his staff that hes look at all options and retained lazard as his Financial Advisory firm. The print ranks eighth in the country monday through friday. The big buzz this morning is about this dress. What color is it . Youve got do it a certain way to get the different colors i guess. Squawk viewers and tweeter liz says black and blue but my hubby says gold and white. 35 years of marriage and we still cant agree. Even the today show, the dog is getting into the conversation. Tweeting, can we at least agree that im a yellow lab. I just think right there, having a dog actually tweet is more significant than the dress itself. But i did that really happen . Not sure. I dont know. Larry, didnt look like he believed. Larry, pleasure having you here, thank you. Thanks for coming in larry. Have a great weekend. See you on monday. Right now its time for squawk on the street. Good fryiday morning. Happy birthday to post 9. Three years ago today we moved our show on to the floor of the nyse. We have never looked back since. Its been a wonderful set. Continues to be. Im carl quintanilla. Jim cramer david faber at new york stock exchange. We close out the month. The best month for stocks in nearly four years. Oil hoping for its first winning month since june. Pennies above break